areas. lower interest rates may provide short - term support. but they are no substitute for structural policy measures. to return to higher growth rates, innovations and digitalisation will be important factors. they provide opportunities for our two countries to increase efficiency and develop new business models. as a central bank, we are committed to ensuring price stability. this is our best contribution to favourable economic conditions that in turn can be conducive to the free flow of goods, services and ideas. indeed, price stability plays a key role. it is important because it preserves the currency's purchasing power, reduces economic uncertainty and creates a stable environment for investment and trade. price stability also makes an important contribution to political stability. as a contrast, global fragmentation increases the likelihood of future price pressures. if such pressures result in high inflation, this is a heavy burden, especially on low - and middle - income households. and it can lead to political instability – not least by influencing voter preferences. 3 aim for resilience far - sighted policies aim at resilience. during the pandemic, businesses and organisations have learned to become more flexible and resilient. they have adjusted their business models to better respond to unpredictable events, without abandoning their international focus. thus, as seen in the covid example, resilience means a combination of strengthening our economies and preserving openness and international interconnectedness. and preserving a " level - playing field " in global trade where possible. let us continue to build on this foundation together. 4 conclusion ladies and gentlemen, i firmly believe that we have much to learn from each other and can greatly benefit from mutual exchange. at the same time our corporates are not only business partners but in part also competitors. that being said, we have to find a way to ensure competition is fair and beneficial for both sides. by combining our strengths we can create a sustainable and successful future together. our task in the context of constantly changing global conditions is to address challenges – together! – and to identify potential and opportunities for a sustainable and resilient future. 3 / 4 bis - central bankers'speeches to this end, the common dialogue – like our's today – is invaluable! 1 the people's republic of china is again germany's main trading partner - german federal statistical office ( destatis. de ) 2 bundesbank monatsbericht januar 2024. 4 / 4 bis - central bankers'speeches

reflect this new reality or are we still working with the old assumptions and coefficients? if we have not changed our models, are we not likely to underestimate the impact of the spillover? bis central bankers ’ speeches non - tradeable sector • second, do we understand transmission of spillovers which originate in the non - tradeable sector? after all, the global financial crisis had origins in the housing sector, a quintessentially non - tradeable sector. global supply chains • third, do we understand the working of the global supply chains sufficiently? in an interconnected world, global supply chains can be conduits for negative spillovers as in the case of the japanese tsunami. • does the imf understand how global supply chains operate? deleveraging by eurozone banks • fourth, financial developments in the euro area have given rise to concerns that euro area banks could deleverage by reducing their lending to emerging market economies. the recapitalization needs of various euro area banking systems may also have an impact on credit flows to emes. bis data show that the cross - border bank lending to emerging markets has dropped sharply since the second half of 2011 as the euro area crisis intensified. spillovers from both unwinding of qe and amplification of euro area uncertainties, if they occur together, would take on the dimension of a perfect storm for almost all members of the imf. • all these illustrations suggest that there is need to refine our understanding of the interlinkages and spillovers. ( ii ) capital flows • the change in our world view on capital account management is by far one of the most remarkable intellectual shifts brought on by the crisis. consensus dissolved • in the pre - crisis period, there was consensus on several issues surrounding capital account. those consensus views have now dissolved. ( a ) opening up of capital account • pre - crisis : consensus was that every country should move towards a fully free capital account. the only questions were about timing and sequencing. • now we are not so sure. - argument : capital controls protected emes from adopting some of the financial products that proved toxic in aes. - but there is the old argument that if countries are integrated economically, can they remain separate financially? - there are also questions on whether capital controls can ever be effective permanently as interested parties can circumvent them. ( b ) pre - crisis : consensus was that capital controls are bad always and everywhere. • now we are