antonio fazio : the relationships between currencies and gold speech by mr. antonio fazio, governor of the bank of italy, at the world gold council international conference “ the euro, the dollar and gold ”, held in rome on 17 november 2000. * * * 1. “ if a gold standard had never existed, it might be necessary to invent something of the kind ”. this quotation from a monograph by dennis robertson ( money, 1928, p 122 ) refers to one of the positive aspects of the gold standard : that of shielding central bankers from pressures to increase the money supply. after the first world war the return to gold was in fact the overriding objective of economic policymakers, in order to ensure monetary stability. the economic disequilibria produced by the war were so pronounced, however, that they made it hard to re - establish the gold standard. the cost, in terms of welfare, imposed by inflation, rising public debt and war reparations was so high that it prevented the rapid return to gold. the genoa conference of april 1922 laid the foundations for an important innovation : the creation of the gold exchange standard, under which gold was flanked by convertible currencies and central banks were granted greater autonomy ; this was to be used to stabilize the value of gold, through international cooperation. however, the new system did not enjoy the same credibility as the earlier regime and, at the same time, failed to leave the monetary authorities sufficient room for manoeuvre. culturally still under the influence of the gold standard, the monetary authorities were in any case little inclined to cooperate and tended to accumulate gold reserves, thereby exerting powerful deflationary pressure on the economy. the monetary disorder of the thirties created the need for a new reform, which was implemented after the second world war with the bretton woods agreements. the suspension of the dollar ’ s convertibility on 15 august 1971 officially cut the link between legal tender and gold - an epochal change after more than 2, 500 years during which money had always been based explicitly or implicitly on a precious metal, prevalently gold. 2. the abandonment of a monetary system hinging directly or indirectly on gold was a consequence of the severe economic disequilibria that developed between the two world wars. the advances made in monetary theory also exerted a powerful influence. ricardo provides us with a clear indication of the main objective of the gold standard : “ to secure the public against any other variations

international initiative got under way in 2009, when the group of twenty ( g - 20 ) leaders set out commitments related to reform of the otc derivatives markets. since work on the g - 20 commitments is being pursued in a number of international groups and foreign jurisdictions, continued attention will be required to ensure that the global convergence process continues in a timely fashion. such attention will be particularly important in areas where international convergence is desirable to avoid a significant fracturing or regionalization of the existing global structure of the swaps market, or to prevent undue constraints on the ability of u. s. firms to compete in foreign markets. a good example of this is the introduction of margin requirements for uncleared derivatives. u. s. and foreign regulators have formed a joint working group of the basel committee and the international organization of securities commissions ( iosco ) to develop internationally consistent margin standards that appropriately address the risks of uncleared derivatives while ensuring that u. s. and foreign firms compete on a level playing field. bis central bankers ’ speeches other key areas of otc derivatives reform present similar international challenges and will demand similar levels of international collaboration. these areas include the creation and regulation of central counterparties, swap execution facilities, and swap data repositories, including mutual recognition by u. s. and foreign regulators where appropriate. issues also arise around the treatment of governmental entities in derivatives reforms in the united states and abroad. for example, title vii of the dodd - frank act generally exempts from swaps regulation any transaction to which the federal reserve is a party, but does not contain a similar exemption for transactions to which a foreign central bank is party. foreign central banks have expressed concerns that the application of certain parts of title vii may interfere with the manner in which they conduct their national monetary policies. in addition to its involvement in specific derivatives reforms related to the dodd - frank act, the federal reserve also participates in a variety of international groups that serve as broader forums for coordinating policies related to the participants and the infrastructure of derivatives markets. these forums include the basel committee, which has recently enhanced international capital, leverage, and liquidity standards for derivatives, as well as the committee on payment and settlement systems, which is working with iosco to update international standards for systemically important clearing systems, including central counterparties that clear derivatives instruments, and trade repositories. these collaborative exercises are intended to support the development of a consistent international approach to the regulation and supervision of derivatives products, dealers, and