Burkhard Balz: The importance of networks during the pandemic
Speech by Mr Burkhard Balz, Member of the Executive Board of the Deutsche Bundesbank, at
the ceremony to mark the change of head of the Bundesbank's Representative Office in New
York, New York City, 14 December 2021.
* * *
1 Introduction
Ladies and gentlemen,
I am delighted to be here with you in New York today to celebrate the official inauguration of Dr
Jens Reich as head of the Bundesbank's Representative Office.
Mr Reich already took over the role from his predecessor, Gabriele Kabelac, in August.
Sadly, the pandemic meant that we were unable to celebrate the official handover any earlier.
But summer isn't the only time to visit New York - it's an attractive destination all year round, and
especially in the run-up to Christmas. No wonder so many Christmas films have been set here.
The huge Christmas tree that graces the Rockefeller Center every year must surely be one of
the most beautiful in the world. In summer or winter, New York is a cosmopolitan city, cultural
metropolis and tourist hotspot all rolled into one.
New York means a great deal to the Bundesbank, too - and not just because a large share of
Germany's gold reserves are stored here.
As the world's foremost financial hub, New York has had, and always will have, a close bearing
on developments in Germany and Europe.
And so, since 1986, the Bundesbank has also had a representative office in New York, enabling it
to engage in personal dialogue and maintain local contacts.
2 The importance of networks
Ladies and gentlemen,
The last couple of years have been tough on all of us. Many of the things we used to take for
granted have not always been possible in a pandemic.
That included day-to-day activities like shopping, going to restaurants, concerts and the theatre,
all the way to international travel.
In our joint efforts to combat the highly infectious coronavirus, we have had to give up a great
deal. In fact, we are still having to do so.
This also applies to our professional lives, of course. Following a sharp rise in Germany's
infection figures over the last few weeks, the Bundesbank's Executive Board decided to ask
employees to work from home again wherever possible.
And here in New York, too, I'm sure that people will go back to working from home temporarily
just as soon as the next blizzard hits.
Just like at many other companies and institutions, working remotely has become second nature
to the Bundesbank's employees.
Part of the reason it works so well is that our staff have forged close personal bonds with each
other in the past. They can now draw on the networks they have established.
But networks are like plants in the desert. If they are strong, they can go a long time without
water. They can't survive without it altogether, though.
Networks need personal contact like plants need water. And an oasis can only flourish where
there is a continuous supply of water.
As effective as communicating by email, telephone and video conference has now become,
cooperation that is based on mutual trust primarily comes from direct personal contact and
faceto-face interactions like those we are engaging in today.
Ladies and gentlemen,
Establishing networks and exchanging information across institutions and national borders is
important in a globalised world, and will remain so.
The most pertinent example here is probably climate change. To combat climate change
effectively, the international community needs to agree on a common set of rules - agreements
that are only sustainable in the long term if they are underpinned by strong international networks.
The Bank for International Settlements (BIS) is one example of a solid international network. With
over 60 member central banks, it has been setting global standards for 90 years now.
It is home to a number of significant standing committees which work towards harmonising
financial and banking systems.
These include the Committee on the Global Financial System (CGFS), the Basel Committee on
Banking Supervision (BCBS) and the Committee on Payments and Market Infrastructures
(CMPI), to name but a few.
The Bundesbank has its own division dedicated to the mutual exchange and transfer of central
bank knowledge with partner institutions - the Centre for International Central Bank Dialogue.
And we nurture and maintain a network of representatives and representative offices in many
countries around the world.
This year, for instance, we also started seconding representatives to the German embassies in
Paris, Rome and Madrid, thus making it easier to reach out to national authorities and financial
institutions in major euro area countries via the close working relationships we already enjoy with
other central banks. This mirrors what we have already been doing at the global level for many
years via our network of representatives and representative offices.
As well as allowing us to establish valuable contacts, this international network also provides us
with important insights into the economic and financial situation of each country.
An in-depth exchange of ideas in joint consultations and projects can bring differing viewpoints to
light early on, deepening mutual understanding and trust and strengthening multilateral
cooperation.
For example, in the past, my colleagues here at the New York Representative Office have liaised
with the Fed's network of representatives to organise events such as presentations - about the
Bundesbank's gold book, for instance.
They have also set up laptops for their colleagues from the Fed, giving them direct access to
micro data collected by the Bundesbank to use in their research.
Over the last three years, Gabriele Kabelac headed up our Representative Office, providing us
with key insights into society and the financial landscape in the United States. This was most
valuable - especially at a time when it wasn't possible to visit in person.
Ms Kabelac returned to Germany as planned this summer. Her highly capable successor, Jens
Reich, is now taking up the reins in New York on behalf of the Bundesbank.
After completing a PhD in economics at the University of Frankfurt, where he later took on a
teaching post, he also gathered experience working for Germany's Federal Financial Supervisory
Authority (BaFin).
Since joining the Bundesbank in 2014, he has been entrusted with various topics, especially
those with a macroeconomic focus.
In the Directorate General Financial Stability, alongside many other tasks, he dealt with important
policy issues relating to the impact of central bank digital currency, a topic that central banks
around the world are currently grappling with.
Mr Reich was also deputy office manager for the Vice-President of the Bundesbank, Professor
Claudia Buch. This was a role that required both professional expertise and excellent networking
skills.
These qualities are also essential to the role of head of the Representative Office in New York.
3 Conclusion
Ladies and gentlemen,
The famous American author Mark Twain once said: "Make your mark in New York and you are a
made man."
On that note, Mr Reich, I hope you will have plenty of time to forge new contacts, establish
networks, and make your mark on this wonderful city.
I'm sure that you will learn to love New York - if you don't already, that is - and, at the same time,
do an excellent job of representing the Bundesbank in the United States.
I would urge everyone present to draw on Mr Reich's wealth of expertise and his contacts. After
all, the networks we share are what make us strong.
Mr Reich, I wish you all the best and every success in the tasks that lie ahead of you.
Thank you very much for your attention.