Obviously, we have been doing a lot of thinking about it, and I will see if I can say something useful about it in the 20 minutes I have available tonight. What has happened? The exchange rate has behaved during 2000 in a way that noone predicted.
At around the same time as the Delors Committee, another committee was meeting in Basel – the Basel Committee on Banking Supervision – and made what proved to be a momentous decision for the euro area. The new common set of international capital rules stipulated that government bonds issued by developed countries in their own currency be valued as riskfree assets.