, europe and around the world. yet politicians must also play their part. the crisis has shown how dangerous an unstable banking system can be for the real economy. the most important step to address this issue is, of course, to improve regulation and supervision. that has been achieved. but especially in europe it would be worthwhile to take measures to ease the real economy ’ s access to alternative sources of funding. some initial ideas on a european capital markets union are already being discussed ; let ’ s seize the opportunity to make these ideas a reality. so i should actually correct what i said at the beginning of my remarks. it isn ’ t just the banks which are now standing at the starting line of a marathon – so are politicians. and it is in everyone ’ s interest to arrive safely and swiftly at the finishing line together. thank you very much. bis central bankers ’ speeches

jean - pierre roth : life in a two - headed monetary system - the swiss experience speech by mr jean - pierre roth, chairman of the governing board of the swiss national bank, at the 50th anniversary of the bank of israel, jerusalem, 29 november 2004. * 1. * * introduction it is almost a common - place to state that the birth of the euro on january 1, 1999 was a milestone in the process of european integration. giving up national sovereignty in monetary matters was without doubt a very bold move of historical proportions. it will have long lasting economic and political consequences. it is meant to promote efficiency, transparency, and growth. the creation of a single currency should also act as catalyst towards further european integration. moreover, and this is really what i would like to focus on today, the creation of the euro has changed the world ’ s monetary landscape. i believe that one can say without fear of exaggeration that it has led to a new international monetary order. countries such as israel and switzerland, situated on the periphery of the euro area, are affected as well. i would like to share with you some of our experiences in this regard, and i would be very interested to know to what extent these findings apply to your country too. 2. our pre - euro worries quite frankly, my colleagues and i at the swiss national bank were somewhat worried before the introduction of the euro. although we fully appreciated the benefits that switzerland would draw from the creation of the euro in terms of increased transparency and lower transaction costs, we were also quite concerned about the possible risks. three of these came to mind. first, we feared that the swiss franc might be in for a bumpy ride. in the past, whenever the dollar was under attack, international investors turned their attention to the german mark and the swiss franc. their status as safe - haven currencies meant that at times of turbulences on foreign exchange markets they would move well beyond what economic fundamentals could justify. in fact, the swiss franc often revealed a tendency to appreciate even more than the german mark, a phenomenon that was generally attributed to the relative narrowness of the swiss financial markets. now with the german mark gone, wouldn ’ t all attention focus almost exclusively on our currency? would it not mean that in a dollar crisis the franc would have to bear even more of the adjustment than in the past? even more frightful, what would happen if the euro itself were under attack? the last thing