the rest of the world. germany ’ s gdp fell by 3. 8 % in the first quarter of this year, and the bundesbank predicts a fall of 6. 2 % for the year 2009 as a whole, making germany one of the industrial countries currently being affected particularly seriously by the crisis. the reasons are not hard to find. germany has an extremely open economy and is accordingly heavily dependent on exports. in addition, the range of german exports contains a large share of capital goods, that is to say goods for which global demand has slumped particularly distinctly on account of the crisis. the german example therefore demonstrates that the growing export specialisation of an economy is associated with stronger swings in the business cycle – at least in those cases in which the world economy is hit by a common global shock. to complete the picture, though, it needs to be noted that the german economy has benefited very strongly in the past few years from the cyclical stimuli emitted by exporters and their downstream industries. diversifying the export portfolio by region or product, however, ultimately will not protect an open economy such as germany ’ s from veritable global shocks. let me finally add with a view to the german banking system that lending by banks in germany to german non - banks grew with an annual rate of merely 0. 8 % on average in precrisis years ( ie 2004 to 2006 ). hence, during that time, german banks profited strongly from portfolio investments in structured financial products and booming real estate markets abroad. financial crisis and economic research let us return to the global view of the financial crisis. there is no disputing the fact that a whole cocktail of micro and macro - level factors caused the global financial crisis. the variety of causes leading to the current crisis is also reflected in this conference ’ s programme. this is already the second research conference jointly organised by the bundesbank and the banque de france. you will certainly be aware that research plays an important role in central banks. joint projects, conferences and discussions between researchers both within and outside the world of central banking have contributed time and again to further expanding and improving the theoretical foundations of economics and to backing them up empirically. the financial crisis has once again underlined clearly that, in this context, the interests of researchers and central bankers are very closely related, and not just in the area of monetary policy. a by - product of the crisis, so to speak, is that it has provided numerous ideas for the

advancement of research in this area. it presents an opportunity to rethink, and examine with scepticism, some of the assumptions found in theoretical models. one example that comes to mind is modelling how economic agents form expectations, or the degree of sophistication with which the financial system can be integrated into macro models. there is another quite interesting question from the empirical side. how can the available data in the area of the financial world be better used to identify systemic risks – or do they need to be supplemented by certain additional data? some of the papers presented at this conference have found very promising approaches. answers to these and similar questions will amplify the meaningfulness and practical relevance of future research findings. this is of great interest to central banks, not least because we use the knowledge gained from research as an input in our monetary policy decisions. allow me to discuss two relevant cases in which current events have stimulated research. 2. 1 segmentation in the money market one concerns the question of how central banks can most effectively supply the financial system with liquidity. after the us investment bank lehman brothers had filed for insolvency, the ability of whole financial market segments to function was severely constrained, requiring central banks around the world to inject a massive volume of liquidity into the money markets. against this background, a deutsche bundesbank study 1 identified segmentation in the german money market. for the behaviour of german banks in the money market, the study finds signs that the size of a bank has a systematic effect on the price of liquidity. taking a number of other factors into account, larger banks end up paying less for liquidity than see f. fecht, k. nyborg, j. rocholl ( 2008 ) : the price of liquidity : bank characteristics and market conditions, deutsche bundesbank discussion paper, series 1, no 30 / 2008. smaller banks. this effect is even more pronounced when there is an increase in the imbalance of the liquidity positions. thanks to its very broad range of counterparties, the eurosystem was able to ensure that all banks active in the euro area, whether large or small, were given equal access to the ample supply of central bank liquidity from the beginning of the financial crisis onwards. in addition, over a year ago the eurosystem had already expanded the range of maturities of its refinancing operations and now provides liquidity in the form of a fixed - rate tender