the role of monetary integration should not be overstated because the main impediments to integration in the western and central african region, and in africa more broadly, are non - monetary by nature. • as was pointed out by several speakers, the key challenge in african economic integration is to boost cross - border trade within the continent, i. e., within and across various regional integration structures. in this regard, lowering of relatively high tariff rates was mentioned as a priority. • also a number of other well - known measures to boost trade and economic growth were discussed : remove red tape, harmonize rules and practices, improving transportation and energy infrastructure, improve business climate, invest in labor force skills, etc. also in europe, there remains more to do on most of these areas, we need to continue to address similar issue in order to boost the growth potential. our discussion has highlighted the crucial role of institution building for successful integration, both in europe and africa. the underlying logic behind any economic integration process is to pool sovereignty or to give up some flexibility in decision - making in order to realize something that is mutually beneficial. this requires clear " rules of game " and mutual trust in the decision - making structures and at each participant's national as well as at the supranational level. the more heterogeneous the participants are, the more essential it is to have in place clear decision - making structures. the eu was built gradually around a nucleus of countries that were relatively homogenous in terms of culture and the level of economic development. each new entrant to the " club " had to accept the common rules of the game and had to adjust its own institutions to comply with the community standards. over time, as the number and heterogeneity of members has increased, it has become evident that eu needs to update and strengthen its decision - making structures. to achieve this, the european countries need to come to a better understanding on an allocation of policy responsibilities to their most appropriate levels. while the subsidiary principle has served eu well owing to its flexibility, it alone cannot provide sufficient clarity on the durable allocation of responsibilities. clearer rules of game and more efficient decision making mechanisms would facilitate deeper economic integration within europe, the draft eu " constitution " would constitute, despite its shortcomings, is an important improvement in this respect. when talking about challenges brought about heterogeneity, it was noted that heterogeneity has not posed significant problems

practice. that is especially so when we consider the length of the typical financial cycle, where episodes of serious stress might be separated by intervals of a decade or more. it will be a long time before these new arrangements are tested by the next cycle. i would also stress that the centralised model is not the only way to get effective coordination. in australia we retain a model of separate policy agencies, with a coordinating structure to ensure they work together effectively. our four main regulatory agencies ( the rba, apra, asic and the treasury ) together comprise the council of financial regulators, under the chairmanship of the rba governor. the council has no statutory powers of its own, but works to coordinate the activities of the agencies in exercising their own powers. where existing powers to act are inadequate, the council will typically make recommendations to the government for legislative action to remedy that. in australia we ’ ve found that these cooperative arrangements worked well during the crisis period. people sometimes ask us how we ’ ve achieved that without a formalisation of cross - agency relations, or giving one agency primacy over the others. how has the informal coordination been possible where other countries have found it difficult to make that kind of arrangement work? are we just nicer people? i ’ d like to say that the answer is yes, but i think the less frivolous answer is that institutional history matters. we ’ re fortunate to have built up a culture across the regulatory agencies where we regard cooperation with the other agencies as an important part of our job, and there is a strong expectation from the public and the government that we will continue to do so. that being the case, we ’ re not inclined to disrupt an arrangement that ’ s working. but clearly every country needs to tailor its institutional arrangements to its own circumstances and history. my second question was about the framework of instruments and objectives for macroprudential policies. here again i think we need to be suitably modest as to what we can say constitutes best practice. i ’ ve spent much of my career working on monetary policy, and it strikes me that there are certain parallels between the current desire for a more rigorous framework for prudential policy and the search for rigor in monetary policy that occurred after the breakdown of old certainties in the 1980s and 1990s. the result of that search on the monetary policy front was a broadly agreed framework with a single instrument ( the short - term interest rate ) and a well - defined objective ( inflation