mr tietmeyer talks about systemic risk and lender of last resort facilities speech by the president of the deutsche bundesbank, prof hans tietmeyer, at the conference entitled “ systemic risk and lender of last resort facilities ” organised by the center for financial studies in frankfurt on 11 june 1999. i thank you very much for the invitation to speak to this distinguished audience. as a financial center, frankfurt has to be more than a center of commercial and central banking. undoubtedly, it also needs to be a center of critical scientific analysis. therefore, i appreciate very much the contribution which the center for financial studies is making to the intellectual capabilities of frankfurt. ii the subject of this conference “ systemic risk and lender of last resort facilities ” is likewise both important and tricky. there is no doubt about the fact that recent events have placed questions about the soundness of global financing on the intellectual and political agenda. on the one hand, we have experienced severe financial crises in different regions over the past few years. in terms of their impact, the speed with which the events occurred and the ensuing contagion effects, the crises revealed a new dimension. on the other hand, new games and players have entered global financial markets ; for example, highly leveraged activities and institutions. we have learned, in one case in particular, that such institutions can cause serious troubles if their working assumptions on the future development of market prices fail. so, besides all the old or new - fashioned macroeconomic questions, the discussion on the soundness of appropriate financial and supervisory structures is an important one. and the consideration of systemic risk is part of that discussion. however, we should be careful when using the label “ systemic risk ”. firstly, not every financial crisis of a country or an institution necessarily causes a systemic risk. that does not mean that the international community should or could neglect such crisis. but in order to assess which measures are appropriate, the nature of the crisis has to be clear. and secondly, systemic risk is not a given quantity. to a large extent, it is an endogenous variable which depends on the structures of the financial market, on the supervisory framework at the national and international levels and on the decisions taken by the political and monetary authorities. therefore the topic of systemic risk has a lot of different aspects. the aspect on which this conference focuses, namely the lender of last resort, is certainly not the most prominent point. the first and most fundamental question in that context is how

extending our network of bundesbank representative offices was particularly close to my heart, and i am pleased to say that we stabilised this network during my tenure and added two new locations – istanbul and pretoria. now we have representatives everywhere we want to be represented. you will no doubt have gathered by now that the international dimension was always particularly important to me. indeed, i recall my first franco - german financial summit in 2010, where i had the privilege of standing in for bundesbank president axel weber. on the french side, banque de france governor christian noyer was represented by his deputy, and my colleague and friend, jean - pierre landau. christine lagarde, still the french finance minister at that time, looked at the two of us before turning to german finance minister wolfgang schauble to say : “ well, wolfgang, if the representative of germany's central bank has the surname dombret and the one from france is called landau, there isn ’ t really much point in holding these francogerman summits any more, is there? … ”. but representing the bundesbank externally was just one part of my duties. being a manager, i aspired to mould my surroundings a little from the inside as well. but ultimately, the bank is one of those places where the institution moulds its executive board, which is why i am now proud to say that i am a bundesbanker. at the same time, i am pleased to have implemented one project or the other within the bank. i never regarded the bundesbank as an ivory tower out here in the ginnheim wilderness. interaction with the markets and dialogue with the banks was a cause i genuinely believed in – one which i both pushed and encouraged. with all due distance, i always felt that permeability between the worlds – between the central bank and politics, between supervisors and banks – was particularly important. parallel worlds – or " echo chambers ”, to use today ’ s parlance – are of no use to anyone ; hence my enduring commitment to forging a constructive and open relationship between central bankers and bankers. i dare say my mission to bring banks and supervision closer together over the past eight years has been successful – and i ’ m talking here not about nepotism or fraternisation but about nurturing a greater sense of mutual understanding. in this vein, i would also like to take a stand against the wholesale criticism levelled against bankers who “ switch