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

##erted by governments, parliaments and other european institutions. it has a clear mandate to safeguard the value of money. at all events, that is its primary task. the monetary system is hence removed from the realm of everyday policy - making. the objective of monetary stability is protected in a particular manner. and policy makers cannot subordinate it to other objectives - - subject to expedience, the political leaning of the government, or election dates. by choosing that structure, the signatories of the treaty made a conscious decision to continue a tradition which, especially in the postwar era, has become established in a number of countries in europe whose currencies have shown a particular degree of stability. even countries which, for a long time, had tied their currency regimes much more closely to everyday policy - making have evidently come to recognise the advantages of unpolitical monetary systems in the run - up to maastricht. this does not, of course, rule out the possibility of the earlier tradition occasionally rearing its head in some isolated issues. denationalisation and depoliticisation, though, are certainly linked in a particular fashion. at all events, removing monetary boundaries in any form calls for a modicum of matching depoliticisation. this is true not just for the ultimate form in which boundaries are removed, monetary union - - but it is particularly applicable to it. but even the first steps in removing boundaries - - such as the transition to convertibility - - reduce the leeway for a monetary regime which is simultaneously intended to serve other political ends. with convertibility, a currency exposes itself to a comparison of its stability with that of other currencies. that means that external pressure towards stability begins to be exerted. this was clearly recognisable when a number of european currencies made the transition to convertibility in the 1950s and 1960s. national political influence on the monetary system is restricted even more by participation in an exchange rate system with fixed parities, regardless of whether a multilateral system or a unilateral pegging to another currency is involved. it is true that every country continues to have a national monetary policy to a certain extent. however, if the national monetary policies - - for instance, owing to different political leanings and preferences - - diverge too greatly, then the respective parities will no longer be realistic. in most cases, this results in unrest in the markets which sooner or later forces parities to change. but