francois villeroy de galhau : european central bank monetary policy and the resilience of the eurozone speech by mr francois villeroy de galhau, governor of the bank of france, at columbia university, new york city, 19 april 2017. * * * accompanying slides. i am grateful to p. antipa, l. py, t. mouakil, f. haas, ph. andrade, b. mojon and m. dujardin for their assistance in preparing these remarks. thank you for inviting me to columbia university and your school of international and public affairs ( sipa ). columbia university is well - known as an institution of excellence. what might be less well - known is that columbia has a unique relationship with france and with my institution, the banque de france. let me say from the outset that i will not comment on the current events in france and on our presidential election : i would just like to remind you that there are two rounds, the first one on sunday and the second one on 7 may. especially in moments like these, it is worth looking past the present, with a long - term view. the maison francaise on the campus was created 100 years ago. your french department is one of the best in the united states. moreover, the banque de france has always followed very closely and valued columbia academic production, including two concepts that i will use today : the research of robert mundell on optimal currency areas and the research of mike woodford on forward guidance. lastly, patricia mosser, now a senior research scholar here at sipa, used to work at the new york fed, and a number of banque de france staff have had the privilege of working with her over the years. so, patricia, allow me to thank you warmly for organising this lecture on the ecb ’ s monetary policy and the resilience of the eurozone. in europe, the euro construction process is pretty well - known, while the ecb monetary policy is often debated. in the united states, it may be the reverse : the monetary policy is often better understood than the euro construction process. thus i will deal successively with both issues before turning to the future and a call for action in europe. 1. the euro has strong foundations. political foundations as you know, the single currency was officially launched with the maastricht treaty in 1992 and introduced in 1999. but maastricht and the euro are naturally

about 40 percent of all trading activity in the global fx market in 2013, serving as a critically important cross - currency funding tool for a wide variety of market participants. for example, banks may have domestic currency liabilities but foreign currency assets, and thus may use the fx swap market to source foreign exchange. the spot market, which accounted for about 40 percent of trading activity in 2013, is used by private nonfinancial entities to trade goods and services or to invest in foreign businesses, while banks may use it to engage in cross - border lending and asset managers may use it to purchase financial assets or take positions based on their economic and financial market outlook. the foreign exchange market is a truly global market and one of the few markets that trades around the clock. this gives it the unique ability to provide signals as to how market participants are interpreting or responding to developments taking place in other markets or in the real economy. during the global financial crisis, the foreign exchange market often was the first to reveal how market sentiment was evolving in response to significant events that occurred outside of trading hours in other markets. such signals can be very useful to policymakers and market participants, particularly during periods of market stress. of course, the foreign exchange market ’ s ability to support price discovery and to enable the international flow of goods and capital requires a marketplace that is founded on integrity and capable of ensuring smooth and efficient interaction among market participants. this remains especially important as the structure of the market continues to evolve and adapts to new technologies and financial flows. world bank development indicators ; http : / / data. worldbank. org / data - catalog / world - development - indicators. bis 2013 triennial central bank survey. the triennial survey is coordinated by the bis under the auspices of the markets committee ( for the foreign exchange part ) and the committee on the global financial system ( for the interest rate derivatives part ). the latest survey of turnover took place in april 2013. central banks and other authorities in fifty - three jurisdictions participated in the 2013 survey. they collected data from about 1, 300 banks and other dealers in their jurisdictions and reported national aggregates to the bis, which then calculated global aggregates. the survey, among other things, provides data on turnover, instruments, counterparties, and currencies, which are referenced in this speech ; http : / / www. bis. org / publ / rpfx13fx. pdf. sifma us bond market trading volume ; http