journal. 6 see helene rey ( 2013 ), “ dilemma not trilemma : the global financial cycle and monetary policy independence ”. in : jackson hole economic symposium 2013. 7 according to the trilemma, in a financially integrated world, fixed exchange rates export the monetary policy of the centre country to the periphery. the corollary is that if there are free capital flows, it is possible to have independent monetary policies only by having the exchange rate float ; and conversely, that floating exchange rates enable monetary policy independence ( see e. g. obstfeld and taylor ( 2004 ) ). 8 see e. g. olivier jeanne and anton korinek ( 2010 ) “ excessive volatility in capital flows : a pigouvian taxation approach ”, american economic review papers & proceedings 100 ( 2 ), pp. 403 - 407 and emmanuel farhi and ivan werning ( 2014 ), “ dilemma not trilemma? capital controls and exchange rates with volatile capital flows, ” imf economic review 62, pp. 569 - 605. 9 under the imf new institutional view, cfms should not substitute for warranted macroeconomic adjustments. circumstances which allow for cfms on capital inflows include for example a situation in which the economy is overheating, the exchange rate is overvalued and reserves are at adequate levels. similarly, cfms could be applied on capital outflows if the economy is stagnating, fx exposures are high, and reserve levels are inadequate. 10 in many studies gains are of second order of magnitude as financial integration enables a reduction of consumption volatility but does not affect output ( see nicolas coeurdacier, helene rey and pablo winant, 2015 “ financial integration and growth in a risky world ”, nber working paper, no. 21817 ). 11 one estimate suggests that the standard deviation of income growth uncertainty is reduced through financial markets by as much as 35 % across u. s. states ( see stefano g. athanasoulis and eric van wincoop, ( 2001 ), “ risk sharing within the united states : what do financial markets and fiscal federalism accomplish?, ” the review of economics and statistics, 83 ( 4 ), pp. 688 - 698. according to a recent imf paper, cross - country risk sharing in the euro area is not only more limited ( roughly half that seen in existing federations ), but also falls sharply

, of course, the banking sector. but the media has also been accompanying the changeover in a very positive, informative and supportive manner, thus helping us to convey certain messages to the citizens of the euro area as to how they can contribute to a successful operation. at the end of the day, the success of the euro cash changeover depends not only on the co - operation of all professional parties directly involved, but also on a favourable attitude and quick acceptance by the citizens. therefore, i should also like to express my gratitude to the media for their efforts. let me now mention some of the other factors which have contributed to the success of the euro cash changeover. first, in march last year the governing council of the ecb established the cash changeover co - ordination committee ( cashco ) comprising representatives from the ecb, the 12 ncbs of the euro area, the european commission and europol. the committee has overall responsibility for the co - ordination of the changeover to euro banknotes and coins from the period before 1 january 2002 until the end of february 2002. second, measures were taken to ensure an early return of national banknotes and coins. as regards the return of legacy currency coins, most national authorities reduced the work for banks during the dual circulation period either by encouraging the public to deposit hoarded coins at banks'counters early on, or through a range of charity schemes introduced in some countries. with regard to national banknotes, there was also a return of hoarded banknotes, particularly high denominations. in total, legacy currency banknotes in circulation fell during the course of the year by eur 110 billion to eur 270 billion at the end of 2001. third, a crucial factor for the success of the euro cash changeover was the decision to allow the frontloading and sub - frontloading of banknotes and coins to the banking sector and to other target groups from 1 september 2001. this four - month lead time was required in order to ensure that sufficient euro banknotes and coins were available for widespread circulation from 1 january 2002. in fact, the scale and timing of frontloading and sub - frontloading varied considerably between different countries, depending on the national changeover scenario chosen, the national infrastructure ( e. g. the extent of the central bank branch network and its role in the money supply, the storage facilities available in bank branches ) as well as the size and geography of the country. in almost all euro area countries the national authorities provided euro