the sole issue. it is equally important for the euro area to facilitate and encourage the spread of new technology from the frontier to the laggard firms. simply by diffusing better the technology we already have in the euro area, we could make sizeable gains in productivity. in other words, there is much we can still do to reverse the aggregate productivity slowdown and dispel pessimism about our future. 1 gordon, r. ( 2016 ), the rise and fall of american growth : the us standard of living since the civil war, princeton university press. 2 see fernald, j. ( 2014 ), ` productivity and potential output before, during, and after the great recession ', federal reserve bank of san francisco working paper series ( 2014 – 15 ) and cette, g., fernald, j. g., and b. mojon, 2016. “ the pre - great recession slowdown in productivity. ” federal reserve bank of san francisco working paper 2016 – 08. 3 see, e. g. brynjolfsson, e. and a. mcafee ( 2014 ), the second machine age : work, progress, and prosperity in a time of brilliant technologies, w. w. norton & company. 4 see veugelers, r. ( 2016 ), “ the european union ’ s growing innovation divide ”, bruegel policy contribution, issue 2016 / 08, april 2016 and mazzucato, m. ( 2013 ), the entrepreneurial state : debunking public vs. private sector myths, anthem. 5 bloom, n., sadun, r. and van reenen, j. ( 2012 ), “ americans do it better : us multinationals and the productivity miracle ”, american economic review, 102 ( 1 ) : 167 – 201 and van welsum, d., overmeer, w. and van ark, b. ( 2013 ), “ unlocking the ict growth potential in europe : enabling people and businesses ”, report prepared for the european commission. 6 for example, syverson, c. ( 2004 ) : “ product substitutability and productivity dispersion. ” review of economics and statistics, 86 ( 2 ) : 534 – 50 shows that within four - digit industries in the us the top 10 % of firms are, on average, two times as productive as the bottom 10 %. 7 see, for example, acemo

particularly important that a session of this forum is devoted to the subject of merger and acquisition activity in the insurance industry. my third issue is closely related to the second. one reason why shareholders have been slow to grasp the need for industry consolidation has been the expectation that the returns on capital that they were able to achieve during the boom years will swiftly return. during the boom years all sections of the financial industry were able to achieve returns on equity that were quite exceptional. however, we need to recognise that the global financial crisis was not just a temporary interruption, and that we will soon return to the period of strong profits and quick and easy returns. as we gain more perspective on the global financial crisis it is becoming increasingly clear that the boom years immediately before the crisis were the exception rather than the rule. shareholders and investors in all financial firms, including in the insurance industry, will need to adjust to a world in which the returns on their investments will be lower than they came to expect in the boom times. in the insurance industry, with its many competing firms, this adjustment is particularly important. we are currently living through a period of adjustment. once shareholders and investors recognise that they will need to accept lower returns on their investments than during the boom years, the process of industry consolidation is likely to begin. improved returns on investment will require greater efficiency, better standards of customer service, and new product innovation, all of which are more likely to be delivered by larger more diversified insurance firms. let me conclude by returning to the title of this keynote address. successfully supporting the next phase of development for the regional insurance markets is a process that must be led by the industry itself, particularly by its shareholders and managers. the next phase of the development of the insurance markets is likely to require the consolidation of firms, the development of new product offerings, the expansion of insurance firms in the region, and high standards of customer service that only the private sector can deliver. while we as the regulator can work to ensure a sound and stable insurance market and the protection of policy - holders, ultimately it is for you in the industry to take advantage of the growth opportunities that the middle east and north africa region can offer. as the regulator, the cbb will continue to provide a strong framework of rules based on international best practice and will apply them in a transparent and fair way. we will continue to consult with the industry and to ensure that we are responsive to your needs. ultimately, however, the future of the industry is in the