higher unemployment in canada than would otherwise be necessary, and at other times it would lead to periods of labour shortages. one important feature of the u. s. labour market and, in my opinion, perhaps the most important source of the u. s. economy ’ s success, is that workers do, in fact, migrate easily - not just from job to job, but also from place to place within the united states. we would need to share in that flexibility. but clearly, canada and the united states are a long way from integrating their labour markets, and further integration of markets for goods and services is proving difficult. if these markets - for labour, capital, and goods and services - became much more highly integrated, then the benefits from having a separate currency could decline enough to make considering the adoption of the u. s. dollar worthwhile. here, the european experience is relevant for us. some observers look at the successful launch of the euro and suggest that this shows that canada could easily adopt the u. s. dollar. but the euro marked the end of a long process of political and economic integration, not the beginning. the countries in the euro zone undertook a massive effort to integrate their markets for goods and services, capital, and labour, and to harmonize their fiscal and regulatory policies. only after all of this was in place did they move to launch the common currency. it would not have made economic sense to go through the process in reverse. it would not make sense in north america either. we would first need to more closely integrate trade in goods and services, and, particularly, our markets for labour. only then would it make sense to deal with the currency issue. concluding comments as i said at the beginning, this is an important topic for discussion and research. at the bank of canada, we have been contributing to this debate for some time by laying out the economic facts and by promoting the research needed to determine the facts and carry out our analysis. we will continue to do this. but right now, our analysis tells us that canada derives a significant benefit from having a floating currency - a benefit that far outweighs the costs. this system helps the economy to adjust to economic shocks, and allows us to have a monetary policy accountable to all canadians. the floating exchange rate system serves the interests of all canadians very well.

. 45. even as branch authorization has been substantially liberalized, several challenges remain. the biggest challenge, as always in india, is in the numbers. in 1969 when banks were nationalized, there were 8321 branches with an average population per branch office ( appbo ) of about 64000. that has improved to 97180 branches with an appbo of about 13000 by march 2012. but in a country with over 600, 000 villages, these numbers, while both impressive and commendable, serve to highlight what remains to be done. in the first index of financial inclusion prepared by the indian council for research on international economic relations ( icrier ) to determine the extent of reach of banking services in 100 countries of the world, india has been placed at the 50th spot, below china, kenya and morocco. 46. the second big challenge lies in moving beyond numbers and looking at how we actually make a difference. there is a disappointingly large number of cases of bank branches with low customer footfalls ; bcs who drift off after a few months and “ no frills accounts ” which remain largely inoperative. this is where issues of perception come in. unless banks are convinced that reaching out to the common man is not just a forced regulatory imperative but a potential business opportunity, the numbers will remain without life. the reserve bank looks forward to competition among banks to develop business models for such small, low staff and low cost branches. conclusion 47. i have so far covered five specific areas : ( i ) microfinance ; ( ii ) priority sector lending ; ( iii ) lending interest rate system ; ( iv ) savings deposit interest rate ; and ( v ) liberalization of the branch authorization policy, to illustrate how the reserve bank ’ s regulatory and supervisory policies are guided by the belief that financial inclusion is a necessary prerequisite for inclusive growth. 48. what financial inclusion requires most of all is efficient and sympathetic customer service by banks. no amount of regulation, rules, policies and plans will deliver sustainable results unless banks serve their customers with efficiency, empathy and courtesy. 49. many of you are aware of the reserve bank ’ s outreach programme which is an effort to connect with people in the villages. i know that many commercial banks, including iob, have their own versions of the outreach programmes. these programmes give us all a bis central bankers ’ speeches first hand exposure to the needs and aspirations of less privileged people and also an understanding of their problems and concerns.