A second group would be those supervisory agencies, central banks, multilateral financial institutions, and other public authorities around the world who shared with us the perspectives and needs of banking systems that are based in many different markets, economies, and legal systems. Thanks to discussions with these colleagues, such as through joint working groups like the Core Principles Liaison Group and through regional consultations and meetings, the Committee was better able to ensure that the new framework would be relevant to many different kinds of banks and economies that are in various stages of growth and development. The cooperation of so many public authorities worldwide has helped to make Basel II a truly global product. The Committee will continue to seek opportunities to deepen its relationships, and its opportunities for discussion, with other supervisors and central banks in the months and years ahead. Of course, this work would have been impossible without the sponsorship of the Bank for International Settlements. I would like to offer my sincere thanks to Malcolm Knight, the General Manager of the BIS, for his institution’s support of our work on Basel II. The BIS has been a staunch ally and advocate for our work over the entire thirty-year history of the Committee. With regard to Basel II itself, the BIS is fostering a greater understanding of the new framework among central bankers and supervisors  BIS Review 38/2004  1  worldwide through programs organised by its Financial Stability Institute, the “FSI”.
I intentionally spoke of “a” gold standard and not of “the” gold standard because this standard has taken various different forms over history. Under a pure gold standard, a Swiss franc is equivalent to a certain amount of gold, and therefore, vice versa, the gold price is fixed in terms of Swiss francs. The SNB would be obliged to purchase or sell gold at this price, without any restriction. In other words, there would be an obligation to redeem SNB banknotes in gold. In my view, the are two main arguments against a return to the gold standard. The first argument relates to gold as an anchor of price stability. Our modern economy is diverse and complex. Why, then, should we confine it in a monetary corset that takes as its measure the scarcity of a precious metal that, for the overall system, is relatively unimportant? Price stability is not guaranteed by the gold standard. As we have most clearly seen in the past few years, there is no direct connection between the gold price and the general price level of goods and services. The second argument is that the gold standard reduces the room for manoeuvre in monetary policy. The closer it comes to its pure form, the greater the reduction in the freedom of manoeuvre. Only those who believe that no monetary policy at all is required to react to economic shocks should plead the case of the gold standard.