have indeed been intuitive and simple. they have had a tremendous impact on policy. i guess that most of you are familiar with many of the key insights. on the relevance of price stability ; on the costs of inflation ; on the inability of monetary policy to raise the structural growth rate of the economy ; on the importance of central bank independence from political influence. the point here is that these essentially simple insights were distilled from a huge and often very complicated body of research. i am thinking here about contributions in the 1960s and 1970s on the shape of the phillips curve, research on time inconsistency that emerged from the late 1970s onwards, research on central bank independence in the 1980s and 1990s, and recent discussions on central bank accountability and communication. perhaps current researchers can take comfort in the fact that one day the outcomes of current scientific debates may also become glaringly obvious. but in the meantime we need to struggle on before science reveals the answer to us. conclusion let me conclude with a forward looking perspective. it seems obvious that globalisation and financial innovations will continue, so that complexity in the economic and financial system will continue to increase. take the financial turmoil of the past year, to which i referred already. obviously there is a need to tailor our policies, for example financial supervision and monetary policy, to the dynamics that we have witnessed in the financial sector. but in order to do so we need a thorough understanding of what is going on. with a more complex and dynamic financial system, our demand for high quality analysis and research can only increase. at the same time, while demands are increasing, resources are under pressure. the efficiency operations of the current government that apply to the ministries and the cpb also apply to dnb. while i fully support the need for an efficient government and an efficient central bank, i also see a risk that knowledge - intensive functions could be under disproportionate pressure. a key characteristic of research is that it requires relatively long time horizons, and that its pay - off emerges in the medium rather than in the short run. as a result, it can easily be crowded out by the many policy issues that continue to require immediate attention. the challenge is to protect key research areas from such pressures, and to maintain the human capital base in our institutions. the need for research will always remain, whether policy makers immediately like the answers or not. for each question that we answer, new ones arise. i truly believe that the interaction between science and policy

klaas knot : want a strong financial system? implement basel iii speech by mr klaas knot, president of the netherlands bank, before the international institute for banking research ( iieb ), a group of european bankers, amsterdam, 11 october 2024. * * * thank you ralph, and thank you for the invitation to speak here before this distinguished audience. you are all leaders of big organisations. so you are familiar with the question of strategic change : how do you navigate your bank through the waves of financial market sentiment, changing consumer preferences and technological innovation? a sound strategy starts with a lot of thinking, for sure. strategic thinking. board room discussions. a couple of consultants perhaps. finally there is a strategy. a strategy with a capital s. you know where you want to go and how. but now you enter a crucial phase : implementation. how do you get all corners of your bank from a to b? because all the strategic thinking in the world will come to nothing if your bank does not follow suit. implementation is key. so how would you feel if, after 13 years, your plans are still stuck in the implementation phase? i ask because that's the situation we are in with basel iii. when i became governor back in 2011, we were discussing the implementation of basel iii. and now, towards the end of my second term, we are still discussing the implementation of basel iii. by now, some of you might think :'ok, so this morning we got war for breakfast, and now for lunch we get a central banker who wants to talk about the rules. what's next? we've heard this scratchy old broken record dozens of times before!'but, as you know, these are often the best records. so let me take a step back here. where are we coming from? in 2010, the basel committee on banking supervision introduced the first set of basel iii standards. a set of international rules designed to fortify the global banking system after the worst financial crisis since the great depression. these reforms were not just a patch - up job. they were a complete overhaul of banking regulation to improve bank resilience, transparency, and risk management. basel iii focused on increasing capital adequacy, introducing the leverage ratio, and creating more stringent liquidity requirements. with the memory of the crisis still fresh, national implementation of this first part of basel iii went relatively quickly. this first set of standards was then complement