Trade fragmentation could see the flow of goods and services increasingly being pulled towards different trade blocs, at the expense of countries outside those blocs. By leveraging our regional strength, Europe and the CESEE region can recreate some of the benefits of globalisation on a smaller scale. The euro area is already the main trading partner for most CESEE economies.
Of course, while active overseas financial institutions could play a complementary role in reinforcing the intermediary function, they might not be able to  4  BIS Review 14/2008  participate aggressively in areas such as SME financing where the extent of disclosure is relatively limited. Second, securing Japan's financial stability over a longer period also is an issue.