a lack of transparency and clarity in policymaking. in the remainder of my presentation i shall focus on monetary policymaking in a global market. the subject is naturally too vast to be fully covered in my introductory statement. thus, i shall focus my attention on two issues which i think are relevant to our discussion today. first, i shall mention some of the consequences of globalisation for policymakers. second, i shall explain why i think that the monetary policy strategy of the european central bank is well designed to face the challenges stemming from globalisation. some consequences of globalisation for policymakers with regard to the first issue, let me emphasise that i do not believe that globalisation has eliminated policymakers ’ influence over domestic political, social and economic developments, particularly in larger industrialised countries ( or areas ). on the contrary, the fact that people and capital can move more freely and quickly across borders makes the consequences of national policy decisions for the respective economies much more immediate and visible. obviously, this makes national policymaking and its presentation to the public more demanding. naturally, there is a disciplinary effect which comes from globalisation but this does not necessarily run counter to the national interest. the influence of domestic policymakers can be used for good or evil. globalisation improves the incentives for national politicians to implement good policies, such as structural reforms, which increase the flexibility of the economy. this is demanded by the treaty establishing the european community, which requires member states and the escb to “ act in accordance with the principles of an open - market economy with free competition ”. these policies will contribute to improved growth and employment perspectives. i believe in the idea that all nations gain from trade, including trade in financial assets. notwithstanding possible imperfections in the financial markets, international capital market integration can yield considerable benefits. however, it is important to stress that without flexible markets, countries will not be able to reap the full benefits of globalisation. moreover, it is well known that national authorities would face an impossible task if they had to reconcile in a sustained manner the objectives of what has been called the “ inconsistent quartet ” of ( 1 ) free trade, ( 2 ) complete international capital mobility, ( 3 ) fixed or managed exchange rates and ( 4 ) national autonomy in the conduct of monetary policy. the painful lesson to be learned from economic theory and historical experience is that these four elements cannot coexist, and that at least one will have to give way. this is of course one of the

of our work as central bank governors, and it ’ s insightful for all of us to hear from leaders beyond our own organizations and the borders of our countries. global issues i touched on many topics — the pandemic, the war, and inflation. these are global issues with domestic implications, and when we address them to fulfill our own mandates, we affect the economies of other countries in the region as well. in this regard, the work of the bis in bringing central banks together has never been more important. i look forward to continuing our dialogue and engagement in the future. again, congratulations to the central reserve bank of peru, and best wishes for your second century. 2 / 2 bis central bankers'speeches