). the role of multinational enterprises in the world economy has similarly grown over the years, as reflected in the expansion of the world ’ s fdi stock, which is almost equal to the annual gdp of the euro area. in many countries, the operations of foreign affiliates are now extremely important for domestic growth, with rising sales, value added, employment and exports. for the euro area, these international linkages are for a comprehensive analysis on the implications of alternative exchange rate regimes, see issing ( 2006 ). highly significant, particularly because economies of scale and cross - country technological spillovers support euro area economic growth. euro area corporate businesses are among the most dynamic in the world, providing more than one - third of the world ’ s fdi stock. at the same time, almost one - third of world fdi is invested in euro area member states. intra - euro area fdi stocks have also grown robustly, increasing from almost 14 % of euro area gdp in 1999 to around 24 % by 2004. consumers clearly benefit from greater trade and fdi linkages via greater variety of goods and lower prices. however, adjustment costs, which are often front - loaded and concentrated on specific regions and sectors, also need to be taken into consideration. the change in the structure of the global economy requires individual countries to make structural adjustments through the determined implementation of structural reforms ; such reforms are even more vital for countries in a monetary union. we know that the ability of a country to benefit from globalisation very much depends on the quality of its institutional and structural environment. all economies – including advanced ones such as the euro area – have to adapt to the changing needs of the world economy. structural reforms in the labour, goods and capital markets are a key element of any long - run strategy to improve investment, growth and employment prospects, and are essential in order to face successfully the challenges ahead of population ageing, technological change and globalisation. the euro area has indeed undergone and will continue to undergo substantial structural changes, all of which are necessary and beneficial if the euro area is to secure a leading role in the global economy. member states, therefore, need to stick to the implementation of their agreed reform agendas. the impact of globalisation is also apparent in the sharp increases in cross - border portfolio flows observed since the beginning of the 1990s, a process that continues to be encouraged by the substantial number of bilateral investment treaties, the liberalisation of capital accounts, and technological advances in payment, settlement

towards ensuring the health of individual institutions or markets. but the way to organise the macroprudential function is still work in progress in particular on the role of central banks. there are different views on how to design such a framework and how they should relate to central banks, their governance structures and their monetary policy strategies. 2 this is essentially related not only to the difficulty to define financial stability in an operational way ( contrary to price stability ), but also to the number of authorities concerned ( central banks, bank supervisors, insurance supervisors, market supervisors, competition authorities, consumer protection authorities, ministries of finance, ministry of justice, see adrain, t. and h. s. shin ( 2011 ), “ financial intermediaries and monetary economics ”, in : b. m. friedman and m. woodford ( eds. ), handbook of monetary economics, vol. 3a, elsevier. see nier, e., j. osinkski, l. i. jacome and p. madrid ( 2011 ), “ institutional models for macroprudential policy ”, imf staff discussion note, sdn / 11 / 18, november and also eichengreen, b. et al. ( 2011 ) : “ rethinking central banking ”, committee on international economic policy and reform, september. bis central bankers ’ speeches resolution authorities ) and to the variety of possible tools often assigned to several objectives. central banks should undoubtedly assume important roles in macroprudential policies. central banks bring in essential expertise in analysing financial systems from an aggregate perspective. they also have proper incentives to mitigate systemic risk ex ante since central banks typically have to deal with the fallout from financial crises. last but not least, involving central banks in macroprudential policy should foster effective coordination between monetary policy and financial stability policies in a manner that preserves their autonomy. policy coordination is likely to become important in light of the strong mutual interdependencies between the financial and the real sectors and thereby between both policy functions. i will come back to policy coordination later on. a wide range of different approaches exist to institutionalise central banks ’ role in the new financial stability frameworks. the different approaches taken largely respond to countryspecific circumstances. a “ one size fits all ” approach simply doesn ’ t exist. this is also in the european union where individual countries have adopted different approaches. at the level of the european union as a whole, a new financial