nout wellink : rebuilding the financial sector speech by dr nout wellink, president of the netherlands bank and chairman of the basel committee on banking supervision, at the colloquium of the centre for financial studies, frankfurt am main, 8 december 2010. * * * introduction 1. ladies and gentlemen, the financial crisis that has raged since july 2007 is a manyheaded monster. at its core is a lack of market confidence in financial institutions and in some countries. i will speak about the background to the global financial crisis, its impact, and about the current situation in some european countries. i will elaborate on some challenges we face for the future. in particular, i will focus on strengthening the resilience of the banking sector, including the approach towards too - big - to - fail banks. i will conclude with the initiatives to enhance macro - prudential supervision. causes of the global crisis global fire fuelled by interdependencies, … 2. after the first signs of difficulties with subprime mortgages in the united states emerged in the summer of 2007, they were long thought to be a specific us problem that would only indirectly affect other parts of the world. that proved an illusion : the mortgage problem in the us was the spark that set the system on fire worldwide. the flame was kindled by the negligent contracting of mortgage loans, via risky constructions and poor documentation. the popularity of financial innovations generated an opaque pyramid of financial risks that became steadily more unstable. … and insufficient buffers 3. the innovations enlarged the net leverage in the system, because they enabled banks to operate with an ever slimmer capital position ; the ratio between assets and capital at large banks before the crisis averaged out at more than 30. the supervision of liquidity risks at banks was inadequate and fragmented, also in europe. in addition, the innovations deepened the interdependencies between financial institutions, and hence the pace and scope of contagion channels. in other words : the fuel to start a great fire was omnipresent. the crisis eventually erupted with great force after the collapse of the us investment bank lehman brothers in september 2008. the losses caused by that collapse and the major uncertainty about who exactly was hit, led to a disappearance of market confidence and a full - blown systemic crisis. global imbalances contributed to indiscipline 4. although the relative importance of the various causes is subject to debate, there is now a rather broad consensus

otmar issing : the european monetary union in a globalised world speech by professor otmar issing, member of the executive board of the european central bank, delivered at the second vienna globalization symposium, institut fur den donauraum und mitteleuropa, wirtschaftskammer osterreich, vienna, 11 may 2001. * 1. * * introduction the role of the european monetary union ( emu ) in an increasingly globalised world is a rather challenging topic for many reasons but not least because it requires also addressing another important element of international integration, namely " regionalisation ". after all, the creation of the euro area is not only tied in with the wider process of globalisation but is also part and parcel of the european regional integration process. some see european integration as a defensive reaction to globalisation, with the european union ( eu ) as a fortress attempting to shut out the challenges and uncertainties of globalisation. in my view, this reasoning is extremely dangerous. first, the " fortress europe hypothesis " fails to take into account that the process of european integration started more than half a century ago, i. e. well before the phenomenon of globalisation became apparent. second, its aims go well beyond the realm of economics, since it is also politically motivated. third, even large economic entities such as the euro area and the eu can not prosper in the long run if they become inward - looking and close their doors to the rest of the world. it is therefore much more useful to emphasise the positive links between european integration and globalisation. economic integration will enhance growth and competition in the euro area, which in turn will result in more trade and greater capital flows. furthermore, fast - growing and competitive economies are likely to be less responsive to possible calls for protectionism. in short, progress on regional integration can support rather than impede the globalisation process, to the advantage of all concerned. i would like to begin this speech by taking a " regional " perspective, presenting to you some of the key features of emu : first, focusing on the euro area itself and, second, on the european central bank. after that, i will take a look at the role of the euro as an international currency and i will finish my remarks by reviewing some of the current challenges for emu. more specifically, i will sketch what the euro area can do for the outside world and the policy reforms that are still needed in order to ensure a high level