##bank is against the general implementation of an output floor. in theory, it acts as a way of putting a stop to the frivolous calculation exercises associated with using internal models. in practice, however, it works against the focus on risk. this is something we ’ re not prepared to accept. we have no interest in banks taking on additional unwanted risks. basel iii has developed other instruments, such as the leverage ratio, to fight against risks of modelling and misuse. 4. internal models for calculating operational risks, known as amas, should be done away with as planned and an appropriate standard solution used instead. 4. outlook for basel iii though there is still much work to be done in basel, before i close, i ’ d like to take this opportunity to emphasise just how much progress has already been made at the basel committee meetings thus far. the changes that are yet to be implemented likewise need to align with the original objectives – they should adequately cover risks and set the right incentives, for example. in summary, we mustn ’ t lose sight of how valuable an international agreement like basel iii can be. it combats regulatory arbitrage and the shifting of risks. beyond the regional level, effective international standards are in everyone ’ s interests. in this way, basel sets the standard for effective international cooperation that benefits everyone. that is more important than ever. currently, we are seeing many citizens calling our globalised world into question, with more and more looking for answers in separation or regionalisation. i very much hope that with the new administration in the united states, the cooperation on the basel committee will continue to be based on mutual trust. it must be said, however, that the bundesbank is not prepared to reach an agreement at any price. thank you for your attention. 1 advanced internal ratings - based approach. 2 foundation internal ratings - based approach. 3 / 4 bis central bankers'speeches 4 / 4 bis central bankers'speeches

close trading partners and our financial centres would retain their close ties – our supervisors would work together to ensure high regulatory standards, without imposing undue burdens on firms. let ’ s not be unrealistic : achieving such cooperation is highly challenging. we need to define the areas in which we want to cooperate, and to what degree we want to cooperate – this will be difficult politics. but it is worth trying to save the post - war order – by developing it further. we can all further that cause : by finding solutions that respect the legitimate interests of countries wanting increased national autonomy and the need to continue global economic cooperation. the bundesbank ’ s representative in london furthers that cause. ms julia becker has done an excellent job over the past two and a half years : she played a vital role in the exchange between the bundesbank and the bank of england, and she was instrumental in shaping our brexit analysis. i am pleased that after a short family break, she will continue to perform an essential role at our frankfurt headquarters. i am also confident that ms olga wittchen will continue this successful track record. coming from our directorate general for banking and financial supervision, she is an expert in international banking regulation. i have worked with her on several projects on the financial stability board – and i am convinced that she will put her skills towards fostering cooperation between britain and germany. 7. conclusion ladies and gentlemen 3 / 4 bis central bankers'speeches henry l mencken, an influential american writer of the early twentieth century, once said : " for every complex problem there is an answer that is clear, simple, and wrong. " let ’ s search for answers that are right – and let ’ s expose oversimplified, misleading ideologies – neither nationalist populism nor hyper - globalisation will lead to prosperity and security. global economic cooperation has helped us to build a more prosperous society. however, it does have side effects. only by reducing and managing these side effects can we foster global cooperation in the long term. focused global cooperation promises a way forward. we should all put our minds together to decide how this can be best achieved. thank you for your attention. sam : the floor is now yours. 1 d rodrik ( 2000 ), how far will international economic integration go? in journal of economic perspectives : 14 ( 1 ) : pp 177 - 186. 4 / 4 bis central bankers'speeches