axel a weber : 7th bundesbank lecture 2010 – introductory remarks introductory remarks by professor axel a weber, president of the deutsche bundesbank, at the 7th bundesbank lecture 2010, berlin, 14 september 2010. * 1. * * introduction ladies and gentlemen i am very pleased to welcome you to this year ’ s bundesbank lecture, which is being held at the old town hall in the very heart of berlin. the old town hall was built between 1902 and 1911 as an extension of the “ red town hall ”, which is just a stone ’ s throw from here. from 1949 to 1990, the old town hall was the seat of the council of ministers of the then gdr, and, in 1990, the unification treaty between the two german states was negotiated in this very building. today, it serves as the seat of the senator for the interior of the federal state of berlin. the room we are in is the “ bear hall ”, named after the statue of a bronze bear in the middle of the hall. this statue – the bear is berlin ’ s heraldic symbol – had been exiled to east berlin ’ s zoo for four decades before it returned in 2001. it is in these historic surroundings that we have gathered for the 7th bundesbank lecture. i am particularly grateful that mr mark carney, governor of the bank of canada, will be our speaker today. mark, my special welcome to you and thanks a lot for accepting our invitation. it is an honour to have you here. let me say a few brief words about both this event and our speaker for today. 2. on the event when we established the bundesbank lecture in 2004 we had two objectives in mind : the first objective was to raise the bundesbank ’ s profile further in the german capital. the second aim was to provide a high - level forum for public debate on economic and monetary policy issues. especially this second objective seems to have gained in importance given our turbulent times and the intellectual uncertainty they have provoked. consequently, we are happy to look back on a long line of very distinguished speakers – including, of course, mark carney, but also alan greenspan, jean - claude trichet, tommaso padoa - schioppa, ben bernanke, mario draghi and dominique strauss - kahn. 3. on the subject it is no surprise that the financial crisis has dominated this event during the recent past. we have just entered the fourth year of the crisis

percent in march 2024. while this decline was due mainly to lower energy prices, monetary tightening is also bearing fruit. according to the latest ecb staff projections, we expect the inflation rate to return to 2 percent on average in 2025. we are on a good path, but risks remain. at present, i am not fully convinced yet that inflation will actually return to target in a timely and sustained manner. core inflation remains high, especially inflation in the services sector. driven by continued strong wage growth, it is more persistent than goods inflation. by june, we will know a lot more, for example about wage growth in the first quarter. and this data will feed into new projections. if they help to increase our confidence in a timely and sustained return to 2 percent, i would be in favour of a rate cut in june. however, such a step would not necessarily be followed by a series of rate cuts. given the current uncertainty, we cannot pre - commit to a particular rate path. the governing council will continue to decide – meeting by meeting and based on incoming data – how we proceed. people trust us to soon restore price stability. we have to live up to this trust. 3 the digital euro – a matter of trust trust is also an important keyword when it comes to payments. trust is the soul of money. 1 and in times of change, as we are currently experiencing, trust is particularly important. digital transformation has radically changed the payment landscape. we have seen many new players, including fintech start - ups and bigtechs, who have successfully entered and established a prominent position in the payments market. by offering innovative and convenient means of payment, they have challenged incumbent payment solution providers, even though they lack the same level of trust. at the same time, cash is being used less and less. it cannot be used in digital payments, and it is also being used less at stores. in such an environment, the question arises as to the central bank's future role. cash is currently the only form of central bank money available to non - banks, including the general public. it is public money. all other means of payment for euro area citizens are provided by commercial issuers. 2 / 6 bis - central bankers'speeches public money is a cornerstone of our financial system. it does not only define the unit of account. in combination with regulation, it also ensures that a euro is ( literally ) equivalent to a euro, no matter who issued the