hermann remsperger : monetary policy - how relevant are other policymakers? welcoming address by professor hermann remsperger, member of the executive board of the deutsche bundesbank, to the 5th bundesbank spring conference “ monetary policy : how relevant are other policymakers? ”, eltville, 2 may 2003. * * * ladies and gentlemen, i have the pleasure to welcome you to this year ’ s bundesbank spring conference on issues concerning the relationship and interactions between monetary policy and other policies. regrettably, i have to tell you that the policy lecture to our conference had to be cancelled because ken rogoff informed us only very recently that he was not able to come. the broad spectrum of subjects to be discussed today ranges from theoretical considerations about optimal fiscal and monetary policy co - ordination, the role of monetary and fiscal stabilisation policies up to empirical evidence on the interaction between monetary and fiscal policies. in tomorrow ’ s sessions we are scheduled to extend our perspective by explicitly taking into account the openness of the economy and look into the implication for exchange rates and exchange rate regimes in particular. with the following remarks i only want to emphasize that the subject of our conference is highly topical from the economic policy point of view. however, a part of the subject has been with us for a rather long time. at any rate it reminds me of my thesis in the 70s. at that time i came to the conclusion that a strictly rule - based monetary policy requires discretionary leeway for fiscal policy. meanwhile many central bankers - and i include myself - plead for the application of rules in fiscal policy. such rules were created by the implementation of the stability and growth pact in the european union. i do hope that there will be sufficient time at our conference to discuss the importance of fiscal rules for monetary policy. i have to admit, ladies and gentlemen, that when we were planning this conference we did not know how much the discussion about the ecb ’ s monetary strategy would intensify. now we are right in the middle of this discussion, which in my view reflects the first out of three political factors that form the background of our conference. why? well, if you want to talk about the relationship between monetary policy and other policy areas not only in an abstract but in a realistic way, then you must have a clear idea of the applied monetary policy strategy. 1. price stability you will understand that i have no intention to forecast the outcome of this strategy

##dging products that are already available. in this regard, i welcome the australian financial sector ’ s efforts to support the development of an rmb market here in sydney, in particular, by ensuring that the current and future rmb product needs of australian corporates are met, and that clients have ready access to information. another encouraging sign is the recent announcements by two chinese banks operating here in sydney regarding rmb clearing services. conclusion the internationalisation of the rmb – and china ’ s associated move towards a liberalised capital account and more flexible exchange rate regime – has the potential to create a seismic shift in the international monetary and financial landscape. and while china clearly has an interest in getting this process right, the rest of the world – including australia – also has a strong interest in the outcome. history teaches us that financial deregulation is an inherently risky process, but that there are substantial payoffs if it is done well. conferences like this are an important part of understanding this whole process and i wish you all the best in exploring the challenges and opportunities that lie ahead. for an overview of the results of this survey, see ballantyne a, m garner and m wright ( 2013 ), “ developments in renminbi internationalisation ”, rba bulletin, june, pp 65 – 74. bis central bankers ’ speeches