jens weidmann : crisis economics – the crisis as a challenge for economists lecture by dr jens weidmann, president of the deutsche bundesbank, at the annual gala meeting of the munich volkswirte alumni, munich, 13 june 2013. * 1. * * welcome mr baader members of the munich volkswirte alumni - club ladies and gentlemen i would like to extend a very warm welcome to you here at the deutsche bundesbank in munich. at the same time, i wish to thank the volkswirte alumni - club for inviting me to give this year ’ s lecture. even at the bundesbank, it is not every day that so many economists are gathered together, and the bundesbank employs a large number of economists. i would therefore like to take this as an opportunity to talk about economists and their role in the crisis. before that, however, i would like to offer my sincere congratulations to this evening ’ s prize winners on receiving their awards. 2. have economists failed? on 6 april 2009, a severe earthquake occurred in the central italian town of l ’ aquila with the tragic loss of more than 300 lives. only six days earlier, there had been a meeting of a national commission for the forecast and prevention of major risks. afterwards, the experts made a public declaration that, despite a few tremors over the past few days, there was currently no heightened risk of an earthquake in the region. ladies and gentlemen i am telling you about this incident because it is possible to draw instructive parallels with the role played by economists in the crisis. in much the same way as seismologists are accused of not giving ample warning about the possibility of an earthquake, economists are accused of not giving ample warning about the looming financial and debt crisis. and much as engineers are accused of making buildings that are not earthquake - resistant, economists are accused of building design flaws into the financial and economic system, with whole nations now suffering under the consequences. economists have never had the best of reputations, even in the academic world. many may feel that the topics which occupy economists are too common or vulgar – such as money. as silvio gesell wrote in 1911, “ lofty idealists can easily find subjects of investigation more attractive than money. religion, biology, astronomy, for example, are infinitely more edifying than an investigation of the nature of money. ” by the way, silvio gesell himself found this object of investigation interesting

national markets. this is why both authorities and industry players are making great efforts to achieve posttrade harmonisation. today, we have been offered a comprehensive overview of what is currently happening in europe at the post - trade level. on behalf of commissioner barnier, mr paulis highlighted how, with the crisis, the speed of financial reforms has accelerated. many participants have underscored the importance of transparency to achieve safer posttrading and to increase the existing level of competition in the industry. we have heard an interesting discussion on the legal initiatives currently being undertaken at eu level to remove the barriers that are hindering the single market objectives. mifid is being revised to increase investor protection and improve the functioning of eu capital markets. emir entered into force in summer 2012, requiring standard derivative contracts to be cleared through central counterparties and establishing stringent organisational, business conduct and prudential requirements for central counterparties. the european commission ’ s bis central bankers ’ speeches proposal for a csd regulation improving securities settlement is under scrutiny by the eu legislators ; it will enhance the legal and operational conditions for cross - border settlement in the union in general, and a strong emphasis has been placed today on the importance of its timely adoption. i noted that the majority of the audience saw the need to adopt the csd regulation at the latest by the start of 2014, also with a view to allowing sufficient time for the technical standards. the representatives from the parliament and the commission have highlighted the importance and feasibility of this objective. finally, another initiative is in the pipeline to harmonise the securities law legislation, establishing an eu - wide framework for the ownership of securities and increasing legal certainty in cross - border environments. combined, the review of mifid, the emir, the csd regulation and the securities law legislation are consistently building a harmonised legal framework for the whole securities transaction chain – from trading to clearing to settlement. important progress is also being made at the operational and business levels. the most notable example mentioned by many today is t2s, a project with huge potential for market integration. t2s will enable the participating csds to focus on value - added services while the basic settlement service is provided via the single t2s platform. t2s will thereby make it easier for business to move from one csd to another. the actors that harmonise in t2s have a greater chance of reaping the full benefits of t2s and widening their business. conversely,