corporate sector, including the financial sector. last but not least, structural reforms have gathered pace. the countries under an adjustment programme have taken many initiatives to make their economies more flexible and marketoriented, thus sowing the seeds for better performance and increased competitiveness in the future. all of these developments give reasons to be cautiously optimistic about the prospect for crisis - ridden countries ’ return to a path of sustainable growth, productive investments and creation of new jobs. however, historical experience suggests that the combination of an economic downturn and a financial crisis is usually associated with a prolonged recession and losses of jobs and welfare. most structural reforms take time to generate positive effects, and some of the countries in distress are still saddled with rigidities in the markets for goods, services and labour. in order to prevent – and indeed reverse – job losses, the downward adjustment of both prices and wages need to be stronger in those areas where unemployment is still high, and where this adjustment has not taken place to a full extent due to structural or institutional factors. if this goes hand in hand with a continued consolidation of public sector budgets, then the cautious optimists will see their views confirmed through a chain of reduced uncertainty, renewed investor and consumer confidence, better access to funding and a return to robust and sustainable growth. 4. 2 reforms at the european level let me now turn to the last and arguably most important topic of my intervention today, namely the reforms which have been introduced in order to make the euro area and the eu stronger in the long haul. to an external observer, especially from asia, the reform process may seem slow and haphazard, but one has to keep in mind that institutional evolution is almost never a formal optimization exercise starting from a “ clean slate ”, but rather something that builds on the existing institutional setting and adds additional layers and structures, and the institutional evolution of emu is no exception, as pointed out in recent ecb research. 6 the need to agree on reforms at both the domestic and the european level also introduces an additional element of complexity, which is perhaps difficult to understand from the outside. but it is important to point out that if one looks back it is impressive how much has been achieved in a matter of a couple of years. let me just briefly describe what has changed in the institutional setting of emu – and indeed also in the eu more generally – in just a few years. i will start with innovations in the crisis prevention toolkit, and will then move to

the back, let us not get complacent. rather, let us be inspired to further push the boundaries and produce more tangible results in our countries and across the region. financial inclusion is about thinking outside the box, because what is required is beyond the norm. what is required is innovative thinking. i therefore invite us to put on our collective thinking caps in this regard. allow me to suggest a few issues for possible deliberation over the next two days. financial inclusion usage the financial inclusion monitoring framework, according to international standards, looks at access, usage and quality indicators. financial access points are just the building blocks. what is important is getting our people to understand and use these financial products and services. for example, even though remitting funds through mobile phones is perhaps the cheapest of the channels, we still see other alternative expensive mediums being used. we ask the question, why is this so? as a working group, we need to see the translation to active usage of all these positive developments. it is promising to note that we are beginning to gain ground on the financial access points being now visible in our countries, but this must simultaneously be accompanied by active usage. this will provide economies of scale for the provider and, therefore, the sustainability of a particular product or service. bis central bankers ’ speeches diagnostic exercises – surveys during the next two days, i think it would be timely if we can deliberate on why there is low uptake for certain financial products and services, for instance mobile financial services. i know answers to some of these questions can only be determined by asking the very people on the ground, the intended customers. to this end we need to work towards a national demand survey in our respective countries. piwg may also explore the idea of a progress out of poverty index ( ppi ). the index measures, assesses and tracks the poverty level over time and is a tool that is statistically sound, yet simple in its implementation. remittances and msmes remittances are another important area for us. what can be done to improve remittance flows, as they can play a pivotal role in advancing financial inclusion in our countries? similarly the encouragement of micro, small and medium enterprises is another crucial area in the financial inclusion sphere. what do we need to do to further develop and grow these sectors in our economy? developments in fiji ladies and gentlemen, please allow me to give you a quick update on developments in fiji after our last