. 70 ). • by prioritising an international playing - field that is as level as possible and as sound as possible, speed is sacrificed. • second issue – some key policy discussions end up being away from home, away from the westminster parliament. mainly global in fact. • that global process is pretty transparent – consultative papers, speeches and so on. but perhaps not covered in any national media, including here in the uk, as much as one might expect. bis central bankers ’ speeches • but there is a deeper question here about the compatibility of domestic and global objectives. in the monetary sphere, it is well known that one cannot combine capital mobility, monetary policy focused on domestic price stability, and fixed exchange rates. solution in post - bretton woods world has been floating exchange rates. this does not mean there are no spillovers. hence information sharing in basel meetings etc. • there is a financial trilemma too. cannot combine cross - border banking, and an integrated international financial system more generally ; financial stability ; and national policies focused solely on domestic stability. • came home to roost in the crisis : global banks were, as mervyn king put it, “ international in life but national in death ”. financial autarky is not the answer. • solution : co - ordination and co - operation on the resolution of global banks. g20 financial stability board has led the way here. real progress. • means foreign countries have a stake in our banks, and vice versa. means the key policies are unavoidably international, global. as a trading nation we should welcome that. i hope these brief remarks provide the basis for a good discussion. in short, the traditional roles of central banks – for the first time ever reflected in uk legislation – touch every household and business in this country and, in truth, more widely. we need to be clear about what we can do and what we cannot do ; we need to operate consistently within our remit ; and above all we must be sufficiently transparent to make proper accountability realistic. that is what trust requires, and we are in the business of trust – trust in the value of money. bis central bankers ’ speeches

. they were recognised in the maastricht treaty, which established the famous “ convergence criteria ” precisely in order to try to limit the risks before the euro - project went ahead. they are essentially similar to the risks of sectoral or regional divergence within a national currency area - which we in the uk certainly know something about - it is in fact a major monetary policy headache for us at the present time. but in the case of the eurozone the risks are of divergent monetary policy needs between the different member countries - they apply at the national level. and if they materialised to any very significant extent, the resulting tensions could be serious, because alternative mechanisms - such as labour migration or fiscal redistribution through a central budget - which help to mitigate sectoral or regional disparities in the national context - are less developed at the eurozone level. some commentators point to the present inflationary pressures in ireland as an example of the problems that could arise where the single monetary policy is easier than the national situation might require - though i am not sure how far one can sensibly generalise from the irish experience. it is equally possible to envisage circumstances in which the single monetary policy is too restrictive for some countries. the fact that the uk did not join in the first wave of emu was a disappointment to some people, including to some of our european partners - but it was also a considerable relief to them - we would certainly have complicated the task of the ecb in setting its single monetary policy. and from our own perspective, if we had joined emu from the start - and had eurozone interest rates over the past eighteen months or so, it is very difficult to envisage how we would have avoided an inflationary boom in the uk. it is true that, to the extent that the present imbalance within our economy reflects sterling ’ s appreciation against the euro, we would have been protected against that. but, with accelerating inflation in the economy as a whole, the effect would have been tantamount to real exchange rate appreciation, which would in any event have damaged their competitive position and so provided at best only short - term relief even to them. and it would not in that case be possible to reverse that effect through exchange rate adjustment. the fact is that there are no easy answers or ideal solutions to the one - size - fits - all problem at the eurozone level, without substantial - and sustainable convergence between our economies, although coping with such