possibly more – other major international currencies. second, the euro can only be assured of a major role in a multipolar currency world if the architecture underlying the single european currency is sufficiently strong. the task of achieving this cannot be delegated to financial markets and requires appropriate institutional steps. the euro in a multipolar world when the idea of the single currency was first mooted in the 1980s, the global economy was dominated by three countries : the united states, germany and japan. since then, the global economy has seen major changes. with the ongoing integration of global markets, we have witnessed the rise of emerging market economies. china, in particular, has led to a progressive shift in the centre of economic gravity and is expected to overtake the united states in terms of gdp at market exchange rates sometime from 2025 onwards. the us dollar has remained the main international currency, as a result of the predominance of us financial markets and also the inability of several emerging economies to pursue independent policies ( for example by de - pegging their currencies from the us dollar ). but there is little reason to believe that these factors will not change over time. the renminbi, in particular, should be in a position to relatively quickly emancipate itself from the dollar and become a major international currency if the chinese authorities were to consistently pursue capital account liberalisation, greater exchange rate flexibility and all related policy measures in the years to come. the international role of some other emerging market currencies is also likely to increase over time. we are clearly moving towards a multipolar currency world. the question is whether the euro will be one of the poles – so to speak – of the new system. i will not dwell on the advantages for europe of being one of the poles, but rather i invite you to reflect upon what would happen if it were not. to be sure, the euro, like any other currency, would be affected by economic and political developments in the countries issuing the leading reserve currencies, and would suffer severely from external shocks. consider, as an illustration, the recent experience of the swiss franc, a currency which is renowned for its stability. after the onset of the global financial and economic crisis the franc appreciated by 17 % vis - a - vis the euro in 2010 alone, driven by the reallocation of global capital on a massive scale. this has fuelled deflationary risks and slowed economic growth. to counter

. this task poses significant challenges because it requires special skills and the further development of analytical tools. models must be developed to help structure and analyse the vast amount of information collected for risk assessment. as financial stability and macro - prudential analyses are at a relatively early stage, it is advisable to employ a multiplicity of approaches. it goes without saying that the creation of the esrb does not change in any manner the allocation of responsibilities among policy - makers enshrined in the treaty, notably the unambiguous establishment of the maintenance of price stability as the primary objective of the ecb ’ s monetary policy. at the same time, the assignment of specific tasks related to the functioning of the esrb to the ecb actually enhances its ability to fulfill the task of contributing to the maintenance of financial stability, as foreseen by the treaty. conclusions the current financial crisis has spread across the world at an unusual speed and with surprisingly strong consequences. the fact that the tensions originating from a relatively small segment of the international financial market ( the us market for sub - prime mortgage loans ) evolved over time into a global crisis of a magnitude unseen in decades – wreaking havoc on a number of economies and the lives of millions – may deceive some into thinking that worldwide financial integration has gone too far and that we would better off under financial autarchy. it is therefore worthwhile to recall what the benefits of financial integration are, especially in europe. integrated financial markets help to realise the full economic potential by increasing competition and expanding markets. this results in lower intermediation costs and a more efficient allocation of capital, which in turn raises the potential for increased economic growth. for those european member states which have gone even further by adopting the euro as the single currency, there are added benefits in terms of price transparency, lower interest rates, reduced transaction costs and the elimination of exchange rate fluctuations. these benefits are very substantial. at the same time, the financial crisis has been a rough reminder that, although financial integration improves the access to financial markets and the opportunities for risk diversification, it may also increase the scope for financial contagion across countries. it is therefore paramount that the financial stability arrangements keep pace with the degree of financial integration. such arrangements should be particularly ambitious in the eu and the euro area, which are characterised by a very high degree of financial integration. this is why it is important that we fully and quickly implement the reforms of the european and