the ” other professionals of the financial sector ”, whose employment comes close to 20 % of the employment of the banking sector. staff redundancies via social plans have however so far been the exception. as concerns the number of banks, 178 at the end of january 2003, we have witnessed a reduction of nine units compared to the end of 2001 and a notable decrease compared to the peak of 223 banks in june 1996. this movement is mainly the result of mergers resulting from restructuring within the banking groups, cross - border as well as cross sectoral, at the international level. the tendency has abated for now, but is likely to revive once the economy recovers. this restructuring process can lead among others to the concentration of specific activities within banking groups into one single handling unit. it - infrastructure, back - office, trading and accounting are some prime examples. while acknowledging the possible economic benefits of this concentration, care should be taken that outsourcing does not create gaps, neither in risk management nor in supervision. from a macro - prudential perspective, the banks have been able, partly due however to the aforementioned factors in their profit and loss accounts, to cope with the harsh external environment. on an aggregated basis, the global net constitution of value adjustments, related to their own funds, has increased from 1. 9 % in 2001 to 5. 1 % in 2002. their return on assets, in terms of net results at 0. 4 % at the end of 2002, has fallen back to its level of 1999. their global aggregated capital ratio has improved from its stance of 14 % at the end of 2001, to 16 % at the end of 2002, comfortably above the prudential 8 % threshold. the investment fund business has equally not been spared by the unfavorable external environment. the ucis, numbering 1 941 at the end of 2002, albeit showing a modest increase of 33 units over the past year, has seen its growing trend reversed from october 2002 to december 2002 by 19 units. the value of assets under management, at close to 845 billion euros at the end of 2002, has diminished by 9 % as compared to 2001. this decline seems however to be mainly the result of the reduced market value of assets. positively, a net accumulation of 57 billion euros in new capital invested in 2002 has taken place. ladies and gentlemen, although the current picture does not look favorable, the sector has remained resilient. ultimately, the sector ’ s

christian noyer : international financial stability keynote address by mr christian noyer, governor of the bank of france and chairman of the board of directors of the bank for international settlements, at the international pariseuroplace financial forum, tokyo, 29 november 2010. * * * although the financial crisis originated in one country, it quickly became apparent that it was truly global in nature. it brought home a simple message : capital markets are closely interlinked around the world and, thus, domestic and international financial stability cannot be dissociated. they really are two sides of the same coin. today, i would like to reflect upon international financial stability. the views expressed are my own but, as you know, france now holds the presidency of the g20 and i will try to put my own thoughts in that perspective. international financial instability has increased over the last period. whether we look at exchange rates, international capital flows or commodity prices, signs abound of more intense volatility. volatility may not necessarily be a bad thing. to some extent, it is a sign of well functioning financial markets. movements in asset prices help the financial system to serve as a cushion, an “ absorber ” for exogenous economic shocks. this is welfare improving since it avoids, or mitigates, adjustment in more rigid goods or labor markets. volatility may also be driven by fundamentals. for instance, capital inflows to emerging economies partly reflect very favorable long term growth prospects and high potential returns on capital. this can ’ t be seen as an anomaly. if anything, it remains counterintuitive that net capital flows are still going “ uphill ” from emerging to developed economies. that means that some of the poorest citizens of the world are lending money to some of the richest, allowing those to finance their consumption. the same holds true for commodities prices. commodities markets increasingly function like asset markets with the development of financial instruments based on commodities baskets. in fact, commodities have become an asset class in themselves which warrants special attention in terms of financial stability. on the other hand, there may be good reasons to think that “ fundamentals ”, such as strong growth in commodity intensive emerging economies countries underpin the current behavior of many commodity markets. finally, financial volatility may be the product of some very specific features of the current environment. the conjunction of economic uncertainty, high risk aversion and ample liquidity worldwide is especially conducive to