transpose the key attributes into national legislation. the financial stability board is closely monitoring this process. a recent peer review by the financial stability board4 showed that implementation is still at an early stage in many g20 countries. implementation efforts therefore have to be treated as an urgent matter in all jurisdictions. we would have to pay dearly for any delay. to summarise, we cannot accept any excuse for deviations from timely implementation. 3. 2 europe ’ s implementation of resolution rules : key issues in europe, the implementation of resolution rules has been carried out through ecofin ’ s agreement of 27 june 2013. 5 the council adopted its general approach on the draft directive for the recovery and resolution of credit institutions and investment firms. i welcome the general thrust of the recovery and resolution directive – or rrd. and i hope that the trilogue process with the european parliament can be completed swiftly, as planned. please allow me to look in more detail at three key issues relating to the rrd. first, the bail - in tool : this enables resolution authorities to write down the claims of shareholders and write down, or convert into equity, the claims of creditors of institutions which are failing or likely to fail. as predictability is crucial when it comes to allocating losses, i very much agree with the council ’ s general approach stipulating a clear pecking order. shareholders will be the first in line to bear losses, followed by clearly defined classes of creditors. very few classes of liabilities are permanently exempted from any bail - in, with covered deposits being the most important category. i also broadly agree with the council ’ s list of permanent exemptions – with only one reservation. excluding all inter - bank liabilities with an original maturity of fewer than seven days could have far - reaching consequences, as it may well foster an unwanted bias towards short - termism. i would therefore argue that these liabilities should be shifted from the permanent to the discretionary category of exemptions. in general, the bail - in tool should enter into force in parallel with the other resolution tools, that is, in 2015. second, i welcome the minimum requirement for own funds and so - called eligible liabilities. this will ensure that each institution has sufficient loss - absorbing capacity based on its size, risk and business model. third, i wish to comment on resolution funds. as a general rule, the draft rrd requires member states to set up resolution funds, which are to be funded ex -

jens weidmann : independent, stability - oriented central banks are the main anchor of confidence opening speech by dr jens weidmann, president of the deutsche bundesbank, at the deutsche bundesbank ’ s second cash symposium, frankfurt am main, 19 may 2014. * 1. * * introduction : unbacked currencies need anchor of confidence ladies and gentlemen, the austrian poet johann nepomuk nestroy is once said to have wittily remarked : “ the phoenicians invented money – but why so little? ” i cannot guarantee that we will have come up with an answer to this question by the end of the day. however, what i can say is that i am pleased to open today ’ s event and therefore wish to welcome you warmly to the bundesbank ’ s cash symposium. it is the second of its kind – the first was held in 2012 – and is intended to promote professional and personal exchange between the various cash handlers. the professional activities of most of the people in attendance here today revolve around cash. however, cash naturally accompanies the everyday lives of you as individuals as well as the general public – for it is one of the few things that nearly everyone is likely to have on his or her person at all times. sometimes more, sometimes less, but at least enough so as never to be completely out of money. cash not only continues to be the most popular and widely used medium of payment for shopping in germany, but is also a central bank ’ s most visible “ product ”. banknotes and coins have a concrete touch and feel to them and are physically tangible, which is not the case with other “ central bank products ” – such as monetary stability. ladies and gentlemen, in his satirical essay “ brief outline of the national economy ” published in 1931, kurt tucholsky noted sarcastically that “ where money comes from is unknown. it is there, or not – mostly not. ” the fact that banknotes are now almost always issued by central banks and circulated through commercial banks is easy enough for the average citizen to understand. but that does not exhaustively describe central banks ’ role in the cash cycle by any means. in order to understand this role, it is important to also answer the more fundamental question of what exactly money is. in economics terms, the shortest possible answer to this question is that money is what money does. all sorts of objects can function as money if they can be used as