*  *  *  Introduction I would like to thank the Banque Centrale du Luxembourg for the invitation to speak here today. It gives me great pleasure to congratulate the Banque Centrale du Luxembourg on its tenth anniversary. It is a great honour for me to contribute to the Pierre Werner Lecture and to address such a distinguished audience on this occasion.
Depending on one’s perspective, this is either the worst or the best time to address the question of productivity in the financial sector and its implications for monetary policy. I lean towards the latter. The current financial crisis is now wreaking havoc and the economic outlook is extraordinarily difficult to assess.