stability and sound public finances is the best contribution monetary and fiscal policies in the euro area can make to financial stability. there is no trade - off between price stability and financial stability and there is also no trade - off between sound public finances and financial stability. if monetary and fiscal policies became distracted from their medium - term objectives they would themselves become a source of volatility and would thereby destabilise, rather than stabilise, financial markets. stability orientation of macroeconomic policies is as crucial today as it was sixty years ago when walter eucken worked on his landmark study. so much for macroeconomic policies. but what about financial markets themselves? how can we redesign the financial market architecture in such a way as to reduce the likelihood and cost of future financial crises? even the most fervent champions of unregulated financial markets have been forced to recognise that there is a need for appropriate rules. needless to say, there is a need for a realistic assessment of the costs and benefits of tighter regulation. but the current crisis has made it clear that the benefits of tighter regulation are larger than thought in some quarters. still, we need to avoid excesses in the direction of excessive regulation. moreover, new regulation needs to be in the spirit of eucken, i. e. setting general principles rather than drawing up long lists of individual measures, which are necessarily incomplete and invite renewed regulatory arbitrage. let me give you a concrete example of what i have in mind. some financial market participants argued before the crisis that the enormous rise in their bonuses during the financial boom was justified because they had to be seen as financial entrepreneurs. indeed, financial innovation shares many characteristics of innovation in other markets. successful innovation in those markets means that the respective entrepreneur can become extremely rich, possibly even in a very short period of time. yet, the analogy ends there. an unsuccessful entrepreneur will lose his or her entire fortune. history has plenty of examples of entrepreneur bankruptcy, including one of the world ’ s most famous business cycle theorists, joseph a. schumpeter, who provided one of the most convincing theories of the process of innovation and its importance for economic growth. yet, this did not prevent him from bankruptcy in his personal commercial endeavours, nor should it have. so, what is the difference between these entrepreneurs and the self - proclaimed financial “ entrepreneurs ”? an important element has been missing in financial markets, one of the core principles devised by walter eucken necessary to sustain a

transparency resulting from the introduction of the euro and the move to exclusive euro pricing will strengthen competition in the retail sector and contain price pressures in the euro area. these permanent benefits and efficiency gains from introducing the euro will far outweigh the generally very small changeover effects on inflation. concluding remarks let me sum up. the introduction of the euro banknotes and coins has been a major success which was made possible by the thorough preparations of all parties involved and the good reception by the public. the euro banknotes make visible the monetary union and the close financial integration of the twelve euro area countries. we are very satisfied that the banknotes were immediately accepted by the public in the euro area. and as the foreign demand for the euro banknotes shows, the euro is much sought after outside the euro area as well. finally, even though there have been effects on certain goods and services prices, the permanent benefits of the single currency and efficiency gains of introducing the euro will far exceed any short - term effects on inflation. ladies and gentlemen, i would like to thank you for your attention.