Despite all the European convergence and integration, financial systems in different EU member states still look and work very differently. Trying to administer them from a single centre according to a single set of rules might be like trying, say, to feed all the animals in a zoo with a single type of food. As an illustration: the recent ECFIN Retail Banking Survey says:   in Austria almost 100% of house purchasing loans feature variable interest rates, while in France the share is only about 10%.   countries differ substantially in the share of owner-occupied housing and therefore in the importance of the mortgage market;    they differ in how intensively they use electronic means of payment;    in the significance of building societies and credit unions;    in tax and other incentives that the government provides for certain types of financial transactions;    in the extent to which local banks trade in various non-plain vanilla products such as derivatives;    in the share of subsidiaries and branches of foreign financial institutions and, more generally, in ownership structure    in the loan-to-deposit ratio, which varies from roughly 70% in some countries to more than 200% in others;    in the degree of local market concentration;  etc. There are many more examples, some of them influenced by long-term developments, some by entrenched behavioural differences and habits.
There are several structural challenges facing the global economy. I want to elaborate on two key driving forces that will shape the medium-term outlook in both the advanced and emerging economies: deleveraging and monetary expansion. Deleveraging 8. Let me begin with deleveraging. From around 1990, debt levels began to rise rapidly in most advanced economies. Governments ran persistent fiscal deficits that were financed by borrowing. Total government debt in the OECD economies grew relentlessly, from 58% of GDP in 1990 to 98% in 2010. Households went on a consumption binge, financed by easy borrowings on the back of rising property prices and housing equity. Household debt in the developed economies also climbed, from 62% in 2000, to 76% in 2010. Deleveraging is the process by which this excessive debt is brought down to more sustainable levels. This will be long-drawn, only because the build-up of leverage took place over such a long period of time. Synchronised deleveraging in the US and EU 9. The deleveraging process that is unfolding across the advanced economies is taking place across three fronts:   Governments in the US and EU    Households in the US    Banks in the Eurozone  10. First, deleveraging by governments. The public finances of the US, UK, and the Eurozone, have substantially deteriorated, due to pre-crisis fiscal profligacy and post-crisis discretionary stimulus. These countries have now embarked on fiscal adjustment programmes to varying degrees, primarily through austerity measures.