Speaking at the Bocconi University in Milan ECB President Trichet called on all institutions, governments, central banks and other parties concerned to make the new post-crisis global governance work exemplary .He added that crucial for the success is the FSB and G20.
In his view, international interdependencies are too large for purely national or regional rules to be optimal and there is a clear need to strengthen global governance, in particular in the financial field.
He summarized the key lessons of the global financial crisis by emphasizing three main points:
· Firstly, a very profound transformation of economy and finance at the global level has taken place over the last thirty years. The fact that a sole event, namely Lehman Brothers’ bankruptcy, was transmitted in all economies - whether industrialised or emerging - and in all sectors - whether financial or non-financial - in a few half days, was a “première” in the history of economy and finance.
· Secondly, the fact that the pertinent economic and financial entity is now global, calls for an appropriate concept of global governance. In this respect, the crisis has been revealing. Extremely bold changes that seemed unthinkable have been triggered by the intensification of the crisis in mid-September 2008. It is imperative that all institutions, governments, central banks and parties concerned do what they can to make the new constellation of global governance work exemplary.
· Thirdly, the central issue for executive branches is that, even if the pertinent entity is the global economy and global finance, major decisions have to be taken at the level of individual countries. Only to speak of the industrialised world, it is necessary to make our public opinions sufficiently aware of the externalities of national decisions, and consequently on the necessity to internalize complex concepts like global economic prosperity and global financial stability.
© ECB - European Central Bank
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