exporting countries – providing this capital through sizeable trade surpluses. today ’ s uneven pattern in global trade and capital flows is being accompanied by a massive accumulation of foreign exchange reserves – mostly in these asian or oil - exporting surplus regions. this reveals that the unprecedented accumulation of foreign exchange reserves, following large current account surpluses in many emerging market countries, is as much a part of global imbalances as is the us current account deficit. global imbalances are an ongoing matter of concern since they still harbour the latent risk of a disorderly unwinding, with substantial negative consequences for global economic growth, employment and stability. thus, successfully rebalancing the global economy remains a pressing issue of global relevance. undoubtedly, this goal can only be achieved through the combined policy actions of all parties involved. second aspect : search for yield in riskier assets the search for yield in riskier assets was one of the main topics during the time of record - low interest rates in major economic regions. key central bank interest rates as well as long - term market interest rates have moved upwards in the meantime, while remaining rather moderate by historical standards. therefore, the search for yield in riskier assets still seems to define the actions of many market participants. despite the marked corrections in various financial markets quite recently, there are ongoing signs of relatively low risk premia and still increasing use of leveraged instruments, such as in the credit markets. both developments reflect a rather pronounced feeling of complacency among many market participants. this raises the question of whether risks are appropriately reflected in the prices of various financial assets. why does search for yield entail risks? the search for yield in riskier assets might be a profitable investment if economic conditions remain as favourable as they are at present. however, an unexpected deterioration in the macroeconomic environment, for instance, could trigger a turnaround in sentiment with widespread repercussions. it is therefore key that risks are adequately taken into account and priced appropriately. the ongoing search for yield in riskier assets warrants further close monitoring by central banks. concluding remarks globalisation, defined as the process of the international division of labour, is a quite natural process in an economic environment that is evolving continuously. basically, it is beneficial for all the countries participating in this process. however, the degree to which a country can benefit from the opportunities of open markets is determined mainly by domestically influenced factors. india has shown how to integrate successfully in the global exchange of

axel a weber : 6th bundesbank lecture welcoming remarks by professor axel a weber, president of the deutsche bundesbank, at the 6th bundesbank lecture, berlin, 4 september 2009. * * * introduction ladies and gentlemen, i am very pleased to welcome you to this year ’ s bundesbank lecture here in the very heart of berlin. i am particularly grateful that dominique strauss - kahn, managing director of the imf, will be our speaker. my special welcome to dominique and thanks for accepting our invitation. it is an honour to have you here. let me now say a few words regarding both this event and our speaker for today. on the event the bundesbank lecture series has two objectives : first, to provide a high - level forum for public debate on economic and monetary policy issues. second, to raise the bundesbank ’ s profile in the german capital. today ’ s gathering marks the 6th anniversary of the lecture series, which started in 2004. the previous speakers were : alan greenspan, jean - claude trichet, tommaso padoaschioppa, ben bernanke and mario draghi. on the subject the financial crisis has been the dominant topic for more than two years now. since the crisis intensified last september, policymakers have been fighting it on many fronts. • central banks have acted through massive interest rate cuts and an extremely largescale provision of liquidity, but also through recourse to unconventional measures. • national governments have initiated substantial fiscal stimulus packages and bank rescue measures. these extensive efforts are having stabilising effects on the financial markets and the real economy. the global recession is bottoming - out, and strains in banking and financial markets are abating. nonetheless, huge uncertainties remain. the crisis is not yet over and there will, in all likelihood, be further tests ahead. however, as forward - looking decision - makers, we are well advised to take a step back and consider the longer term as well. in this context, i would like to stress two issues : • first, we need to reform the financial market architecture to make markets more resilient and less prone to speculative exuberance. in order to achieve this, we have to use the current political momentum. • second, credible exit strategies will be needed at the right moment all around the globe. both issues represent important preconditions for a return to sustainable growth and price stability. the issue of credible exit strategies includes winding down