the limits of national responses in handling the activities of cross - border, systemically important institutions, markets and instruments. therefore, no initiative targeting these activities can be fully effective without global coordination. the international community has shown remarkable unity during the financial crisis. a common understanding on the broad response to the challenges has indeed been achieved at the global level. let me name a few examples. last year, the report by the financial stability forum ( fsf ) on enhancing market and institutional resilience was a key achievement that set the priorities for action. 1 the agreed principles targeted banks ’ capital and liquidity risk management, standards for valuation and transparency, and the role and the uses of credit ratings, in particular for structured finance instruments. the authorities were in addition called on to review their responsiveness to risks and arrangements for central banking operations in crisis situations. up until october 2008 the g7 had been steering the efforts to deal with the financial crisis, which was up to that time also primarily a crisis of the financial system in advanced economies. the aftermath of the lehman brothers ’ collapse saw this financial crisis spreading across the globe. in november last year, therefore, the heads of state or government of the g20 countries met in washington to step up international cooperation to address the ongoing crisis. they agreed not only on urgent actions to restore global growth and stabilise financial markets, but launched a major reform agenda to strengthen financial markets and regulatory regimes so as to avoid such crises in the future. the process continued at the recent g20 leaders ’ meeting in london in april this year. for example, the new financial stability board ( fsb ), the successor to the fsf with an expanded membership, was given a mandate to provide early warnings in collaboration with the imf. moreover, it was agreed to extend regulation and oversight to all systemically important institutions, instruments and markets. all this shows that many decisions have been made at the global level, many of which have already also been put into practice. for example, several international fora ( such as the fsb and the basel committee ) have been enlarged through the inclusion of new member countries. moreover, the basel ii capital framework will be strengthened in a number of areas, including the treatment of securitisation activities, trading book exposures and exposures to off - balance sheet vehicles. in addition, principles for sound liquidity risk management and supervision have been published, also by the basel committee. 2 it is now very important to maintain the

stands out as an exceptional period for emerging economies. between 2000 and 2010, aggregate growth in emerging markets averaged 6 % on an annual basis. that compared to around 4 % in the preceding two decades. the future looks less rosy. estimates from the imf2 point to a significant moderation in potential growth in large emerging markets. the factors behind the slowdown are varied. but a common theme is that several countries are reaching the limits to their current growth models. china has become overly reliant on credit and investment ; in india structural reforms slowed ; russia and brazil have failed to diversify growth models and domestic investment has languished. the answers to such problems are structural reforms and ambitious efforts which became now necessary. in view of emerging economies ’ growing importance, the success of this process of reform and adjustment will have a profound impact on the global outlook in the coming years. waning global trade integration the third global theme i would like to touch on is the future for global trade. in recent years, world trade has been puzzlingly weak. before the financial crisis, global imports typically rose considerably faster than activity. in the three decades before the great recession, trade rose almost twice as fast as output ( an elasticity of trade to gdp growth averaging 1. 8 ). but since 2011, world trade has plateaued relative to world gdp around the level reached in 2008. some of this weakness is likely to be cyclical. global business investment, which typically has high trade content, has surprised on the downside in recent years and that has probably restrained the pace of global trade. as investment recovers, it should also spur a pick - up in global trade in the medium term. however, there are a number of structural factors that could underlie the slow global trade growth. a first factor may be slower progress in trade liberalisation. while stalled talks at the see box 1. 2 in october 2013 imf ’ s weo. bis central bankers ’ speeches global level have led to increased efforts towards bilateral and regional deals, the recent impetus towards trade growth seems to have lessened. a second factor stems from waning integration through global supply chains. anecdotal evidence suggests that in the wake of a series of supply disruptions, firms are aiming to reduce the complexity and length of their supply chains. perhaps, therefore, we might be approaching some natural limits of global trade integration. this would have profound implications for the global economy. for euro area countries, which are