low participation rates in some countries, point towards the need to stimulate both the supply and the demand sides of the labour market. concerning labour supply, further reforms in income tax and benefit systems would contribute to increase incentives to work, especially for those segments of the labour force characterised by a weaker attachment to the labour market, such as women and older workers. concerning labour demand, it is necessary to reduce labour market rigidities, in particular those restricting wage differentiation and wage flexibility, which negatively impact upon the hiring especially of younger and older workers. under this respect, in several euro area countries progress towards greater contractual flexibility has been comparatively slow, and employment protection legislation – especially for permanent contracts – remains quite rigid. beyond increasing flexibility, another key challenge for the euro area is improving its competitiveness. in this respect, a key issue is keeping the dynamics of unit labour costs firmly under control to prevent or correct abnormal deviations. in situations in which such deviations appear, it is of paramount importance that social partners and national governments take swift action in order to address wage developments that go beyond productivity increases, so that unit labour costs in those economies increase less rapidly than the euro area average. the third key long - term challenge is the commitment to sound fiscal policies and, thereby, to implement the stability and growth pact. there are several reasons why sound fiscal policies are a crucial prerequisite for the monetary union ’ s long - term success. first and foremost, they are needed in order to minimise the risk of fiscal policy spillover, both into monetary policy and, more generally, across countries. further, they are needed to increase the flexibility and adaptability of the economy. sound fiscal policies, for example, are a necessary condition for flexibility, thus dampening business - cycle fluctuations through the workings of automatic stabilisers. the final challenge pertains to the full completion of the single market, which will not only increase competition and efficiency, but also improve adjustment mechanisms in the face of adverse shocks. under this respect, in spite of the fact that the single market was already a goal of the founding fathers of the european union – as set out in the treaty of rome – there is still significant progress to be made. according to the oecd, for example, product market regulation is still high in several euro area countries, and the extent of regulation in the euro area considered as a whole is still significantly higher than in the united states. let me now turn to a key challenge that we are

klaas knot : strengthening financial resilience - lessons from pittsburgh speech by mr klaas knot, chair of the financial stability board and president of the netherlands bank, at the bloomberg global regulatory forum, new york city, 22 october 2024. * * * good morning everyone. it could have been right here in new york city. that would have been fitting, as this city was, and still is, the center of gravity for global finance. but, as it happened, the us administration made a last - minute decision to pick pittsburgh as the venue for the g20 summit. we are back in the fall of 2009. less than a year earlier, when g20 leaders first met in washington dc, the world economy had been facing its greatest crisis in generations. at the pittsburgh summit, the memory of the crisis was still fresh. the fall of lehman. the rescue of aig. the race against the clock to prevent a total meltdown of the financial system. leaders from the 20 largest nations in the world had all gone through those fateful crisis days. they shared a conviction that this should not happen again. ever. they decided on a massive strengthening of regulation to address the weaknesses in the global financial system and to curb excessive risk taking. and they endorsed the mandate of the newly established financial stability board to coordinate and monitor progress. pittsburgh turned the tide. the rest is history. but it is an unfinished history. for sure, the reforms that were agreed in pittsburgh did substantially strengthen the global financial system. in recent years, markets have experienced several episodes of turmoil, and we have seen potentially destabilising failures of banks and non - banks. but the core of the system has held up relatively well. so, one interpretation is that the financial system has proved to be resilient. but that is not entirely true. take march 2020 for example. this turmoil was contained both through improved resilience and unprecedented policy actions. without the combined force of these policy actions, the reforms implemented since 2009 may have not been sufficient to stave off another financial crisis. and it's not only in 2020 that unprecedented policy actions were needed. in 2023 the fire brigade had to turn out again. so, we've made progress, but there is much left to do if we want a truly resilient financial system. one that can finance the economy through thick and thin without recourse to extraordinary support. furthermore, the financial system is evolving, and so