sound and liquid financial assets is largely disconnected from their level of economic growth : rising revenues in the emerging world need to “ find a home ” in sound and liquid financial markets. finally, in any case, the question of sustainability – the resilience of capital flows to the accumulation of imbalances – remains a pressing one. while capital flows tend to move freely across borders, exchange rate regimes remain very diverse in their degrees of flexibility. this leads to asymmetric adjustments depending on the exchange rate regime, not only between currency areas, but also inside the same region, such as in asia. overall, some of the main floating currencies may end up bearing a higher share of the adjustment on their shoulders than they should. maintaining integrated global capital markets in an environment where such differences persist might not be sustainable over the long term. an orderly unwinding of global imbalances might therefore imply greater flexibility from countries with large current account surpluses and fixed exchange rates. i will conclude on a matter of debate for international financial stability for the future. as i have said, financial systems have become more efficient as a result of globalisation and innovation. but have they become more resilient, that is, more capable of absorbing shocks? none of us has the answer to that question now, but it will be interesting for central banks and regulators to monitor financial developments in the coming months, in search of clues. ladies and gentlemen, thank you for your attention.

them as wished, to fit a specific investor ’ s risk profile. the emergence of derivatives, combined with the appropriate mathematical tools to price them, has greatly expanded the range of tradable risks, opening up new and vast horizons for hedging strategies. financial institutions are able to actively manage their exposures and reallocate certain risks to those players that are most able to bear them. overall, investors are more willing to invest across borders, knowing that they can reach an improved riskreturn trade - off. simultaneously, economies are becoming more open financially, especially in the emerging world. the growth of international capital flows is the consequence both of domestic policies and global factors. domestically, financial liberalisation and deregulation have relaxed investment restrictions. more flexible exchange rate policies, liberalisation of capital accounts, the opening of domestic stock markets to foreign investors as well as “ investor - friendly ” policies help to attract foreign investors. global factors have also played a role, with the abundant global liquidity environment as well as the decrease in home bias. by way of example, non - residents currently hold 46 % of french market capitalisation and slightly more than 50 % of french government bonds. a third driver is the emergence of global financial players, such as large banks, hedge funds, private equity funds and more recently sovereign wealth funds. they all share common characteristics : - they play an important role in fostering market efficiency, and provide liquidity to capital markets ; - they use sophisticated investment strategies ; - they implement advanced risk management practices, and help to spread them across markets and countries. however, because of their sheer size and potential impact on market equilibria, they raise some concerns of transparency as well as questions about their role in fostering, or not, financial stability. those issues warrant being debated. what are the consequences of the financial globalisation currently underway for global capital markets? they are well known, so i will just highlight two of them. first, globalisation increases the efficiency of financial markets. thanks to financial globalisation and technological progress, informational efficiency of capital markets has increased over the past few decades. any new available information is accurately processed and impounded in asset prices, leading to more accurate pricing of assets and risks. and the permanent quest for arbitrage opportunities has fostered crossmarket and cross - border strategies also leading to more consistent pricing. allocative efficiency, that is the market ’ s ability to allocate resources in a way that maxim