However, we would certainly be in an even better position now if we had built up a stronger presence in emerging economies. Contrary to what some people believe, I am fully convinced that globalisation is not the cause of weak growth and unemployment in Switzerland; indeed the opposite is true. Foreign trade is the engine driving our economy. It has expanded in recent years in step with the global economy. By contrast, our domestic market has been much less dynamic and has registered only limited gains in productivity. In comparing Switzerland to Singapore the many similarities are evident. As small countries, both of us have simply no choice but to trade with the rest of the world, if we want to prosper. In many respects, we also face the same challenges: We have to adjust to a rapidly changing world, we have to remain competitive with our high technology products as well as our world-class services, and we have to focus on niche policies. In other words, we have no choice but to opt for excellence. 4  BIS Review 85/2006
However, independent of specific events, the question arises whether regulatory and oversight control has kept up with this development everywhere. It is indeed rather problematic that custody activities lie in a grey area between banking supervision and system oversight. In some countries where the tasks deriving from banking supervision and system oversight are performed by separate authorities the regulatory and oversight  4  BIS Review 28/2003  framework is very likely to be incomplete or at least sub-optimal unless the two authorities succeed in establishing a strong and effective co-operation. This aspect seems all the more important as large custodians tend to become direct competitors to traditional market utilities like CSDs and ICSDs. This said, I must admit that regulatory and oversight authorities should address this issue with the aim of allowing an acceptable level playing field among large custodians and providers of market utilities. The aim here is not the protection of incumbents against efficient predators - or of Little Red Riding Hood against the big bad wolf - but rather to restrict the use made by large individual suppliers of their powerful market position which eventually could lead to outright dependency of the former customers of CSDs and ICSDs on huge and incontestable financial service suppliers. In view of these challenges, there is good reason to critically reassess rules and regulations related to securities clearing and settlement systems as well as to the way regulatory and oversight responsibilities are implemented in practice. A predominantly national approach no longer serves market needs.