rather than increase, cross - country divergences in inflation. fiscal policy should also be in a sustainable position so that automatic stabilisers can operate fully. at times it may even be appropriate for fiscal policy to seek to offset divergences. it is certainly the case that there is little to be gained from discretionary pro - cyclical policies. rather, economic cycles could become more pronounced, resulting in costly adjustment taking place in downturns. the point i made earlier about small countries is relevant here. euro area monetary policy is not significantly influenced by the inflation rate of a small country. it is therefore important for small countries to have the flexibility in other policy areas to offset inflation. of course, large countries would also gain if they undertook structural reform and avoided pro - cyclical fiscal policy. and there could be times when it is appropriate for large countries to use national policies to offset divergences. i would merely make the point that the costs of not being flexible might be greater for small countries in the event of a downturn. monetary policy after enlargement i would also like to briefly discuss how these issues apply to enlargement. first, the points made regarding small countries currently in the euro area apply with even greater force to accession countries. given the relative size of accession countries, monetary policy for the enlarged euro area will be little influenced by their inflation rates. accession countries are in general less converged in real terms than the initial emu members were when monetary union began. this is true when measured on the basis of gdp per capita, and when adjustments are made for differences in purchasing power. real convergence may therefore take a considerable period of time. ongoing convergence, eu membership, and eventually adoption of the euro, could all result in economic shocks that mean monetary policy requirements in an accession country differ from those in the euro area as a whole. given these factors, the extent of the difference in monetary policy requirements could be greater or more protracted than is the case for small countries currently in emu. to minimise the economic and social impact of divergences, it is important that accession countries have flexible economies, sound financial systems, a solid fiscal position, and a well - developed institutional framework. arguably, accession will therefore have greater consequences for countries now than was the case previously, in the sense that they are less converged in real and institutional terms than initial emu members. a cautious approach to the adoption of the euro therefore appears appropriate, as premature adoption

points. i gave my perspective as a central banker on the importance of resolution and the limits of monetary policy. to be ready for the next crisis – or rather to avoid it – we need to resist the analogy of a swinging pendulum. we must also be critical of relaxing post - crisis regulation such as mrel. i also identified funding in resolution as the critical missing link in the framework. i wish you all pleasant and productive discussions. i trust that after today, you will be better equipped in your journey to make banks resolvable.