One striking example is the pharmaceutical industry, where very innovative, but also potentially dangerous, products are put on the market with (almost) no accident. The reason, of course, is that those products themselves are subject to strict, and costly, testing and approbation procedures. This cannot be transposed to the financial industry, where innovation takes place under a different regime (with no protection for intellectual property). Nevertheless, some product control or standardization may contribute to reducing extreme risk. For instance, those countries where loan to value ratios were strictly enforced tend to experience less credit accidents than others. Those trade-offs may not be stable in time. For that reason, it is important that regulation and supervision become more responsive to changes in circumstances and the macro economic environment. This is the essence of the so called "macro prudential" approach to financial supervision. Implementing such an approach may prove very challenging. Early detection of incipient disequilibrium inside the financial system is conceptually difficult: no crisis looks like the previous one and the search for "early warning" indicators has not yielded fully convincing results. There is also an institutional challenge in bringing together different authorities with different mandates and approaches to financial stability. In the words of C. Borio "there is still considerable reluctance to calibrate prudential instruments more systematically from a macro prudential perspective".
If there are such gains to be made from a common currency in a reunified Europe, would it not be possible that such gains may also be attained on a global level? Should we continue on a path towards more global monetary cooperation? There are many arguments both for and against such an arrangement. In recent years we have seen substantial exchange rate fluctuations between some of the world’s large economic blocs. These have largely been related to developments in the US dollar. The dollar’s weakening against the euro has recently gained impetus once again; in two years, the euro/dollar exchange rate has gone from a low of 84 cents to 1.18 dollars in recent weeks - a rise of just over 40 per cent. Discussions of the implications of an overvalued dollar for the US current account deficit have quickly turned into concern over the effects of the rapid fall in the dollar on euro area growth. Should there be a quicker correction in the US current account deficit due to diminishing interest among international investors in US assets, the dollar could weaken further. A fast and dramatic depreciation of the dollar could derail Europe’s fragile recovery.