were also changes in economic research, as more attention was progressively given to actual policy - making. one of the leading examples is perhaps the so - called taylor rule, which was created to describe the actual behavior of central bankers. this allowed a much richer interaction between academia and policy makers. changes also affected policy - making, with more attention paid to academic debates. these even influenced the very structure of central banks. research units were put into place and developed in most major central banks, including the banque de france, which also implemented an external evaluation of research ( eer ). central bankers indeed realized the importance of conducting their own research activities to support policy making. heavier use of theoretical findings and data - based analysis was made, in order for central banks to better articulate their policy actions. also, economic research outside central banks – which is not driven by direct “ daily ” topics – proved ultimately valuable for policy too. for example, some ideas developed in krugman ( 1998 ) and eggertson & woodford ( 2003 ) on policy at the zero lower bound, inspired by the economic stagnation in japan, entered the united states and euro area policy debates years after their publication. the banque de france foundation has accompanied all these significant trends. by fostering research conducted by international teams. by sponsoring research unrelated to immediate banque de france needs, but which would ultimately prove beneficial for our policies. in that respect, i do expect that the foundation will still play an important role in the next decade in promoting excellence in research in the field of monetary and financial economics. i also hope – and this will be my conclusion – that this is no wishful thinking either. bis central bankers ’ speeches once again, let me thank all the participants, speakers, discussants and chairs that have joined us today for such fruitful talks and congratulate the young researchers who received a well - deserved prize for their work. a special thanks also to all the actors of the foundation, whose constant help and dedication to their missions are precious and appreciated. now is time to have lunch and i believe a buffet has been prepared. thank you. bis central bankers ’ speeches

to bring back their own asset portfolios to levels of volatility matching their requirements. therefore listed companies will have an incentive to adjust their risk profile and avoid more hazardous – which may also be more innovative – investment projects. therefore, “ entrepeneurship ” may be curbed and the growth potential may be influenced adversely. another impact of volatility on financial management is related to recourse to hedging, namely derivative products. as i mentioned earlier, derivatives are a driving force behind mature financial markets, and their strong development in the last two decades is merely consequence of the benefits they have generated. more precisely, derivatives and related financial innovations have enabled companies to transfer the impact of interest rate and currency fluctuations to financial institutions or investors that were ready to manage it, whereby facilitating international trade or project financing. meanwhile, the pricing of derivatives is closely linked to volatility. as volatility is indeed difficult to predict, market practitioners have developed models, which are constantly being refined. over time, market participants, – especially banks, – have become more competent in managing risk, while being left that residual risks which are more complex and harder to control. these consequences would not be a major concern, if the episodes of excessive volatility were only accidental. peaks of volatility clearly reflect macroeconomic imbalances, as soon as market participants take into account the relevant information. this has been evidenced in studies reviewing factors behind currency crises in emerging countries. macro data – such as balance of payment or fiscal policy indicators – prove to be discriminant - leading indicators from this point of view. however, i cannot affirm that the resolution of market imbalances would result in a reduction of volatility to levels that prevailed before these imbalances were taken into account by market participants. in my view one should not underestimate the part played by technical factors in the persistence of volatility peaks. this persistence in volatility is fuelled by technical features that facilitate the build up of mimetic behaviours ( amplifying effects ), or that reinforce the links between the various market segments ( diffusion effects ). mimetic behaviour is of course by no means a new phenomenon on financial markets. however benchmarking, index management, and risk management techniques may have gradually reinforced this type of behaviour, as participants are under increasing pressure to follow their peers through matching the performance of a benchmark. there is no doubt that the spread