joachim nagel : the benefits of diversity for central banks speech by dr joachim nagel, president of the deutsche bundesbank, at the g7 cebadi diversity, equality and inclusion summit 2022, frankfurt am main, 4 november 2022. * * * 1 welcome good morning everybody, when i was invited to give the " opening speech " at your cebadi summit some time ago, i happily agreed. unfortunately, my schedule changed in the meantime and i wasn't able to make it yesterday. thus, i am only joining you on the second day of this summit. and i would like to share some thoughts with you : the experts who are driving diversity throughout central banks worldwide, who are attending this summit either in person or virtually. 2 why diversity does matter let me start with the basics. the bundesbank, as a federal authority in germany, is of course committed to the values of our society. diversity is a cornerstone of our liberalpluralistic system of values. it is enshrined in our constitution and a key human rights issue. as a public authority, we also want to reflect the society we serve. this is a question of fair participation for all. looking at the bundesbank as an employer, however, there is another aspect that needs to be taken into account. we need more diversity because diverse teams can achieve better work results. the reason is that diverse teams are more likely to question traditional structures and to think creatively. they tend to find different ways of solving a problem. this is how innovation is achieved and how an organisation remains capable of learning and developing. 3 dimensions of diversity to attain this diversity of thought, we need to promote all dimensions of diversity in all its facets. over the last decade, the focus of diversity at the bundesbank has been first on the inclusion of people with disabilities and second on equality between men and women. we have already been very successful in the inclusion of persons with disabilities. in 2014, the bundesbank further developed the previously existing integration agreement and adopted the inclusion agreement. in doing so, it became one of the first federal authorities in germany to adopt the un disability rights conventions and to firmly anchor the guiding principle of inclusion within the bank. in recent years, the bundesbank has significantly exceeded the legally required quota of 6 % for employees 1 / 3 bis - central bankers'speeches with disabilities. last year, this quota was even slightly above 9 %. however, for me

of policy. this proposition has recently again been called into question. economists at the bank for international settlements ( bis ) point out that economic developments are determined, among other things, not just by business cycles but also by financial cycles. in particular, a financial crisis can dampen the output path of an economy persistently. consequently, the bis economists write : “ to the extent that monetary policy ( … ) can influence 5 / 7 bis central bankers'speeches the financial cycle, it too may have a persistent impact on the economy ’ s long - run path, and hence also on real interest rates. ” 11 the impact of this finding extends far beyond the use of the natural interest rate as a benchmark for monetary policy. it also raises the issue of whether monetary policymakers should focus more of their attention on the financial cycle. as we have witnessed, financial crises have a considerable impact on macroeconomic outcomes and, ultimately, on central banks ’ ability to guarantee price stability. since the financial cycle is longer than the business cycle, this comes down to extending the policy horizon. jacques - yves cousteau, the pioneer of modern underwater diving, was well aware that it is often a good idea to take the longer - term view, too. speaking in 1992, he said : “ we are living in an interminable succession of absurdities imposed by the myopic logic of short - term thinking ”. 12 taking a longer - term perspective on inflation, central banks might be compelled to act on the build - up of financial imbalances, even if they pursue only the single objective of price stability. this would also help to reduce asymmetric responses by monetary policy. i am convinced that monetary policy should have a symmetrical effect over the entire economic cycle. in a downturn, policymakers must respond vigorously ; but in an upswing, when risks in the financial sector can build up, they must also be able to tighten the reins again as needed. 5 conclusion ladies and gentlemen, a golden rule for divers is : don ’ t exceed the maximum time. i ’ d say that ’ s good advice for speakers, too. so i will now bring my speech to a close. our financial system is much more stable today than it was ten years ago. a large number of weaknesses have been addressed and reforms initiated. now our task is to make sure that the rules we have created are applied consistently. the former chairman of the fed, paul volcker, recently cautioned that “