axel a weber : 7th bundesbank lecture 2010 – introductory remarks introductory remarks by professor axel a weber, president of the deutsche bundesbank, at the 7th bundesbank lecture 2010, berlin, 14 september 2010. * 1. * * introduction ladies and gentlemen i am very pleased to welcome you to this year ’ s bundesbank lecture, which is being held at the old town hall in the very heart of berlin. the old town hall was built between 1902 and 1911 as an extension of the “ red town hall ”, which is just a stone ’ s throw from here. from 1949 to 1990, the old town hall was the seat of the council of ministers of the then gdr, and, in 1990, the unification treaty between the two german states was negotiated in this very building. today, it serves as the seat of the senator for the interior of the federal state of berlin. the room we are in is the “ bear hall ”, named after the statue of a bronze bear in the middle of the hall. this statue – the bear is berlin ’ s heraldic symbol – had been exiled to east berlin ’ s zoo for four decades before it returned in 2001. it is in these historic surroundings that we have gathered for the 7th bundesbank lecture. i am particularly grateful that mr mark carney, governor of the bank of canada, will be our speaker today. mark, my special welcome to you and thanks a lot for accepting our invitation. it is an honour to have you here. let me say a few brief words about both this event and our speaker for today. 2. on the event when we established the bundesbank lecture in 2004 we had two objectives in mind : the first objective was to raise the bundesbank ’ s profile further in the german capital. the second aim was to provide a high - level forum for public debate on economic and monetary policy issues. especially this second objective seems to have gained in importance given our turbulent times and the intellectual uncertainty they have provoked. consequently, we are happy to look back on a long line of very distinguished speakers – including, of course, mark carney, but also alan greenspan, jean - claude trichet, tommaso padoa - schioppa, ben bernanke, mario draghi and dominique strauss - kahn. 3. on the subject it is no surprise that the financial crisis has dominated this event during the recent past. we have just entered the fourth year of the crisis

of social and cultural factors, in the extent to which they support the idea that price stability is an indispensable, yet insufficient factor for achieving those objectives. it would have been nice had we found only successful stories in the history of central banking in the republic of macedonia. however, in the largest part of the past 60 years, facts are different. both successes and failures are evident. starting from the fact that the role of central banking in the development of the economy is best seen in the development of the institution itself, please allow me to draw your attention to some of the more significant moments of that development. at the very beginning, the bank was conducting only a few central banking operations : distribution od cash, payment operations, control, i. e. in today's language, supervision of banks. its first manager was dr. todor mirovski, at that time manager of makedonska stopanska banka, while from the beginning of 1947 until june 1950, aleksandar bogoev. from a functional viewpoint, the central banking in the past 60 years may be conditionally divided into three periods. we could call the first period pre - institutional ( 1946 - 1970 ), the second was a period of formal institutionalization ( 1971 - 1991 ), and the third was a period of monetary independence ( 1992 - 2006 ). we denote the first period as pre - institutional since there was an institution established only on a federal level - central bank. and, as you are well aware, the main feature of post - war life in all spheres, including banking as a whole, was centralization. consequently, all communal banks immediately became branches of the national bank of, at that time, federal yugoslavia - head office of nrm, engaged in attracting funds, extending credits in the amount of the funds attracted, performing limited activities in the international payment operations, performing vault activities for executing the budgets of the local units, etc. the head office, i. e. the rudiment of the central bank continues to distribute banknotes and coins, attract funds, extend credits to banks, organize international payment operations. as late as in the sixties of the preceding century the competences of the national bank, i. e. the head office in macedonia started to be distinguished from the competences of the commercial banks. at the same time, however, the dependence of the head office in macedonia on the national bank of yugoslavia of that time, increased - a process which