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are also currently looking at the way a spanish macroprudential authority should be set up. changes in bank regulation ladies and gentlemen, i would like to turn now to the changes that have occurred in the regulatory field bis central bankers β speeches the crisis we are still going through was triggered, on the one hand, by the extraordinary loose monetary and financial conditions β and the expansion of credit β of the period between 2000 and 2007. on the other hand, inadequate rules β result of two decades of deregulation, and sometimes bad deregulation β compounded the problem and facilitated high leverage. the basel capital ratios of the time were low or, in some cases, not applied. there was excessive reliance on internal bank models. the way var models were defined by basel and applied by banks underestimated what we call tail risks, that is, risks associated to events with low probability of occurrence but extremely high cost. therefore, there was a need for a regulatory response after the crisis. since the main elements of this response are well known, i will limit myself to a few remarks. first, the response took a predictable pattern : the strengthening of capital requirements, both as regards levels and quality of capital. basel iii is first of all about this. second, as already mentioned, the crisis highlighted the need to introduce a macroprudential perspective in financial regulation. the new counter - cyclical capital buffer in basel iii is an important step in this direction. however, the implementation of this instrument will not be easy. the right time for its activation will be difficult to determine and there is uncertainty on the appropriate size of the buffer. third, another important element of the new regulation is the introduction of a new leverage ratio. the result is that two different approaches, one risk - weighted based and the other one non risk - weighted, will coexist under the roof of basel iii. this, i believe, introduces some tension in the regulation. fourth, it is worth noting that, while basel iii brings in convergence in the numerator of capital ratios β which is a positive development β improvements will be needed in the calculation of its denominator. available evidence β that is now being considered by the basel committee β points to differences in the measurement of risk weighted assets across jurisdictions, which are not always easy to justify on the basis of differences in the nature of risks. and, fifth, basel iii introduces liquidity standards aimed at addressing the deficiencies in liquidity risk management that became | efforts to retain adequate internal risk control methods and to invest in technology and human capital. furthermore, banks have to maintain their capacity to adapt to a changing environment and be able to take advantage of the new financial landscape. the supervisory model will face new challenges ahead, as the global banking system is continuously evolving. new products of increasing complexity and new players subject to little or no regulation are continuously appearing. the model must be flexible enough to maintain its adaptability, without losing its solid foundations. accordingly, spanish banking supervision has recently developed its own methodology based on the continuous monitoring of every banking institution, complemented by frequent on - site inspections. this methodology incorporates a risk - focused approach, that enables it to strengthen preventive measures without forsaking the objectives of solvency and stability. there are no doubts that in the current context of deceleration in the world economy, distortions and tensions in global financial markets and an increasingly uncertain economic outlook, to have a sound and securely managed banking system is of paramount importance. only on that premise will we be firmly placed to meet the fresh challenges arising from the new financial environment. and, in this context, the spanish experience provides us with final lesson : that any process of financial liberalisation or rapid innovation has to be accompanied by the application of appropriate regulatory and supervisory measures. thank you for your attention. | 0.5 |
our friends. i can't think of a better way to honor john's contributions than to continue that discussion around the dinner tables of dallas by reflecting on the role of simple rules in informing policymaking. three benefits of simple rules in monetary policymaking in his carnegie rochester conference paper, john considered a simple policy rule under which the nominal federal funds rate is adjusted in response to both the gap between real i am sure my colleagues join me in honoring john. however, my thoughts on policy rules are my own and not necessarily those of my colleagues on the federal open market committee. jinill kim and andrew levin, of the board's staff, contributed to the preparation of these remarks. and trend gross domestic product ( gdp ) and the gap between the inflation rate and policymakers'target. based on data for the previous few years, john calibrated the long - run target for inflation and the two parameters that determine the responsiveness of the federal funds rate to the two gaps. the equilibrium real interest rate was based on a longer history of actual real interest rates. in the handout, figure 1a depicts the actual nominal funds rate and the taylor rule prescriptions between 1987 and 1992, as presented in john's paper. despite its simplicity, this policy rule fits the data remarkably well ; it described a period of generally successful policymaking ; and it adhered to the taylor principle of adjusting the nominal rate more than one - for - one with changes in the inflation rate, so it provided a plausible template for future success. it is no wonder that john has been such a dedicated salesman and that his efforts have been so well received in academia and policy councils. following john's seminal contribution, many other economists have engaged in research on similar policy rules and, together with john, have identified several benefits of such rules in conducting monetary policy. i will elaborate on three of them. the first benefit of looking at a simple rule like john's is that it can provide a useful benchmark for policymakers. it relates policy setting systematically to the state of the economy in a way that, over time, will produce reasonably good outcomes on average. importantly, the emphasis is on levels and gaps, not growth rates, as inputs to the policy process. this emphasis can be a problem when a level, say of potential gdp, is in question, but in many respects it is also a virtue. for the united states, the two gaps relate directly to the legislative mandate of the federal reserve to | of limitations was that simple rules do not take account of riskmanagement considerations. as shown in figure 2a, the core cpi inflation rate for 2003 was falling toward 1 percent. the real - time reading of the core pce inflation rate ( not shown ) was on average even lower than the comparable cpi figure. given these rates, the possibility of deflation could not be ruled out. we had carefully analyzed the japanese experience of the early 1990s ; our conclusion was that aggressively moving against the risk of deflation would pay dividends by reducing the odds on needing to deal with the zero bound on nominal interest rates should the economy be hit with another negative shock. this factor is not captured by simple policy rules. a final note i have offered this analysis in the spirit of so many of the discussions i have had with john. his framework has been enormously important to policymaking in the federal reserve, and it has yielded many benefits. nevertheless, it's important to keep in mind that some significant practical limitations also are associated with the application of such rules in real time. in other words, it's not so simple to use simple rules! references orphanides, athanasios ( 2003 ). " the quest for prosperity without inflation, " journal of monetary economics, vol. 50 ( april ), pp. 633 - 63. poole, william ( 2007 ). " understanding the fed, " federal reserve bank of st. louis, review, vol. 89 ( january / february ), pp. 3 - 14. taylor, john b. ( 1993 ). " discretion versus policy rules in practice, " carnegie - rochester conference series on public policy, vol. 39, pp. 195 - 214. _ _ _ _ _ _ _ _ _ ( 2007 ). " housing and monetary policy, " speech delivered at " housing, housing finance, and monetary policy, " a symposium sponsored by the federal reserve bank of kansas city, held in jackson hole, wyo., august 30 - september 1. | 1 |
the banking sector through reduction of regulatory costs, enhanced legal and information infrastructure, and new competition introduced in orderly manner through phased deregulation and liberalization. fourth, the private sector has shown much resiliency and adaptability. for example, in response to the appreciation of the baht, exporters have made increasing uses of foreign exchange hedging instruments. at the same time, the increasingly diversified export market structure has provided thai exporters with cushions against the current slowdown in major advanced economies. as another example but perhaps more relevant to today β s audience, our listed companies no longer over - leverage their balance sheets, turning instead to equity and retained earnings as major sources of funds. fifth, thailand is among the world β s top places when it comes to the ease of starting and operating businesses. the recent report, β doing business 2009, β by the world bank upgraded thailand by six places. despite all the storms we have faced, we are now ranked at 13th place out of 181 countries ( 4th in asia after singapore, hong kong, and japan ). according to the report, thailand led other reformers in the region with improvements in four areas β registering property, protecting investors, paying taxes, and trading across borders. as investors, you may be interested to hear that one of the cited reform measures is amendments to the thai securities and exchange act to strengthen minority shareholder rights. ladies and gentlemen, provided that the current political deadlock is soon resolved and the new political equilibrium is reached, these fundamentals should provide a solid platform for thailand β s economic growth going forward. a recent study by the bank of thailand β s staff finds thailand β s potential gdp growth to be in the range of 5. 5 - 6. 1 % between 2008 and 2015. this may appear a far cry from the 1987 - 1996 period when the growth of the thai economy averaged 9. 5 %. however, everyone now realizes that the thai economy then was operating beyond its potential and therefore not sustainable. in contrast, our staff β s projection was based on a balanced growth path scenario used to characterize an economy in a steady state. there is however an important catch in the cited projection and that is the implicit assumption that the ratio of real gross investment to real gdp recovers from the current level of 22 % to 28 - 30 % by the end of the period. thus, things like mega - project investments are conceivably already included in the projection. the current political doldrums | from support measures that we instituted. in our context, the extension of repayment assistance programme has been accompanied by strengthened supervisory expectations on monitoring and stress testing of exposures under repayment assistance. further, we have also increased supervisory reporting requirements on such exposures and focused monitoring on more forward - looking indicators such as banks β internal mfrs 9 staging of exposures for purposes of macro - and micro - prudential surveillance to facilitate timely decision - making. 2. second, frequent engagements with banks have helped to provide timely and steady steer in ensuring their support of the recovery, without compromising resilience. for example, banks were not only expected to allocate resources and management attention to support repayment assistance efforts, but also effectively monitor the attendant risks arising from these efforts. as a result, we saw banks strengthening their own capacity to cope with the sharp increase in debt restructuring applications and support tailored repayment assistance plans for viable borrowers. in addition, notwithstanding the flexibilities granted under accounting standards, banks have maintained prudent asset classification and provisioning practices when assessing borrowers β creditworthiness. these include pre - emptive staging of loans to recognise higher credit risks among specific borrowers seeking repayment assistance, more conservative provisioning models, and increased application of management overlays to bolster model - determined provisions. 3. finally, the ready presence of effective institutional arrangements has also helped us be prepared for managing an influx of distressed borrowers. drawing on our experience from the asian financial crisis, malaysia has in place debt restructuring mechanisms for individuals and businesses alike. these include out - of - court platforms, namely the corporate debt restructuring committee ( cdrc ) for large corporates, small debt resolution scheme ( sdrs ) for smes, and credit counselling and debt management agency ( akpk ) for individuals. akpk, in particular, has become a staple name in malaysia due to its vast publicity campaign. although we have not observed any spikes in the number of cases admitted into cdrc, sdrs and akpk, in part due to banks β enhanced capacity to carry out debt restructuring, we resolved not to leave anything to chance. accordingly, the capacity of these out - of - court platforms was ramped up at the onset of crisis in anticipation of a potential deluge of distressed borrowers. to further enhance operational efficiency, the 2 / 3 bis central bankers'speeches sdrs was absorbed into akpk, making akp | 0 |
mohd razif bin abd kadir : reaping opportunities as financial advisers keynote address by mr mohd razif bin abd kadir, deputy governor of the central bank of malaysia, at the financial advisers seminar, kuala lumpur, 18 october 2008. * * * it is with great pleasure that i welcome all the participants to the seminar today, which is organised by bank negara malaysia, with the assistance from the malaysian financial planning council, the financial planning association of malaysia and the malaysian association of chartered financial consultants. in this regard, i would like to express my sincere appreciation to the three associations for their commitment and effort in facilitating and ensuring the success of the seminar, for the benefit of the financial planning industry. the chosen theme, β reaping opportunities as financial advisers β, is a fitting indication of the potentials and prospects as a financial adviser and i hope that this seminar would inspire you to achieve your full potential in a career in the financial services industry and for those not already in the industry to be aware of these opportunities. today β s dynamic environment is marked by a more competitive financial services industry, increasing access to financial services, broader range of financial products and services, and more complex financial transactions. in such an environment, the need and demand for sound financial planning will continue to increase. with the proliferation of financial products from basic risk protection to more sophisticated financial products for retirement and asset accumulation, it is important for consumers to have access to professional advice to help them work through the wide range of financial solutions which involve increasingly complex structures, and to avail themselves on solutions that will best suit their needs and capacity. for this purpose, bank negara malaysia has introduced the framework for the licensing of financial advisers in 2005 in response to the increasing demand from malaysian consumers for professional and specialised advisory services to meet their financial needs. the growing affluence and sophistication of consumers have created the demand for more complex financial products and services, specifically insurance products. the introduction of financial advisers, as a new distribution channel for the insurance and takaful industry, will complement the services of the existing professional intermediaries in the financial markets in providing holistic financial advisory services which range from insurance protection, savings for education, investments and retirement planning. in the long term, financial advisory business is only sustainable if its operations are transparent and focused on providing value added services rather than simply selling products. financial advisers must provide the highest service levels and professional standards in order to | this perspective, the key analytical question is whether, by accepting somewhat larger deviations of employment and inflation from the levels otherwise attainable, we are able to sufficiently enhance financial stability in a way that significantly reduces the probability of a very severe financial crisis and the attendant serious economic costs. in my view, the theoretical and empirical models that would underpin this approach and its implementation are not adequately developed. particularly in the absence of reliable models to guide us, policymakers attempting to conduct such a policy would confront serious challenges in identifying threatening imbalances and in calibrating and timing effective and appropriate policy actions. moreover, a cursory review of the evidence is not encouraging regarding the direct use of monetary policy to promote financial stability. for example, would a small adjustment in policy rates damp the optimism or complacency that was feeding the speculative excesses producing an asset or credit bubble? we don't know. but the impression from our experience in 1999 is that tightening policy had no effect on the intensity of dot - com speculation. and the housing bubble and the spread of lax mortgage lending practices built up for several years after we began raising interest rates in 2004. if policy adjustments intended to deflate asset prices or credit expansion only reduced inflation and output without affecting the bubble, they will have ultimately moved the economy further from its sustainable path when the bubble breaks. and if large adjustments are necessary to damp speculation, medium - term variations in the economy will be commensurately greater. in addition, timing policy action accurately is critical to realizing greater benefits than costs in leaning against potential speculative excesses. adjusting policy shortly before a bubble breaks, when its existence will be most evident, is not likely to be optimal, as it will do little to damp the excesses and will add to the downward pressure on the economy. central banks would need to spot these threats very early, when they may not be generally recognized as divergences from fundamentals. efforts to spot emerging imbalances early would raise the odds on identifying developments as threats to stability, when in fact they are natural and sustainable adaptations to changing relative prices, for example, from shifts in technology. even with the access to the wide range of data, sophisticated models, and market analysis enjoyed by central banks, our ability to discern deviations of asset prices from fundamental values is very limited. the difficulties i've just outlined lead me to a strong preference for using prudential regulation to deal with potential problems in credit and asset | 0 |
any direct role in financing economic development ; Β· the exchange rate can not be used as a tool to adjust to economic shocks or poor economic performance. these areas of policy discretion, if used wisely and in moderation, could be of advantage to economic development in bh. there are lots of projects in bh for which a β little bit β of cbbh finance may be helpful. but the problem would be in keeping the cbbh credit to a β little bit. β the experience of the region is that excess central bank credit has usually been created and the result is inflation. that does not help business, employment or confidence in bh. so in my view, the strict currency board is the best approach for bh. will the currency board be continued in bih? i believe it will for the following reasons : Β· there is widespread support for it because it has provided one of the few elements of stability the people of bh have had for some time ; Β· it would be risky to change it. confidence in the km would drop as people waited to see how any alternative monetary policy would work ; Β· currency boards have worked well in other eastern european countries such as latvia and bulgaria. currency boards are becoming acceptable, even fashionable ; Β· the long - term goal of bh policy is to take the economy closer to europe. the km is already tied to the euro. it would therefore seem sensible to maintain this link. macro - economic sustainability in bih while i believe strongly that bh should maintain its currency board, there will need to be changes made in other areas if bh is to have macro - economic sustainability over the medium term. the currency board requirement means that the cbbh can not issue km currency in any quantity it chooses or the economy needs. the amount that can be issued is tied to the net position of bosnia and herzegovina β s external accounts. this is the currency board arithmetic. what does this currency board arithmetic mean for a central bank and a country? if the net position on a country β s external accounts is positive, the central bank β s foreign reserves will increase as the foreign inflows are changed into the domestic currency. there is nothing to stop a currency board having more than 100 % backing for its domestic currency liabilities. ( indeed, at present the cbbh has foreign reserves equal to 106 % of our km liabilities. ) so if the overall foreign accounts are in good shape, there will be no pressure on the currency board and medium | peter nicholl : perspectives on monetary policy in bosnia and herzegovina lecture by mr peter nicholl, governor of the central bank of bosnia and herzegovina, to the 1 / 1 student initiative, sarajevo university, sarajevo, may 2001. * * * introduction i am very pleased to have this opportunity to talk to the top students of sarajevo university about monetary policy in bosnia and herzegovina ( bh ). as we have only an hour and a half in all, and i want to leave plenty of time for your questions, i do not have time for a comprehensive discussion of all possible monetary policy issues for bh. so i have decided to talk on the following four inter - related issues : Β· the currency board option ; Β· macro - economic sustainability in bh ; Β· the role of the banking sector in bh ; Β· institutional design of economic institutions. the currency board option as i am sure you all know, the cbbh operates monetary policy in bh by a currency board arrangement. the three essential features of the currency board, all of which are specified in the cbbh law, are : Β· the bh currency, the convertible mark ( km ) is tied to the deutschmark ( dem ) at a fixed exchange rate of 1km = 1dem. it is now also tied to the euro at the same rate as the dem ( 1 km = 0. 511 euro ) ; Β· the km liabilities of the cbbh have to be fully backed with convertible foreign assets ; Β· the cbbh has to be prepared to convert km for dem at any time for any amount ( i. e. it is a fully convertible currency ) it is interesting to remember back to the sort of payment and banking sector that operated in bh before the cbbh was established in 1997 : Β· there were four currencies in use in bh and the only one that was used over the whole country was the dem ; Β· there were three payments bureaus that had a monopoly on domestic non - cash payments but could not settle electronically with each other ; Β· there were around 70 organisations that called themselves banks but most were very small and none of them operated over the whole country. linking the km to the dem through a currency board was an easy choice for bh because the dm was already extensively used in the country and was the currency people trusted. it has been a successful choice too : Β· the km has been a stable currency against the dem and the euro since it was introduced ; | 1 |
28. 7 14. 2 source : based on european central bank data. table 2 market shares of foreign banks in italy ( annual averages with reference to bank branches and subsidiaries ) 2009 total branches and subsidiaries total assets 4. 2 2. 6 5. 2 7. 1 7. 9 16. 4 16. 2 interbank assets 9. 8 6. 0 15. 7 12. 9 13. 3 20. 6 17. 1 loans 5. 2 3. 0 2. 7 5. 8 9. 0 16. 2 15. 8 mortgage loans 0. 7 0. 2 0. 3 5. 7 5. 8 12. 5 15. 2 personal loans 11. 5 7. 7 6. 2 14. 2 27. 7 35. 4 27. 5 securities 1. 6 1. 5 6. 3 10. 1 9. 9 17. 6 12. 0 deposits 1. 0 0. 9 2. 0 2. 9 4. 7 11. 2 9. 3 interbank liabilities 13. 7 9. 7 16. 3 19. 3 24. 0 32. 7 27. 6 off - balance - sheet items commitments and contingent liabilities 8. 6 6. 1 5. 4 10. 6 11. 3 13. 5 12. 3 29. 5 1. 9 24. 4 2. 2 42. 6 5. 6 16. 8 9. 0 6. 9 10. 7 27. 3 28. 7 11. 9 33. 3 securities held for custody of which : branches total assets 3. 3 1. 8 4. 1 4. 8 5. 4 9. 4 8. 9 interbank assets 8. 6 5. 0 14. 2 9. 9 10. 3 12. 5 10. 7 loans 4. 0 1. 9 2. 0 3. 0 6. 3 7. 7 7. 2 mortgage loans 0. 2 0. 1 0. 2 0. 7 2. 6 3. 6 4. 6 personal loans 0. 1 0. 0 0. 2 3. 0 9. 0 3. 5 5. 6 securities 1. 2 1. 3 5. 2 7. 9 4. 3 7. 6 5. 9 deposits 0. 2 0. 2 0. 8 1. 4 3. 2 3. 0 2. 2 interbank liabilities 12. 5 8. 7 15. 0 15. 0 20. 3 22. 1 19. 3 off - balance - sheet items commitments and contingent lia | that have marked the last ten to fifteen years. i propose the following summary, which admittedly is perhaps a little too usa - centric : 1. the revolution in the new information and communication technologies halted the progressive decline of productivity growth in the united states, which returned to markedly high rates of expansion in the second half of the 1990s. 2. during the same period, following the financial crises that hit the countries of southeast asia and russia ( 1997 - 98 ) and the collapse of ltcm ( autumn 1998 ), the federal reserve β s policy remained essentially accommodating, with a strong expansion of liquidity also to counter the so - called millennium bug. 3. the β new economy β euphoria, beyond being compatible with objective interpretations of the increases in productivity linked to the introduction and spread of the new technologies, was reflected in us household consumption, with a rapid rise in debt and a sustained decline in savings, but with financial positions basically in balance thanks to the increase in net wealth due to capital gains, in part the result of soaring share prices during the dot - com bubble. 4. the powerful expansion in us final demand and imports was gradually accompanied by growth in the exports and output of the major emerging economies such as china and india, which had previously lagged behind, and an upwards trend in us inflation, dealt with by a tightening of monetary policy at the beginning of 2000. 5. monetary tightening ended by bursting, late, the dot - com bubble in 2000 - 01. the recessionary effects of this were compounded by those of the severe shock of the september 2001 terrorist attacks. 6. amid fears of recession and deflationary conditions of the kind that had prevailed in the previous decade in japan, the federal reserve β s response was again very accommodating. a drastic reduction in interest rates was accompanied by a strongly expansionary budgetary policy, which remained in place also in relation to the war operations in the middle east. 7. monetary policy also remained expansionary for a long time, facilitating a return to sustained growth in household consumption, not countering the trend towards a zero saving rate, and giving free rein to financial innovation, in conditions of abundant liquidity, especially with the repackaging in 2004 - 06 of mortgages β in a context of constantly rising house prices β into structured products that opened up new investment possibilities to banks. 8. the growing us current account deficit was accompanied by ever - larger surpluses in emerging countries and japan | 0.5 |
, or a grexit occur. the emerging market economies are likely to be affected significantly by these developments and countries with weak macro - economic fundamentals and indicators in particular are likely to be most vulnerable. the role of the sarb in the economy the constitution mandates the sarb to protect the value of the currency in the interest of balanced and sustainable economic growth. we strive to achieve this objective within a flexible inflation targeting framework as it is widely believed that price stability is a necessary pre - condition for balanced and sustainable growth. the global financial crisis has, however, demonstrated that price stability in, and of its own, is not sufficient to ensure that financial stability is achieved. this resulted in the bank β s mandate of price stability being expanded to include the additional responsibility of overseeing and maintaining the stability of the broader financial system. south africa has opted to shift to a twin peaks model of financial sector regulation which represents a move away from a fragmented regulatory approach ( based on the institution or activity ) towards a regulatory and supervision model based on objectives. in terms of proposed legislation, the bank will house the prudential authority, which would supervise the safety and soundness of banks, insurance companies and other financial institutions, while the market conduct authority would supervise the way in which financial services firms conduct themselves and treat their customers. these reform forms part of the current broader overhaul of the global regulatory system, which aims to address the too - big - to - fail problem of systemically important financial institutions, building resilient financial institutions, reducing the opacity of over - the - counter derivatives markets, mitigating the impact of shadow banking on financial stability, enhancing financial benchmark transparency, and promoting the convergence of accounting standards. the importance of international dialogue and erm frameworks for central banks the increased connectedness of the world, within which we operate, has necessitated closer cooperation and coordination within the central bank community. the need for this has once again been highlighted by the global financial crisis and the subsequent attempts to not only bis central bankers β speeches restart the global economy but also to undertake an ambitious global regulatory reform agenda in order to address and avoid the excesses and imbalances that led to it. this illustrates the importance of collaboration between central banks. without strong international leadership and active collaboration it would not have been possible to progress the overhaul of the global regulatory system to the extent that had been achieved. the expanded mandate of central banks may in the longer - term lead to demands for greater accountability and | the pressing maintenance needs if supply safety and quality are to be secured. the mpc also sees risks of a pickup in food prices in the outer years of the forecasting period. in addition, any unresolved domestic policy uncertainties could trigger exchange rate volatility even in the absence of external shocks. page 7 of 9 the south african reserve bank β s reaction and policy mandate following its decision to hike the policy rate by 25 basis points at the november 2018 meeting, the mpc felt that the inflation backdrop and outlook had improved sufficiently enough to warrant keeping the policy rate unchanged at the january meeting. while the mpc still judged the policy stance as broadly accommodative, the endogenous rate path generated by the qpm now only entails one hike of 25 basis points in the policy rate, to 7. 0 % by the end of 2021. as previously indicated, this does not represent policy guidance nor commitment. the mpc will remain alert to any possible secondround price effects of potential shocks and stands ready to act accordingly should data indicate a shift in the inflation outlook and the risks thereto in either direction. it has at times been suggested that the sarb should place greater emphasis on growth and employment objectives, or even that its mandate should be modified to make such objectives clearer. these suggestions may miss the key channels through which monetary policy best serves the goal of long - term economic development. south africa β s monetary policy framework is not one of rigid inflation targeting, but a flexible one, which takes full account of the outlook for real economic growth and how it is likely to affect inflation over the forecasting period. for instance, when demand is weak and exerts downward pressure on prices, the sarb has far more latitude to β see through β external price shocks than in an environment of domestic β overheating β. however, as i mentioned earlier, trying to β kick - start β economic growth and employment through a larger dose of monetary stimulus would probably have only a short - lived impact on activity. by contrast, its implications for the current account, policy uncertainty and inflation expectations would most likely be negative. over time, therefore, the consequence would probably be higher, rather than lower, interest rates. international and local experience does suggest that it is a stability - oriented monetary policy framework, focused on reducing price volatility and risk premiums on financial assets, that has the best chances of delivering lower interest rates and stronger economic growth, amid sustainable investment | 0.5 |
of debt markets and interest rate flexibility in the budget for 2001 - 02. no doubt, in all the budgets there is progressive liberalisation of capital account. in brief, the budgets over the last three years have contained larger and wider reference to reforms in the financial sector. the canvass is spreading from banks to financial markets. during the period, the regulatory jurisdiction of rbi was fine tuned and clarified through amendments to securities contract regulations act, and enactment of foreign exchange management act. while these are some of the several governmental initiatives, significant changes in legal and institutional framework are necessary for further progress in reform of financial sector. banks elaborating on issues related to banks, in this gathering would certainly be superfluous. suffice it to say that there has been noticeable progress in respect of all the four issues flagged before viz. internal control systems, placement and work practices, flexibility in hiring people and use of technology in banks. however, there is a long way for public sector banks to traverse from current industry - wise approaches to bank - wise autonomy to enhance efficiency and profitability. it may be worthwhile to chart a roadmap for genuine autonomy for public sector banks consistent with principles of good corporate governance. conclusion in brief, a notable part of agenda for reform has been completed and in the process, some items not in the original medium - term agenda became necessary for reform. currently, the focus is rightly shifting to legislation, markets, technology and beyond banks to nonbanks. it is also evident that reforms can succeed only and only if coordinated efforts are made by rbi, government of india and banks, themselves. it must, however, be recognized that key to financial sector reform is banking reform ; key to banking reform is public sector banking reform ; and key to public sector banking sector reform is government β s initiative. finally, you would appreciate that, by and large, we in rbi try to be aware of what is desirable and we are implementing whatever is feasible. before concluding, i must mention that the tasks ahead of you listed by the iba are appropriate, complex, and urgent. these are broadly divided into four areas viz. human resources management, technology, structure of banking, and sound banking. the banks β sports board, a relatively recent institution has already impressive achievements to its credit and is bound to advance the course of national sports in the coming year also. i have great pleasure in wishing you all the best on this happy occasion. thanking you all again! | . the indian experience the rbi as a full - service central bank has employed emerging technologies in virtually all its functions while also encouraging their adoption in various parts of the financial system. this has also involved spearheading innovation and building up the digital public infrastructure. as a result, a recent assessment has found that the usage of ai related keywords in indian banks has increased sizeably4. a survey conducted by the rbi at end june - 2023 revealed that almost three - fourths of indian banks and several non - banking financial companies ( nbfcs ) have developed chatbots and virtual assistants. increased collaboration of banks and nbfcs with fintechs has facilitated introduction of model - based lending. within the rbi, big data analytics, ai and ml have been extensively employed in monetary policy, research and data management functions. examples include use of ai powered tools to refine the quality of banking statistics ; building of hybrid models that combine traditional statistical methods with ml tools for forecasting and nowcasting ; applications of natural language processing ( nlp ) for classification of internal audit reports ; and analyses of the textual complexity of banking regulations. the use of unconventional data like media sentiment is undertaken for assessing the effectiveness of central bank communication. other applications include tracking inflation through online food prices and assessing crop production from remote sensing data. on the supervisory front, the advanced supervisory analytics group ( asag ) has been set up to leverage ml models for social media analytics, know your customer ( kyc ) 3 / 6 bis - central bankers'speeches compliances and for gauging governance effectiveness. the establishment of an advanced off - site supervisory monitoring system - daksh β is helping to digitalise supervisory processes. an integrated compliance management and tracking system ( icmts ) and a centralised information management system ( cims ) are two major suptech initiatives being implemented for seamless reporting by supervised entities for enhancing data management and data analytics capabilities, respectively. on the digital financial inclusion front, the rbi innovation hub has pioneered the delivery of farm loans or kisan credit card ( kcc ) loans in a fully digital and hassle - free manner. the rbi has also facilitated setting up of digital banking units ( dbus ) by commercial banks, which will enable broader access to cost effective and convenient digital financial products and services. the rbi's innovations in payment and settlement systems have been recognised the world over. it is now building upon the success of india's fast payment system β the unified payment | 0.5 |
transmit loss of confidence across the globe, central banks acted decisively to avert a total meltdown of the world financial system and to prevent an even more severe economic crisis. the challenge facing central banks around the world is planning and timing their exit strategies from unconventional policies so as not to jeopardise the recovery, whilst at the same time keeping close watch on possible inflation pressures that may start to emerge. the fact that we have stepped away from the brink should not allow complacency to creep in with regard to the repair work still required in terms of the reform of the international financial architecture and enhancing regulatory and supervisory standards in a coordinated manner. economic and financial conditions in south africa did not reach the stage where the bank had to broaden the scope of monetary policy to unconventional policies. in my view the interest rate policy within an inflation targeting framework and the flexible approach followed by the south african reserve bank in its implementation has served the country well and is a good basis to move forward from. thank you for your attention. references 1. opening remarks by william r white at the seventh bis annual conference on 26 β 27 june 2008 on β whither monetary policy?, monetary policy challenges in the decade ahead β 2. south african reserve bank monetary policy review, november 2009 3. unconventional monetary policies : an appraisal, claudio borio and piti disyatat, bank for international settlements working papers no 292, november 2009 4. challenges of inflation targeting for emerging - market economies : the south african case, brian kahn, south african reserve bank, 2008 5. south africa amidst the crisis, spire awards ceremony, mr a d mminele, deputy governor, south african reserve bank, 3 november 2009 | loi m bakani : effective compliance, risk mitigation and control speech by mr loi m bakani, governor of the bank of papua new guinea, at the institute of banking and business management ( ibbm ) seminar on β risk management β, port moresby, 4 july 2012. * * * regulation and prudential supervision of banks the bank of papua new guinea ( bpng ) has regulatory and supervisory powers and duties over commercial banks under the central banking act 2000 ( cba ) and the banks and financial institutions act 2000 ( bfia ). prudential supervision is conducted through on - site inspections and off - site monitoring and involves licensing and policy work as well as enforcement and compliance. the bfia gives powers to the bpng to issue prudential standards or directives on matters relating to the supervision of banks. the central bank is also the regulator and supervisor of the superannuation and life insurance industries, savings and loan societies and micro - banks. in short, we supervise almost the whole financial system, except for the general insurance industry. my presentation however will focus only on the deposit taking institutions. risk based supervision in recent years, bpng has shifted away from the traditional rule based approach to regulation and supervision, and has adopted a risk - based approach, which is more risk focused. the bank recognises that supervisory practice is not a one size fits all approach ; instead institutions should be regulated and supervised based on their systemic importance. in this regard, the bank considers that regulation should be proportional to the systemic importance of the financial institution. for instance, savings and loans societies and micro - banks are tier iii institutions that play a key role in providing financial services for the unbanked population. as the risks undertaken by these institutions are high, they should have significant corporate governance, capital adequacy, liquidity, operations and credit risk issues. the bank has taken a deliberate approach to providing an advocacy and promotional role in working together with these institutions to promote the growth of financial intermediation in the monetisation of the economy that in turn ensures financial system stability and promotes economic growth. risk and risk management risks are inter - dependent and events affecting one area of risk can give rise to other categories of risk. from a regulators perspective, the most important thing is to understand the risks forced by the banks and to ensure that the risks are properly assessed, effectively controlled and managed. the risk profile of a bank changes every time a new business | 0 |
imf jurisdiction over capital account policies of member countries or to impose an obligation on members on this count. the imf β s resources 8. we welcome the ratification of the april 2008 quota reforms. the next step in this process should be the speedy ratification and implementation of the 2010 quota and governance reforms. a comprehensive review of the quota formula should be completed by january 2013 to set the stage for the 15th general review of quotas by january 2014 which will carry forward the modest progress made so far in enhancing the representation of dynamic emerging and developing countries in the imf to meaningfully reflect the changing global economic realities. we must make our best efforts to complete the 2010 reform before the 2012 annual meetings. 9. we welcome the expanded and amended new arrangements to borrow ( nab ) which became effective from march 11, 2011. the activation of the nab should be regarded as a bridge between current expectations and the availability of higher quota resources under the 14th general review. subsequently, nab should be scaled down so as to preserve the quota - based character of the imf as an institution that is accountable to its membership. reserve adequacy 10. in our view, the insurance that reserves provide against sudden stops in growth due to capital drying up far outweigh the opportunity costs. reserve accumulation by countries is an important part of the global safety net, particularly when the reserve accumulation takes place in the context of current account deficits. bis central bankers β speeches 11. any assessment of reserve adequacy needs to be informed by underlying countryspecific conditions, rigorous analytical and empirical foundations and judgments based on practical experience. there should be due consideration to macroeconomic and prudential frameworks and policies, as well as alternative forms of contingent financing, country insurance, and overall assets and liabilities that may not be easily captured in any formula for reserve adequacy. for emerging economies facing volatile surges of capital flows, consideration needs to go even beyond to a broad range of scenarios relating to potential drains on reserves, including a sudden stop of new financing, withdrawal of foreign portfolio investments, capital flight, and current account vulnerabilities. further, the question of reserve adequacy cannot be resolved without addressing the broader issue of scarcity of safe reserve assets. currency internationalization and the role of the sdr 12. in principle, it is desirable to develop a multi - currency system with several currencies operating as broad substitutes and reflecting changing economic weights and global | and to strengthen multilateral adjustment mechanisms to deal with imbalances and sources of instability. imf surveillance 5. the surveillance function is critical to the imf β s overall mandate. by focusing on vulnerabilities and detecting the onset of crises, it assumes a vital, preemptive role in preserving global and national stability. effective implementation at both multilateral and bilateral levels is the key to providing surveillance with incisiveness and traction. we believe bis central bankers β speeches that this can be achieved within the ambit of the existing provisions of the articles of agreement. if, however, there is a consensus that there are gaps in the legal mandate that hinder effective implementation, an amendment to the articles is the optimal approach. ensuring consistency and comprehensiveness across the various levels of surveillance is important, as is the candour and evenhandedness of the imf β that systemic risks are pointed out irrespective of where they may originate. we need to stress that multilateral surveillance by the imf should not lose sight of sovereign debt concerns of developed countries by adopting tighter screening criteria for developing countries that have actually seen fiscal improvement relative to the advanced economies. managing capital flows 6. as the recovery of emerging and developing countries has gained momentum, capital flows have surged back to near pre - crisis levels. these flows have exhibited considerable volatility, imparting macroeconomic instability in the event of sudden stops and reversals, eroding competitiveness and complicating the setting of macroeconomic policies. policy prescriptions with respect to capital flows should be even - handed. so far as lumpy and volatile flows are a spillover from policy choices of advanced economies, managing capital flows should not be treated as an exclusive problem of emerging market economies and the burden of adjustment should be shared. how this burden will be shared raises both intellectual and practical challenges. 7. as regards multilateral strategies to managing capital flows, it is difficult to follow an approach that seeks to establish, standardize, prioritize or restrict the range of policy responses of the member countries that are facing large surges in volatile capital inflows. based on their experience, policymakers must have flexibility and discretion to adopt policies that they consider appropriate to mitigate risks through macroeconomic, prudential and capital account management policies without a sense of stigma attached to particular instruments. given the state of knowledge on these issues, it will be premature to consider amending the articles to either give the | 1 |
not forget that banking tends to be a cyclical business irrespective of regulatory requirements. nonetheless, the basel committee has begun a comprehensive review of the potential procyclicality of the basel ii framework. the objective is to promote adequate capital buffers over the credit cycle and to mitigate the risk that the minimum capital requirement magnifies the procyclicality of the financial system. under discussion are ways to promote a high quality tier 1 capital buffer that banks would increase in good times and be allowed to use in difficult times. supervisors are also reviewing the need to supplement the current risk - based approaches with simple, transparent gross measures of risk. this would constrain the amount of leverage banks could have in good times and therefore also contain the degree of deleveraging in bad times. let me now turn to lessons that can be drawn from the financial crisis with regards to supervisory arrangements. over the past one and a half years supervisory arrangements around the world have been put to the test. these real stress tests have provided us with important insights into the pros and cons of different supervisory arrangements. and, though there is no single optimal supervisory arrangement, three lessons can be drawn. first, as macroprudential supervision and microprudential supervision strongly overlap, central bankers and prudential supervisors should cooperate closely and continuously. second, financial supervisors need to step up international cooperation, simply because the financial industry is particularly internationalized. third, while prudential and conduct of business supervision are distinctly different, they are complementary and should both receive due attention. separating prudential and conduct of business supervision institutionally helps to keep both supervisory goals in clear sight. as financial sectors today are more concentrated, more integrated and more exposed to the financial markets than ever before, problems at individual institutions are increasingly likely to have systemic consequences. indeed, during the financial crisis we saw several examples, most notably the collapse of lehman brothers in september 2008 which had a truly systemic impact. these events have demonstrated that the distinction between macro - and microprudential stability is hypothetical in practice. therefore, there is an urgent need for close and continuous cooperation between macro - and microprudential supervisors, of course with due observance of the relevant legal provisions. such cooperation can be achieved in different institutional settings. also when the central bank plays no role in microprudential supervision, extensive micro - macro cooperation can be and in fact should be organized. the need for effective interplay | ##bach, and david reifschneider ( 2015 ), β the macroeconomic effects of the federal reserve β s unconventional monetary policies ( pdf ), β finance and economics discussion series 2015 005 ( washington : board of governors of the federal reserve system, january ). reflecting securities holdings from the asset purchases, the federal reserve has remitted about $ 500 billion to the u. s. treasury from 2008 to 2014 and is expected to have cumulative net income from 2008 to 2025 that is far higher than would have been the case in the absence of these asset purchases. bis central bankers β speeches policy normalization turning to policy normalization, the fomc and market participants anticipate that the federal funds rate will be raised sometime this year. we have for some years been considering ways to operate monetary policy with an elevated balance sheet. prior to the financial crisis, because reserve balances outstanding averaged only around $ 25 billion, relatively minor variations in the total amount of reserves supplied by the desk could move the equilibrium federal funds rate up or down. with the nearly $ 3 trillion in excess reserves today, the traditional mechanism of adjustments in the quantity of reserve balances to achieve the desired level of the effective federal funds rate may well not be feasible or sufficiently predictable. as discussed in the fomc β s statement on its policy normalization principles and plans, which was published following the september 2014 fomc meeting, we will use the rate of interest paid on excess reserves ( ioer ) as our primary tool to move the federal funds rate into the target range. 5 this action should encourage banks not to lend to any private counterparty at a rate lower than the rate they can earn on balances maintained at the fed, which should put upward pressure on a range of short - term interest rates. because not all institutions have access to the ioer rate, we will also use an overnight reverse repurchase agreement ( on rrp ) facility, as needed. in an on rrp operation, eligible counterparties may invest funds with the fed overnight at a given rate. the on rrp counterparties include 106 money market funds, 22 broker - dealers, 24 depository institutions, and 12 government - sponsored enterprises, including several federal home loan banks, fannie mae, freddie mac, and farmer mac. this facility should encourage these institutions to be unwilling to lend to private counterparties in money markets at a rate below that offered on overnight reverse repos by the fed. indeed, | 0 |
wage increase was of the order of 17 per cent during 2008 β 09 to 2012 β 13 so far. even after adjusting for high rural consumer inflation, real wage increase over 6 per cent per annum was significant ( table 2 ). in the formal sector, company finance data suggest that the wage bis central bankers β speeches bill has risen at a faster rate since the middle of 2009 β 10. as wages increase, entitlement goes up, and consequently demand and preference for essential commodities increases. third, with the persistence of near double - digit inflation in 2010 and 2011, the medium - to long - term inflation expectations in the economy have risen, underscoring the role of higher food prices in expectations formation. if inflation is expected to be persistently high, workers bargain for higher nominal wages to protect their real income. this creates a pressure on firms β costs and they may in turn increase prices to maintain their profits. independently, the producers β own inflation expectations also affect inflation directly by influencing their pricing behaviour. if companies expect general inflation to be higher in the future, they may believe that they can increase their prices without suffering a drop in demand for their output. fourth, there has also been added stimulus from the crisis driven fiscal and monetary policy. fiscal consolidation process was reversed in 2008 β 09 which impacted the macroeconomic conditions ( chart 2 ). higher fiscal expansion also impedes efficacy of monetary policy transmission. the moderation in private demand resulting from anti - inflationary monetary policy stance is partly offset by the fiscal expansion. let me now turn to the role of monetary policy in a little more detail. role of monetary policy the current phase of high inflation followed the global financial crisis, which affected india β s economy, though not with the same intensity as advanced countries. india, though initially somewhat insulated from the global developments, was eventually impacted significantly by the global shocks through all the channels β trade, finance and expectations channels. the reserve bank, like most central banks, took a number of conventional and unconventional measures to augment domestic and foreign currency liquidity, and sharply reduced the policy rates. in a span of seven months between october 2008 and april 2009, there was an unprecedented policy activism. for example : ( i ) the repo rate was reduced by 425 basis points to 4. 75 per cent, ( ii ) the reverse repo rate was reduced by 275 basis points to 3. 25 per cent, ( iii ) cash reserve ratio ( crr ) of banks was reduced by a | slowdown of the aes is both a cause and an effect of the sovereign debt crises in the eurozone and the associated fiscal problems. the sovereign debt crisis in the eurozone has not only aggravated the macroeconomic conditions of the countries of the eurozone but also, in turn, has deeply affected the balance sheets of global banks having exposures to these countries. the political measures and announcements, co - ordinated initiatives of the governments, and prolonged easing policies backed by unconventional measures of the central banks to provide a solution to the problems arising out of this crisis have not been able to evoke sustainable confidence in the financial markets. the fiscal austerity measures taken in response are further weakening the prospects of growth and employment in the affected european countries and, in turn, fiscal adjustment and repair of the national balance sheet are becoming an onerous task. the us continues to face high levels of unemployment, the consumer and business confidence remains shaken and the financial sector is still recuperating from the earlier crisis. the european union and the us form the two largest economies in the world and are deeply inter - twined with each other even in such adversities. there is, thus, a felt need for concerted actions by the policy - makers across the aes to save the global economy from falling into a downward spiral, rejuvenate the employment led bis central bankers β speeches recovery and pave the way for structural reforms required for sustainable and balanced growth not only in these economies but also in other economies including india. growth prospects economic growth around the world weakened significantly in q2 2012 after being better than expected in q1 2012. aes and edes alike are experiencing moderation in growth. the numerous problems confronting the highly inter - connected global economy are reinforcing each other in retarding the pace and prospects of growth. growth in the us has fallen during q2 2012 while uk has been experiencing negative growth rates for three quarters now. gdp growth in the euro area and japan has been negative during q2 2012. economic growth even in the brics nations, which serve as an engine of growth in the developing world, has slowed down considerably. one of the other pressure points in the world economy, particularly the aes, is the prevailing high unemployment. unemployment in the us above 8 per cent has been persistently high. uk is also experiencing high unemployment of about 8 per cent and so is the eurozone at around 11 per cent. unemployment in the peripheral countries | 0.5 |
i would suggest that exempting them from volcker compliance and resolving issues through the supervisory process would be a more effective use of bank and supervisory resources. see board of governors, fdic, and occ ( 2013 ), β the volcker rule : community bank applicability ( pdf ), β december 10. see 12 cfr part 225, appendix c, www. gpo. gov / fdsys / pkg / cfr - 2014 - title12 - vol3 / pdf / cfr - 2014 - title12 - vol3part225 - appc. pdf. bank holding companies with less than $ 500 million in assets may still be required to file regulatory reports with the same detail and frequency as larger bank holding companies if they meet certain criteria that are set forth in the instructions for the federal reserve fr y - 9sp and fr y - 9c regulatory reports or to otherwise meet supervisory needs. bis central bankers β speeches excessive debt. similarly, because most bank holding companies under $ 1 billion have limited activities outside of their banks, and we will still receive detailed quarterly bank data, the reduced regulatory reporting requirements for qualifying holding companies should not be problematic for supervisors. of course, the policy statement was issued by the board and thus one might think the board could raise the threshold on its own. however, the collins amendment to dodd - frank 19 effectively eliminates any authority of the board to extend the capital treatment in the policy statement to holding companies with assets greater than the threshold in effect on may 19, 2010, or to savings and loan holding companies of any size. thus, we would need legislative action to effect these changes. tiered supervision federal banking regulators have long organized supervision into portfolios of institutions based predominantly β though for larger firms, not exclusively β on asset size. various provisions of dodd - frank motivated the federal reserve to modify the composition of the portfolios somewhat. we have four such groups : ( 1 ) community banks, ( 2 ) regional banking organizations, ( 3 ) large banking organizations, and ( 4 ) firms overseen by the large institution supervision coordinating committee ( liscc ). 20 this arrangement is not simply a matter of organizational convenience. nor is it only a means for promoting consistency of treatment among similar banks throughout the federal reserve system, important as that goal is. as with tiered regulation, this tiered approach to supervision is intended to take account of differences in business models, risks, relative regulatory burden, and other salient | core of the financial system is now much stronger and more resilient than before the crisis. all of that said, i would also agree that monetary policy may sometimes face tradeoffs between macroeconomic objectives and financial stability. indeed, it would be a divine coincidence if that were not the case. there are times when all of these objectives are aligned. for example, the fed β s initial unconventional policies supported both market functioning and aggregate demand. more broadly, post - crisis monetary policy supported asset values, reduced interest payments, and increased both employment and income. all of these effects are likely to have limited defaults and foreclosures and bolstered the balance sheets of households, businesses, and financial intermediaries, leaving the system more robust. but at times there will be tradeoffs. low - for - long interest rates can have adverse effects on financial institutions and markets through a number of plausible channels, as listed on the next slide. 8 after all, low interest rates are intended to encourage some risk - see adrian and liang ( 2014 ). - 5taking. 9 the question is whether low rates have encouraged excessive risk - taking through the buildup of leverage or unsustainably high asset prices or through misallocation of capital. that question is particularly important today. historically, recessions often occurred when the fed tightened to control inflation. more recently, with inflation under control, overheating has shown up in the form of financial excess. core pce inflation remained close to or below 2 percent during both the late - 1990s stock market bubble and the mid - 2000s housing bubble that led to the financial crisis. real short - and long - term rates were relatively high in the late 1990s, so financial excess can also arise without a low - rate environment. nonetheless, the current extended period of very low nominal rates calls for a high degree of vigilance against the buildup of risks to the stability of the financial system. if we look at the channels listed here, the picture is mixed, but the bottom line is that there has not been an excessive buildup of leverage, maturity transformation, or broadly unsustainable asset prices. low long - term interest rates have weighed on profitability in the financial sector, although firms have so far coped with those pressures. as shown in the next slide, net interest margins ( nims ) for most banks have held up surprisingly well. nims have moved down for the largest banks. return on assets, shown to the | 0.5 |
yuba raj khatiwada : development of regional capital markets in asia β issues and challenges speech by dr yuba raj khatiwada, governor of the central bank of nepal and chairman of the seacen board of governors, at the 50th seacen governors β conference, port moresby, papua new guinea, 20 november 2014. * * * 1. asia is the fastest growing economic region of the world and the engine of global economic growth. but its growth is still dependent on ( i ) external demand from advanced economies and ( ii ) external capital and direct investment. the region has the highest saving rate and keeps on funding the fiscal deficits of many economies of the advanced world. at the same time, the region lacks sufficient long term fund for promoting investment for high economic growth. sustaining high economic growth in the asian region requires huge investment in both public and private sectors. big infrastructure projects are likely to demand high amount of capital even above the capacity of domestic market ; and resorting to international market for the same is not always practical. this is where the development of regional capital markets in asia is called for. 2. a regional capital market implies that there are no barriers to the movement of capital and the provision of investment services within a geographic region. this implies that domestic savers find suitable instruments for saving in the region and investors / issuers can invest or raise capital in other countries along with domestic markets, all knowing that they will encounter broadly similar regulations, information, trading systems, settlement systems, accounting standards and governance standards throughout the region. while development of regional capital market is necessary to promote investment and economic growth in asia, it is also instrumental to strengthen domestic capital markets and provide liquidity, scale, and capacity and ultimately put asia in the position to integrate with global market. however, the development of capital markets in asia has not kept pace to that of economic growth in the region relative to other regions of the world. this has led to the asian investors β continued dependence on the markets of advanced economies for mobilizing long term capital. 3. developing a regional capital market leads to the convergence of risk adjusted returns on financial assets of similar maturity across the region. further, it helps the deepening of domestic capital markets, increases competition, and widens the range of instruments available for savings and investments. these changes, in turn, lead to more efficiency and innovation in the provision of services to savers, investors, and issuers. more innovation in such financial | along with the risk taking capacities of the banks. policy makers thinking about developing a stronger asian regional capital market will have to assess this situation in depth. 10. various potential barriers, which may be related to regulations, taxation, or monopoly, pose serious challenges towards the capital market integration. regulatory barriers like exchange controls and restriction on foreign listings restrict the movement of capital towards its efficient use. taxation barriers alter the economic comparison between different activities or participants leading to narrower markets and higher costs. monopolistic structures like limitations on the total number of stock exchange members prevent access to particular parts of the market, reduce competition, and increase costs for all users. 11. also important are fairness barriers and information barriers. fairness barrier such as explicit discrimination against foreigners or a perception that such discrimination exists deter them from entering the market. likewise information barriers could exist when there are significant differences in accounting standards or disclosure requirements, and lack of transparency of trading, which prevent nonlocals from seeing the state of the market. a multidimensional approach with strong regional cooperation is required to overcome such potential barriers and move towards the regional integration. efforts should be directed towards harmonizing rules and practices by addressing major differences in laws, regulations, and tax treatments that prevent investors from building regional portfolios. emphasis should be given to convergence with globally accepted standards and best practices, which will also facilitate easier global integration later. 12. a major challenge faced by asian nations towards developing a regional capital market is the building of necessary market infrastructures. establishing links between national clearing and payment systems, creation of regional credit rating agencies and benchmarks should be emphasized to enhance the depth and liquidity of capital markets. 13. one more challenge to the asian capital market is the limitation of bond market. currently, more than 80 per cent of the asian bond market is contributed by government bonds. corporate bonds issues are still limited and companies are often inclined to bank loan financing than resorting to the issuance of bonds. in future course of time, government bond market is expected to saturate for the reason that ( i ) public debts are on the rise and such debt levels do not allow governments to incur high deficits and issue bonds to finance the deficit, and ( ii ) the past fiscal profligacy and subsequent macroeconomic imbalances of some of the asian countries have taught strong lessons on not incurring high fiscal deficits. therefore, if the development of the asian capital market in terms of bonds is concerned, there is | 1 |
ravi menon : three β c β s of a good payment instrument welcome address by mr ravi menon, managing director of the monetary authority of singapore ( mas ), at the currency conference 2011, singapore, 3 october 2011. * * * why cash is still king distinguished guests, ladies and gentlemen, good morning and a warm welcome to singapore and the 2011 currency conference. singapore is honoured and delighted to host this flagship event. the late mr john shepherd - barron, who pioneered in 1967 the development of the automated teller machine, or atm, said during a 2007 interview : β money costs money to transport. i am therefore predicting the demise of cash within three to five years. β shepherd - barron believed fervently that we would soon be swiping our mobile phones at till points, even for small transactions. we have indeed seen an increasing use of cashless payments at point - of - sale. electronic payment alternatives have mushroomed in many countries, ranging from contactless stored value cards in singapore to real - time settlement of electronic fund transfers in the united kingdom. but cash remains β king β. even in advanced economies. this is especially so for person - toperson transactions and micro - payments. take high - tech singapore. the use of electronic payments has proliferated rapidly in recent years. yet, currency - in - circulation has been growing at an average 7 per cent per annum during the last ten years. this has reflected demand from a growing population and a growing economy. less well known is how the demand for cash globally is being driven by tourism. tourists have a habit of taking back home unused currency β both notes and coins. this represents a leakage from circulation and needs to be replaced. we don β t have good data on this. but take for example, singapore. last year, we received almost 12 million visitors. if everyone took 8 coins back with them, close to 100 million coins would have leaked out of the country. and it will cost mas about s $ 10 million to replace them. that β s why we have been working with the singapore mint, changi airport group, and charity organisations to increase the availability of boxes in various parts of changi airport, for tourists to donate their excess notes and coins before they leave the country. physical cash commands a premium during times of uncertainty. we saw this during the 2008 global financial crisis. within the first month of the collapse of lehman brothers, there was an exceptionally large withdrawal of high denomination notes by banks in | this country. the question remains β can we keep it up? the answer to that question depends on developments both at home and abroad, but let me comment first on the international situation which is currently the focus of a great deal of attention. the bounce back from the world economic slowdown in 1998 / 1999 was such that in the year just ended world economic activity grew at a rate of some 4Β½ % which equals the fastest rate for 16 years β and compares with an average rate of some 3ΒΌ % over the last 10 or 20 years. in large part this recovery was underpinned by unusually strong growth in the us, averaging some 4Β½ % over the past 4 years and surging to a peak of some 5Β½ % at an annual rate in the first half of last year β compared with an average rate of 2ΒΎ % over the preceding decade. this remarkable strength of the us economy was possible, without overheating, against the background of unusually rapid productivity growth as investment in it spread through the us economy improving its supply - side capacity. these developments together implied higher corporate earnings growth in the us pushing up the stock market and at the same time attracting massive direct and portfolio capital inflows into the us β substantially from the eurozone β which comfortably over - financed a burgeoning us current account deficit and underpinned the strong dollar. however helpful all this was in supporting the world economy it clearly could not continue for ever or without limit. at some point β and no - one could know at all precisely at what point β demand in the us would begin to outstrip supply and the growing external imbalance between the us and the rest of the world would become unsustainable ; relative asset prices β including the dollar β s exchange rate β would over - discount prospective us corporate earnings growth and both equity and foreign exchange markets would then become vulnerable to abrupt correction. against that background it has been clear for some time that there needed to be a slowdown in the growth of the us economy to a rate which was more sustainable, both in the us itself but also in terms of the imbalance within the global economy β and the debate turned to whether it would come as the β soft landing β we would all welcome or a more disruptive β hard landing β which we could all well do without. and slowdown, of course, is what we have seen over the past six months. in the third quarter us gdp growth fell to an annualised rate of some 2 | 0 |
this forum today. this type of forum is a practical step toward achieving the ultimate common goal of asia's bond market development. the global economy continues to recover and the financial system has been maintaining stability. as the imf's managing director expressed in her global policy agenda at the last international monetary and financial committee ( imfc ) meeting, current economic and financial conditions provide " a window of opportunity " to tackle key challenges. stakeholders in the region must maintain the will to further develop and deepen the market. through these concerted efforts, the challenges in fostering bond markets can be overcome. on the 10th anniversary of the asian financial crisis, at a boj symposium, the then governor zeti of bank negara malaysia, stated : asia, especially the asean tigers, is back and poised to leap on to the next wave of economic advancement and prosperity. 6 how correct she was. asia's economy has developed much more vigorously than many had anticipated. economic integration in the region has further deepened through the development of global value chains. looking ahead to the next twenty years, asia's economy will continue to be at the core of world economic growth and we will experience further integration. along with such developments, it is natural to seek more developed and integrated regional financial markets. we can anticipate that twenty years from now, asia's financial markets will have developed to become as efficient and liquid as other major financial centers in the world. thank you for your kind attention. " ten years after the asian currency crisis : future challenges for asian economies and financial markets, " a speech at the international symposium hosted by the center for monetary cooperation in asia ( cemcoa ) of the boj on january 22, 2007 in tokyo ( available from https : / / www. boj. or. jp / en / announcements / release _ 2007 / index. htm / ). asian financial markets οΌ 20 years since the asian financial crisis, and prospects for the next 20 years οΌ november 28, 2017 haruhiko kuroda governor of the bank of japan chart 1 increased resilience less reliance on foreign - currencydenominated short - term funding % growth of asian local currency bond markets us $ trillion indonesia malaysia philippines thailand corporate government cy notes : 1. the figures are the ratios of foreign currency - denominated short - term claims to all claims of foreign banks. 2. the latest data are as of end - june 2017. source : bis. cy notes : 1 | . as i have mentioned, local currency bond markets have grown over the last twenty years. at the same time, bank financing still dominates as a primary source of funding in the region. you can see this from chart 2. bank credit, as a source of corporate funding, has outgrown both stock market capitalization and corporate bonds outstanding over the years. the strong reliance on bank - financing may be explained by asian corporate culture, which puts high priority on business relationships. bond financing is often not the first choice for domestic firms when financing their business. to make my point clear, i am not proposing that asian corporates should rely on market - financing over bank - financing, as is the case in some other countries. i would rather like to stress the importance of diversifying the sources of funding to reduce the direct effect on the corporate sector, should the banking sector face economic or financial shocks. along with this cultural issue, domestic firms are deterred by the cost of bond - financing when compared with bank loans. one of the factors that explain the unattractiveness of bond - financing may be the lower levels of market activity and less liquidity in the secondary market. with lower liquidity in the secondary market, investors require additional premiums, which increase the cost of issuance. in such an environment, domestic firms are more likely to rely on banks for financing. in this regard, developing highly efficient and liquid local currency bond markets is essential. past initiatives in the region have enriched the primary markets. we may therefore need to put more focus on developing liquid secondary markets. as presented in chart 3, according to a survey conducted by asian bonds online, there is no single factor that inhibits the development of the secondary markets. survey respondents were asked how important each of the eight structural issues was, with respect to local currency bond market liquidity. the survey results in recent three years show that " greater diversity of investor profile " was the most important structural issue for promoting the market liquidity. another structural issue, " transaction funding, " which also marked a relatively high score, may also be worth noting as an important impediment. let me elaborate these two structural issues. first, the issue of investor base diversification. since banks are the dominant financial institutions in the region, they are often the largest investor group as well. the presence of buy - and - trade investors like mutual funds, and active investors like hedge funds is relatively low, and this may be one of the | 1 |
##bc ) which i referred to earlier is mandated to review the flow of credit in each district with reference to the cdr and draw up a special, monitorable action plan for districts with cdr of less than 40 %. if the cdr of ner is low, what it means is that savings of people in the region are going outside to finance investment elsewhere. this is unfair and strictly inadvisable. the savings in the ner should be used to finance investment here in the region. this requires responses both from supply and demand sides. our efforts have so far largely focused on the supply side. we must do much more to generate demand for credit. the state governments and the banks should work in partnership in this regard. the reserve bank will be happy and willing to promote this partnership for raising the absorptive capacity of states for institutional credit. 5. indian government is now encouraging trade with asean. but unfortunately there are very limited bank branches along border. the existing branches are not sufficient to meet the demand of the customers. will rbi take any step? as i have already pointed out earlier, at the policy level, we have been encouraging expansion of bank branches in the ner. if the state governments come forward with infrastructure development and other facilities along the border, the reserve bank will be bis central bankers β speeches happy to work with them to improve the presence of banks along the border. perhaps, the ne council should come up with a viable plan in this regard. 6. customers often complain about poor atm service. existing atms are inadequate to meet the demand as volume of business is increasing day by day. what is your advice to the banks? scheduled commercial banks are no longer required to take reserve bank β s permission to install off - site / mobile atms. as at end march 2011, there were close to 75, 000 atms across the country. but you are right. with just about 1800 atms, the share of the ner in the total number of atms is low. you must, however, appreciate that north - east is a difficult terrain. there are frequent power failures, and problem of digital connectivity and security. lack of infrastructural facilities is a major problem restricting the spread of banking, including atms in the area. nevertheless, at the policy level, we have taken some measures to enhance access of banking services as a whole to north east region. these include : to improve branch network in the region, domestic scheduled | in a position to not merely avail the offered services, 2 / 5 bis central bankers'speeches but are also capable of demanding preferred products and services suitable to their needs / choices. 14. the mudra is a case in point. while such a massive push would have lifted many beneficiaries out of poverty, there has been some concern at the growing level of nonperforming assets among these borrowers. banks need to focus on repayment capacity at the appraisal stage and monitor the loans through their life cycle much more closely. 15. the role and importance of the microfinance sector in our economy has also been steadily growing. according to the bharat microfinance report 2019 prepared by sa - dhan, mfis operate in 29 states, 5 union territories and 570 districts in india. the mfis are also expanding into newer territories for reducing their concentration risk. 16. tailored products for providing credit to those without a credit score, entrepreneurial and consumption credit, handholding, financial literacy, social occasion credits and insurance ( life and non - life ), are all waiting to be tapped in scale and size. limited forays have been made but are yet to achieve their full potential. 17. the rbi defines financial inclusion as the β process of ensuring access to appropriate financial products and services needed by all sections of the society in general and vulnerable groups such as weaker sections and low income groups in particular, at an affordable cost in a fair and transparent manner by regulated, mainstream institutional players β. the national strategy for financial inclusion ( nsfi ) 2019 β 24 has been framed by us. it gives the vision to make financial services available, accessible, and affordable to all citizens in a safe and transparent manner to support inclusive and resilient multi - stakeholder led growth. potential of microfinance 18. a major demographic change is taking place in our country with a huge and growing working population. there is a big chunk aspiring to grow into the middle class with the support of institutional credit. therefore, microfinance can play a big role in meeting their requirements and fulfilling their goals. 19. the credit needs of low - income groups range from emergency loans, consumption loans, business loans, working capital loans, housing, etc. in addition to credit, poor households would benefit from a combination of financial services, including savings, remittances, loans, microinsurance, micro - pensions, and the like. 20. in today β s world | 0.5 |
fish, particularly the tilapia and the nile perch, has become an important export and therefore source of uganda β s foreign exchange earnings and economic development. this stamp is geared to enhance this industry. the fourth stamp of shs 2, 000 features the mountain gorilla found in the bwindi impenetrate forest & mgahinga gorilla reserves. there are less than 600 left in the wild in the entire world! the objective is joining the worldwide effort to preserve this endangered specie and in turn promote tourism to uganda. in conclusion, let me reiterate bank of uganda β s commitment to deliver the bank β s mission of fostering price stability and a sound financial system. it gives me great pleasure to officially launch asset of four the bank of uganda commemorative stamps. i call upon the stamp collectors and the public to make full use of these stamps. allow me once again to thank post uganda for partnering with us in issuing these stamps. | rightful role in skills development. it is as if our private sector still views skills development as an additional cost rather than an investment for the future. we need to have a true partnership, a partnership based on mutual desire to progress, between the government and the private sector to address the problem of skills deficit. let us also agree that the most effective way in which we can address the quality of our education system is when education is once more regarded as a meaningful profession to pursue. today education is regarded as the profession of the last resort. our research suggests that the young people who enrol to become teachers are those who have passed grade 12 with the lowest points. it is hardly surprising therefore that we have not been able to produce the engineers, the scientists, and the economists that we so much need. the only way to change this is to make teaching an attractive profession. this we can do, as a first step, by starting to reward our good teachers and educators commensurately. as with regard to the labour market, it appears that our labour market is too rigid, unnecessarily adding to the costs of doing business. in this regard, organized labour should try to look beyond the interest of their immediate constituent. what is good for the workers is not necessarily good for the country. it does not help we protect a few jobs at the expense of lower future unemployment. in today β s globalized world, it becomes virtually impossible to protect jobs. when job losses occur, however, there should be temporary social support to assist the unemployed from falling below the poverty line. one of the weakest links in the chain of our economic development cycle has been the lack of effective monitoring and evaluation. this weakness is in part due to weak state capacity, which is in turn linked to lack of skills and sometimes lack of commitment. it is necessary to strengthen our monitoring and evaluation mechanisms. a key reform in this regard would be to strictly enforce accountability. there should be consequences when agreed targets are not met and we should not entertain rewarding non - performance. what is clear is that if we fail to improve our monitoring and evaluation structures, a more government interventionist approach to economic development will be a waste of resources and we might as well not do it. we also know that not doing it is not a viable proposition. the stakes are simply too high. ultimately development starts with all of us. as individuals, let us be aware of the great potential that is within all of us ; let | 0 |
mar guΓ°mundsson : iceland β s recovery β facts, myths, and the lessons learned speech by mr mar guΓ°mundsson, governor of the central bank of iceland, at the official monetary and financial institutions forum ( omfif ) city lecture, london, 28 january 2016. * * * accompanying figures can be found at the end of the speech. chairman, ladies and gentlemen, i would like to begin by thanking omfif for giving me the opportunity to speak to you here today in the city of london about iceland β s recovery. this is interesting for me because, for better and worse, the uk and iceland deeply shared some aspects of the financial crisis, and because the city of london has for decades been iceland β s international financial centre. but it also gives me great pleasure to see so many in the audience who have in various ways helped iceland over the years. today i will focus on the recovery from the crisis and the current challenges, including the task of lifting capital controls. but the recovery cannot be understood without an understanding of the nature of the negative shocks that hit iceland during the crisis. it is well known that iceland was the first advanced country to experience a full - scale banking crisis in autumn 2008, when its three big cross - border banks failed. it was also the first advanced country to go on an imf programme during the great financial crisis. what is somewhat less well known is that at that point, iceland was already on its way into a recession after an unsustainable boom and serious overheating during 2005 β 2007 and a currency crisis in the first half of 2008. the banking collapse and the associated wealth loss and further currency depreciation made the recession significantly worse, of course, as did the global recession that began in the fourth quarter of 2008. in autumn 2008, two separate but interrelated sub - stories of the recent icelandic saga converged in a tragic grand finale. the first story was related to iceland β s boom - bust cycle and problems with macroeconomic management in small, open, and financially integrated economies. this is a story that has played out many times around the globe, and many of its elements have been seen before in iceland. it might have been somewhat more extreme this time around, but it wasn β t fundamentally different. all the usual suspects were present, including strong capital inflows fuelling a credit and asset price boom that subsequently turned into a bubble at the same time as the economy overheated and | an unsustainable external position developed, as could be seen in a double - digit current account deficit. and macroeconomic and prudential policies were not up to the task. quite the contrary : there was a policy conflict between monetary policy and the demand levers pulled by the government, and the risks inherent in capital flows, fx balance sheets, and credit and asset price booms were left under - regulated and insufficiently supervised. the second story was the rise and fall of three cross - border banks operating on the basis of eu legislation ( the european β passport β ). this story was much more unique, as it was part of the first banking crisis in europe since the eu single market was formed in the early 1990s. this framework, along with the prevailing conditions in international financial markets that provided for ample and cheap credit, facilitated the cross - border expansion of the newly privatised icelandic banks. in less than five years, from the end of 2003 to mid - 2008, the combined balance sheet of these banks went from under two times gdp to almost ten times gdp, topping other small european countries with international financial centres, as can be seen on figure 1 : bis central bankers β speeches towards the end, around two - thirds of the combined balance sheet of the three cross - border banks was denominated in foreign currency. on the liabilities side, the share of fxdenominated debt was actually higher, as can be seen on the right side of the slide, with almost half of the financing in the form of fx deposits and other short - term fx financing. the fx part of the balance sheet therefore had a significant maturity mismatch. however, there was a very limited safety net of the type we have in a national setting, in the form of liquidity provision and lender of last resort ( lolr ) to back it up. it was an accident waiting to happen, and happen it did, with a vengeance, at the peak of the international financial crisis in autumn 2008, when there was a wholesale run on the fx financing of internationally active banks. after having done a post mortem on the failed banks, we now know, however, that they also had other ailments that would probably have done them in at a later stage, although the process might have been somewhat less disorderly. the combination of the macroeconomic imbalances, an unsustainable banking system, and the full eruption of the great financial crisis meant that iceland faced unprecedented | 1 |
one data set which is harmonised but lacks coverage. and there is another one which reflects high coverage but lacks harmonisation. iii feasibility constraints i think we have to tackle these and other harmonisation gaps. furthermore, there is no doubt that the availability of reliable statistical data for financial stability purposes is not yet complete. we are faced with data gaps. there are, however, practical difficulties with regard to gathering additional, and more detailed, statistical data. one possibility to reduce these difficulties is to consider whether more data from commercial data providers could be purchased. however, the scope may not be sufficient as the focus of private providers is on financial market data. in addition, this option could turn out to be quite costly. another option might be to consider extending the statistics produced under the stewardship of the escb in the field of money and banking statistics. however, a good sense of proportion is necessary when deciding on new harmonised statistical requirements. there is a common understanding that producing statistics is a costly matter, in particular from the viewpoint of the data suppliers. any new statistical reporting will place an increased burden on the reporters and strain their resources. and let β s not forget that central bank statisticians and data reporters anyway have to cope with a whole bunch of new challenges. examples are the enlargement of the european union, any potential enlargement of the european monetary union, the change in accounting rules, and, last but not least, the requirement of calculating new indices and indicators for banking supervision purposes under the basle ii regime. given all these tasks, it is absolutely essential to set priorities. the highest priority should be attributed to closing data gaps with regard to essential indicators for financial stability such as statistics on the securitisation of bank loans. in order to narrow the data gap in this area we should use existing data with sufficient coverage from other sources. an obvious example is the biannual information by the bis on derivative instruments which is collected from a small number of leading market players, which covers still 80 % of the overall market volume. at the same time, we have to check whether existing statistical surveys could be discontinued in exchange for any new data requirements. for example, regionally disaggregated balance sheet data of banks in germany no longer have analytical relevance because of euro - area membership. in order to keep the costs within strict limits, statisticians may find it helpful to determine the extent to which one and the same data source might serve different analytical purposes | be able to cushion such shocks as much as possible rather than amplifying them. this year, the german financial stability committee ( fsc ) thus recommended raising the countercyclical capital buffer to 0. 25 % on account of increased cyclical systemic risks. allow me to explain in more detail how we assess these risks and what action needs to be taken. 1 underestimation of credit risk overall, the credit scores of german enterprises have been exceedingly good and insolvencies correspondingly low over the past few years. hence, it follows that the number of non - performing loans has declined. however, there are mounting signs that future credit risks are being underestimated : β’ banks β risk provisioning remains exceptionally low, reflecting the low number of insolvencies. β’ economic downturns coupled with steeply increasing credit risks are likely to be underrepresented in many banks β risk assessments. this is indicated, for instance, by the low risk weights of banks which use internal ratings - based models. β’ in addition to this, at around 5 % over the past year, lending to the private sector reached a 15 - year high. large, systemically important financial institutions have recently expanded their lending in this area to a greater degree than small and medium - sized institutions. allocation risks may thus emerge for the entire loan portfolio that appear paradoxical at first glance : even if the creditworthiness of all enterprises has improved following a long upswing, making each individual loan appear sound, the structure of the loan portfolio may shift to enterprises that are riskier in relative terms. allocation risks, then, are not themselves a new risk, but rather a further indication that credit risks are being underestimated. β’ creditworthiness varies between enterprises. most enterprises have a fair credit score, although there are some which are rated particularly highly, and others which are weaker. β’ this distribution is broadly reflected in banks β portfolios, too, although some enterprises also obtain funding via the capital market, whilst others draw on equity capital. β’ now, what happens during a cyclical upswing? in such an event, all enterprises see an improvement in their creditworthiness. strong enterprises increasingly turn to retained earnings or the capital market as sources of funding. even relatively riskier enterprises are able to take out more loans from banks on the strength of an overall improvement in creditworthiness. these are merely initial theoretical considerations which serve to illustrate the mechanism. but what concrete developments are | 0.5 |
and the means to achieve the desired results. the fundamental objectives of economic development in our country remain the same : growth and social justice. instrumentalities to achieve these will have to change in tune with our experience and according to the demands of the time and the responses of the society. in bringing about faster growth we need to address many issues. perhaps one that is most relevant in the context of work that is going on at iima is the issue of productivity. in ensuring a higher growth rate, there is no doubt that we must bring about an increase in the saving rate and, consequently, the investment rate. but at the same time one cannot over - emphasise the need for improving the productivity and efficiency of input use. economists in fact talk about total factor productivity, which identifies the contribution to the increase in output of influences other than increase in factor inputs. the total factor productivity growth thus encompasses the effect not only of technological progress but also of better utilisation of capacities, improved skills of labour, etc. in fact during the period 1960 - 87 the total factor productivity growth of east asia was 1. 9 per cent per productivity and efficiency. contrary to the general impression, the natural resources of our country are not large. from the point of view of long - range sustainability, the need for greater efficiency in the management of natural resources of land, water, minerals, etc. has become urgent. in a capital - scarce economy like ours, there can be no excuse for under - utilisation of capacity. macro - policy framework and micro - management practices must be such as to bring about the desired increase in productivity. while the policy framework must be supportive, industrial structure must be such as to compel firms to continually innovate and to cut costs. the policy environment, the organisational structure and the attitude to work and technology : all these have to be right. needless to say, institutes of management have an important role to play in bringing about this improvement in productivity by sharpening the skills and the vision of managers. - 2the recent development experience has clearly shown that countries which have grown fast are those which have made very heavy investment in education. even as we aim at creating a broad - based educational system, including compulsory education at the primary and secondary levels, we also need institutions of excellence. living as we are in a complex and globally competitive world, institutions of excellence in all disciplines are required to meet the challenges of competition, which in effect is the competition in skills | - border activity. the fifth progress report on implementation of the otc derivatives market reform, published by the financial stability board ( fsb ) in april 2013, has reported that, eu, japan and the usa, which account for the largest volumes of otc derivatives activity, are among the most advanced in implementing legislative and regulatory reforms, with several key regulatory measures either already enforced or likely to be in force by mid - 2013. the recent guidelines issued regarding reforms in the otc derivatives segment by the eu include the markets in financial instruments directive ( mifid - ii ), markets bis central bankers β speeches in financial instruments regulation ( mifir ) and european market infrastructure regulation ( emir ). a number of other jurisdictions have reported that they expect regulatory measures related to trade reporting to come into force over the course of this year, and a few jurisdictions expect clearing requirements to come into force in 2013 β 2014. many jurisdictions have adopted rules to implement the basel iii capital framework for banks, including higher capital requirements for non - centrally cleared transactions. 9. the new regulatory requirements may have a substantial impact on the work flow for the market participants including the end users. these regulations also have exceptions for some category of participants and products. the end users must determine what is necessary to comply with the regulations from which they are not exempted. they must meet certain criteria in order to qualify for available exemptions and will need to be aware of the activities that could prevent them from qualifying for the exceptions in the future. depending on the extent to which the end users engage in otc derivatives, the costs associated with preparing for the above could be significant. some of these initiatives have also raised concerns about the possibilities of extra territorial regulatory jurisdiction leading to regulatory clashes and disruptions for market participants. further, as annat admati & martin hellwig point out ( β the bankers new clothes β - 2013 ) and i quote, β these proposals presume that concerns about depositors and the payment systems are, or, should be, the major reason for governmental interventions to banking..... this approach has two weaknesses. first, protection of depositors and the payment system is not the only reason that might induce governments to bail out banks. second, commercial banking activities can also be a source of risks that cause banks to fail unless they are bailed out β ( unquote ) 10. in summary, the common theme of all the proposals in the pipeline is one of putting sand in the wheels | 0 |
decreased to 135. 8 million euros, from 176. 2 million euros a year ago. regarding other macroeconomic indicators, it is worth noting that the average annual inflation rate until november 2020 was 0. 2 percent compared to the rate of 2. 7 percent recorded in 2019. this price movement trend reflects price dynamics in international markets, but also the decline of general economic activity in kosovo during this year. * * * now, let me move on to the developments in the country's financial system : in accordance with the new conditions that were created in the country's economy, the cbk was proactive in reacting quickly in order to maintain the normal functioning and stability of the financial system and, at the same time, to put the financial system at the service of the economy. * * * in this way, from the first days of the restrictive measures, the cbk activated the work continuity team, which had the task of monitoring and providing instructions that ensure the smooth running of the cbk and the financial system in general. in this way, the regular functioning of the payment and cash supply system throughout the country was ensured at all times, including the areas which have been isolated for a longer period of time. the central bank, since 2016 has developed and operates an interbank system of secure and stable payments, which is based on international standards and best practices. during this year the number of bank accounts has reached 2. 26 million accounts, or an increase in the number of bank accounts of 4. 3 percent, which can be justified by the need for businesses and individuals to open bank accounts to benefit from the government β s economic facilitation measures.. also, compared to the same period last year, there was an increase of 22. 4 percent of accounts that have access to e - banking, where the number of e - banking accounts until october 2020 is 393 thousand. also, during 2020, the cbk has fulfilled the provision of a qualitative and quantitative supply of euro banknotes and coins for the banking sector in order to settle cash transactions of the economy and citizens. in order to deal as effectively as possible with the created conditions, the cbk has continuously been in coordination with all institutions of kosovo, financial institutions in kosovo, chambers of commerce, as well as international financial institutions, holding very frequent meetings to ensure that adequate and timely measures are taken against the needs of the economy. from the beginning, the cbk was part of the inter - institutional group | competition. this activity aims to promote research activity in the field of economics among young people. based on the evaluation of the professional commission for the evaluation of these works, today i have the pleasure to announce the winner of this award, mr. qendrim shkodra with the topic " kosovo's economy in the time of the pandemic, the impacts of covid - 19 on the local and international economy ". finally, hoping and believing that next year will be a more positive year in all aspects, i wish you good health, joy and success to all of you and your families. | 1 |
require extraordinary monetary policy 2 / 5 bis central bankers'speeches support. we maintained our policy rate at its effective lower bound of 25 basis points, and we remain committed to holding it there until economic slack is absorbed so that the 2 percent inflation target is sustainably achieved. in the bank β s july projection, this happens in the second half of 2022. the bank β s qe program continues to reinforce our forward guidance and keep interest rates low across the yield curve. yesterday, we maintained our qe purchases at a target pace of $ 2 billion per week. decisions regarding future adjustments to the pace of net bond purchases will be guided by governing council β s ongoing assessment of the strength and durability of the recovery. the reinvestment phase this brings me to the second part of my remarks today β our qe program and monetary policy for the recovery. the economic recovery we have experienced to date has allowed us to gradually reduce the pace of qe purchases from at least $ 5 billion a week to a target of $ 2 billion a week. at that pace, we are still adding stimulus β but at a slower rate. when we get to the reinvestment phase, we will adjust the level of our bond purchases to maintain the bank β s total holdings of government of canada bonds roughly stable. and when we arrive at the reinvestment phase, we will communicate this monetary policy decision clearly. last march, my colleague, deputy governor toni gravelle, outlined a few important things about the transition to the reinvestment phase. first, the process will be gradual and will proceed in measured steps. second, the timing of changes to the pace of purchases will be guided by our evolving assessment of the outlook as well as the strength and durability of the recovery. third, adjusting the pace of bond purchases won β t necessarily mean that we have changed our views about when we need to start raising the policy interest rate. these decisions are distinct. we have tied interest rate decisions to our forward commitment to not raise the policy rate until slack is absorbed so that we sustainably achieve our inflation target. eventually, when we need to reduce the amount of monetary stimulus, you can expect us to begin by raising our policy interest rate. what this all means is it is reasonable to expect that when we reach the reinvestment phase, we will remain there for a period of time, at least until we raise the policy interest rate. but again, let me emphasize, when we get | erosion of the single market. their central concern is that new member states should not only incorporate all 90, 000 pages of the acquis communautaire in their national legislation, but actually implement them. [ as a matter of fact, the european union is already paying the necessary attention to transition - and catch - up - related policy challenges in the financial and economic field. both the european council of ministers of finance and the eurosystem have entered into active consultations with the accession countries to discuss diverse issues such as the monetary policy strategy, financial stability and fiscal policy. during these consultations, the eu addresses not just the challenges inherent in joining the union, but also the manner in which successful convergence can be continued after accession. ] a major element in this surveillance is exchange rate poliy. sooner or later the new member states will take part in the european exchange rate mechanism, erm ii. the treaty provides for a minimum participation period of two years before changeover to the euro can be considered. it cannot be sufficiently stressed that apart from this requirement, participation in the mechanism can offer the necessary stability and flexibility for a successful convergence process. the erm offers stability in the form of a central parity anchor against the euro, and flexibility in the shape of ample fluctuation margins and the option of central parity adjustments. participation in erm ii should therefore not be perceived as an obligatory hurdle on the road to the euro, as some policymakers in central and eastern europe unfortunately do. [ actually, the financial and economic dialogue with the accession countries could be incorporated into the regular process of european policy coordination and surveillance, with special emphasis on the monitoring of transition periods, specific challenges to policy and administrative capacity. changeover to the euro will eventually follow, when a sufficient degree of structural convergence can guarantee the desired price stability in an environment marked by an irrevocably fixed exchange rate and a centralised monetary policy. ] conclusion having set out the specific policy challenges facing the accession countries consequent on accession, transition and convergence, i am coming to the end of this address. obviously these challenges will continue to present themselves in some way or another to newly joined member states. in this context, i warned against premature changeover to the euro. the surrender of exchange rate flexibility and the euro area - wide orientation of monetary policy may not be compatible with the challenges posed by structural and real convergence. it is important that these challenges ( continue to ) be explicitly acknowledged in | 0 |
nout wellink : fundamentally strengthening the regulatory framework for banks remarks by mr nout wellink, president of the netherlands bank and chairman of the basel committee on banking supervision, at the korea - fsb financial reform conference : an emerging market perspective, seoul, 3 september 2010. * i. * * introduction and background let me start by thanking our korean hosts and the financial stability board for organising this conference. the timing could not have been better as the basel committee has entered the final phase of completing its reform programme. it is especially fitting that this meeting is hosted by the republic of korea, given the importance and continuing growth of the south korean economy, its membership on the basel committee, and of course its key role as current chair of the g20. as you know, the basel committee β s reform programme will be presented to the g20 leaders for their endorsement when they meet here in november. a number of commentators have questioned whether the basel committee β s reforms of global banking standards are really necessary for countries that neither β caused β the crisis nor were directly affected by it. however, i should point out that all were affected indirectly through the global economic downturn. this includes emerging market economies. to me, at least, it is clear that we all have a lot to learn from both the recent and past financial crises. history has shown that crises have emanated from all regions of the world and have a range of causes. none of us knows what will be the source of the next crisis. what we do know, however, is that in a dynamic, ever changing global economy, there will be future crises and that it will be hard to predict them in advance. moreover, as banks are at the centre of the credit intermediation process, it comes as no surprise that the deepest and most prolonged downturns occur when the banking sector ceases to perform its central role in the economy. we therefore must increase the resilience of the banking system to financial and economic shocks, in particular through higher capital and liquidity buffers, but also through a more resilient infrastructure. we also must change incentives in areas such as governance practices, compensation and the moral hazard associated with too - big - to - fail institutions. this is the best form of preparation and will contribute to increasing our long term growth and welfare. the reforms of the basel committee are intended to address these identified shortcomings by promoting a more resilient banking sector that can support more sustainable growth | history has demonstrated β critical element to the regulatory capital framework is a backstop to the risk - based capital requirement. i am talking, of course, about the newly introduced leverage ratio. in the lead up to the last crisis, banks managed to comply with the risk - based regime : they reported brilliant tier 1 risk - based ratios, while building up massive levels of on - and offbalance - sheet leverage. in good times, the market did not seem to care about this, but when the crisis hit, market participants required banks to meet basic measures of leverage. the subsequent process of deleveraging resulted in a downward spiral between the financial sector and real economy. to contain these cycles of boom and bust leverage and the gaming of the risk - based regime, the basel committee β s governing body agreed recently on the design of the leverage ratio and an indicative calibration of 3 %. it is important to understand that the new leverage ratio not only includes on - balance sheet positions but also off - balance sheet items and derivatives, like credit derivatives. for global banks with significant capital market activities, this 3 % calibration is likely to be more conservative than the traditional measures of leverage that have been in place in some countries. the proposed minimum of 3 % will serve as the basis for testing during a parallel run period that will begin in january 2013 with full disclosure starting january 2015. the reason for the parallel run period is not to prolong the implementation. rather, we want to make sure that the risk - based requirement and the leverage ratio floor interact in a manner that makes sense. and this can only be done when observed over different points of the economic cycle, taking into consideration the impact on different types of business models. buffers the next essential element of the new regulatory capital framework is the build up of buffers in good times that can be drawn down in periods of stress. to achieve this, the committee has proposed a capital conservation buffer. during the crisis, some banks that were under stress β in an attempt to signal their financial strength β continued to pay out dividends instead of retaining their profits, which would have replenished their capital. this behaviour was partly driven by a collective action problem : a reduction in dividends, it was feared, would be viewed as a sign of financial weakness. as a bank β s capital levels move closer to minimum requirements, the conservation buffer would impose a constraint on a bank β s discretionary distributions. these include dividend payments, share buy | 1 |
compared with our expectations in december, risks to the inflation outlook are tilted to the upside, particularly in the near term. if price pressures feed through into higher than anticipated wage rises or the economy returns more quickly to full capacity, inflation could turn out to be higher. in a few weeks, the march ecb staff projections will provide an updated assessment, taking the most recent data into account. this will help the governing council better appraise the implications of the surprisingly high december and january inflation figures for the medium - term outlook. in particular, we will carefully examine how higher energy prices will transmit through the economy and affect the outlook overall. two channels could be at play, pulling inflation dynamics in different directions. on the one hand, rising energy costs can drive up prices directly, by increasing the cost of production, as well as indirectly, by having second - round effects on wages. on the other hand, they can have a negative impact on the incomes of households and the earnings of companies, thereby reducing economic activity and dampening the inflation outlook. in the past, the euro area has been particularly vulnerable to the second channel, as surges in energy prices weakened the spending power of households, and reduced inflation over the medium term. obviously, in our assessment of the inflation outlook, we have to bear in mind that demand conditions in the euro area do not show the same signs of overheating that can be observed in other major economies. this increases the likelihood that the current price pressures will subside before becoming entrenched, enabling us to deliver on our two per cent target over the medium term. indeed, while moving up over recent months, indicators of longer - term inflation expectations are consistent with this expectation. survey - based measures point to inflation returning to two per cent by 2023 and remaining close to this level thereafter ; and market - based indicators stabilise around levels somewhat below two per cent. the solid anchoring of long - term inflation expectations in the euro area is a reassuring development, coming after a long period when they were subdued. 2 / 3 bis central bankers'speeches to sum up, the euro area economy has continued to recover, although growth is expected to remain subdued in the first quarter. while the outlook for inflation is uncertain, it is likely to remain elevated for longer than previously expected, but to decline in the course of this year. in our meeting last week, we confirmed the decisions we took in december. accordingly, we will continue reducing the pace of our | rasheed al maraj : financial technology and its impact on the banking and financial sector keynote address by his excellency rasheed mohammed al maraj, governor of the central bank of bahrain, at the 1st middle east and africa fintech forum, manama, 29 march 2017. * * * your excellencies, distinguished guests, ladies and gentlemen, assalam u alaikum and good morning. i welcome you all to the afs fintech conference. this conference will discuss a very important and topical subject β financial technology and its impact on the banking and financial sector. afs deserves our appreciation for arranging this conference. we are living in an era of unprecedented changes mainly brought about by technological advancement. technology was once the backoffice function of a bank. then came the time when technology took the front seat and started driving the industry. now we are witnessing the next phase when technology is defining financial services. technology influences heavily the banks β strategy. if a bank is unable to satisfy its tech - savvy customers in an era of super mobility, hyper connectivity and immense computing power, it risks losing them to competition. this is the new normal. at the central bank of bahrain we understand the disruptive nature of fintech to business models and jobs but we have made a conscious decision to adopt it. the pace of innovation is not reversible, so the only choice we have is how well we prepare ourselves for the disruption. the cbb issued yesterday a white paper for consultation on a regulatory sandbox for fintech in which new companies can test their fintech solutions. we will also issue by the end of next month draft rules for consultation on crowdfunding platforms for both conventional and sharia compliant services. we will also release soon our new directives on cloud computing. these new initiatives are continuation of our efforts to provide the right mix of policies and products to develop and enhance the quality and competitiveness of services in the financial sector. bahrain has had a long history of proactive adoption of new technology. in the past few years the cbb has taken a number of important steps in this regard, which include : introduction of a new license of payment service provision and allowing payment service providers to issue prepaid cards to allow the unbankable segment access to affordable payment services including remittances. introduction of efts commercially known as fawri and fawrit as mandatory for all retail banks. the cbb is all for embracing innovation and new | 0 |
25 per cent improvement in our terms of trade, which alone has been responsible for roughly two - thirds of the 15 per cent gain in real per capita disposable income recorded over that period. these income gains have helped reduce corporate leverage to its lowest level in a quarter of a century and have helped our governments to record consistent fiscal surpluses. higher commodity prices bring increased investment, which entails direct and indirect benefits not only for the sectors in question, but also for the service sectors that support them. as well, many individual canadians β and their pension funds β have benefited greatly from the gains in the value of their own investments in commodity - producing firms. 11 finally, the rise in our terms of trade has brought with it an associated appreciation of our currency that has benefited everyone by lowering the cost of imported goods and services. with this downward pressure on import prices, productivity - for example, the prices of many non - indexed commodities have risen more rapidly than those of indexed ones. the tsx energy sector has risen roughly 18 per cent per year since the beginning of 2002, while the metals and mining sector is up 11 per cent annually and the fertilizers and agricultural chemicals sector is up 44 per cent annually. these sectors have a combined weighting of 50. 3 per cent of the tsx composite index. enhancing machinery and equipment β much of which is imported β has become less expensive for all firms, not just commodity producers. these benefits are important. however, it is unavoidable that large, sustained changes in terms of trade β whether favourable or unfavourable β will cause stress and dislocation because of significant shifts in production and employment among economic sectors. in macroeconomic terms, terms - of - trade shocks trigger a shift of resources to activities generating higher income. from that perspective, postponing adjustment would mean forgoing the potential income gains that the reallocation of resources can bring. adjustment is always difficult, but it is vital to our long - term economic prosperity. despite the difficulties involved, the adjustment process of the past few years has gone more smoothly than in previous periods. canada's labour force participation rate has risen to a record high, and the jobless rate has fallen to a 33 - year low. while the manufacturing sector has lost about one in seven jobs since 2002 β a total of about 335, 000 jobs β total employment in canada has risen by 1. 6 million jobs over the same period. equally encouraging is the quality | , 7 output from the oil sands is expected to grow by 3 million barrels per day by 2020, representing about 15 per cent of expected marginal global demand. 8 other supplies can be expected to come on stream, and alternative energy sources should be developed. although there will be lags, it would be a mistake to assume that the market has ceased to function. demand will also be more responsive over time. suv sales in the united states have fallen by nearly one - third so far this year β an important early indicator. oil demand in oecd countries has been essentially flat since 2003, and the international energy agency projects it to remain weak for the next few years. 9 as a result, the extent of continued upward demand pressure will depend almost exclusively on emerging markets. there are several considerations. first, we are about to find out the extent to which slowing domestic demand growth in the g - 7 will affect growth in emerging asia. second, the stance of monetary policy in emerging markets will be an important determinant of prices in the short term. monetary policy remains highly accommodative in a number of fast - growing economies that are major marginal consumers of commodities. the combination of accommodative monetary policy and overheating economies will eventually be reversed, either through policy action or generalized inflation. in either case, aggregate demand in emerging markets will likely slow relative to current trends. a third consideration is that the demand response in many economies is currently being muted by the prevalence of administered food and energy prices. these efforts to protect the most vulnerable are usually poorly targeted and, as a consequence, highly distortionary. by keeping domestic commodity prices artificially low, the authorities are simultaneously data supplied by the energy information administration ( eia ). see http : / / www. eia. doe. gov / ipm /. according to the canadian association of petroleum producers ( capp ), a 100, 000 - barrel - per - day integrated oil sands project that cost $ 3. 3 billion to build in 2001 now costs over $ 10 billion. see http : / / www. capp. ca / raw. asp? x = 1 & dt = pdf & dn = 134739. data provided by imf. data provided by alberta finance and enterprise. production estimate from capp. demand estimate from the eia. data from the energy information administration. see http : / / www. eia. doe. gov / emeu / steo | 1 |
prices and monsoon conditions for india. β 1 the capital account liberalization primarily aims at liberalizing controls that hinder the international integration and diversification of domestic savings in a portfolio of home assets and foreign assets and allows agents to reap the advantages of diversification of assets in the financial and real sector. however, the benefits of capital mobility come with certain risks which should be categorized and managed through a combination of administrative measures, gradual opening up of prudential restrictions and safeguards to contain these risks. the discussion on capital flows and monetary policy inevitably begins with the well - known β trilemma β or the impossible trinity in the sense that a country can choose no more than two of the following three features of its policy regime : ( 1 ) free capital mobility across borders, ( 2 ) a fixed exchange rate, and an independent monetary policy. various combinations of these features have dominated world monetary arrangements in different eras. the question of how developing and emerging - market countries like ours should resolve the trilemma is very crucial. at best a medium - term goal of achieving free capital mobility could be set with measured steps and optimal control. recent policy initiatives india adopted a gradualist approach while initiating a process of gradual capital account liberalisation in the early 1990s and treated it as a process rather than an event. in recent past, there has seen significant changes in the external sector policy of the reserve bank. the department concerned of the reserve bank has been rechristened from the exchange control department to foreign exchange department, highlighting the change in the intent and content of the policy framework. let me assure you that this change is not just a matter of semantics but is reflective of the changed mind - set. the focus of the measures has been to dismantle controls and provide an enabling environment to all entities engaged in external transactions. the current approach to liberalisation has been characterized by greater transparency, data monitoring and information dissemination and to move away from micro - management of foreign exchange transactions to macro management of forex flows and forex market. the emphasis of the reserve bank has been to ensure that procedural formalities are minimised so that exporters and others are able to concentrate on their core activity rather than engaging in avoidable paper work, while ensuring observance of know - your - customer ( kyc ) guidelines. the details of the various initiatives taken by the reserve bank will be discussed later by other speakers. let me, for the sake of completeness, present a quick run - | c koep, m leibbrandt, h mcewan and i woolard, β employment and inequality outcomes in south africa β, southern africa labour and development research unit and school of economics : university of cape town, 2010. another part of the failing job creation machine is simply weaker real economic growth compared to the 2000s, when job creation was quite strong. this should not, however, lead us down the path of grasping at another seemingly β easy β answer. higher inflation will not give us higher sustainable growth. instead, higher inflation undermines short - run growth by increasing interest rates on borrowing, affecting consumers β buying on credit and business owners who want to use credit to invest. higher interest costs reduce short - run cash flow, reducing all future consumption spending. while surprise inflation reduces the real value of the existing stock of debt owed, the trade - off is lower economic growth in subsequent years. the short - run benefit of a surprise lower interest rate is transformed by higher inflation into a long - run cost to growth. when inflation is higher than that of our trading partners, we suffer a continuous loss of competitiveness. high inflation overall also generally means higher inflation for poorer and less - skilled south africans than for the wealthy. this increases inequality further and worsens the already low standard of living for those households, making them costlier to employ. for a few years before the gfc in 2008, the relationship between growth and employment was better β if economic activity grew by 1 %, employment grew by around 0. 62 %. but since then, up to 2018, each percentage point improvement in growth only gives us 0. 37 % more jobs. our low employment problem overlaps entirely with our low growth problem. in this context, the best a central bank can do is stabilise unemployment at the rate consistent with price stability. if a central bank attempts to get unemployment below the nairu, the result will be larger quantities of inflation but only small and temporary quantities of jobs as the supply curve becomes more vertical. the same is true for economic growth. 11 assuming that most of our unemployment problem is structural, are we at least sure that the residual cyclical unemployment is being reduced by monetary policy? is a dual mandate better at addressing these cyclical drivers? at the sarb, we use an alternative measure of economic activity to the nairu for understanding where the economy is relative to its tipping point into more inflation or into deflation. this is the output gap, or the | 0 |
necessary in other workplaces. and so it is a basic responsibility of ours that we comply fully with the regulations and principles regarding our duties. further, as members of a central bank with strict self - discipline and a strong sense of responsibility, we need to put the public interests before our own personal interests, and respect our organizational values. meanwhile, our organizational culture of respecting and caring for each other is a longstanding tradition that we have cultivated ever since the bank of korea was established. although the environment surrounding us is changing rapidly, we have to work to maintain and further develop this proud tradition going forward. dear fellow bok members, there are substantial concerns that the korean economy could face huge difficulties this year. however, a crisis that is foreseen is no longer a crisis. if we are not too absorbed in pessimism, and prepare for approaching difficulties with optimistic and active attitudes, we can help our korean economy to overcome any troubles it may face and to take itself one - step further to a higher level. i hope that you will fully demonstrate your strong competence and potential again this year, to show that the bank of korea is indispensable to the development of our national economy. i look forward as well to your beginning this new year with renewed vigour and determination, and i wish you all happiness and fulfillment. thank you. bis central bankers β speeches | mr baΒ€ckstra ΒΆ m covers monetary policy in sweden from 1996 to 1998 opening remarks by mr urban baΒ€ckstra ΒΆ m, governor of sveriges riksbank, the swedish central bank, before the standing committee on finance in stockholm on 18 may 1999. introduction in the period 1996aβ¬ β 98 the annual rates of inflation, measured with the cpi, were 0. 8, 0. 9 and 0. 4 per cent, respectively. this means that in each of these years the change in the cpi not only deviated from monetary policyaβ¬β’s 2 per cent target for price stability but was also outside the lower tolerance limit of 1 per cent inflation. the riksbank has indeed made assessments that subsequently proved to be a bit off the mark. as a result we have also made decisions that, looking back when the outcome was known, could have been somewhat different. but on the whole, the result of monetary policy in this period seems to be acceptable. in my opening remarks i intend to give this appraisal more substance. one major reason why cpi inflation has been low in the past three years is that the price trend has been affected by some specific price movements that monetary policy neither can nor should aim to counter fully. if the riksbank attempts to counter such price movements, the result might be unnecessarily costly for the economy, that is, exaggerated fluctuations in economic activity as well as in the financial markets. it was against this background that the new executive board of the riksbank clarified the inflation target earlier this spring. to a large extent, the clarification tallies with how monetary period has actually been conducted in the period that the standing committee is now appraising. i therefore conclude that when inflation is measured with the cpi, deviations from the inflation target, upwards as well as downwards, in certain periods are something to which we unfortunately will have to grow accustomed. as a target variable, however, the cpi has many advantages, including being familiar and covering a large assortment of goods and services. deviations from the target may sometimes even be desirable and actually benefit real factors, such as production and employment, as well as financial market stability. this conclusion does of course presuppose that people in general expect that in the medium term inflation will be in line with the target. inflation in 1996, 1997 and 1998 i now want to look in more detail at the path of inflation in the three years 1996, 1997 and | 0 |
countries making an explicit determination of the mode of presence of foreign banks in the form of branch or subsidiary. what has been the global response? the crisis has shifted the bias towards domestic incorporation of foreign banks i. e. subsidiarisation. indeed, even pre - crisis, a number of jurisdictions mandated local incorporation of foreign banks. the subsidiary form of presence provides several comforts to regulators. first, a subsidiary has its own board of directors, including independent directors, which provides sufficient separation between the bank and its owners to ensure that the interests of domestic depositors are not compromised ; second, the clear delineation between the assets and liabilities of the bank and those of its parent affords greater leverage to the host country to ring fence the operations of the bank ; third, it is local economic conditions, rather than global perspectives, that drive the managerial decisions of subsidiaries ; and finally, it is easier to define the jurisdiction whose laws would apply to the subsidiary, thereby affording more effective control to regulators in a crisis situation. how have we, in india, responded? what is the policy in this regard in india? the road map for the presence of foreign banks in india put out by the reserve bank in 2005 allows foreign banks a choice β of coming in either as a branch or as a subsidiary β but not in both modes at the same time. even so, all foreign banks operating in india, currently 43 in number, have chosen to come in only in the branch mode. reflecting the lessons of the crisis, we deliberated in the reserve bank on whether in india too we should require mandatory incorporation of foreign banks. accordingly, the reserve bank put out a discussion paper in 2011 marshalling the merits and demerits of this initiative. the proposed framework leans towards the subsidiarization model for fresh entrants while nudging existing foreign banks with a balance sheet size above a threshold to bis central bankers β speeches convert from a branch model to a subsidiary model. it is expected that this will level the playing field for foreign banks and make the overall indian banking system more competitive and inclusive. in order to reach a final decision on this issue, we needed to clarify some taxation and legal issues. over the last two years, we have worked with the government to resolve the major taxation issues such as exception from stamp duty and capital gains tax on conversion from a branch to a subsidiary. we have yet to resolve a few legal issues which we hope can be done in the next | originated in advanced economies, emerging economies too were affected, indeed by much more than they had thought possible. the contagion brought home a simple message. in a rapidly globalizing world, national and international financial stability are interlinked. they are really two sides of the same coin. another important lesson we learnt is that financial markets are not self correcting. indeed in the pre - crisis years, a consensus was building around the view that modern risk management has increased the resilience of the financial sector, and that any excess would self correct in good time. the crisis proved that to be wrong. as we unlearnt that, we also learnt some new insights β that it is difficult to detect signs of pressure building up in the system in real time, that the financial sector can contain pressure for a longer time than we think possible, and as a consequence, when the inevitable implosion takes place, it can be quite disastrous, or even catastrophic. we learnt that it is difficult to predict the precise nature of the implosion. for example, in the pre - crisis years, even the few who sensed stress bis central bankers β speeches building up in the system, thought there would be a currency crisis ; in the event the implosion took the form of a financial sector crisis. there were other lessons too. that a collection of rational financial institutions does not necessarily make a rational financial sector. in other words, rational behaviour at the individual institutional level does not aggregate to collective rationality because of the fallacy of composition. financial institutions are notoriously prone to herd behaviour. they have a strong collective tendency to over expose themselves to the same type of risk during an upturn, and become overly risk averse during a downturn which can lead the whole system on a downward spiral of risk aversion, market seizure and instability. converting lessons into policies i have so far spoken about the broader lessons of the crisis that have enhanced our understanding of the financial sector, especially of the financial sector in a highly integrated world. a logical question would be how are we converting those lessons into practical policies and systemic improvements. this is what i now want to turn to. as you all know, the last four years have witnessed a vigorous debate internationally on how to foster a strong, stable and sustainable financial sector. there has already been significant agreement on some reforms while some important issues are still under debate. emerging economies and global reforms there have been some questions about why emerging economies too should | 1 |
bank of albania have provided the necessary monetary stimulus to support the normal functioning of the financial markets and to ensure the flow of credit in the economy. interest rates for households and businesses are low and liquidity pressures are under control, while the exchange rate appears stable. the albanian banking sector remains sound, despite the challenges posed by the pandemic. the immediate operational measures taken by banks, as well as the macro and micro prudential measures taken by the bank of albania, ensured not only a continuation of the operation of the critical functions of the banks, but also satisfactory financial intermediation despite the great shock suffered by the economy. credit to economy is growing ( it grew by 6. 3 % in the third quarter 2020 ), capital is adequate and the banks β balance sheets remain healthy, signalling their ability to withstand first - round shocks. we are optimistic that the economic activity is expected to revitalize over the next two years. however, the economic outlook for the future is accompanied by a high level of uncertainty and downside risks. in the short term, the risks are mostly related to 1 / 3 bis central bankers'speeches the uncertainty of the pandemic itself, its severity, duration, and potential return of restricting measures. in the long run, the risks relate to the long - term damage sustained by the productive capacities and domestic demand, as well as potential structural change sustained in the economy as a result of the altered behaviour of economic agents. we are sure that research based evidence, analysis and forecasts will provide accurate and timely information for policy orientation and coordination. research in the area of monetary policy, financial stability and banking supervision has always dominated the topics of our workshop. this year covid - 19 has entered the agenda by brute force. this shock and the negative effects that it brought upon the economy and the central bank policies have been beyond comprehension. the authorities are feeling the difficulty of performing their task in the zero lower bound or very close to it. in this respect central banks have lost the traditional instruments of monetary policy and are reverting to money as the instrument of monetary policy. the shift has been significant not only in size but also in concept. the leading central banks in developed economies, the ones which set the trends, are under process of reviewing their objectives and monetary policy. using support of research analysis and conclusions they are eventually rewriting monetary economics by giving central banks new instrument in the form of permanent use of the central bank balance sheet as a tool of monetary | authorities should continue working to improve the credit environment, among other things, by strengthening contract enforcement, implementing new legal and sublegal procedures related to collateral execution, and completion of the remaining duties under the national programme for the reduction of non - performing loans. the signing of a memorandum of cooperation in the field of banking supervision, between the european central bank and the bank of albania, will facilitate the exchange of information and enhance the security of european banking groups that operate in albania. likewise, the completion of the restructuring and consolidation process of the banking sector, which has had and will continue to have our attention, is an additional guarantee in this regard. in parallel, the development of other segments of the capital markets should be further encouraged, yet with prudence, so as to avoid missteps, and in harmony with supervisory and regulatory norms and standards for the banking sector. second, the structural reform agenda should be accelerated. 2 / 3 bis central bankers'speeches the second phase of this reform should aim at improving the education and know - how of the labour force, creating a legal, political, administrative and fiscal environment that attracts foreign developments and encourages domestic ones, and increasing the integration of albania β s economy with the regional and european development infrastructure. third, the opening of accession negotiations with the eu should be viewed as a primary instrument for the advancement of albania β s development. the bank of albania judges that the fulfilment of the criteria for opening accession negotiations and the rigorous implementation of reforms that this process imposes should be the focus of the entire political spectrum in albania. thank you for your attention! 3 / 3 bis central bankers'speeches | 0.5 |
nuclear armageddon. it would seem extreme to do so now, but maybe in the 1950s it wouldn β t have been perceived as such a tail event. to take perhaps a more relevant recent example : in the us, financial institutions, credit rating agencies and investors stress tested their mortgage portfolios and mortgage - backed securities. however, the stress test was derived from the history of house prices in the us. that history suggested that cities in the us had their own price cycles and that the correlations across markets were not particularly strong. periods of large house price decline were confined to a few idiosyncratic events in a few cities. one could obviously have stressed the mortgages assuming some moderate nationwide house price decline. 7 and indeed a number of the aaa - rated securities would not have maintained their rating under that scenario. but given the history prior to 2007, would a stress test of a nationwide 20 per cent decline in house prices have been considered plausible? to illustrate this point one last time, consider bear stearns. with the benefit of hindsight, it would seem sensible that bear should have stress tested their funding resilience to a significant reduction in funding from the repo market. but how significant a reduction should have been stressed? a 10 per cent reduction, a 50 per cent reduction or a complete closure of the repo market? 8 in the event, the latter was obviously what occurred. but there had not been such an event in that market before, so it may well have been difficult to have even conceived of it or believed it to be a plausible stress. in terms of risk assessment, one could only have expressed it qualitatively not quantitatively. i could have told you that a closure of the repo market was an extremely unlikely event, but i could not have assigned a probability to it. for a stress test, the ability to only assign an ordinal rather than a cardinal probability is not necessarily a problem, but it is a problem in then assessing the market value of financial instruments issued by bear, or determining the appropriate risk mitigation strategy that bear should have adopted. however, post - bear, a complete closure of the repo market to a particular institution is now a conceivable event, and maybe i could even begin to assign a cardinal probability to it. and to some extent the market did in its re - pricing of cds premia of various financial institutions. but from a stress test point of view, it would appear that | abdul rasheed ghaffour : opening address - malaysia's climate finance day opening address by mr abdul rasheed ghaffour, governor of the central bank of malaysia ( bank negara malaysia ), at malaysia's climate finance day at cop28 uae, dubai, 3 december 2023. * * * assalamualaikum, good morning and welcome to the malaysia pavilion. over the past few days, pressure has intensified for advanced economies to deliver on their promises to support developing economies navigate the effects of climate change. one highlight has been the agreement by world leaders on formal adoption of the loss and damage fund. with commitments trickling in, a pragmatic solution towards the delivery of these commitments is critical. another major issue taking centre stage is the debate surrounding phasing out of fossil fuels. this has a direct bearing on many developing economies, including malaysia. with the undeniable high cost of reducing emissions, a balanced approach is crucial to ensure progress both in building climate resilience, and economic and social developments. we take great interest in the outcomes of these conversations. let me now turn to malaysia. we see the climate agenda not only as a pressing challenge but an opportunity for growth. through the national energy transition roadmap, the hydrogen economy and technology roadmap, and the new industrial master plan, malaysia is taking concrete steps that will enable us to advance sustainable practices across the economy. this is consistent with a just and orderly climate transition. effective and coordinated implementation of national and sector - level transition plans by the government is crucial. it addresses a key condition for malaysia to benefit from the opportunities offered by the green transition. this can be achieved by reducing strategic and policy risks for investments in the green transition and effecting partnerships between the public and private sectors. this would mean better higher skilled jobs, more sustainable and higher income, as well as overall shared prosperity. the malaysian financial sector is working closely with the government as part of the whole - of - nation approach to turn these plans into reality. significant efforts have been invested in strengthening our collective capacity, institutional frameworks and coordination arrangements that will drive financial flows towards malaysia's climate transition efforts. you will hear today some of these efforts at this pavilion. we have a packed programme, with an exciting line up of speakers who will share what malaysia is doing to innovatively bridge traditional financing mechanisms with sustainability to fund green initiatives. 1 / 4 bis - central bankers'speeches to kick things off | 0 |
lehman shock, japan β s economy faced a series of headwinds such as the great east japan earthquake and the flooding in thailand in 2011, as well as the deceleration of the chinese economy from 2012. however, it has overcome such shocks and a path toward a self - sustained recovery is finally in view. a high degree of uncertainty remains concerning the global economy, and i see risks to the economic outlook as somewhat tilted to the downside. however, the external environment as a whole is expected to exert positive effects on japan β s economy unless a tail risk affecting the global economy emerges. therefore, i believe that the present offers a window of opportunity for japan β s economy to overcome deflation ( chart 14 ). exports had lagged behind domestic demand, which has started to increase its resilience, but have been picking up led by exports of automobiles to the united states. production of manufacturing firms followed a moderate increasing trend in the april - june quarter of 2013, and is expected to continue to do so in the july - september quarter judging from interviews with firms ( chart 15 ). although the deceleration of the chinese economy β which i will discuss later β is a major concern, it is not a serious obstacle to the recovery of japan β s economy as long as the robustness of the u. s. economy is maintained. private consumption for the january - march quarter of 2013 seemed to be supported by an improvement in sentiment and wealth effects. private consumption is expected to continue increasing, as household sentiment has remained firm on the whole even amid the recent turmoil in financial markets, and as the employment and income situation improves moderately ( chart 16 ). according to anecdotal information, negative effects on consumption of high - end goods and services have not been observed to a large degree despite the recent turmoil in financial markets. the contribution of public investment to the economy is expected to increase again from the july - september quarter, supported by the effects of various economic measures ( chart 17 ). in these circumstances, coincident indicators of machinery investment β such as shipments of capital goods and the aggregate supply of capital goods β suggest that business fixed investment, which had been sluggish, is finally showing some signs of picking up from the april - june quarter. investment for energy - saving and disaster prevention as well as pent - up demand for maintenance and replacement of business equipment seem to be emerging ( chart 18 ). business fixed investment is expected to bis central bankers β speeches | ##qe differs completely from the bank β s other monetary easing policies adopted in the past in the sense that ( 1 ) the bank had adopted the stance of pursuing bold monetary easing all at once to achieve the price stability target of 2 percent in about two years and to avoid an incremental approach ; and ( 2 ) by doing so, the bank aims to exert influence on the expectations of firms and households as well as financial markets. the former policy stance of avoiding an incremental approach is based on the lessons learned from the fact that japan β s economy could not overcome deflation, even though the bank had continued to fine - tune its policies under the framework of comprehensive monetary easing in accordance with the economic cycle. therefore, this policy stance should be regarded as a serious one. the latter policy stance of aiming to exert influence on the expectations of firms and households as well as financial markets is associated with the former policy stance. the bank aims to drastically change such expectations by implementing all possible measures called for at the time. to do so, it is important to first implement bold monetary easing measures that go beyond market expectations and then bis central bankers β speeches carefully monitor their effects, rather than adopting measures in a piecemeal manner, which would have adverse effects. at the same time, the bank does not exclude the implementation of additional measures and will not hesitate to fine - tune its policies flexibly when unexpected tail risks materialize. the policy stance of the bank that i have just described is not necessarily fully understood yet by market participants. therefore, the bank should provide a thorough explanation to the public of its policy stance through various communication channels, including dialogue with market participants. g. the meaning of the 2 percent price stability target i will now discuss my understanding of the price stability target of 2 percent. generally, inflation - targeting policy is a flexible monetary policy framework and countries adopting it do not change their monetary policy stances mechanically in accordance with the achievement or undershooting of their targets. this understanding is widely shared by central banks that have adopted such a policy framework. i understand that the bank β s monetary policy framework β in which the bank sets the 2 percent price stability target β is a flexible one, in the sense that it focuses mainly on maintaining the 2 percent target in a stable manner rather than merely on achieving the target exactly ( chart 9 ). in terms of maintaining the target in a stable manner, it is almost impossible to stably maintain the inflation rate specifically at 2 | 1 |
). the role of multinational enterprises in the world economy has similarly grown over the years, as reflected in the expansion of the world β s fdi stock, which is almost equal to the annual gdp of the euro area. in many countries, the operations of foreign affiliates are now extremely important for domestic growth, with rising sales, value added, employment and exports. for the euro area, these international linkages are for a comprehensive analysis on the implications of alternative exchange rate regimes, see issing ( 2006 ). highly significant, particularly because economies of scale and cross - country technological spillovers support euro area economic growth. euro area corporate businesses are among the most dynamic in the world, providing more than one - third of the world β s fdi stock. at the same time, almost one - third of world fdi is invested in euro area member states. intra - euro area fdi stocks have also grown robustly, increasing from almost 14 % of euro area gdp in 1999 to around 24 % by 2004. consumers clearly benefit from greater trade and fdi linkages via greater variety of goods and lower prices. however, adjustment costs, which are often front - loaded and concentrated on specific regions and sectors, also need to be taken into consideration. the change in the structure of the global economy requires individual countries to make structural adjustments through the determined implementation of structural reforms ; such reforms are even more vital for countries in a monetary union. we know that the ability of a country to benefit from globalisation very much depends on the quality of its institutional and structural environment. all economies β including advanced ones such as the euro area β have to adapt to the changing needs of the world economy. structural reforms in the labour, goods and capital markets are a key element of any long - run strategy to improve investment, growth and employment prospects, and are essential in order to face successfully the challenges ahead of population ageing, technological change and globalisation. the euro area has indeed undergone and will continue to undergo substantial structural changes, all of which are necessary and beneficial if the euro area is to secure a leading role in the global economy. member states, therefore, need to stick to the implementation of their agreed reform agendas. the impact of globalisation is also apparent in the sharp increases in cross - border portfolio flows observed since the beginning of the 1990s, a process that continues to be encouraged by the substantial number of bilateral investment treaties, the liberalisation of capital accounts, and technological advances in payment, settlement | towards ensuring the health of individual institutions or markets. but the way to organise the macroprudential function is still work in progress in particular on the role of central banks. there are different views on how to design such a framework and how they should relate to central banks, their governance structures and their monetary policy strategies. 2 this is essentially related not only to the difficulty to define financial stability in an operational way ( contrary to price stability ), but also to the number of authorities concerned ( central banks, bank supervisors, insurance supervisors, market supervisors, competition authorities, consumer protection authorities, ministries of finance, ministry of justice, see adrain, t. and h. s. shin ( 2011 ), β financial intermediaries and monetary economics β, in : b. m. friedman and m. woodford ( eds. ), handbook of monetary economics, vol. 3a, elsevier. see nier, e., j. osinkski, l. i. jacome and p. madrid ( 2011 ), β institutional models for macroprudential policy β, imf staff discussion note, sdn / 11 / 18, november and also eichengreen, b. et al. ( 2011 ) : β rethinking central banking β, committee on international economic policy and reform, september. bis central bankers β speeches resolution authorities ) and to the variety of possible tools often assigned to several objectives. central banks should undoubtedly assume important roles in macroprudential policies. central banks bring in essential expertise in analysing financial systems from an aggregate perspective. they also have proper incentives to mitigate systemic risk ex ante since central banks typically have to deal with the fallout from financial crises. last but not least, involving central banks in macroprudential policy should foster effective coordination between monetary policy and financial stability policies in a manner that preserves their autonomy. policy coordination is likely to become important in light of the strong mutual interdependencies between the financial and the real sectors and thereby between both policy functions. i will come back to policy coordination later on. a wide range of different approaches exist to institutionalise central banks β role in the new financial stability frameworks. the different approaches taken largely respond to countryspecific circumstances. a β one size fits all β approach simply doesn β t exist. this is also in the european union where individual countries have adopted different approaches. at the level of the european union as a whole, a new financial | 0.5 |
to use different methods to allocate rrps to participating banks, including possibly an auction system. in turn, the option to auction rrps will give the bsp the means to implement a full interest rate corridor for omo in the future. presently, our omo is conducted with the rp as the ceiling and the sda as the floor. the electronic reporting of transactions will also expedite the calculations for another important initiative in progress β the ois, which is a determinative component in completing the benchmark yield curve. we can see, therefore, some interesting times ahead. we look forward to continue working closely with the leaders of our financial system in building financial market infrastructure and systems that are safe, secure and responsive to its stakeholders. thank you for your continuing support. finally, let us congratulate the bsp β s treasury department under the leadership of assistant governor winnie santiago who worked with the bsp β s payments system office, information technology sub - sector, and legal office in setting up this trading platform. bis central bankers β speeches we look forward to more joint undertakings that will continue to move us forward toward a better, bigger and stronger financial market that will keep our economy growing and increasingly inclusive. thank you all and mabuhay! bis central bankers β speeches | our challenge is to distinguish the trend from the temporary to avoid for a more detailed discussion of the use of monetary policy to counteract headwinds or tailwinds, see technical box 2, bank of canada monetary policy report ( july 2011 ) : 28. bis central bankers β speeches overreacting to the temporary β and give the public confidence that inflation will return to the right track. for this reason, the bank of canada, along with many other central banks, uses a number of measures to calculate core inflation, which are designed to minimize the influence of transitory price movements ( table 2 ). an effective core measure must have four key properties. it must be less volatile than total inflation ; closely track long - run movements in the total cpi ( in other words, be β unbiased β ) ; be related to the underlying drivers of inflation, notably the output gap, in order to reliably predict future trend movements in the total cpi ; and be easy to understand and explain to the public. since 2001, the bank of canada has featured one measure of core inflation as our operational guide for monetary policy : cpix, which excludes eight of the most volatile components of the cpi and adjusts the remaining components for the effects of indirect taxes ( chart 4 ). 4 included in those eight components are mortgage interest costs, which cpix strips out for a different reason : to avoid giving a perverse reading of the impact of monetary policy on core inflation. ( a measure of core inflation that includes mortgage interest costs increases when policy is tightened to bring down inflation. ) another exclusion - based core measure, cpixfet, takes out food, energy and indirect taxes. yet others calculate core inflation using a trimmed mean, which excludes different components each month based on whether or not they are exhibiting volatility at that specific point in time. more sophisticated methods track common price movements across categories in the cpi basket. such movements are more likely to reflect aggregate demand fluctuations than sector - specific developments. the advantage of these tools is that they take information on all the prices in the cpi and use objective methods to filter that information. the disadvantage is that in some cases they are constructed using techniques that, while firmly founded in logic and statistical theory, are very opaque. all the measures have followed similar tracks ( chart 5 ). each measure satisfies the key properties identified above to differing degrees. they all display less volatility than total inflation ( chart 6 ). and all but | 0 |
terminals that accept a particular card greatly affect the utility of the user. the larger the number of payment terminals that a bank can install, the happier will be the users and the larger the share of the card payment market the bank will have. economies of scale and network effects both increase the incentives for co - operation between card issuers in establishing common standards and communication between systems. in sweden and in the other nordic countries as well, banks have a long tradition of cooperation in using common infrastructure and implementing common standards, perhaps more so than in many other regions. this is likely to have contributed to the rapid expansion of the card payment market in the nordic countries. there are some country specific differences, though. as should be expected, the number of payments per capita increases with the number of terminals installed ( fig 8 ). at least for sweden, there seems to be remaining positive network effects that may further expand the market. see for example humphrey, pulley and vesala ( 1996 ) : " cash, paper, and electronic payments : a cross - country analysis ", journal of money, credit, and banking, nov. this is an econometric study of different factors affecting the choice of payment instruments. the price coefficient had no statistical significance in this study. however the data set was poor. this result was later revised in the norwegian study : humphrey, kim and vale ( 1998 ) : realizing the gains from electronic payments : costs, pricing and payment choice, norges bank. consideration of risk risk considerations are always important in card transactions. consumers in countries where criminality is low, such as switzerland and japan ( and sweden for that matter ), tend to favour cash payments to a larger extent than in countries, where the risks of carrying large amounts of cash are higher. problems in the handling of risk are also likely to be behind the disappointing development of e - commerce. the evolution of a digital market is believed to have been partly hindered by the lack of sufficiently secure payment instruments. for card issuers and banks matters of security are crucially important. there is, as always, a trade off between risk and the cost of avoiding risk by adopting security enhancing technology. when technology becomes less costly, more of it will be used. e - commerce is likely to benefit from that development. incentives to reduce risks are important and drive the current technological developments in the market. costs for fraud are very high. moreover, these costs are increasing in most countries. although card frauds are relatively less | villy bergstrom : should the riksbank be concerned about asset prices? speech by mr villy bergstrom, deputy governor of the sveriges riksbank, at a breakfast meeting arranged by round table in sundsvall, on 11 april 2000. * * * the swedish economy is growing more quickly than for a very long time. in 1999, gdp increased by 3. 8 % and during the coming three years, growth is expected to average almost 3. 5 %. at the same time, the prerequisites for a long - term favourable development appear better than for many decades. almost all economic indicators are pointing in the right direction. despite a very strong upswing, the long - term inflation expectations remain stable and close to the target for monetary policy. central government finances are in surplus for the second year running and despite a planned tax reduction of over sek10 billion this year, the surplus in the central government budget is expected to total at least 2 % of gdp. from having had the next poorest budget balance in the entire eu in the early 1990s, the budget balance in our public finances is now among the strongest in the whole union. since the mid - 1990s, central government debt has decreased from 80 to 70 % of gdp. our country β s financial balance, ie the current account, has at the same time shown a surplus for a number of years and the foreign debt has fallen from 40 to 20 % of gdp during this period. however, unemployment is still too high - the increase in production of almost 15 % since the end of the 1980s has not been sufficient to bring the labour market into balance. the employment ratio has increased, however, from 72 to 74 % during the past year and employment is expected to increase greatly during the coming years. it is expected that open employment will fall to 3. 7 % in 2002. however, the beginning of this decade looks very promising. almost the entire 1990s were marked by the problems in the wake of the high inflation economy of the 1980s and the overheating that ended that decade. loan - financed consumption, excess investment, among other things, in properties, which took place in tandem with the increasing asset and property prices, had led to large financial and real imbalances being built up. when the bubble burst and the krona fell, there was a great need among households, businesses and banks to review their balance sheets and reduce their debt. as we know, this led to a great | 0.5 |
central bank of kenya afro - asia fintech festival nairobi online city in partnership with the 2020 singapore fintech festival opening remarks by dr. patrick njoroge governor, central bank of kenya december 7, 2020 as prepared for delivery good morning, good afternoon, good evening! it is a great honour for the central bank of kenya ( cbk ) to host the nairobi online city, an iteration of the afro - asia fintech festival ( aaff ) launched in 2019. the aaff nairobi online city is part of the 2020 singapore fintech festival ( sff ). cbk is therefore honoured to join the global community of central banks, governments, financial institutions, fintechs, and other players to deliberate and reflect on the theme of β people and talent : harnessing collaboration in pursuit of resilience and growth post covid - 19. β β at the outset, let me express cbk β s gratitude to the monetary authority of singapore ( mas ) for allowing cbk and almost 40 other cities to partner in expanding the reach of the virtual 2020 sff. i also appreciate all our partners and service providers who have worked with us to make this event a reality. 2020 has been an exceptional year dominated by the coronavirus ( covid - 19 ) pandemic. our lives and livelihoods have dramatically changed as governments, businesses and citizens globally sought to contain the pandemic. there have been significant adverse health and economic effects that have rolled back global progress in efforts towards the shared prosperity of our citizens. as significant progress begins to be made on the medical front in developing vaccines and therapeutic drugs, the conversation must shift to building back better. while the pandemic has been devastating, it has also accelerated digitalization that should stand us in good stead as we transition to the post covid - 19 recovery. digital platforms have been the lifelines in accessing essential financial, health, education, medical, entertainment and other services. we must embed these gains and leverage them as we pursue global resilience and growth post covid - 19. towards this end, we shall over the next few days, deliberate on various strategies. let me highlight three broad themes to set the stage. first, is restoring small and medium enterprises ( smes ). smes are the engines of economies globally and more particularly in africa. however, they have borne the brunt of covid - 19 containment measures including movement restrictions and curfews. their businesses have been disrupted causing | governance. the overarching theme in our discussions all through this week must be about people. we must constantly ask ourselves, what are their needs? how does technology and innovation meet these needs? most importantly, how do we place people at the centre? in closing, let me once again reiterate what a privilege it is for cbk to be hosting you. the journey of building back better cannot be undertaken alone. platforms such as the nairobi online city provide opportunities for many more of us to come together. let us walk together, as we collectively work towards restoring the lives, livelihoods and dignity of our citizens. it is now my distinct honour and pleasure to declare the afro - asia fintech festival nairobi online city officially opened. i wish you all a fruitful virtual journey as you traverse the world over the next three days. thank you! | 1 |
. 3. policy rules to inform discretionary monetary policy a third contribution of models to the monetary policy process is through simulations with alternative rules for federal reserve action. at lhm & a we designed our model to offer users four policy regimes : setting paths for the money supply, nonborrowed reserves or the federal funds rate or turning on a reaction function according to which the federal funds rate responds to developments in output, unemployment and inflation. while we increasingly used the reaction function in our analysis of alternative fiscal policies, we did not routinely take advantage of the reaction function to forecast monetary policy. another irony is that there is a much more active interest in the implications of monetary policy rules at the board, where discretionary policy is made, than in the private sector, where estimated rules might be effectively used to forecast monetary policy. the staff has examined a number of alternative rules, including those based on monetary aggregates, commodity prices, exchange rates, nominal income, and, most recently, taylor - type rules. these rules, in effect, adjust the real federal funds rate relative to some long - run equilibrium level in response to the gaps between actual and potential output and between inflation and some long - run inflation target. such a rule can be interpreted as either a descriptive or normative guide to policy. if the parameters of the policy rule are estimated over some recent sample period, the rule may describe the average response of the fomc over the period. alternatively, parameters can be derived from some optimizing framework, dependent on a specific objective function and model of the economy. stochastic simulations with such a rule can provide some confidence that following the rule will contribute to both short - run stabilization and long - term inflation goals in response to historical shocks to the economy and the rule, in turn, can provide discipline to discretionary policy by providing guidance on when and how aggressively to move interest rates in response to movements in output and inflation. the focus on rules is much more important under an interest rate operating procedure than under an operating procedure focused directly on monetary aggregate targets and is also more important under an interest rate operating procedure when the monetary aggregates, as has been the case for some time, do not bear a stable relationship to overall economic performance and therefore do not provide useful information about when and how aggressively to change interest rates. taylor - type rules, in this environment, provide a disciplined approach to varying interest rates in response to economic developments that both ensures a pro - cyclical response of interest | created by politicians out of thin air. as one of my predecessors, mr lino spiteri, wrote recently, β they don β t make magic wands that work any more. β in the real world, a key precondition for prosperity is higher productivity. it should, therefore, be our common task, but particularly that of the political class, to promote policies and practices that are conducive to a more efficient use of the nation β s scarce resources. | 0 |
ΓΈystein olsen : economic perspectives annual address by mr ΓΈystein olsen, governor of the norges bank ( central bank of norway ), to the supervisory council of norges bank and invited guests, oslo, 12 february 2015. * * * accompanying charts can be found at the end of the speech. an oil - driven economy it is no coincidence that the walls in this hall cover the monetary history of modern norway. the exhibit begins with the speciedaler from 1817 and continues up to the current banknote series. money is at the core of central banking. the central bank β s task is to ensure the availability of means of payment and to preserve trust in the value of money. low and stable inflation is the primary objective of monetary policy. people must also be assured that banknotes are genuine. it has become increasingly difficult to prevent the counterfeiting of banknotes. the current banknote series is due for replacement and work on a new series is well underway. the new banknotes are intended to function as a calling card for norway. the choice of the sea as the theme embraces both our past and present. we have always made good use of the opportunities the sea has provided. it has been our lifeblood, and it has been a main artery. fishing, shipping and trade have been a source of livelihood for many. with its changing face and magical power, it has also inspired artists. β nothing is so boundless as the sea, nothing so patient. β 1 so begins alexander kielland β s first novel. kielland, who was born and raised in stavanger, could scarcely suspect the inconceivable wealth the sea was so patiently concealing under the sea floor. the discovery of oil was the start of an amazing era for the norwegian economy. when the first oil was brought to the surface in 1971, income levels in norway were low compared with other western countries ( see chart 1 ). the picture has reversed since then. we have gradually caught up to the wealthiest nations. measured by gdp per capita, norway now ranks at the top ( see chart 2 ). the large revenues from the oil industry have been managed soundly. norway β s economy is in good order. well - functioning institutions and a high degree of trust between different groups in society provided a good starting point. at an early stage, it was established that the oil and gas resources belong to the norwegian people. the tax system and framework conditions for the petroleum industry were | . the policy rate increase is intended to prevent a rise in pressures in the economy that would trigger an acceleration in price and wage inflation. a higher interest rate also mitigates the risk of a renewed, rapid rise in property prices and debt. high price and wage inflation and a further build - up of financial imbalances would increase the risk of a sharp economic downturn further out. the plan is to move gradually to a more normal interest rate level. our assessment in march was that capacity utilisation was slightly above a normal level. at the same time, underlying inflation was a little higher than the inflation target of 2 percent. our projections implied that the policy rate would be raised in the course of the next half - year. there were also prospects that the policy rate would rise to 1. 75 percent by the end of 2022. this means that the average residential mortgage rate could increase from 2. 6 percent in march to 3. 5 percent in the course of the same period. we therefore believe that interest rates will not be as high as in previous upturns. with that path for the policy rate, inflation is projected to be close to target in the years ahead, at the same time as unemployment remains low. more persons employed and prospects of higher wage growth will contribute to lifting income. despite higher interest rates, there are prospects that most households will experience an improvement in purchasing power in the coming years. the risk outlook is dominated by global developments. over the past year, rising protectionism and political uncertainty have weighed on global growth. the uk β s relations with the eu have yet to be clarified. if trade tensions deepen, growth among trading partners may be lower than we projected in march. the uncertainty surrounding global developments and the effects of monetary policy suggests a cautious approach to interest rate setting. our most recent monetary policy meeting was held yesterday, and we published the decision earlier today. since the publication of our march projections, capacity utilisation appears to be rising as expected, while inflation has been a little higher than projected. global uncertainty persists. at its monetary policy meeting, the executive board decided to keep the policy rate unchanged at 1. 0 percent. the executive board β s current assessment of the outlook and balance of risks suggests that the policy rate will most likely be raised in june. our mission is to deliver low and stable inflation, while contributing to high and stable output and employment. should economic developments diverge from our current projections, the policy rate path | 0.5 |
puerto rico, and the u. s. virgin islands. this area includes enormous diversity in institutions from state member banks with total assets of less than $ 100 million operating in a local community to bank holding companies with trillions of dollars of assets operating on a global scale. our staff assesses the safety and soundness of domestic banking institutions and operations of foreign banking organizations in the district through onsite evaluations and offsite financial analysis and surveillance. one of our fundamental responsibilities is to ensure that each institution has in place the appropriate risk identification and risk management processes that are necessary for prudent banking. we also analyze issues and industry developments to identify emerging risks and to contribute to the development of domestic and international supervisory policy. i β ll return to a discussion of emerging risks later in my talk. bis central bankers β speeches the supervision group at the new york fed works with our colleagues around the federal reserve system to develop and implement the system β s supervisory programs. this includes working through governance structures like the large institution supervision coordinating committee ( liscc ) that oversees supervision for the largest, most systemically important institutions in the u. s. we are also involved in similar system - wide committees for other types of institutions such as community banks, regional banks, foreign banks, and other large banking institutions, as well as consumer protection. i β ll speak mostly today about our supervisory responsibilities for the largest firms, but will note that we recently hosted a conference at the new york fed focusing on the role of community banks. for the largest firms, we actively participate in system - wide horizontal examinations such as the comprehensive capital analysis and review, or ccar, which is the annual process for evaluating capital adequacy of the largest firms that began last week. we are actively involved in other horizontal programs such as the comprehensive liquidity analysis and review ( clar ), and the supervisory assessment of recovery and resolution preparedness ( srp ). clar is the federal reserve β s annual, horizontal, forward - looking program to evaluate the liquidity position and liquidity risk management practices of liscc firms. srp is the federal reserve β s annual horizontal review of the liscc firms β options to support recovery and progress in removing impediments to orderly resolution. these three programs form the foundation for the horizontal aspects of the system β s supervisory program for the largest firms. the supervision group at the new york fed plays a strong role in developing and executing these initiatives. in parallel | . with this monetary easing and with the strengthening in the pace of economic activity in the second half of the year, we now project annual average growth of between 2 and 3 per cent in 2001. for next year, we see output expanding at a rate slightly above the bank's estimate of potential output growth of 3 per cent. consistent with the bank's expected path of output growth, core cpi inflation will likely average somewhat below 2 per cent over the remainder of 2001, then move back up to 2 per cent by the end of 2002. total cpi inflation is expected to be volatile over the next few months, before moving down to about 2 per cent by the end of the year if world energy prices remain close to current levels. i would now like to say a word about recent developments in financial markets. these developments have essentially reflected the increased concerns and uncertainty surrounding world economic prospects. in the circumstances, global investors have, once again, sought the safety and liquidity of u. s. financial assets. and this has led to an appreciation of the u. s. dollar against all major currencies despite the marked economic slowdown in that country. although the canadian dollar has remained firm against other major currencies, the decline in its value against the u. s. dollar until just recently has been the subject of much public commentary in canada. since the exchange rate is a key price in our economy, the bank recognizes that movements in its value can be a source of concern for canadians. i want to assure you that the bank monitors market developments very closely. and we carefully assess the implications of currency movements for aggregate demand and inflation in canada. in closing, let me reiterate that the bank remains generally positive about canada's economic prospects in the period ahead. we continue to expect a pickup in growth in the second half of this year and further strengthening in 2002. the main risk to this outlook is the timing and strength of the projected pickup in u. s. growth. given this uncertainty, we will continue to monitor developments closely and we will respond appropriately. | 0 |
the bank has a strong incentive to restructure the positions to allow them to be reclassified into a lower regulatory risk category, by using securitization or other devices. if the bank doesn β t do this, it cannot make a market rate of return on the regulatory capital of 8 percent on the loans. regulatory arbitrage, from the perspective of proper resource allocation, can be a good thing. if there were no way for the bank to avoid the uneconomically high regulatory requirement, it would need eventually to exit its low risk businesses because of insufficient returns to equity. in the long run, this would serve no purpose other than causing the regulated entity to shrink in size relative to its unregulated competitor. at the extreme, the one - size - fits - all capital standard, if there were no arbitrage safety valve, would cause the bank to engage in only those activities for which the economic capital requirement is greater than the 8 percent regulatory standard. that is, the regulatory standard would induce risk - taking - - perhaps excessive risk - taking. while regulatory arbitrage can be useful in negating improperly high regulatory capital requirements, it can also be used to mask the true riskiness of the bank. in the united states, for example, the top 50 bank holding companies have a mean total risk - based capital ratio of 12. 1 percent. the standard deviation of this ratio across the 50 institutions is only 0. 8 percent. in other words, everyone seems to be holding about the same amount of capital. indeed, since a bank is declared to be β well - capitalized β when its total risk - based capital ratio is over 10 percent, it is not surprising that we see no top - 50 banking company with its ratio less than 10 percent. but do all these banks have equally low insolvency probabilities? one simply can not tell much of anything by looking at capital ratios. it is perfectly possible that a bank may hold 12 percent capital when a more carefully constructed internal risk model would call for holding 15 percent, or even 18 percent, capital to meet the bank β s internal insolvency standard. or, the bank could have a great model, but simply have a preference for risk that is unacceptable to regulators. such a bank may be holding risky positions for which even its own model would call for more capital, if the bank were to adhere to a lower insolvency probability standard. for such a bank | receive deposits, pay bills, and accrue savings. they also need access to credit to tide them over before their next cash infusion arrives. they may be coming up short paying their rent, their mortgage payment, an emergency medical expense, or an unexpected car repair. they may want access to a savings vehicle that, down the road, will help them pay for these items and for education or further training, or to start a business. and many want some form of non - cash payment method, such as a credit or debit card, to conduct transactions that are difficult or impossible to conduct using cash. products and services that serve these core financial needs are not consistently available at affordable rates to all americans. those with low and moderate incomes may have insufficient income or assets to meet the relatively high requirements of banks. americans without jobs, or with jobs that have slow wage growth, have little, if any, opportunity to establish a credit history that facilitates access to financial services. others, especially in the wake of a recession that put many people out of work and homes, may have dents on their credit records that inhibit their ability to borrow on affordable terms. how the recession undermined financial inclusion the economic crisis has undermined financial inclusion for many americans. low - and moderate - income families entered the recession with little financial buffer against the adverse effects of wage cuts, job loss, and drops in home values. according to the 2007 survey of consumer finances ( scf ), home equity accounted for 75 percent of total assets for low - and moderate - income families, which made them extremely vulnerable to the eventual housing market collapse. sure enough, families in the bottom fifth of the income distribution saw an 18 percent drop in median net worth between 2007 and 2009, going from $ 8, 100 in 2007 to $ 6, 600 by 2009. 3, 4 families in the middle of the income distribution fared bureau of labor statistics. β the employment situation β may 2011. β ibid. bucks, brian k., arthur b. kennickell, traci l. mach and kevin b. moore. 2009. β changes in u. s. family finances from 2004 to 2007 : evidence from the survey of consumer finances, β federal reserve bulletin, v. 95, pp. a1 β a55. bis central bankers β speeches even worse, experiencing a 21 percent decline in the value of their assets, the highest of any group during the same period. combined with widespread unemployment, housing and | 0.5 |
away, to keep me company here and be my allies in the process of transition which is obviously not as easy as we thought it would be back in the year 2000. in late march this year the nbs organized a gathering in london of about one hundred serbs who are employed in the most prominent financial institutions of the uk capital. i must admit that it was only then that i fully realized where the really very best have gone. but, the times are a - changing, serbia is taking big strides towards the european union, standard of living is improving and there are ample professional challenges around. we have managed to persuade some of those young professionals to come back to serbia and work in the national bank. let me emphasize again that the doors of our bank, and the doors of my office are kept wide open to all who wish to work for serbia and not only make profit in serbia!!! | of risks. they have also realized the need for international cooperation to develop standards that could form the basis of a strong structure for islamic banking. the increasing global interest in islamic banking, in recent years, is attributable to the rapid growth of this type of activity in terms of size, scope and significance both in islamic countries and other parts of the world. islamic banking has spread widely in more than twenty - five countries in asia and africa. it has also emerged in many financial centers in europe and north america to the extent that major international banks and specialized financial institutions have started to offer shari β a - compliant products to meet the needs of a wide spectrum of customers in their markets and those of islamic countries. dear brothers, you all know the efforts made by basel committee to issue various standards governing conventional banking in the area of capital adequacy, corporate governance, and the principles of compliance, and others. these and other standards have helped create an appropriate environment for banking business which supports competition. on the other hand, a number of central banks in a number of islamic countries, including sama, have established the islamic financial services board ( ifsb ) to promote establishment and development of shari β a compliant financial services industry, characterized by prudence and transparency, through the adoption of existing or new international standards compatible with islamic banking principles and methods. since its establishment in november 2002, the board has made great efforts in issuing international standards governing islamic banking business through a number of committees and work teams in the membership of which sama participates effectively. such standards will help setting up a strong structure to create robust banking entities able to compete in the international markets. the board also makes great efforts in organizing conferences and workshops to promote awareness of the nature of islamic banking. i can not, on this occasion, but thank the board's members. dear audience saudi arabian monetary agency exerts persevering efforts to promote awareness and emphasize the importance of applying international standards that help manage risks, enhance competition and create strong entities. therefore, this symposium is the first of its kind on islamic financial services board's standards which complement the guidelines of basel ii. the symposium aims specifically at providing a clear understanding of islamic financial services board's standards with regard to capital adequacy, risks management, supervisory review process, corporate governance systems, transparency and market discipline, which constitute fundamental bases to ensure soundness and stability of islamic banking services. therefore, it is expected that this symposium will | 0 |
order to accompany these changes and help us to meet the challenges we face. before concluding, i would like to emphasize the invaluable opportunities that the new information technologies can offer us in terms of data sharing, collection and storage. but they also involve major challenges, particularly in terms of cyber security and personal data protection. i wish you a successful and fruitful meeting, and hope that you can combine business with pleasure and allow yourself some time to discover the millennial richness of rabat, this imperial city which was listed by unesco as a world heritage site on june 29, 2012. thank you for your attention. | is illustrated in chart 2. the chart shows that using strong instruments to achieve an inflation target or exchange rate target in the short term results in more pronounced fluctuations in the real economy. by allowing greater flexibility with regard to the short - term achievement of goals, it is possible to achieve more stable developments in the real economy. but confidence in the nominal anchor must not be undermined. this may lead to a less favourable trade - off, as illustrated in the chart by the broken line. if there is insufficient confidence in monetary policy, economic agents may expect higher price and cost inflation to persist. this will be taken into account when setting wages and prices. the result will be a wage and price spiral. experience shows that this in turn leads to slower growth and lower employment. a lack of confidence therefore entails a risk of higher unemployment. in consequence, monetary policy must also focus on movements in nominal variables when the economy is subjected to supply - side shocks in order to prevent the economy from entering a vicious circle. the building of confidence in nominal developments must be given sufficient priority. if there is confidence in monetary policy, economic agents will expect the rise in price and cost inflation to be of short duration. higher prices will then not feed through to prices for other goods and to wages to the same extent, and there will be less risk of a recession. confidence in monetary policy therefore results in a better trade - off between nominal fluctuations and fluctuations in production and employment. i have been talking about supply - side shocks to the economy. however, there are many types of shock where there is no conflict between stable nominal developments and stable developments in the real economy. for example, a sharp decline in overall demand may give rise to a deflationary recession. in such a situation, an expansionary monetary policy may contribute to both nominal and real economic stability. whether disturbances arise on the supply side or the demand side, it should be possible to use the interest rate to influence economic developments. the interest rate is an instrument, rather than a target variable. a passive monetary policy will lead to both price and exchange rate instability and to greater fluctuations in production and employment. however, an active monetary policy does not imply attempting to fine - tune economic developments. we must be mindful of the uncertainty associated with economic developments and the effects of monetary policy. normally, interest rate changes should be made gradually to allow us to acquire more information, for example about the effects of previous interest rate changes. uncertainty and credibility according to nor | 0 |
elizabeth a duke : cra β a framework for the future speech by ms elizabeth a duke, member of the board of governors of the us federal reserve system, at the revisiting the cra policy discussion, washington dc, 24 february 2009. the original speech, which contains various links to the documents mentioned, can be found on the us federal reserve system β s website. * * * good afternoon. i am pleased to be here to discuss the future of the community reinvestment act ( cra ). as many of you probably know, i joined the federal reserve board last year after having spent many years as a community banker. my experience gives me both a practical and theoretical interest in today's discussion of cra's future. when the federal reserve bank of boston celebrated the 30th anniversary of cra's enactment, it did so by hosting a forum in october 2007 that focused not just on the law's contributions to making financial services more readily available in low - and moderateincome communities, but also on the challenges of applying the law in a financial landscape that is vastly different from the one that existed in 1977. it was at that gathering of researchers, regulators, bankers, nonprofit practitioners, and community advocates familiar with the cra that congressman barney frank challenged the federal reserve bank of boston to collect the best thinking about how the cra might be improved for the future. the bank took this challenge to heart and, together with the federal reserve bank of san francisco, invited an impressive group of experts to contribute to the creation of a publication serving as the center of discussion at today's forum, revisiting the cra : perspectives on the future of the community reinvestment act. this volume presents a variety of perspectives from many who have been closely involved in the development and implementation of cra policy over the years. as one might imagine, there is no shortage of good ideas contained in these pages including suggestions for statutory as well as regulatory changes. while many divergent views are expressed in this publication, its most striking feature is an expression of a shared understanding that access to financial services for all, including low - or moderateincome communities and individuals continues to be an important goal for policymakers. in my remarks today, i will highlight what i consider to be the most compelling reasons for making changes to the cra at this time, discuss many of the themes and issues raised in this publication, and suggest a framework for how, as policymakers | and expanding businesses may require time to put the necessary capital equipment in place to increase productivity. and of course, some firms will go out of business and some people will be unemployed for a period of time. but from a macroeconomic point of view, adjustment can take place with less social and economic cost overall when inflation expectations are well anchored, the economy is operating close to its potential, and a floating exchange rate is helping to absorb external shocks. international adjustments that β s a quick look at how the canadian economy is adjusting to global forces. our flexible exchange rate is helping to bring about movements in the real exchange rate, which is what matters in terms of the adjustment process. but this is not the case in all countries. where the nominal exchange rate is fixed, the only way to bring about adjustments in the real exchange rate is through large movements in relative wages and prices. this is theoretically possible if wages and prices are highly flexible, both upwards and downwards. but in practice, wages and prices aren β t that flexible. and so when exchange rates are fixed, adjustment can still take place, but it comes at a high cost - through shrinking output and rising unemployment in countries with current account deficits, and eventually through very high inflation in countries with current account surpluses. while this adjustment is costly, it does work, provided countries that are fixing their currencies through foreign exchange intervention are not offsetting the monetary consequences of this by β sterilizing β the intervention. this is an important point. when intervention is sterilized, this temporarily prevents the movements in wages and prices needed to bring about the necessary economic adjustment. in these cases, economic adjustment is postponed - in both surplus and deficit countries. but the adjustment and its costs are only delayed, they are not avoided. indeed, the costs typically end up being larger than they would otherwise be, precisely because they have been delayed. the only way to truly minimize the costs of adjustment is to allow nominal exchange rates to move around. for decades, canada has benefited from having a flexible exchange rate that can help bring about economic adjustments. by the end of the 1990s, most industrialized economies and a number of emerging - market economies had also realized the benefits of having a floating currency. but other economies, particularly but not exclusively here in asia, have opted for a fixed exchange rate regime. and unfortunately, some have rejected the adjustment mechanisms that should go along with such a regime. by sterilizing their interventions, they are accum | 0 |
is already working towards that goal. 3. some thoughts on the most recent backslide on the financial markets i could have closed my speech with this rather positive outlook not even two weeks ago. however, since then the crisis has again raised its head, this time exposing the weak position of government budgets in some euro - area countries. at first sight, the current problems seem to be rather different from what we experienced during the financial crisis. however, a second glance reveals that the underlying causes are quite similar, and so are the remedies. just like the financial crisis itself, the current problems can be traced back to a limited number of factors. first, a credit boom due to lower interest rates once the countries in question had joined the euro area. second, insufficient or totally absent risk management in economic policy, which should have been much more countercyclical. and third, the stability and growth pact was not applied as strictly as it should have been, or was weakened by questionable accounting practices and faulty statistics. given these similarities with the root causes of the financial crisis, the responses of economic policy are similar, too. the first challenge has been to stabilise the situation. the relevant steps towards that goal were taken by the eurosystem and the ecofin ten days ago. in particular, the commitment of fiscal policy to stepping up frontloaded consolidation efforts shows the will of the member states to tackle the current crisis at its root. what must follow are structural reforms in a similar vein to those that i have just described with regard to the financial sector. it is essential to strengthen the existing fiscal rules to prevent individual countries from running into budgetary difficulties. relevant proposals to enhance the stability and growth pact have already been put forward. they could be complemented by national fiscal rules similar to the national debt brake in germany. in addition, we might β over the medium - term β also think about devising mechanisms to limit the systemic impact of sovereign debt crises that might still occur. however, particular caution is warranted in this regard given that adverse incentive effects would most likely be even more severe than in the financial sector. for example, a permanently available support scheme would only exacerbate these problems and therefore should not be a policy option. 4. conclusion ladies and gentlemen three years into the crisis, the necessity for a reform of financial regulation has been well understood at a global level. until now, a number of relevant proposals have been put forward by international bodies such as the financial | axel a weber : the g20 agenda on financial regulation dinner speech by professor axel a weber, president of the deutsche bundesbank, at the international conference on financial market regulation, berlin, 19 may 2010. * 1. * * introduction ladies and gentlemen, these days it is hard to find a topic that is suitable for a light - hearted dinner speech. one could either choose to talk about a crisis - related topic, which would mostly be unpleasant, or one could choose to talk about something completely different and run the risk of appearing slightly out of touch with reality. as a compromise, i have decided to talk about one of the more positive outcomes of the crisis β assuming that β positive β is not a misnomer. as devastating as the crisis has been, it has set in motion a process of reform that will eventually lead to a more stable and resilient financial system in the future. originally, i wanted to give you a short overview of the state of these reforms. and even though i will stick to that plan, current events have to be acknowledged and i will do this at the end of my speech. 2. major issues of reform at the micro and macroprudential level the reform of financial regulation was initiated by the g20 during various meetings in london, washington and pittsburgh. having devised the general objectives, the g20 then commissioned the financial stability board and the basel committee on banking supervision to draw up proposals as to how these objectives could be met. the overarching principle of reform is to create a financial system that is more stable, more resilient and thus more capable of absorbing potential shocks. any attempt to achieve this objective has to begin with the individual institution β that is, at the microprudential level. preventing individual institutions from failing would serve as a first line of defence against systemic crises. regulation at the microprudential level centres on the basel ii framework, which was launched in 2004 and has been implemented by a large number of countries. in a nutshell, the basel ii rules require banks to provide risk - adjusted capital and liquidity buffers. these buffers serve to absorb potential losses and help to prevent failures. thus, an enhanced basel ii framework would further strengthen the first line of defence against future crises. relevant proposals were put forward in december 2009, including, among other things, measures to raise the quality, consistency and transparency of the capital base, a global standard for funding liquidity, and the introduction of a leverage | 1 |
the federal reserve β s purchases of longer - term securities have not affected very short - term interest rates, which remain close to zero, but instead put downward pressure directly on longer - term interest rates. by easing conditions in credit and financial markets, these actions encourage spending by households and businesses through essentially the same channels as conventional monetary policy, thereby supporting the economic recovery. a wide range of market indicators supports the view that the federal reserve β s securities purchases have been effective at easing financial conditions. for example, since august, when we announced our policy of reinvesting maturing securities and signaled we were considering more purchases, equity prices have risen significantly, volatility in the equity market has fallen, corporate bond spreads have narrowed, and inflation compensation as measured in the market for inflation - indexed securities has risen from low to more normal levels. yields on 5 - to 10 - year treasury securities initially declined markedly as markets priced in prospective fed purchases ; these yields subsequently rose, however, as investors became more optimistic about economic growth and as traders scaled back their expectations of future securities purchases. all of these developments are what one would expect to see when monetary policy becomes more accommodative, whether through conventional or less conventional means. interestingly, these developments are also remarkably similar to those that occurred during the earlier episode of policy easing, notably in the months following our march 2009 announcement of a significant expansion in securities purchases. the fact that financial markets responded in very similar ways to each of these policy actions lends credence to the view that these actions had the expected effects on markets and are thereby providing significant support to job creation and the economy. my colleagues and i have said that we will review the asset purchase program regularly in light of incoming information and will adjust it as needed to promote maximum employment and stable prices. in particular, it bears emphasizing that we have the necessary tools to smoothly and effectively exit from the asset purchase program at the appropriate time. in particular, our ability to pay interest on reserve balances held at the federal reserve banks will allow us to put upward pressure on short - term market interest rates and thus to tighten monetary policy when required, even if bank reserves remain high. moreover, we have developed additional tools that will allow us to drain or immobilize bank reserves as required to facilitate the smooth withdrawal of policy accommodation when conditions warrant. if needed, we could also tighten policy by redeeming or selling securities. fiscal policy fiscal policymakers also face significant challenges. the | provisional. these uncertainties - - especially our inability to identify the upper bound of future demands for medical care - - suggest significant prudence when considering spending initiatives. new programs, whether spending or tax benefits, quickly develop constituencies who tend to fiercely resist any curtailment. as a consequence, our ability to rein in deficit - expanding initiatives, should they later prove to have been excessive or misguided, is quite limited. programs can always be expanded in the future should the resources for them become available, but history has shown that they cannot be easily curtailed if resources later fall short of commitments. i fear that we may have already committed more physical resources to the baby - boom generation in its retirement years than our economy has the capacity to deliver. if existing promises need to be changed, those changes should be made sooner rather than later. we owe future retirees as much time as possible to adjust their plans for work, saving, and retirement spending. they need to ensure that their personal resources, along with what they expect to receive from the government, will be sufficient to meet their retirement goals. addressing the government's own imbalances will require scrutiny of both spending and taxes. however, tax increases of sufficient dimension to deal with our looming fiscal problems arguably pose significant risks to economic growth and the revenue base. the exact magnitude of such risks is very difficult to estimate, but, in my judgment, they are sufficiently worrisome to warrant aiming, if at all possible, to close the fiscal gap primarily, if not wholly, from the outlay side. in the end, i suspect that, unless we attain unprecedented increases in productivity, we will have to make significant structural adjustments in the nation's major retirement and health programs. our current, largely pay - as - you - go social insurance system worked well given the demographics of the second half of the twentieth century. but as i have argued previously, the system is ill - suited to address the unprecedented shift of population from the workforce to retirement that will start in 2008. much attention has been focused on the forecasted exhaustion of the social security trust fund in 2041. but solving that problem will do little in itself to meet the imperative to boost our national saving. raising national saving is an essential step if we are to build a capital stock that by, say, 2030 will be sufficiently large to produce goods and services adequate to meet the needs of retirees without unduly curbing the standard of living of our working - | 0.5 |
is increasing, year - on - year growth in bank credit to both the household and non - financial corporate sectors remains negative. against this background, the countercyclical capital buffer ( ccyb ) rate on banks β irish exposures is maintained at zero per cent. the countercyclical capital buffer ( ccyb ) is a time varying capital requirement which applies to inscope banks and investment firms. it is designed to make the banking system more resilient and less pro - cyclical. essentially the ccyb will increase the capital requirement of banks if we see credit growth becoming β excessive ". it can then be released, partially or fully, either in the case of a period of systemic stress or when credit growth and associated systemic risks recede. the review shows that credit growth to smes remains negative across all sub - sectors as firms continue to deleverage. new lending to smes, however, has been rising since early 2014. a large decline in npl rates across all categories of sme / corporate loans has been evident in recent years, although more than 10 per cent of loans are non - performing and substantial sectoral variation in npl rates arises. 1 / 3 bis central bankers'speeches some categories of household credit are showing positive growth, including non - mortgage credit and mortgage lending at fixed rates. the overall rate of growth in mortgage loans remains negative as floating interest rate mortgage lending continues to fall. while household debt has been declining, the sector remains highly indebted, at β¬143. 8 billion in 2016q4, leaving it vulnerable to a rise in interest rates. those in the 30 β 44 age category have high debt - to - income ratios relative to other age cohorts and by international comparison. the overall number of mortgage arrears cases has declined by 44 per cent since 2013q2. almost half of mortgage arrears cases are in very long term arrears. turning now to the irish commercial real estate ( cre ) market, 2016 continued to see high total returns. the commercial property vacancy rate was 13. 5 per cent in 2016q4. it is much lower for the dublin office sector, at 7 per cent in 2017q1. a substantial amount of new office supply is under construction, being planned, or at pre - planning stage. the commercial real estate market has also seen a broadening of its investor base in recent years. the possibility of firms seeking to relocate to ireland as a | real economy and avoid a credit crunch. 2. a globally symmetric crisis calls for a globally coordinated policy response. it is a symmetric crisis in a global scale, affecting both advanced economies and emerging and developing countries. it is illustrative that the imf is flooded with emergency financing requests from a vast number of countries : by now 102 out of 189 members have requested imf emergency financing. in order to be able to help its members and safeguard global stability, it is imperative that the imf has sufficient resources. finland, as well as its nordic - baltic constituency at the imf, has always been a resolute supporter of a strong and adequately resourced imf, at the centre of the global financial safety net. given the high uncertainty about the length and severity of the crisis, [ and the external financing needs of the poorest countries with fragile health systems, ] we must keep the door open for 1 / 3 bis central bankers'speeches further measures. specifically, in my view, there is an evident case for a new general allocation of sdrs, as part of the imf β s crisis - fighting package. this would be in line with the actions of central banks in all main currency areas who have taken swift action to support liquidity and market functioning. the federal reserve quickly engaged in aggressive balance sheet expansion and established swap lines with several other central banks to support us dollar liquidity. the ecb has done the same to safeguard euro liquidity. as the larger central banks like the federal reserve and the european central bank are providing ample liquidity and preventing a credit crunch by their bold actions, why should we not amplify this liquidity - producing impact in the global context through a new sdr allocation? 3. in europe, the ecb and the eurosystem as a whole have launched a very substantial monetary stimulus and other credit - enhancing measures. it is imperative, as the euro area economies are estimated to contract roughly by between 5 β 15 % this year. last month the ecb started a new pandemic emergency purchase programme ( pepp ), buying both public and private sector bonds up to 750 billion euros to ensure favourable financing conditions. together with its other programmes, the ecb β s net asset purchases will amount to more than 1 trillion euros this year. furthermore, via a new targeted lending facility with substantially more favourable terms than previously, the ecb can provide liquidity to banks at a negative rate for up to 3 trillion euros. this | 0 |
##a rulebook contains 638, 000 words β 77, 000 words longer than war and peace in english translation. the complexity of the language used can make the text difficult to read. another layer of complexity is added because of cross - references and links between different parts of the rulebook, requiring the reader to refer backwards and forwards, disrupting reader flow. figure 2 is a visualisation of the rulebook. each node is a part the pra rulebook. each line between the nodes is a cross - reference in the text. when parts of the rulebook are linked together, tweaking one part can have unintended consequences for others. we can quantify the interconnectedness of different parts of the rulebook using the pagerank algorithm, the same algorithm used by google β s search engine. a higher score implies greater connectivity of a particular part to other parts. happily, most parts of the rulebook are self - contained and β β structurally simple β. β looking further into the future, a bigger win might be to automate the rulebook entirely. regulated banks are required to submit large quantities of data to regulators. the cost of collecting and reporting data to meet regulatory requirements is a significant burden to both regulators and regulated firms. regulatory data collections also have significant time lag s, normally 4 to 6 weeks. one solution is to make the data reporting process better tailored to the needs of supervisors. digital regulatory reporting ( drr ) is the automation of regulatory data collection, and could potentially lead to significant improvements in both the cost and timeliness of data. the idea is based on machine readable reporting requirements that firms β systems could automatically interpret and satisfy via a secure regulator - firm digital link. this would allow regulators to collect data on an ad hoc basis from firms as required, in close to real time without any manual intervention at either end. that would enable amadxarif, z, brookes, j., garbarino, n., patel, r., and walczak, e ( n. d ) [ forthcoming ] all speeches are available online at www. bankofengland. co. uk / speeches supervisors to specify the data they needed to solve a particular puzzle β exposures to a particular country, for example β and transmit that data request to firms in a machine readable form. the data would then be β grabbed β directly from firms β systems and sent back to supervisors automatically. the fca and bank of | - out from last year β s financial disturbances, against the background of the longer - standing financial and economic fragility in japan - which is of course the largest economy in the asian region. the concern relates in part to the implications for global economic activity ; but it relates importantly, too, to the prospective external payments imbalances within the global economy which will need to be handled very carefully if they are not to lead to trade frictions and / or exchange rate volatility. but attention has also turned to an intensive reappraisal, in all sorts of international fora, of more effective means of preventing, and managing, such situations in the future. it would have been understandable in the light of the asian experience if there had been some turning back from the path towards greater freedom of international capital movements, and there has been some suggestion of this. but on the whole the international debate - in which central banks as well as governments are actively involved - continues to recognise the long - term benefits of free capital movements and the contribution that they can make to global economic prosperity. the mood is to continue cautiously down that path, but to emphasise the need, not only for sound macro - economic policies, which everyone accepts as a sine qua non, but also for steps to accompany capital account liberalisation designed to reduce the risks of volatility. these relate in part to the process of capital account liberalisation, where there is now a good deal more stress on β sequencing β - that is on liberalising potentially more stable, longer - term, capital inflows initially, rather than short - term borrowing denominated in foreign currency. but they relate particularly to three key conditions for living with free capital movements. the first is β transparency β. in a broad sense a need for greater transparency is recognised in relation to public policy, to the relationship between the public and private sectors, to corporate governance, accounting standards, and so on. in a narrower sense there is seen to be a need for more reliable, and greater and more timely disclosure of, financial information generally, at the level of individual borrowing entities, but especially also in relation to countries β true foreign exchange short - term asset and liability positions. this is especially important in relation to the foreign currency liquidity position of the monetary authorities and of the banking system. the general point is that we cannot reasonably expect markets to make a proper assessment of the risks of their investments, including particularly their short - term | 0.5 |
result, the investment share has risen from around 18 % to 28 % of gnp over this period. within this sector, building and construction has expanded very strongly over the period, rising from about 10 % of gnp in 1994 to 18 % this year. tighter monetary conditions in the euro area and a restoration of more sustainable growth rates would inevitably reduce the returns on investment. this could raise questions about the viability of some of this investment. investment : percentage of gnp total building and construction machinery and equipment 18. 4 10. 5 7. 9 19. 3 11. 0 8. 3 21. 0 12. 5 8. 5 22. 9 14. 1 8. 8 25. 0 15. 3 9. 7 27. 4 17. 0 10. 4 2000 ( f ) 28. 5 18. 0 10. 5 source : national income and expenditure central statistics office, and central bank forecasts. these developments that i have outlined in relation to property prices, bank credit and investment inevitably raise concerns about the soundness of the financial sector. the bank, as the supervisory authority, has impressed on credit institutions the need to continue to maintain prudent standards in lending. in relation to mortgage finance, lenders have been requested to adhere to prudent norms in regard to loan - to - value ratios of houses and conventionally accepted income multiple norms. as i mentioned earlier, institutions have also been required to undertake sensitivity analyses in relation to adverse events such as an economic downturn or a sizeable interest rate increase. institutions are constrained by sectoral limits in regard to lending to specific sectors - this is a significant constraint on undue exposure to individual sectors. institutions must also apply prudent loan loss provisioning policies. in this regard, the bank is exploring ways in which counter - cyclical provision policies should be actively pursued by credit institutions. conclusion ireland β s economic performance has been exceptionally strong over the period since 1994 following the uncertainty and turbulence associated with the ems exchange rate crisis of late 1992 / early 1993. over this period, the growth in ireland β s gross national product has averaged about 8 %. decomposing this growth into its components in a growth accounting exercise indicates that about 4Β½ percentage points of this growth is due to increased inputs of labour and capital, with all other influences accounting for about 3Β½ % of gnp growth. some part of these other influences that increase growth may be due to β new economy β effects associated with structural changes in the | ##ration in the rate of house price inflation is expected. property prices : annual percentage increases residential a commercial b rents c 4. 1 7. 6 2. 3 7. 2 4. 2 1. 8 11. 8 11. 1 8. 2 17. 2 17. 0 10. 6 22. 6 32. 1 14. 6 18. 5 23. 8 16. 1 13. 9 21. 6 16. 2 d ( a ) department of environment and local government, national new house prices. ( b ) jones lang lasalle, capital values. ( c ) jones lang lasalle, rental value for irish commercial property. ( d ) jan. - sept. 2000, year - on - year. commercial property prices have followed broadly similar trends to residential property prices with the rate of increase accelerating from 1996 onwards. since then, prices have risen by 113 %. the rate of increase in rents in the commercial property sector also accelerated in 1996, and while still strong, the cumulative rate of increase has been somewhat lower than for commercial property prices. these increases reflect very low vacancy rates, low nominal interest rates and a high level of business confidence. associated with this acceleration in residential and commercial property prices, and perhaps to some extent driving it, has been a large rise in bank lending. personal sector credit, which is dominated by residential mortgage lending, has risen strongly in recent years, although at a slower rate than total private - sector credit. the share of non - housing personal sector credit in total lending has remained relatively stable in recent years and was lower at end - 1999 than end - 1994. lending to real estate and construction activities rose from some 6 % of total lending at end - 1994 to over 8 % at end - 1999. bank lending : annual percentage increases to selected sectors total private - sector credit a personal b, c building and construction b, d financial b, g other b, h 11. 8 10. 5 16. 1 15. 2 4. 0 11. 2 13. 1 12. 1 2. 1 7. 2 15. 4 15. 9 26. 3 12. 3 17. 1 23. 6 21. 0 19. 8 47. 9 13. 5 23. 6 19. 3 58. 1 35. 7 21. 4 31. 6 26. 0 50. 2 86. 9 22. 9 2000 i 24. 2 17. 8 58. 4 39. 3 25. 6 ( a ) adjusted for lending to non - bank | 1 |
4. 5 per cent. assuming that there are no unexpected adverse developments, there is merit in maintaining the status quo as far as the monetary and credit policy measures are concerned, while pursuing with the reform process. hence, unless unforeseen circumstances emerge, the current measures should in the normal course remain till the next monetary and credit policy in april 2004. against this backdrop, the reserve bank expects the growth momentum to be reinforced, inflation to be contained as indicated, financial stability continued to be maintained and external sector to perform well. in conclusion, may i say that the overall developments in the economy are favourable and provide the main springs for a strong revival of investment by industry? thank you. | account of fruits, vegetables, mineral oils, fuels, and cotton textiles. two important international factors have contributed to more than the unanticipated upward pressure on prices. first, international oil prices have remained firm. the average price of opec basket had reached us $ 29. 5 a barrel at the end of 2003, while us prices are hovering around us $ 32 a barrel. the global oil prices today are thus about 10 per cent higher than they were at the time of the mid - term policy statement. the outlook for oil prices in the near term appear highly uncertain. secondly, world primary commodity prices have also increased in 2003. these trends, along with revival of growth and falling excess capacities in several advanced economies have brought about a noticeable shift in the outlook for prices. the fear of deflation in advanced economies has been replaced by a possible upward pressure, led by increases in commodity prices. no doubt, these international developments enhance the probability of international transmission of inflation. at the same time, there are three favourable factors to counter these recent adverse global developments. first, in the normal course, it is expected that the inflation rate would fall in the period mid - january to march 2004. secondly, there are cushions in terms of food stocks and ample forex reserves. thirdly, our economy has, in recent years, shown remarkable resilience in absorbing shocks including on the oil front. in view of all these factors, it is possible that the downward bias may not be attainable but it appears that the range of 4. 0 per cent to 4. 5 per cent for inflation indicated in the mid - term review continues to be relevant for policy purposes unless there are unanticipated severe shocks. it may be noticed that the policy assumption in april 2003 was 5. 0 - 5. 5 per cent and the latest assessment placing it in the range of 4. 0 - 4. 5 per cent demonstrates that, overall, inflationary situation continues to be benign for 2003 - 04. there has been a marginal improvement in central government finances since the mid - term policy statement. the gross fiscal deficit of the central government as at the time of mid - term review which was higher by 40. 3 per cent ( based on fiscal data available up to september 2003 ) is now higher by 12. 3 per cent ( based on fiscal data available up to november 2003 ) over the corresponding periods of last year. similar improvement is also seen on the revenue account, which was higher by 37 | 1 |
the euro coins, more than 37. 5 billion coins or 90 % of the coins now in circulation with a total value of around eur 12. 4 billion had been frontloaded. broadly speaking, sub - frontloading β the pre - delivery by banks to retailers and other professional target groups β represented an overall amount of 10 to 20 % of the frontloaded amount. given that, in terms of transactions, around 70 % of banknotes are put into circulation via automated teller machines ( atms ), the quick adaptation of these machines was one of the key factors for a smooth changeover. in total, more than 200, 000 atms either on site in bank branches or off site, for example in shopping centres, had to be converted. this was achieved within less than one week. as a result, on average, 75 % of all cash transactions were already effected in euro after only one week. on the whole, the euro banknotes and coins were introduced considerably faster than originally foreseen, not least because of the favourable attitude of and quick acceptance by european citizens. i should like to mention that the changeover has also been smooth outside the euro area. the euro banknotes were received positively in third countries. information to the public has been generally adequate and euro banknotes were readily available in banks and exchange offices, in most cases. with regard to the frontloading of central banks outside the euro area, i should mention that 26 central banks, mainly in central and eastern europe, the mediterranean area and in africa, requested to be frontloaded with euro cash. the total value of the euro banknotes provided to these central banks and to wholesale banks outside the euro area amounted to some eur 4 billion. overall, the eurosystem is proud of and grateful to all actors β contributions to this historic process. the enthusiasm of the european citizens to get hold of euro cash can be seen as a clear vote for a united europe. recent global economic developments let me briefly review the current international environment. i feel quite some relief that the world economy has proved relatively resilient to the shock of the terrorist attacks in september of last year. the events of 11 september and their aftermath undoubtedly increased uncertainty, and for some time contributed substantially to the already ongoing deterioration in confidence in most countries. however, there are now more and more signs that the global economic downturn may have come to an end around the end of 2001. at the current juncture, a mild recovery is generally expected | am repeatedly confronted with it, since my confirmation hearing in the european parliament, and have not seen signs of a full understanding of the arguments. the point that i would like to submit for a serious analysis of central bank transparency is that the latter is inextricably linked to accountability. the means and instruments for implementing transparency in any country depend on its institutional and political framework for accountability. just to point to one relevant aspect, a system in which accountability is collegial is different from one in which accountability is individual. the way in which transparency is implemented cannot be the same in the two systems. the european union, which is obviously a very peculiar entity, not comparable to a federation or a state, has a specific system of accountability for its institutions, in particular the commission, the court of justice or the european central bank, where the appointment of the decision - making bodies is partly a responsibility of the member states. such a system foresees collegial, not individual accountability. in such a system, the publication of individual decisions, votes or opinions cannot be foreseen, except for historical purposes. only the result of the collegiate decision can be made public. this is currently the case for the european commission, the court of justice and the european central bank. to be sure, the institutional and political framework underlying the european union is a complex one and maybe not easy to understand. but this framework cannot be ignored in any meaningful and realistic analysis on the way in which the ecb ensures transparency. to move to a system in which the detailed minutes and votes would be published, the ecb statutes would have to be modified to allow for individual accountability, rather than a collegial one. this would require several modifications, including the compositions of the decision - making body and its nomination procedure. it would also most likely require changes in the eu institutional and political framework. differences in the structure of economies represent another issue which is often forgotten in the assessment of central bank policies. divergences in the degree of economic flexibility, in particular, can affect the degree of intrinsic inflation persistence, namely the inertial character of inflation which cannot be reduced by the central bank despite its best efforts. 8 two central banks with similar see for example ubide ( 2005 ). see for instance ehrmann and fratschzer ( 2005 ). see erceg and levin ( 2003 ) and levin and piger ( 2004 ). 5 / 6 credibility and policy strategy might have to implement | 0.5 |
, will offer tremendous opportunities for banks with the right credential to establish their presence as regional players. on the retail side, there exists vast potential for growth β owing much to the demographic transformation in the region. asia is now home to a growing middle income population, the number of which is projected to reach 3 billion by 2030. the region will also be faced with an ageing population in the years ahead. with rising affluence, coupled with the need to achieve higher levels of income to support the increasing longevity, asian consumers will increasingly demand innovative, better quality financial products and services. at another end of the product spectrum is the scope for enhancing financial inclusion and reducing inequality for the traditionally underserved, such as poor households and small and medium - sized enterprises ( smes ). to unlock the potential of this segment as a driver of growth not only requires product innovation that delivers cost - effective, high - quality and innovative instruments, but also the use of new business model and technology to expand the reach of financial services, especially in poor and remote areas. second, the strong growth of islamic finance across asia in the recent years is another trend that is characterising the region. this dynamic segment will continue to offer strong growth bis central bankers β speeches prospect going forward, backed by its increasing importance as a tool for enhancing financial inclusion and reaching out to the underserved segments, the growing demand for sociallyresponsible investment and ethical financial services in this post - crisis era, and the increase in the wealth of individuals in asia. islamic finance has also proved to be a competitive and innovative financial intermediation channel that could strengthen global financial and economic linkages, led by the high growth segment of the sukuk market which has now become an important avenue for international fund raising and investment activities. third, the impact of global regulatory reform in response to the global financial crisis is another important force that would continue to drive change in the financial landscape. the asian financial sector was resilient throughout the crisis. but asia is not immune to the volatility and uncertainty that is constantly changing our financial and economic landscape. some areas of the regulatory reforms, notably capital and liquidity requirements, have now progressed into the implementation phase. integrating the new regulatory enhancements will have a fundamental impact on how banks in asia manage risks in their businesses, particularly in the context of optimising capital to support growth in the region. banks that are able to develop a strong governance framework to link | raise the standards on education in financial services. less than a month ago the faa β finance accreditation agency, an entity responsible for reviewing the quality of the learning programs that serve the industry was launched. this agency complements the initiatives by the international centre for leadership in finance ( iclif ) to produce capable and competence leaders. taken together, these efforts reflect our motivation in ensuring comprehensive talent development solutions for financial sector professionals throughout their career progression from entry - level up to leadership positions. equal emphasis is also given in the area of islamic finance. talent development has been identified as a key thrust to support industry growth and development, both domestically and globally. the role of several talent development institutions dedicated to serving the industry has been instrumental in contributing towards achieving this goal β the international centre for education in islamic finance ( inceif ) which is as a global university offering academic and professional qualifications in islamic finance, the international shari β ah research academy for islamic finance ( isra ) which is a centre for applied research in shariah and islamic finance, as well as ibfim or the islamic finance and banking institute malaysia β an industry - owned training entity for islamic finance professionals. despite being relatively new in existence, these institutions have now become increasingly recognised as leading providers of expertise in islamic finance, providing the islamic finance global community a reference centre for knowledge and talent development. bis central bankers β speeches i am most inspired by the optimism set by theme of this year β s conference β β waves of change, oceans of opportunities β. the theme very aptly sums up the business conditions we face today. rapid change is the new normal in today β s dynamic world. the rise and interconnectivity of asia as well as its demographic changes, the impact of regulatory changes and new technologies are all combining to transform the financial landscape of the region. survival and success in today β s challenging environment will depend on being able to exploit new growth opportunities that come with change. but this journey will not happen without determined action to lay the foundation for future success of the industry. in closing, i wish you an insightful and productive deliberation and trust that your discussion will be useful and will leave you with additional insights to tackle the challenges that you face. to our overseas guests, i hope you will leave kl with pleasant memories of your brief stay here. bis central bankers β speeches | 1 |
however. according to a study by kpmg, these are projected to total around β¬9 billion. 4 reports in the press recently made frequent mention of a β wave of regulation β inundating the banks β it. there was even talk of β excessive regulation β or a β regulatory tsunami β. with all sympathy for the great challenges that the banks are facing, we should not forget why these demands arose. they were due to sometimes glaring errors in developments and to a lack of meaningful possibilities of analysing the data that existed at the banks β both before the crisis and to this very day. what we have observed from inspections at the banks is that it at most banks is suffering from data not being collected and maintained in accordance with uniform standards and that there are only limited automated facilities for analysing these data and thus utilising them for a forward - looking risk management. risk silos exist. the outcome of this is that the management often finds itself in a situation where decisions have to be made with insufficient knowledge of the facts. this chiefly concerns banks with an international focus, which admittedly find it difficult to coordinate it spread over a large number of locations. more than for others, however, it is absolutely essential for them to do so in order to hold their own in a volatile economic environment. the whole thing is not just a problem for german banks ; according to a study by the basel committee, it concerns more or less all international banks. it goes without saying that no β data graveyards β should be created. i think that, together with the financial institutions, we will strike a healthy and, above all, viable balance in the future as well. furthermore, many of the regulations have not been newly invented ; they are already national banking supervision reality. in germany, for example, the implementation of section 25 of the banking act ( kreditwesengesetz, kwg ) and the minimum requirements for risk management ( mindestanforderungen an das risikomanagement, marisk ) means that many of the mentioned requirements are already common practice among supervisors. warren buffett is quoted as saying β someone is sitting in the shade today because someone planted a tree a long time ago. β as i see it, the it departments that have consistently and promptly implemented the requirements of earlier inspection practice are well equipped for the future demands of it. the new β principles for effective risk data aggregation and risk reporting β ( bcbs 239 ) adopted by the | sabine mauderer : reaching net zero - the risks of idle bystanders keynote speech by dr sabine mauderer, member of the executive board of the deutsche bundesbank, at the net zero delivery summit, london, 4 june 2024. * * * check against delivery 1. introduction my lord mayor, ladies and gentlemen, albert einstein observed that the most serious threat to our world comes not from those who do evil, but from those who stand by and watch. sadly, this famous remark applies just as aptly to the topic of climate change. the scientific evidence is clear, with numerous studies already outlining the economic damage that climate change is likely to cause and is already causing. yet, global climate policies that would mitigate these enormous economic threats are not in place. fossil fuel demand is still on the rise1, so are the prices of the shares of the oil industry. so, investments in oil are relatively attractive for investors. at the same time, there is a wide climate financing gap, estimated at almost us $ 7 trillion per year. 2 this discrepancy is easy to explain. it is merely a consequence of ( private ) investors looking for attractive returns and reacting to current price signals. so, for many market participants, the risk - return profile of investments in oil and gas still seems to be very attractive. however, it seems to be important that markets price in medium and longterm financial and economic risks. my job as a central banker is to worry exactly about both these categories of risks, financial and economic. think about risks stemming from extreme weather events such as droughts, floods and wildfires. these are already putting substantial pressure on our economies, including on inflation. according to the latest study, as a result of future warming, annual food inflation is expected to increase significantly, by between 1 and 3 %, at a global level, by 2035. 3 i am speaking to you today as the chair of the network for greening the financial system ( ngfs ), a network of more than 130 central banks and supervisors worldwide. our goal is to analyse climate and nature related risks and address them accordingly. today, i will outline some of the work we are doing. 2 main part 2. 1 climate scenarios central bankers, supervisors and investors have at least one thing in common : they base their actions on data and models. one should not react to what one does not understand. yet, climate change calls for new kinds of data | 0.5 |
sector and the expanding cluster of technology talents and industrial base, the bay area is going to become one of the main engines of growth for china and a very fertile ground for innovation in financial services and fintech. 9. recognising the importance of cross - border collaboration in the bay area, the hkma, as a start, has signed a fintech mou with the office of financial development service ( β ofds β ) 2 / 4 bis central bankers'speeches of the shenzhen municipal government. now, i am pleased to announce that, in pursuing our commitment to collaboration, hong kong and shenzhen will jointly launch three fintech initiatives : ( i ) a fintech competition ; ( ii ) a soft - landing scheme ; and ( iii ) a talent development programme. fintech competition 10. together with the shenzhen ofds, we will organize a fintech competition that is open to participation by shenzhen and hong kong financial institutions. it offers total prizes of more than hk $ 7 million for the winning fintech products or solutions. i am sure the awards will provide a strong incentive for financial institutions to innovate, either by themselves or in partnership with fintech firms. there are two categories of awards, both of which are open to shenzhen and hong kong - based regulated financial institutions. the first is for the use of fintech, while the second is for cross - border financial innovation. it is a prestigious award and i would encourage hong kong financial institutions to take part and showcase their achievements. the director - general of ofds will share with us more details about this exciting competition in the next session. soft - landing scheme 11. the second initiative is a mutual referral system for fintech firms β this is sometimes called β soft - landing β. under this programme, the ofds will provide support to hong kong fintech firms that want to establish a presence in shenzhen, perhaps with a view to using it as a springboard to tap into the enormous market of mainland china. 12. to better utilise this valuable opportunity, we are working with our strategic partner, cyberport, on the establishment of cross - border soft - landing facilities in shenzhen. such an arrangement would give qualified hong kong fintech firms access to the business support from ofds, which would be helpful for these firms to expand their business to the mainland. at the same time, cyberport will leverage on this platform in shenzhen to assist mainland fintech companies to establish operations in hong kong. 13. | for working very hard with us on this most meaningful collaboration. 4. hong kong and singapore are the two leading international financial centres in asia. both the hkma and mas are actively promoting the use and development of fintech respectively. there is considerable scope for the two places to collaborate and achieve a win - win outcome. a priority area of collaboration is the use of fintech in advancing the hitherto paperbased trade finance system that has been in use for as long as trade existed. as we know, trade finance is an integral part of the global trading system and the paper - based system is very inefficient and prone to human errors and fraud. but then it has proved to be very difficult for the trade finance processes to be automated or digitalised mainly because multiple parties and banks in different jurisdictions are involved in a single trade transaction. unless there is a common global standard for the digitisation of trade - related documents and a trusted central repository, it is pointless for any party or jurisdiction to change the paper - based system on its own. however, with the breakthrough of the distributed ledger technology ( dlt ), we firmly believe that the time has come for trade finance to move into 1 / 4 bis central bankers'speeches the digital era. together with a consortium of five banks in hong kong, the hkma conducted in the second half of 2016 a proof - of - concept project on the use of dlt to build a trade finance platform in hong kong. i am pleased to announce that the proof - of - concept project has been successful in that it can digitise trade documents, automate the processes, allow sharing of required documentation among authorised participants, and reduce human errors and risks of fraud. we are therefore moving into the next phase of the project by developing a full production system. the consortium, now joined by two more banks, is in the process of conducting tender for the system development. we aim to build an open system in which other banks in hong kong are welcome to join if they are interested. it is obvious that the new platform will create the highest value if the majority of banks engaging in trade finance businesses are making use of it. 5. however, this is only half of the story. as we all know, trade is by definition cross border and invariably involves parties and financial institutions in two or more jurisdictions. so it is not good enough for a jurisdiction to do it alone in digitalising trade finance. in this connection, i am pleased to | 1 |
m r pridiyathorn devakula : financial markets and new financial instruments opening address by mr m r pridiyathorn devakula, governor of the bank of thailand, at the seacen - imf institute course on financial markets and new financial instruments, bangkok, 6 september 2004. * * * dr. subarjo joyosumarto, mr. sunil sharma, distinguished speakers and participants, it is indeed a pleasure for me to be here this afternoon to officially open the seacen - imf institute course on financial markets and new financial instruments. on behalf of the bank of thailand, i would like to extend a warm welcome to everyone of you to bangkok. today β s course is the second of three seacen courses that the bank of thailand plans to host this year. we are pleased to be given the opportunity to support the work of the seacen centre, and all its member central banks. these series of courses are indeed most topical, as the global economic recovery gathers momentum, financial market activities also pick up, along with innovative financial practices and instruments. the imf recently adjusted its forecast of global gdp from 4. 6 percent to 4. 9 percent, the highest growth rate in nearly three decades. economic performance in asia has also been in sharp contrast to the situations we faced four or five years ago, reflecting the synchronized recovery of the global economy. with the strong economic recovery comes the demands from firms and enterprises for more sophisticated and efficient services from their financial intermediaries. this is expected to happen in asia as well. the authorities therefore need to be mindful of the inherent risks associated with new financial instruments and practices. to promote growth and financial stability sound macroeconomic and prudential policics are required, as well as vigilance in the supervision and regulation of markets and intermediaries. these include being better prepared to withstand increased volatilities in financial markets and improving the structural resilience of the financial system. as we all know, the cost of financial instability can be grave not only for the country in which thc financial turmoil emerges, bot also for the international financial system as a whole. we saw this in the mexican crisis in 1994 / 95 and again in the asian crisis in 1997 / 98 where international investors β confidence was undermined thus imposing significant economic and social costs in all affected countries. the globalisation of markets and the increasing importance of financial stability have prompted central banks to be active and vigilance in | prasarn trairatvorakul : the asean economic community β s impact on the greater mekong subregion β s economies keynote address by dr prasarn trairatvorakul, governor of the bank of thailand, at the euromoney conference β the greater mekong investment forum β, bangkok, 12 june 2014. * * * excellencies, honorable speakers, distinguished guests, ladies and gentlemen, 1. it is an honor for me to be back here at the euromoney greater mekong subregion investment forum. let me thank the organizers for inviting me to speak at such a distinguished forum once again. this conference takes place at an important juncture as we are on the eve of the asean economic community which will be launched at the end of next year. my remarks today will focus on how the aec will have meaningful impacts on the gms economies. also, i will share with you some thoughts on how we can overcome challenges to capitalize on the region β s growth and prosperity. 2. the gms has become one of the most vibrant regions in the world, transforming itself into a new investment frontier. the global attention on this region is reflected in the large inflows of foreign direct investment, which have increased dramatically in the past two decades. according to world bank statistics, the fdi inflows to the clmv countries over this period increased forty - fold to around 13 billion dollars in 2012. 1 this wealth of investment opportunity has been underpinned by the smooth transition to market - based economies, the rich and diverse resources as well as the improvement of intra - regional logistics. 3. most importantly, we are in an exciting time for the gms when the aec draws closer. as most gms countries are members of the aec, the gms will significantly benefit from the growth opportunities of the aec in the coming years. 4. with integrated markets being forged under the aec, this will greatly benefit the gms through a more interconnected production base. let me give you three key examples where i see this will materialize : 5. first, on the tariff reductions. much has already been completed here, with the group of asean - 6 countries, 2 including thailand, having already removed tariffs for almost all of our products since 2010. the plan according to the aec blueprint, will see clmv countries β tariffs being removed by 2015. the benefits will of course multiply throughout production | 0.5 |
this but 40 % of our budget goes to social services. our growth story has been supported by structural and policy reforms in the economy for around three decades. these reforms enable growth by expanding the role of market forces in key sectors of the economy ; encouraging investments and private sector activity ; removing bottlenecks to doing business and investments in the country ; and strengthening the country β s fiscal position and the financial sector. these, and other structural reforms in the pipeline, will continue to play a significant role in propelling the economy toward a balanced, sustainable, and inclusive growth. in addition, recently approved legislation β such as the bsp charter amendments, philippine identification system ( philsys ) act, national payment systems act and the gold law β allow us to pursue our mandate with more vigor and in effect, enable us to espouse the interests and uplift the lives of all filipinos. so what is the role of bsp in the philippines β growth narrative? our mandate is clear : β maintain price stability conducive to a balanced and sustainable growth of the economy and employment. β our objective in the bsp is to protect the real purchasing power of the peso to support conditions for long - term economic growth. with your presence in this annual corporate planning and budgeting process summit, i know you are fully aware of the importance of efficient allocation of resources. as a central banker, i would argue that price stability is closely linked with financial efficiency. if the prices are low and stable, financial planners are better equipped to allocate resources to their most efficient use. lesser price volatilities would also enable us to anticipate risks and plan better. and with our amended bsp charter, we are now in a better position to implement sound policies to promote and maintain price stability, a strong financial system, and a safe and efficient 2 / 6 bis central bankers'speeches payments and settlements system. in terms of price developments, we are on track to achieving our inflation target of 2 to 4 percent for 2019. to give you some context, our june inflation declined to 2. 7 percent from 3. 2 percent in may, the lowest inflation recorded in more than 20 months since august 2017. later this morning, the philippine statistics authority ( psa ) will announce the average percentage of inflation for july. my forecast is that it will settle within the range of 2. 2 β 2. 8 percent. this sits comfortably within the government β s target band, in line | amando m tetangco, jr : a tipping point and a rising tide is lifting up the philippine economy remarks by mr amando m tetangco, jr, governor of the central bank of the philippines ( bangko sentral ng pilipinas ), at the philippine economic briefing, central bank of the philippines, makati city, 20 february 2007. * * * thank you rene. ladies and gentlemen, welcome and good afternoon. last year, the government set out to β make things happen β and in the end, as you all know, it did. many positive things happened. and while i wish i could be publicly swept up by what former fed chairman alan greenspan famously called " irrational exuberance, " in my button - down role as central bank governor, i have to settle for " rational exuberance " instead! i'll leave any irrational comments to others who feel less constrained β¦ but let me say this β¦ 2006 was a good year, and 2007 promises to be even better. i believe our economy has reached a tipping point and, to mix metaphors, the rising tide will lift up, not capsize, our boat. with some of the most stable macroeconomic fundamentals we have seen in a decade, including a much improved fiscal position, single digit rate of inflation with a downward trajectory β despite volatility in oil prices β a healthy external position, a strong peso and a substantial level of foreign exchange reserves, the rising tide of economic and fiscal reforms paired with sound monetary and external sector policies will continue to lift the boat of the philippine economy. last year, these efforts earned us five credit rating outlook upgrades, double digit growth in portfolio and foreign direct investment and new heights for investor confidence. most importantly, it is a clear sign that we are on our way to achieving further economic progress that will benefit domestic and foreign investors alike. but the tide has not been raised enough to benefit all sectors of our economy. our goal for 2007 is to build on our macroeconomic strengths to allow a broader base of the economy to experience the positive impact of our economic gains. but the government β s efforts alone are not enough. as reflected in the theme of this year β s economic briefing, ensuring the sustainability of economic momentum is a shared responsibility between the public and private sectors. this collaboration should focus on the exchange of new ideas to propel our economy forward, which is why we have invited business leaders to join us today in an open discussion | 0.5 |
denton rarawa : the credit union movement in solomon islands address by mr denton rarawa, governor of the central bank of solomon islands and registrar of credit unions, at the international credit union day celebrations, honiara, 20 october 2011. * * * chairman, sicul general manager, sicul directors and members of credit unions representatives of partner organizations participants ladies and gentlemen let me thank the organizers for inviting me to say a few words at this event to mark the international credit union day. it is an honour to be here this morning to deliver this address as part of celebrating and observing the international credit union day with the rest of the world. today the international credit union day is celebrated all over the world in recognition of the many positive contributions that credit unions have made in the lives of millions of their members around the world. our theme for this year : β credit unions build a better world β β fittingly highlights the economic and social contributions credit unions make to their members and communities worldwide. it is important that we acknowledge the contribution of credit unions as an important vehicle for social and economic development. i will return to this theme later in my speech. credit unions are owned by the members and aim to provide affordable financial services to improve their living standards. in the words of the founder of the movement, f. w. raiffeisen, β credit unions must not confine itself to granting loans. the main objective should be to control the use of money, and improve the moral and physical values of people and their will to act by themselves β. it is therefore important that we view credit unions not only as institutions where we can borrow money rather credit unions should be seen as vehicles for ( members ) to improve their livelihoods through ; financial self - reliance ; financial discipline β save first before spending ; borrowings for opportunities. productive purposes including creating self - employment solomon islands context recently we have started observing the international credit union day in solomon islands. this was in recognition of the global reach of the credit union movement and to celebrate the achievements and contribution of credit unions in the country in delivering financial services to their members and the solomon islands economy. bis central bankers β speeches for many years, credit unions have demonstrated that they can provide micro - finance services to their members in our communities. credit unions therefore, are an important part of our financial system and have the potential of advancing national development that could improve the living standards of people in the country. stakeholder commitment the office of the registrar of credit | with the process of financial deregulation that has taken place in the asian countries over the last 10 years or so is that it was driven partly by doctrine. this doctrinal imperative reflected two separate forces, which came together more or less by accident. the first of these forces was the dominance in academic circles of the β efficient markets paradigm β. this is a powerful analytical device, which has taken thinking in economics down very useful directions. but it, like all paradigms, is an imperfect representation of the real world. perhaps more seriously, in the course of academic debate, it became quasi - religious, with beliefs and facts becoming confounded. this made it hard to leaven the efficient markets paradigm with some real - world facts β principally, that markets are imperfect. the second force was a simple commercial imperative on the part of foreign financial institutions to gain access to new markets and compete in the most vigorous way. this commercial imperative was successfully transplanted into the political processes, so we saw, for example, the oecd insisting on capital market deregulation as a condition of korea β s membership of the organisation. these forces combined to form powerful rhetorical pressures, to deregulate as fully as possible, with special virtue being attached to those who opened their markets at the most breakneck speed. one of the notable manifestations of this was the bangkok international banking facility, whereby small thai businesses were presented with a frictionless conduit to international financial markets, where they could borrow at attractively low interest rates, in foreign currency. in australia, we know, from our small taste of the swiss loans in the 1980s, how dangerous it is to have relatively unsophisticated borrowers given the opportunity and incentives to take on sophisticated products involving foreign exchange risk. but in australia this was relatively modest in macro - economic terms. in thailand, the inflow through the bangkok international banking facility was not far short of 10 % of gdp. with this change of attitude, it should be easier to insert some common sense into the process of deregulation, and have the courage to say β no β ( or β not yet β ) to some aspects of deregulation which seem to make countries more vulnerable. so it may be quite sensible, from this viewpoint, to put various restrictions on short - term capital inflows, and on foreign - currency borrowing. this is compatible with free - market principles, because these are properly seen as transition measures, to be modified and | 0 |
sufficiently to the new technologies, or to globalization. understanding the reasons for this has been the aim of much of the research conducted by the bank of italy in recent years. i have reported on it several times, most notably in these annual remarks. our analyses point the finger at italy β s productive structure, which is more fragmented and static than in other economies ; and at government policies that fail to encourage, and often hamper, its development. bis central bankers β speeches the problem of the inefficiency of civil justice has to be tackled at the root. ordinary lower court cases are now estimated to last more than 1, 000 days, putting italy in 157th place out of the 183 countries covered in the world bank β s rankings. the consequent uncertainty is a major factor of friction in the economy as well as the source of injustice. according to our estimates, the shortcomings of the civil justice system in italy could subtract up to one percentage point a year from gdp growth. we must proceed with the reform of the education system, on which a start has been made, in order to raise our levels of academic achievement, which are among the lowest in the western world even with equal expenditure per student. the disparities within italy remain unacceptably wide, between north and south and between different schools within the same area, even at the level of compulsory education. at the university level, more competition between institutions is desirable in order to establish centres of excellence that can compete in the world arena. the number of university graduates is still low by international standards. according to oecd estimates, the gap between the italian education system and global best practices could depress the rate of gdp growth by as much as one percentage point in the long run. competition, which is well rooted in a good part of industry, is making very slow headway in services, especially public utilities. what is wanted is not unrestrained privatization but a system of regulated competition in which the customer, the citizen, is better protected. the challenge of growth cannot be left solely to the enterprises and workers that are directly exposed to international competition, while positional rents and monopoly advantages in other sectors depress employment and undermine the country β s overall competitiveness. italy lags behind the other main european countries in its endowment of infrastructure, despite having had a higher ratio of public infrastructural spending to gdp from the 1980s until 2008. under the government β s programmes the ratio is | drt and drat before courts should be made costlier for the appellants. courts should require them to deposit the undisputed portion of the loan before admitting the case so that routine frivolous appeals diminish. β’ the system also needs professional turn - around agents who can step in the place of promoters. asset reconstruction companies ( arcs ) were meant to do this, but they need more capital and better management capabilities. also, there is a requirement that they hand the enterprise back to the original promoter once they have generated enough value to repay the original debts. such a requirement is misconceived and needs to be repealed, else arcs have little incentive to spend effort and money to turn around firms. they will simply be liquidators, as they have largely proven to be so far. i should mention that the rbi is open to more firms applying for licenses as arcs. β’ the government is working on a new bankruptcy law, which is very much needed. properly structured, this will help bring clarity, predictability, and fairness to the restructuring process. flexibility not forbearance finally, let me end on a current concern that pertains to the rbi β s regulation that is not unrelated to the issues discussed in this lecture. today, a large number of industries are getting together with banks to clamour for regulatory forbearance. they want the rbi to be β realistic β and postpone any recognition of bad loans. this is short - sighted, especially on the part of the banks. today, the market does not distinguish much between non - performing loans and restructured loans, preferring to call them both stressed loans and discounting bank value accordingly. mutilating shakespeare, section 21 of rddbi act requires deposit of 75 % β of the amount of debt so due from him as determined by the tribunal... β. in appeals to drat from action initiated under sarfaesi act, under section 18 ( 1 ) second proviso of sarfaesi act, β... no appeal shall be entertained unless the borrower has deposited with the appellate tribunal fifty per cent of the amount of debt due from him, as claimed by the secured creditors or determined by the debt recovery tribunal, whichever is less. β bis central bankers β speeches an npa by any other name smells as bad! indeed, because forbearance makes bank balance sheets opaque, they may smell worse to analysts and investors. the fundamental lesson | 0 |
of living and housing availability are still predominant concerns, among others. the entertainment, arts, businesses, culture, and landmarks that we have here in new york cannot be replicated elsewhere. but those experiences can only be had if there are jobs and a healthy economy to support it all. it's important that we invest in the study of the challenges and opportunities for employment in this city, so that we can build the future. our conference today will do just that. in our sessions this morning, we'll talk about how employment was and continues to be impacted by shifts in the city. and we'll discuss similarities and distinctions across industries and occupations, initiatives that will attract and retain a robust workforce, and more. thanks again to our speakers and panelists for the knowledge and insight they bring to this event, and to all of you for attending and demonstrating your commitment to shaping the future of this great city. 2 / 3 bis - central bankers'speeches 1 jaison r. abel, jason bram, and richard deitz, " new york fed surveys : business activity in the region sees historic plunge in april, " federal reserve bank of new york liberty street economics, april 16, 2020. 2 jaison r. abel, jason bram, richard deitz, and jonathan hastings, " the region is struggling to recover from the pandemic recession, " federal reserve bank of new york liberty street economics, december 17, 2021. 3 / 3 bis - central bankers'speeches | john c williams : new york city is alive remarks by mr john c williams, president and chief executive officer of the federal reserve bank of new york, at the " future of new york city : focus on jobs " conference, organised by the federal reserve bank of new york, new york city, 4 october 2024. * * * as prepared for delivery good morning. let me welcome you to the federal reserve bank of new york and to our second future of new york city conference. and thank you to the speakers, participants, and organizers who make this such a valuable forum. this year we are celebrating the centennial of this landmark building here at 33 liberty street. we are proud of our history as a downtown anchor institution and look forward to the next 100 years. before i go further, let me give the standard fed disclaimer that the views i express today are mine alone and do not necessarily reflect those of the federal open market committee ( fomc ) or others in the federal reserve system. it was not too long ago - a little over four years back - when some predicted that the future of new york city was quite bleak. others even went as far to declare that new york city is dead forever. well, that forecast didn't age well. i imagine those of you sitting right here in this auditorium would agree with me. just to get here this morning, you likely had to catch a ride on a crowded subway, train, bus, or ferry. or maybe you were brave enough to drive over a bridge or through a tunnel and then search for parking. perhaps you stood in a long line waiting for coffee or a pastry, or dodged tourists taking a photo right in the middle of the sidewalk. i won't even mention the e - scooters and bikes. and it's only 9 : 00 a. m. that's because new york city is again one of the most alive cities on earth. in truth, that 2020 forecast was based on the reality during that moment in time, at least economically speaking. new york city was the epicenter of the pandemic in the u. s., and our region was hit especially hard. according to new york fed business surveys, business activity plunged to historic lows in april 2020, as fear of contagion kept many people at home and efforts to stop the spread of the virus shutdown large parts of the regional economy. 1 about 60 percent of service - based businesses and more than half | 1 |
nfra. securities, funds and insurance companies swap facility ( sfisf ) are now open to financial institutions for application. the policies related to special central bank lending for shares buyback and holdings increase have been officially released today for implementation. 1 / 6 bis - central bankers'speeches since it was announced and implemented, the policy package has received positive feedback both at home and abroad. it has vigorously boosted social confidence and played an effective role in promoting stable economic and financial performance. we have taken three main factors into consideration while formulating these policies. first, given the current economic performance, we need to implement strong macro aggregate policies. major problems in the current economic operation, as reflected at the macro level, are insufficient effective demand, weak social expectations and low prices. a common market view is that we need to launch strong macro policies. according to the arrangements of the cpc central committee, the pboc has conducted in - depth researches and prepared policy plans in advance. against this backdrop, the cpc central committee promptly made the decision to launch a package of incremental policies, which reflect its determination to secure the economy, stabilize expectations, boost consumption and benefit people's livelihood. the market responded to the initiative positively. second, the economy still faces some prominent challenges, which are mainly related to the real estate market and the capital market. drawing on international experience and china's practices in the past, we need to unveil targeted policies in response. in terms of the real estate market, the pboc, based on its mandate, has improved four real estate finance - related policies, supporting risk defusing and sound development of the real estate market from a macro - prudential perspective. in terms of the capital market, the pboc, together with the csrc, has developed two instruments to facilitate the stable development of the capital market. the two instruments were designed completely based on market principles, and internationally there had been successful practices. regarding the sfisf, the central bank does not provide fund support for the market directly, so it does not expand the central bank's money supply and base money. the central bank lending for shares buyback and holdings increase is targeted. the credit funds must not enter the stock market in violation of financial regulation. this remains a red line. the two instruments showcase the efforts of the pboc to expand and explore its mandate of maintaining financial stability. we will keep on cooperating with the csrc to gradually improve the | pan gongsheng : strike the right balance and pursue high - quality development of the chinese economy keynote speech by mr pan gongsheng, governor of the people's bank of china, at the annual conference of the financial street forum 2024, beijing, 18 october 2024. * * * distinguished party secretary yin li, mayor yin yong, mr. wang jiang, mr. li yunze, mr. wu qing, mr. fu hua, mr. zhu hexin, and dear guests, good morning! it is a great pleasure to attend the financial street forum. i would like to take this opportunity to exchange views with you on three issues. i. progress in implementing a package of incremental monetary policies according to arrangements of the cpc central committee, financial regulators announced a package of policies to support stable economic growth on september 24. the move attracted great attention and received extensive support. the day before yesterday, the pboc, the national financial regulatory administration ( nfra ), and china securities regulatory commission ( csrc ) organized a meeting with major commercial banks, securities firms, and fund companies to make arrangements for prompt implementation of the package of policies. here i would like to share with you our progress in implementing relevant policies. in terms of the required reserve ratio ( rrr ) and interest rate cut, on september 27, the rrr was cut by 0. 5 percentage points, the 7 - day reverse repo rate was cut by 0. 2 percentage points, and the medium - term lending facility ( mlf ) rate was cut by 0. 3 percentage points from 2. 3 percent to 2 percent. we might further cut the rrr by 0. 250. 5 percentage points at proper time, depending on the market liquidity before the yearend. this morning, the commercial banks have announced to lower the deposit rates, and the loan prime rate ( lpr ) to be released on october 21 is also expected to drop by 0. 2 - 0. 25 percentage points. the four policies related to real estate finance have all been rolled out. specifically, the adjustment of rates on existing housing loans is a policy to benefit people's livelihood unveiled at the decision of the cpc central committee. it will benefit 50 million households, whose interest expenses will be reduced by about rmb150 billion each year. as for the two financial instruments to support stable development of the capital market, the pboc has established a special working group together with the csrc and | 1 |
also provides a stable framework for monetary policy. under such conditions, the effect of monetary policy instruments will be more predictable. the uncertainty facing economic agents is reduced through the establishment of credible fiscal policy guidelines. a stable operating environment is an important precondition when decisions that have long - term consequences shall be taken. this will also contribute to stability in financial markets. the guidelines that were introduced last year stated : β fiscal policy has the main responsibility for stabilising developments in the norwegian economy β. if fiscal policy is to continue to contribute to smoothing fluctuations in the economy at the same time that the guidelines for the phasing in of petroleum revenues are to appear credible, the guidelines should be applied in such a way that they place a strict limit on the average use of petroleum revenues over time. this means that if we use more than the expected return in one period, we must use less than the expected return in other periods. the guidelines allow the use of petroleum revenues to be adapted to some extent to the cyclical situation. fiscal policy will then ease the burden on monetary policy in the sense that the inflation target, and hence nominal stability, can be achieved with fewer changes in monetary policy. however, permitting a discretionary use of fiscal policy also involves temptations. it will probably always be easier to increase spending over government budgets during a downturn than it will be to reduce spending when the cyclical situation again improves. in that case, fiscal policy may prove to be more expansionary over time than implied by the guidelines. this will have to be countered by a tighter monetary policy, and there is also a risk that doubt arises as to whether the guidelines actually apply. the need for credibility may therefore in itself indicate that cyclical considerations should only very seldom lead to discretionary deviations from the main rule. automatic stabilisers will still have an effect. i believe that our politicians are aware of this risk. in the national budget for 2002, the budget balance was cyclically adjusted by nok 5. 1 billion, which shows that we are experiencing a period of strong expansion. the plans nevertheless called for the use of petroleum revenues in 2002 that was identical to the expected real return on the petroleum fund at the beginning of the fiscal year. hence, it is only via automatic stabilisers that fiscal policy will be adapted to the cyclical situation this year. i interpret this to mean that the threshold for departing from the main rule is high. structural effects on the norwegian economy as may be | labour force. at the same time, improved terms of trade will led to higher activity in the norwegian economy. capacity utilisation is expected to revert to a normal level in the second half of 2011. in the coming years, output in the mainland economy is expected to increase at an annual rate of 3 β 4 per cent. a strong krone and low external price impulses will continue to have a dampening impact on inflation, and inflation will remain below target for some time. further ahead, higher capacity utilisation and profitability in the business sector point to a pickup in wage growth. at the same time, the fall in import prices will slow. to conclude : norway has weathered the financial crisis better than most countries, and the economic recovery in norway is now on a firm footing. currently, interest rates are low, with the key policy rate at 2 per cent. in the years ahead, there are prospects for fairly strong growth in the norwegian economy, driven by solid income growth, rising investment and high population growth. on balance, the consideration of stabilising inflation, as well as developments in output and employment, imply a gradual increase in the key policy rate towards a more normal level. thank you for your attention. bis central bankers β speeches | 0.5 |
. the unique nature of banks provides the rationale for prudential regulation. but it is unrealistic to expect that bank regulation alone can guarantee the efficient and safe operations of the banking system. good corporate governance is as equally important for sound and efficient bank management bis central bankers β speeches as bank regulation. corporate governance must start with the board of directors, setting the overall strategic policies of the bank and providing independent oversight of bank management. in particular, the directors must understand clearly their fiduciary responsibilities. they must ensure that the bank β s risk management is adequate to ensure its safe operation, so that depositors funds are protected and that the financial statements provided by the bank to the regulator and the public are accurate. bis central bankers β speeches | bank failures was poor corporate governance. in many of the failed banks, a dominant shareholder or group of shareholders was able to exert undue influence over the management of the bank which resulted in abuses such as pervasive insider lending. the losses incurred on insider loans were the single most important contributor to the collapse of these banks. the kenyan banking industry was also afflicted by multiple bank failures in the 1990s, with poor corporate governance playing a major role in these failures as it did in uganda. poor and abusive management was allowed to flourish in banks because their boards of directors were usually weak, lacking the professional expertise and often the independence and incentives to provide any effective oversight of bank management. the bank failures of the 1990s prompted the bou and the government to strengthen banking regulation. parliament enacted new legislation in 2004 β the financial institutions act β which, inter alia, raised minimum bank capital requirements, tightened restrictions on insider lending and mandated the bou to intervene promptly in failing banks before their bis central bankers β speeches capital is completely eroded and their depositors suffer losses. the fia also imposes a ceiling of 49 percent on the share of a bank β s equity which a single shareholder, or a group of related shareholders, can hold, in order to limit the influence of dominant shareholders, although this ceiling does not apply to shareholdings by reputable parent banks domiciled in other jurisdictions with good home country bank regulation. but we also recognised that statutory bank regulation and supervision by a public agency cannot be expected, on its own, to guarantee the sound management of banks. moreover, excessively heavy handed regulation, although it might protect depositors, can also stifle innovation and risk taking in banks, which would be detrimental to economic development. in a market economy, the onus for sound management, including the proper management of risks, must lie with the banks themselves. bank regulators cannot be a substitute for bad bank managers. as such good corporate governance is an essential complement to good bank regulation and supervision. this principle was made explicit in the financial institutions act, section vii of which was devoted specifically to providing a regulatory framework for good corporate governance in financial institutions. the provisions in section vii of the fia were supplemented by a set of corporate governance regulations which were issued by the bou in 2005. uganda β s corporate governance regulations were influenced by the guidelines published by the basel committee on banking supervision, based at the bank for international settlements, which is responsible for formulating global standards for bank | 1 |
euro area should also moderate. at the same time, a cross - check of the outcome of the economic analysis with that of the monetary analysis confirms that the underlying pace of monetary expansion has remained strong but has continued to show further signs of deceleration. hence, when taking all information and analysis into account, there is a further alleviation of upside risks to price stability at the policy - relevant medium - term horizon, even though they have not disappeared completely. at this juncture, it is therefore crucial that all parties, including public authorities, price - setters and social partners, fully live up to their responsibilities. the level of uncertainty stemming from financial market developments remains extraordinarily high and exceptional challenges lie ahead. we expect the banking sector to make its contribution to restore confidence. the governing council will continue to keep inflation expectations firmly anchored in line with its medium - term objective. in so doing, it supports sustainable growth and employment and contributes to financial stability. accordingly, we will continue to monitor very closely all developments over the period ahead. in the area of fiscal policy, medium - term challenges, such as population ageing, strongly underline the need for fiscal policy to focus on medium - term sustainability and thereby build confidence. accordingly, and as recently confirmed by the ecofin council and the european council, the fiscal policy provisions of the maastricht treaty and the stability and growth pact should continue to be applied fully. the fiscal rules are one of the indispensable pillars of emu and the single currency, which must remain firmly in place so as not to undermine the confidence in fiscal sustainability. finally, the current situation calls for ensuring the high quality and timeliness of statistical information on government interventions to ensure the transparent and accountable use of public funds. turning to structural policies, the ongoing period of weak economic activity and high uncertainty about the economic outlook will require a significant degree of resilience from the euro area economy. the current situation should therefore be seen as a catalyst to foster the implementation of necessary domestic reforms so that countries may fully exploit the benefits offered by the enhancement of international trade and market integration, in line with the principle of an open market economy with free competition. we are now at your disposal for questions. | movements would be short - lived and therefore not relevant from a monetary policy perspective. looking through such volatility, however, upside risks to price stability at the policy - relevant horizon are alleviating. the remaining upside risks relate to an unexpected increase in commodity prices, as well as in indirect taxes and administered prices, and the emergence of broad - based second - round effects in price and wage - setting behaviour, particularly in economies where nominal wages are indexed to consumer prices. the governing council calls for these schemes to be abolished. it is imperative to ensure that medium to longer - term inflation expectations remain firmly anchored at levels in line with price stability. turning to the monetary analysis, the annual growth rates of broad money and credit aggregates, while still remaining strong, continued to decline in september. taking the appropriate medium - term perspective, monetary data up to september confirm that upside risks to price stability are diminishing but that they have not disappeared completely. a closer examination of the money and credit data indicates that the recent intensification of financial tensions has already had an identifiable impact, particularly in the form of outflows from money market funds and greater inflows into overnight deposits. however, the full impact of investors β uncertainty on their portfolio allocation behaviour is still to be seen in the coming months. both portfolio shifts between non β monetary and monetary assets and shifts between different types of monetary assets can therefore not be ruled out in the period ahead. hence, such effects will need to be taken into account when assessing monetary growth and its implications for price stability over the medium term. there is also some evidence in the september data that the recent intensification of the financial tensions has triggered a slower provision of bank credit to euro area residents, mostly taking the form of smaller holdings of securities. at the same time, for the euro area as a whole, up to september there were no indications of a drying - up in the availability of bank loans to households and non - financial corporations. in particular, the maturity composition of loans suggests that non - financial corporations continued to obtain funding, also at relatively long maturities. however, more data and further analysis are necessary to form a robust judgement. to sum up, the intensification and broadening of the financial market turmoil is likely to dampen global and euro area demand for a rather protracted period of time. in such an environment, taking into account the strong fall in commodity prices over recent months, price, cost and wage pressures in the | 1 |
a range of advice and support for those in arrears, including the money advice and budgeting service ( mabs ), the national mortgage arrears resolution service ( abhaile ) and a court mentor service to assist debtors faced with court proceedings. the government also introduced the personal insolvency act 2012. the insolvency service was established in march 2013 as an independent statutory body. the government also introduced a national mortgage - to - rent scheme. there are also a number of other non - statutory organisations providing assistance to those in mortgage arrears. and, as is evident from the significant reduction in mortgage arrears, much of this has worked, primarily through the engagement between lender and borrower, such that there are now c. 94, 000 restructured pdh mortgage accounts, 86 % of which are meeting the terms of the restructure arrangement21. but as is also evident, serious problems still exist. in this room, through dealing with the varied causes and consequences of arrears and indebtedness, we know that affordability and sustainability of lending at origination and the financial consequences of job loss, illness, or relationship breakdown all contributed to arrears formation. as part of public sector bodies working every day to help borrowers and make the system less risky, we know that this requires continued diligence and determination, regardless of what type of lender holds the loan. the central bank / single supervisory mechanism22 ( ssm ) do not have a preference for loan sales. we have a preference for sustainably reducing non - performing loans. there are multiple tools available, including : re - engaging with borrowers, restructures, accounting write downs, mortgage to rent, engaging through the insolvency service, sales and securitisations and the legal process. a sustainable restructure is good for the borrower and for the lender. these long term benefits are not always being given sufficient prominence relative to shorter term capital relief. there is clearly a high level of personal distress for borrowers when they are in arrears, particularly as they go through legal proceedings. however, a functioning secured lending market has to have meaning to that security. there are costs to all other borrowers through the impact on secured lending pricing together with financial stability risks where this security is undermined. this is reflected in the irish banks holding considerably more capital for mortgage lending than some european peers. it is also | oyer β january 2018. 26 love thy neighbor? ethnoracial diversity and trust reexamined. american journal of sociology, vol. 121, no. 3 ( november 2015 ), pp. 722 β 782. 7 / 7 bis central bankers'speeches | 0.5 |
. the ecb monitors and assesses risks to financial stability, because turbulence in the financial system may weaken the ecb β s ability to maintain price stability β the two are functionally connected. and since the crisis, the ecb also plays a role in maintaining financial stability through its competences in banking supervision and in macroprudential policy. but going back in time, the relationship between the different functions of central banks have generated quasi - existential questions. what a central bank is, can be defined by what it does. 1 and the β what it does β part mostly revolves around the question of whether a central bank cares about two types of stability. the first is monetary stability : the creation of a monetary regime that can ensure price stability. the second is financial stability which, when central banking was born, was essentially the same as β bank stability β. so, throughout history, the most popular definitions of β central bank β have revolved around their role in ensuring monetary stability, financial stability or both. 1 / 10 bis central bankers'speeches one of the founding ecb board members, tommaso padoa schioppa, believed that both aspects mattered. to him, a central bank was defined by its role in safeguarding both price stability and financial stability. as for financial stability, he argued that historically, a central bank β s role in this realm was rooted in its dna. first, the central bank was a bank. it was also monopolist in the provision of ultimate liquidity. and last but not least, it was a bankers β bank. it played a role in settling payments between banks. 2 and a well - functioning interbank market plays an important role for financial stability. and he was of course not the only one to see the role that central banks played in financial stability as essential. from walter bagehot β s book β lombard street β all the way to the work of charles goodhart, one function has been singled out to identify central banks : their role as lenders of last resort. take the bank of england as an example. even after becoming a monopolistic issuer of notes, it still operated as a profit - maximizing bank. charles goodhart argues that it did not become a true central bank until the second half of the 19th century, once it let go of profit - maximizing and took on the role of lender of last resort. 3 and there is a similar story about the emergence of central banks | the recent property market contraction, i think we will be able to weather the situation through appropriate policy responses given the overall soundness of domestic financial institutions. moreover, while there is much concern about the trade account deficit, this is mainly attributable to the increase in imports due to the surge in global commodity prices. in fact, korea's exports reached an all - time high last year. despite sluggish semiconductor exports due to the fall in unit prices, exports of other major items continued to grow last year. given this, korea's trade account is expected to improve rapidly should external conditions recover. while it is possible that the fragmentation of international trade and high interest rates could further weigh on the korean economy going forward, from a different perspective, they could also serve as an opportunity for us to address the structural issues that have been left untackled. in the course of responding to the restructuring of global supply chains, we need to reduce our heavy dependence on the chinese economy through, namely, market diversification. the high interest rate environment could also be a starting point for us to alleviate the high level of household indebtedness while improving the debt structure. the korean economy has been repeatedly seeing property - related finance emerge as a structural vulnerability, albeit in different forms. we should take this opportunity to bring good out of evil by fundamentally resolving the related issues. toward this goal, we will also need to look into the reasons why macroprudential regulations did not operate effectively as preemptive measures. 2 / 4 bis - central bankers'speeches the german philosopher hegel once said, " we learn from history that we do not learn from history. " let us not repeat the same mistake as pointed out by hegel. it is true that we are facing hardship both domestically and internationally. however, i believe we can produce a better outcome based on our actions. we have it in our dna to effectively overcome any crisis. we must turn these challenges into opportunities. my dear colleagues, in times of need, people look to experienced professionals. in flight, if visibility is poor due to worsening weather conditions and if the runway is so narrow that a soft landing seems unlikely, an experienced and reliable pilot will be needed more than ever. with a wealth of experience and a balanced perspective, the bank of korea should work hard to become one of the most trusted pilots to help our economy make a soft landing. to this end, it is necessary to more accurately judge and predict | 0 |
maiava atalina ainuu enari : educating individuals to manage their personal finances opening remarks by ms maiava atalina ainuu enari, governor of the central bank of samoa, at the moneypacific β money guide β launch, apia, 2 april 2014. * * * members of the diplomatic community youth and education directors of the church denominations present today our moneypacific partners β kim hailwood and becky de beer - lamont distinguished guests ladies and gentlemen it is indeed an honour for me to address this gathering today, at this important milestone in the partnership of the moneypacific project and the central bank of samoa. the moneypacific project was established in 2007 under the umbrella of the nz - pacific remittances β project which stands to help reduce costs of sending money within the pacific region, and has concurrently worked hard to lift pacific communities awareness of the need to prudently manage their personal finances. we have worked closely with the moneypacific programme over the recent years and we consider them a great ally in the promotion of financial inclusion and financial literacy here in samoa. in a moment kim and becky will elaborate more on the moneypacific initiative and its latest resource but before that i would like to take a few moments to talk a little bit more on why financial literacy is important to the central bank of samoa. β financial literacy β or β the set of skills and knowledge that allows an individual to make informed and effective decisions with all of their financial resources β is an important life - skill in our diverse capacities as students, employees, consumers, savers and investors etc. by now you may wonder as to why how you manage your personal finances is of any interest to the bank? you may wonder as to why the bank should care on how best you can manage your personal finances? the answer is simply this β we believe that economic development can be fostered by educating individuals on how best to manage their personal finances. we don β t have to rely on the big businesses or other forces for this β each and every one of us has the potential to foster economic development. therefore we stand before you today not as leaders or dictators of your wallets and purses, but as counterparts on a way to forward our future financial prospects. and so it gives me great pleasure to introduce to you a tool designed to help you take charge of your personal finances and take you closer to realizing your full potential as agents of economic development β the moneypacific money guide | the guide is simple enough for everyone to understand. it is featured in, samoan, tongan and english and with this in mind, samoa has accepted the privilege to be the imperative starting point for launching this project. this guide was by you and for you. it was compiled using your perspective as a school student, as an elder of the village, as a hard working stay at home mother and as a danceloving - father when he gets his paycheck without his wife knowing ; or to put simply, as an everyday samoan citizen. moneypacific has produced the guide and made it easy to understand, and made it accessible to everyone so that you can plan, measure, prioritise or just to be aware of how bis central bankers β speeches much you are spending for everyday necessities. again the intension is not to dictate how much your wallet is crying but to ensure that your wallet is happy to deliver a well sought out purpose for you and your families. to round up my remarks, i would like to take this opportunity to thank the new zealand and australian governments for the support afforded to the moneypacific iniative as we have benefitted greatly from the work it carries out for the pacific communities. i would like to thank each and every one of you for making the time to attend today β s moneypacific money guide launch. but before i hand you over to the moneypacific team for their presentation i truly believe your goals and objectives in your respective designations can be greatly complemented with our agenda of financial literacy and that this latest resource will be of use to the pursuit of youth and women empowerment, assist the micro - entreprenuers, complement student learnings from the existing national education curricula, and overall greatly assist us in all our diverse capacities as financial consumers. manuia le tatou fa β amoemoe. thank you. bis central bankers β speeches | 1 |
bring predictability and certainties to economic agents and generate market signals so as to channel savings into investment. lastly, i have set the greatest challenge for our term of office and for this board, that is, generating credit, medium - term credit in pesos for our companies, so that all those who have dreams in argentina are able to materialize them. i understand that generating credit is not something instantaneous and that it is the central bank role to pave that way through simple, clear, and transparent rules. but it is the financial intermediaries who have to take the necessary chances and fulfill their role as such. i take office with a willingness towards dialog. those who are familiar with my professional career know that this is not the first challenge i have faced as a civil servant. i am a professional that traditionally seeks consensus and dialog with all our institution β s officers but also with the private sector, with the productive sectors, in order to set permanent policies. i am persuaded that we have the ability to do so. i come from a three - year term of office in which we have laid the foundations for a foreign trade policy that enables argentina to leave its ideological zeal aside and look outside to the rest of the world. thus, our exports can become a natural source of foreign currency to strengthen the central bank and to provide stability and predictability to the main financial variables. i come to govern this institution with that same spirit of seeking consensus, but essentially i am deeply proud of being able to manage such a group of professionals as you are, with a strong sense of commitment. i am also extremely glad to be part of this board together with these efficient professionals. the efficiency criterion will be the key factor to assess our performance. i will expect and demand efficiency and commitment from every one of you because i myself will set the example. i am very devoted to my job and i demand that commitment from those who work with me. but, since i am a professional of consensus, my style is extremely informal, and i believe that the chain is as important as each of its links and, therefore, your concerns are also my concerns. i do not conceive of a group of people that do not have, firstly, a sense of mission and, secondly, a clear direction, a clear horizon, as well as the ability to respond to the professional and human needs of each. that is why i face this challenge - undoubtedly the major challenge in my professional career - | to control inflation. i was saying that our monetary policy has to be tight. this is absolutely necessary for various reasons. first, because inflation is still high. second, because we have to combat the forces of inertia of our history. but also because monetary policy should take into account the current context of uncertainty, with the top two world powers having engaged in a trade dispute. the upcoming presidential election in argentina is another source of uncertainty. this endogenous rate reflects the current uncertainty. let me briefly refer to the slight decrease in the interest rate on liquidity bills ( leliqs ) in the past few days. such a drop should not be mistaken as a loosening of monetary policy. it is explained by the drop in inflation and in expected inflation in recent months. 1 / 2 bis central bankers'speeches however, the real interest rate continues and will continue to be positive. the real interest rate has been positive for nearly 9 months, a historical exception that should, actually, be the rule. our tight monetary scheme guarantees this result. in fact, as the leliq rate decreased in the past few days, the real rate slightly increased. this is the endogenous dynamic of the interest rate in the current context of uncertainty. high interest rates carry a cost for many sectors in the short term. however, the alternative carries a higher cost in the current context. this monetary policy protects us from uncertainty, whether domestic or external, and will bring about lasting benefits for society as a whole. 2 / 2 bis central bankers'speeches | 0.5 |
patrick njoroge : launch of the banking industry sign language self - training mobile application remarks by dr patrick njoroge, governor of the central bank of kenya, at the launch of the banking industry sign language self - training mobile application, organized by the kenya bankers association ( kba ), 2 december 2021. * * * good morning! i am pleased to be part of the launch of the deaf elimu banking application ( app ). my gratitude goes to the kenya bankers association ( kba ) for putting together this event and for the invitation to participate. i also extend my appreciation to the financial sector deepening ( fsd ) kenya and deaf elimu plus limited for their partnership with kba on this project. the choice of date for this launch is apt, being a day before the world commemorates the international day of persons with disabilities. i note with appreciation that my sentiments one year ago, during the launch of the persons with disability digital access report, were duly considered and executed. i challenged the participants to provide tailor - made financial products that meet the needs of persons with disabilities. i am informed that 31 commercial banks have submitted their roadmaps on how they intend to implement the recommendations made in the report. it is therefore exciting to be here today to launch an app that is going to revolutionize banking for the hearing impaired. the world health organization ( w ho ) estimates that 5 percent of the world β s population ( 430 million people ) are living with β disabling β hearing loss. this number is envisaged to grow to over 700 million people ( one in every ten people ) by 2050. of this population, about 80 percent are people living in developing countries. in kenya, of the 900, 000 ( 2. 2 percent ) persons with disabilities, 150, 000 people ( 16 percent ) are living with hearing loss. this is a significant population, who are likely to be sidelined due to the non - inclusivity of our systems. in kenya, we pride ourselves in achieving 82. 9 percent financial inclusion. however, only 0. 5 percent of persons with disabilities are part of these statistics. this brings me to the barriers locking out persons living with disabilities from the financial system. it is interesting to note that these barriers are rudimentary. they include negative attitude, misunderstandings by both financial institutions as well as their clients living with disabilities, unfavorable infrastructure such as lack of ramps and having to endure long queues. it is | njuguna ndung β u : implementing reforms in kenya remarks by prof njuguna ndung β u, governor of the central bank of kenya, at the 15th east afritac steering committee meeting, naivasha, 8 april 2013. * * * members of the east afritac steering committee here present ; mr. xavier maret, the east afritac centre coordinator ; mr. ragnar gudmundsson, imf resident representative to kenya ; east afritac advisors and consultants ; distinguished ladies and gentlemen : it is my pleasure to officially open the 15th east afritac steering committee meeting. on behalf of the government of kenya, i take this opportunity to welcome you all to kenya. in particular, i would like to welcome you to naivasha, one of our leading horticultural producing regions and a tourist destination at the heart of the great rift valley. i know that we have some good work cut out for us in the next one and a half days but at the same time i would like to encourage all of you and especially those visiting the region for the first time, to find time to sample our beautiful tourist attractions in naivasha before you depart. naivasha is also the home town of the roses that are cherished in europe and the town is also located in the precincts of the panoramic landscapes of the great rift valley which you must have enjoyed as you descended the escarpment on your way to this resort. ladies and gentlemen some of you may be wondering why i am opening the 15th east afritac steering committee meeting this evening instead of tomorrow, 9th april 2013 as had been indicated in the programme. it is for a good reason because on the 9th of april we will be witnessing the culmination of a process that started way back in 2010 when we promulgated our new constitution. the kenyan constitution 2010 brought in new governance structures and processes including the way we conduct elections and procedures for transfer of political power. this is why we had to adjust the programme to allow my participation during the inauguration of the fourth president of the republic of kenya on tuesday, 9th april 2013. given the critical importance of this meeting, we thought it should proceed as planned. ladies and gentlemen let me now turn to the subject matter of our meeting and in this regard, i would like to first and foremost express our sincere gratitude to east afritac for the support that we have received over the years. through this support, we have | 0.5 |
on current developments, while the best lessons we might learn from each other remain uncertain, our insights will be much, much better. thank you very much for your attention. bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches | ) at our offices in lusaka and our regional office here in ndola. nevertheless, i am confident that the respective presenters will ensure clarity in their presentations and fully respond to any issues arising there - from. ladies and gentlemen, allow me, at this point in time to brief you on the performance of the economy in 2006 and the period january β august 2007. as you may be aware, zambia has in the recent past recorded macroeconomic stability and growth in the economy, reflected in low and falling inflation, relative stability in the kwacha exchange rate, falling lending rates and positive real gdp growth rates underpinned by strong private sector investment in all growth or priority sectors. further, the financial sector has been stable, and continues to post growth. in 2006, the performance of the zambian economy continued to be encouraging as it registered a positive growth of 6. 2 % in real gdp, marking the eighth consecutive year of positive real growth. you will note that over the period 2001 - 2006 growth in real national output averaged 5. 0 % per annum and was above the average population growth over the same period, while inflation declined to 8. 2 % in december 2006 from 15. 9 % in december 2005. distinguished journalists, it is worth - mentioning that the growth, which has been broad - based has extended beyond the recovery of the mining sector and shown resilience to adverse shocks, such as droughts and record increases in oil prices, agriculture, construction, transport and communications, and tourism sectors have been the other key contributors to the sustained increase in economic activity. a lot of progress continue to be made on the inflation front, as shown in september 2007, when inflation declined to 9. 3 % despite having risen to 12. 7 % in march. continued implementation of prudent monetary and fiscal policies, fairly favourable developments in the exchange rate coupled with pro - growth and pro - poor agricultural policies that have led to an increase in food supply and subsequent improvement in the country β s food security largely explain the favourable developments in inflation. for instance, the country recorded an increase in maize surplus to 250, 000 metric tons ( mt ) this consumption period from 160, 000 mt during the 2006 / 2007 consumption period. with respect to the money market, given lower inflation and yield rates on government securities, commercial banks lending rates have been on the downward path. this can be illustrated by the nominal average lending rates which declined to around 28 % in december 2006 from about 34 % in december | 0 |
the most recent figures are approaching 3 per cent annual growth, which is back to pre - crisis levels. if i am right, the us economy is due for another period of better bis central bankers β speeches productivity growth, and i have every reason to think that canada will follow once we work through our adjustment to lower resource prices. a reversal of the cyclical slowdown in investment i mentioned earlier would also serve to support future productivity growth. a second reason for optimism about productivity is that even if most major economies have exploited most available opportunities for integration, gains may still be had from improvements to existing supply chains. economies evolve over time, and comparative advantages are not set in stone. consider china, which for years was the main destination for outsourced production. today, its working - age population is shrinking. unit labour costs have been rising quickly as the economy moves up the value chain. now, we β re seeing signs that labour - intensive production is shifting out of china and into nearby economies, such as cambodia and vietnam. all of this suggests that companies and investors may be able to find ways to improve the efficiency of supply chains in many geographic areas. this will show up as a new wave of integration and global trade growth. for policy - makers, of course, this means we should be working to help initiatives such as the trans - pacific partnership and the comprehensive economic and trade agreement between canada and the european union become a reality. third, nobody can predict the future disruptive technologies that would allow the global economy to take its next giant step forward. history gives us no reason to be pessimistic with respect to future technological progress. before i wrap up, let me make one more point. international trade, as measured by our standard global trade statistics, is not the only way for companies to exploit integration opportunities. some companies find it more sensible to operate foreign affiliates in other countries while managing them from home. for some firms, this model effectively acts as a substitute for international trade. and this business model has been growing, even while traditional exports and imports have been slowing. we know that sales by canadian - owned foreign affiliates now exceed total exports from canada, approaching 30 per cent of gdp. in other words, these foreign affiliates are almost like another canadian economy out there, supporting jobs in canada in areas such as research and development, engineering, design and marketing, not to mention lawyers, accountants, and executives who manage the operation from home. in the united states, foreign affiliates are | jerome powell : the role of boards at large financial firms speech by mr jerome h powell, member of the board of governors of the federal reserve system, at the large bank directors conference, chicago, illinois, 30 august 2017. * * * good morning. thank you to president evans for inviting me to speak here today about the role of boards of directors of large banking firms. 1 ten years ago this month, the world witnessed the first tremors of what we now think of as the global financial crisis and the subsequent great recession. for the united states and many other countries, this would turn out to be the most painful economic period since the great depression. in the wake of the crisis, governments around the world instituted a wide range of reforms that were designed to reduce the likelihood and severity of a recurrence. in the united states, the core elements of those reforms included significantly higher capital standards ; new liquidity requirements ; forward - looking stress tests ; and resolution planning. our largest banking firms are without question much stronger than before the crisis. we are nearing completion of the major parts of this reform program, and are undertaking a thorough review to help assure that the reforms we put in place are both effective and efficient. 2 during the crisis, some large banking firms incurred massive losses. some of these losses were from products β such as super - senior collateralized debt obligations ( cdos ) or structured investment vehicles ( sivs ) β whose risks were not even on the radar screen of the firm β s board of directors. after the crisis, the federal reserve significantly raised our expectations for the boards of directors of large banking firms. taking risk in service of clients is an essential part of the business of banking, including credit risk, interest rate risk, and various forms of operational risk. our reforms were designed to assure that boards of directors understand and approve the strategy of the company and the risks inherent in that strategy, and that the institution has the capital, liquidity, and risk management capabilities necessary to manage those risks. today, the role of a director of a large banking firm is more expansive, more challenging, and more important than ever. boards now oversee management β s participation in highly challenging annual exercises, such as stress testing, capital planning, and resolution planning, that have fundamentally changed the business of our largest institutions. boards now more carefully evaluate the compensation practices of these large institutions to assure that they reinforce positive incentives and discourage unwanted risk taking. across a range of responsibilities, we simply expect much | 0 |
. 5 billion ) as at end - march 2010, a compounded annual growth rate of 35. 5 %. while such positive trends are encouraging, we are also mindful of the associated risks, such as non - performing loans, over - indebtedness and consumption of financial products and services that are not suitable for the user. in this regard, efforts towards financial inclusion are always conducted within the framework of sound banking practices, risk management and adequate consumer protection. importance of financial inclusion data in the growth and development of an inclusive economic system policy formulation for financial inclusion is complex for a number of reasons. first, it requires the active involvement of many different stakeholders, in particular government agencies and very often a variety of ngos, as well as financial institutions with specialized skills and knowledge. second, the state of economic and social development of a society is an important determinant on the level and quality of financial inclusion. third, what constitutes acceptable level of inclusion, in terms of access to finance, protection of personal rights and liberties, or assurance of retirement and healthcare benefits varies from one jurisdiction to another. for the reasons that i mentioned, there is no uniform global benchmark that can be used as a successful model for financial inclusion programs. success stories and experiences are dispersed and often go unrecorded and to further the cause we need to reveals this situation. the financial inclusion agenda requires a systematic and internationally - recognized set of financial inclusion indicators that is meaningful and capable of assisting us in formulating developmental policies. furthermore, enormous efficiency gains from the availability of such indicators can both reduce the cost of research and implementation as well as increase the effectiveness of the delivery and execution of the policies. lessons learned in using financial inclusion data in the malaysian context let me to briefly share some of the lessons we have learnt in terms of using data to improve the policy formulation process, and develop a more efficient and inclusive financial sector. perhaps the most interesting example is the development of quality credit data which has enabled financial institutions to make informed and responsible lending decisions in a timely manner and to be able to mitigate serious problems such as fraud. these data have also assisted bank negara malaysia in performing its macro - and micro - surveillance duties and in its policy - making role. the data in this case came from the development of a comprehensive credit registry system. the availability of such data also allows individuals with good payment track records to make a more credible case for access to credit, and helps overcome the limitation of inadequate collateral. | global agenda for a more inclusive financial system, and look forward to the fruits of your work in the months ahead. | 1 |
amando m tetangco, jr : empowering entrepreneurial filipinos thru microfinance speech by mr amando m tetangco, jr, governor of the central bank of the philippines ( bangko sentral ng pilipinas ), at the 2010 microentrepreneur of the year official launch, manila, 21 may 2010. * * * fellow advocates of the microfinance sector, good afternoon and congratulations! yes, ladies and gentlemen, we have many reasons to celebrate. first, this annual national search for outstanding filipino microentrepeneurs is on its 8th year. this speaks well of the commitment of those involved in this program. and so, let us give a big hand to citi philippines headed by sanjiv vohra ; the microfinance council of the philippines headed by mr. ruben de lara ; the bangko sentral ng pilipinas and my fellow central bankers ; and finally my hardworking co - members at the national selection committee which includes philippine daily inquirer chairperson marixi rufino - prieto ; sm investments vice chairperson tessie sy - coson ; former mbm antonino alindogan ; gma network ceo atty. felipe gozon ; go negosyo movement head and rfm corporation ceo joey concepcion ; chair of the leadership and strategy department of the ateneo de manila university and finance educator of the year dr. darwin yu ; and ayala corporation president fernando zobel de ayala. they are not only hardworking judges, they are also deeply engaged in supporting microentrepreneurs. palakpakan po natin silang lahat. another reason to celebrate is the continued growth and development of the microfinance sector in the philippines that has produced so many inspiring success stories. this has allowed us to sustain our annual search across the country. of course, this has made the work of the national selection committee members more difficult but ultimately more satisfying. let us therefore celebrate the transformative power of microfinance with a round of applause. i am also pleased to report that our efforts to promote microfinance and financial inclusion in our country have placed us in the international radar screen. in particular, survey results of the first annual global microfinance index and study β which was conducted by the economist intelligence unit of the economist group β measured the state of the regulatory framework, investment climate and institutional development. overall, the philippines ranked 3rd out of 55 countries, next to usual leaders | the capital shortfall, meaning the banks that came below the threshold of 5. 5 %. but this is a measure of the strictness of the exercise that it had such an impact on the balance sheet of the banks, and it β s a usual measure of the impact of such types of exercises. but it β s also a measure of the resilience of the system because, in spite of this drop of β¬263 billion, the vast majority of banks stayed above 5. 5 % and were able to support such a shock, and still have a capital ratio above the threshold. and let me underline that the threshold of 5. 5 % is well above the regulatory minimum, because as you know the regulatory minimum for common equity capital ratio will be in 2018 4. 5 %, so we have chosen a more demanding threshold. and most of the banks were able to resist such a drop in their capital and stay above the threshold. that β s proof of the resilience of the system, and at the same time proof of the strictness of the exercise. the distribution of this drop in the capital ratio you have in this slide. i β m not going to comment in detail. just to underline that 75 % of the participating banks experienced a 0 to 6 percentage points impact on common equity tier 1 under the adverse scenario. now the capital shortfall itself, as i said, comes both from the aqr and from the stress test. and the distribution you have in this slide, 11. 2 % from the stress test and 10. 7 % from the aqr. this is the capital shortfall from the stress test, 11. 2 %, but in the previous slide you have seen that the drop in capital coming from the stress test corresponded to β¬182 billion, which is a component of the β¬263 billion that i highlighted just now. so this is then the composition. and what i said about the front - loading that the banks have done since july last year is disaggregated in this table. and you see that the overall amount of measures of different kinds, they are not just capital measures, but are measures that strengthen the balance sheet and help to clean and prepare the balance sheet for the exercise. gross equity issuances since then amount to β¬60 billion. cocos or contingent capital issuance instruments that count as additional tier 1 and satisfy our conditions amounted to another β¬32 billion. internal capital generation, either by | 0 |
further, barclays bank zambia has continued to work closely with junior achievement zambia where i serve on the board. the bank has been providing office space as well as hosting the meetings of junior achievement at its premises. as a matter of fact, on 22 february, 2009, the junior achievement worldwide / barclays bank partnership was launched in dubai. as a result of this partnership ja zambia receives annual grants which are utilized to deliver ja entrepreneurship and work - readiness education to the local young people. i further wish to acknowledge the contribution that barclays bank zambia plc continues to make to the development and deepening of the banking sector in zambia. clearly mr. masud has been a key factor in the process and our expectation is that the incoming caretaker managing director mr. bret packard will continue to progress this process. it is in this vein ladies and gentlemen that i request you to join me in formally wish mr. masud success in his future endeavors as we welcome mr. bret packard, the new acting managing director at barclays bank zambia plc. thank you. | caleb m fundanga : financial sector development in zambia remarks by dr caleb m fundanga, governor of the bank of zambia, at the farewell cocktail hosted in honour of the barclays bank zamia limited managing director, lusaka, 4 february 2010. * * * the chairman β barclays bank zambia plc, mr j j sikazwe the chairman β bankers association of zambia, mr saviour chibiya chief executive officers of commercial banks outgoing barclays southern africa regional managing director, mr zafar masud acting barclays bank plc, managing director, mr bret packard management and staff of barclays bank zambia plc colleagues from bank of zambia distinguished guests ladies and gentlemen ladies and gentlemen i am privileged to officiate at this farewell cocktail as we say goodbye to mr. zafar masud who has been the managing director of barclays bank zambia since january 2008. in the past few years, barclays bank zambia plc has contributed to making banking more accessible through its outreach programme which saw an increase in its atm and branch network to over 150 atms and 55 distribution points comprising branches and agencies nationwide. clearly the grass - root population in zambia has continued to benefit from this initiative. as is the case with a number of other banks, barclays bank zambia plc has continued to innovate and positively contribute to financial sector development in zambia. notable innovations that came under mr. masud β s time include the commissioning of the bank β s branch queue management system at its mutaba and kafue house branches and northend atm lobby, as well as the launch of premier banking. barclays bank zambia plc may have not pioneered all of these innovations, but they have provided reasonable competition to their colleagues which we at bank of zambia believe will be of benefit to the zambian financial sector in the medium to long - term. it is my expectation that barclays bank zambia plc will continued to contest the market in a meaningful and beneficial way. let me also acknowledge the contribution made by barclays bank zambia plc under mr. masud through the bank β s partnering with the corporate world to cosponsor the first ever euromoney investors β conference in zambia. in addition, it is worth mentioning that baz, under the chairmanship of barclays bank zambia plc and mr. masud, helped initiate the beautification of cairo road by adopting the maintenance of its wonderful gardens. the positive change to our immediate surroundings particularly around the bank square is there for all to see. | 1 |
structure, a quick primer. the federal reserve is the third central bank in american history. we were created during woodrow wilson β s presidency, in the aftermath of the financial panic of 1907. congress passed the federal reserve act in 1913 ; like st. andrews, we will mark a centennial next year, but it will be our first, while you celebrate your sixth. the federal reserve act established 12 federal reserve banks, together with a board of governors. the members of the board, of which ben bernanke is chairman, are appointed by the president of the united states and confirmed by the senate. the 12 bank presidents are not : they serve at the pleasure of nine - member boards of directors composed of private bankers and citizens from their respective districts. they are distinctly nonpolitical, immune from partisan influence ; they represent main street, not the washington power elite or the new york money changers, just as president wilson and the federal reserve founders envisioned. these are profit - making banks that perform services for the private banks in their districts : warehousing and distributing currency ; operating discount windows from which banks borrow to assist in their operating funding needs ; functioning as the depository for the $ 1. 5 trillion or so in excess reserves presently piled up and going unused in our private banking system. the banks also house and manage staff that supervise and regulate banks in the districts ( under policy guidance from the board of governors ), and perform other services, the most widely observed and commented upon of which is the operating of the bis central bankers β speeches open - market operations conducted by the federal reserve bank of new york on behalf of all 12 banks at the instruction of the fomc. all 12 bank presidents serve on the fomc together with the seven members of the board of governors. this is where monetary policy for the united states is determined by collective decision. the operating procedure of the fomc is for each of the governors to have a vote on policy ; the bankers rotate their votes, with the new york fed having a constant vote. however, all 19 members β the seven governors and the 12 bankers β participate fully in every fomc meeting and actively contribute to policy discussions. the fomc has traditionally decided the federal funds rate, the overnight rate for interbank lending that anchors the yield curve. in recent years, in reaction to the financial panic of 2008 and 2009 and its aftermath, the fomc has instructed the new york desk to buy mortgage - backed securities and | punched through previous peak employment levels. here is the job creation record of the so - called mega - states within the united states since 1990. and last, and just for fun, here is the record of texas β job creation over the past two decades versus resource - rich countries, such as australia and canada, as well as versus the major countries of europe, the u. s. and japan. bis central bankers β speeches indulge me for a minute here. i share these with you not to engage in stereotypical β texas brag β or because st. andrews has become a popular destination for recent generations of undergraduate scholars from texas. i do so to illustrate a point, specifically the influence of fiscal policy on the effectiveness of monetary policy. the limits of monetary policy and the importance of fiscal policy here is the rub. as mentioned, the fomc sets monetary policy for the nation, for all 50 states β its influence is uniform across america. the same rate of interest is charged on bank loans to businesses and individuals in texas as is charged new yorkers or the good people of illinois or californians ; texans pay the same rates on mortgages and so on. why is it that the texas economy has radically outperformed the rest of the states? a cheap answer is to revert to the hackneyed argument that texas has oil and gas. it is true that we produce as much oil as norway and almost as much natural gas as canada. and we have some 60 percent of the refineries of the united states. but remember that the numbers i showed you are employment numbers. only 2 percent of employment in texas is directly generated by oil and gas and mining and related services. we are grateful that we are energy rich. but we are a diversified economy not unlike the united states, where business and financial services, health care, travel and leisure activities and education account for similar portions of our workforce. why, then, do we outperform the rest of the united states? bis central bankers β speeches to me, the answer is obvious : we have state and local governments whose tax, spending and regulatory policies are oriented toward job creation. we have the same monetary policy as all the rest ; our income is taxed at the same federal tax rate ; and we are equally impacted by washington β s tax, spending and regulatory policies. but we have better fiscal policy at the state level. we have no state income tax ; we are a right - to - work state ; | 1 |
if signaling is the primary channel through which large - scale asset purchases act, there remains much that we don β t understand about how to calibrate such operations. in any event, it will be important that the signals conveyed by balance sheet policies are consistent with the forward guidance about future interest rate policies. this has been a difficult communications challenge at times for the fomc. and it will likely remain a communications challenge as the committee coordinates the unwinding of the fed β s balance sheet with the gradual increase in the policy rate. implementing forward guidance i have indicated conceptually why a systematic approach to communications is important but have yet to discuss how a central bank might implement such an approach. this issue has received increased attention in recent years, with various central banks adopting different strategies. the differences are based on alternative economic viewpoints as well as on varying institutional structures. i think the fed can learn a great deal from the various approaches. many of you in this room are very knowledgeable, and have thought deeply about the costs and benefits of the various approaches. a forecast is, of course, a critical piece of information emanating from the central bank, and the nature of the policy rate β s future path is an important element of that forecast. these forecasts are often presented and discussed by central banks in the form of published inflation or monetary policy reports. such reports can and should be an important element of a central bank β s communication and transparency about the policy process. but a number of interesting questions arise. should a central bank β s published forecast be based on its assessment of what the policy rate path is likely to be, or should the forecast be based on an interest rate path that is more arbitrary, such as a constant interest rate path or one that is related to market expectations? i am fully aware that great care needs to be taken in providing more specific forms of forward guidance. we must avoid a false sense of certainty regarding future policy or a mistaken sense of commitment to a specific path of policy rates. yet, i believe there are approaches, like the one i am about to suggest, that can avoid or mitigate these pitfalls. because i believe systematic monetary policymaking can enhance economic performance, i am in favor of clearer communication concerning the formulation of policy. now, in our stylized models, there tends to be a single monetary policymaker who knows the structure of the economy. therefore, the approach for communication would be a forecast derived from the policymaker β s model | . those considered too important to fail due to their size, the level of complexity of their operations or their interconnectedness with other financial system participants. in future, these banks will have to meet greater regulatory and supervisory demands, which will need to be adapted to the type of activity, complexity and structure of each bank. headway has been made and is being made in many other areas, such as remuneration in the financial sector, the regulation of rating agencies, etc. generally speaking, spain has much to learn from other countries about economic policies. the clearest and most pressing example, in light of the economic and social consequences of the burgeoning number of jobless spaniards, is the employment and labour market policies of those countries which, even at the height of crises, keep unemployment rates low. however, within the realm of financial regulation and supervision policies, the opposite is the case : our supervisory arrangements are being closely studied for reforms in other countries. the ingenious idea of governor rojo and his team to set in place a countercyclical mechanism in order to try and soften credit growth or at least mitigate the adverse consequences of its cyclical behaviour on the banking system was a forerunner of the countercyclical capital buffers envisaged in the basel iii accord. the constraints on complex products and the obligation to consolidate are further examples of rules or guidelines that are characteristic of spanish banking supervision and regulation and which fully coincide with the direction in which global financial system reform is advancing. spain β s approach to restructuring its banking sector has demonstrable advantages. the process has been undertaken using the frob ( fund for the orderly restructuring of the banking sector ), which was set up following parliamentary approval over 18 months ago and has since overseen numerous integration processes between savings banks that have reduced their number from 45 to 17. the design of the frob was based around a twopronged approach. first, it was geared to supporting banks which, while viable, required restructuring to ensure their ability to resume a path of sustainable profitability, by reinforcing their solvency with public funds. significantly, in certain countries where the need for a similar instrument has been acknowledged, this has not yet been created. second, the frob involved giving the banco de espana wide - ranging powers to swiftly and effectively take control and resolve the problems of those banks that are not viable. rounding off the remit of the frob has been the approval of the reform of the legal | 0 |
4 ( * ) ipv stratified method. cchc hedonic model for new homes in metropolitan region ( rm ). source : central bank of chile using sii, cchc and sbif information. | - and long - term financing reached record lows, in line with market expectations for the mpr and the environment of low long - term external rates. in this context, institutional investors made moderate changes in the composition of their portfolios. in particular, the assets in layer 1 mutual funds continued to grow relative to the other funds ; life insurance companies continued to increase their positions in real estate investment ; and pension funds increased their exposure in local bonds. also, at the statistical closure of this fs report we did not observe any significant changes between the funds managed by the afps, in contrast to the significant transfer of affiliates to the e fund documented in the previous report. it is also worth noting that the financial position of local companies presents no big diversion from previous reports, despite the fact that local economic activity has performed worse than expected. total debt to gdp declined slightly, largely explained by external financing sources ( figure 12 ). meanwhile, the greater dynamism of bond issues has focused mainly on the refinancing of liabilities, while the growth rate of commercial loans remains low. the group of companies that report to the svs increased their profitability at the end of 2016. however, about 70 % of this increase has its origin in non - operational sources. finally, those firms in productive sectors that do not report to the svs and have no external debt, posted a decrease in their bank debt recently. this, combined with information from the bank credit survey, reflect lower financing needs of these firms, which is consistent with the evolution of local economic activity. the less dynamic economy has marginally affected the repayment behavior of firms, increasing the credit risk of the commercial portfolio. although delinquency levels are fairly low, since the last fs report some npl indicators showed increases. this, coupled with the fact that the fraction of loans rated sub - standard remained relatively high, has worsened the quality of the commercial portfolio ( figure 13 ). going forward, a less favorable macroeconomic scenario would lead to some these credits being defaulted. the evolution of the labor market has begun to reflect in deteriorated economic and financial indicators of households. thus, since the last fs report, bank consumer loans posted an increase in non - compliance. meanwhile, mortgage default ceased to decline as it had for some years ( figure 14 ). meanwhile, households'aggregate indebtedness continues to rise, most of all the mortgage component ( figure 15 ). most recently, survey responses reveal | 1 |
therefore, you are all encouraged to use the branch and, of course, all other licensed banks in your area, to save money and undertake other financial transactions. similarly, it is my expectation that bank gaborone w ill take full advantage of the botsw ana payments and other public infrastructure, partnership w ith mobile operators and other electronic payments systems, to enhance financial inclusion ; and this includes providing the much - needed support for the informal businesses in botsw ana in general and maun, in particular. distinguished guests, ladies and gentlemen, in addition to w hat i have just said, i w ish to implore the maun community to engage banks w ith viable borrow ing proposals that are sustainable and can yield positive returns. equally, important, and having obtained loans and other credit facilities, borrow ers should honour their obligations by adhering to the repayment programme agreed w ith banks. distinguished guests, i am making this point because the bank of botsw ana is concerned about the recent observed upw ard trend in non - performing loans. while this trend could be, in part, due to sluggish global economic activity and idiosyncratic business performance and environment, there is some evidence of lack of financial discipline on the part of some individuals and poor management practices by some businesses. there is also an undesirable creeping culture, on the part of some customers of banks, of failing to repay their obligations to banks according to the agreed schedule. let me, therefore, take this opportunity to remind you, distinguished guests that, in the main, banks in botsw ana are funded mainly by depositors / savers β funds. therefore the board and management of a bank have a fiduciary duty and responsibility to ensure that the lending and credit underw riting standards are sound ; the bank is managed in a safe and prudent manner, to safeguard depositors β funds and ensure that these borrow ed funds are not lost through uncollectable loans. in this context, i should therefore caution that, w here a borrow er is in default, the bank is entitled to institute law ful, procedural and ethical recovery procedures including attachment and liquidation of property pledged as collateral to recover its money. moreover, providing for a loss or w riting off a loan in the bank β s books, as a non - bankable asset, does not extinguish the debt the customer ow es to the bank. in this case, | speech of the cbbh governor senad softic, ph. d. at the first europe - wide international monetary fund regional economic outlook entitled β regional economic perspectives for europe β. sarajevo, november, 13, 2017 honorable guests dear mr. decressin, panelists, coleagues, ladies and gentlemen. it is my pleasure to welcome you to premises of the central bank of bosnia and herzegovina today for presentation of the first europe - wide imf regional economic outlook. thank the imf for choosing bosnia and herzegovina for such event. we are meeting today at a good time for europe and bosnia and herzegovina. economic growth is gaining strength. in the euro area, growth is expected to remain about 2 percent in 2018. inflation, big concern for us central bankers, is expected to remain stable in 2018. in bosnia and herzegovina, growth was 3. 1 percent in 2016. we expect the recovery to continue. the central bank of bosnia and herzegovina continues to maintain monetary stability through strict implementation of the currency board arrangement, as defined in the law. inflation remains firmly anchored to price developments in the euro area. we expect prices not to increase by more than 1. 5 percent in 2018. it is very important for us in bosnia and herzegovina that growth in the european union is sustained over the medium term. the eu is our largest trading partner and foreign investor. a large bosnian diaspora sends remittances close to 12 percent of gdp per year. these are very strong economic links that should be considered together with our diaspora as important resource for economic development of the country. however, policy makers in europe, and also here in bosnia and herzegovina, should take advantage of the recovery to implement ambitious economic measures and structural reforms. for bosnia and herzegovina, we should focus on three broad areas : 1. first, we need to improve the composition of the budgets at all levels of government. the general governments of bosnia and herzegovina are on track to achieve a combined overall fiscal surplus for the second year in a row. however, there needs to be a reorientation of spending towards infrastructure, to help catch up with european standards, and to improve connectivity and competitiveness of our economy. 2. second, we need to continue to strengthen the single financial system of bosnia and herzegovina. the banking system in bosnia and herzegovina is strong and stable. there is enough liquidity and sufficient capital. progress was made since 2015 in putting in place new banking legislation that brings bosnia and herzegovina banking system closer to european standards. still | 0 |
although the uae is well developed when it comes to financial inclusion, there are still unbanked sectors of the society and under banked geographical areas within the uae. therefore, we need to provide the infrastructure necessary for banks and other financial institutions to provide their services including credit, to all sectors of the society and in all bis central bankers β speeches geographical regions within the uae. this will be achieved, sometimes, through using electronic systems. 2 ) sme financing : we believe that sme financing will become more difficult when new global regulations are implemented, therefore, we have to find ways and means to improve sme financing outside the banking system. at the moment, the uae is looking at experiences of other jurisdictions and recently we have at a gcc banking conference which was held at the beginning of this month, discussed the experience of korea. we are also looking at the experiences of italy and malaysia. we believe that sme financing is very important for job creation. our region in particular will need to create more jobs in the future, due to relatively young population. 3 ) domestic debt market : the development of a domestic debt market is, in my view, of a national priority. companies, particularly large private companies and gres, need an alternative to bank lending. it is a more reliable source of funding and it is less costly for large corporations. banks also would need instruments of the domestic debt market to fulfill the requirements of basel 3 regarding liquidity ratios. as local debt markets are at an infancy stage in many countries in the region, this would make it difficult for banks to hold highquality liquid debt instruments as β preemptive β liquidity buffers against early signs of stress as required by basel 3. therefore, it is necessary for the uae now to expedite the issuance of the public debt law and to set up the needed market infrastructure, as a first step on the way to a vibrant domestic debt market. excellencies ladies & gentlemen with this i come to the end of my speech, but before i close, i would like to thank the basel committee on banking supervision ( bcbs ), the fsi of bis and the amf, for holding this important high level meeting here in abu dhabi, uae. i wish you all a successful meeting. thank you for your attention β¦ bis central bankers β speeches | other countries. this means that at least 80 % of the 80 % of non - euro area imports of the gcc countries are denominated in us dollars. on the other hand, if we look at uae imports'picture, the situation is more so not in favour of imports from the euro area, due to the fact that uae imports from the euro area went down from 24 % of all uae imports in 2001 to only 15. 28 % in 2005. interestingly the picture to the europeans is misleading if we look at it from absolute figures of imports. these have grown from us dollars 7. 21 billion in 2001 to us dollars 15. 12 billion in 2005, also the uae gives the euro area about us dollars 9 billion of trade surplus. the next point i want to tackle is the issue of flow of foreign investment funds into the euro area, also from a gcc countries'perspective. there are two questions here ; β’ can the euro area absorb large amounts of investment funds from the gcc countries in a short period of time? β’ can the euro area provide a competitive environment to attract investment funds from the gcc countries, to make it worthwhile to convert part of their oil revenue maintained in dollar at the moment? the answer to the first question is obviously, " no ", probably because euro area countries do not try to attract large foreign investments, in general, one reason maybe because they do not want to see a lot of liquidity go into their local markets and cause inflationary pressures and the other maybe they do not want to create increased demand for foreign labor force. however, there seems to be no uniform stand on this issue within the euro area countries. the answer to the second question is also " no ", but in this case may be due to the euro area have not yet harmonized its labor, tax and financial services laws, which also explain the no common stand regarding the issue of whether the euro area is really interested in attracting large investment funds. the euro area countries have choice at the moment in terms of interpretation of their dominant local laws, but once laws get harmonized or unified their choice will be reduced or eliminated all together, and the euro will witness an upward demand through foreign investment flows. the last point i will consider is tourism and the influence tourism has on demand for a certain currency. europe is, and has been the most popular tourist destination for people of the uae and other gcc countries. hundreds of thousands from gcc countries visit one | 0.5 |
i would also like to thank all of our development partners, especially kfw, gtz and the world bank, who have supported the project through both financial and technical assistance. thank you for listening. bis central bankers β speeches | emmanuel tumusiime - mutebile : introducing innovative services to meet credit needs in uganda speech by mr emmanuel tumusiime - mutebile, governor of the bank of uganda, at the yearend stakeholders β function and sharing of compuscan β s vision 2012, kampala, 8 december 2011. * * * the board of directors compuscan information technologies, managing director compuscan crb limited, representatives of the development partners ( word bank, kfw, giz ), representatives of the participating institutions ( pis ), distinguished guests, ladies and gentlemen. i would like to welcome you all to this event to launch officially the compuscore and compuscan β s vision 2012. i would also like to thank the board of directors and management of compuscan crb for inviting me to preside over this function. credit markets are plagued by informational problems, and these problems are especially acute in developing economies. informational problems raise transactions costs, often to such an extent that potential borrowers are denied access to credit in the formal sector. the adverse consequences of informational imperfections for financial markets were analysed in the 1970s by joseph stiglitz and george akerlof ; work for which they received the nobel prize. the etymology of the word β credit β is the latin verb β credere β ; to trust or believe. unfortunately trust alone is rarely sufficient to ensure that a creditor will ever get her money back ; hence credit decisions must be made on the basis of accurate, reliable data. without such data creditors will be reluctant to risk their money. a key challenge for policy makers concerned with financial market development is how to design policy interventions which can mitigate informational imperfections and thus reduce their negative externalities. the kernel of the challenge is how to ensure that accurate and reliable information about those which wish to raise finance can be acquired in a cost effective manner by those who provide finance and bear the risk of doing so. credit reference bureaux provide an institutional solution to the problem. a well functioning credit reference bureau mitigates information related market failures because it is compulsory for all participants in the credit markets to provide and share information, in circumstances where they may have private incentives not to do so. furthermore, the pooling of information in a credit reference bureau reduces the social costs of acquiring information. this was the motivation for the bank of uganda, with the support of development partners β kfw, gtz | 1 |
for learning will be boundless. technology has also significantly broadened the reach and means for learning, as well as increased learning efficiencies. as you step into this new and exciting world, these possibilities should be fully optimized. in concluding, allow me to offer my congratulations once again to the graduates of the class of 2006. you represent the promise of our nation's future. indeed, nation building no longer belongs exclusively to the realm of the government. as professionals, your advancements should not just be confined to those of immediate interest or relevance to you. instead, you have the opportunity to cast your energies beyond your own interests, beyond the immediate term and beyond your own boundaries. be open to working together with people from different backgrounds, and persevere through the new challenges and above all, hold fast to the values that are good and important, in particular to that of basic honesty and integrity. always remember that these will form the foundations and basis of the trust that society will have in you. on this note, i wish you every success in your future endeavours. thank you. | business practices so as to ultimately realise the strategic goals. this trend has become important for all sectors in the economy. within the financial sector, for example, significant structural enhancements have been made to enable financial institutions and markets to respond to the rapidly changing demands. these include changes that have heightened competition and which have fostered the emergence of increasingly diverse market participants and organisations. the dramatically changing landscape calls for a new generation of highly - qualified professionals equipped with more comprehensive skills. to support and sustain these developments, the education system must evolve so as to meet these new demands. against this backdrop, our ability to sustain long - term growth clearly depends on our ability to build, maintain and continuously expand our knowledge base. the key to this process is thus to be able to adapt to the new environment. as charles darwin observed " it is not the strongest ", " nor the most intelligent that survive " but it is those that are " the most responsive to change. " it is this capability that needs to be cultivated to ensure a mobile and agile work force that can adjust and respond to the emerging developments in the changing environment. as graduates today, you embody the hopes of the nation in making the transition towards a knowledge - based economy a reality. in graduating today, you would have achieved an important milestone in your life. this is indeed an important and distinct mark of success for all of you. not so much because of the degree which you now hold in your hand, but more importantly its promise for your future. your journey to reach this moment is a testimony of your own individual potential, determination and hard work. the learning experience, however, needs to go on. in today's environment, cultivating a lifelong learning experience is essential to personal and economic success. lifelong learning involves more than just formal education and training. it encompasses learning throughout the life cycle, at different stages of life and in different learning environments. as individuals, attention to lifelong learning is essential to remain relevant in a highly competitive environment and to enhance our ability to function effectively and in a meaningful way as members of our community. with new knowledge comes innovation, agility and increased productivity that contributes to the overall performance and economic growth process. while it also enables us to adapt to the constantly changing environment, it also increases our capacity to cope with natural emergencies. the challenge then is to embrace the opportunities as they present themselves and to continuously develop new skills and competencies that will be needed to meet current and future demands. the opportunities | 1 |
europa. eu / press / key / date / 2021 / html / ecb. sp211008 ~ 3c37b106cf. en. html. https : / / www. fsb. org / work - of - the - fsb / financial - innovation - and - structural - change / crypto - assets - andglobal - stablecoins /. https : / / www. ecb. europa. eu / press / key / date / 2021 / html / ecb. sp211008 ~ 3c37b106cf. en. html. brunnermeier and landau, 2022. similarly, without the european central bank issuing digital money β that would provide a common unit of account and a convertibility anchor underpinning the various forms of private digital money β consumers could lose sight of a visible symbol linking money to the state. this could undermine trust in money and ultimately monetary sovereignty. moreover, it remains unclear to me why central banks, charged with fulfilling their mandates, should stand idly by in the face of digitalisation. the changes affecting money and payments are at the core of central banks β responsibilities. in today β s technological landscape, central banks cannot confine themselves to merely providing paper money. they have a responsibility to satisfy people β s needs, which increasingly favour digital payments over physical cash. issuing a digital euro as a form of digital cash would ensure that public money remains an option available to all, providing a convenient payment instrument with a pan - european reach. and it would provide an alternative payment network to those operated by the dominant card and online payment solution providers, making it easier and cheaper for supervised intermediaries to offer new, pan - european services. the benefits of a digital euro would be amplified in the context of the potential disruption caused by a handful of large technology companies seeking to dominate the payments market. it would play a key role in fostering competition, protecting privacy and enhancing stability. let me start with competition. a digital euro would be driven by public interest, promoting open standards to create a network that benefits everyone, rather than serving private interests by creating β walled gardens β. a digital euro would avoid the creation of closed loops, and instead offer all payment service providers ( psps ) an open platform for innovation, immediately scalable at european level. nowadays, the novel and advanced payment solutions available in many european countries encounter challenges in achieving a pan - european dimension, with direct | useful life for other equipment is about seven years. firms must invest in computers at a faster rate than that for other forms of capital just to maintain a given level of the capital stock. the rapid replacement of high - tech capital means that technological progress becomes " embodied " in the capital stock at a faster rate than is the case for longer - lived assets. the second feature of high - tech equipment that sets it apart from other classes of capital is the sensitivity of its demand to fluctuations in the cost of capital. economists have debated for decades about the magnitude of cost - of - capital effects on traditional capital goods. a past consensus was that there probably was a cost - of - capital effect but that it was small and very difficult to identify empirically. a somewhat different conclusion has arisen lately when the same basic models of investment are applied to spending on computers alone. the latest research shows that computers are quite sensitive to movements in the cost of capital, and as a result of the 20 percent per annum decline in relative computer prices, the cost of this type of capital fell rapidly in the past decade. this combination of a high price elasticity and a rapidly declining price led to the boom in high - tech investment. a third characteristic of high - tech investment is the magnitude of " external " or " spillover " effects that it generates. high - tech equipment generates benefits not only to the owner of the machine but to other agents in the economy as well. i am thinking in particular about so - called network effects - - that is, linking computers together makes possible larger productivity gains than do computers operated as stand - alone units. although difficult to measure, such network effects certainly have stimulated the demand for high - tech equipment and have helped to speed up the dispersion of new technologies. supporting structural changes the technological changes inspired by investments in computers have enhanced the ability of businesses to reduce their operating expenses. in many industries, investments in information technologies have helped firms to cut back on the volume of inventories that they hold as a precaution against glitches in their supply chain or as a hedge against unexpected increases in aggregate demand. product development costs have probably also been reduced through the use of better computer hardware and software, and new communications technologies have increased the speed with which firms can share information - - both internally and with their customers and suppliers. this is the intersection of macroeconomics and management. many business observers now believe that these newer technologies are not only reducing the cost of transforming inputs | 0 |
. europe must remain an anchor of stability in a world that appears ever more unstable and politically unpredictable. the introduction of a safe asset in the euro area is a clear and immediate objective. it is a technical endeavour, but it is also the common denominator to the three unions ( banking, capital markets, fiscal ) that must flank monetary union. by partly replacing national government bonds, a european debt instrument could help to diversify the sovereign exposures of financial institutions. it could reduce the risk of flights to safety by investors in times of market tension and enable the financial market to play an effective role as shock absorber, thereby also enhancing the effectiveness of monetary policy. it could be an instrument for funding shared automatic stabilisers within a common fiscal capacity. as i have said, it is possible to design mechanisms that enable a safe asset to be introduced with the necessary safeguards against the risk of opportunistic behaviour. but aside from the rules, the essential requirement for the viability of this solution lies in a renewed and convinced commitment by all to the european project and a willingness to pursue common solutions for common problems. grafica a cura della divisione editoria e stampa della banca d β italia | in the years spent in education and work, will decrease by just under three million. over the last ten years, the lack of suitable work opportunities has driven almost one million italians to move abroad, many of whom are highly educated ; by contrast, there are increasingly fewer people, often with low skill levels, who transfer from abroad to italy. adequate policies for planning migration flows, training and integration are lacking. the labour market participation rate is among the lowest in europe, especially in southern italy. the participation rate for women, equal to 55 per cent in italy compared with an average of 68 per cent for europe, is 18 percentage points lower than that for men ( figure 9 ). to narrow the gap, among other things, the obstacles that mothers face in re - entering the work force after having children must be removed. the nrrp funding for services for families is a first step in this direction. employment opportunities and the choice of whether to participate are closely connected with educational attainment, which should be raised quantitatively and qualitatively starting from secondary school, where there is still a high rate of abandonment and learning outcomes are unsatisfactory. despite the progress made, there is still a big gap between the percentage of italian university graduates and those of other european countries, even for the youngest population cohort : 28 per cent of those aged between 25 and 34 held university degrees in 2021, 13 percentage points below the european average. the interventions and the effective use of nrrp funds for schools β physical and digital infrastructures, for bolstering stem programmes, and for improving the selection and training of teachers can all help to increase both the demand for and the supply of high - quality education. those most in need of this are students from less advantaged geographical and family backgrounds and young immigrants, for all of whom education surveys continue to show severe difficulties, which worsened considerably during the the governor β s concluding remarks annual report 2021 banca d β italia pandemic. it is increasingly necessary for these survey findings to be used in framing targeted and consistent corrective measures. in order to achieve the hoped - for results, it is crucial for the structure of the italian economy to open to change, by taking advantage of the programmes and reforms envisaged under the plan to increase firms β propensity to expand and to invest in innovation and in enhancing human capital. this is particularly needed in the regions of the south, where more than one third of the population resides but that only produces just | 0.5 |
money above the level of comfort of the monetary authorities, there would be concerns around controlling money supply and transmission of monetary policy impulses and may hinder achieving the broader objectives of price stability. therefore, it β s not just unqualified, unconditional β credit growth β which is crucial for economic development, but β orderly credit growth β which maintains and anchors financial stability in system and that in turn ensures sustainable growth over the long term. necessity for regulation of credit market given the size of credit portfolios of financial institutions and the large share which credit risk plays on their balance sheets, it is imperative that any strategy to maintain financial resilience of the institution and financial system stability needs to consider β credit risk β as its core element. source : supervisory returns, rbi if we delve a little deeper into the landscape of credit risk, it is apparent that there are three fundamental elements which need to be factored in, namely - β trust β, β prudence β, and β contractual arrangements β which are also mutually inter - connected. information asymmetry may result in vulnerabilities despite having due contractual arrangements in place which can potentially impede the process of credit intermediation. regulatory frameworks and policies come into play here and our regulatory policies require well thought out frameworks relating to credit appraisal, due diligence, recovery and resolution, in order to overcome this trust deficit or compensate for it in some manner or the other. the policies seek to ensure that the risks associated with lending business are prudentially measured, managed, and provided for. from the perspective of this thematic seminar, let me focus on the β prudential β aspect of credit risk management for which we have a principle - based regulatory approach. to describe our approach in an engaging manner, we can call it a 5m framework for risk management which focuses on the following five elements β measuring, monitoring, managing, mitigating, and migrating. the elements of this framework are not mutually exclusive and interact with and relate and reinforce each other. to elaborate : β’ measurement : peter drucker, the famous management expert once said that β if you cannot measure it, you cannot manage it β. i believe this to be a universal principle, and banking regulations around risk management also follows a similar approach. in order to measure the credit risk, all the regulators around the world, including the reserve bank, have prescribed detailed guidelines to enable a proper measurement of the risk. β’ monitoring | : this aspect of credit risk management largely relies on the monitoring and oversight exercised by the financial institutions through their policies which have to be dovetailed with the prudential norms prescribed by the regulators. the concerned financial institutions are mandated to frame prudent policies on risk management, governance, compliance, etc. these norms are intended to overcome any inherent moral hazard in the system. there are usually three layers of internal checks prescribed for the institutions - first, underwriting and due diligence at the time of origination of loans, second, adherence with internal risk management and compliance practices, and third, internal audit. this is examined as part of supervisory oversight wherein apart from assessing the efforts of financial institutions on these parameters, supervisors also assess if the general or other provisions maintained by the bank truly reflect the inherent risk. β’ management : factoring in the risk - and - reward payoff, the financial institutions may prefer to bear and manage some risk as part of its risk management practice. that would be essentially a business call. but in order to ensure that the regulated entities are well capitalised in proportion to the risk they are carrying, regulators across the world prescribe capital adequacy norms where minimum regulatory capital is provided by the banks based on certain principles. this then becomes the first level of risk management wherein the risk is absorbed internally, and adequate capital is provided for the same. besides, pricing of credit also influences this risk return trade - off. β’ mitigation : if the risk taken by financial institution grows beyond its comfort zone ( β risk appetite β ), then they may have to manage it actively rather than merely absorbing it. this risk mitigation is enforced at two levels β first by the regulators β which is mostly prudential in nature like provisioning norms or exposure limits. second at the institutional level, wherein the institutions themselves may prescribe exposure limits to manage concentration risks or put certain collateral constraints on borrowers or prescribe stringent covenant to manage the risks. in addition, financial institutions may also deploy permitted credit risk mitigants such as loan guarantees, collateralised transactions, on balance - sheet netting, etc. to mitigate credit risks. β’ migration : this involves taking the risk out of the bank β s books. there could be several tools available for transfer or migration of credit risk, but i am going to touch upon two of them. first and probably the most popular way is to simply transfer the asset ( loan ) and associated risk to another | 1 |
mastercard payment cards to buy groceries and medicines among other thing, even if the internet is down. this has required close collaboration between several actors to make a number of necessary adjustments to systems and rules related to the use of payment cards. the contingency measure is expected to be fully rolled out to the majority of grocery stores and pharmacies by early 2025. but the danish payments council is aware that the work on the card payment contingency measure does not end here. the next step for the members of the danish payments council will be to ensure that the contingency measure is tested regularly to ensure that it is ro - bust and works effectively in the event of a crisis. in four to five months we will join the pan - european payments infrastructure, target services. this means, among other things, joining forces with the euro countries in a common front against cyber threats. this is a huge investment for both you in the sector and for danmarks na - tionalbank, and the collaboration has been very successful. the other nordic central banks also see target services as a future possibility. this means we can look forward to strong and increased nordic and european collaboration on a common payments infrastructure with increased joint innovation in mind. the tips cross - currency project is one such example. here, danmarks nationalbank is working with the ecb and sveriges riksbank to enable instant cross - currency payments on the common tips platform. the project will allow banks to develop new and improved solutions for settling cross - border payments. i therefore encourage the banks to actively participate in the project. together, we must achieve a solution that offers easy and efficient settlement of these payments while meeting the eu requirements that banks face. 4 / 6 bis - central bankers'speeches all with the aim of ensuring that danish citizens continue to have access to secure and efficient payments in the future. state of the financial sector let me say a few words about the state of the financial sector. you still have high profits at the banks. higher interest rates in 2022 and 2023 have contributed to a significant increase in net interest income, while you have experienced very few losses on your customers. the limited losses are largely due to the fact that the soft landing in the economy has become a reality. for businesses, the financial statements generally reveal a moderate increase in profits. for the vast majority of home - owners, their economic situation has also proved robust during the period of high inflation and rising interest rates. however, that | and there are still many challenges facing us. the hkma has therefore embarked on a review of our debt market development with a view to identifying measures which can be adopted to help market development. on the demand side, everybody knows that the mainland of china is enjoying a rapid economic growth and business opportunities are mushrooming. the recent announcement by the mainland authorities of measures to liberalise portfolio investment outflows has marked the emergence of such kind of opportunity for hong kong. under these new rules, each chinese citizen is allowed, among other things, to invest in fixed income securities overseas within certain limits. we expect that this will help boost the demand for fixed income securities although we do not know exactly how much such investment outflows will be approved by the mainland authorities in the initial years. given our experience and achievements in financial services and the fact that we are the only international financial centre of china, i am sure that hong kong is well positioned to grasp the opportunity. apart from the initiatives and developments i just mentioned, i believe that it would be useful to highlight a few fundamental factors which make hong kong an ideal place for the bond market. the first is our free capital mobility. the absence of capital controls means that there are no restrictions on foreign enterprises using our capital markets to raise funds. foreign investors can also freely invest in our markets and easily remit the proceeds back home. secondly, our well - developed financial markets, including derivative markets, would allow issuers and investors to manage any interest rate risk or exchange rate risk effectively. thirdly, hong kong has a critical mass of financial institutions which stand ready to support issuers to tap the capital markets. hong kong is also an asset management centre thus providing a large investor base for debt instruments. last but not least, the absence of capital gains tax and interest withholding tax would also favour bond market development. our exceptional geographical, cultural and language advantages also make hong kong an ideal place to link up the mainland of china with the rest of world. on our part, the hkma will continue to play a leading role in enhancing the development of the debt market in hong kong, by removing market frictions and unnecessary restrictions, and by keeping up with the best practices adopted in other well - developed markets. lastly, i would like to thank euromoney again for inviting me to speak. i look forward to the continued cooperation with our partners on the healthy development of the bond market in this region. thank you. | 0 |
european central bank press conference introductory statements introductory statements given by dr willem f duisenberg, president of the european central bank, and mr christian noyer, vice - president of the european central bank, at the press conference, held in frankfurt on 2 december 1999. * * * ladies and gentlemen, the vice - president and i are here today to report on the outcome of today β s meetings of the general council and the governing council of the ecb, the latter of which was attended by mr niinisto, president of the eu council. let me first report that the governing council decided to confirm the reference value for monetary growth, namely an annual growth rate of 4Β½ % for the broad aggregate m3. this decision was taken on the grounds that the components underlying the derivation of the first reference value in december 1998, namely the eurosystem β s definition of price stability and the assumptions for trend real gdp growth and the trend decline in m3 income velocity, have remained unchanged. as before, the governing council will assess monetary developments in relation to the reference value on the basis of a three - month moving average of annual growth rates. the governing council has decided henceforth to review the reference value on a regular annual basis, with the next review to take place in december 2000. against this background, the governing council wishes to emphasise that the trend growth potential of the euro area could be considerably enhanced by structural reform in the labour and goods markets. the eurosystem β s monetary policy strategy would take such changes into account, as appropriate. the derivation of the reference value of 4Β½ % is an expression of a medium - term - oriented approach. the generous liquidity situation in 1999 will have to be borne in mind. the ecb will issue a press release today providing some background information on the review of the reference value carried out today by the governing council. the press release will also recall the role of the reference value within the eurosystem β s monetary policy strategy. the governing council also conducted its regular review of the outlook for price developments and the risks to price stability in the euro area, this time including a review of the most recent forecasts and projections. after this examination, the interest rate on the main refinancing operations of the eurosystem was left at 3. 0 % and the interest rates on the marginal lending facility and on the deposit facility were maintained at 4. 0 % and 2. 0 % respectively. allow me to outline the main elements of | regtech from the trade - off between the need for organizations to stay compliant with the rapidly changing regulations and the need to remain profitable, while suptech is focusing on the challenges faced by supervisory agencies2. the payment infrastructure is one of the examples where innovation has developed quickly with payment tools available directly through an app on a smartphone or even on a smartwatch nowadays. the issuance of central bank digital currency, which is a digital version of cash, could be seen as a natural consequence of the broader process of digitization of the financial system. in a world where assets are being traded electronically and payments are being made with smartphones, should there only be room for physical cash? central bank digital currency ladies and gentlemen, distributed ledger technology is currently reshaping the financial system and is here to stay in one form or another. if this financial revolution is not embraced by regulators, private players will continue to innovate and drive the development of alternative 1 / 3 bis central bankers'speeches technologies, new payment methods, and digital currencies. central banks need to become active shapers in the current debate to fulfill their mandates and drive change as active agents rather than passive bystanders. given some of the shortcomings of cryptocurrencies pointed out by the bis, some people have supported the idea of central banks issuing their own digital forms of currency as more stable and reliable alternatives to cryptocurrencies. let β s face it : a central bank digital currency could overcome the volatility risks of an unbacked asset with no intrinsic value. in addition, central banks are in better position to develop a robust financial infrastructure that provides a secure environment for both domestic and cross - border transactions. with the recent shift in the interest of central banks, it is not unthinkable to assume that digital cash will one day dominate the payment infrastructure. financial innovation ladies and gentlemen, as i noted a few minutes ago, the fintech industry is designing new services that better adapt to users β needs in order to expand its business. in doing so, fintechs try to find the right balance between the opportunities in the market place and the financial regulation they have to comply with. however, fintech will aim at enhancing profitability and, therefore, may not have the right incentives to reach a socially viable equilibrium. the greatest challenge for central banks is to find the right balance between the clear benefits that financial innovations have on growth and identifying and mitigating the associated | 0 |
the crisis has reignited the debate of whether central banks should β lean against the wind β and use monetary policy also to prevent the build - up of asset price bubbles. this debate is still ongoing. and as usual, the riksbank has been at the forefront of it, with regard to both policy invention and implementation. the riksbank started to tighten monetary policy in 2010. initially, the concern was rising consumer prices. but attention soon shifted to high levels of household debt, which were perceived to present a vulnerability to the wider economy. to mitigate this weakness, monetary policy continued to tighten. this decision was not uncontroversial at the time. then deputy governor svensson argued that it was the job of macroprudential policy, not monetary policy, to deal with debt vulnerabilities. he voiced his concern that monetary policy was too blunt a tool for mitigating financial stability risks, and that doing so would cause macroeconomic performance to suffer. and indeed : while household debt was not curbed significantly, inflation dropped below target levels and unemployment started to rise. 2 / 4 bis central bankers'speeches what is the takeaway here? for me, it is first and foremost that moving monetary policy into uncharted territory will trigger debate. in my opinion, this is something not to shy away from, but to welcome and embrace. for it is only when we openly and constructively debate our differences that progress is possible. this episode thus speaks to the strength of the riksbank as an institution. when it comes to wider implications for monetary policy, it seems to me that the lessons are actually less clear than what immediately meets the eye. yes : when it comes to handling financial stability risks, monetary policy is a sledgehammer rather than a scalpel. macroprudential policy should be the preferred choice of tool, and getting it ready for use has to be a political top priority. however, the effectiveness of many instruments has not been confirmed in practice. and since applying these instruments could mean, for example, that it becomes harder for some to qualify for a mortgage, policymakers might be reluctant to use them. in order for monetary policy to fulfil its mandate and to ensure clear accountability, it β s important that price stability remains the primary objective of monetary policy. but that is not to say that when it comes to monetary policy and price stability there are no lessons to be learned. as we have recently witnessed, financial crises have a | considerable impact on the monetary policy transmission process, and monetary policymakers β ability to guarantee price stability and price developments as such. financial crises almost always originate in excessively loose bank lending. 3 the last crisis was no exception. confining monetary policy to mopping up when the milk is already spilled creates an asymmetry. in my opinion, a symmetrical monetary policy that takes into account money and credit growth and that is oriented towards the medium term seems most conducive to price stability. just to be clear : i am not arguing in favour of a monetary policy that strictly targets money growth. but i do suggest that money and credit developments provide valuable information to monetary policymakers. in principle, this is already the basis of the eurosystem β s two - pillar strategy. 4 e - krona finally, a project where the riksbank seems to be even more ahead of the pack is digital central bank money. developments in this field have been dizzying. we have had to familiarise ourselves with new concepts, including at least the basic intuition of the blockchain, and, not to forget, a host of buzzwords. and whereas minting coins in the 17th century required quite a bit of metal, as i pointed out at the beginning, mining crypto token can require quite a bit of energy β a single bitcoin transaction, for example, uses up to 900 kilowatt hours of electricity ( in april 2018 ), enough to power a four - person household for two months. separating hidden potentials of new technologies from the hype and excesses is challenging, often arduous. the effects of digital central bank money on the payment system will not be the only consideration for central banks, however. depending on its concrete design, digital central bank money would provide non - financial corporations and even households with access to the central bank balance sheet. evidently, cash allows this, too. but unlike cash, digital balances have no noteworthy storage costs. 3 / 4 bis central bankers'speeches allowing the public to hold claims on the central bank might make their liquid assets safer, because a central bank cannot become insolvent. this is a feature which will become relevant especially in times of crisis β when there will be a strong incentive for money holders to switch bank deposits into the official digital currency simply at the push of a button. but what might be a boon for savers in search of safety might be a bane for banks, as this makes a bank | 1 |
2004 and the financial services act 2007. the banking act is administered by the bank of mauritius and applies to banks, non - bank deposit taking institutions and the cash dealers while the financial services act is implemented by the financial services commission which oversees all other segments of the financial sector including insurance and leasing. the non - bank deposit taking institutions engaged in leasing business are regulated and supervised by both the bank of mauritius and financial services commission, such overlaps not being uncommon in other jurisdictions as well. there are conglomerates having business in segments coming within the purview of both regulators. we have a joint coordination committee to exchange notes and we are moving towards the concept of a lead regulator. the bank of mauritius act basically sets out the responsibilities and functions of the bank and thus its provisions have a bearing on the bank β s regulatory and supervisory role. there are in all 19 banks and 13 non - bank deposit taking institutions. out of these institutions, at present there are two banks and three non - bank deposit taking institutions in which government has a majority stake β directly or indirectly. the shares in a bank in which the government - controlled development financial institution held a majority stake were divested to private entities recently. the government β s interest in the five institutions is held in different ways. for instance, in one of the banks government of mauritius directly holds a part of the shares while the remaining is held through government - controlled organizations like the pension fund etc. in another case, government stake is partly held by the government - controlled post office. one of those banks is listed on the stock exchange as well. two of the non4 banks are subsidiaries of government undertakings. in the final analysis though, the manner in which the government stake is held may not have any bearing on the control exercised by government on the entities β management. all these institutions are regulated and supervised by bank of mauritius like any other institution under its purview, as i would explain later on. however, a deposit - taking development financial institution in the public sector is not yet brought within the purview of the bank. a uniform regulatory approach in certain jurisdictions, the legal framework for regulation and supervision makes a distinction on the applicability of certain provisions of the legislation to privately - owned and public sector financial institutions. in india, some of the provisions of the banking regulation act ( 1949 ), particularly relating to the appointment of the chief executive and directors, are not applicable to the public sector banks. however, in mauritius, all | and staff of the mauritius civil service mutual aid association ltd. thank you for your attention. 2 / 2 bis central bankers'speeches | 0.5 |
yves mersch : amcham β principles versus rules speech by mr yves mersch, governor of the central bank of luxembourg, at a conference of alfi and the american chamber of commerce ( amcham ), luxembourg, 14 june 2007. * * * ladies and gentleman, i would like to thank alfi and american chamber of commerce ( amcham ) for inviting me to participate in this conference. i am sure that this conference will reveal interesting views on the topics regarding principles versus rules - based approach. we will surely return home with new insights and suggestions for further research and developments. through my own research, i observed, as underlined by one member of the us securities and exchange commission, that there is confusion as to the difference between rules and principles. principles are frequently defined as β accepted and professed rules of action or conduct β. this confusion about rules and principles leads me to approach this topic from different angles. 1. in my view, rules have the benefits of being precise and durable. further, they are widely accepted and adhered to by the industry and they generally achieve the sought objectives. finally a rule reflects the consensus of past situations and can only address circumstances known or anticipated by regulators at the time of implementation. thus, rules become outdated as circumstances change. while principles are characterized by less preciseness, they remain more durable and widely accepted. however, their implementation is weaker and thus leaves more room for judgment. the setting of principles may be more appropriate in a rapidly changing environment marked by financial innovation and growing cross - border financial activities. indeed, principles leave an open window to adapt judgments in case of changing circumstances and thus, need less frequent changes which would spread out confusion. but we have to be conscious that principles ought to lead to rules just like a constitution needs laws to be effective. the constitution of the soviet union, which was considered as one of the most democratic, went unheeded due to the gap in practice between this constitution and laws. 2. of course, there are differences between private and public rules, only the latter benefiting from the monopoly of forceful implementation. principles may also have private or public sources. therefore the question of rules versus principles is often addressed through the criteria of the degree of cooperation or responsibility of the private sector. but additional criteria can be added such as the implication of the private sector in the elaboration and implementation of rules or principles. this conducts to reduce the potential conflicts and improve the identification of regulatory objectives, and the effectiveness | 1. 7 % in 2016 and 1. 8 % in 2017. again compared with the projections in june, the outlook for real gdp growth has been revised downwards. this is due primarily to lower external demand owing to weaker growth in the emerging markets. the risks to this outlook are tilted to the downside, reflecting in particular the increased uncertainties related to the external environment. notably, current developments in emerging market economies have the potential to further affect global growth adversely via trade and confidence effects. before addressing the second part of my remarks, let me revert to the evolution of the output gap, i. e. the difference between actual and potential output. the negative output gap is expected to narrow gradually over the projection horizon, which is encouraging news. ecb staff macroeconomic projections for the euro area, september 2015. eurosystem staff macroeconomic projections for the euro area, june 2015. bis central bankers β speeches however, it is also necessary to stress that while the output gap is narrowing, it is occurring against a background of weak potential output growth, which is estimated to be around 1 % over the projection horizon. this is below its pre - crisis level. in noting this, we should, moreover, not overlook the fact that since the late 1990s the euro area experienced a steady decline of potential output growth : from about 2 % in 2000, it declined continuously to about 1. 5 % before the crisis. there is indeed a problem in long - term growth dynamics. this problem is not new but has deepened over time. with this in mind, let us consider very briefly fiscal and monetary policy before focusing later on structural reforms. starting with fiscal policy, it should support the economic recovery, particularly through growth - enhancing public investment, material and immaterial, while remaining fully compliant with the stability and growth pact. a full and consistent implementation of the pact is crucial to maintain confidence in the euro area β s framework. this, in turn, would have positive implications for future growth prospects, which should help ensure debt sustainability and be conductive to future fiscal space. with regard to monetary policy, which has to be focused on the primary objective of maintaining price stability over the medium term, its highly accommodative stance has contributed and continues to contribute to support economic activity and investment, narrow the negative output gap and foster economic growth. let us also bear in mind the important fact that price stability, as well as financial stability, is a conditio sine qua non | 0.5 |
give you a few examples. inflation expectations remain anchored. healthy corporate balance sheet from past savings and profits will allow firms to rebuild and re - invest. corporate lending remains high despite some headwinds to the banking sector. these headwinds include the effect of the flood and global uncertainty on the macroeconomic outlook and on loan quality, as we have seen some pressure on the delinquency rate. the new fidf fee will also have some effect on banks β bottom line. nevertheless, the thai banking system will be able to handle these challenges given a strong capital base as a result of continued profitability in the past ten years, a good risk management system, and strong risk - based supervision. therefore, thailand β s key fundamentals remain resilient in the face of these challenges. most importantly, human resources and know - how remain intact. history shows that no matter how severe the natural disaster, roads can always be rebuilt and buildings restored in a relatively brief span of time should the human spirit remain, as it does in thailand. the growth rates i have mentioned for 2012 and 2013 are consistent with the medium - term trend, as strong fundamentals mean that thailand β s long - term growth trajectory remains intact despite the flood and volatile external environment. an important reason for this is bis central bankers β speeches that thailand is well positioned geographically to reap the benefits of growth in asia. the rise of china and the asean economic community ( aec ) provide enormous growth opportunities from economic integration. for sure, there will be more competition. but our research shows that trade gains will be substantial, from both inside and outside the region. however, there is a catch. to reap these gains, the thai economy will have to undergo structural adjustment, that is, the flow of labor and capital from sunset to sunrise sectors. the exact form of adjustment is uncertain, as it depends on global developments. however, what is quite certain is that the size of structural change required will be large, comparable to what thailand experienced during the economic liberalization of the 1980s and 90s. this change, almost by definition, will not be easy. if thailand overcomes this hurdle, it will benefit from exporting more goods, possibly more hi - tech, to the region while becoming part of the regional supply chain and enjoying a greater range of imports. but while the domestic outlook appears positive, the global environment remains uncertain. the lingering euro debt crisis and fragile us recovery continue to weigh on global growth. why | yves mersch : prospects of islamic finance β the view of a central bank in europe closing keynote address by mr yves mersch, governor of the central bank of luxembourg, at the islamic finance conference, frankfurt am main, 18 november 2010. * * * ladies and gentlemen, it is my pleasure to talk to an audience of such distinguished financial specialists. before i embark on what islamic finance means for central banking in europe, i will have a look at the growing importance of the phenomenon, its characteristics in the context of financial stability in general and its performance during the financial crisis in particular. finally, i will present the achievements within my own constituency to overcome the obstacles for an accelerated and safe spreading of islamic finance in europe. islamic finance : growing importance the development of modern islamic finance roughly started more than four decades ago. at the very beginning it occupied a small niche visible in islamic countries. in malaysia the pilgrim fund ( tabung haji ) was established in 1969 as an islamic savings institution. more recently islamic finance has expanded out of this niche. worldwide, the assets of islamic finance institution have grown at double - digit rates for a decade. even some conventional banks have embarked into the provision of shari β ah compliant financial assets reaching an estimated 509 billion usd at the end of 2007 according to moody β s 1. today, there are at least 70 countries that have some sort of islamic financial services. almost without exception, the major multinational banks offer some kind of these services. with the rise of the importance of sovereign wealth funds ( swf ), islamic finance was pushed further. about a decade ago, many emerging countries started to accumulate huge foreign exchange reserves, most of them benefiting from rising oil, gas and other natural resources β prices, being supported by favorable macroeconomic policies. with assets under management of an estimated 3, 000 bn usd in 2009, swf represent twice the wealth of hedged funds. muslim countries, oil exporters in particular, account for more than 50 % of all swf β s assets β not all of which are islamic finance products, though. while islamic banking remains the main form of islamic finance, islamic insurance companies ( takaful ), mutual funds and islamic bonds ( sukuk ) have witnessed strong global growth. the sukuk markets in particular have gained importance. in recent years, the issuance rose from less than 8 bn usd in 2003 to 50 bn usd by mid - 2007. 2 after a sharp decline during the financial crisis, private | 0 |
mercedes marco del pont : the certainties and uncertainties in the world economy speech by ms mercedes marco del pont, governor of the central bank of argentina, at the money and banking conference 2010, central bank of argentina, buenos aires, 2 september 2010. * * * this 2010 conference is very special to all argentineans because this year is our country β s bicentennial and the 75th anniversary of the central bank. we are celebrating this money conference in the framework of a world economy with abundant uncertainties. during the early morning session, the possibility of developed countries entering a final, sustainable and balanced growth phase was discussed. there is also uncertainty as to what is going to happen to the weakest european economies that are implementing the fiscal consolidation and adjustment programs imposed on them to settle their debt issues, which most of us think will probably stress europe β s current structural issues. there is also uncertainty in the international financial regulation arena and its new engineering. after the onset of the crisis when rock bottom was hit, there were some signs of a possible exit to the crisis with the emergence of positive indicators in a number of developed economies ; now the most critical positions concerning a substantial reform of the international financial architecture are starting to fade away. the idea of making changes so that everything at the structural level remains the same seems to be consolidating. there are many more uncertainties that could be discussed, but i would rather speak to you today about some certainties we have in developing countries, especially in argentina. we have one clear certainty : for the first time in our short - and long - term history, countries in the region, in general, and argentina, in particular, are going through this global crisis β one of most severe since the great depression β with very low economic and social costs, without having faced a cyclical and structural external sector crisis or been immersed in recession crises leading to job and wealth destruction. in fact, it was quite the opposite : as we faced this crisis, activity levels were preserved, macroeconomic imbalances, avoided and, at the same time, income levels were intended to be distributed, both in argentina and in many countries in the region. this is not by chance. it is the result of our countries β consistent economic models, which gave up old conventional theories that furthered our nations β underdevelopment, and drove attention back to domestic market growth supported by wage corrections and redistribution policies, where public investment acts as a source of wealth and social inclusion | position in the world with these countries, and it is expected to be somewhat symmetrical with them as regards the impact of external shocks. these phenomena have severely harmed long - term performance, and were not cost - free in terms of welfare : excessive volatility is probably the main reason for our country β s economic stagnation in the last three decades of the previous century. furthermore, the past quarter of a century was prolific in terms of the lessons learned from the crises of diverse origin and the consequences for the monetary and financial regime. we know that the channels through which excessive volatility affects economic performance are different. in this type of economies, where society has developed a high risk aversion and the need to prevent a new crisis becomes a priority objective, macroeconomic policy coordination is critical. if there are doubts about the intertemporal solvency of any of the macroeconomic policy set, the conventional monetary policy room for manouver can be limited. when designing monetary policy, it is important to take the fiscal, financial and external conditions into account. an autistic monetary regime that dodges these issues, at the risk of becoming an additional source of uncertainty, would be of no use. in sargent β s words, there is no robust monetary regime for an inconsistent fiscal policy. our twentieth century history says a lot about the close link between the lack of fiscal solvency and inflation. even though in recent years the restriction has eased thanks to the surplus public accounts, the literature on fiscal dominance problems is not limited to the current period. it is well known that tax revenue structure depends on the current relative price structure β hence the need to address the question under a general equilibrium approach. similarly, doubts as to the financial system β s solvency or external sustainability can also limit monetary policy room for maneuver. as to external solvency, it would be wrong to tailor exchange rate policy to temporary trends : part of the current pressure for the appreciation of emerging currencies relates to commodity prices ( through the current account ) and the investors β risk appetite ( through the capital account ), which may clearly be temporary instead of permanent forces. further research in the economic literature has highlighted the difference in treatment according to whether the trend is caused by permanent or temporary factors. in a financial world characterized by capital flow volatility, a massive amount of capital may lead to some kind of β dutch disease, β with unsustainable paths and high real variable volatility. this kind of | 0.5 |
enhancing our corporate culture. with our frameworks for governance, risk management and organizational enhancement in place, assessments on where we stand in these areas are nearly completed. we are finalizing our roadmaps toward a bangko sentral that exhibits governance principles which are highly integrated in our policies, systems, processes and practices ; a bangko sentral that exemplifies a values - based culture, with men and women of inspiring leadership, dynamic, achievement - oriented, and acting as one team. revisiting the fundamentals β bsp β s mandate as the end of our strategic plan draws near, fundamental questions emerge as we respond to new challenges relating to our mandate. during this past day and a half, we also engaged in a strategic dialogue on how we would like to position bsp, the country β s lone monetary authority, in the next medium term. our engaging dialogue on the assessment of seventeen years of monetary policy at the bsp highlighted key issues such as the financial stability dimension of price stability, the operating environment and practice of inflation targeting in emerging market economies like the philippines, and the approach in responding to asset price bubbles. we also had a spirited discussion on the complexity, impact and requirements of pursuing financial stability in bank supervision, bsp β s relationships with other regulators, monetary policy and payments and settlements. in this connection, we also looked into the challenges in the payments and settlements system in the context of meeting our goals of monetary and financial stability, as well as in achieving economic efficiency. focusing on the homestretch we are on the final leg of the journey. apart from the sense of urgency this evokes, this reality prompts us to heighten our teamwork and to collaborate more to guarantee our strategic success. looking at our scorecard, the β reds β and β yellows β pointed out the areas of concern that need the attention of the entire organization β the monetary board, management and staff. we said that we are a strategy - focused and results - oriented organization, and we are determined to prove this true. let us focus our energy to the implementation of the strategic initiatives that will contribute to the attainment of our targets in the medium - term plan. let us continue our efforts in closing the gaps and in addressing the overlaps to achieve the synergy we desire within the organization and in our relationships with external partners. we will deliver on our promise. in staying true to our commitment for continuous improvement, let us keep in mind what our | amando m tetangco, jr : moving forward with financial infrastructure integration through the bsp β s reverse repurchase e - trading system speech by mr amando m tetangco, jr, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the signing ceremony of the bsp β s reverse repurchase e - trading system, manila, 30 january 2015. * * * i am pleased to see that the partnership between the bangko sentral ng pilipinas and the banking industry continues to grow, strengthen and deepen. today, the signing of a memorandum of understanding for the bsp β s reverse repurchase electronic trading system marks yet another milestone in our efforts to promote financial market operations underpinned by strong and secure infrastructure and well - designed rules. over the years, the bsp has launched initiatives to address the growing needs of its stakeholders and to adapt to the changing times. these include the implementation of realtime gross settlement system which bsp operates today as the philpass, the intraday liquidity facility, the bsp e - rediscounting system, and the remit system for ofw remittances, just to name a few. ladies and gentlemen. these initiatives form important building blocks towards a domestic financial market infrastructure that efficiently and effectively responds to the needs of the real sector. with this goal in mind, our latest initiative is the rrp e - trading system, a web - based electronic platform β¦ where overnight and term rrp agreements between financial institutions and the bsp β s treasury department may be transacted and settled. with built - in security access procedures, the new e system will replace the manual queuing of the rrp trade orders that are posted via a combination of telephone and stand - alone trading platforms, e. g., reuters or bloomberg. it will also eliminate the unintended consequence of manually collating transactions from different order sources. another benefit that users of the e - trading system will enjoy is straight through processing where reporting of interbank call loan transactions will be done electronically. in sum, therefore, the system should heighten the security of the full dealing, settlement and reporting cycle of rrp transactions. but more than the benefits of automation, the creation of this system opens up for the bsp new horizons for enhancing the way it conducts open market operations or omo. this electronic trading system provides the bsp the flexibility | 0.5 |
option, companies that use international accounting standards will be permitted to apply fair value accounting to certain financial instruments that they designate at the time of purchase or origination. accordingly, firms using the fair value option could mark to market both the credit derivative and the hedged position and report changes in their fair values in current earnings. while at first glance the fair value option might be viewed as β the solution β to addressing the problems of the mixed - attribute model, it also raises a number of concerns. many of these concerns, as well as recommendations to address them, were included in a comment letter to the iasb from the basel committee on banking supervision ( basel committee ) issued on july 30. 2 let me first summarize some of the basel committee β s concerns, many of which are similar to those i described earlier. addressing reliability and verifiability issues, the committee suggested that, without observable market prices and sound valuation approaches, fair value measurements are difficult to determine, verify, and audit. it also suggested that reporting will become more complex and less comparable. the basel committee comment letter also discussed the β own credit risk β issue. if an entity β s creditworthiness deteriorates, financial liabilities would be marked down to fair value and a gain would be recorded in the entity β s profit and loss statement. in the most dramatic case, an insolvent entity might appear solvent as a result of marking to market its own deteriorated credit risk. to address these concerns, the basel committee recommended certain restrictions on the fair value option, such as disallowing the marking to market of credit risk of the institution β s own outstanding debt and prohibiting the fair value option for illiquid financial instruments. it also suggested that the fair value option be limited to transactions that seek to economically hedge risk exposures and to situations in which accounting volatility associated with the mixed - attribute model can be reduced. lastly, it recommended enhanced disclosures related to the fair value option. representatives of the basel committee continue to work constructively with the iasb on these issues, and i believe this dialogue can lead to a more - balanced approach to the fair value option that supports transparent accounting and sound risk - management policies in a manner consistent with safe and sound banking practices. as banking organizations using iasb standards consider how to use the fair value option for their own financial reporting purposes, additional issues should be considered. for example, if loans are accounted for under the fair value option, | eddie yue : asian development bank β working to reduce poverty in asia statement by mr eddie yue, deputy chief executive of the hong kong monetary authority, and head of delegation, hong kong, for the 49th asian development bank annual meeting, frankfurt am main, 3 β 5 may 2016. * * * i would like to thank the government of germany for hosting the 49th annual meeting of the asian development bank ( adb ), and the management and staff of adb for the excellent arrangements of the event. i would also like to congratulate adb for the successful conclusion of the eleventh replenishment of the asian development fund, which would provide critical resources to adb to further its work in poverty reduction in asia. adb is approaching its 50th anniversary this year. over the past fifty years, asia has undergone tremendous development. the economic miracle in asia, together with the important work of the bank, have lifted millions of people out of poverty and substantially improved our standard of living. after decades of rapid growth, however, there have been signs that the trend growth of the region is slowing. this reflects, to a considerable extent, supply - side constraints on potential output. in particular, a number of emerging economies in the region have been held back by infrastructure bottlenecks. as i have noted during the past few annual meetings, to sustain growth and propel the economy to the next stage of development, boosting infrastructure investment is a top priority for many developing members in the region. the infrastructure demand in asia is huge. adb estimates put the overall infrastructure investment needs of asia at us $ 750 billion per annum over the 2010 β 2020 period. in the meantime, there is no lack of investors interested in infrastructure investment or financing. despite a generally longer investment cycle, infrastructure projects can offer relatively stable returns and a hedge to inflation. that is why sovereign wealth funds, insurance funds and institutional investors have shown a growing interest in infrastructure investment in recent years. however, despite this increasing interest in infrastructure investment, there are significant impediments in channeling savings into infrastructure financing in emerging asia. put it in the language of bankers, there is a shortage of β bankable β projects, due to lack of a credible public - private partnership ( ppp ) framework ; deficiency in regulatory regime and legal environment for contract enforcement ; lack of transparency for monitoring project implementation ; and political uncertainty. the above impediments call for coordinated efforts to facilitate financial intermediation, lower barriers to investment, | 0 |
remarks by carolyn rogers senior deputy governor calgary economic development september 8, 2022 calgary, alberta economic progress report : restoring price stability good morning, everyone, and thank you for the opportunity to be here. this is my second public speech since joining the bank of canada at the end of last year, and i am really pleased to be out west this time. i grew up in western canada and over the course of my career have lived in every province from manitoba west to british columbia, including some time here in calgary. my favourite time to be out west is in the fall, during harvest. it β s a time of year that holds a lot of promise and brings back many fond memories for me. i β m looking forward to spending the next couple of days speaking with business leaders like you, hearing their perspectives on the albertan and canadian economies. but first, i β d like to offer you some of the bank β s views β particularly on the economy and monetary policy. i plan to cover three things this morning. first, i want to spend some time discussing our current view on the canadian economy and inflation, specifically. the consumer price index ( cpi ) was 7. 6 % in july, down slightly from june β s rate of 8. 1 %. while it looks like we might have seen the peak of overall inflation in canada, inflation excluding gasoline prices has continued to rise and broaden across goods and services. there are also some significant uncertainties, particularly in global commodity markets, that could set us back. and although most days it feels like the pandemic is behind us, we are heading into winter, and that means more time indoors. if we β ve learned anything over the last two years, it β s to expect the unexpected. of course, the second thing i want to talk about is our most recent rate decision. yesterday the bank raised the policy interest rate by 75 basis points. this came on the heels of july β s decision to increase the policy rate by a full percentage point. in total, the bank has increased the policy rate by 3 % since march. i β ll spend some time explaining why we have chosen to front - load rate increases β i would like to thank erik ens and kristina hess for their help in preparing this speech. why we think this has been the right response to the current underlying causes of inflation in canada. the third and final thing i will spend some time on is the path forward. i hope to give you a | has put it, β the global financial crisis has shaken the foundations of the deceptively comfortable pre - crisis central banking world β. 2 the conventional wisdom which held prior to the crisis has proved inadequate. it is now generally accepted that price stability alone is insufficient for macroeconomic stability. in addition, we now know that there is no neat separation between monetary and financial stability functions, and that if each central bank looks after its own economy, this does not automatically lead to an appropriate global monetary stance. further, interest - rate policy alone is not enough. the regulation and supervision of financial institutions needs to go beyond a microprudential perspective towards a macroprudential orientation, with central banks playing a key role in this process. it was the financial crisis which brought to the fore the need for greater global cooperation, not only among advanced economies but also in emerging - market economies who would prove to be the drivers of global growth during the crisis. it was for this reason that the prominence of the g - 20 was raised to that of a leaders β summit in 2009. there was clear recognition that there needed to be greater inclusivity to effectively mitigate the damage of the financial crisis, which had clearly highlighted the vulnerability and the interlinkages of the global financial system. the international response let me now turn to the work undertaken by the international forums in which the bank is an active participant ( including the g - 20, brics, and the bank for international settlements ), globalisation and central bank policies, a speech by lucas papademos at the bridge forum dialogue, 22 january 2008. bis working papers no. 353, central banking post - crisis : what compass for uncharted waters? by claudio borio. bis central bankers β speeches with the objective of ensuring that outcomes reached are in the best interest of not only the global economy but also emerging markets, south africa, and the region. since the onset of the crisis, the g - 20 assumed a leading role in trying to address the consequences thereof in an effort to reduce the negative repercussions for the global economy. this entailed, inter alia, the g - 20 taking the lead in addressing the shortcomings of the global financial system, enhancing financial safety nets, and, together with the basel committee on banking supervision, ensuring a more sound and stable financial and regulatory framework. the g - 20 played a prominent role in shaping the elements of the work programme of the international monetary fund, or | 0 |
##plete rapidly on the back of the need to maintain exchange rate stability and imbalances will keep building up in the economy. what are the current price dynamics? in april, inflation accelerated to 16. 4 % yoy. in particular, core inflation rose by 13 %. in monthly terms, prices grew by 3. 1 %. according to the nbu β s preliminary estimates, inflation continued to grow in may. as of now, inflation is restrained by : βͺ βͺ βͺ βͺ βͺ a certain recovery in the economic activity a gradual setting up of logistics an increase in supply from domestic producers and importers an excess of agricultural inputs and a relatively low demand for them the nbu fixing the official exchange rate and limiting its fluctuations on the interbank market, and the government imposing administrative caps on prices. the liberation of ukraine β s northern regions ( kyiv, chernihiv, and sumy oblasts ) and the ukrainian army β s resistance in southern and eastern regions restrained the deterioration in inflation expectations. at the same time, the disruption of production and logistics by the war is fueling inflation. high global energy prices also remain a significant inflationary factor, putting pressure on consumer inflation, both directly and indirectly, through higher production costs. third, ukraine is also in part importing global inflation, which has hit a record - high. in particular, the current inflation rate in the united states and euro area countries is over 8 %. how will prices behave in future? despite the gradual recovery of the economy, the upward trend in inflation will continue over the coming three months. this could worsen inflation expectations even further, and encourage depositors to convert their hryvnia savings into fx ones. for this reason the nbu has decided to return to an active interest rate policy to prevent these negative trends. why did the nbu raise the key policy rate significantly? after considering several scenarios, the nbu decided to raise the key policy rate by a whole of 15 pp, to 25 % per annum. the nbu believes that a slight increase in the key policy rate wouldn β t have had the desired influence on the financial and economic system. the first reason for this is that the monetary transmission mechanism has only a limited effect in wartime. second, this would have resulted in depositors taking a wait - and - see approach and, investors having weak interest in hryvnia assets. third, to revive interest in hryvnia assets, their yields must exceed expected inflation rates | luis m linde : united kingdom and spain β assessing current issues intervention by mr luis m linde, governor of the bank of spain, at the dinner opening the 25th tertulias hispano - britanicas, madrid, 26 october 2012. * * * almost a quarter of a century back, following the visit by her majesty queen elizabeth ii to madrid in 1988, a group of spanish and british diplomats, politicians, academics and civil servants had an excellent idea. they took advantage of the gibraltar dispute not to further cool relations between spain and the united kingdom, or to squabble some more, but rather to seek to be closer friends and try and understand one another better. today marks the 25th edition of the tertulias. let me welcome all those taking part, firstly and especially our british friends, who honour us with their presence. a few days ago, perusing james boswell β s legendary book on the life of samuel johnson, one of european culture β s literary giants, i came across several paragraphs in which boswell relates dr johnson β s interest in spain. he was convinced that spain was a greatly unknown country in england and in europe, and he suspected it could teach much to those taking the trouble to travel there. samuel johnson made this statement around the mid - 1760s. today, spain is no doubt much better known in the united kingdom than in johnson β s time, as it is also the case for the united kingdom being better known in spain. but everything is relative and i believe it β s not difficult to spot black holes, mistaken notions and errors of understanding on both sides. while these tertulias are usually an opportunity to overcome some of these problems, they most importantly allow us to understand our respective stances on current, important or pressing issues. and we also enjoy ourselves. because, unlike other meetings, the tertulias are, from my experience, a rather entertaining event. i still have fond memories of the meetings i attended and the discussions we had in the now distant 1990s in santiago de compostela, in seville, in santander and also in oxford and in edinburgh. the tertulias were instituted at what was a key time in recent european history : the disappearance of the berlin wall, german reunification, the collapse of the soviet union and the start of the european monetary union project. next came the great economic expansion at the onset of the 21st century, the international financial crisis and the serious economic | 0 |
however, this was due to many other accompanying measures, not just the separation of the currency. in other words, the currency was only as strong as the foundations of the set of economic policies in place at the time. as you all know, we tried a currency separation again in february 1993. again we had nothing to be ashamed of, as not a single drop of blood was shed in the process. savings started to spill over from slovakia into banks in the czech republic as soon as the former federation broke up. the general level of uncertainty also increased, affecting the foreign exchange market. but despite all that, the excellent organisational preparations for this step, stared secretly in the middle of the previous year, allowed the operation to be conducted quickly and efficiently. the architects of this currency separation deserve great recognition, because everything began to return to normal soon afterwards and the previous uncertainty quickly faded away. it is no secret that they were inspired primarily by rasin β s separation and its success, and they themselves later became a source of inspiration for currency separations in other economies gaining independence. all this tells us that the czech nation is reasonably good at running its own macroeconomic, monetary and financial affairs. it has never had to resort to an exchange rate arrangement such as a currency board, and it has enjoyed the benefits of relative economic and monetary independence. although at times the exchange rate of the koruna has been a source of domestic economic volatility, at other times it has done a great job of absorbing external shocks. until quite recently, we were also using the koruna exchange rate as an unconventional monetary policy instrument to help us achieve the inflation target. our ability to conduct our own monetary policy successfully is one reason why the czech republic is not currently seeking to adopt the euro any time soon. to sum up, the past 100 years have not been a series of random economic events. despite all the discontinuities, there has been some continuity. in the same way that we inherit various physical and personality traits from our forebears, economists learn their craft from those that came before them and pave the way for those that come after. i am sure this conference will bear me out on that. i wish you an interesting debate. thank you for listening. 2 / 2 bis central bankers'speeches | jiri rusnok : currency, taxes and other institutes of financial law welcome speech by mr jiri rusnok, governor of the czech national bank, at the currency, taxes and other institutes of financial law conference, faculty of law, charles university, prague, 20 september 2018. * * * good morning, everyone. it is an honour and a pleasure for me to welcome you to today β s conference on the currency, taxes and other institutes of financial law. the 100th anniversary of the foundation of the independent czechoslovakia is a good opportunity to look back and identify the main features of our national economic history. as you know, we have been through four periods since 1918 β the period of political and economic emancipation from austria - hungary, the wartime economy, the era of central - planning - based totalitarian communism, and finally almost three decades of democracy and a market economy. so, more than enough has happened in our country over the last 100 years. although these periods could not have been more different, two common features have appeared in various guises. i would characterise them on the one hand as economic moderation, prudence and discipline, and on the other as a struggle for economic independence and a willingness and ability to bear the consequences. let me give some examples of both. czechoslovakia β s founding fathers tomas garrigue masaryk, karel kramar and alois rasin were well aware that nurturing a sound financial environment was crucial to the prosperity of the young nation. the czech lands had been a key industrial and economic part of the former austriahungary and hence had a relatively well - developed banking sector. an awareness of the close links between government finances, the banking sector, firms and households shaped the economic policy of the first czechoslovak republic. karel englis worked systematically to balance the budget and deserves most of the credit for sorting out public finances in the early 1920s. in 1927 he submitted three tax laws that substantially lowered corporate taxation and supported the creation of capital. at the same time, though, he tied the tax reform, which led to lower revenues, to cuts in government expenditure and a streamlining of the civil service. so, rasin and englis established a trinity of traditions in our country : a stable currency, sound government finances and non - inflationary economic policy. these traditions became a theoretical, practical and moral legacy for subsequent generations of economic policymakers. it is unusual these days to look back to the communist period for economic inspiration. the | 1 |
of external fragility ( an index based on exports, current account, external debt, and foreign exchange cover ). this external deficit cannot keep increasing with impunity. ultimately the markets would penalise the large external liabilities and deficit position by requiring a larger premium for its continued funding, and the sheer size of servicing our obligations could become an intolerable burden to the country. already we spend around 6 β 7 percent of gdp servicing debt and returning profits off - shore to owners of new zealand domiciled businesses. as the recent imf report on new zealand makes clear, there are a number of aspects of our external position that are unusual by world standards : we have relatively high foreign investment here, but we do not do much investment overseas. we have high levels of private debt, predominantly overseas funded, short - term, but fx hedged. almost all of this debt is channelled through bank lending. we do not save much, with very limited financial savings and stocks and shares. overwhelmingly our household assets are invested in housing and other property. 4. how to reduce our vulnerability if this growth in our external indebtedness cannot continue, then it will not. but rather than await the market descriptions noted above, are there proactive steps that can improve the situation? the diagram shows a highly simplified picture of how the actions of households, businesses, banks and government feed into our balance of payments, in a way that over time drives our net international position. while the actions of government and businesses can be significant, the real impact comes from household consumption and savings, and from the actions of banks. with this is mind, how can we see this external position best being controlled and improved? reducing our external vulnerability is a long - term proposition that would mean running lower current account deficits than we have in the past and sustaining them over an extended period, not just one or two years. our calculations suggest that reducing current account deficits to no more than about 5 percent of gdp on average is necessary to stabilise the net investment position as a share of gdp, while reducing that share over time would require lower deficits to be run. there are many factors that can influence the size of our deficits, some of which are within new zealand β s control and some that are not. changes in national savings, the terms of trade, exchange rates, interest rates, and the fiscal balance can all affect new zealand β s external vulnerability. most would take some time to | percentage points of gdp between 1999 and 2009. the euro area is a vast continent of more than 331 million citizens. by population size, it is comparable with the other large economy of the developed world, namely the united states, with a population of 310 million. in terms of economic output, the euro area is second only to the united states. it accounted for about 20 % of world output in 2010, twice the share of japan ( about 10 % of world output ), and somewhat less than the united states ( about one - quarter of world output ). second, the euro is a stable and credible currency. for over 12 years now, the european central bank β together with all national central banks β has been delivering what it is expected to deliver : price stability in the euro area as a whole over the medium - term, with an average annual inflation of less than 2 %, but close to 2 %. since we are in kiel, let me add that in germany the average yearly inflation has been 1. 5 %, which is a better result than for any such 12 year period over the last 50 years. bis central bankers β speeches we have thereby been safeguarding the euro β s purchasing power. this has been achieved despite several headwinds to the european economy : oil prices went up ; the internet bubble burst ; violence and wars have raged in some parts of the world ; and starting in mid - 2007 we had to cope with the most severe global financial crisis in over 60 years. taken as a whole, the euro area performed soundly also when looking at other macroeconomic indicators, or comparing with other large developed economies. adjusted for differences in population growth, per capita gdp growth in the euro area over the last decade has been almost the same as in the united states, at about 1 % per year. the dispersion of real gdp growth rates across euro area countries is comparable with the equivalent dispersion across u. s. states. for instance, the difference between the fastest and slowest - growing u. s. states is not of a markedly different order of magnitude as that between euro area countries. overall employment in the euro area increased by 14 million during the first twelve years, compared with a rise of about 8 million in the united states. and the overall yearly public finance deficit in the euro area is presently about half that in the united states or in japan. the imf projects indeed the euro area β s fiscal deficit to reach 4. 4 % of gdp | 0 |
large - scale purchases of government bonds may affect the relationship between the central bank and the fiscal authority. what i am not sure of is when such a relationship can be characterised as β problematic β or β unproblematic β. reading the paper, i gained the impression ( perhaps wrongly ) that a β problematic β relationship is one in which monetary and fiscal policies are distinct, as is the case in the euro area. i would then like to ask : β just where is the problem if monetary policy is kept distinct from fiscal policy, and cannot be manipulated by the fiscal authorities to solve budgetary problems? β perhaps it is a problem for the fiscal authorities, because they would like to use the instrument of monetary policy to inflate away the fiscal problems and have, instead, to resort to fiscal measures that are subject to parliamentary approval and that all citizens are able to judge and assess. it seems to me that it is not a problem for the citizens at large, especially for the less wealthy, that fiscal problems are not solved through the inflation tax or by keeping the rate of interest on public debt instruments artificially low. to be sure, for the european population at large, the role of the central bank should remain distinct from that of the fiscal authorities, and monetary policy should remain firmly in the hands of the central bank. this is why the prohibition of monetary financing of the government and the independence of the central bank have been enshrined in the treaty. it is the best way to ensure that budgetary problems are addressed in a democratic way, rather than through the manipulation of the currency, which has hidden distribution effects on the population. in greece, ireland and spain, in france and germany, the governments are adopting budgetary policies in full awareness of the fact that they cannot count on the inflation tax to solve their fiscal challenges, challenges that all advanced societies have to face. can we consider this to be a problem? let me conclude on a broader issue, related to the title of the conference : transatlantic relationship in an era of growing economic multipolarity. at many of the conferences on trans - atlantic relations that i have attended in the past, participants often discussed the decreasing relevance of these relations in the light of the new emerging global powers. interestingly, when we get to discuss monetary issues, trans - atlantic relations remain important. the reason is that they are the only relevant ones. a great deal of attention seems to be devoted to potential β and i would add, minor | develop a framework of metrics for measuring progress. e. develop innovative financial solutions for supporting the needs of long gestation environment - friendly projects. f. enhance capabilities for assessing the risks including environment risks in order to dovetail them into lending decisions. 22. while the time taken to achieve these milestones could vary in view of the balanced emphasis on economic development and environment, it would go a long way in aligning the indian financial system with sustainable agenda. 23. i wish ficci and unep the very best for all the future endeavors in this area. bis central bankers β speeches | 0 |
is channeled namely, financial service providers, most of whom are participating in this exhibition. no matter what kind of financing, be it government, donor or private financing, it is channeled through our financial institutions. as earlier stated, the main reason this exhibition is being held is to showcase how our financial institutions are contributing to financing for gender equality. i also hope that the exhibition will encourage increased access to financial services by not only women but also men from all walks of life. ladies and gentlemen, the 2005 finscope survey undertaken by finmark trust confirmed that levels of access to financial services in zambia are extremely low. fewer than 15 % of adult zambians are reported to have had access to commercial banks. of the 15 %, the majority were men. therefore more needs to be done to enable women have increased access to financial services. this is why one of the strategic objectives of the bank of zambia in its 2008 - 2011 strategic plan is to promote financial inclusion. the more financial services are extended to ordinary citizens and small business enterprises, the more there will be a greater proportion of women amongst those receiving these services. we should note that it is women who have special needs in terms of access to financial services. in small businesses, such as small scale farming and market trading, it is very important to have a safe place to save money, maintain working capital and also access loan facilities. ladies and gentlemen, as we discuss financing for gender equality, there are fundamental questions we need to ask ourselves such as : β’ are services available from a financial service provider more to the advantage of men, rather than women? β’ are men β s interests served more than women β s? β’ do financial service providers enable women to overcome discrimination against them in their economic life? i believe these questions will be answered positively by the institutions present here. ladies and gentlemen, i am happy to inform you that among the products on exhibition here, we have finance building society marketing loans without collateral. this is a very welcome development as one of the challenges to women accessing finance is the requirement for collateral which most do not have. we also have the united nations country office with all their respective agencies participating in this exhibition to show case how they are supporting women in this country. we appreciate your collaboration with us in this exhibition. the environmental council of zambia has also joined with the financial institutions to increase our awareness on environmental issues and thus promote sustainable development. distinguished ladies and gentlemen, i believe the next two days will be very inform | of workshops, marked the end of phase i of the implementation programme of the risk management framework at the bank. following the end of the risk sensitization workshops the next stage required the implementation of the framework in the business areas. as mentioned earlier, the bank faced a number of teething problems in the implementation process of the first stages of the framework with departments having some difficulties in following written guidance that was being given by the risk management department. as one of the possible solutions to this, senior management agreed to the risk management department β s suggestion that phase ii of the risk management framework implementation process also be effected through workshops, targeting the risk liaison officers who are, by definition, the critical anchors of the approved risk management framework. this background therefore justifies the gathering that we have here today. ladies and gentlemen : your group, as risk liaison officers, alternates and risk coordinating officers, occupies and a plays a very important role in the governance structure of the risk management framework. you may wish to note that your group plays a function of a β critical link β between staff from your respective departments and the head of department who is, by definition, the risk manager. for this reason, the importance of your responsibilities should be very clear and need not be overemphasized. for those who might have forgotten their roles, i wish to encourage you to re - familiarize yourselves with the risk management and business continuity management ( bcm ) policies, where your respective responsibilities are clearly spelt out. having said this, the workshop you are attending today and tomorrow has the following key objectives : i. to explain the practical aspects of β context establishment β and the β risk identification β processes so as to ensure that you fully understand these initial, but critical steps, in the risk management process so as to enable you to assist your respective departments to complete these important stages of the process ; and ii. to remind you of your role and responsibilities, as risk liaison officers, alternates and risk coordinating officers, in the risk management framework. ladies and gentlemen : allow me to reiterate what i said during the risk sensitization workshops β the success of the bank of zambia risk management framework will in a large measure depend on how well this process will be understood and how well its implementation at departmental level will be facilitated by you. as risk liaison officers, alternates and risk coordinating officers for your respective departments, you will be expected to not only provide leadership and guidance to your respective departments on risk | 0.5 |
real house price in the u. s. increased by more than 40 percent between 2002 and 2006, while u. s. loan growth, particularly mortgage loans, accelerated during the same period. these signs were also present in east asia before the 1997 crisis. in the current crisis, the securitization boom and the easing of monetary policy in the us helped fund the loan growth, while in the case of the asian financial crisis, it was the large capital inflows in the form of direct borrowing that funded the credit boom. in both cases, however, poor underwriting standard by banks was an important common contributing factor. looking back, the asian financial crisis has been an important turning point for policymakers in the region, as the lessons learned from the crisis had led to many important policy reform initiatives, all of which aimed at strengthening the robustness and the risk management discipline of the domestic financial systems, and this brings me to my second point. in the case of thailand, after having restored financial stability in the early 2000s, financial reform became a top priority, with emphasis on instilling prudent regulations and strong risk management. we adopted a macro - prudential approach in the early 2000s, in recognition of the systemic linkages between the financial system and the increasingly opened macroeconomic conditions ; utilizing our natural institutional advantage as we continue to oversee both monetary policy and financial institutions supervision. hence, from 2003 to 2006, a series of macro - prudential measures were introduced, aiming at restraining then the rapid growth of credit, especially credit card loans and mortgage loans. the preventive measures that were introduced included placing limits on the loan - to - value ratio for luxury mortgage, raising minimum repayment requirements for credit cards and personal loans, and strengthening npl provisions by fair valuation standards of ias39. looking back, these measures have been useful in curtailing excessive leverage and household indebtedness, thus helping to maintain stability in our domestic financial system. risk - based supervision was a key driving force to strengthen risk management practices of our financial institutions. financial institutions and central bank laws have been overhauled to keep up with the increased complexity of the financial system. the new financial institutions business act, enacted last august, empowers the bank of thailand with the authority to regulate banks and non - banks under a consolidated supervision regime. furthermore, risk management and governance practices of financial institutions have also been strengthened. board of directors are now held accountable by law for setting the strategic and | important milestones on that map, the most important is to cease issuance of term sterling libor - linked cash products by the third quarter of 2020. 3 the increased focus and energy from sterling market participants this year is palpable. but they cannot run this race alone. as track marshals and safety officials, the bank of england and fca also have important roles to play β and we are using all the tools at our disposal in that quest. understandably, perhaps, focus often alights on the β sticks β we can wield. and it β s true that the regulatory authorities have stressed that firms β boards and executives must take ownership of the transition and its key milestones, through β dear ceo β 4 and β dear senior manager β 5 letters, and through direct supervisory you can see this vividly in the charts at : www. theice. com / iba / historical - data www. bankofengland. co. uk / - / media / boe / files / markets / benchmarks / rfr / rfrwgs - 2020 - priorities - and - milestones. pdf this target refers to products maturing beyond 2021 dear ceo letter : www. bankofengland. co. uk / prudential - regulation / letter / 2018 / firms - preparations - for - transition - from - libor - to - risk - freerates and feedback : www. bankofengland. co. uk / - / media / boe / files / prudential - regulation / publication / 2019 / firms - preparations - for - transitionfrom - libor - to - risk - free - rates. pdf www. bankofengland. co. uk / prudential - regulation / letter / 2020 / next - steps - on - libor - transition all speeches are available online at www. bankofengland. co. uk / news / speeches engagement. the fca has set out how it will exercise its powers of life and death over libor, including the critical judgment on representativeness. 6 and the bank β s financial policy committee ( fpc ) has said that it will consider using other policy and supervisory tools to encourage transition if progress is too slow. 7 figure 1 : sterling risk free rate working group roadmap for 2020 but the public sector has β carrots β too β and we are doing at least as much to encourage and enable sterling transition as we are to enforce it. the bank of | 0 |
the banking sector now? by the beginning of 2021, 75 % of loan repayment holidays ended. in other words, restructured loans now pose objectively lower risks to banks β financial standing. moreover, the absolute majority of borrowers have managed to resume their scheduled repayments. this means that they really needed loan repayment holidays and easing for that period ( which was not writing - off, but easing ). this was a critical measure. i said this earlier, at the meetings with parliamentary fractions, and would like to repeat this again : we are very thankful for the timely amendments to the laws in those areas where they were truly needed. i would like to focus on mortgage lending separately. mortgage lending soared last year, adding 20 % as of the end of the year. banks β total mortgage loan portfolio reached 9. 5 trillion rubles. this is a really large amount β almost one half of all bank loans issued to households. this year, mortgage lending continues to grow, adding 5 % in q1 alone. the rise in lending was spurred by low interest rates, primarily owing to the lending programmes subsidised by the government. that was a very efficient programme in the conditions of the acute phase of the crisis, but in march the interest rate on both market - based and subsidised loans averaged 7. 2 % compared to nearly 9 % as of the beginning of 2020. 3 / 6 bis central bankers'speeches eventually, such a significant increase in the demand for mortgage loans, coupled with other factors hindering supply expansion, pushed up housing prices. according to rosstat, price growth in the primary market in 2021 q1 reached 17. 6 % in annualised terms, and it is also rather high in the secondary market β 13. 6 %. i would like to remind you that currently annual inflation is about 5. 8 %, that is, price growth in this market is significantly higher than inflation. in a number of regions, housing prices surged by more than 20 %, even though households β real incomes declined. as an anti - crisis measure, we also expanded opportunities for the so - called good mortgage loans with a small down payment. however, in the primary market, the portion of mortgage loans with a small down payment, which involve higher risks, increased from 24 % in 2020 q2 to 45 % in 2021 q1. this also reflects the observed trends and shows that the anti - crisis measures achieved their objectives and should be phased out. otherwise | movement, to undertake this search. because, you need to find answers to some inconvenient questions. they are as follows : a. has the co - operative movement retained its relevance after its 130 years existence in india? b. has the indian psyche grown beyond the need for β one person one vote for mutual benefit β idiom? c. has the co - operative movement captured the imagination of younger generation? d. has it produced enough qualified and energetic young leaders to carry forward the movement? e. how the movement can insulate itself from the trends that as the cab study pointed out reduce the cooperativeness of co - operatives? 36. i would strongly urge the sector, if not in this seminar, to find answers to these questions. 37. another area where the cooperativeness of co - operatives is missing relates to the federations β role. several committees have suggested that the co - operative banking sector need umbrella organisations to facilitate, among others, funds management, it services, capacity building and strategic guidance. i hear about only one serious attempt has been made by the gujarat federation so far in that direction. it is a matter of regret that federations could not so far come forward to activise such umbrella organisations. i look forward to the federations moving ahead on this very useful, self - helping initiative. conclusion 38. to conclude, let me say that we do recognize that co - operative banks are unique in terms of their structure, clientele and credit delivery. the resilience shown by these banks during their long existence can be leveraged. despite their inherent weaknesses in terms of low capital, poor management and intrusive policies of state, co - operative banks in india have successfully weathered several challenges during their century old existence and continued to grow in the competitive environment which emerged following the economic and financial sector reforms initiated in 1991. rbi has been continuously taking policy measures to strengthen the co - operative banking sector. it is heartening to see that supportive regulatory environment, adoption of technology and re - orientation of business strategy can act as enablers for co - operative banks to contribute more meaningfully. yet, looking into the future, some hard questions relating to maintaining the cooperativeness in co - operatives need to be answered. and federations have to deliver on umbrella organisations. 39. thanking you all for your patient attention. bis central bankers β speeches | 0 |
lines at each of the 19 firms, making unprecedented efforts to achieve methodological consistency across firms, portfolios, and supervisors. through it all, we tried to be as transparent as possible. the assumptions, processes, and results of the capital assessment program have been communicated in detail, taking into account legitimate supervisory and firm confidentiality concerns. we released a white paper on april 24 describing the process and methodology. 1 on may 6, we provided more information on the measures used to size the required capital buffer, as well as a preview of the information that would be disclosed. 2 the final release of results, this past thursday, may 7, included the supervisory - determined indicative loss rates that were used in evaluating firm submissions, and, most importantly, aggregate and firm - specific estimates for losses, loss rates, resources to absorb losses, and the resulting capital buffer needs. 3 finally, as i have noted, the assessment was forward - looking. to project losses and offsetting resources two to three years in the future under the adverse scenario, we analyzed the historical relationships of losses and earnings to macroeconomic conditions and other determinants, and we dug deeply into cross - firm differences in portfolio compositions and vulnerabilities. the process began in earnest in early march when each firm submitted its estimate of losses and earnings over a two - year scenario, under two alternative assumed paths for the u. s. economy. the baseline scenario reflected the consensus expectation for the economy among professional forecasters as of february 2009, and the more adverse scenario incorporated the possibility that the recession could be more severe than the consensus expectation and that house prices could fall even more sharply. although we began the process by asking the firms to submit their own estimates of expected losses and revenues, we by no means accepted these submissions uncritically. senior supervisors and on - site examiners evaluated the firms'estimates to identify methodological weaknesses, missing information, over - optimistic assumptions, and other problems. examiners had detailed conversations with bank managers, which led to numerous corrections to and modifications of the firms'submissions, including sensitivity analyses based on alternative assumptions. as a second step, supervisors made judgmental adjustments to the firms'loss and revenue estimates. this process used both firm - specific and comparative analyses. for example, supervisors sometimes disagreed with the technical assumptions underlying a firm's loss forecast. in these cases, they adjusted the loss rates based on sensitivity analyses performed by the firm, results from other firms, and the supervisors'own | advanced economies, the ecb β s response was fully comparable with that of the other major central banks. thanks to its independence, the ecb has been able to adapt its policy response and reaction function. preserving this key asset will allow the ecb to adapt to future circumstances and ensure the effectiveness of its measures. this is all the more important considering that the desirability and relevance of central bank independence are increasingly being challenged around the world. as i argued in my introduction, the best way to preserve the ecb β s independence is to ensure a commensurate degree of central bank accountability. during the past eight years, our accountability practices have evolved and intensified in response to the quest for scrutiny that emerged from the crisis. 2 i have always appreciated the ability of this parliament to react to citizens β demands, support, concerns and channel them in a constructive manner during our discussions here. and i would like to personally thank you for this. i am confident that this parliament β and this committee in particular β will continue the good work it has done during my term as ecb president. this, in turn, will further strengthen the effectiveness of the ecb β s actions and citizens β trust in the eu project. thank you for your attention. i am now at your disposal for questions. 1 see draghi, m. ( 2011 ), β hearing at the committee on economic and monetary affairs of the european parliament β, brussels, 19 december. 2 see fraccaroli, n., giovannini, a. and jamet, j. - f. ( 2018 ), β the evolution of the ecb β s accountability practices during the crisis β, economic bulletin, issue 5, ecb. 5 / 5 bis central bankers'speeches | 0 |
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