I recognise the importance of the efforts that Germany has made. FT: Your plans for a central clearing house for derivatives have provoked controversy in London, where this is seen as a continental grab for business to pass though LCH.Clearnet and people are unconvinced that you need to have this lender-of-lastresort, central bank function. CN: For me, the argument is very simple. If you really want to have a safe system you really need these clearing houses to have the possibility of extensive access to central bank liquidity. I think that is the only way to ensure that in times of stress, when you have eventually defaults of counterparties, you can manage the liquidity in a smooth fashion. Having said that, no central bank would accept large-scale access to central bank liquidity without having the oversight. FT: But market participants say that even after the Lehman collapse, they still managed to unlock a lot of these trades without having to resort to central bank liquidity. CN: Well, the fact that it went well doesn’t mean that it will always go well. It may depend also on the type of instruments that you are clearing. We have the feeling that it may be different for, on the one hand, fixed-income instruments and, on the other hand, derivative instruments. But this is a long-standing position, it is not taken especially vis-à-vis London. FT: What sort of model of European capitalism will emerge after this economic crisis? CN: We will probably return to a more organised, ruled, economic system.

This led to the endorsement of the G20 as "the first forum for international economic cooperation".2  1  Anne Krueger (2007), “An enduring need: multilateralism in the twenty-first century”, Oxford Review of Economic Policy, Volume 23, Number 3, 2007, pp.335–346. 2 G20 Pittsburgh Declaration, September 2009. 4/8  Indeed, the new framework proved to be key in containing the effects of the global financial crisis, through multilateral and coordinated actions on the monetary and fiscal fronts. The protectionist response to the crisis was significantly smaller than during the Great Depression. In addition, since 2009, the G20 has promoted a range of policies to enhance the resilience of the global financial sector, including stricter prudential requirements for internationally active banks and, particularly, for systemically important institutions. However, after the initial impetus provided by the G20-multilateralism, finding consensus at international level has become increasingly difficult over time and the initial hopes that the G20 could become an effective mechanism for coordinating national policies have faded somewhat. Against this backdrop, it seems clear to me that the way in which international cooperation is defined and multilateral institutions work need to be revised. The system of global trade is a paradigmatic case, given the broad consensus on the need to reform and revitalise its backbone, the WTO.3 While some western economies raise concerns about China’s trading practices, as well as the effects of its industrial and technology policies on the level-playing field, many emerging countries complain about western countries’ policies in areas such as agriculture.