After the onset of the global financial and economic crisis the franc appreciated by 17% vis-à-vis the euro in 2010 alone, driven by the reallocation of global capital on a massive scale. This has fuelled deflationary risks and slowed economic growth. To counter these effects, massive unilateral interventions were conducted, leading de facto to a closer alignment of monetary conditions with those in the euro area. This points to the conclusion that in a multipolar world having appropriate domestic macroeconomic policies is not sufficient to absorb external shocks. Unless a country or an economic region also has a deep and liquid capital market and its size is sufficient to absorb large capital flows, it is bound to become subordinate to the existing poles, or to be squeezed between them. The prosperity of the euro area countries is inextricably linked to the success of the euro. The euro: a unique construct The euro is the only major currency that is not issued by a single sovereign state, but by a union of states. As this is a totally unprecedented monetary framework, it is fair to ask whether it has what is needed to become one of the poles of the new system – in other words, is it sufficiently robust to ensure sound economic policies at the euro area level and in the individual countries, and does it have a large and deep financial market? Decisions are about to be taken on strengthening the governance of the euro area with a view to achieving these objectives.
The Association has built a strong foundation for its important role in bringing the industry to new heights with the full support of the industry players to realise the shared vision under the industry’s five-year Strategic Blueprint. We have made tremendous strides in setting a clear path for the future. I am confident that the best for this industry is yet to come. Well done to the Association on a great first year. 4  BIS central bankers’ speeches