getting stronger, some then start to question things. i ’ m rather shocked by the number of voices being raised to explain how we can, after all, easily live with major imbalances and that they can be economically justified. i do not believe this to be the case at all. i think we have to resolutely carry on and bolster the efforts being made in this area. from that viewpoint, the euro area as a whole does not have an external imbalance since our current account balance is broadly in equilibrium. what importance do you ascribe to the debate on the international monetary system? – i think that the points identified by the g20, from a long - term standpoint, particularly the issue of capital flows, special drawing rights and other topics associated with the international monetary system, are interesting. it is good to discuss them. ultimately, though, we have two questions for the short to medium term. one of these involves the relationships between the major convertible currencies : the dollar, the euro, the yen, the pound sterling, the canadian dollar. for over 30 years we have had a system in which these important relationships have been monitored by the g7. from that viewpoint, these relationships have not been destabilised in the course of the crisis. we should congratulate ourselves on this, even though it calls for constant vigilance of course. then there is a topic on which it seems to me that the international community also agrees, i. e. the ties between the currencies of the major emerging countries, which themselves have very large surpluses, and all the other currencies, including the major convertible currencies. the currencies of these major emerging countries with large surpluses must progressively become more flexible, i. e. appreciate in an orderly and progressive manner. in europe there are genuine concerns about the union ’ s capacity to overcome the debt crisis facing the peripheral countries. the markets are highly sceptical. what can they be told in order to convince them of the relevance of the measures undertaken at the european level? – on the issue of fiscal policies, i believe that the european central bank, through me, can reiterate certain points. firstly, we always said that when there was a single currency but no political federation, there was a clear need for budgetary supervision. this was hotly disputed. i can remind you how in 2004 and 2005 major countries, notably france but also germany

participants, but the systemic risk which can be associated with them must be considered from every angle. obviously it would be counterproductive if tighter regulations had the effect of pushing regulated finance into the unregulated area. this is a major topic which is being examined right now at the request of the entire international community, particularly at the level of the financial stability board. i think i am expressing the feelings of all central bankers when i consider that there are crucial issues here in terms of transparency and appropriate regulation. we must be sure that these financial market participants do not create new systemic risks. are you satisfied with the rise of the organised markets compared with over - thecounter ( otc ) transactions, with specific reference to centralised compensation? bis central bankers ’ speeches – here again, we are dealing with another core issue on which the entire international community is reflecting. the act of pushing activities which are very broadly disorganised towards clearing houses, towards organised markets, is a formidable undertaking. of course, there will always be otc contracts, but we have a major interest, in terms of regulation, financial stability and the removal of as much systemic risk as possible, in ensuring that these contracts, these derivative instruments, become as standardised as possible and can be traded through organised markets. in more macroeconomic terms, how do you judge the actions of the g20 aimed at reducing global imbalances? – the reasons for the crisis and the responsibilities are manifold, because there were multiple failures. it is unnecessary to dwell on finding a single scapegoat. however, one of the causes was certainly the prevailing complacency over a long period about very large international imbalances. one of the main lessons from the crisis is the need to have the right kind of coordination of macroeconomic policies, which is the international community ’ s responsibility. we have created integrated global finance and a globalised economy : there is a need to strengthen very considerably the governance of these. the international monetary fund is playing a leading role here by providing significant conceptual support for this strategy of the g20 and the entire international community. we have a lot of progress to make in this area as well. everyone is well aware of the dangers associated with these major imbalances – surpluses on the one hand, deficits on the other – in a full - blown crisis. then, as we emerge from it, as is the case, with a perceptible upturn that is