Ensuring a growth-supporting financial sector While the financial sector needs to be regulated to prevent it from causing instability and hampering the transmission of our monetary policy, it can also support growth. Since the late 1990s, we have seen a marked slowdown in the growth of labour productivity and a corresponding reduction in estimates of potential growth amounting to approximately one percentage point.
Some evidence attributes the slowdown to greater dispersion of productivity between frontier and laggard firms, capital misallocation and lower business dynamism. 3/4  BIS central bankers' speeches  Similarly, in addition to a healthy banking sector, well-functioning, diversified and deeply integrated EU capital markets can contribute to boost growth.