and very little time. in only three months, the group delivered an important and insightful report. it provided the basis not only for establishing the esrb but the whole european system of financial supervision, including the european supervisory authorities. 2 / 6 bis - central bankers'speeches one of the key conclusions of the report was that regulators and supervisors had not sufficiently focused on " the macro - systemic risks of a contagion of correlated horizontal shocks ". as a policy response, de larosiere proposed establishing the esrb ( or the european systemic risk council as he then called it ). as a member of the european commission at that time, i had the privilege of being present at the esrb's creation, specifically by preparing with my team the legislative proposals for setting up the esrb, while my dear colleague michel barnier introduced the legislation for the european system of financial supervision. the legislative process was swift. the general board of the esrb held its inaugural meeting in the eurotower in january 2011. given the constantly evolving environment, it is necessary to review the mandate and workings of the esrb from time to time. the commission is now tasked – for the second time – with reporting to the european parliament and to the council on the review of the esrb. while the esrb will not take a formal position on its founding regulation, it believes it is important that the legislator has the opportunity to benefit from the experience of those who have been deeply involved in the work of the esrb. for this purpose, the esrb has set up a high level group to ( i ) identify which adjustments to the mission or framework of the esrb might be required and to ( ii ) provide its insights to the eu colegislators before the review process. i have the honour of chairing the group. let me give you an interim snapshot of the key issues in the review. first, as part of the high level group's work we have been seeking feedback more broadly from the esrb membership by way of a survey among the members of the advisory technical committee on how the esrb has succeeded in its core tasks over the years. we have also sought to explore whether the current operating model of the esrb is fit for purpose and how the esrb and its tasks should be renewed and developed as the financial system evolves. the feedback received from the members of the atc has been most valuable. it indicates that the current model and mandate of the esrb do

erkki liikanen : economic research and economic policy speech by mr erkki liikanen, governor of the bank of finland, at the yrjo jahnsson foundation ’ s 60th anniversary gala. helsinki, 16 december 2014. * * * the esteemed honorary chairmen of the foundation, mr chairman, ladies and gentlemen, the work of the yrjo jahnsson foundation in promoting economic research and in educating economists in finland is truly invaluable. the inauguration of the foundation, and its activities, have been guided by the belief that economic education and research can make a valuable contribution to society. * * * the importance of research as an aid to political decision - making is a subject that is always interesting and controversial. but there are times when it seems to be particularly topical. one such time was around the founding of the yrjo jahnsson foundation. during the late 1950s and early 1960s, there was a strong positivistic current in finnish economics. at the centre of this movement was the so - called o group, which was made up of young economists who set out to modernise finnish economics, that is, to free it from the remnants of the historical school of thought and to adopt the western analytical tradition. the aim of the group was to put economics on a more scientific footing and make it a tool for rational policy - making. the bank of finland ’ s research institute and the yrjo jahnsson foundation both supported the group ’ s activities. the role model for the economists of the time was jan tinbergen who later received the first nobel prize in economics. according to his economic - policy philosophy, the politician determines the objectives and the limits within which the various tools can be used. the role of the economist, on the other hand, is to show how the tools, as allowed, can be used to achieve the objectives set by the politician. policy analysis and quantitative planning were the lingo of the day. to this end, economics as a science had to become objective and quantitative. many of the young researchers of the time were quite fixed on their mission. one of the hardliners of the o group, olavi niitamo, wrote in the finnish economic journal in 1960 that “ there does not appear to exist a fundamental difference between economic models and, for example, models used in physics. both are models based on probabilities and the difference is merely in the accuracy of model. ” 1 for many