mr. tietmeyer ’ s statement as governor of the fund for germany statement by the president of the deutsche bundesbank, prof. hans tietmeyer, at the joint annual discussion in washington, d. c. on 6 / 10 / 98. the situation in the world economy, without doubt, has turned out to be more difficult than we expected a year ago in hong kong. in some regions, growth has slowed down and global financial markets have become more volatile. it must be recognized, however, that the existing international economic and monetary system has brought advantages to all of us in the past. particularly those countries that are at present undergoing temporary setbacks have benefited from the inflow of foreign investment. this has been reflected by impressive and - until last year - sustained economic growth in the emerging markets. it is true that globalization is bringing several new challenges but, overall, the advantages for people throughout the world are clearly prevailing. the response to today ’ s problems should, therefore, not be to question international integration, which would jeopardize the progress in development that has been achieved so far. rather, the international economic and monetary system should be developed further in such a way that it will be ready for the challenges of the 21st century. ii there is certainly no panacea for overcoming the present problems. we know today that the problems in the countries currently undergoing crises are different in some respects from those of the eighties. therefore, the prescriptions must in some respects be different, too, being no longer solely an issue of macroeconomic stabilization following periods of lax fiscal and monetary policies, but also one of good governance, a reliable legal framework, stable financial markets, efficient banking supervision and the phenomenon of an excessive and illstructured private debt. market economies in particular, require a reliable legal framework and well - functioning institutions. it has become evident that restoring confidence also requires social and political reforms. especially at this juncture, we need a strong imf, both in crisis prevention and in crisis management. regrettably some responses to the crises in recent years and months may have contributed to the distortion of the incentive structures for financial market players, and lulled investors into a false sense of security. excessively large financial assistance by the imf can undermine the proper working of the markets. consequently, market players may easily underestimate the risks, trusting in government guarantees or a bail - out by the international community. this moral - hazard problem has to be taken seriously.

hermann remsperger : central banks and forecasting needs concluding remarks by dr hermann remsperger, member of the executive board of the deutsche bundesbank, at the eighth bundesbank spring conference “ new developments in economic forecasting ”, eltville, 6 may 2006. * * * at the end of this conference and after two days of intensive discussion, i am sure, dear colleagues, that you would like my concluding remarks to be brief. and that is why i want to raise only one specific question : are all central banks confronted with the same forecasting needs or are there differences – in particular, are there differences rooted in different strategies? i think, we can approach this question from two opposite angles. the first perspective takes a certain monetary policy concept as given and asks about the consequences on forecasting. the second perspective takes our forecasting abilities as given and asks about the consequences on the choice of a specific monetary policy strategy. let me start from this second perspective. i ’ d like to emphasize that the limits in forecasting do have an influence on the design and implementation of monetary policy. take the ecb as a first example. the two - pillar strategy of the eurosystem was designed and built in 1998 with the expectation of a profound regime shift : the move to stage three of european monetary union was expected to affect economic behaviour, institutional structures and statistical series in the euro area. in its first monthly report in january 1999 the ecb made the following statement : “ the eurosystem ’ s stability - oriented monetary policy strategy is a new and distinct strategy, which reflects the unique circumstances and institutional environment that will face the eurosystem. … in particular, mechanical responses to a small number of indicators or forecasts at the start of stage three may be especially misguided, given the inevitable uncertainties about economic relationships prompted by the regime shift associated with the transition to monetary union ”. 1 during this conference, fabio canova assured us that the maastricht treaty and the creation of the ecb have not triggered any major structural changes in the features of business cycles and the transmission of shocks. however, it was not clear ex ante that we would come to this conclusion ex post. furthermore, this result is probably not unconnected with the behaviour and strategy of the ecb. in this respect, it is not an argument against the ecb ’ s cautious behaviour. a second example of how limited forecasting abilities impact on monetary policy strategy