area9, there has been an absolute gain : all net wealth groups have seen their wealth increase as a share of their mean income. this is because house prices within the euro area went up over the period, while bond prices on average rose modestly and stock prices on average actually fell. higher net wealth households, however, benefitted more in relative terms ( chart 5 ). this result is partly driven by the situation in germany, where home ownership is comparatively low and hence the median household benefits less from rising house prices. still, over half of german households have seen net wealth increase over the past two years. and in spain, households all along the wealth distribution have benefitted given the high rate of home ownership. 7 / 13 bis central bankers'speeches so overall, we do see some signs that wealthier households have benefitted relatively more from increases in asset prices. but those benefits have also been broad - based, meaning the effect on distribution is unlikely to have been large. and it is important to remember that, to the degree that monetary policy has boosted asset prices, it has often been correcting previous falls in asset prices due to the crisis. in this sense, monetary policy has not been distorting the distribution of wealth, but rather restoring the distribution of the status quo ante. bringing in the macroeconomic effects in any case, a balanced assessment of the distributional effects of monetary policy cannot focus only on its short - run financial effects. it must also include its more slow - moving macroeconomic effects. even if low interest rates and high asset prices do worsen short - run inequality, they have positive distributional effects over the medium term. they lead to stronger aggregate demand, a faster fall in unemployment and medium - term price stability, all of which reduce inequality in the ways i described above. the income gains support firms ’ profitability, which ultimately sustains higher investment. redistribution of income across households is typically expansionary as well, given that liquidity constrained households have a higher marginal propensity to consume than more affluent ones. 10 and the wealth effects of our policy – which have been spread across all net wealth groups – boost the economy to the degree that households are able to convert asset price rises into consumption. alongside this are also the expansionary effects that monetary policy creates through its other channels : the exchange rate channel and intertemporal substitution. in particular, low interest 8 / 13 bis central bankers'speeches rates encourage households to bring forward durable consumption,

offers faster prospects of internationalization. caribbean economies have realized that they can accelerate development of their services sector even before the manufacturing sector matures. this is certainly the case with some international financial centres ( usually termed “ offshore centres ” ) whose manufacturing sectors had not yet reached the levels of sophistication of many developed countries, but whose services sectors have grown exponentially. barbados, bahamas, bermuda and cayman are well - known examples. support services are very critical to the development of the services sector in the caribbean. business services, telecommunications, information technology and computer based services influence the ability of many service economies to deliver cross border services and are critical to the building of a vibrant international services sector. we are happy to say that the caribbean is beginning to benefit from the liberalization of the telecommunications sector and the results are already obvious in terms of lower operational costs of business. we have also observed that in the current global environment, there is a clear shift away from physical product - based wealth accumulation to knowledge - based wealth accumulation. professionals with the flexibility to adapt to the changing environment can provide the catalyst needed to propel the caribbean to higher sustainable growth paths. at the same time, growth of our services sector has the potential for greater employment because of the labour - intensive nature of service activities and offers the possibility for small - scale operations to expand rapidly by drawing on the potential linkages with the other sectors of the economy and with the rest of the world. electronic commerce is also providing opportunities for caribbean companies, since it does not recognize size as a constraint. it allows service providers in the region to offer services in foreign jurisdictions with greater ease, though admittedly, it also permits foreign professionals to offer services in the region as well. this means that local providers have to step up their game, since technology has already outpaced the ability to protect domestic service providers and is forcing the internationalization of service markets. in fact, services are becoming the most traded item on the internet. this mode of service delivery while giving developing countries like the caribbean an advantage, will not be a give away since it does not take the competition away. because of the traditional perception that developed countries do it better, the quality of services provided by the caribbean will need to be superior to that provided by develop country operators. this will require a massive investment in education and training by our universities, colleges and corporations, since many professional services allow for provision without a presence there are possibilities for expansion in overseas markets at low costs. no