, we must also pay attention to the cumulative effects of, and the interplay between, individual regulatory initiatives. where there is a lack of consistency there is a danger that different measures may create conflicting incentives or may even cause countervailing effects. this then may diminish, or even completely prevent, the desired effects of new rules. take, for example, the interplay between the capital requirements directive / capital requirements regulation, which serve to implement the basel iii rules in europe, and solvency ii : the former seeks, among other things, to place bank funding on a more stable, long - term basis. however, solvency ii may, under certain circumstances, benefit short - dated bonds, impacting insurers ’ asset allocation and thus banks ’ funding costs. 4. implementing basel iii ensuring consistency clearly calls for intensive cross - border cooperation. this holds especially true as the reform process is shifting from policy development to implementation. countries must live up to their commitments and ensure the timely and globally consistent implementation of agreed policies. this applies, above all, to basel iii, which is without doubt the central achievement of our reform efforts. although it has become apparent that some countries are having difficulties sticking to the timetable, i urge all authorities involved to implement the framework as internationally agreed. recently, there has been a somewhat disconcerting discussion about the perceived shortcomings of basel iii. some argue that it is not enough. others argue that it is too complex. yet, neither of these criticisms is convincing. first, one clear lesson from the crisis is that banks ’ risk absorbing capacity was way too low. therefore, basel iii substantially raises capital requirements, reducing the probability of bank failures and the associated risks to financial stability and to taxpayers. second, while risk measurement will never be perfect, simplicity can sometimes come at a cost, too. operating exclusively on a simple non - risk - based ratio may counteract one of the basel framework ’ s overarching principles : more risk - taking means higher capital requirements. having said this, i fully agree to the leverage ratio ’ s overall intention which is to deliver a simple, transparent and credible ratio, complementing the risk - based capital requirements – and not replacing them. it should just serve as a backstop. there is no alternative to implementing basel iii on a global scale. in particular, i call on my colleagues in the us not to unexpectedly question the whole framework in the 11th hour – after taking part in its negotiation during the entire

to the eu. in economic terms, it is hoped that the launch of the euro will likewise yield substantial benefits : it is anticipated that the disappearance of exchange risk within the eurosystem and the intensification of competition in the european financial, merchandise and services markets will have a favourable impact on the further enhancement of the common market. don ’ t let yourselves be confused by the fact that the old currencies, such as the deutsche mark or french franc, are still in circulation in the 11 euro countries. euro banknotes and coins will not be launched until the year 2002 because of the immense logistical trouble it will cause. actually, in statutory and economic terms, the euro is already the sole currency in the eurozone ; the old currencies are – as we say in the jargon – nothing but the “ non - decimal denominations ” of the euro. at this juncture, i have no wish to bore you unduly with figures. as regards the dimensions of the euro monetary area, it is enough to say that, in terms of their population and economic performance, the eurozone and the united states are roughly comparable ( 290 million emu europeans compare with 270 million us americans ; in terms of economic performance, the euro area, accounting for 15 % of global gdp, is second only to the usa, at 20 % ). ii the statutory and institutional prerequisites of the euro are laid down in what is known as the maastricht treaty. figure 2 the european system of central banks ( “ eurosystem ” ) european central bank ( ecb ) + 11 national central banks primary objective : maintenance of price stability, accompanied by independence from instructions from government institutions ( the general economic policy of the community is endorsed only insofar as the primacy of the objective of price stability is not in jeopardy ). according to that treaty, the so - called “ eurosystem ” consists of the european central bank and the national central banks of the 11 member states. hence the deutsche bundesbank is integrated in the eurosystem, rather than sunk – a small but significant distinction. i am not addressing you today as one of the last representatives of a species doomed to extinction. the primary objective of the eurosystem is the maintenance of price stability. that institution is independent of instructions from government bodies. it is required to support the community ’ s general economic policy only insofar as that is possible without endangering the objective of price stability