mr. tietmeyer asks whether the euro can assume the role of a major international currency speech given by the president of the deutsche bundesbank, prof. hans tietmeyer, at a luncheon at the american express company in paris on 28 / 10 / 97. i. the “ american express company ” is not only a financial institution, but also a brandname familiar throughout the world. the “ american express credit card ” and “ american express travellers ’ cheque ” are acknowledged in most countries as safe and convenient means of payment, which facilitate not just travel. for decades past, therefore, “ american express ” has been a symbol of increasing globalisation. there are not many other enterprises that can claim that. today, however, i do not want to talk about payment instruments. even so, my reference to the travellers ’ cheque takes us straight to our topic : alongside the “ greenback ”, the travellers ’ cheque is likewise a symbol of the dollar ’ s status as the absolute number one among the currencies of the world. ii. a currency which serves at the same time as a unit of account, a medium of exchange and a store of value - - for private investors and public monetary authorities alike - - is known as an international key currency. what are the pre - requisites that a national payment medium needs, in order to assume these functions? monetary history teaches us that the international role of a currency may often develop spontaneously with the country ’ s political and economic significance. hence it is not surprising that, besides gold, the pound sterling played the overriding role in the international monetary system for many decades. a well - functioning banking system and efficient capital markets had evolved in the united kingdom at an early date. the industrial revolution began in great britain, and helped the british economy to gain an edge over all other countries. the role of sterling was primarily based on the uk ’ s position as a great power, in both economic and political terms. what is more, over a period of two centuries sterling did not depreciate against other currencies. once the significance of sterling started to decline, the dollar took the stage as the principal international currency. this was due not only to the us ’ rise to the status of a world power. another important factor was that, for a long period, the dollar was far less exposed to inflationary pressures than other currencies. by virtue of the bretton woods system, the us dollar

in the face of such a severe global crisis. bulgaria ’ s global issue of 5 - year euro - denominated bonds, marking our country ’ s return to the international bond markets after a decade, was a great success. the international investors ’ orders oversubscribed the offered amount more than 6 times. their strong interest has resulted in a very low annual yield of 4. 436 %. at present, only the highest - rated eu member states can afford to pay a lower price for borrowing on the private capital markets. to conclude, we have achieved monetary and banking stability in bulgaria during the last 15 years. they have been bolstered by the synergies of monetary and macroprudential mandates ( including banking supervision ) within the central bank, complemented by the prudent fiscal policies of several consecutive governments since 1997. the bnb representatives will be eager to discuss our knowledge today and tomorrow, while also looking forward to learning about the experiences of the other countries represented at this conference. i wish you a most fruitful exchange of views and ideas. thank you very much for your attention. bis central bankers ’ speeches