And you have asked me, particularly, as Deputy Governor of the Bank to talk about Economic and Monetary Union, and the way it will impact on your business. Let us, therefore, move quickly on to that point. Whenever I have accepted an invitation to speak about EMU over the last couple of years, I have done so with the hope that when the day came to speak, the clouds of uncertainty surrounding the project would have cleared - both in terms of developments among the countries committed to going ahead, and in terms of the UK’s position. But my hopes have so far been confounded, and indeed the events of the last couple of weeks have complicated matters even further. This is not the time or place to talk in detail about the Bundesbank’s little local difficulty with Herr Waigel. And it is too early to assess the consequences for the project of the results of the French election. But it is clear that new elements of uncertainty have entered the scene, making it harder than ever to forecast the outcome next year. Looking at the markets’ own assessment, our interpretation of movements in the forward FX markets since the autumn is that the markets have become more persuaded that the euro will begin, but that it will be a broader, and possibly weaker euro. Until last summer the assumption appeared to be that only seven or eight countries would make up the hard core.
I note with interest that your own assessment is that the best option for the futures and options business in London would be for EMU to go ahead and for the UK to participate in the first wave. It is a moot point as to whether the impact on the profits and bonuses of derivatives traders will be the number one criterion in the minds of Labour MPs when they come to reach a view on EMU, but I will certainly draw it to their attention if you would like me to do so. BIS Review 67/1997  -3-  By contrast, you are slightly, though not exaggeratedly pessimistic about business opportunities in London if EMU goes ahead with the UK a ‘slow track’ country. I regard this as a pessimistic assessment, and will attempt this morning to persuade you that you are wrong. My first point, and perhaps the strongest, is that uncertainty about UK participation in EMU has persisted now for a considerable number of years - perhaps indeed since the late 1970s when the UK government’s response to the original EMU plan was distinctly lukewarm. And certainly no British Prime Minister has given an enthusiastic endorsement of the most recent Delors Plan for EMU, at any stage.