it must become the momentum for the entire european financial sector. it could provide the required push for the banking industry to find the touchstone to guide them to a new level of competitiveness. * * * why do we need a conference such as this? in their individual statutes, the euro area central banks have been given the task to contribute to the smooth conduct of policies pursued by the various authorities relating to the prudential supervision and the stability of the financial system. on top of which, we are to contribute to the smooth operation of the payment and securities infrastructure. this is the basic task of the european system of central banks. the bank of finland has even been explicitly committed to participating in developing financial markets. from this, you can see that the objective comes mainly from the need to boost economic growth ; the solutions however lie at the micro - level. two thirds of the topics covered by this conference take a micro approach. we need to interlink the forces of integration, competition, innovation and the use of technology. within the financial markets, technology can give us that edge. when setting up this conference my colleagues were faced with the difficulty of placing the issue before central bankers : the theme is partly a financial market policy issue, partly an oversight issue and we cannot ignore the fact that central bank operations are involved, too. it falls into the area of cooperation with supervisors, as technology changes the risk profile of financial institutions and the market as whole. it is essential that new technologies, new products and processes are understood not only by market operators but also by the authorities. contagion can take on new forms via networks and loss of public confidence. the new multi - channel world is more transparent than the old brick and mortar world. this understandably poses new demands on supervisory regulation – although it should not become a barrier to development. co - operation across borders must be ensured in the integrated markets. i would like to wrap this issue up by promoting e - banking, which to me covers various services in banking and securities markets while extending to the basic infrastructure that include payment systems and instruments. we at the bank of finland have felt this area should constitute a strategic focus. i believe you can share this vision. how can we enforce such a strategy? perhaps best through the provision of analysis and research focusing on efficiency and productivity in the financial sector. some of this requires the development of methodology and we must surmount the difficulties of current research in capturing a multifaceted reality due to a shortfall

world, and that the new measures promote competition. a fully risk - proofed system is neither attainable nor desirable. the point is not to pile up so much capital in our institutions that they are never heard from again, either as a source of instability or of growth. the challenge is to get the balance between resiliency and efficiency right. the basel iii agreement accomplishes these objectives. moreover, a careful analysis indicates that the economic case for the reforms is compelling. most fundamentally, successful implementation of the g - 20 agenda will increase the likelihood of an open, flexible international financial and trading system. modern germany has prospered in this environment and has a great stake in leading the g - 20 in building a more secure foundation for modern prosperity. the bundesbank has led the development of many of these reforms. tremendous progress was made this past weekend, but there is still more to do. germany ’ s continued leadership in the coming weeks and months will be critical, so that we can finish building a solid financial foundation for growth and social improvement. we should all heed the words of president weber : " policy - makers now have to muster the political will to take the necessary steps, however contested and painful they might be ”. 15 thank you. a. a. weber, “ the g20 agenda on financial regulation ”, dinner speech at the international conference on financial market regulation, 19 may 2010. appendix chart 1 an illustration of the cumulative output loss in canada from the financial crisis chart 2 expected longer - run benefits and costs of tighter capital and liquidity standards in per cent of gdp table 1 cumulative benefits and costs for the g - 20 from stronger regulatory requirements present value in per cent of gdp table 2 estimated long - run costs and benefits for canada from stronger regulatory requirements expressed as annual percentage impact on the level of gdp table 3 present value of benefits and costs for canada from stronger regulatory requirements