shall focus on the multilateral relations which the ecb - and more generally, the eurosystem - maintains with other policymakers at the international ( ie neither euro area nor european union ) level. these relations are promoted within organisations such as the imf, the oecd and the bis, as well as in fora such as the g7 and the g20. i shall first provide a brief overview of the current relations of the ecb and the eurosystem, both from an institutional angle and from the point of view of their rationale. without wanting to be exhaustive, i shall then highlight a few challenges which the ecb - and, more generally, the international official community - may be confronted with. in this context, i shall outline the ecb ’ s assessment of a more specific issue, namely the issue of private sector involvement in the resolution of financial crises. 1. the ecb and the process of international cooperation institutional framework the treaty establishing the european community ( the “ treaty ” ) stipulates which european institutions are allowed either to speak or to act on behalf of the euro area at the international level. the euro area, like the eurosystem, has no legal personality. this implies that the euro area cannot negotiate and conclude public international law agreements or become a member of international organisations. this also implies that the euro area has to be represented externally by community institutions or bodies which have a legal personality ; this means : ( 1 ) the council of the ministers of finance and economy of the eu ( “ ecofin council ” ) ; and ( 2 ) the ecb and, in accordance with an ecb decision, one or more ncbs. while the treaty provides for interaction between the ecofin council and the ecb in a number of cases, these entities have well - defined responsibilities. this legal framework provides guidelines to give the euro area a voice at the international level. in particular, when the external representation of the euro area in the field of international cooperation involves the tasks entrusted to the eurosystem, decisions are centralised in the hands of the governing council of the ecb. this facilitates the decision - making process with regard to external representation. while ncbs may participate in international fora depending on their respective memberships ( eg g7, g10, g20 ), the participation of the ecb in all relevant fora gives continuity and visibility to the external representation of the euro area. the roles the ecb plays in

##ia are systematically related to economic fundamentals. modelling them, however, requires nonlinear economic frameworks. similarly, we might possibly need nonlinear techniques to answer the question how policy should deal with really large shocks. linear models may give sufficiently accurate answers for dealing with small to medium - sized shocks, but if economic relationships are essentially non - linear, then such models may make considerable prediction errors in a situation where large shocks carry the economy far away from a state characterised by “ average behaviour ”. for all these reasons, it seems important from a policy perspective to develop and employ non - linear modelling and estimation techniques. iv. concluding remarks to sum up, over the past decades, tremendous progress has been made towards making monetary policy more of a science. undoubtedly, this has contributed to enhancing the effectiveness of monetary policy. at the same time, there is still room – and indeed a need – to further advance the scientific elements of monetary policy - making by addressing a number of conceptual, methodological and empirical challenges. some of these challenges are a consequence of the nature of the economic system and the uncertainty surrounding its evolution over time. the economic environment is continuously changing and at fast pace as a result of the actions of economic agents. technological advances, financial innovations, the process of globalisation, even changing preferences, are influencing the structure and functioning of markets and the monetary policy transmission mechanism. monetary policymakers have to take decisions against the background of the evolving economic environment and then face a host of uncertainties. this makes our task challenging – but admittedly also more exciting. moreover, these observations have two important implications for monetary policy. first, the ability to combine “ science and art ” in a well - structured, balanced, prudent and effective way will always remain a key feature of the successful performance of monetary policy. second, in an environment of continuous change and considerable uncertainty, it is essential that central banks provide an anchor of stability and certainty : through their commitment to and delivery of price stability. this conclusion is directly linked to the purpose of this conference, to celebrate the bundesbank ’ s 50 - year - long unwavering dedication to its task of “ safeguarding the currency ” ( “ die wahung zu sichern ” ) as it is stated in the bundesbank act. i am confident that 50 years from now, on the occasion of the 100th anniversary of the bundesbank, a conference can be again be organised to celebrate this great achievement : “ stable money for germany and