as essential in order to fulfil our objectives. this assessment of the role of research has already led to the build up of significant research capacities within the bundesbank. it has been realised by several efforts like the founding of our economic research center, the appointment of a board of research advisers as well as the creation of research professorships and last but not least an ongoing active participation of our economists in the international academic debate about monetary policy and other economic issues. academic conferences like this on financing innovation have almost become a part of our “ daily business ”. ( although i have to admit a very pleasant one! ) i wish you thought - provoking discussions and a pleasant stay at our conference facilities. thank you very much for your attention.

ignazio visco : the impact of the crisis on financial integration in central and eastern europe speech by mr ignazio visco, governor of the bank of italy, at the conference “ twenty years of transition – experiences and challenges ”, hosted by the national bank of slovakia, bratislava, 3 may 2013. * * * i wish to thank for useful discussion and help emidio cocozza, paolo del giovane and valeria rolli. introduction the global financial crisis has been severe and widespread, affecting different economies in different and long - lasting ways. the transition countries of central and eastern europe1 have been no exception : their quite rapid financial integration over the past twenty - years has brought enduring economic benefits but also left them relatively more exposed to the global financial turmoil, through their links with western european banks, which hold dominant stakes in the region ’ s markets. financial stability has become a fundamental objective of policy - making once again, and central banks are heavily involved in this endeavor, which calls for a thorough overhaul of financial regulation and supervision. tomorrow ’ s financial system will be different from the one that has developed over the last two decades. global financial integration during the past decade in the decade before the financial crisis the financial system grew dramatically in size, and its role and pervasiveness in the economy increased in comparable measure. since the advent of the crisis, this process has not been interrupted but only slowed down. in the euro area, the total financial resources collected by the private sector ( bank credit, bonds issued domestically and stock market capitalization ) rose from 160 per cent of gdp in 1996 to 240 per cent in 2007, before slipping to 230 per cent in 2011. a similar pattern is found for the united states, where over those same years the ratio rose from 230 to 330 per cent and then declined to 260 per cent in 2011 ( figure 1 ). driven by the revolution in information and communications technology and by the process of financial integration, there was a considerable expansion in the supply of derivatives products, the securitization of banks ’ assets, and so - called structured financial instruments. the total outstanding notional amount of over - the - counter and exchange - traded derivatives rose from about 94 trillion u. s. dollars at the end of 1998 to around 670 trillion dollars at the end of 2007 and has hovered around that level since ( figure 2 ). an important aspect of this process has been international financial integration. in the last decade industrial countries ’ gross external financial