##uchin monkeys1 and chimpanzees2 proved that primates are programmed to be fair and place a high value on social contracts. in these studies, two primates were each offered a snack in return for carrying out a simple task. the two animals would get either a tasty grape or a less tasty piece of vegetable. all 1 / 4 bis central bankers'speeches of the animals preferred the grapes, but they also liked the vegetables – they would eat the latter, as long as both primates got the piece of vegetable. you can probably see where this is going : once one of the two animals got a grape and the other a vegetable, the latter would refuse to eat his snack, even though he had eaten it when both got the vegetable. to express their feeling that this was unfair, several of the disadvantaged primates actually threw the pieces of vegetable at the researchers! the study with chimpanzees revealed a further very interesting finding : if one chimpanzee got a grape and saw the other receiving the vegetable, the one with the grape would in most cases also refuse to eat the tasty grape. what a conscience! primates clearly seem to be programmed to cooperate. but why then the recent tide of populism and nationalism, you may ask. well, it may be because redistributive and restructuring tendencies in developed economies, globalisation and technological change in particular – while having created huge welfare gains for our societies – have also been penalising significant segments of our societies. this has created political tension and conflict over time – the great recession was a tipping point at which the frustration grew. this has led people to be frustrated with globalisation and free markets. but we should be careful not to throw out the baby with the bathwater : trade and globalisation have brought us more gains than losses. so rather than resorting to protectionism, we should improve international cooperation. 3. focused global cooperation yet, when talking about global market liberalisation and economic cooperation, we hear extreme, ideologically motivated solutions all too often : for instance, populist nationalism promises that everything will get better if we build new walls between our societies. at the other extreme are those who favour hyper - globalisation, that is, no borders to economic activity at all and full harmonisation. history has proven that both solutions are mere ideologies. the theories of both sides have proven to be unrealistic and, to a considerable extent, plain

discussed in the context of ttip. what we need is a reliable legal framework, something that all developed economies can already guarantee. if we want to do business in a society or deliver goods or services to its markets, we have to accept the rules this society deems essential, in which case a company ’ s cost - benefit analysis will show either that compliance with said rules will still deliver an acceptable return, or that it should not engage in the business in question. 5. how much harmonisation in global finance? let ’ s turn to my second example : global finance and regulatory harmonisation. here, focused harmonisation and more diversity could also be applied. this statement may surprise some of you, as the basel committee on banking supervision has just finalised the basel iii agreement after eight years of global cooperation to devise the complex set of rules. and of course i would not wish to see this wheel turned back. basel iii is an important milestone ; it is a global minimum standard that imposes limits on the risks that internationally active banks can take. by defining minimum amounts of equity for banks in relation to their risk - weighted assets, it seeks to reduce the international risks to financial stability. the basel committee on banking supervision, a transnational body of supervisory authorities from 28 jurisdictions, has worked since the onset of the financial crisis to provide a global solution to problems that brought about the financial crisis. and i am a strong supporter of implementing this standard in the european union to make it a binding reality. i am convinced that the ukauthorities will take a very similar view. however, please note two qualifications : these are minimum standards for internationally active banks. 11 since basel standards are minimum standards, a country may decide to set stricter requirements. for example, switzerland has a higher leverage ratio. and as many of you know, the uk has ring - fencing rules in place that separate vital basic functions of a bank from the riskier ones. this policy is not of the basel committee ’ s making, and the uk is free to apply it in its jurisdiction. the second qualification of the basel iii standard is that it is for internationally active banks. as such, jurisdictions are free to apply a different set of rules to smaller, only nationally active banks that pose no threat to international financial stability. most nations already have less restrictive rules on smaller banks in order to reduce the operational burden for them. i am a strong proponent of extending this proportionality further, because the highly complex regulatory reforms