I don’t think Romania would have looked the way it does today had we remained outside the European project. I have already mentioned how important it was to have an anchor for domestic policies in a country where drifting from the set course tends to be the rule rather than the exception. If we add the contribution of EU membership to securing a more solid business environment, which allowed us to reap more fully the benefits of our competitive advantages, I guess it is pretty clear why I believe it was an inspired choice. Foreign investors started to look more confidently at the local economy, which became the destination of increased capital inflows – the flood I mentioned previously. Granted, part of them were volatile in nature or directed towards the non-tradable 2/4  BIS central bankers' speeches  sector. Still, some of these inflows were aimed to create or enhance production capacities or to set up businesses in tradable services, which were essential to securing welfare through job creation and increased income, the type of welfare that is more resilient when faced with worldwide volatility such as that seen during the crisis. These positive developments continued to produce effects in the aftermath of the crisis as well, when Romania experienced an export-driven recovery, to which sectors on the receiving end of FDI inflows made a significant contribution, and which enabled progress in terms of income per capita.
Therefore, we need to recognize the unknown element, that is, we don’t know their full impact on the financial market and global economy. The latest review of the Financial Stability Board of potential unintended consequences of regulatory reforms pointed to these concerns. Emerging markets have raised some concerns about the Basel III capital and liquidity frameworks. These may have negative impact on domestic financial markets, increase banks’ cost, and thus reduce credit and financial market liquidity. In particular, the liquidity standard, which is not yet finalized, the calculation in the framework may not accurately reflect emerging market’s financial market, and the implementation could distort local financial market. There have also been concerns about the treatment of traditionally low-risk trade finance in leverage ratio which may impact growth and development. Emerging Asia is predominantly bank-based; thus, Basel III will affect its financial intermediation relatively more than in the West, just at the time when financial intermediation is critical to support economic development and integration. Some of these standards are still under discussion, and thus Asia-Pacific region already has a proactive regional strategy to help steer these regulatory reforms, such as through EMEAP forum, to reflect our economic and financial market context. With regard to the OTC derivatives reform which aims to move OTC derivatives trading on to exchanges and cleared through central counterparties. There are concerns regarding inconsistency of regulation between countries, infrastructure that is needed, and cost for users.