It worked well for a long while, and some call the period from 1950 to 1970 the golden years. Yet there were inherent flaws in this set-up that contributed to its demise in the early 1970s, not least the well-known Triffin dilemma regarding the conflict between the domestic economic objectives of the country providing the main reserve currency and the required international supply of that currency. Then capital accounts were opened up, with strong momentum in the 1980s and early 1990s. Capital controls were increasingly undermined by technology and financial innovation, and strong arguments were being made to the effect that open capital accounts would bring significant benefits. After all, ongoing real economic integration at a global level demanded at least some degree of global financial integration. As the BIS reminded us in its latest Annual Report – and Jaime Caruana might touch on in his keynote speech later in this session – trade and finance tend to go together. Freer capital movements in turn undermined pegged exchange rates and thus contributed to the spread of flexible exchange rate regimes and inflation targeting. 1  There can be little doubt that both real and financial global integration have brought enormous economic benefits. Still, it has been increasingly questioned of late. We partly understand why. We know that there are significant gains from real integration but that there are winners and losers. The losers can be compensated in principle, but in practice this does not always happen.
I am even more pleased to see how many of them are old colleagues and friends. The speakers will all be properly introduced in their sessions. Let me just note that the relevant international organisations are represented at a high level. We have a General Manager of the Bank for International Settlements for the first time in Iceland. We have also a chairman of the Basel Committee for Banking Supervision for the first time in Iceland, as far as I know, although Stefan has of course been in Iceland several times with other hats. We have Deputy Managing Director of the IMF for a second time in Iceland. We have two current governors (not counting me) and two former governors. We have three former deputy governors from G20 countries and we have prominent academics. As you have probably realised there is some double counting in this, which just goes to show the quality of the speakers. Before I make my final remarks, I would like to remind us all that this is a closeddoor invitation-only event. There is no press here, and we are under modified Chatman House rules, which imply that you may use what you hear in your work and even speak about the event, but without attributing to or quoting individual speakers. We wanted to have it this way in order to facilitate frank and open discussion of a difficult topic that many of us are trying to get a handle on.