diversify products and markets. 7. my own personal experience at the bank the uncertainty and instability prevailing in the global economic and financial environment have kept me on my toes. it was a path full of challenges that confronted me, a path strewn with obstacles where i sometimes stumbled and where i found myself, like many fellow - governors elsewhere, regularly attacked, sometimes ridiculed, and even scorned. but i always emerged, often bruised, but more determined than ever, motivated by the unchanging desire to rise to the constantly - changing challenge, raise the profile of the bank, and transform it into a modern and innovative institution that fulfils its mission confidently and efficiently for the sustainable development of the mauritian economy. we had our share of achievements, small victories and successes obtained with great satisfaction. 8. the decisions and actions that i took at the bank over the last five years have been directed towards maintaining financial and macroeconomic stability – this, as the global financial crisis revealed, is the most important function of a central bank. this overriding consideration has guided all my decisions and actions. however, given the highly uncertain and unstable global environment, flexibility and promptness in action turned out to be key elements in our decision - making. i saw the need to bring some key reforms to the organisational structure of the bank. for operational efficiency, the bank was restructured into a more flexible institution. new divisions were created to monitor areas that i had foreseen would be critical in the years to come, among which the financial stability unit to monitor and assess the risks to financial stability and associated macro - prudential policy. our strategies have borne fruit and the bank ’ s contribution to financial and macroeconomic stability has been recognised locally and internationally. 9. let me sketch the broad outlines of the bank ’ s policies and actions during the past five years, which flow from this overriding consideration. 10. monetary policy at the very start of my tenure as governor, i set out to remedy what was, to my mind, a major flaw in our approach to monetary policy decision - making. although it had been three years since the new bank of mauritius act had been enacted, with explicit provision for the creation of a monetary policy committee ( mpc ), the interest - rate decision process had remained unchanged. one of my first moves as governor was to establish this committee, which was officially launched in april 2007. soon after the first meeting, i proposed that amendments be brought to

aware that spill - over effects and contagion increase with financial integration. so, it will probably be a major challenge in the coming years to accurately gauge this dimension, as borne out by the growing importance of cross - border financial institutions. in recent weeks, when the financial turbulence was at its fiercest, it became clear that a revamp of prudential supervision in europe will be an essential element of the reforms necessary to avoid a repetition of such a dramatic turmoil. finally, by encouraging more efficient allocation of resources, financial integration acts as a prerequisite for realising europe's full economic potential, that is raising the potential for stronger non - inflationary economic growth, as highlighted in the lisbon strategy. for all these reasons, the eurosystem has always been a strong supporter of the european financial integration process and we have monitored developments in the different segments very closely. the tenth anniversary of the ecb, a few months ago, gave us the opportunity to take stock of the achievements in european financial integration over the last decade. we were proud to conclude that significant progress has been made and that the single currency has acted as a major driving force. the progress that has been achieved nevertheless differs across market segments. the money market, in particular the interbank market for unsecured deposits, can be considered as a single area - wide market – also its current difficulties ignore national borders! but the segment for short - term debt securities ( commercial paper and certificates of deposit ) is still fragmented. i would like to remind you that, in order to try and close this gap, the eurosystem is supporting the private step initiative which aims to develop a pan - european short - term paper market. a considerable degree of integration has also been achieved in corporate bond and equity markets. by contrast, while the euro - area banking markets for wholesale and capital - marketrelated activities also show clear signs of integration, retail banking markets have so far remained fragmented. undoubtedly, the euro - area government bond market is the segment – apart from the unsecured money market – that has reached the highest degree of integration. the removal of exchange rate risks, the drop in transaction costs and the disappearance of currency restrictions for investors and intermediaries have pushed up cross - border bond holdings. let me mention the case of my own country. at the end of june this year, the proportion of belgian linear bonds held by foreigners reached 55 p. c. in the case of treasury certificates, foreign holdership came