and wealth distribution in the labor market, and more substantial redistributive measures. v otherwise, we risk losing public support for policies which contribute to our prosperity. we should not forget that international cooperation and exchange remain the key to prosperity in an interconnected world economy. finally, i would like to come back to the role of technology. let me touch on a few implications for the banking sector. whatever impact digitalization will have on the future shape of the financial sector, it is reasonable to expect a reduction of the current labor force in the banking sector. to some degree, such downsizing is already an ongoing process in the post - crisis landscape. in austria, we see employment in the banking sector decline. and we must be prepared to see a continuation of this trend in the years to come. the other important change that is likely to occur is the rising importance of market - based forms of finance, also in countries like austria, i. e. countries which are traditionally characterized by a dominance of bank - based finance. the capital markets union pursued by the european union will foster activity and cross - border integration in this domain, promoting the development of new forms to finance economic activity. but the extent of economic activity to be undertaken and its financing needs will be shaped less by technology than by the macroeconomic parameters and policies i have already referred to above. having said that, framing technological evolution in a way that best adapts to macroeconomic circumstances and contributes to their favorable development is certainly an important endeavor in an era of rapid change. i hope our conference will help foster our understanding of emerging trends and their possible impact – with all due modesty, given our experience in attempting to forecast the future. i wish all of us two days of lively and productive discussion, and i hope we will succeed in strengthening confidence in the future ahead of us. i david a. graham ( 2014 ) : rumsfeld's knowns and unknowns : the intellectual history of a quip, https : / / www. theatlantic. com / politics / archive / 2014 / 03 / rumsfelds - knowns - and - unknowns - the - intellectual - historyof - a - quip / 359719 / ii scherbov et al. ( 2008 ) : probabilistic population projections for the 27 eu member states based on eurostat assumptions, http : / / www. oeaw. ac. at / fileadmin / subsit

of smaller, export - oriented countries, while some peripheral countries are lagging behind, both in terms of gdp growth rates and of unemployment rates. although this divergence is of course worrisome, we should not immobilize ourselves by focusing on the problematic cases alone. if we do, we might forget that on average the performance of the eu economy was good – both during and after the crisis. the flexible way in which many countries reacted to the unexpected events was certainly facilitated by the past progress of european integration, which was accompanied by structural progress and an intensification bis central bankers ’ speeches of trade. the remaining divergence in economic development, however, is in my view a clear mandate to further reduce the institutional heterogeneity of economic governance. in order to shape the new institutional landscape in the best possible way, it is useful to look back for a moment and analyze the trends and conditions that made a crisis of this size possible. a correct account of the crisis period is not only important for economic historians. it is even more important for today ’ s policymakers as it enables them to identify the main weaknesses and to tackle them in an adequate way. in many respects the chronology of the recent contraction has followed the prototypical sequence of events characteristic for severe financial crises. the main preconditions were a number of slowly emerging disequilibriums on the real side of the economy, accompanied by suboptimal behavior and regulation in the financial sector. these real factors include, for example, the global imbalances that led to the “ paradox ” financial flows from emerging to advanced economies. this caused a relative abundance of available funds in the advanced economies, which was further amplified by a rapidly growing financial industry and a period of rather low global interest rates. these elements, among others, contributed to an increase in household indebtedness and to low private savings rates. the financial sector, on the other hand, was eager to satisfy the demand for apparently safe assets by designing and selling exotic products. at the same time, one could observe a deterioration of lending standards, excessive leverage ratios and the extension of management contracts that favored shortterm behavior and excessive risk - taking. in the financial crisis, all of these factors worked together to cause a massive fall in asset prices, a wave of fire sales and an almost complete breakdown of the interbank market. these turmoils in the financial market then led to a loss of confidence in the real sector and