in the national constitutions - the eu treaty can only be amended unanimously by all member states ( see bockenforde, 1997, p. 33 ff. ). the same applies to the objective of giving priority to monetary stability. hence, the reappointment costs, i. e. the costs of changing the conditions under which monetary policy operates ( jensen, 1997 ), seem likely to be very high in emu. that gives the supranational institution ecb a special standing. it is not for nothing that there are repeated calls for a political “ counterweight ”. yet the necessary coordination of economic policy within the eu should not be allowed to become an instrument which undermines the european central bank ’ s independence. objections to this final and irrevocable “ abdication by policy makers ” are surfacing throughout europe. there is already talk of a future ” dictatorship ” of the ecb ; there are also warnings of “ centralbankisation ”, i. e. that europe will be shaped in the image of the central bank. however, the priority accorded to stable money is precisely what was agreed in the maastricht treaty, and an independent central bank has been given the mandate to keep this promise. only now do some seem to be getting the picture that this monetary arrangement has implications for many other policy areas, too. now it will inevitably be revealed to what extent all the other areas comply with the conditions set by the objective of “ stable money ”. the euro will have to demonstrate a large measure of stability if it is to contribute successfully towards integrating europe and not towards dividing it. in the past, various individuals have vowed emphatically that this will indeed be the case. however, public statements in favour of a stable euro hardly constitute a copper - bottomed guarantee on their own. a broad base of public support for the ecb ’ s clear, stability - oriented policy stance will be a crucial factor. unlike the statute, the “ stability culture ” ( richter, 1994 ) of which so many speak cannot be established by fiat. that does not mean that both phenomena are mutually independent ( also noted by neumann, 1997, p. 27 ). permanent confidence in the stability of the currency can be instilled only within the context of a well - conceived status and its implications for monetary policy ; this is confidence which, in turn, underpins monetary policy measures geared to stability. - 10 - uncertainties the maastricht treaty

of market participants, and the trading and settlement technologies they use ; and the evolving toolkit needed to maintain safety, soundness and financial stability. the role of currencies in macroeconomic frameworks the fxjsc was forged against the backdrop of the collapse of the bretton woods system, in which the major currencies fixed to the dollar, which in turn fixed to gold. the system operated effectively for a quarter century after world war 2, but ballooning deficit spending to fund the vietnam war made defence of the gold peg increasingly untenable for the us authorities. in august 1971, president nixon unilaterally suspended convertibility. heroic efforts to recalibrate the system, via the smithsonian agreement, were abandoned by spring 1973. it is sometimes said that 1973 was the beginning of the ‘ free floating currency ’ era – and certainly many countries headed in that direction, albeit the route was often indirect. here in the uk, we retained extensive capital controls from 1973 to 1979, including during the sterling crisis of 1976. in the late 1980s and early 1990s we informally, and then formally, shadowed european currencies. since exiting the exchange rate mechanism ( erm ) in september 1992, we have embraced a free float. table 1 : exchange rate arrangements ( % of imf membership, april 2022 ) source : international monetary fund others have taken equally circuitous routes. industrialised countries came together to lean against the level of the dollar twice in the 1980s – first, via the plaza accord in 1985, the year i joined the bank of england, in an attempt to bear down on the 44 % appreciation in the previous five years ; and then, via the 1987 louvre accord, to do the reverse. the 1990s saw a concerted push by many continental european countries to fix their bilateral exchange rates, first through the erm and later through the formation of the euro. but the majority, indeed fully two thirds of countries, still operate today some form of hard or soft peg, often against the dollar ( table 1 ). the changing shape of market participants and technology a second key theme is the changing shape of fx market participants, and the technology that serves them. looking back at the early fxjsc minutes, committee membership was limited exclusively to banks and brokers. fast forward to 2023, we now have representation from infrastructure providers, the buyside, non - bank liquidity providers ( an unheard of concept in 1973 ) and the corporate sector. diversity is not limited