conditions for further assistance. i will be brief but positive about my second point : the need for changes in the framework. last sunday, ecb president draghi stated that mutual consensus about the need to transfer some fiscal sovereignty to the european level is growing. so we can look forward to the outcome of his report on the future of the eu framework, which will be presented and discussed at the next eu council meeting in mid - december. finally, the public debate in europe recently focused on the topic of a “ banking union ”, i. e. a single european supervisory mechanism. a banking union can very well be a major step towards breaking the link between banks and sovereigns – but by harnessing the disciplinary forces of the market, not by doing away with them. bis central bankers ’ speeches in order to minimise the risk that bank rescues pose to government finances, creditors have to be the first in line when it comes to bearing banks ’ losses. taxpayers ’ money can only be the last resort. with regard to spillovers from sovereigns to banks, sovereign - bonds need to be adequately risk - weighted to strengthen market signals and improve resilience in case of market turmoil. in addition, there should be caps on banks ’ maximum exposure to individual sovereign creditors, as is already the case with private creditors. in summary, i wish to remind you that we need both short - term crisis management as well as long - term structural adjustments and reforms, as structural problems and “ macroeconomic imbalances ” did not appear overnight. similarly, reforms will not achieve their desired effects all at once, but the time bought by short - term crisis management measures must be used wisely. remarks on german gold reserves please let me also comment on the bizarre public discussion we are currently facing in germany on the safety of our gold deposits outside germany – a discussion which is driven by irrational fears. in this context, i wish to warn against voluntarily adding fuel to the general sense of uncertainty among the german public in times like these by conducting a “ phantom debate ” on the safety of our gold reserves. the arguments raised are not really convincing. and i am glad that this is common sense for most germans. following the statement by the president of the federal court of auditors in germany, the discussion is now likely to come to an end – and it should do so before it causes harm to the excellent relationship between the bundesbank and the us fed. let ’ s get back to facts and figures : i

andreas dombret : remarks on current developments in europe speech by dr andreas dombret, member of the executive board of the deutsche bundesbank, at the reception of the bundesbank representative office, new york, 1 november 2012. * * * introduction dear governor dudley ladies and gentlemen it is a pleasure for me to be here with you today in new york and to welcome you all. due to “ sandy ” it was not easy for me to get over to new york, but i can imagine it was much more uncomfortable for all of you staying in the area over the last couple of days. and please let me express my deepest sympathies for the hardships new yorkers are facing right now. bill dudley will speak to you in a couple of minutes about cooperation between central banks. in the long tradition of this cooperation, trust and mutual understanding have been established among central banks worldwide. and joerg stephan, the head of our representative office, has already mentioned the history of the cooperation between our two central banks. i am proud of this history, and we are committed to upholding it with the same degree of trust and mutual understanding in the future. i will come back to this later. before doing so i would like to make a few brief remarks on developments in europe. remarks on current developments in europe from abroad, i must admit that developments in europe are hard to follow and may well appear complicated. this can result in risks being overstated and the progress already made being neglected. as regards the european monetary union, significant steps in the right direction have been taken to overcome the crisis. in this context i will briefly comment on three topics tonight. first, adjustments in the periphery countries are unavoidable, but they are under way. for example, wage moderation has gained some momentum, exports in some of the crisis countries have been rising, and current account as well as budget deficits are shrinking. my favourite example is ireland, which shows that trust can be regained if the agreed measures are adopted and implemented. as concerns the specific case of greece, we are way behind the programme goals due to the standstill in consolidation and basic structural reforms in this member state. politicians and the eu are willing to assist greece, but greece must, first and foremost, help itself. announcing and passing laws is not enough if the administration and the general public undermine them. it is now the task of the troika to decide impartially whether greece meets the