4  BIS central bankers’ speeches  For global systemically important banks, the higher capital levels approved by the G20 and crisis management measures will strengthen their ability to absorb losses and will limit how far banks are interconnected and the risk of contagion among intermediaries and between finance and the real economy.
Second, improvements in labor quality, or the capabilities of the workforce, contribute as well— through education, training, and experience. Finally, innovations yield more or better output from the same inputs—the same capital and labor—such as the introduction of the assembly line and computer-aided product design. I will consider the role that policy may play through each of these channels.