we face the following trilemma : we cannot have all three things at once : ( a ) full, global market liberalisation, ( b ) national sovereignty, and ( c ) democracy. we must choose two of these three, and give one up. 1 if we choose full economic globalisation, without any obstacles to free trade, then we must give up either our national sovereignty or our democratic ability to oppose global rules. for example, if we give up democracy, an autocratic ruler could decree that everyone has to accept the global 1 / 4 bis central bankers'speeches rules. if we give up national sovereignty, we could have a global democracy. i think it is fair to say that we would rather not give up democracy or national sovereignty. what remains is to limit market liberalisation, where our societies deem this necessary. this is not a convenient truth, because it means we have to look for answers in less clear waters : we need to find those areas where global cooperation and harmonisation is sensible, and how far it can go. this strategy must then go hand in hand with more national autonomy for finding domestic solutions to national challenges. given these constraints, a realistic middle ground would be focused global cooperation : continuing to cooperate and to harmonise regulations, where possible – but also focusing and improving our efforts. focused global cooperation would also offer greater scope for solutions that respect the legitimate interests of countries wanting to run their economies independently. 3. brexit i ’ d like to discuss briefly what focused cooperation would mean for brexit negotiations and the future relationship between the european union and britain. i think it is fair to say that we are searching intently for a workable solution that ensures friendly collaboration. yet the scope of possible solutions is limited by the british decision for a hard brexit, as well as by the eu ’ s understandable prerogative to prevent cherry - picking. one of the possible scenarios we now have to imagine is making cooperation possible in two legally distinct jurisdictions, with different legal frameworks. this would mean that firms would have to comply with partially - differing rules. to continue serving their clients in the other jurisdiction, it might be wise for banks to check if it is viable to open branches or subsidiaries in the respective economic area. in such a scenario, close coordination between supervisors becomes crucial. when regulations differ, it is our responsibility as supervisors to facilitate cross - border activity without imposing undue operational burdens. the fact that sam woods and i are

close trading partners and our financial centres would retain their close ties – our supervisors would work together to ensure high regulatory standards, without imposing undue burdens on firms. let ’ s not be unrealistic : achieving such cooperation is highly challenging. we need to define the areas in which we want to cooperate, and to what degree we want to cooperate – this will be difficult politics. but it is worth trying to save the post - war order – by developing it further. we can all further that cause : by finding solutions that respect the legitimate interests of countries wanting increased national autonomy and the need to continue global economic cooperation. the bundesbank ’ s representative in london furthers that cause. ms julia becker has done an excellent job over the past two and a half years : she played a vital role in the exchange between the bundesbank and the bank of england, and she was instrumental in shaping our brexit analysis. i am pleased that after a short family break, she will continue to perform an essential role at our frankfurt headquarters. i am also confident that ms olga wittchen will continue this successful track record. coming from our directorate general for banking and financial supervision, she is an expert in international banking regulation. i have worked with her on several projects on the financial stability board – and i am convinced that she will put her skills towards fostering cooperation between britain and germany. 7. conclusion ladies and gentlemen 3 / 4 bis central bankers'speeches henry l mencken, an influential american writer of the early twentieth century, once said : " for every complex problem there is an answer that is clear, simple, and wrong. " let ’ s search for answers that are right – and let ’ s expose oversimplified, misleading ideologies – neither nationalist populism nor hyper - globalisation will lead to prosperity and security. global economic cooperation has helped us to build a more prosperous society. however, it does have side effects. only by reducing and managing these side effects can we foster global cooperation in the long term. focused global cooperation promises a way forward. we should all put our minds together to decide how this can be best achieved. thank you for your attention. sam : the floor is now yours. 1 d rodrik ( 2000 ), how far will international economic integration go? in journal of economic perspectives : 14 ( 1 ) : pp 177 - 186. 4 / 4 bis central bankers'speeches