olli rehn : monetary policy and bank supervision in europe after the last financial and sovereign debt crisis and challenges for the future remarks by mr olli rehn, governor of the bank of finland, in the governors'panel discussion at the bank of greece economic history conference " the birth of inter - war central banks : building a new monetary order ", athens, 2 november 2018. * * * dear colleagues, ladies and gentlemen : i want to thank the organizers and particularly governor yannis stournaras for the invitation to this conference. i also want to congratulate the bank of greece for its 90th anniversary. the hellenic central bank has always been a highly professional and reliable european partner, renowned for its expertise in economics and economic policy. the theme of this conference – focused as it is on lessons from economic history – is indeed quite timely. as some of the more intricate macroeconomic theorizing of the last decades is currently subject to a lot of criticism and even reconsideration, the voice of historians is now listened much more closely than some years ago – and rightly so. history may not repeat itself, but it certainly rhymes, as the saying goes. in this vein, a comparison of the latest international financial crisis with the great depression of the 1930 ’ s yields some important lessons. the first is the paramount importance of international policy cooperation for sustainable growth and employment. in the 1920s and 1930s, this cooperation failed, which paved the way for the rise of totalitarian regimes and global economic depression with large human and societal damage. since the second world war we have had international institutions that are – more or less – capable of facilitating policy coordination in economic and monetary affairs, to manage financial crises and, in effect, to protect growth and jobs. i refer to the imf and gatt, now the wto, in particular. these institutions and their capacity to act should be protected and developed even today. as i see it, the eu now has a heightened responsibility as a leading guardian of the multilateral economic order. a second lesson from the comparison of the economic crises is how important is the central banks ’ responsibility for maintaining price stability, to prevent deflation in crises and inflation in boom periods. in the 1930 ’ s, the prevention of deflation was not taken seriously enough, which led to a fatal deflation spiral and mass unemployment on a world scale. without denying the many problems at all, the performance of monetary policy was much better this time around.

part of economics or finance in the universities. but we need solid research foundations upon which to build our models ; hence, this situation needs to change. and we at the central banks must play our part in taking this discipline forward. after all, it is in our own interest to be able to assess the financial stability impact of climate change as well as the climate risks posed on our own balance sheets. we need to lead the way. and leading the way is what this conference has always been about. the systemic risk analytics conference has always taken onboard excellent papers that are innovative in terms of their approach and topic. to continue this tradition, i was delighted to see what we have on the agenda at this year ’ s conference. for what i see in the presentations is a lot of novel thinking and new approaches to analysis. these are the kinds of action we need in order to take things forward, which is a necessity, given the tasks ahead. i hope that the presentations in this conference give you ideas on how to extend your thinking beyond the traditional approaches. and i hope this in turn helps you to develop new approaches that might take your own field of research forward. so, i wish you all a fruitful conference. 2 / 2 bis central bankers'speeches