. technological advances, deregulation and harmonisation of laws and regulations are important forces contributing to a freer flow of capital and services in the single market. there is little doubt, however, that the introduction of a single currency will make a major contribution to accelerating this process. in sum, trends influencing developments in the banking and financial industry such as deregulation, internationalisation, changes in customer behaviour and rapid technological advances – leading to intensified competition – have been there for some time and will continue. however, the establishment of monetary union will probably intensify existing trends, creating even greater challenges with regard to competition in the banking and financial industry. this brings me back to the basic proposition made in the introduction. in many respects, the euro will not give rise to fundamentally new challenges. it is highly likely, however, that the euro will accentuate challenges that are already present. and that, i think, goes for the uk as well as norway. * * *

stanley fischer : longer - term challenges for the us economy speech by mr stanley fischer, vice chair of the board of governors of the federal reserve system, at " a conversation with stanley fischer ", sponsored by the council on foreign relations, new york city, 21 november 2016. * * * notwithstanding a number of shocks over the past year, the u. s. economy is performing reasonably well. job gains have been robust in recent years, and the unemployment rate has declined to 4. 9 percent, likely close to its long - run sustainable level. after running at a subdued pace during the first half of the year, gross domestic product growth has picked up in the most recent data, and inflation has been firming toward the federal open market committee ’ s 2 percent target. 1 although the economy has moved back to the vicinity of the committee ’ s employment and inflation targets — suggesting that the cyclical drag on the economy has been greatly reduced, if not largely eliminated — along some dimensions this has not been a happy recovery. unease with the economy reflects a number of longer - term challenges, challenges that will require a different set of policy tools than those used to address nearer - term cyclical shortfalls in growth. prominent among these challenges are low equilibrium interest rates and sluggish productivity growth in the united states and abroad. i will first touch on low interest rates before turning to productivity. the federal funds rate and policy rates in other advanced economies remain very low or even negative. longer - term rates are also low by historical standards, even taking into account the increase of the past two weeks. such low interest rates, together with only tepid growth, suggest that the equilibrium interest rate — that is, the rate that neither boosts nor slows the economy — has fallen. why does this matter? importantly, low interest rates make the economy more vulnerable to adverse shocks by constraining the ability of monetary policy to combat recessions using conventional interest rate policy — because the effective lower bound on the interest rate means that monetary policy has less room to reduce the interest rate when that becomes necessary. also, low equilibrium rates could threaten financial stability by encouraging a reach for yield and compressing net interest margins, although it is important to point out that so far we have not seen evidence that low rates have notably increased financial vulnerabilities in the u. s. financial system. more fundamentally, low equilibrium real rates could signal that the economy ’ s long - run growth prospects are dim. why are