as the reserve - issuing country has the privilege of not being under much pressure to adjust to current account deficits, at least over the short and medium term. it is worth noting that part of keynes ’ goal in setting up the imf was to try to create symmetry between the need to adjust for both deficit and surplus countries. more recently, the question appeared under the perspective of global imbalances. this discussion highlights that current account surplus countries can forego, at least temporarily, the required adjustment by accumulating international reserves instead. the sustainability of these imbalances, and the extent to which they have contributed to the recent global financial crisis, is still under discussion. the question of the reserve asset has often been at the center of the debate. but as mark carney has recently argued, the adjustment mechanism may be more important than the choice of reserve assets. if adjustment were rapid, symmetric, and global, and if adjustment costs were fairly distributed amongst countries, we probably would not need to gather here today. unfortunately, this is not the world we live in now. historically, exchange rate flexibility has often been the answer. while it is not a silver bullet, it remains true that adjustment through the exchange rate is usually faster, and in the end less costly than adjustment through prices and wages. at the same time, of course, discontent with what is often perceived as excessive exchange rate volatility has been an important source of dissatisfaction with the present international monetary system. what constitutes excessive exchange rate volatility, and whether domestic policies or the international monetary system are at the root of it, is a matter of legitimate debate. iii. the conference nearly twenty years ago, jacob frenkel made the following observation about the international monetary system : “ academics and policymakers have made numerous proposals for reform while, at the same time, the monetary system itself has been in a constant state of change ”. this points to another problem that any attempt to reform the international monetary system faces : the world economy and financial markets, and therefore the international monetary system never cease to evolve. today ’ s conference is organized around four panel discussions. they will focus on issues that are at the forefront of the current debate on shortcomings of the international monetary system. the first panel, chaired by axel weber, will discuss the predominant concerns about the present system. large global imbalances, volatile capital flows, and rapid reserve accumulation give rise to concerns about vulnerabilities. are they possible sources

john c williams : " elementary, dear data " remarks by mr john c williams, president and chief executive officer of the federal reserve bank of new york, at the 2023 us treasury market conference, federal reserve bank of new york, new york city, 16 november 2023. * * * as prepared for delivery introduction this is the ninth year that our joint member agencies have come together for this conference. it's been a wonderful five - way partnership. but the honorific of " greatest crossover of all time " must be awarded to the theme and corresponding title of my remarks today. for those who know of my proclivity to lace my speeches with music references, no, i am not referring to the crossover of taylor swift and travis kelce. instead, i'm referringof course - to the epic 29th episode of star trek : the next generation, titled " elementary, dear data, " in which 221b baker street meets enterprise - d in a brilliant sherlock holmes - style mystery. it's a perennial fan favorite for trekkies and sherlockians alike. but the reason i mention it today is that i'd like to speak about how data - transactions - based, transparent, and well documented - is elementary to our collective understanding and decision - making at the federal reserve and beyond. before i get in any deeper, and rest assured i will, i need to give the standard fed disclaimer that the views i express today are mine alone and do not necessarily reflect those of the federal open market committee ( fomc ) or others in the federal reserve system. data dashboard sherlock holmes stressed the importance of " data, data, data. " i, too, have been often quoted emphasizing the need to be " data dependent. " 1 in sherlock's world, data means fingerprints, footprints, handwriting, and ciphers. in our world, data means economic indicators like gross domestic product, the consumer price index, and the unemployment rate. these numbers make up the dashboard of what's happening in the economy. these are numbers we can trust. government agencies in the u. s. and abroad put an enormous amount of effort into developing the methodology, implementation, and design of these official statistics. while no specific data series is without its limitations, we have an excellent understanding of how these numbers come together and behave over time. financial markets have their own data dashboards too. equity indexes, bond yields, and the value of the dollar are just a