and particularly china, the increase in trade surpluses and its corollary, the worsening of the us imbalance, exerts upward pressure on the currencies while swelling foreign exchange reserves increase the costs of an appreciation vis - a - vis the us dollar. does this configuration correspond to a mutually advantageous and sustainable situation? in this second session, bill white, economic adviser at the bank for international settlements, will clarify these paradoxes in the light of the work carried out by the latter organisation, which makes a vital contribution to the analysis and promotion of macro - financial stability. in the third session, which will tackle economic policy adjustment and responses to the increase in global imbalances, we will examine private and public players ’ ability to adapt to the current situation. can the behaviour of private agents, through a change in their savings or the redirection of capital flows, lead to a spontaneous decrease in global imbalances without engendering destabilising adjustments on the financial markets? more specifically, can greater foreign exchange flexibility in certain areas, and particularly the emerging economies, help to restore some balance? in europe and japan, we expect an increase in potential output following structural reforms on financial, product and labour markets. beyond the mechanical effect of a reduction in the growth differential, what would be the impact on capital flows? in the united states, bearing in mind the savings behaviour of private agents, what lever should be used in addition to the tightening of the policy mix to substantially improve the savings - investment balance? lastly, could international institutions play a bigger role in the management of global imbalances? in this third session, otmar issing, former professor at the university of wurzburg and member of the executive board of the european central bank, will explore the avenues for finding a way out of the current global imbalances notably by presenting the analyses developed by his institution in the areas of fiscal and foreign exchange policy and structural reform. the last session will focus on the consequences of these developments for international financial stability against the backdrop of the liberalisation, the increase in and redirection of capital flows. the emerging economies have on several occasions borne the brunt of erratic capital flows. the asian crisis of 1997 thus brought to light the risks associated with the accelerated liberalisation of short - term capital flows, particularly where prudential supervision structures were inadequate. what is the appropriate global financial integration policy for an emerging economy? for mature economies, the ltcm investment

currently being achieved through the social responsibility pact. the “ macron act ”, which allows working on sundays, for example, is certainly a positive step. however we have not done enough on the labour market, and i hope that the other reforms will see the light. we need a more flexible minimum wage and more room for negotiated arrangements in firms and branches, like in germany. public finances will only be sustainable and credible if the reduction in the structural deficit continues, in particular through a downsizing of the public sector. structural reforms must gain momentum in order to support growth. interest rates will eventually rise and the governments that have not implemented the necessary reforms will find themselves in a difficult situation. your second term as governor is coming to the end. what were the highlights? c. n. naturally, the financial crisis. the most important event has been the creation of the banking union. it is the most significant step since towards a united europe and is exactly in the spirit of how the founding fathers of europe wanted the eu to evolve since the introduction of the euro. the role of the governor of the bdf like that of the president of the bundesbank will increasingly be that of an important player on the european field, and much less at the national level. in germany, we tend to believe that the role of national central banks is shrinking. c. n. at the banque de france, some of my colleagues thought that one day the ecb could replace us. i told them that it would not happen as we are in a federal system with a relatively small centre. within the governing council we take common decisions but most of the work is done by the national central banks. but from now on we will have to work differently, for example, instead of looking for the best payment system for france, we must look for the best payment system for the euro area as a whole. in this respect, our best partner has mostly been the bundesbank. but the relationship seems to have become more distant? bis central bankers ’ speeches c. n. no, certainly not. the bundesbank remains our number one partner. we may start with different approaches on some of the issues in the governing council but in the vast majority of cases we have the same responses. it is with the bundesbank that we have developed most of the projects for the euro area, with which we organise conferences, and with which we cooperate in the international field. this cooperation is beneficial for both of us