Additionally, our Comprehensive Assessment and stress tests have been rigorous and thorough; this means that banks’ balance sheet problems are being dealt with and that the necessary transparency will be provided on the health of European banks. This is in contrast to the pronounced balance sheet problems of Japan in the 1990s. Finally, a number of euro area countries have implemented structural reforms to increase their competitiveness. Clearly, these efforts now need to gain momentum to achieve higher sustainable growth and employment in the euro area. In this context, it is also essential that governments conduct fiscal adjustment that is growth-friendly. Economists and politicians in Lithuania sometimes voice concerns that the economic benefits of being part of the euro area are offset by the rising costs of having the euro, e.g. with the implementation of the Single Supervisory Mechanism, contributions by Member States to the European Stability Mechanism, etc. What would your response BIS central bankers’ speeches  1  be to these concerns? Why does Lithuania need to be part of the euro area despite those costs? Joining the euro area is not a free lunch: it entails significant obligations, but many benefits at the same time. The obligations are stated very clearly in the Treaty and in EU regulations. In this respect, compared with those countries that joined in the first wave of entry, Lithuania has the advantage of joining a stronger euro area. The euro area has painfully recognised the flaws in its original design and taken major steps to repair them.
Jean-Pierre Roth: No frontiers in monetary policy – from the fight to avoid internationalisation of the currency to the internationalisation of monetary policy Speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank, at the Swiss Institute of International Studies, Zurich, 6 May 2009. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  In view of the challenges with which it has been faced, the Swiss National Bank (SNB) demonstrated its adaptability time and again. Over the past thirty years, for instance, it abandoned its endeavours to prevent the use of the Swiss franc as an international currency. Moreover, it has gradually incorporated international elements into its monetary policy strategy and its monetary policy instruments. The goal when making these adjustments was always to improve the effectiveness of monetary policy in order to protect the country from any inflationary trend. In managing the current crisis, both the internationalised monetary policy strategy and the internationalised policy instruments have served the SNB well thus far. BIS Review 552009  1