jens weidmann : united in diversity welcoming remarks by dr jens weidmann, president of the deutsche bundesbank and chairman of the board of directors of the bank for international settlements, on the occasion of the handover ceremony for the central bank of the republic of austria ’ s ( oesterreichische nationalbank / oenb ) new governor, vienna, 1 october 2019. * * * 1 introduction dear chancellor bierlein, dear vice - chancellor jabloner, dear finance minister muller, dear president mahrer, dear governor holzmann, dear ewald, ladies and gentlemen, joseph schumpeter once said that to realise the relative validity of one ’ s convictions and yet stand for them unflinchingly is what distinguishes a civilised man from a barbarian. 1 ewald nowotny is an exceedingly civilised man. as an economist, he is aware that many insights are preliminary and potentially mistaken. at the same time, ewald nowotny is, in his charming way, always an independent and ingenious thinker. and as such, he has, for many years, left his mark on the governing council of the ecb. after all, of the remaining governing council members, only yves mersch and mario draghi can lay claim to a longer membership. from the outset, the years on the governing council demanded his full commitment. exactly two weeks after he took up office as governor of the oenb, the insolvency of investment bank lehman brothers left the financial community in a state of shock. the resolute monetary policy response helped to prevent a worse outcome. similarly, the subsequent sharp economic downturn in the euro area forced the governing council of the ecb to take unusual decisions. this period was incomparably challenging for central bankers – and instructive for us all. ewald nowotny has always unhesitatingly shared his wealth of experience with me and others. he has always been there to advise me and other colleagues if we had any questions. for that, i would like to thank you once again most sincerely, dear ewald. in all these years, the governing council has been able to count on your competence and independent judgement. but why is an independent assessment so valuable, especially in bodies such as the ecb ’ s governing council? 2 the jury theorem back in the 18th century, the marquis de condorcet, a french mathematician and philosopher, examined

the question of what conditions had to be met for a jury to be more likely than a single voter to arrive at the correct judgement when voting on two alternatives. 2 1 / 4 bis central bankers'speeches in his important contribution to probability theory, condorcet showed that if each individual member has sufficient good judgement and decides completely independently, the group is more likely to select the superior alternative. the british mathematician francis galton was also surprised by the potential precision of a “ vox populi ”, a voice of the people. 3 when he visited a livestock exhibition in 1906, competitors in a quiz estimated the weight of one of the show ’ s oxen. it transpired that the competitors ’ average estimate corresponded to the ox ’ s actual weight of 1, 197 pounds. condorcet ’ s conditions – sufficient expertise and independent judgement – are often far from being fulfilled. in real decision - making situations, the information upon which members of a group base their decisions is frequently the same, or at least similar. this alone means that their voices are not independent of one another. where they are dependent, aggregation in itself no longer guarantees that the jury will tend to select the better outcome. this is because its members may jointly succumb to the same error. as a consequence, a wide range of ideas, experiences and views is essential if the judgement of a group is to be, on balance, superior to that of an individual. probability theory has meanwhile shown that a jury is more likely to take a sound decision, even under more realistic assumptions, if its members ’ outlooks are sufficiently different. 4 what the governing council therefore needs is experience and independence of judgement, and that is something ewald nowotny has always supplied in abundance. 3 monetary policy it is especially important to look at data, concepts and potential viewpoints as holistically as possible where uncertainty about future developments is particularly high. looking at the global and the euro area economy, it is abundantly clear that we are in such a period of uncertainty. the governing council of the ecb passed a very comprehensive package of measures when it met in mid - september, which, looked at in its entirety, i believe to be overdone. the economic situation and the outlook in the euro area are not so bad, wages are rising clearly, the forecast for the inflation rate two years ahead was lowered only slightly and there is no evident danger of deflation, in other words a permanent drop in prices and wages. ec