have severe repercussions on a country ’ s competitiveness and trigger painful economic adjustments. after all, in addition to the fundamental alternative of flexible exchange rates, there are also intermediate solutions such as basket pegs or even crawling pegs. given global financial markets, international investors and the free movement of capital, exchange rates are nowadays - even more than before - “ bridges ” between the economies. these bridges may be fixed or movable. what is crucial, however, is that they are strong and sustainable. pegging to another currency must therefore be given very careful consideration, and the economic setting and internal adaptability must also be taken into consideration. vi in his novel “ the unbearable lightness of being ”, milan kundera, the well - known czech writer, also wrote about the burden of taking decisions. in other words, people can never know what they ought to want, because they only have one life and that life cannot be compared with earlier lives nor can it be corrected in later ones. therefore, it is impossible to tell what is the right decision because there is nothing to compare it with. there are no comparisons for the euro, either. it is a unique project in europe ’ s history. and much depends on its lasting success. a number of nation states, which in other respects are largely sovereign, are giving up their own currency in favour of the euro, and thus also relinquishing a major element of national sovereignty. given global integration, this historic change in the economic policy has an impact going far beyond the participating countries which affects neighbouring countries and trading partners. everyone must now adapt their future decision - making on regulatory policy to the changed environment. unlike tomas, the character in kundera ’ s novel, those bearing responsibility must not avoid making the necessary decisions. and i am also sceptical as to whether it will be enough - after taking the decisions in favour of monetary union and the euro - to rely on the emergence of a “ spontaneous system ”, as called for by hayek. certainly, the risk of “ constructivist error ”, which hayek warned against with the planned economy in mind, can never be dismissed out of hand. in other words, one should not overestimate what is possible in each given case. nevertheless, it is precisely in the area of regulatory policy that there are sufficient lessons to be learnt from the past. this means that there are also guidelines suggesting the approach to follow, a few of which i have

effect, it will be absolutely crucial that we identify any potential interactions of this kind and, as far as possible, avoid them. this is quite clearly anything but an easy task. it means weighing up the aims and effects of various measures. it could also mean that measures which have already been adopted have to be amended or revised while they are in the process of being implemented or soon after. the latest example of this is the revision of the liquidity standard by the basel committee. having said that, however, it should be clear to both the general public and those affected by regulation that this is not a case of watering down measures once they have been adopted. rather, it is matter of taking due account of systemic aspects of regulation so as to avoid possible unwanted consequences. 5. conclusion ladies and gentlemen the international regulatory agenda is not a patchwork. rather, it represents an all - embracing approach covering a wide range of issues from institutions to financial markets to individual instruments. this coherent strategy consists of several interlocking structural elements, the overall impact and potential interactions of which have to be carefully analysed. for it is only with an internally consistent regulatory agenda that we can make the international financial system more stable and more resilient to crises. in order to achieve this goal, the international agreements now finally also have to be consistently transposed into national regulations and laws. even if slight delays to the original timetables cannot always be avoided, there should be no doubt about the determination of all the g20 countries, including the eu, to continue fulfilling their commitment to implement the reforms. thank you for your attention. i look forward to the ensuing discussion. bis central bankers ’ speeches