promote discussion. its quality was attested to by mervyn king, who went over to palle at the end of one meeting to say, “ i am really impressed by how much insight you can compress into only six pages ”. that was quite a compliment from a man who is known to be both very smart and very demanding. and perhaps even more astonishing, palle produced more than 80 such papers, over more than a decade, and i cannot recall one case where a governor found a factual error. finally, and this ties back into my earlier comments about palle ’ s research findings, he was never dogmatic in his policy analysis. he could always see the two sides of every argument and the way changing circumstances might alter the balance between them. this was a great quality to have in working for a cooperative institution like the bis. our mission, after all, is not to tell people what to do but rather to help our clients understand better both their own options and the options open to other central banks. palle did this splendidly. contributions to how med functioned i want to finish with a few words about palle ’ s personal qualities, qualities which contributed materially to the functioning of med and to the pleasure that i took personally in the work that i did at the bis. for all of the praise that i have heaped upon him, palle was not an easy man. he could be overtly intolerant of those he considered as too big for their boots, time wasters, or interested in their own advantage at the expense of the best interests of the department. and his disdain for modern management methods, consciousness - raising, performance appraisals and the like presented a problem for those, like me, who were responsible for such processes. but palle got away with it, because everyone knew that he was both extraordinarily conscientious about his work and extraordinarily kind to almost everyone. on many occasions palle came to me to tell me that someone on the staff was ill, or overworked, or needed a talk for motivation. and i know for a fact that he often offered such help himself, and sometimes to the most unlikely persons. it was characteristic of him that the last note he ever prepared for the bis was one for the global economy meeting in january – a meeting that palle ( having just retired ) would not attend. his rationale was simple : the note had to be prepared over the christmas

##p2 and wp4. palle once told me that he could have managed to service wp1 as well, but, unfortunately, there wasn ’ t one. then, in 1983, palle moved to the bis where, in effect, he became the general economics division of the monetary and economic department, all by himself. it was, and still is, a very small shop here. yet there are often misconceptions about this, as made evident by what is now a famous bis story. at a dinner a number of years ago, a visiting central banker asked the bis to write a paper on the prospects for the oil market. as quick as a flash, andrew crockett ( then the general manager of the bis ) said he would get our oil department on it immediately. there was a pause, and then someone asked how many economists were in the oil department. again quick as a flash, andrew said “ about 40 ”. and then there was another pause as those at the dinner seemed by their silence to accept this as fact. astonished, andrew then had to point out that there were hardly 40 economists in the entire bis, and they had to cover everything : real, nominal, financial and, not least, oil. how could such a misconception arise? in part, it was because of the enormous output of palle, and of course other colleagues, over the course of the years. i could not begin to count the ad hoc notes he prepared for meetings of governors, deputy governors and economists. but i would draw attention to one of the last things that palle did. a few years ago, he and karen johnson of the federal reserve board held the pen for a study into global imbalances, and the particular role of asia in that regard. it was a sensitive issue, given our new shareholders from emerging market countries, and had to be treated in a sensitive manner. and it was. that paper, in fact, provided the basis for a number of discussions among central bank officials where analysis was kept central and finger - pointing was wholly avoided. i am particularly pleased to say that this paper will now be published, along with the other documents from this conference. palle was also personally responsible for the principal macroeconomic monitoring paper given to the governors at their regular meetings in basel. this paper, now bimonthly, describes what has been going on in the world economy, asks why, and always finishes with pertinent questions to