the credit cycle, the pricing of risk and systemic risk. i also believe that such policy instruments must be able to operate at the cross - border level since, in today ’ s financial markets, systemic risk propagates very quickly across national boundaries. the european systemic risk board ( esrb ) is well placed to take the primary responsibility for controlling systemic risk in europe. it will have the expertise, access to relevant information and close cooperation with central banks and financial supervisors. what it may still need is more effective instruments to deal with systemic risk. the first couple of years will be a critical in establishing the esrb ’ s precise institutional role and operational modalities. the esrb will no doubt face challenges, and the risk of institutional turf wars is real – particularly with strong national supervisors. but we need to be ambitious and provide the esrb with sufficient powers to do its job. again, i hope we can work together with estonia also on this issue. finland and the euro finally, a few remarks on our own experiences from being a member of the economic and monetary union from the very beginning. as in other countries, there was intensive debate in finland on the pros and cons of the emu membership before the final decisions were taken in may 1998. not surprisingly, opinions at that time were widely divided. much attention was devoted to the possibility of “ asymmetric shocks ”. the finnish economy was judged to be structurally different from those of the so called core european countries, such as germany, france and the benelux countries. the sceptics believed the economic stability of finland was likely to suffer if economic development were too “ asymmetric ” vis - a - vis the core countries. there were good historical reasons for this early scepticism. the structure of the finnish economy had been one - sided. the share of forest - based industries in industrial production and exports, although declining, was much larger than in other european countries. only one - third of finland ’ s exports went to the prospective euro area countries, implying that the country was likely to be more vulnerable than others to shocks coming from outside the euro area. there was also a particular concern about exchange rate movements. especially, there were fears that the movements in the swedish krona, the pound sterling and the us dollar vis - a - vis the euro would undermine the competitiveness of the finnish economy. after 12 years in emu it should be possible to draw at least preliminary conclusions about whether these

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