openness is always a source of inequality. at the same time, in areas where unanimous decision - making is more prevalent, europe has not always used the potential of its multilateral structure to the same extent. this is the case, for instance, in combatting profit - shifting and tax avoidance, although progress is now being made, 19 which clearly chimes with the mood of eu citizens. 20 in short, there are certain concerns about equity that can most effectively – and perhaps only – be addressed through multilateral actions. as such, in tandem with well - targeted welfare policies, they are a key part of the policy toolbox for making openness sustainable. implications for the global economy clearly, the european model involves several unique features. in particular, it depends on a relatively advanced political structure that helps reconcile multilateral cooperation with democratic control, which is difficult to replicate elsewhere. still, eu countries are generally more open than other advanced economies and perhaps have fewer problems of skewed income distribution. 21 so what lessons can we draw for the global economy from our experience? the most salient is that, at a time when disaffection with openness is growing, multilateral institutions become more, not less important. they provide the best platform to address concerns about openness without sacrificing open markets. so organisations like the wto, which make sure that trade is governed by rules and is subject to fair arbitration, remain vital to ensuring that global trade is perceived as fair and safe – while at 4 / 7 bis central bankers'speeches the same time avoiding protectionism in disguise. and bodies that foster global cooperation, such as the g20, remain just as necessary to reconcile openness with equity. the oecd / g20 initiative to combat tax base erosion and profit - shifting is just one example of such cooperation. that said – and going by our experience in europe – the area where we need a special focus today is cross - border finance. organisations that facilitate convergence in financial regulation and supervision, such as the financial stability board and the basel committees, are key in this context. within these committees, a substantial amount of work has been done since the crisis to strengthen microprudential regulation, as well as to design and calibrate macroprudential tools. this work has been essential for at least three reasons. the first reason is that finance is the most mobile production factor, and therefore the most likely to cause dangerous spillovers. this makes convergence in

potential output growth, and to do so with ageing societies we need to lift productivity growth. for advanced economies that are close to the technological frontier, this depends crucially on openness to trade. yet openness to trade is under threat, and this means that policies aimed at answering this backlash are a vital part of the policy mix for dynamic growth. some of those policies can be implemented domestically, but some can only be effectively enacted through multilateral cooperation. multilateral cooperation is crucial in responding to concerns about fairness, safety and also equity. by encouraging regulatory convergence, it helps protect people from the unwelcome consequences of openness. and protection ensures that we do not lapse into protectionism over time. the european experience provides some insights into the opportunities and challenges involved. it also shows the importance of ensuring that, at all times, openness remains under democratic control. multilateral institutions are necessarily staffed by experts. but it is essential that they always remain accountable to elected representatives who set the parameters and have the final say. 1 per capita potential output growth, oecd data. 2 polanyi, k. ( 1944 ), the great transformation. 3 see, for example, williamson, o. ( 1996 ), the mechanisms of governance. 4 bown, c. p. ( 2016 ), global antidumping database, the world bank ; world bank temporary trade barriers database. 5 pew research center ( 2014 ), “ faith and skepticism about trade, foreign investment ”, september. however, a pew research center poll released in august 2017 found that, in the context of immigration, 68 % of americans believe that “ america ’ s openness to people from all over the world is essential to who we are as a nation ”. 6 he most recent review in the literature has been published by the imf and confirms that international trade improves welfare and strengthens economic growth. see imf ( 2016 ), “ global trade : what ’ s behind the slowdown? ”, world economic outlook, chapter 2, october. 7 for more information on this topic, see helpman and krugman ( 1985 ), grossman and helpman ( 1991 ), melitz ( 2003 ), broda and weinstein ( 2006 ), melitz and ottaviano, ( 2007 ), antoniades ( 2015 ). 8 saia, a., andrews, d. and albrizio, s. ( 2015 ), “ productivity spillovers