the workers could negotiate. there is simply no room for any wage mark - ups. frictions in the capital market are a less debated area. yet they play an important role not only in financing the investments of existing firms, but also in the reallocation of capital from less productive to more productive uses. this is a part of the “ creative destruction ” by which the economy adapts to changes in the environment and raises its total factor productivity. there has been a lot of debate and analysis of financial integration. we know the euro has catalysed substantial integration in markets closely linked to monetary policy. in particular, the interbank markets are well integrated – or at least they were, and hopefully will be again, once the turmoil passes – as are the government bond markets and, increasingly, also the corporate bond markets. however, much still remains to be done in other areas. the infrastructure supporting the bond and equity markets is fragmented and hinders competition. retail banking continues to be mainly national, except in our two countries and some others. we know from experience that protected sectors seldom develop, because they lack incentives. and so it is also in financial services : it is the pressure of cross - border competition that will motivate innovation and productivity improvement within the financial sector. the best way to guarantee a high level of financial services for eu citizens is to remove the remaining obstacles to competition. financial development goes hand in hand with financial integration. financial development is, in turn, an important determinant of competition, innovation and, thereby, productivity in the whole economy. without well - functioning financial markets, economic power would be in the hands of those who have liquid wealth, collateral and connections, not in the hands of those who have ideas. that would be a recipe for stagnation. financial markets create the opportunities for newcomers to dislodge the incumbent, to leapfrog them by innovating. competition increases, monopoly rents fall and productivity rises. the finnish perspective finland's road to emu finland was among the first group of countries that moved to the third stage of emu at the beginning of 1999. finland had been a member of the eu for three and a half years at that time. the currency had been part of erm2 for less than two years. at the time of finland's accession to the european union in 1995 it was not yet certain that emu would become a reality. the likelihood that finland would be in the first group of countries

services ; and key third party contracts. • finally, firms should have inventories of key legal information, including legal entity types, purpose and relevant licenses, physical location, regulator, senior management and directors ; and applicable resolution regime and authority, as well as sufficient information on legal agreements, such as parties to the agreements, key terms of agreements, and any relevant interdependencies. arrangements for shared or outsourced services • the final area for additional work is ensuring robust arrangements for the continued provision of shared or outsourced services needed to maintain operations. • firms should understand and have sufficient information available on its internal and external dependencies, including continuity or replacement strategies for each service, as well as contingency arrangements in place to retrain or replace personnel or services needed to maintain operations. • while there are many areas that supervisors / regulators and legislators need to continue to work on to make cross - border resolution a reality, these five areas are ones that we have highlighted for near - term focus by firms. • and just a note for firms in the next tiers, including the wave two and three filers – as i know that concerns have been raised about the depth and breadth of work required – particularly for the “ non - systemically important ” foreign banking organizations ( fbos ) : bis central bankers ’ speeches – 2. as we ’ ve indicated in our discussions, our reviews of your plans, which we are conducting jointly with the fdic, will be a learning experience for us – as much as it is for you. we are viewing this process as iterative – as it has been for the first wave filers, and we expect to learn quite a bit through the reviews, including much more about your u. s. operations, that will help us and you ensure a robust planning process that works for each firm. challenges of coordination turning now to the second area where i think more work needs to be done – coordinating the supervision and oversight of the large systemically important institutions. while the crisis has provided a great opportunity to enhance our dialogue across supervisory boundaries, there are still impediments to realizing a more seamless and coordinated approach. among the impediments are the challenges in information sharing, where there continue to be barriers to freely sharing information among supervisors. while some of these impediments are cultural – or trust - related – ones, there are still legal barriers to sharing information that need to be addressed. we need to address the legal