Second, since foreign banks are active in more than one market they usually hold a more geographically diversified credit portfolio. Therefore they are less likely to be affected by stress in the local market. Third, as affiliates of foreign-owned banks generally have better access to international funding they contribute to less volatile lending over the local business cycle. For this reason they can serve as a countervailing force to the local business cycle. Finally, as I have already touched upon, foreign bank entry can have a positive impact on the host country authorities, which in turn may induce stricter regulation and improved financial supervision. For all these reasons foreign banks have the potential to contribute to the overall soundness of local banking systems. Having said this, I am of course aware that there are also problems associated with cross-border banking. First of all, as has become evident during this crisis, the increasing globalisation of financial markets can create strong contagion effects across markets. Problems in one country tend to spill over to other countries very fast, generating a snowball effect where problems grow along with the costs of handling them. Furthermore, it has become clear that it can be extremely difficult and costly to deal with distressed banks in a cross-border setting. The reason for this is that there are many stakeholders involved and that the resolution of failing institutions is even more poorly defined at the international level than at the national level.
We are likely to meet the numerical values of the Maastricht criteria by the end of 2009 and Estonia expects to join the euro area in 2011, in full accordance with the Treaty provisions. It is clear that in order to adopt the euro, the key issue of Estonia's fiscal policy is ensuring sustainable public finances in the next years. Looking at longer-term growth potential, it would be advisable not to achieve this by excessive increases in the tax burden. BIS Review 90/2009  1  Finally, the way out from the current crisis depends critically on further strengthening of the EU Single Market for goods, services and production factors (including capital, labour and know-how). To conclude I would like to assure that Eesti Pank is always open for your inquires and cooperation. Thank you for your attention! 2  BIS Review 90/2009