spreads. however, total turnover is less than that for the predecessor currencies taken together ; indeed one would be disturbed if that were not the case, since the rationale for cross trades and arbitrage between the former currencies has evaporated. that is why in most financial centres - and hong kong is no exception - dealing rooms have been slimmed down. this is the dividend in respect of resource saving which represents one of the net benefits of moving to a single currency, even though the forex traders whose skills are no longer in such demand may not see it that way. in the bond market we have witnessed the first hong kong corporate issue in euro, which generated good demand - primarily from european investors but also with significant interest from local buyers. in former times an issue of this sort in any of the parent currencies would probably have been rarer, because the individual markets lacked maturity. a significant consequence of the euro ’ s arrival is that there now exists a market with the potential for a critical mass of liquidity well beyond that which the individual parent currency markets ever managed to achieve. there is further evidence to support that view in provisional reports that global international bond issuance in euro this year has exceeded that of issuance in the parent currencies during the equivalent period last year, while the same comparison for non - euro european currencies shows a decline ( although i have not yet seen the formal statistics by which to confirm this ). this has been achieved despite the fact that the process of establishing the euro firmly in these markets is not yet complete. investors are still feeling their way : for example, deciding on a benchmark yield for the euro, when there is a significant spread of perceived credit risk even between member state governments, is one area where fund managers may still be finding their feet. although i am not close to it myself, it is my impression that the industrial and commercial sectors have also adapted well to the euro, although the amount of adaptation that has been required differs across individual cases. many may not be affected, but equally many may be experiencing a drift towards more quoting and invoicing in euro ; in some cases there will be pressure to do so which, on competitive grounds, they can ill afford to ignore. and there will be some who find themselves at a slight competitive disadvantage if they are bidding for business in a euroland country against a competitor from another euroland country ; previously both bidders had to take account of exchange

the central bank ’ s balance sheet as a result. this type of swap would ensure that the full authority and responsibility for fiscal matters remained with the treasury and congress. congress has mandated the goals of monetary policy to promote long - run price stability, maximum employment, and moderate long - term interest rates. asking monetary policy to take on the role of fiscal policy undermines the ability to achieve this congressional mandate. central banks and monetary policy are not and cannot be real solutions to the unsustainable fiscal paths many countries currently face. proponents who believe otherwise are skating on thin ice. the only real answer rests with the fiscal authorities and their ability to develop credible commitments to sustainable fiscal paths. it ’ s a difficult and painful task to be sure, but a monetary solution is a bridge to nowhere at best, and the road to perdition at worst – a world of rising and costly inflation. once again, i want to thank everyone for coming today. i am confident that it will be a fascinating program. so now that i ’ ve told you what i think, let ’ s get stared and hear from the real experts. bis central bankers ’ speeches