than 200 % in others ; in the degree of local market concentration ; etc. there are many more examples, some of them influenced by long - term developments, some by entrenched behavioural differences and habits. bis central bankers ’ speeches to apply – or even try to apply – a federal or pan - european approach to such a diversified financial system requires, in my eyes, a key precondition : to have a functioning european federation in the first place. if that is not possible then we should not try to create half - baked pan - european solutions here in the area of banking – an area which is arguably more sensitive in many aspects than that of fiscal policy and fiscal transfers. if we are not careful enough, we risk repeating the difficulties of the single currency project. the euro is a currency without a state. this means nobody knows who should pay what to whom in bad times. it is for good times only. and we now all know very well that this is the biggest shortcoming of the whole project. some believe that cross - border integration is good per se, without any conditions. i tend to believe – not least because of the current crisis – that cross - border integration of national financial systems is welcome only if each of the national systems alone is and can be sufficiently sound and stable. that ’ s why we at the czech national bank are so nervous about this tendency to continue separating the powers of supervisory and regulatory authorities from their responsibilities in the area of financial regulation. these powers are gradually shifting in small steps towards those who have no direct responsibility and no pots of money to pay should things go wrong in the future. and such a system is not sustainable for future bad times. i believe this is a concern shared by policy - makers not only in our country, but also in other eu countries ( such as here in poland ) and i hope that the coalition of like - minded states has the potential to grow over time. so let me repeat : until we have a full - fledged eu federation we should not build a half - baked one in the area of eu banking. and i strongly advise paying attention to the rules being prepared by the european commission ( for instance the crisis and resolution mechanisms ), which have the potential to be out of line with this proposed approach. bis central bankers ’ speeches

my definition of a clear hegemon is : it should have the right to set the rules and to force others to behave accordingly, the right to enforce the rules. and it has to have the right even to breach the rules itself and still not allow the others to breach the very same rules. but this is not true for germany after the introduction of the euro. to put it simply, eurozone membership turned germany from a hegemon into just one important player in rule making and practical policy making. if i use a simple analogy from the world of motoring, in the german mark era germany controlled the steering wheel, pedals and gearstick of the monetary vehicle, whereas in the euro era – and especially since the crisis broke out – it has had a firm foot only on the brake. and only sometimes, one must add. why is that? well, in a euro - style monetary union, many important issues are put to a vote ( or complicated negotiations ), and votes and negotiations typically have different outcomes than dictates or decisions of a hegemon. if there had ever been a notion that the euro could be as depoliticised as the former mark, it simply had to fail. in reality it had to be more politicised by definition. the euro could not be a depoliticised german mark, because in many key decisions and respects it had to be a rather more politicised french franc, italian bis central bankers ’ speeches lira or spanish peseta. otherwise, it seems to me, it could not have come into being in the existing set - up in the first place. a bitter remark : allan meltzer once said the ecb ’ s biggest advantage over the us federal reserve system is that it doesn ’ t have a government standing against it. this, he believes, is the best safeguard of the ecb ’ s independence. but the opposite and rather bitter argument can also be made. the ecb at times has to stand against all 17 governments of the eurozone member states. i do not want to talk about nominal and real convergence, about rigidities, oca arguments etc. rather, let ’ s take one example. many complain that it is so hard to make real macroeconomic adjustments within the current eurozone, among its individual states. but if i understand monetary history correctly, the eurozone was created partly to make standard adjustments more complicated. the fear of constant “ humiliating devaluations ”