CMU would help significantly to foster private risk-sharing by: First, providing incentives for cross-border investments – preferably in equity – through the harmonisation of accounting, taxes and insolvency laws; Second, developing pan-European savings products more oriented towards long-term investment. This could be done through a variety of savings vehicles, starting with the creation of European venture capital funds; Third, completing the Banking Union. * * * To conclude, global imbalances are not inevitable and we always need fresh ideas to improve the functioning of our globalised economies. In this respect, I would like to quote George Bernard Shaw, the famous Irish writer, who said once “You see things; and you say ‘Why?’. But I dream things that never were; and I say ‘Why not?’” Thank you for your attention. 1 Milesi Ferretti, G.-M. and A. Razin (1998). Current account reversals and currency crises: Empirical regularities,  NBER WP No. 6620. 2 Lane, P. and G.-M. Milesi-Ferretti (2012). External adjustment and the global crisis, Journal of International  Economics, Elsevier, vol. 88(2), pages 252–265. 3 Gourinchas, P.O. and M. Obstfeld (2012). Stories of the Twentieth Century for the Twenty-First, American  Economic Journal: Macroeconomics, American Economic Association, vol. 4(1), pages 226–265. 4 4/5  BIS central bankers' speeches  4 Obstfeld, M., and K. Rogoff (2001). The Six Major Puzzles in International Macroeconomics: Is There a Common  Cause? in NBER Macroeconomics Annual 2000, ed. by Ben S. Bernanke and Kenneth Rogoff, Vol. 15, NBER Chapters, National Bureau of Economic Research, Inc.: MIT Press, pp. 339–412.

The impact that changes in Fed policy can have beyond our borders has led to calls for us to do more to internalize those impacts, or even further, to internationally coordinate policymaking. As I’ve already noted, we are mindful of the global effects of Fed policy, given the central place of U.S. markets in the global financial system and the dollar’s status as the global reserve currency. Accordingly, we seek to conduct monetary policy transparently and based on clear principles. Promoting growth and stability in the U.S., I believe, is the most important contribution we can make to growth and stability worldwide. There is, of course, the argument that Fed policy has been too accommodative for too long, creating risks for financial stability worldwide. Here, I think it’s important to consider carefully the counterfactual. Would countries beyond our borders really have been better off with a weaker U.S. economy – an economy that might have required exceptional monetary policy accommodation for a much longer period of time? The fundamental issue is whether U.S. monetary policy has helped support our dual objectives of maximum employment in the context of price stability, and whether this support is consistent with a healthy global economy. 2  BIS central bankers’ speeches  While explicit coordination looks neither feasible nor desirable, there may be more that central banks in general, and the Fed in particular, could do to be better global stewards. As an example, I would emphasize the importance of effective Fed communication.