the austrian currency because of inflation and state bankruptcy ; now a way had to be found to regain public confidence. the solution was to create the new issuing bank as an institution held by private shareholders. this arrangement was not uncommon at the time. the bank of england, which dates back to 1694, as well as the banque de france and de nederlandsche bank, which had both been founded only a couple of years before the oesterreichische nationalbank, had been set up as privately held joint stock corporations. the advantage of this arrangement was two - fold. on the one hand, the shareholders contributed capital, which was the foundation of the financial strength of the new institution and which the austrian government itself would have found difficult to raise. on the other hand, private shareholders ’ participation in the management of the bank was thought to pose limits on the government and prevent government from intervening in a way that might prove harmful to monetary stability. thus, the new institution would find it easier to obtain confidence and trust. the shares of the bank were subscribed by a rather broad group of people. indeed, we find many entries with just one or two shares in the list of shareholders. one of many medium - sized investors was the composer ludwig van beethoven. in our museum you can have a look at a share made out to his name. by the bis central bankers ’ speeches way, this was quite a good investment : between 1818 and 1827, when beethoven died, he earned something between 15 % and 20 % per year on his investment. the nationalbank was not only financially successful for its shareholders ; it also succeeded in stabilizing the value of the austrian florin in terms of silver. the period of calm lasted until 1848, when the people of the empire toppled metternich ’ s repressive regime. the bank, which was perceived as quite close to the state, faced a run – everybody tried to convert his banknotes into silver coins. in response, the nationalbank resorted to a measure that was a small revolution in itself. to restore confidence, the governing board decided to start publishing end - of - month financial statements. before 1848 nobody apart from a handful of bank officials and civil servants at the ministry of finance had known about the true state of the bank, notably the amount of banknotes in circulation and silver reserves held. now this information was made public. in the following years, the bank never returned to its former secrecy, but recognized the importance of

klaus liebscher : economic and monetary union ( emu ) - an important pillar of stability for the international financial system speech by mr klaus liebscher, governor of the oesterreichische nationalbank, at the symposium “ the role of international institutions in globalisation ”, centre for the study of international institutions csi, innsbruck, 16 november 2001. * * * it was with great pleasure that i accepted the invitation to take part in the symposium on “ the role of international institutions in globalisation ” and to deliver some thoughts about the economic and monetary union and its role in the international financial system. but first of all i would like to congratulate dean prof. chen and prof. socher for their faculty initiatives to set up the “ centre for the study of international institutions ”. i strongly do hope that this new centre will contribute to a better understanding for the functioning as well as the need of international institutions like the imf, the worldbank, the bis and others safeguarding the economic developments in a world of liberalisation and globalisation. i really do wish you all the success needed for! it has always been the duty of monetary authorities to secure both monetary and financial stability. yet, issues of monetary and financial stability have moved up prominently on the agenda, due to the growth of financial services, both in volume and in depth, the financial crises of recent years or the terror attacks of september, 11. with the globalisation of capital flows the vulnerability of countries to financial crises has increased. international institutions, especially the imf, have in recent years played an important role in crisis prevention and crisis management. the crises in asia and other regions have directed attention towards the phenomenon of financial contagion both from the side of politicians as well as academics. through the global network of financial markets a crisis in one part of the world may quickly spread via a chain reaction to other places, with the potential to destabilise the global financial system. these crises have transformed the international agenda : at the global level plans for a new international financial architecture have abounded and the future role of institutions like the imf and the world bank has been widely and intensively debated. prominent economists like paul krugman, joseph stiglitz, stan fischer, barry eichengreen and, of course the meltzer commission have formulated quite diverse and controversial proposals. in this context i will focus my deliberations to the role of emu and how the euro can provide for more