 We would argue it was a phase, but not necessarily the course of the crisis. So if you look at how events unfolded, obviously cross-border banks were right at the forefront. You had the large exposure of European banks to the US real estate markets, which then obviously immediately affected their balance sheets. You had the indirect interlinkages of holdings of claims between different banks across countries, and you had the exposure to the same asset markets which enabled the contagion to go ahead very, very quickly. And of course, just to give one example, one of the first places in Europe for the crisis to show up was the balance sheet of a couple of smaller banks in Germany in the summer of 2007. Now on the other hand, we would argue that cross-border banking was just part of a much larger development process in the financial sector in the early parts of the 2000s. There was a general trend towards consolidation both on the national level within countries, but also across countries fostered by the introduction of the euro, fostered by regulatory integration within the European economic area. And of course also driven by the attempt of banks, not necessarily to re-scale economies, but just to gain a too big to fail status, so to kind of gain additional regulatory benefits by having such a large status that they wouldn't be allowed to be failed by the regulators. We normally always tend to look at individual banks or at country level. We looked for the first time in the book at the aggregate EU banking system level, and then according to the weight of the financial system over the globe, you should have about 33% exposure to the US. It appears that European banks have collectively 47% to the US, so more than 14% more than according to the portfolio weight. And it's exactly why the European banks had such large losses to the US. The subprime crisis which started in the US and the Asian bank had far less losses from the US subprime crisis. We work on the premises that a single European banking market is something to be achieved, something to be desired. But for that policies have to be adjusted both on the regulatory level but also on the macroeconomic level. So just to take one example, the fiscal criteria that were in place before the crisis, 3% deficit limit, 60% debt limit, are just too crude to be really useful because some of the countries that actually went into a crisis, Ireland or Portugal, actually fulfilled these criteria whereas other countries such as Germany or France actually several times reached these criteria. So these tools, the fiscal policy tools have to be refined much more and also require much more coordination on the European level. Now second, monetary policy has to be complimented by macro-potential policy. The European central bank sets interest rates for the whole Euro area but it might not be the ideal level for all countries. What is good for Germany might not be good for Spain. Now obviously given that we have one single financial market, the European central bank cannot set different interest rates for different countries so the additional tool of having macro-potential regulation to fight for example against asset bubbles in certain countries, to fight against credit booms in certain countries is an additional important policy tool. Mostly it has to be applied on the national level but it definitely has to be monitored on the European level to make sure that there's a consistent framework throughout the Euro area and throughout the European Union. Now this brings me to the third point and that is on sovereign debt. We all know by now that sovereign debt is not risk-free as even though the Basel framework still claims so for OECD countries but that there are different risk weights to be attached to debt from different countries and that should be also reflected of course in the accounting rules. A second step from this would be to have a bankruptcy regime in place for sovereigns and the place to start is basically the European Union which would both improve ex ante and exposed efficiency of this model because it would force investors to properly price the risk they take when buying riskier sovereign debt and it would be also exposed in efficiency improvement because it would make the resolution of a situation such as increased right now much easier because the framework would be in place. It's very difficult to have cross-border banks and you want to have European or global financial stability and still trying at the national level to influence the banks and this Trelemme is saying you have to make a choice of two objectives not three and then of course we want to have European financial stability so either we keep cross-border banks with the single market or we keep national sovereignty but basically we would go to national banks and our reports makes a very clear choice for keeping cross-border banks working throughout Europe but it means that we have to do supervision resolution deposit insurance at the European level to keep a stable banking system. I would say overall the benefits outweigh the costs. The benefits in general are diversification of risks from the bank's view not being exposed to just one economy but being exposed to different economies especially if their business cycles are not completely synchronized. From the user viewpoint even more important having access within the financial system not just to domestic banks but also foreign banks diversifies the risk that if one bank a domestic bank let's say or foreign bank from country A falls out there are still other options for funding for example in the form of foreign bank from country B. Now on the cost side of course is the contagion effect and that we've seen during the recent crisis the crisis spreads throughout the world in a very high speed because of the interlinkages of the financial system the crisis would have spread anyway but in a much lower speed if it had been through the trade links for example not through the financial links only so on the cost side there is the contagion effect and the cost side there is also the the risk of being exposed too much to only one other economy to one home economy from your from your foreign banks so if you basically put all your eggs in one basket that can also hurt you. Now overall we would say that having a balanced and not excessive exposure to cross-border banking definitely helps economies. The monetary policy framework and in particular inflation targeting has been focusing so much on retail inflation retail price index so that the financial indicators are outside the monitoring of the monetary policy people but in the end financial crisis is about building up leverage credit in the system and the ultimate price of leverage of credit is the interest rate so in the end the interest rate is extremely important in building up of financial imbalances so what we argue in the report is that the monetary policy at least should have a look at financial stability take it into account in addition we may need extra instruments like a loan-to-value ratio to constrain a housing boom or higher haircuts on the stock market if equity price are rising too fast but monetary policy cannot turn a blind eye to financial stability and basically we need a new type of central bankers not only macro trained but also having knowledge about the financial system and we call it always macro finance to combine the two elements