##ity provision would in fact mean : for the imf, unlike central banks, cannot itself create liquidity. consequently, the national central banks of countries whose currencies are part of the basket of special drawing rights would be required to provide liquidity, whatever the amount. 3. conclusion ladies and gentlemen, the financial and debt crisis is, unfortunately, far from over. this was made abundantly clear again this summer. i have deliberately disregarded current actions to cope with the crisis, focussing instead on lessons from the crisis and casting a sceptical eye on some aspects of the global reform agenda. let it be understood that the bundesbank certainly does not reject this agenda, since it addresses the areas that need to be addressed ; moreover, reforms are crucial to establishing more solid foundations for the global economy. however, it is important to avoid measures which hamper or prevent market - economy processes without recognisably reinforcing stability. blind faith in the market lost its appeal, at the latest, with the onset of the crisis. yet this does not mean that statism and government control are the right answers to the crisis. the cost of attempts to achieve politically desirable market results and structures is likely to be high – indeed, too high. the prime objective of the global reforms ought to be to identify weaknesses in the existing regulatory framework and to adjust the framework accordingly. in this admittedly often lengthy and arduous process, the bundesbank sees itself in the role of committed advocate and constructive admonisher. thank you very much for your attention. i wish you an enjoyable evening at the deutsche bundesbank ’ s reception here at the goethe university in frankfurt. bis central bankers ’ speeches

the financial system. after all, the financial sector is not only a part of the economy with a distinct value added – although this value added can be quite significant, as in the united kingdom. even more importantly, the financial system also plays a crucial role in capital accumulation. however, especially in highly developed economies that typically boast sizeable and sophisticated financial sectors, the role of the financial system goes far beyond that of mere capital accumulation. in such economies, the financial system plays a key role in identifying and funding innovations, thus helping to advance the state of technical knowledge and promoting technological progress. for these reasons alone, an efficient financial system is indispensable for growth. in a sense, even the crisis with its massive repercussions for the real economy and its enormous costs illustrates how important the financial system and its stability are for economic performance and welfare. with that in mind, it becomes obvious that the reform of financial regulation will not only have a profound impact on the financial system itself but will also influence the real economy. the question at issue is whether the reforms strike the right balance between financial stability and economic growth. in fact, the development of basel iii has been accompanied by concerns that tighter regulation might have a negative impact on economic performance by severely restricting access to credit. however, a comprehensive cost - benefit analysis by the basel committee on banking supervision has revealed that fears of a significant negative impact on growth are unfounded. this is all the more the case given that there will be an adequate transition period before the new requirements enter fully into force, which will give bis central bankers ’ speeches banks sufficient time to strengthen their capital base. this favourable overall assessment of the macroeconomic impact of well - designed regulatory reform highlights the fact that there is no inherent conflict between the objectives of a more stable financial system and of ensuring strong and sustainable growth. 4. conclusion ladies and gentlemen, the crisis has certainly been a devastating event. but it has also presented the chance to make the financial system more resilient. trimmed down, where necessary, to activities with an unquestionable positive net social value added, it can once again be an important driver and catalyst for economic growth. and, in terms of the general future outlook for growth, we should bear in mind that the financial crisis has not impaired major growth drivers. emerging markets, for instance, will still make great efforts to catch up, and technical progress will continue. thus, the crisis certainly does not mark the end of economic growth