Likewise, the reforms of the regulation and supervision of the financial industry has taken us in the right direction, and much has been accomplished to make our banks safer. But still much needs to be done to feel the right degree of comfort. Some final words I would direct towards the threat of protectionism. An enormous risk for the global economy is the temptation to shed the commitment to multilateralism and embark on protectionism. Beggar thy neighbor policies are quite perilous, as history amply shows. It is true that trade needs to be both free and fair, that commitments made within the framework of the World Trade Organization and other fora need to be observed. Unless we defend open markets, we invite big commercial conflicts and a proliferation of lose-lose situations. Allow me to conclude my short address by pointing out that as a Romanian official I am confident that important steps have been already taken to ensure a more close cooperation in order to solve the afore mentioned issues. As you know, Romania holds at the moment the Presidency of the Council of European Union and good work has already been done by our team in Bucharest and Brussels. They held 15 working parties in the Council, negotiated in 18 trilogues with the European Parliament, attended over 30 technical meetings, among bilateral meetings, informal consultations with the Parliament and the Commission. They have concluded the work and agreed on two files (Risk Reduction measures – the Banking package and Pan-European Pension Product).
This is also due to the operations of major central banks, to their unconventional policies; policy reversals can cause major pains, especially where there is much external indebtedness, public and/or private. As Hélène Rey says, the trilemma (free capital flows, exchange rate stability and autonomous monetary policy) may have turned into a dilemma; and that the power of monetary policy rests with the ability to control capital flows – which is a huge tall order. The resort increasingly to macro-prudential tools shows that, de facto, some kind of capital controls revival is under way, for the sake of both monetary policy effectiveness and financial stability reasons. I would argue that exchange rate flexibility has been quite helpful for undertaking macroeconomic adjustment, in Romania, too. Under-development creates additional challenges for monetary policy since catching up is accompanied by higher inflation (the Balassa Samuelson effect). This may not be a problem right now in view of the overall context, but it will likely turn out to bother us in the not too distant future. Migration of human capital (which is a very intense in some of our countries, including Romania) 2/3  BIS central bankers' speeches  also puts a lot of pressure on wages and fuels inflation. Let me turn now to a few regulatory issues. It is widely accepted among professionals, among us, central bankers, that the European banking sector has cleaned up much of its balancesheets, that it is better capitalized.