Ladies and gentlemen

Welcome to the Karl Brunner Distinguished Lecture. This year marks the tenth anniversary of the event. For this special occasion we have invited a truly outstanding speaker: Mario Draghi. I am very honoured that Mario Draghi has accepted our invitation. 

But this year is also special for a different reason: This is also the last Karl Brunner Distinguished Lecture for Joël Mesot as ETH President. Joël will soon step down from this position. He has always been a great supporter of this event. I would like to thank you, Joël, as well as ETH Zurich, for your kind hospitality over the years. We look forward to working with his successor, Günther Dissertori.

The SNB started this event in honour of the Swiss economist Karl Brunner. Karl Brunner believed that central banking should rest on sound rules and institutions. It should not depend on how gifted the person at the top of a given central bank happens to be. Brunner might have said: A good system should work without a Mario Draghi. But Mario Draghi has shown us how much the person at the top can in fact matter. Brunner was maybe right in normal times. But Mario Draghi did not lead the ECB in normal times. Instead, he showed how one person can matter when times are not normal.

Mario Draghi hardly needs an introduction. We all know his achievements. Mario Draghi has held many positions over the years. And over the years, he has collected almost as many nicknames as positions. In Italy they call him l’Americano because of his time at MIT and the World Bank. And also il Prussiano because of his legendary seriousness. All over the world he is simply Super Mario. Because he saved the euro. Just like our speaker, the game character Super Mario always moves forward and excels during crises. If he wants something, he will achieve it.

The reports of Mario Draghi’s distinctions date back to 1971. Back then, Franco Modigliani, Professor at MIT and later Nobel laureate, was visiting the Banca d’Italia. Mario Draghi had just graduated from La Sapienza. He approached Modigliani to ask for a place in MIT’s doctoral programme. The problem was, the application deadline had passed, and he also needed funding. Against these odds, Mario Draghi became the first Italian to earn a PhD in economics from MIT.

Forty years later, he distinguished himself once again. But this time on a global scale. During the euro crisis in 2012, he said three famous words: “Whatever it takes.” Ladies and gentlemen, these words changed my life. Let me explain why. Back then, I was Head of the Foreign Exchange unit at the SNB. The SNB had the minimum exchange rate in place: 1.20 francs per euro. At the time, the pressure on the minimum exchange rate was huge. My team and I would sit at our trading desks staring at the flickering screens. We had to buy billions of euros – every day! And then – after those three words, “Whatever it takes” – the euro/Swiss franc exchange rate moved away from the floor. I can assure you, Mario Draghi’s famous three words made my job back then a lot easier. 

But ten years later, they made my job more difficult. His three words made a comeback after the Credit Suisse crisis. According to some people, the SNB could have simply said it would do “Whatever it takes” to rescue Credit Suisse. So I went back to Mario Draghi’s speech. And I noticed a small but important nuance. In fact, he spoke many more than three words! What he actually said in his speech was: “Within our mandate, within our mandate, the ECB is ready to do whatever it takes to preserve the euro.” Within our mandate: Mario Draghi made clear that a central bank must always remain within its mandate. That is why he said the phrase twice. Karl Brunner would have found Mario Draghi’s reference to the mandate reassuring. Even at a moment when much depended on his determination, Mario Draghi acted within the mandate.

When it comes to managing crises, Mario Draghi has few equals. In Italy’s Finance Ministry, he navigated the public-finance reforms of the 1990s. As Chair of the Financial Stability Board, he turned the FSB into a powerful international coordinator following the global financial crisis. As President of the ECB, he saved the euro and created new tools for fighting crises. These accomplishments are truly remarkable.

This past spring, Mario Draghi received the prestigious Charlemagne Prize – in German, the Karlspreis – for his outstanding contributions to Europe. Tonight, he will hold the Karl Brunner lecture – for his outstanding contributions to central banking. His lecture today brings together these two remarkable achievements.

Ladies and gentlemen, let’s welcome Mario Draghi to the stage with a warm round of applause!