## Mr Duisenberg's speech at the 11th Frankfurt International Banking Evening
Speech by the President of the European Central Bank, Dr W F Duisenberg at the Frankfurt International Banking Evening in Frankfurt on 20 May 1999.
It is indeed an honour for me to have been invited to say a few words here this eve Frankfurt International Banking Evening. At the same time, it is more than a challe rather daunting task. Speaking after Hans Tietmeyer is almost like preaching after Moreover, I believe it is well known by now that the members of the Governing Coun the ECB speak with one voice. So, what does that leave me to say?
Some have taken this principle of 'speaking with one voice' to mean that there would one spokesperson for the ECB. That is a misunderstanding. Each of the members o Governing Council of the ECB has a voice and makes use of it. It is essential for th and views of the Governing Council to be explained comprehensively throughout the area as well as outside it and multiple expression is one way to do it. This is part these early years following the introduction of the euro. After I had given a speech Theo Waigel once observed, 'The euro speaks German.' He was right, of course, but th actually speaks the languages of all the other countries in the Eurosystem. We speak voice but, if need be, in eleven languages. This evening we are speaking English, Hans quoted an advertisement in Dutch in which I appear. I shall presently also s sentences in German. Incidentally, Hans could also have referred to another adverti which a puppet - according to some people, a President of the ECB look-alike - is do basic arithmetic. He calculates that if 1 euro is 2 guilders and 20 cents then 2 guilders and 40 cents. At the ECB our sums are rather more complicated than that, b rightly argued that central bankers cannot be replaced by computers. Neither sh second advertisement be taken as an argument for replacing central bankers by p especially not with their strings being pulled by Ministers of Finance.
We, the members of the Governing Council of the ECB, speak with one voice, but no voices are identical. How can they be, since they belong to different individuals? in the business of producing clones. Earlier this evening we once again had the pr listening to a convincing and clearly audible voice. There is nothing in what was which I disagree, and I intend to add very little to it. In fact, on some matters I what was said in my own words. Don't worry, I shall not do this extensively. Ho repetition is the mother of all genuine knowledge. I cannot therefore resist the te focus briefly on two points that Hans made. The principle of conducting monetary within a longer-term framework and from a longer-term perspective is the first iss should like to address. This principle sounds simple and its logic is indeed not com is, however, as difficult to adhere to it in practice as its logic is simple. It se has even become more difficult to apply in recent decades as a result of the rapid d in information and communication technology. Tonight is not the occasion to elaborate at length, but perhaps you will allow me to share the following reflections with you.
Developments in these areas have brought great benefits and have the potential to significant additional welfare gains in the years ahead, not least in Europe. At th they present challenges to economic policy-makers, since they have already fundame changed the character of society and its economies. These changes are ongoing and only beginning to come to terms with them. The word which characterises much of t
lifestyle is 'zapping'. The equivalent of 'zapping' in monetary policy terms is adoptin activist policy, with over-eager responses to all the items of daily information in the markets. I sometimes have the impression that activism is experiencing a revival in s circles, although the past has demonstrated clearly how ill-advised we would be to fo such policies. Hans Tietmeyer has time and again stressed the importance of taking a lon term view. He has also pointed out - although this is perhaps less known - that economie not operate in isolation. Historical developments and the wider social and cult environment should be taken into account. Short-termism is also the name of the game bei played by some commentators who, barely five months after the introduction of the euro, drawing far-reaching conclusions about the success of the euro or, more spectacular, failure. From a longer-term perspective, one can appreciate, for example, that the cu situation of price stability is a great improvement on the situation in many countries i decades. Making the euro a lasting success is of course an ongoing process and indeed, in with the title of Hans' speech, 'a permanent challenge and task'. This task requires the of many persons, firms and institutions. Of course, the Eurosystem is not the least imp in this respect.
This brings me to the second point made by Hans on which I should like to focus. That is in the end, even the most independent central bank cannot guarantee the maintenance of pr stability if no real support for this objective is given by fiscal policies, politici partners, good academic analysis, the financial community as present here this evening the public at large. Although, technically speaking, an independent central bank is ab maintain price stability in the medium term, in the longer term the actual outcome woul radically different without the existence of what Hans would call an entrenched stab culture. The importance of this cannot be overstated here in Europe, where we have j introduced a new currency in eleven countries with different histories, cultures backgrounds. Establishing and maintaining a European culture of stability is of the ut importance. This also explains why central bankers regularly express their views on o policies, be it fiscal policies or structural reforms. I have done so in the past and sha to do so in the future - as always, on a constructive basis and in recognition of the fac central bank does not decide on these policies, but only gives its advice. The Ger authorities have received a great deal of advice from Hans over the past six years. Pe they did not always like his advice - for instance when they wanted to revalue the sto gold - but I am sure that they were not surprised that he gave it. They would have been surprised, however, if the President of the Deutsche Bundesbank had not expressed his vie To help to establish and maintain a culture of stability is also one of the reasons why a bank needs to be open and communicative. We at the ECB attach great importance to thi principle and are making every effort to practise it. We are prepared to learn from expe and to adjust our line of thinking wherever and whenever it proves necessary.
Only the pope is infallible - central bankers are not. Communication should not unidirectional. We are willing to listen to others and to exchange information and views them, while at the same time bearing in mind our own spheres of responsibility and thos others. Finally, I should like to mention the importance of a serious, well-informed constructively critical press in this communication process. For the communication proces function well we need to provide the press with sufficient information, clearly conveyin views to its representatives. It also calls for journalists who are prepared to really information, not just to 'zap' through it in search of an eye-catching headline; they al to study the sometimes technical background of central banking. A particular group
journalists awards the prize of European central banker of the year. Perhaps it w good idea to award a prize to the best European financial journalist of the year. L myself clear, I should not want to be involved in the organisation of such a compet even to have a vote in selecting the winner. I have to admit, though, that I would b in the outcome.
Tonight Hans Tietmeyer has addressed the Frankfurt International Banking Evening f last time in his capacity as President of the Deutsche Bundesbank. Hans, I know tha over yet. However, August is drawing closer and closer. You have now entered the ph which you are doing things for the last time in your present capacity. Recently, you Nederlandsche Bank. It was probably your last visit, but, surprisingly, it was also say surprisingly, because as President of the Deutsche Bundesbank you represent Deutsche Mark, which, as we in the Netherlands used to say, was for fifteen years p successfully to the guilder.
Tonight is not the occasion to say farewell to you. Nor am I the person to make th speech that you deserve. In this group of financial experts there is no need to g impressive career with all its highlights; they are well known. Let me just simpl some of the facts: almost six years as President of the Bundesbank, your unique ro German unification process, your key role in the establishment of EMU from the beginning (in fact, you were a member of the Werner group in the early days of p economic and monetary union) and your role on the international scene, not least but not only in the central banking community. Germany, Europe and the world know you determined, uncompromising and convincing teacher of the necessity and merits of st oriented policies. What you had and have to say was perhaps often predictable, but m than not your saying it lent it weight and inspired confidence. Moreover, what you o said is absolutely true: 'Man kann schöne Sonntagsreden halten. Die Entscheidungen fallen an Werktagen.' You are known to be a hard worker - some would even say a workaholic and you have tremendous ' Ausdauer '.
You never get tired of putting your analysis and convictions across, as has ag demonstrated tonight. We owe you a great deal of gratitude. After August we central will miss you as a colleague, although I believe we have internalised your basic They will therefore still be around as if you are still present yourself. And shoul forget them, I am sure that Ernst Welteke will help me to remind other colleagues Sometimes, I wish that we could do the same as they do in the world of sport in th States. There, when an outstanding player retires, in order to honour him the number on the back of his shirt is never again used by another player. Central bankers d shirts with numbers on the back, but if we did, I am sure that we would withdr number. Retirement is the natural end of one's career, but it should not be overd People do matter - and you have certainly shown that - but institutions generally ou In fact, that is what many people work for. Luckily, I am convinced that this is central banking. So, the institutions that you have worked to build will go on. Mean look ahead to August, I know that while I will lose a colleague, I will still ha friend. I know that is true for many of us here this evening. I should therefore lik simply expressing my thanks for your support over the years both as a colleague and a