The reason why I have chosen a European focus is simply that there are already institutional arrangements in place which can be used as a platform for bringing us closer to the goal of supra-national supervisory frameworks. In my view though, the underlying challenges of financial integration are of a global nature. Therefore, even if it may not be possible to achieve the same solutions outside Europe, it should be of wider international interest to at least move in the direction of enhanced cooperation between supervisory authorities. I hope that I have been saying here today can serve as inspiration for further discussions on this issue. Considering that financial integration is already widespread and that the process of revising present regulatory structures will most certainly be demanding and protracted, we need to get to work. Returning to what I said in the beginning, history shows us the importance of having proper regulatory structures in place. Therefore, it would be highly unfortunate if the appropriate measures have not been taken before the next major financial crisis occurs. For once, it would be encouraging to see pre-emptive policy actions rather than a crisis being the catalyst for such actions. Thus, in the same way as the international community is facing increasing challenges to cope with the negative externalities in the environmental area, the financial regulators have to face the consequences of financial integration.
We’ve done this by passing the rise in both export and import prices through the UK’s input:output tables and used the same definition of tradables and non-tradables as before. 11  All speeches are available online at www.bankofengland.co.uk/speeches  11  higher output in the tradable sector. There is less room to raise output but more of an incentive to add to that capacity.   Third, and despite these incentives, growth of overall business investment in the UK was relatively weak last year. Early official estimates say it shrank slightly in the year to Q4, by around 1%. (This compares with positive growth of 2% or so in the Euro area.) And although those estimates are particularly prone to revision, the various survey indicators also subsided in 2016 (Chart 12). This last point is the critical one. The world economy is looking better than it has done for some time. Against this backdrop, and given the existing capacity constraints, the fall in sterling provides a powerful incentive to invest in the UK’s tradable sector. All else equal, it would make sense for existing exporters to expand; for domestic-facing firms to think about entering new markets; and for multinationals to shift production to the UK. Yet some caution would also be understandable. All else is not equal. While much is at stake, no-one can be sure about the eventual outcome of the Brexit negotiations.