jean - claude trichet : reflections on the international financial system speech by mr jean - claude trichet, president of the european central bank, at the bundesbank lecture, berlin, 21 june 2005. * * * it is an honour for me to be invited to give this year ’ s bundesbank lecture and address such a distinguished audience. it is a particular pleasure for me to speak in berlin, which symbolises more than any other city the historic peaceful re - integration of europe. i would therefore like to extend my warm gratitude to president axel weber and the board of the bundesbank for the invitation to berlin this evening. in my lecture, i will try to take stock and look ahead at the challenges our economy is facing today, focusing on the challenges from global financial integration for the international financial system, its architecture and its functioning. in my view, international financial integration and the state of the international financial system are far less abstract topics than one might think at first glance. they reflect one of the most complex, intriguing and powerful aspects of the phenomenon that is generally referred to as globalisation. this phenomenon represents a key issue that policy - makers in europe and beyond have to deal with. it is therefore of utmost importance that we understand the significance of this issue for our role as economic policy - makers, and it is against this background that i would like to reflect on international financial integration and the international financial system today. policy - makers often face very specific concerns about economic uncertainty and the risk of instability, and we need to address these concerns. monetary policy also has to play its part. we have created a stable currency for 307 million people. we have created confidence in this currency. we have anchored inflation expectations below, but close to, 2 %. we have ensured monetary stability on our continent. in the same way, other policies have to contribute to addressing the challenges of the future. they have to boost confidence and ensure that the opening - up of borders turns into something that is ultimately worthwhile in terms of economic development and institutional cooperation. in my reflections today i will describe the recent developments in the international financial system and how they have shaped the institutional setup of this system in recent years. i will then turn to the current challenges facing both the international community and europe, and the implications of those challenges. international financial integration the clearest example of global economic integration is trade, and this is certainly true for this country. the label “ made in germany ” is recognised the world over

check on whether we have taken the systemic interactions between the various pillars of the international financial architecture into consideration in an appropriate manner. much remains to be done in this regard and, as i already said, this is no time for complacency. the ecb is keen to play its role fully in this respect, not only by participating actively in the g7, the g20 and the financial stability forum, and by being fully dedicated to the g10 group of governors, but also by calling, when necessary, for a larger, more comprehensive, more systemic view in a number of important fields. for instance, we suggested additional considerations of financial stability in the context of the international accounting standards board, and these have now been done to our satisfaction. third, further work also remains to be done to achieve full inclusiveness of emerging economies and economies in transition in the international financial architecture. the g20, as i said, is an emblematic illustration of this new feature, which was overdue. in the field of central banking, the global economy meeting gathering central bank governors of systemic industrialised and emerging economies all over the world is another major example of the new inclusive handling of issues that are both systemic and global. thank you for your attention.