text1
stringlengths 1
3.21k
| text2
stringlengths 1
3.21k
| label
float32 0
1
|
|---|---|---|
second pillar is intended to reveal this information, giving policymakers greater insight into shorter - run price dynamics and their implications for monetary policy. monetary policymaking in the euro area has to reflect the complexities and uncertainties which surround the transmission mechanism of monetary policy in a wholly new economic entity. these uncertainties imply that no single approach is likely to be entirely reliable. the inherent uncertainty faced by the central bank cannot simply be wished away. reliance on a single indicator or forecast, or a single model of the economy or view of the world, would, in these circumstances, be extremely unwise. the strategy needs to incorporate the full range of relevant indicators and assess them in the context of a variety of different models. in this respect, the two pillars complement one another. they allow for a structured cross - checking of the evidence and analysis underlying policy decisions, encompass all information and allow for various views of the structure of the economy. the academic literature and other external commentators are slowly coming to recognise the importance of β robustness β in monetary policymaking - something which i believe has been understood by central bankers for some time. a successful monetary policy is not one that performs β optimally β in the context of a specific model or given a particular view of the world. in the light of our limited understanding of how the economy works, no single model is reliable enough. rather given the great uncertainty faced by central banks - a successful monetary policy should perform well in a broad range of possible situations and across a variety of models or views of the world, each one of which may capture important aspects of actual economic behaviour or may, ex post, turn out to be close to reality. monetary policymaking is therefore complex. the two - pillar strategy chosen by the eurosystem where these pillars represent distinct, yet complementary, approaches - captures this complexity in an honest and genuinely transparent manner. this naturally brings me to transparency - a topic of considerable and ongoing debate in the euro area. in my view, the transparency of the monetary policy process is best understood as the extent to which the external, presentational role of the strategy is consistent with the internal, decision - making procedure. as a party to both the decision - making and the presentation of the single monetary policy, i can assure you that the correspondence between the internal and external aspects of the eurosystem β s strategy is extremely close. discussions in the governing council take into account, on the one hand, an analysis of monetary developments and their implications for monetary | slovakia was 5. 6 %, significantly above the average economic growth in the euro area. this resulted in real economic convergence as the gdp per inhabitant in purchasing power parity terms as a percentage of the gdp per inhabitant of the β euro area β increased from below 44 % in 2000 to above 62 % in 2007. the good times for the slovak economy are exemplified by rising real incomes. importantly, the gains in prosperity have also spread beyond the country β s economic heart in bratislava, even though considerable disparities between regions still exist. slovakia has experienced only limited external economic imbalances in recent years. the current account deficit remained relatively contained in the past few years and, due to increasing export capacities, it has in fact been shrinking lately. unit labour costs have until recently favoured the competitiveness of slovak producers. the koruna has participated in the exchange rate mechanism ii since november 2005. the underlying strong macroeconomic performance has led to a gradual appreciation of the nominal exchange rate against the euro, without impairing the competitiveness of slovak exporters. reflecting strong macroeconomic fundamentals, the central parity of the slovak koruna against the euro was revalued by 8. 5 % and 17. 65 % in march 2007 and may 2008, respectively. economic progress in slovakia has been based on a series of structural reforms. the substantial reforms of taxes and social benefits together with a greater flexibility in product and labour markets have brought slovakia to the attention of foreign investors. the ensuing inflow of foreign direct investment has boosted the economy and promoted rapid real gdp growth. and these days, more than ever, the pace of reforms from earlier years has to be maintained in order to reap all the benefits of euro adoption. 2. sustainable convergence is key euro adoption by slovakia implies that the benefits of the single market will be further enhanced by the single currency. the euro offers a credible framework for price stability as it removes exchange rate uncertainty within the euro area. slovakia will benefit from the stability - oriented policy of the ecb, which will help to anchor inflation expectations. furthermore, euro adoption may help to shield slovakia, a small and highly open economy, against the effects of international financial turbulence, which often has disproportionate effects on smaller economies. however, for the euro to remain a success story in slovakia, the national authorities will need to be very alert and pursue ambitious economic policies on all fronts. our main concern is that slovakia, being a catching - up economy | 0 |
private demand. with regard to prices, import prices are rising due to the increase in international commodity prices such as crude oil prices, along with the recent depreciation of the yen. domestic wholesale prices, notwithstanding the fall in prices of electric machinery, are flat mainly due to the rise in prices of petroleum and chemical products reflecting an increase in crude oil prices. meanwhile, consumer prices are somewhat weak due to a decline in prices of imported products reflecting the past this report was written based on data and information available when the bank of japan monetary policy meeting was held on 8 march 2000. the bank β s view on recent economic and financial developments, determined by the policy board at the monetary policy meeting held on 8 march as the basis of monetary policy decisions. appreciation of the yen. corporate service prices are still falling slowly. as for the outlook, upward pressure on prices is likely to arise from the gradual improvement in domestic supply - demand balance, as shown in the decline in inventories, and from the rise in crude oil prices. on the other hand, downward pressure is expected from the long - term declining trend of machinery prices due to technological innovations and from the fall in prices of imported products reflecting the past appreciation of the yen. on balance, overall prices are likely to remain unchanged for the time being. however, attention should still be paid to the downward pressure on prices stemming from weak demand, as clear signs of a self - sustained recovery in private demand have not yet been observed and wages continue to fall. in the financial market, the overnight call rate has generally stayed near zero, except for a temporary rise reflecting concerns about the possible computer problems related to the leap year, and financial institutions have been confident about the availability of overnight funds. the amount outstanding of funds in the call money market increased slightly in late february, and decreased thereafter. interest rates on term instruments have generally been stable at an extremely low level. the japan premium remains negligible. yields on long - term government bonds were generally above 1. 8 % in february, but declined somewhat from the beginning of march, and are recently ranging between 1. 7 % and 1. 8 %. the yield spread between private bonds ( bank debentures and corporate bonds ) and government bonds continues narrowing, primarily that between private bonds with relatively low credit ratings and government bonds. stock prices have been firm on the whole, and are currently moving around 20, 000 yen. in the foreign exchange market, the yen weakened against the us dollar for most | united states, which are especially important to cyclical economic activity, mexico β s potential long - term economic growth has substantial upside if the nation continues to fortify its fundamentals, which include healthy fiscal finances, low inflation, and a liquid and well - capitalized banking system. its upside potential will also be greater if it promotes pending structural reforms fostering productivity growth and investment. concluding remarks the increasing economic integration of mexico with the united states during the last three decades has benefited both countries significantly. advantages to mexico include greater product specialization and efficiency, and for both nations, a wider variety of goods and services at lower prices. being next to the largest and most diversified economy in the world is a strong advantage for mexico which should not be underestimated. recently, international financial instability has affected mexico mainly through substantial currency depreciation, similar to that experienced by other emerging market currencies, and, to a lesser extent, through slightly higher interest rates. meanwhile, the mexican economy has continued a recovery process which has included more moderate growth in the industrial sector, mainly reflecting slower exports to the united states. mexico β s economic outlook remains dependent on the strength of the u. s. economy, but long - term upside potential can be realized if mexico β s fundamentals are strengthened, and pending structural reforms approved. finally, monetary policy will continue to be consistent with preserving the convergence of inflation to the permanent 3 percent target. bis central bankers β speeches | 0 |
may be implemented more efficiently if private sector companies, with specialist expertise, invest in, and manage the project and bear the risks that the project will not be completed on time and within budget. these are important advantages, not least because project implementation capacity is weak in uganda and some other countries in the region. however, it is a misperception that ppps reduce the fiscal burden on the government over the long term ; instead they usually only extend the time frame over which the fiscal costs are incurred. ppps in many countries have bis central bankers β speeches also entailed substantial quasi fiscal liabilities because of implicit or explicit public guarantees given to private investors. ppps should be one of the options considered by governments for developing infrastructure but they should not be seen as a panacea for a shortage of budgetary resources. thank you very much for listening. bis central bankers β speeches | of singapore. governor subbarao has been a staunch advocate of rbi β s pro - active role in addressing financial inclusion to help those underserved. as the world β s second most populous country, india has faced an uphill task to expand financial inclusion, especially to individuals in remote areas. but the numbers speak for themselves : in 2011, just 35 percent of adults have bank accounts according to the world bank β s global findex report. by 2017 that number has dramatically risen to 80 percent. in his keynote address this morning governor subbarao will share with us india β s remarkable experience on improving financial inclusion by using digital technologies. please join me in giving a warm welcome to governor subbarao. 4 / 4 | 0 |
##s yields over the yields on comparable treasury securities to rise sharply. together with the increased fees imposed by the gses, the rise in this spread resulted in higher interest rates on conforming mortgages. more recently, agency mbs spreads and conforming mortgage rates have retraced part of this increase, and conforming mortgages continue to be readily available to households. however, for the most part, the nonconforming segment of the mortgage market continues to function poorly. in corporate debt markets, yields and spreads on both investment - grade and speculativegrade corporate bonds rose through mid - march before falling more recently. issuance of investment - grade bonds by both financial and nonfinancial corporations has been quite robust so far this year, but issuance of new high - yield debt has stalled. strains continue to be evident in the commercial paper market as well, where risk spreads remain elevated and the quantity of commercial paper outstanding, particularly asset - backed paper, has decreased. commercial and industrial loans at banks grew in january and february, but at a considerably slower pace than in previous months. these developments in financial markets β which themselves reflect, in part, greater concerns about housing and the economic outlook more generally β have weighed on real economic activity. notably, in the housing market, sales of both new and existing homes have generally continued weak, partly as a result of the reduced availability of mortgage credit, and home prices have continued to fall. 1 starts of new single - family homes declined an additional 7 percent in february, bringing the cumulative decline since the early 2006 peak in single - family starts to more than 60 percent. residential construction is likely to contract somewhat further in coming quarters as builders try to reduce their high inventories of unsold new homes. private payroll employment fell 101, 000 in february, after two months of smaller job losses, with job cuts in construction and closely related industries accounting for a significant share of the decline. but the demand for labor has also moderated recently in other industries, such as business services and retail trade, and manufacturing employment has continued on its downward trend. meanwhile, claims for unemployment insurance have risen somewhat on balance, and surveys indicate that employers have scaled back hiring plans and that jobseekers are experiencing greater difficulties finding work. the unemployment rate edged down in february and remains at a relatively low level ; however, in light of the sluggishness of economic activity and other indicators of a softer labor market, i expect it to move somewhat higher in coming | about one point the growth in our working age population. the remainder was drawn from the ever decreasing pool of available job seekers without work. that last development represents an unsustainable trend that has been produced by an inclination of households and firms to increase their spending on goods and services beyond the gains in their income from production. that propensity to spend, in turn, has been spurred by the rise in equity and home prices, which our analysis suggests can account for at least one percentage point of gdp growth over the past three years. even if this period of rapid expansion of capital gains comes to an end shortly, there remains a substantial amount in the pipeline to support outsized increases in consumption for many months into the future. of course, a dramatic contraction in equity market prices would greatly reduce this backlog of extra spending. to be sure, labor market tightness has not, as yet, put the current expansion at risk. despite the ever shrinking pool of available labor, recent readings on year - over - year increases in labor compensation have held steady or, by some measures, even eased. this seems to have resulted in part from falling inflation, which has implied that relatively modest nominal wage gains have provided healthy increases in purchasing power. also, a residual fear of job skill obsolescence, which has induced a preference for job security over wage gains, probably is still holding down wage levels. but should labor markets continue to tighten, significant increases in wages, in excess of productivity growth, will inevitably emerge, absent the unlikely repeal of the law of supply and demand. because monetary policy operates with a significant lag, we have to make judgments, not only about the current degree of balance in the economy, but about how the economy is likely to fare a year or more in the future under the current policy stance. the return of financial markets to greater stability and our growing concerns about emerging imbalances led the federal open market committee to adopt a policy position at our may meeting that contemplated a possible need for an upward adjustment of the federal funds rate in the months ahead. the issue is what policy setting has the capacity to sustain our remarkable economic expansion, now in its ninth year. this is the question the fomc will be addressing at its meeting at the end of the month. one of the important issues for the fomc as it has made such judgments in recent years has been the weight to place on asset prices. as i have already noted, history suggests that owing to the | 0.5 |
salvatore rossi : post - crisis challenges to central bank independence speech by mr salvatore rossi, deputy governor of the bank of italy, at the lbma / lppm precious metals conference 2013, rome, 30 september 2013. * * * first, let me thank the london bullion market association and the organizers of this conference for their invitation to take part in such an important event. i was asked to speak about β post - crisis challenges to central bank independence β. this is certainly a key issue, especially in these particular days. my speech will draw on some of the recent work of my colleagues at the bank of italy, and in particular from franco passacantando β s remarks at the world bank last april on a similar topic. 1 central bank independence yesterday and today2 over the past two centuries reflection on the nature of central banks has been incessant, proceeding hand - in - hand with the spread of these peculiar institutions. today, nearly every country has a central bank, but scholarly opinions still differ over the actual needs that central banks were intended to address. whatever these needs and whatever the circumstances, however, independence has been almost universally considered as the economic and legal heart of central banking. the idea that paper money must be issued by an institution that is independent and distinct from the sovereign is an ancient one : explicit and still highly topical passages were penned two centuries ago by henry thornton and david ricardo. though contested occasionally by advocates of all - embracing political sovereignty, this idea became rooted in economic thought and was incorporated, in varying ways and to varying extent, in the statutes of many central banks. in the 1980s monetary theory β rediscovered β the independence of central banks. economists, politicians and ordinary citizens had been frightened by the inflation of the 1970s, and also highly impressed by the differing ability of the leading countries to quell it. a special strain of economic literature emerged as part of the broader theoretical school of β new classical macroeconomics β associated with robert lucas and thomas sargent. it was based on the concept of β time consistency β of economic policy, i. e. the idea that if a policy is to be credible in the eyes of private agents with rational expectations, it must be consistent over time. since policy - makers may have incentives to deviate from their policies, some sort of institutional straitjacket is required to constrain them to time consistency. the theory quickly came to be applied to monetary policy. it was argued that the only way to prevent policy - makers from | antonio fazio : welcome address for the euro - mediterranean seminar welcoming address by mr antonio fazio, governor of the bank of italy, at the euro - mediterranean seminar, eurosystem and mediterranean country national central banks, organised by the bank of italy and the european central bank, naples, 14 - 15 january 2004. * * * the twelve mediterranean countries of africa, the middle east and europe represented here by the governors of their respective central banks are members of the euro - mediterranean partnership. they are morocco, algeria, tunisia, egypt, israel, the palestinian national authority, jordan, lebanon, syria, turkey, malta and cyprus. they are joined by libya in the capacity of observer. the partnership between the european union and the mediterranean countries began in 1995 with the barcelona conference ; it should lead, in 2010, to the creation of an area of free trade in goods and services. the signatories to the agreement have undertaken, in particular, to allow the reciprocal establishment of enterprises and to promote flows of direct investment in the less advanced economies. the commitments entered into at barcelona have been followed by bilateral association agreements between the european union and nearly all the mediterranean countries, including measures to liberalize trade in manufactures as agreed during the uruguay round. the gross domestic product of these mediterranean countries is equal to 10 per cent of that of the euro area. they have a population of 250 million people, which is growing at an annual rate of 1. 8 per cent ; young people below 15 years of age are 33 per cent of the total. the european union has a population of 380 million ; the proportion of young people under 15 is only 17 per cent. the proportion of over - 65 year - olds is 16 per cent and is destined to rise substantially in the decades to come. the present birth rate is extremely low, only slightly higher than the death rate. according to un estimates, by 2015 europe β s population will have grown by 5 million, that of the mediterranean countries by 60 million. the per capita gdp of the twelve countries is showing a tendency to rise, albeit slowly ; it still averages only 11 per cent of the figure for europe. some years ago the bank of italy began a study of the economies of north africa and the near east. the geographical proximity and already significant commercial ties with these countries, the migratory movements, and the prospect of financial integration prompted us, within the eurosystem, to undertake a more systematic analysis of the scope for their development, which is of great importance | 0.5 |
in place a framework for financial stability to parallel that for monetary stability. we need both. as we have seen, one without the other is not enough. just as the role of a central bank in monetary policy is to take the punch bowl away just as the party gets going, its role in financial stability should be to turn down the music when the dancing gets a little too wild. still, we should not put all our faith in regulation. it has limits. if the structure of banking creates incentives to take excessive risk then regulators will be overwhelmed by the avarice so vividly captured by michael lewis in his book the big short. incentives must be right. one misalignment of incentives today is the implicit guarantee to banks that are β too important to fail β, so that creditors have little incentive to monitor the behaviour of banks because they believe they will be bailed out. this problem is too important to ignore. there is no one simple solution. but we should not shy away from radical reform just because of the opposition of vested interests. so i welcome the setting up of the banking commission, with its talented commissioners and a wise and forensic chairman in sir john vickers. let me now return to the quiz question i posed earlier β to what question is 23 the answer? several plausible answers come to mind. first, 23 is the number of players in england β s world cup squad in south africa. second, it is of course 23 years since england last won the ashes β down under β. but neither of these are the right answer which is that 23 years is the age difference between the chancellor of the exchequer and the governor of the bank of england. in case there is any doubt, george is the younger. this age difference is highly desirable because the appropriate incentives are to allocate the responsibility of determining monetary policy to the older generation, which has a real interest in preserving the value of money, and the responsibility for fiscal policy to the younger generation, on whom falls the burden of excessive debt. if we are tempted to leave a large burden of debt for the next generation to pay back, what better incentive mechanism than to have as chancellor someone who has a longer life expectancy than any previous chancellor on record? given those incentives, chancellor, i look forward to a harmonious coordination of monetary and fiscal policy. lord mayor, as we prepare to toast the bankers and merchants of the city of london, all of us here tonight would like to pay tribute to your charitable work since you | at the same time, this credo should not prevent us from thinking about whether, and if so where, we can cushion any additional operational outlay caused by time pressure. a transitional period, at least as outlined in principle in march, could help with this. it would lower the long - term costs of exit by allowing firms to reflect on their options and decide which markets they want to operate in and which organisational structures would best allow them to strike the right balance between compliance and profitability. however, we cannot count on there being a 1 / 5 bis central bankers'speeches transitional period right now, since negotiations could break down at any time. 3 supervision of future third - country institutions : requirements and cooperation but whether or not there is a transitional period, one thing is certain : what standards apply to the future third - country institutions will ultimately boil down to how they are treated by the relevant supervisor after brexit and how the authorities will work together in this context. to shed light on this issue, the ssm has already adopted a whole bundle of supervisory policy stances. however, in the ssm, our baseline assumption is still the worst case, ie a no - deal scenario. and judging by recent developments in the united kingdom, this seems more than appropriate. with the next meeting of eu heads of state or government fast approaching, it doesn β t look like solutions to a number of quite fundamental issues concerning the future partnership will be found any time soon. the border with northern ireland is just one of these sensitive topics. this means that a huge package of agreements would have to be hammered out at the next summit but one in october, which would then, in turn, have to be reviewed by the parliaments in the shortest of timeframes. and even if this all went smoothly, it would be no more than a framework that would have to be fleshed out in detail to forge a future treaty β which would itself take many years. and because a breakdown in negotiations β and therefore a hard brexit β remains possible at any time throughout the entire process, enterprises should be prepared for this. that is why we banking supervisors are so concerned that a number of banks are easing off in their efforts to establish a licensed and operational entity in the eu or uk in good time ahead of march 2019. let me say in no uncertain terms that these institutions cannot rely on our leniency. we expect all banks to make provisions for a hard brexit. and that | 0 |
framework vindicate the scope and magnitude of the regulatory measures, it should not mask the challenges that are associated with the implementation of the reform package. indeed, basel iii will have some potential transitional costs that arise as banks, on average, need to increase their capital base in order to fulfil the new requirements. while the basic assumptions on the m - m theorem may hold in the long term, financial markets are characterised by information asymmetries and frictions in the short run, which can be especially prevalent in distressed periods. bis central bankers β speeches banks have several possibilities to adjust their capital ratios. for instance, they can raise capital, increase lending spreads, reduce dividends and / or downsize ( risk - weighted ) assets. in practice, it is likely that banks β adjustment is going to be achieved through a combination of all these measures. there is empirical evidence, however, that in the short term and in crisis periods in particular, banks react to capital ( and liquidity ) constraints by de - leveraging and by tightening of credit conditions ( hempell β kok, 2010 ) that can have a measurable impact on loan supply and thus on economic activity ( de bondt et al. 2010 ). whatever methods banks choose to adjust their capital ratios, the overall effect is channelled to the macro - economy via various transmission channels. the macroeconomic assessment group analysed transitional costs related to a 1 percentage point increase in the capital ratio implemented over eight years, assuming a constant return on equity. the results of the study show that the transitional costs are subdued. the cumulated reduction of gdp relative to the baseline would amount to 0. 15 percentage points. similarly, the negative [ un - weighted median ] impact on bank lending to the real economy would be approximately 1. 4 % in cumulated terms. the lending rate spreads are estimated to increase by 15. 5 basis points. the peak impact would occur after 35 quarters from the beginning of implementation period but the negative impact recedes when the time elapses. the interim report of the macroeconomic assessment group assessed also the implications of new tighter liquidity requirements. a 25 % increase in the holding of liquid assets was estimated to yield a fall in lending volumes of 3. 2 % and a [ median ] increase in lending spreads of 14 basis points after four and a half years. this would induce a [ median ] decline in gdp of 0. 08 % relative to the baseline. however, as the new liquid | bond markets and it soon became the benchmark yield curve for all of the eurozone. eventually, we hope to see a similar benchmark yield curve in the philippines. one that can potentially be smoother than the bval curve. we hope that we can get ideas from this discussion on how some curve - it does not have to be the swaps curve - could gain wide acceptance as a benchmark among market participants. 1 / 2 bis - central bankers'speeches all of these may require some government initiative. it maybe that the regulators killed the interest rate swap market, but we want to understand what happened and what could happen after today. so, i hope with today's ese, an amazing thing will also happen, and i think this is a place where we can plant the usual seeds of collaboration to aid capital market development. on that note, i encourage everyone's active participation. let us have a very productive session. maraming salamat at mabuhay tayong lahat! 2 / 2 bis - central bankers'speeches | 0 |
thomas jordan : the rationale for discontinuing the minimum exchange rate and lowering interest rates introductory remarks by mr thomas jordan, chairman of the governing board of the swiss national bank, at the press conference of the swiss national bank, zurich, 15 january 2015. * * * ladies and gentlemen thank you for once again accepting our invitation to this press conference at such short notice. let me begin by explaining the rationale for discontinuing the minimum exchange rate and lowering interest rates. afterwards, i shall be happy to answer your questions. discontinuation of the minimum exchange rate the swiss national bank ( snb ) has decided to discontinue the minimum exchange rate of chf 1. 20 per euro with immediate effect and to cease foreign currency purchases associated with enforcing it. the minimum exchange rate was introduced during a period of exceptional overvaluation of the swiss franc and an extremely high level of uncertainty on the financial markets. this exceptional and temporary measure protected the swiss economy from serious harm. while the swiss franc is still high, the overvaluation has decreased as a whole since the introduction of the minimum exchange rate. the economy was able to take advantage of this phase to adjust to the new situation. recently, divergences between the monetary policies of the major currency areas have increased significantly β a trend that is likely to become even more pronounced. the euro has depreciated substantially against the us dollar and this, in turn, has caused the swiss franc to weaken against the us dollar. in these circumstances, the snb has concluded that enforcing and maintaining the minimum exchange rate for the swiss franc against the euro is no longer justified. interest rate lowered at the same time as discontinuing the minimum exchange rate, the snb will be lowering the interest rate for balances held on sight deposit accounts to β 0. 75 % from 22 january. the exemption thresholds remain unchanged. further lowering the interest rate makes swissfranc investments considerably less attractive and will mitigate the effects of the decision to discontinue the minimum exchange rate. the target range for the three - month libor is being lowered by 0. 5 percentage points to between β 1. 25 % and β 0. 25 %. outlook for inflation and the economy the inflation outlook for switzerland is low. in december we presented a conditional inflation forecast, which predicts inflation of β 0. 1 % for this year. since this forecast was published, the oil price has | once again fallen significantly, which will further dampen the inflation outlook for a time. however, lower oil prices will stimulate growth globally, and this will influence economic developments in switzerland positively. swiss franc exchange rate movements also impact inflation and the economic situation. the snb remains committed to its mandate of ensuring medium - term price stability while taking account of economic developments. in concluding, let me emphasise that the snb will continue to take account of the exchange rate situation in formulating its monetary policy in future. if necessary, it will therefore remain active in the foreign exchange market to influence monetary conditions. thank you very much for your attention. i will now be happy to answer your questions. bis central bankers β speeches | 1 |
payments that continue to be top of mind for policymakers. one of these is the push for real - time payments. since 2019, the fed has been working to launch fednow, a new faster payments system that will be available in the first half of 2023. fednow will help transform the way payments are made through new direct services that enable consumers and businesses to make payments conveniently, in real time, on any day, and with immediate availability of funds for receivers. fednow will enable depository institutions of every size, and in every community across america, to provide safe and efficient instant payment services. we have also been studying the concept of a central bank digital currency ( cbdc ). several foreign governments and central banks are exploring digital currency, and there are many competing proposals suggesting a need to create a digital currency. the common theme underlying the need in these proposals is the desire to increase the speed and reduce the cost of financial transactions. last january, the fed published a paper soliciting comment on possible forms and uses of a cbdc in the united states. the fed continues to study the idea, although much of what supporters hope to achieve with a central bank digital currency may be provided through fednow and existing private payment services. in any case, initiatives to make payments faster and more efficient will continue to be an area of focus. climate supervision climate has also been a recent focus for fed supervision, but our narrow interest in this area it is limited to the largest banks. last fall, the fed announced an exploratory pilot study with six of the gsibs that is narrowly focused on the goal of enhancing the ability of supervisors and firms to measure and manage climate - related financial risks, not credit allocation. the fed has also published a climate guidance proposal for banks over $ 100 billion in assets. these climate efforts do not apply to smaller and community banks. smaller and community banks already integrate and comply with robust risk management expectations. the fed views its role on climate as a narrow focus on 3 / 4 bis - central bankers'speeches supervisory responsibilities and limited to our role in promoting a safe, sound and stable financial system. while this climate supervision effort is a new area of focus, it has been a longstanding supervisory requirement that banks manage their risks related to extreme weather events and other natural disasters that could disrupt operations or impact business lines. community reinvestment act the last item on our regulatory agenda that i will note in my remarks today is the proposal to update | funds rate will continue to be guided by the incoming data and its implications for the outlook for inflation and economic activity. i will be looking for compelling signs that inflation has peaked and for more consistent indications that inflation is on a downward path, in determining both the appropriate size of future rate increases and the level at which the federal funds rate is sufficiently restrictive. i expect that once we achieve a sufficiently restrictive federal funds rate, it 1 / 4 bis - central bankers'speeches will need to remain at that level for some time in order to restore price stability, which will in turn help to create conditions that support a sustainably strong labor market. maintaining a steadfast commitment to restoring price stability is essential to support a sustainably strong labor market. to this point, unemployment has remained low as we have tightened monetary policy and made progress in lowering inflation. i take this as a hopeful sign that we can succeed in lowering inflation without a significant economic downturn. it is likely that as a part of this process, labor markets will soften somewhat before we bring inflation back to our 2 percent goal. while the effects of monetary policy tightening on the job market have generally been limited so far, slowing the economy will likely mean that job creation also slows. and if there are unforeseen shocks to the economy, growth may slow further. it's important to keep in mind that there are costs and risks to tightening policy to lower inflation, but i see the costs and risks of allowing inflation to persist as far greater. these dynamics make the difficult decisions facing the fomc even more challenging, but it is absolutely necessary that the committee achieves our goal of price stability. from the late 1960s through the mid - 1980s, the u. s. economy experienced high inflation, high unemployment, and declining living standards. during that time, policymakers prematurely eased monetary policy when the economy weakened, and inflation remained high. the fomc was forced to return to tightening monetary policy, causing a deep recession in 1981 and 1982. this is an important lesson that guides my thinking about monetary policy and my continued support for policy actions that will continue to lower inflation. it is also important to remember that today's inflation is a global concern. this is because some of the factors driving inflation in the united states are global, including the disruption to goods production and trade during the pandemic, the shutdown and reopening of large economies, and the more recent disruption of food and energy supplies due to | 1 |
spread between danish and ecb monetary - policy rates. this was the case in the autumn of 2008 as indicated by the chart. slide 7 : rising net foreign assets have reduced money - market spread when the fixed exchange rate was introduced, denmark was a net debtor. but after several years with significant surpluses on the balance of payments we are now a creditor nation. our net foreign assets constitute more than 50 per cent of annual gdp. the improved net foreign - asset position is likely to have contributed to reducing monetary - policy interest rates in denmark. until the mid - 1990s, the spread between denmark and germany, expressed by short - term money - market rates, fluctuated strongly and it was often several percentage points. in the subsequent period, until the outbreak of the financial crisis in 2008, the spread was very stable at a moderate positive level. after a temporary widening in connection with the financial crisis, the spread has been in negative territory for most of the time since 2012. the reduction in the spread is likely to be associated with the improved net foreign - asset position. also, whereas episodes with uncertainty in fx markets used to be reflected in downward pressure on the krone, the opposite has been the case side 3 af 13 in recent years. this was first seen in 2011 when a number of euro - area countries experienced a sovereign - debt crisis that led some investors to regard the krone as a safe haven. and more recently, we experienced strong capital inflows in early 2015 when the swiss national bank, snb, decided to discontinue the floor under the franc and the ecb subsequently announced its public - sector purchase programme. slide 8 : separator β strong capital inflows led to a forceful policy response slide 9 : swiss contagion to danish fx market the key danish monetary - policy rate first became slightly negative in 2012. this reflected capital inflows associated with the sovereign - debt crisis in a number of euro - area countries. but it was not until early 2015 that policy rates became substantially negative. on 15 january 2015 the snb announced that the floor under the franc / euro exchange rate would be discontinued. the swiss announcement surprised financial markets resulting in increased volatility in a wide range of financial asset markets. the danish fx market was one of them. in the first few hours after the swiss announcement, the danish exchange rate fluctuated more than usual. over the following days and weeks, we experienced massive inflows of currency | experienced, such losses could challenge macroeconomic and financial stability if households are not sufficiently robust. slide 28 : legal and technical challenges have been addressed let me conclude with some remarks on the legal and technical aspects of negative interest rates. in february 2015 the minister for business and growth set up a task force to identify potential issues in relation to negative rates of interest on mortgage loans. in a report from april 2015, the task force concluded that negative interest rates do not cause significant problems in relation to adjustable - rate loans. but they may constitute a challenge in relation to loans that are based on variable - rate bonds. at the same time, the task force assessed that there is no immediate need for legislation in this area. the individual mortgage banks are free to choose the model that best matches their business. as a result, they have applied different models for handling negative rates. the borrowers have received the negative interest either as a direct disbursement, as a reduction of the outstanding debt or as a capital gain. as regards taxation of interest rates, in february 2015 the danish tax authorities, skat, issued guidelines describing the taxation and deductibility of negative interest : interest income in the form of a negative rate of interest is taxable for the borrower, while interest costs in the form of a negative rate of interest are deductible for the lender. in addition, the danish parliament has adopted adjustments to a number of laws regarding the tax treatment of negative interest. slide 29 : thank you! so let me conclude. since the outbreak of the financial crisis a number of large central banks have resorted to unconventional monetary policies. this has substantially impacted the economic and financial conditions of denmark and other small open economies. by doing so, it has posed a number of challenges and led us into unchartered territory. but it is important for me to stress that the spill - overs arising from the policies of large central banks have been manageable. this has been the case for us at danmarks nationalbank as well as for our commercial banks and for firms and households. looking ahead, the rate cycle is starting to turn. this is likely to coincide with a further strengthening of the economy, and in denmark banks as well as firms and households are well positioned to coping with higher rates. in fact, higher rates will be a welcome contribution to curbing side 12 af 13 house prices as the recovery gains momentum. but needless to say, we will continue to watch out for potential | 1 |
guy debelle : the reserve bank β s operations in financial markets address by mr guy debelle, assistant governor ( financial markets ) of the reserve bank of australia, to the university of adelaide business school, unibreakfast, adelaide, 26 february 2013. * * * i'm very pleased to be back in my home town to talk to you today about the reserve bank β s dealings in financial markets. 1 why might you be interested in this topic? i will talk about how the reserve bank actually implements the target interest rate set by the reserve bank board at its monthly meetings. i will then describe how this interest rate, known as the cash rate, affects all the other interest rates in the economy, including mortgage rates, business borrowing rates and deposit rates. so that affects you one way or another. i will also talk about the reserve bank β s transactions in the foreign exchange market and finish with some thoughts about the exchange rate more generally. domestic market operations as you all know, on the first tuesday of each month ( except january ), the board of the reserve bank meets to determine the appropriate stance of monetary policy in australia. at 2. 30 pm, just after the conclusion of the meeting, the governor issues a press release announcing the board β s decision, along with an explanation for the decision taken. the decision takes the form of a target for the cash rate. it is the job of part of my area, financial markets group, to ensure that the board β s target for the cash rate is actually achieved. so how do we do this? and how does that affect the interest rate on your mortgage, your business loan and your deposit? the cash rate is the interest rate on overnight unsecured borrowing in the interbank market. that is, it is the interest rate banks charge each other to borrow and lend funds overnight. ( unsecured means that there is no security, such as a government bond, tied up in the loan as collateral. ) the reserve bank β s ability to affect this interest rate comes from the fact that we control the amount of funds or liquidity in this market. banks have deposit accounts with the reserve bank called exchange settlement accounts. these are the accounts across which the myriad of transactions in the economy are settled each day. when you pay your electricity bill by direct debit, the funds are effectively transferred from your bank account, across the exchange settlement account of your bank to that of your electricity company β s bank and into the | 8 solid years of non - stop computer programming experience, something that was exceptionally unique at that time for a young man just over 20. for a number of very peculiar reasons, gates started his programming venture in as early as 1968 when he was just an eighth grade kid in a high school in seattle. in those days, even university students in the usa would not find it easy to have access to mainframe computers, let alone doing non - stop programming. but gates had the opportunity and the advantage of having done lots and lots of programming, probably more than 10, 000 hours, when he started microsoft, which subsequently outperformed all other competitors in the field by huge margins. the question that i have is this : would bill gates still be the same bill gates that we now know if he did not have the opportunities that were opened to him in these early years of his adolescence that enabled him to jump start on his programming career ahead of so many other equally clever and talented people in the usa? i don β t quite know the answer, but let me turn to another example of great success in the last century in the musical world β the beatles. being a person born in the 1950s, it is not surprising that i am very fond of the beatles. john lennon, paul mccartney, george harrison and ringo starr were clearly very, very talented. ever since they launched their hugely successful tour of the usa in february 1964, the beatles had for several decades became the centre of the rock and roll world. but is it true that beatles became so good and so successful simply because they were music geniuses? is it that simple? let β s look closer at the days before they became the idol of the world. before 1960, the beatles was still a struggling high school band. however, through some strange connections, beatles got invited to play at some night clubs in hamburg in 1960 β 1962. within a year and a half β s time, the beatles played in these hamburg clubs for 270 nights. these hamburg clubs were not the kind of music halls in which proper concerts are conducted. they were more like drinking clubs where lots of people came in and went out constantly as live entertainment on stage was performed. the beatles had to perform 4, 6 or even 8 hours each night. because of so many live performances of very long hours, the beatles had greatly improved their stamina and team work. moreover, they had to try out different varieties of music and songs in order to satisfy the customers. so | 0 |
β required reserves with the national bank of serbia with an aim to strengthen the local currency and longer term liability side of the banks β balance sheets. reserve requirements for local currency sources of bank funding were set to 0 % ( for maturities over two years ) and 5 % ( for maturities up to two years ). however, the reserve requirement ratio for fx sources of funding is set to 25 % ( for maturities over two years ) and 30 % ( for maturities up to two years ). the message intended for banks was the promotion of financial stability, namely : more long term funding and more local currency funding equals cheaper financing. also, daily liquidity loans and short - term dinar loans may be extended to banks by the nbs only against the collateral of dinar securities issued by the republic of serbia and the nbs. in case of need, the nbs will also conduct dinar liquidity - providing repo operations, again against the collateral of dinar securities. to encourage interbank fx swap trading and the development of the fx hedging market, the nbs continued conducting 3 - month fx swap auctions in 2011. 2. in may 2011, the nbs adopted the decision on measures for safeguarding and strengthening stability of the financial system. the decision entering into force in june 2011 introduced a set of measures regarding fx - denominated and fx - indexed lending to citizens : a ) fx - denominated and fx - indexed loans may be approved only subject to a down payment or placement of deposit of no less than 30 % of the loan amount. this rule does not apply to housing loans ; b ) the ltv of fx - denominated and indexed mortgage loans are limited to a maximum of 80 % ; c ) loans may be indexed only to the euro, i. e. banks can no longer grant loans indexed to the swiss franc and other currencies. 3. the law on the protection of financial services consumers, which entered into force in early june and is implemented as of december 2011, prescribes an obligation for banks to primarily offer to their clients loans in dinars, and to provide an fx linked product only at client request. in such a case, bank is obliged to warn their clients of the fx risk they assume. 4. by the end of 2011, preparations for introduction of basel ii in 2012 were completed. domestic banking sector was recapitalized to a large extent and new risk management capacities with the | global - wide impact because of the underlying interconnectedness. the issues of trust, robustness of markets and financial infrastructure, counterparty - risk, information gap, as well as, liquidity will become important possible triggers of the future market disruptions. in addition, geopolitical events or trade tension can also lead to disruptions in global liquidity and trigger a global - wide impact. the main message here is that, going forward, future crises will be different. they will relate less to misalignment in the individual economies because of better policy and regulation, but will relate more to the resiliency of the global system, market and institutions, as well as the ability of the policymakers to prevent or address the vulnerabilities beforehand. forth, for emerging markets, the most threatening externally - induced crises going forward will be those that relate to the concentration of global liquidity, either too much or too little, in the form of large, persistent, and volatile capital flows that overwhelm the capacities of individual countries to manage and adjust to. and the most worrying aspect of this is that the trigger would lie outside the controls of emerging market β s policymakers since the flows would be the results of market conditions and policy prescription elsewhere. let me now turn to my second observation on the implications that the changing nature of future crises can have for the conduct of ewe going forward. on this, i have four points to make. first, in view of the changing nature of future crises, it is therefore important that the thrust of the ewe is mindful of this possibility. in my view, the focus of ewe should expand beyond macro - misalignments based on historical relationships to include assessing the robustness and the resiliency of the systemically - important markets, system, and institutions. this means the key objective of ewe will not be to forecast future crises per se, but to identify vulnerabilities in the most important areas in advance, especially those risks that are not covered by market data or by the surveillance process elsewhere. second, for ewe to be effective and comprehensive, it should be done at two levels to cover both the global dimension and the country - specific dimension of risk. the global dimension must be the responsibilities of the imf and the fsb given their comparative advantage as international organization. and as i already noted, ewe by the imf and the fsb should focus on monitoring the development of risk in the | 0 |
practical policy perspective. let me focus the remainder of my remarks on one of these : the importance of the in - between. the lean - versus - clean framing suggests a simple model in which there are just two dates : ( 1 ) an initial ex ante date that is prior to when a shock is realized β and when we may not even have much of a clue as to the form the shock will take β and ( 2 ) an ex post date when the shock has hit, its full effects have been felt, and policymakers are dealing with the aftermath. but this before - and - after dichotomy is misleading. many financial crises unfold over months or even years, and the choices made during this in - between period can be among the most crucial to the eventual outcome. recall that problems with subprime mortgages were already surfacing in late 2006. the first serious tremors associated with the crisis were felt in august 2007, with bnp paribas suspending redemptions on its money funds and investor runs on multiple asset - backed commercial paper programs. at this point, there was no longer any real doubt about the nature of the shock confronting us β even if its precise magnitude was yet to be determined. and yet it was more than a full year until the failure of lehman brothers in september of 2008, which ignited the most intense part of the crisis. moreover, during the interval from the start of 2007 through the third quarter of 2008, the largest u. s. financial firms β which, collectively, would go on to charge off $ 375 billion of loans over the next 12 quarters β paid out almost $ 125 billion in cash to their shareholders via common dividends and share repurchases, while raising only $ 41 billion in new common equity. this all happened while there was a clear and growing market awareness of the solvency challenges they were facing. indeed, the collective market cap of these firms fell by approximately 50 percent from the start of 2007 through the end of june 2008. there are two points here worth emphasizing. first, it seems indisputable that the severity of the crisis would have been mitigated if policymakers had clamped down on these payouts earlier, and had compelled substantial new equity raises. second, the conflict between the interests of the firms, acting on behalf of their shareholders, and those of the broader public became particularly acute once the crisis got underway, because of the debt overhang for a fuller discussion of both the potential | of asset sales, equity issues, and other measures, but the federal reserve, in principle and under appropriate circumstances, has the authority to object to a plan that is overly reliant on asset sales and other measures and withhold its non - objection to a plan unless the firm addresses all the shortfall - via - equity issues, over some defined time frame. another complicating factor that may make regulators shy away from pushing for new equity issues in the midst of a crisis is the lack of a government backstop. a number of observers have argued that the availability of a backstop in the form of tarp capital played a key role in the original scap stress tests. bis central bankers β speeches | 1 |
are aligned with the bank's risk appetite and policies. the benefits of basel ii cannot be achieved with just a strict regulatory compliance approach. while basel ii serves as a powerful catalyst to reposition the role of, and the attention to, risk management in banking institutions, significant efforts need to be directed at strengthening the financial structure, corporate governance, risk management and data capabilities within the banking institutions. the approach adopted by bank negara malaysia has been for these efforts to complement and reinforce the positive outcomes of basel ii. these are important preconditions for, and not automatic outcomes from the adoption of basel ii. in the wake of the sub - prime mortgage crisis in the united states, several aspects of basel ii have attracted attention. among them has been the use of ratings in the regulatory framework and whether this has unintentionally discouraged investors from performing their own due diligence. the underestimation of risk for structured credit securitisations has now come under greater scrutiny. there has also been increased debate over the cyclicality impact of basel ii. the effectiveness of the supervisory review process in ensuring that additional capital buffers are provided by banks for risks not fully captured under pillar 1 of the framework has also been the subject of this review by authorities. the relative importance of these issues will be different for different countries, depending on the stage of development of the financial markets and the banking system, as well as the supervisory structure that is in place. among asia pacific countries, experiences with the implementation of basel ii have been varied. for emerging economies, basel ii has arguably a more far reaching impact. this is on account of several factors. firstly, many emerging economies continue to depend heavily on the banking system to finance economic activity. with a few exceptions, commercial banks are the main providers of credit in most emerging economies, accounting for an average of 90 % of total credit. this produces a higher correlation to the economic sectors where the implications on the banking system could result in significant disruptions to credit supply which could in turn affect economic activity. secondly, the more advanced approaches of basel ii are calibrated to the environment of the g10 countries, with significant acceleration of capital charges as the probability of default ratings deteriorate. to the extent that this inappropriately amplifies economic cycles by inducing the systemic misperception of risk in emerging economies, this can exacerbate a credit crunch during periods of weak economic performance. thirdly, the anticipation of lower regulatory capital | theory and practical policy, it was gradually recognised that there is no trade - off between inflation and unemployment in the long term. in the early 1980s, many countries again focused on the need to restore confidence in the nominal anchor. in norway the shift in policy took place in 1986. following the last devaluation of the krone in 1986, economic policy was oriented towards securing confidence in the fixed exchange rate system. a fixed exchange rate was an intermediate target for achieving low and stable inflation. the fixed rate policy was abandoned in 1992, and the experience of the latter half of the 1990s demonstrated that monetary policy cannot fine - tune the exchange rate. norges bank therefore placed increasing emphasis on low and stable inflation. after almost two decades of high inflation, the rise in prices stabilised in many countries in the 1990s. at the beginning of the 1980s, annual inflation in industrial countries was about 13 per cent. in the course of the following decade, it fell below 2 per cent. monetary policy in other countries the formal framework for monetary policy varies somewhat across countries. inflation targeting is the norm in small and medium - sized open economies, and has been introduced in more than 20 countries. new zealand was the first to do so β in 1989. canada, sweden, australia and the uk followed suit in the 1990s. a number of countries that have not formally introduced inflation targeting have nevertheless oriented their monetary policy towards low and stable inflation in practice. among them are the euro area countries and the us. nor does the bank of japan have a formal inflation target, but since 9 march this year its monetary policy has been oriented towards achieving an inflation rate of between zero and two per cent in the medium and long term. in a number of countries, price stability is ranked above managing output and employment. examples are the uk and the euro area. price stability is regarded as a condition for monetary policy contributing to stable output and employment. in the federal reserve act, in the us, the objectives of full employment, stable prices and moderate long - term interest rates are given equal weight. but the federal reserve states itself that in the long term stable prices are a condition for sustained output and employment growth. the introduction of formal inflation targeting has been under discussion in the us for several years. the debate was rekindled with the appointment of ben s. bernanke as chairman of the federal reserve on 1 february this year. he has argued that quantifying the concept of long - term price stability may reduce the uncertainty | 0 |
institutions or sectors as a whole. these systemic risks should be tackled by authorities. macroprudential authorities should coordinate their actions in order to mitigate these risks and seek ways to balance the protection of customers'interests and financial institution risks with specific policy objectives, a level - playing field being one of them. the initiatives taken by the european commission, such as the digital finance package, that captures aβ¬ β among others - the proposal for digital operational resilience act ( dora6 ), and the revision of the second payment services directive, are steps towards mitigating the identified risks. 3 / 4 bis - central bankers'speeches the increasing number of cyber - attacks in europe indicates that a lot more needs to be done. the growth of the fintech sector has raised the need for regulators to adjust their role within the perimeter of prudential regulation. extending the perimeter of bank regulation to all financial service providers could possibly constrain financial innovation. but keeping the new entrants completely out of the perimeter will tilt the playing field in their favour and leave consumers unprotected. a balance must be found to allow the regulatory perimeter to cover all activities that have systemic risk potential, while allowing for innovation. finally, data protection is important in order to safeguard confidence in the banking sector. as a result, cyber security should be further enhanced and prioritised and cyber - risk incidents need to be included in financial institutions'business continuity and disaster recovery plans and be tested frequently. given the cross - border activities of fintech and bigtech, authorities across jurisdictions should cooperate in regulating them. thank you. 1 financial integration and structure in the euro area : https : / / www. ecb. europa. eu / pub / fie / html / ecb. fie202003 ~ 197074785e. en. html # toc1 2 4 challenges for the financial industry and the best tech solutions to fight them, rocky osborn, november 2020. 3 financial stability review, november 2021 : https : / / www. ecb. europa. eu / pub / financial - stability / fsr / html / ecb. fsr202111 ~ 8b0aebc817. en. html 4 eu structural financial indicators : end of 2020 : https : / / www. ecb. europa. eu / press / pr / date / 2021 / html / ecb. pr210526 ~ 7469dedaaf. en | frank elderson : the challenges facing the ecb and europe opening statement by mr frank elderson, executive director of supervision of the netherlands bank, to the economic and monetary affairs committee of the european parliament ( virtual ), 9 november 2020. * * * in his opening statement in european parliament at the formal hearing for the position of member of the executive board of the ecb, frank elderson spoke about the challenges facing the ecb and europe, notably covid - 19 and the climate crisis, and about gender diversity. * * * dear madame chair, honourable members of the european parliament, it is an honour for me to speak to you today. unfortunately, the covid - 19 restrictions make it impossible to come to the parliament physically. as soon as circumstances allow, it would be my privilege to meet you in person. this hearing takes place at a time of great challenge for europe. covid has caused deep human suffering throughout our communities, and has taken a severe toll on our economies. the climate crisis remains as daunting and urgent as ever. these challenges present us, as policymakers, with a solemn responsibility. both the european parliament and the european central bank have a key role to play in steering europe through the current crises, and in making it better and stronger for the future. being fully conscious of the importance of this moment, i feel especially humbled and honoured to have been selected as a candidate for member of the executive board of the ecb. i welcome this hearing as a key step in the appointment process. central bankers are independent and unelected. yet their decisions have an enormous impact on the lives of citizens. for their legitimacy, it is essential that central banks operate within their legal mandates, listen to concerns of the public, and account for their decisions to the people and to you, their representatives. in my short remarks, i will outline my experience before discussing my views on the challenges facing the ecb and europe in the near and medium term. finally, i will turn to gender diversity. qualifications i have been a central banker for most of my career. i have been a member of the governing board of the dutch central bank for more than nine years. at european level, i am a member of the ecb supervisory board and i served as one of the first members of the single resolution board. at international level, i am a member of the basel committee on banking supervision, and i chair the central banks and supervisors network for greening the financial | 0 |
francois villeroy de galhau : productivity - a collective enigma? speech by mr francois villeroy de galhau, governor of the bank of france, at the bank of france - france strategie conference, paris, 1 february 2017. * * * welcome to all of you. it gives me great pleasure to be able to open this conference on french productivity, organised in conjunction with france strategie. the subject is one that is both topical and of great importance to central banks : productivity is one of the principal drivers of growth, and its dynamics are a strong determinant of potential growth, that which is compatible with price stability. as you can see [ slide ], after the major wave of expansion witnessed during les trente glorieuses, which was particularly marked in the case of france, productivity growth in advanced countries has slowed in successive stages since the 1970s. today, it has fallen back to a pace that is historically weak. what are the common factors behind this slowdown in productivity? and is there anything specific to france? i don β t believe so : if there is one thing that is specific to france, it is the high level of hourly productivity β one of the highest in the world, alongside that of the united states and germany. so, rather than being a french enigma, the enigma we are looking at this morning seems to me to be more of a collective phenomenon. by way of introduction, i would just like to go back over the three collective hypotheses at the heart of today β s debate, before nonetheless going on to examine a few factors that are indeed specific to france. * * * 1. does the problem lie in the measurement of growth? the first theory is that there is in fact no slowdown, as we are not measuring growth properly due to the rise of the digital economy. on 16 january this year, the banque de france held a conference1 that notably discussed this issue in relation to the us economy. the main sources of measurement errors were : first, the estimation of quality - adjusted prices for new technology, as falls in prices tend to be underestimated in us national accounts ; and second, product entry and exit, which makes it difficult to estimate changes in prices over time. this could lead to a significant upward revision to us productivity since 1983 : by 1. 1 percentage points per year at the top end of estimates, according to philippe aghion and his co - authors. nevertheless, | into production processes. yet it is also a lot riskier than other types of investment, for example in construction. indeed, it notably combines a low or non - existent resale value with uncertain future revenue flows. like the rest of the innovation economy, therefore, it needs an appropriate form of financing β one that relies more on equity as opposed to debt. however, the cost of capital remains high despite the sharp drop in interest rates over the past 20 years. according to banque de france calculations, the nominal cost of capital for france β s major listed companies is still between 8 % and 9 %, whereas the risk - free rate is currently around 0 %. this particularly high cost places a drag on investment, and hence on innovation and productivity growth. 1. are there any factors that are specific to france? there are nonetheless a number of french specificities that could be playing a part in slowing productivity. let me just cite three : first, failings in our system of initial and lifelong training, as highlighted by the oecd β s pisa and piaac surveys [ slide ]. france stands out as scoring only average overall among oecd countries, and, most importantly, as having high levels of inequality linked to parents β social background. second, corporate investment tends to be weighted more towards construction at the expense of equipment machinery and intangible assets. and while we β re on that subject, it is essential that french banks finance intangible assets better than they do today. lastly, the specific features of the french labour market and the associated policies. a number of studies have highlighted factors such as the shortening of the duration of temporary contracts. questions have also been raised as to the impact of labour policies. how can we strike the right balance between supporting productivity and supporting jobs? policies aimed at reducing the cost of low - skilled labour β be they targeted cuts in employers β social charges or the cice β all have a positive effect on gdp per capita via an increase in the employment rate ; but they can also have a detrimental effect on productivity, especially when targeted at sectors with low productivity. put another way, these policies make it all the more necessary that we improve our system of initial and lifelong learning β failing this, we risk fuelling a downwards spiral in labour skills and productivity. * * * these questions aside, one thing is clear in the case of france β and 2016 β s too - feeble growth of 1. 1 %, as published yesterday, | 1 |
will entail systematic market research, as well as an innovative mindset. the g in big is for guide. guide your banks in navigating through this dynamic and constantly shifting operating landscape. banks will need to keep abreast of developments and adjust to the changing demands of the market. ladies and gentlemen. this is my big challenge to baiphil. with big in place, i believe our banks will be able to drive and optimize the benefits and opportunities that financial inclusion and integration stand to generate. finally, i thank baiphil once again for its continuing support to the bsp in promoting good money habits among teachers, parents of our schoolchildren and other adults from the marginalized sector, through your personal finance management lectures. we have been receiving good feedback for this bsp - baiphil program. therefore, let us commit to continue working together, let us be faithful to what we set out to do β big or small, and then we can look forward to bigger and better things that are yet to come. for your information, this is the 11th time i have attended baiphil β s induction ceremony. i have been faithful and consistent to baiphil. the bsp has been faithful and consistent to bis central bankers β speeches baiphil. therefore, insofar as staying true to your theme of β building capacity for financial inclusion and integration β, we, at the bsp expect nothing less than enduring commitment from baiphil. ladies and gentlemen. you have it in you to help unlock the growth potential in our people, in our economy, and in our country, if you continue to pursue financial inclusion and integration with unwavering dedication. if we succeed, then the market for banking services expands, deepens and strengthens the philippine banking industry in the process, even as we help improve lives, liberate millions of filipinos from poverty, and bring prosperity to filipino homes. let this be our goal and our enduring legacy. i look forward therefore to baiphil remaining faithful and steadfast, like a diamond, in its pursuit of capacity building for financial inclusion and integration. thank you for your kind attention. mabuhay ang ating mahal na bansang pilipinas! mabuhay po tayong lahat! maraming salamat! bis central bankers β speeches | adjustments in our monetary tools, which were calibrated and timed so as to 1 ) rein in domestic liquidity growth, 2 ) pre - emptively arrest possible second - round effects of supply shocks and 3 ) anchor inflation expectations. 3 so far, the numbers reflect that these moves have achieved what they were set out to do. with the latest fed communications pointing to a more dovish approach to its tightening plan, the bsp may be able to bide some time to allow these policy adjustments to pass through to the economy. 2. the bsp also issued several regulatory reforms to further strengthen risk management practices in the banking system and enhance capital buffers against possible unforeseen shocks. these measures include : ( a ) implementation of real estate stress test ( rest ) ; ( b ) approval of enhanced regulation on credit risk management of banks and quasibanks ; ( c ) approval of guidelines for determining so - called β d - sibs β or banks which are deemed systemically important within the domestic banking industry ; and ( d ) increase in the minimum capital requirement for all bank categories, on top of the capital requirement under basel 3. putting the principle of synergy into action 1. the bsp recognizes the importance of the synergy principle in dealing with risks to price and financial stability. thus, we coordinate with other agencies such as the national food authority and department of agriculture on issues related to prices of rice and other crops ; energy regulatory commission on power rates ; and land transportation and regulatory board on public utility vehicle fares. 2. the bsp is also an active member of external committees that broadly endeavor to strengthen and protect the country β s financial sector. these include the financial sector forum ( fsf ) and the financial stability coordination council ( fscc ). 4 the main goal of the fsf is to harmonize financial regulations and address any financial regulatory gaps, while the fscc aims to identify, manage and mitigate the build - up of systemic risks. these are consistent with the overall prudential objective of financial stability. we are pleased to note that as of end - 2013, we have recorded 1. 5 million micro - deposit accounts and a total of p8. 7 billion microfinance loans availed. we have also recorded about 837 thousand msmes with outstanding loans from banks amounting to p385 billion. these include : ( a ) increasing key policy interest rates by a total of 50 bps to 4. 0 percent | 0.5 |
lahat! bis central bankers β speeches | 4, pp. 499 - 533. ruge - murcia, f. ( 2003 ), β inflation targeting under asymmetric preferences β, journal of money, credit and banking 35, 763 - 785. schwartz, j. ( 1995 ), β why financial stability depends on price stability β, economic affairs, autumn, pp. 21 - 25. tirole, j. ( 1985 ) : β asset bubbles and overlapping generations β, econometrica, 53, 6, pp. 1499 - 1528. | 0 |
more sound and resilient financial system. in this respect, recent steps like the basel iii framework mean some good progress in this direction. nonetheless, further bold policy actions need to be taken. this includes in particular the establishment of effective bank resolution schemes for systemically important financial institutions and an improved supervisory framework with new see e. g rudi dornbusch, 1997, β fiscal aspects of monetary integration β, american economic review papers and proceedings 87, pp. 221 β 223. bis central bankers β speeches macro - prudential tools. the establishment of the european systemic risk board and the three european supervisory authorities are only first steps. finally, while the reforms of economic and financial governance that i mentioned are vital, it is crucial that all these measures are complemented by a set of instruments that can directly address financial market tensions. in other words, we need firewalls that tackle the threats to financial stability and the risk of contagion β both between different sovereign debt markets, but also between sovereign debt markets and other financial market segments. therefore, the setting up of the european financial stability facility ( efsf ) and its successor, the european stability mechanism ( esm ), represent important additions to the architecture of emu. in this context, i very much welcome the decision by the heads of state or government to let the esm enter into force already by july 2012, that is, one year earlier than originally planned. monetary policy at the crisis : framework and recent measures having identified the need for reforming the framework for fiscal governance, the question arises whether the institutional framework governing euro area monetary policy would also benefit from some changes or finetunings. my view here is that our framework, with the important institutional elements β that i have mentioned earlier β has in fact served us rather well in conducting monetary policy both in turbulent and more tranquile times. nevertheless, recently some calls have been made on euro area monetary policy to adapt its set of rules and to concede to the needs of other policy areas. before i come back to this, let me take a step back and look at the experience of other central banks, which have β compared to our own relatively young institution β a longer history. in the period after the second world war in the united states, the federal reserve had to completely accommodate the debt management policies of the treasury. with inflationary pressures rising, the conflict between the federal reserve and the treasury escalated and ended with the fed - treasury accord of february | central bankers'speeches | 0 |
war ii. in 1948, they were enshrined in the universal declaration of human rights. the famous five recognized the importance of economic rights much earlier than that, and worked to put in place laws that extended these rights to women. for example, louise mckinney, henrietta muir edwards, and emily murphy helped to establish the dower act in 1917, which granted alberta women property rights in marriage. and nellie mcclung spent much of her political life fighting for mother β s allowances, better public health services, and improved property rights for married women. now, in canada, we have created a society where most of us can take for granted our right to earn a fair wage and provide for our families. but we should not underestimate the importance of macroeconomic policies, frameworks, and institutions that support the standard of living that we enjoy. for example, low, stable, and predictable inflation means that our salaries and our savings aren β t eroded by rising prices, nor will our economy be devastated by deflation as it was in the 1930s. good monetary policy means that we can plan for the future with confidence. a sound financial system means that we can conduct financial transactions with equal confidence. a secure currency means that we can use cash with confidence that bank notes will be readily accepted, and without fear of being stuck with a counterfeit bill. at the bank of canada, we are always mindful of our commitment to canadians - to contribute to the economic well - being of this country. part of that commitment is to communicate our objectives openly and effectively and to stand accountable for our actions. the famous five and therese casgrain remind us of the tremendous influence that individuals can have on society. as louise mckinney said, and i quote, β the purpose of a woman β s life is just the same as the purpose of a man β s life - that she may make the best possible contribution to the generation in which she is living. β we each have a responsibility to contribute to the society in which we live. as a public institution, the bank of canada takes this responsibility seriously. we know that by fulfilling our economic role in canadian society - by giving canadians confidence in the value of money - we make an important social contribution as well. the bank of canada will continue to promote the economic well - being of canada and canadians. that is our commitment to you. tonight, we celebrate the commitment of five individual canadians to the advancement of human rights in our | stephen s poloz : release of the financial system review opening statement by mr stephen s poloz, governor of the bank of canada, at the press conference following the release of the financial system review, ottawa, ontario, 10 december 2014. * * * good morning. senior deputy governor carolyn wilkins and i are pleased to be here today to discuss the december issue of our biannual financial system review ( fsr ), which we published this morning. the purpose of the fsr is not to predict the most likely outcomes for the financial system. instead, we use it to highlight key financial vulnerabilities and the catalysts that could turn those vulnerabilities into a risk to the financial system. the fsr is an essential complement to our monetary policy report. together, the two streams of analysis provide the basis for a fulsome discussion of monetary policy, within a risk - management framework. although we view risks to the financial system separately from risks to growth and inflation, we think carefully about the interplay between them. in this fsr, we discuss three important financial system vulnerabilities : high household indebtedness ; imbalances in the housing market ; and increased investor risk taking. to some extent, all three are normal side effects of stimulative monetary policy. however, the post - crisis recovery has been frustratingly slow β we have called it serial disappointment β and bond yields and policy interest rates have been unusually low for a long time. in this context, these financial vulnerabilities have built up over time. fortunately, canada β s economy is showing the first signs of a broadening recovery. nonenergy exports have been responding to stronger u. s. growth and exchange rate depreciation, investment spending appears to be picking up, and we have seen pockets of new job creation. this natural rebuilding sequence is key to reducing financial vulnerabilities over time. in particular, our expectation of a soft landing for housing hinges on stronger growth, employment and incomes. the recent weakness in oil and other commodity prices raises important risks to this economic outlook, however. this shock is especially complex : it is likely to boost global growth but to moderate growth and inflation in canada, even though the effects should be tempered by exchange rate depreciation and stronger non - energy exports. the potential consequences for the financial system will be monitored carefully in the months ahead. meanwhile, the global financial system is stronger and more resilient, thanks | 0.5 |
october 2022 [ 9 ]. we need to tackle ransomware attacks from various angles. first, every firm must be ready to repel ransomware attacks, either through the use of proper cyber hygiene practices or by ensuring that data is backed up regularly and is kept up - to - date and tamper - proof. second, enforcement agencies need to conduct forensic analyses, locate attackers and join forces to prosecute them. third, crypto - assets β especially unbacked crypto - assets, which are used to make ransomware payments owing to the anonymity and money laundering possibilities they offer [ 10 ] β need to be strictly regulated. similarly, crypto - asset transfers must be traceable. the proposed eu regulation for markets in crypto - assets ( mica ) and revision to the regulation on information accompanying transfers of funds, which extends the β travel rule β [ 12 ] to crypto - assets, are important steps. however, to be effective and prevent regulatory arbitrage, regulation must be stepped up globally. [ 13 ] implementation of the financial action task force ( fatf ) guidance for crypto - assets and its enforcement at international level are therefore crucial. in addition, all firms need to have the highest level of cyber controls in place to prevent attacks from being successful and to detect and recover from ransomware attacks. moreover, insurance firms can lend their support by obtaining assurances from their clients that they have high - level cyber resilience plans in place before providing cyber risk insurance policies, thus ensuring that these very same policies do not lower firms β incentives to prepare for cyberattacks. artificial intelligence ( ai ) even if we do not realise it, the use of artificial intelligence ( ai ) is already widespread. we use ai every day, including on our phones, in our homes and at the workplace. and firms use it to harness big data. ai can help to strengthen cybersecurity, for instance, by improving the detection of highly sophisticated cyberattacks through its ability to identify abnormal system behaviour compared with an established baseline. this is the kind of potential that we need to leverage. but ai can also multiply cyber risks by, for instance, helping malicious individuals, even those who have limited or no technical skills, draft very convincing phishing emails or identify topics that will achieve the maximum engagement from those being targeted. to make matters worse, ai can even create and fix code that can be used to exploit and compromise the endpoint. | 1864 ; andrade, p., j. breckenfelder, f. de fiore, p. karadi and o. tristani ( 2016 ), β the ecb β s asset purchase programme : an early assessment β, ecb working paper no 1956 ; and blattner, t. and m. joyce ( 2016 ), β net debt supply shocks in the euro area and the implications for qe β, ecb working paper no 1957. see, e. g. joslin, s., k. j. singleton and h. zhu ( 2011 ), β a new perspective on gaussian dynamic term structure 5 / 6 bis central bankers'speeches models β, review of financial studies, vol. 24 ; and abrahams, m., t. adrian, r. k., crump, e. moench and r. yu ( 2016 ), β decomposing real and nominal yield curves β, journal of monetary economics, vol. 84. 9 see matheson, t. and e. stavrev ( 2014 ), β news and monetary shocks at a high frequency : asimple approach β, imf working paper 167. 6 / 6 bis central bankers'speeches | 0.5 |
bankers β speeches this raises the question of whether policy is doing enough to compensate for these structural changes β in particular, whether it is creating the framework conditions for new business models to emerge that require higher levels of productive investment. for example, is regulation in all countries conducive to investment? 45 % of fixed investment in europe is estimated to be concentrated in sectors where governments have significant regulatory influence, implying that regulation could play an important role in boosting investment demand. even at the firm level, regulation can influence whether the most productive firms are allowed to grow. one well - known distortion in this regard is the change in status and requirements for firms in this country when they have 50 employees or more. is the tax code conducive to investment? what matters for investment demand is the aftertax return that firms receive, meaning tax incentives can improve the risk - return profile of investment projects, and even more so in a lower growth environment. in this country, several official reports have suggested that high corporate and labour tax rates hinder investment. the focus of the current government on this issue is therefore fully justified. is the education system conducive to investment? europe β s comparative advantage, like all advanced economies, is increasingly located at the high - end of the value chain. yet investment can only flow there if the workforce has the skills to match. around half the countries in the euro area rank below the oecd average for student performance in mathematics, reading and science, implying standards could still rise. indeed, educational attainment is no longer only a factor in income, but also in employment prospects : at the end of 2012 18 % of workers with low education levels were unemployed, compared with only 6 % of highly educated workers. all this underscores that, when we think about how to restore competitiveness in the euro area, we should not only think in terms of lowering wages relative to productivity. this may be a necessary short - run measure in some jurisdictions, but it is a zero - sum game : some countries benefit at the expense of others. the ultimate source of competitiveness for the euro area has to be productivity gains built on investment, and this is a positive - sum game. it raises welfare for the euro area on aggregate. what i am saying here is not new. the need for a continuous rise in productivity performance has long been recognised in europe ; it was the context for the launch in 2000 of the lisbon agenda, which aimed to make europe | including real estate, which is the sector associated with most of the severe financial crises in history. the mirror image of this development was a credit bubble in the banking sector, as banks financed both housing supply, i. e. loans to real estate developers, and housing demand β that is, mortgages. when the crisis broke out, this debt build - up quickly became a debt overhang. many advanced economies entered a prolonged period of deleveraging as firms, households and banks attempted to reduce their debt levels. for firms, this meant less investment. for households, less consumption. and for banks, less credit. moreover, the collapse of lehman brothers sent shockwaves through the global financial system leading to an unprecedented rise in uncertainty and risk aversion. this led to a further retrenchment in investment, trade and hiring and a globalised β great recession β. government budgets went deep into deficit to offset this massive shock to nominal spending. these events were not only shared across major economies, but they were also largely consistent with historical experience. there have been several episodes in economic history bis central bankers β speeches of large build - ups followed by periods of debt deleveraging. serious financial crises tend to be followed by slow economic recoveries. nevertheless, by mid - 2010, most advanced economies were showing signs of returning to growth, albeit at a slow pace. at this point, however, the trajectory of the euro area departed from others. while the recovery gained ground in the us in particular, the euro area entered into a second recession that lasted until the second quarter of 2013. why did this divergence happen? for two reasons that were specific to the euro area. first, the sequencing of policy responses after the first bail - out for greece aggravated concerns about bank and sovereign debt sustainability. second, these concerns interacted with an incomplete institutional framework in a self - reinforcing way. in addressing the situation in mid - 2010 β and with the benefit of hindsight β one could have legitimately expected the following sequence of actions. first, agree on a solid backstop for dealing with sovereign and banking sector problems. thereafter, conduct a stress test and recapitalise banks where necessary. then, with banks in a stronger position to absorb losses and a sovereign backstop in place, construct a consistent framework for dealing with sovereigns with excessive debt. finally, apply that framework to countries that were deemed to need it. for example, this sequence from backstop to stress test | 1 |
, they tell of the miniaturised home - made wireless that they used clandestinely to keep up with the course of the war. this device had been cobbled together by a fellow prisoner of war - a new zealand officer in the raf. that officer we now know was flight lieutenant a. w. h. ( bill ) phillips, 2 known to economists the world over as the inventor of the β phillips curve β. phillips had been trained in new zealand and australia as an electrical engineer, had spent time in asia before the war, spoke fluent cantonese, and only embarked on a career in economics after his discharge from the raf when the war ended. output growth enough of these biographical curiosities. i will now turn to the main subject of my lecture tonight which is the role of asia in australia β s economic future. i think for most of the past two decades, there was general agreement on the importance - if not the primacy - of asia in australia β s economic future. but this agreement suffered a couple of setbacks in the 1990s. first, japan, the biggest asian economy and the one which had been the main driving force, fell back into a period of very slow growth at the beginning of the 1990s. second, the asian crisis which started in mid - 1997 and lasted for about 18 months, severely dented many people β s confidence in asia β s future. for those who are not, the relevant references are β the war diaries of weary dunlop β, penguin, 1990, and β weary : the life of sir edward dunlop β, sue ebury, penguin, 1995. sir laurens van der post refers to him in his book β the night of the new moon β. weary dunlop also referred to him in his published war diaries ( entry for 5 november 1942 ) and confirmed in conversation with leeson that bill phillips was the new zealand raf officer who built the wireless. this event - the asian crisis - had a profound influence on opinion for three or four years. many people saw it as evidence that the β asian miracle β had feet of clay after all. there was a widespread view among western observers that the crisis was the inevitable result of severe governance deficiencies in asian countries, and that these deficiencies would hold back further economic development. during the β tech boom β and the period of infatuation with the β new economy β in the late 1990s, perceptions of asia suffered again as its economy was compared unfavourably with more technologically | and the rest of the world. it mirrors a general shift in the trade patterns of developing economies which are now predominantly exporters of manufactured goods. as recently as 1980, only 25 per cent of the exports of developing countries were manufactures ; now the figure is well over 80 per cent - for asian countries, the figure is likely to be over 90 per cent. the question for australia then is whether our exports to asia are growing as fast as those of other countries into asia. it is difficult to answer this with precision, in large part because of gaps and inconsistencies in data, but the approximate calculations we have made suggest that our exports are keeping up ( graphs 1, 2 and 3 ). these graphs look at imports into non - japan asia and its two biggest economies - china and korea. as already established, the relevant question for us is whether imports from australia are growing as fast as imports from other countries outside the region. the data we have suggest that this is the case ; imports from australia have grown faster than imports from the g10 countries. this is less true for china, where our performance is more or less in line with the g10 countries, but for korea, imports from australia have grown a lot faster than their imports from g10 countries. graph 1 graph 2 graph 3 as we would probably expect, when we look at the breakdown of asian imports by category, it is in categories such as food, fuels and crude materials that australia β s performance has been particularly strong. imports of these goods to china and korea from australia have grown much more quickly than their total imports. australia has been increasing its exports of manufactures into asia as well, particularly to china, but this is from a very small base. exports of manufactures to china grew at an annual rate of 22 per cent over the past five years, but even then they represent only 4 per cent of our total manufactured exports. in summary, i think these comparisons show that we have been doing reasonably well. our pattern of international trade is strongly integrated into asia, and apart from a small downward adjustment due to the probably temporary effects of the asian crisis, the trend is stable. there appears to be a lot of upside potential in the trading relationship with china, given our low market share in that country. when we come to financial integration, however, the story is very different because we do not have a high propensity to buy asian financial assets ( table 5 ). i have always been struck by the contrast between | 1 |
defined nine different categories of business model, ranging from large universal banks and domestic lenders to specialised asset managers. we then place each bank in one of these categories and can thus compare it to its european peers. like all supervisors, we ask one very general question : can a bank generate sufficient returns within a framework of suitable risk appetite and on the basis of a clear and sustainable funding structure? 1 / 3 bis central bankers'speeches for us, a business model is viable if it can generate such returns over the year ahead. and it is sustainable if it can generate such returns over a three - year period and through a full business and economic cycle. the first step we take when we analyse a business model is to map out the general strategy of the bank. we try to understand its main sources of profit and how they might be affected by economic developments. we then refine the map by comparing the bank with its peers across the euro area. as i just mentioned, this is one of the main benefits of european banking supervision. the next step is then to derive an automated score. this score is based on indicators such as the return on assets and the cost - to - income - ratio. and as i already said, we then complement the scoring with expert judgement. in doing so, we take a forward - looking approach. and what we look for are key vulnerabilities. we assess how profits might evolve over time. we analyse the bank β s strategic plan ; we take into account its financial forecasts and assess how it might be affected by internal and external factors. in the light of this assessment, we might adjust the score. the final result then feeds into the srep and guides us when we determine supervisory capital add - ons and other measures. as the ecb is still a young supervisor, we still need to learn more and dig deeper. that β s why, in 2016, we launched a thematic review of banks β profitability drivers at firm level and across business models. that review is still ongoing and will provide some more tools to support us when we analyse business models and monitor profitability. it will strengthen our ability to identify banks with structurally low profits ; and it will examine in depth how banks respond to weak profits β now and in the future. the thematic review will conclude at the end of this year. are we satisfied with the business models of banks in the euro area? are we satisfied with the progress banks have made by learning the lessons | as long as needed. these liquidity - providing operations do not have a direct effect on euro liquidity conditions, but are conducted to address the availability of us dollar funding for euro area banks and aim at improving global funding conditions. it is important to stress that the actions in connection with the taf marked, to my knowledge, the first systematic, multilateral and successful central bank co - operation in the money market field, a market which is central to the implementation of a central bank β s monetary policy. i believe that all of these actions have proved to be effective in easing the tensions at the short - term end of the global money markets and in maintaining control of short - term interest rates in the euro area. i am sure that global money and funding markets will continue to benefit from our very close cooperation. we will carry on working together closely and are prepared to take appropriate steps as needed to address funding pressures. 4. 1. 3 increased financial intermediation before discussing the latest monetary policy decision, i would like to point out that as a result of its enhanced liquidity interventions in euro and usd over the last fifteen months, the eurosystem has significantly increased its involvement in financial intermediation in the euro area. indeed, the eurosystem has moved from the situation before the start of the turmoil in which it provided banks only with as much liquidity as necessary to implement its monetary policy stance, with the intermediation being performed by the market, to the present condition in which it effectively intermediates liquidity flows among banks in order to mitigate dysfunctions of money markets. the increased intermediation role assumed by the eurosystem during this period of turbulence has contributed to the stabilisation of short - term liquidity conditions, as well as to contain volatility in the very short - term rates ( especially in the overnight rate as measured through the so - called eonia ) and to limit somewhat the volatility in the three - month euribor, even if the behaviour of the money market remains extremely tense. of course, this is not the ideal solution in a market - oriented economy like the euro area and, indeed, the eurosystem looks forward to the reactivation of inter - bank lending and to banks resuming their traditional intermediation activity. however, as long as money markets remain dysfunctional, the eurosystem will continue to provide liquidity as needed in order to ease tensions in the impaired money markets, with a view | 0.5 |
chooses to merge into one bank with branches in the various countries. in that case, the authorities in its home country β presumably sweden β would have the principal responsibility for activities in denmark, just as the danish authorities currently supervise e. g. danske bank's activities in its swedish branch. that is how the eu legislation is designed. this legislation is suitable if a bank has a relatively small branch in another country. however, the swedish authorities cannot hold responsibility for nordea's impact on financial stability in denmark. it is still denmark's responsibility that our financial system functions β even if we do not have insight into almost one quarter of the danish banking market. consequently, danmarks nationalbank is of the opinion that where large branches are involved that may affect financial stability in another member state, we need more binding cooperation between the authorities of the home country and the host country than eu legislation provides for. both the supervisory authorities and the central banks in the nordic countries have concluded collaboration agreements relating to cross - border financial enterprises. we have a long - standing tradition for nordic cooperation, and presumably we will be able to negotiate the necessary insight into large danish branches of banks domiciled in other nordic countries, and vice versa. however, the system should also be designed to handle business integration between north and south within the eu. in this respect, the tradition for cooperation is less well - established than among the nordic countries. it may therefore be necessary to rethink the eu legislation so that the individual member states are still empowered to safeguard financial stability β even with the presence of large foreign branches whose operations may have an impact on the financial system. the eu needs a legal handle to ensure that the authorities of the host country gain the necessary insight into a large branch of a foreign bank. the problem is naturally not acute, but amendments to eu legislation take their time, and we do not know when the need may arise. this is an issue that we will pursue in cooperation with other danish authorities. chart 1. lending growth and losses and provisions per cent 3. 0 per cent 2. 5 2. 0 1. 5 1. 0 0. 5 0. 0 - 5 - 0. 5 - 10 - 1. 0 annual lending growth 14 - 12 - 2006 losses and provisions ( right - hand axis ) danmarks nationalbank chart 2. credit risk and average lending growth, 2000 - 05 credit - risk measure, per cent 2. 0 1. 8 1. 6 1. 4 1 | assessments of financial stability. our ambition is to learn more about how the banks affect each other and the economy in stress situations. another task for danmarks nationalbank in relation to financial stability is to ensure that denmark has a secure and effective financial infrastructure that can safely be used for settlement of payments, securities trading and other financial transactions. danmarks nationalbank now has a statutory obligation to oversee payment and settlement systems in denmark. part of the imf's fsap was to assess the core elements of the danish financial infrastructure in relation to international standards. the imf recommended a few changes. danmarks nationalbank will work with those responsible for the systems to ensure that the necessary improvements are made. however, we will not blindly adhere to all recommendations. for example, the imf recommends that we establish a buffer pool to ensure the settlement of securities transactions and retail payments even if the largest participant is not able to settle its payment obligations. danmarks nationalbank finds that the best safeguard is to ensure that participants have easy and flexible access to liquidity, combined with participants'large portfolios of securities that can be pledged as collateral for loans from danmarks nationalbank. consequently, we do not currently see any need for special measures to ensure settlement in the danish systems. a third area that we are looking at is situations where the financial system is affected by dramatic external events. these could be acts of terrorism, widespread epidemics, natural disasters or other situations where the financial system threatens to collapse. danmarks nationalbank chairs a task force to ensure coordination of the financial institutions'business continuity plans in such situations. finally, danmarks nationalbank acts as lender of last resort to the danish banks. danmarks nationalbank can extend loans to a bank that urgently needs liquidity and cannot procure it in the market, even though the bank is solvent. fortunately, we are seldom called on to do that. should a situation occur where it is necessary to rescue an ailing bank, danmarks nationalbank's position is that a market - based solution should be found. nothing definite can be said beforehand about danmarks nationalbank's role. it would depend on a concrete assessment of the situation and the β direct or indirect β consequences for the danish banking system and danish society. however, we can look at what danmarks nationalbank has done on previous occasions. in a number of cases, danmarks nationalbank has played a role in connection with public intervention to help ailing banks β by | 1 |
β s overall financial performance. this would allow for more - informed decision - making, thus contributing towards greater competitive advantage. moving forward, there will be increased expectation for more efficient use of internal resources. a more enhanced and integrated risk management framework, and the adoption of a risk adjusted performance management model would serve to further facilitate shareholders β activism and drive greater efficiency among banks. risk management however does not operate in a vacuum or in isolation and it should not be viewed merely for the purpose of regulatory compliance. priority should be given to ensure that the risk management framework is well - aligned and well - integrated with the strategic business directions of the banking institution. the benefits of refined risk quantification and more robust risk management should be translated into improvements in business operations and more effective functioning of the institutions. this will in turn ultimately bring benefits to the consumers and the economy at large. implementation challenges and considerations ladies and gentlemen, given the complexity of basel ii, the ability to comply appears to be the main concern within the banking community. this is truly a major undertaking with respect to the irb approaches or the internal rating based systems. the resources involved and data constraints are often cited as the two main challenges in implementing the irb approach, particularly for banks in the emerging markets. at this stage, data on default and credit migration for certain market segments is too limited to facilitate any meaningful analysis. it is therefore recognized that some lead time would be needed for banking institutions to produce a robust and meaningful validation of internal estimates of probabilities of default and loss given default. however, this does not mean that banks should wait until all the requisite data is in place. banks can initiate work to establish the framework for analytical functions. while the industry survey conducted by bank negara malaysia revealed a strong preference among malaysian banking institutions to adopt the irb approach, many had indicated the need to further strengthen their business case and undertake more comprehensive gap and impact analysis. this is indeed a critical process. of importance is to be able to extract the benefits out of the new accord. this would however, take time even for large and internationally active banking institutions that have made substantial enhancements over the years. standardised approach offers benefits with much less complexity while capital savings from the adoption of the standardized approach may be relatively lower than the irb approach, the benefits to be gained under the standardized approach are still considerable compared to the current accord. it includes the lower risk weights to be assigned to the mortgage portfolio, which would be reduced | marzunisham omar : opening remarks - international conference on financial crime and terrorism financing ( ifctf ) masterclass 2024 opening remarks by mr marzunisham omar, deputy governor of the central bank of malaysia ( bank negara malaysia ), at the international conference on financial crime and terrorism financing ( ifctf ) masterclass 2024, kuala lumpur, 19 august 2024. * * * assalamu'alaikum warahamatullahi wabarakatuh and a very good morning. thank you for inviting me to speak today. it is an honour and a pleasure to see so many people in the room. i would like to express my sincere gratitude to both aicb and the compliance officers'networking group for their effort and leadership in organising this event. as mentioned by tan sri azman hashim earlier, this is the 14th iteration of the ifctf and the first time it is held in a masterclass format. these exchanges grow in importance each year, amid an environment of rapid changes across the financial landscape. the ifctf, in particular, has always been a platform for leading practitioners to have discussions on the frontiers of tackling financial crimes. the conference is especially timely, given that the national coordination committee to counter money laundering ( ncc ) has recently endorsed malaysia's national risk assessment ( nra ) 2023. it is also of significance as we are in the midst of preparing for the 5th round of the mutual evaluation exercise by the financial action task force. today's masterclass is an exercise in technical depth and exploration, which i hope all participants will find practical and useful. this morning, i would like to speak on three principles that we must embrace in strengthening our ability to address financial crimes : competence, commitment, and collaboration. part 1 : competence β strengthening skillsets ladies and gentlemen, the financial crime landscape is continuously evolving. a key transformative enabler is technology and its rapid advancement. for instance, pwc uk's 2023 report identifies that artificial intelligence ( ai ) will likely drive an increase in the volume and sophistication of fraud and scams. in malaysia today, we also observe these risks materialising as a new wave of scams which leverage technology, such as malware and ai - developed deepfakes, is deployed on social media to deceive victims. the nra 2023 further concluded an upward trend of virtual assets illicit activities in malaysia ( although still small in value ) and | 0.5 |
manuel sanchez : evolving global challenges and policy options for latin america remarks by manuel sanchez, deputy governor of the bank of mexico, at the 2014 iif ( institute of international finance ) latin america economic forum, bahia, brazil, 29 march 2014. * * * it is certainly a pleasure to be invited to the stunningly beautiful brazilian coast to participate in the 2014 iif latin america economic forum. i would like to thank the institute of international finance for the chance to share some thoughts with you on the challenges and opportunities faced by latin america in the current economic environment. i will organize my remarks as follows. first, i will comment on the changing global context for emerging markets ; second, i will highlight some policy options that our countries may entertain to confront likely external financial headwinds ; and finally, i will make a few comments on the mexican economy. evolving global challenges two trends are particularly noticeable in recent world economic developments. the first is decreasing growth since 2010, especially for emerging economies, amid modest post - crisis global improvement. softening commodity prices and the economic deceleration of china have contributed to this tendency, affecting some latin american commodity exporters. in particular, grains and metals have seen moderately falling prices, if from high levels. the second trend is a reversal of fortune in global financial conditions for emerging economies. whereas in the wake of the great recession, these countries drew substantial capital inflows, especially portfolio funds, and saw the prices of their financial assets rise, in 2013, the tables turned. in particular, the expectation and eventual beginning of the tapering of asset purchases by the u. s. federal reserve sharpened global risk aversion. since may of last year, portfolio capital inflows to emerging economies, previously the darling destination for foreign funds, have contracted and in some countries, even become outflows. at the same time, the prices of many financial assets seen as risky have fallen abruptly. emerging - market bonds, equities and currencies were affected by the change in market sentiment. also contributing to lower asset holdings and values has been a weaker relative outlook for growth in emerging economies. however, not all countries have been treated equally. investors have differentiated among destinations according to macroeconomic fundamentals and prospects for economic expansion, among other factors. nations with large financial imbalances, whether internal or external, have been hit hardest, including countries in the latin american region. more recently, political tensions and uncertainty on the ability of some governments to | this would make it easier for a central bank to restore full employment when an economic slump occurs. the determination of an optimal target for inflation is a rather difficult endeavor which depends on the particular circumstances of each country. in my opinion, the adoption of an approach whereby the target is increased simply to ease the zero bound constraint on rates carries disadvantages that outweigh by far the possible merits. an increase of the target based on these grounds would imply not only higher levels of actual inflation, but also the potential undermining of hard - earned central bank credibility, and the resulting higher inflation volatility, greater difficulty to stabilize expectations and increases in risk premia. in addition, it is important to bear in mind that the zero bound problem is likely to emerge only under rare circumstances, while the inflation costs would be immediate. furthermore, recent see dale, spencer ( 2013 ), op. cit. see yellen, janet ( 2014 ) : β monetary policy and financial stability β, remarks at the 2014 michel camdessus central banking lecture at the international monetary fund, july. see blanchard, olivier, giovanni dell β ariccia, and paolo mauro ( 2010 ) : β rethinking macro policy β, imf staff position note no 10 / 03 ; and ball, laurence ( 2014 ) : β the case for a long - run inflation target of four percent β, imf working paper no 14 / 92. bis central bankers β speeches research based on parameter values consistent with us data has shown that increasing the target from 2 to 4 percent would result in net welfare costs, even after taking into account the reduced likelihood of monetary policy being constrained by the zero lower bound on nominal interest rates. 14 to sum up, while it is true that inflation targeting should be further adapted to take into account the lessons from the global financial crisis, it is also clear that this does not imply neither a substantial modification of its fundamental structure nor a question mark on the merits of this approach for anchoring inflation expectations. let me conclude by quoting two phrases from a couple of john murray β s articles on it, which in my view provide a splendid closing to what i have just said : β perhaps inflation targeting will be supplanted by a new, and even more promising alternative. at the present time, however, there does not seem to be any obvious contender. for those who desire monetary policy independence, most of the other policy options have already been tried and found wanting β. 15 β | 0.5 |
bank had plenty of time to my predecessors on the board of de nederlandsche bank had plenty of time to choose otherwise. they did not, however. this is how the history of de nederlandsche bank begins, the institution whose mandate is to ensure that people can have confidence in the financial system. a history that the current board is thoroughly and painfully aware of, thanks to the independent study conducted by researchers at leiden university. a history that provides the current board with a clear mandate. a history that inextricably links my fellow board members and me to boards of past generations. the current board, however, has resolutely decided to take a different path. on behalf of de nederlandsche bank, i acknowledge that many of my predecessors viewed people as nothing more than merchandise. that many defended the existence of slavery and the prolongation of slavery. and that many later ignored the ramifications of slavery for a long, long time. on behalf of de nederlandsche bank, i also acknowledge our involvement as an institution. some of the money that served as dnb β s start - up capital was earned from slavery. dnb accepted products from the plantations, such as coffee and sugar, as collateral for a loan. and when slavery was abolished, dnb paid compensation to plantation owners on the instruction of the ministry of colonies, including to board members of de nederlandsche bank. on behalf of de nederlandsche bank, the current executive board today apologises for these reprehensible facts. we offer our sincere apologies to all descendants of enslaved people in the netherlands, in suriname, in bonaire, sint eustatius and saba, in aruba, curacao and sint maarten. we apologise to all those who, because of the personal choices of my predecessors, were reduced to the colour of their skin. to an amount. to a commodity listed in a ledger. we apologise to everyone who still bears the consequences of those choices even today. over the past few months, i have heard many personal stories β stories of suffering, but also of resistance and struggle. i heard painful stories. i learned a great deal. and it hurt. what i heard brought the suffering of the past and present very close to home. and at the same time, that suffering remained terribly, disconcertingly distant for someone who grew up in the far north of the country. the conversations i | tilting the policy mix in the euro area keynote speech by klaas knot, finanzmarktklausur wirtschaftsrat, berlin thursday 26 january 2017 ladies and gentlemen, thank you for inviting me to speak at this event of your wirtschaftsrat. i would like to give you a central banker β s perspective on the appropriate policy mix in the euro area. i β m referring to the range of measures that policymakers take to influence economic growth. and as you no doubt will know, we central bankers have played a large role in helping the economy stabilize and recover from the crisis. introduction β tilting the policy mix since the onset of the financial crisis in 2008, the euro area economy has had to cope with a series of negative shocks. the private sector has been in a deleveraging mode for nearly a decade. and also many governments had to make large fiscal adjustments to ensure their debts remained sustainable. these deleveraging efforts have been holding back growth, making this recovery one of the slowest in recent history. as a result, over the past decade, economic policy mainly involved crisis management and demand stimulus. in part because of the limited fiscal space in many euro area countries, monetary policy has done the bulk of the work. even after policy rates had been brought to zero, central banks have shown to be creative in finding ways to fight the cyclical problems the crisis had left behind. now, gradually, the economic outlook is more promising. 2016 was an eventful year, with the brexit vote, the surprising outcome of the us election and the italian referendum. but not only did the recovery of the euro area economy turn out to be resilient to these shocks, it is even gaining some momentum and becoming more broadly based. the gradual firming up of the recovery allows us to refocus our attention to longerterm challenges. as the late, widely - respected hans tietmeyer stated back in 1998 : β die geldpolitik kann den anderen politikbereichen β weder der finanz - noch der sozial - und lohnpolitik β ihre aufgaben nicht abnehmen β. it now becomes time to rebalance the policy mix away from demand stimulus through unprecedented monetary accommodation, towards measures aimed at improving the longer - term outlook. unprecedented monetary policy accommoda - tion to get where we are now, the eurosystem | 0.5 |
##ilience of the euro area economy. strengthening economic and monetary union 2 / 3 bis central bankers'speeches remains a priority. the governing council welcomes the ongoing discussions on further enhancing the institutional architecture of our economic and monetary union. we are now at your disposal for questions. 3 / 3 bis central bankers'speeches | have asymmetric effects due to different levels of public debt, as we saw during the crisis. consequently, imf analysis finds that, while business cycles have become more synchronised during the euro period, their amplitude across euro area countries has diverged since the crisis. so, to address this, there needs to be insurance across euro area countries, and such insurance is also likely to be highly effective, perhaps even more so than in the us. progress in this area is much less advanced, however. only around 25 % of local shocks are smoothed through financial markets in the euro area. [ 24 ] we still do not have in place the esm backstop for the single resolution fund and a european deposit insurance scheme. and there has been little meaningful progress on fiscal policy coordination. long ago we reached an impasse on key issues which is being perpetuated by two alleged dichotomies. the first is the notion that private and public insurance are substitutes, and so if the euro area focuses on deepening private risk - sharing, greater public risk - sharing will not be required. but this misunderstands how private insurance develops in the first place. it emerges from deep and resilient financial integration, especially of retail banks, and that only arises in the shelter of public risk - sharing, such as strong backstops and deposit insurance schemes. the reason is that public insurance guarantees that costs will be shared in the event of bank failures, which is crucial for national authorities to let capital and liquidity flow freely within the monetary union. without insurance, on the other hand, there will always be an incentive to ring - fence in order to safeguard national balance sheets, which blocks effective risk sharing. [ 25 ] us banks, for instance, rely on intra - group funding to respond to local shocks and manage credit growth, allowing them to keep their lending more stable over the cycle. similarly, without public insurance, banks have a weaker business case to engage in cross - border consolidation. some of the key benefits of operating multinationally β such as the ability to optimise liabilities by funding loans in one country with deposits in another β cannot be attained if there are different deposit guarantee schemes across countries, and different creditor hierarchies in an insolvency scenario. this is one reason why cross - border banking m & a activity within the euro area is currently at historical lows. in any event, private risk - sharing based on diversification can break | 0.5 |
stephen s poloz : opening statement before the standing senate committee on banking, trade and commerce opening statement by mr stephen s poloz, governor of the bank of canada, to the standing senate committee on banking, trade and commerce, ottawa, ontario, 25 april 2018. * * * good afternoon, mr. chairman and committee members. senior deputy governor wilkins and i are pleased to be back before you today to discuss the bank β s monetary policy report ( mpr ), which we published last week. when we were last here at the beginning of november, we saw signs that the canadian economy was moderating after an exceptionally strong first half of the year. that moderation turned out to be greater and to last a bit longer than we expected. still, it is important to recognize that inflation is on target and the economy is operating close to potential. that statement alone underscores the considerable progress seen in the economy over the past year. the slower - than - expected growth in the first quarter reflected two main issues. first, housing markets reacted to announcements of new mortgage guidelines and other policy measures by pulling forward some transactions into the fourth quarter of last year. that led to a slowdown in the first quarter that should naturally reverse. second, we saw weaker - than - expected exports during the quarter. this weakness was caused in large part by various transportation bottlenecks. some of this export weakness should also reverse as the year goes on. so, after a lacklustre start to 2018, we project a strong rebound in the second quarter. all told, we expect that the economy will grow by 2 per cent this year, and at a rate slightly above its potential over the next three years, supported by both monetary and fiscal policies. the composition of growth should shift over the period, with a decline in the contribution from household spending and a larger contribution from business investment and exports. inflation should remain somewhat above the 2 per cent target this year, boosted by temporary factors. these factors include higher gasoline prices and increases to the minimum wage in some provinces. their impact should naturally unwind over time, returning inflation to 2 per cent in 2019. of course, this outlook is subject to several important risks, and a number of key uncertainties continue to cloud the future, as was the case in november. in terms of risks to the outlook, the most important remains the prospect of a large shift toward protectionist trade polices around the globe. i should be clear that our forecast already includes | the negative effect of increased uncertainty on companies β export and investment plans. otherwise, it assumes that the trade agreements now in place will continue. the range of possible outcomes is far too wide to incorporate into an economic projection. the four main uncertainties around the outlook for inflation are the same as six months ago, but good progress has been made on some of them. first, in terms of economic potential, our annual review led us to conclude that the economy currently has more capacity than we previously thought. as well, this capacity is growing at a faster pace than we expected. this means we have a little more room for economic demand to grow before inflationary pressures start to build. that said, some firms, particularly exporters, are operating at their capacity limits but are hesitating to invest. this hesitation may be due to trade uncertainty, transportation bottlenecks, shortages of skilled workers or other reasons. regardless, it is limiting growth of our exports and economic capacity. the second source of uncertainty concerns the dynamics of inflation. here, recent data have 1 / 2 bis central bankers'speeches been reassuring. inflation measures, including our various core measures, have been behaving very much as forecast and are consistent with an economy that is operating with very little slack. this gives us increased confidence that our inflation models are working well. the third area of uncertainty is about wages, and data here are also encouraging. wage growth has picked up significantly over the past 18 months, approaching the 3 per cent growth rate one would expect from an economy that is running at capacity. however, the most recent figures are being boosted temporarily by the minimum wage increases in some provinces. the fourth source of uncertainty is the increased sensitivity of the economy to higher interest rates, given elevated levels of household debt. the concern is that as interest rates rise, the share of household income going to service debt will also rise, leaving less to spend on other goods and services, and putting downward pressure on inflation. it will take more time to assess this issue, particularly because new mortgage guidelines are currently affecting the housing market and mortgage lending. however, the growth of household borrowing is slowing, which is consistent with the idea that consumers are starting to adjust to higher interest rates and new mortgage rules. so, as you can see, there has been some progress on these four key areas of uncertainty, particularly the dynamics of inflation and wage growth. this progress reinforces our view that higher interest rates will be warranted over time, although some | 1 |
mean by an announcement effect. what i learn from hawtrey's analysis is that the'classical'bank rate system was strong, or could be strong, in its announcement effects. β source : all souls college, university of oxford - - economic perspectives chart 5 japan β s potential growth rate y / y % chg. total factor productivity capital stock number of employed hours worked potential growth rate - 1 - 2 fy 83 note : the potential growth rate is estimated by the research and statistics department, bank of japan. sources : cabinet office ; bank of japan ; ministry of internal affairs and communications ; ministry of health, labour and welfare ; ministry of economy, trade and industry ; research institute of economy, trade and industry. 15 16 chart 6 real gdp and monetary policy responses after the global financial crisis policy rates real gdp s. a., 2007 / q1 = 100 % japan united states euro area united kingdom japan united states euro area united kingdom - 1 cy 07 cy 95 note : for japan, for the period when no target interest rate was adopted, figures for the policy rate are the interest rate applied on excess reserves. sources : cabinet office ; haver ; bank of japan ; federal reserve ; european central bank ; bank of england. chart 7 real interest rate and natural rate of interest ( potential growth rate ) % real interest rate potential growth rate strengthening growth potential - 1 fy 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 qqe notes : 1. the real interest rate is calculated by subtracting the year - on - year rate of increase in the cpi ( excluding fresh food and energy ) from the yield on 10 - year jgbs. notes : 2. the potential growth rate is estimated by the research and statistics department, bank of japan. sources : ministry of internal affairs and communications ; bloomberg ; cabinet office ; bank of japan ; ministry of health, labour and welfare ; sources : ministry of economy, trade and industry ; research institute of economy, trade and industry. chart 8 effects of " quantitative and qualitative monetary easing " corporate profits unemployment rate s. a., % ratio of current profits to sales ( all industries and enterprises ) s. a., % cy 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 cy00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 hourly | 3 / 4 percent using the same estimates for r * and u *. the more aggressive rule does a reasonably good job of accounting for movements in the federal funds rate in the decade prior to its falling to its effective lower bound in late 2008, see david reifschneider ( 2016 ), β gauging the ability of the fomc to respond to future recessions ( pdf ), β finance and economics discussion series 2016 β 068 ( washington : board of governors of the federal reserve system, august ). for more information on the standard taylor rule, see john b. taylor ( 1993 ), β discretion versus policy rules in practice, β carnegierochester conference series on public policy, vol. 39 ( december ), pp. 195 β 214. bis central bankers β speeches our expanded toolkit to address the challenges posed by the financial crisis and the subsequent severe recession and slow recovery, the federal reserve significantly expanded its monetary policy toolkit. in 2006, the congress had approved plans to allow the fed, beginning in 2011, to pay interest on banks β reserve balances. 9 in the fall of 2008, the congress moved up the effective date of this authority to october 2008. that authority was essential. paying interest on reserve balances enables the fed to break the strong link between the quantity of reserves and the level of the federal funds rate and, in turn, allows the federal reserve to control short - term interest rates when reserves are plentiful. in particular, once economic conditions warrant a higher level for market interest rates, the federal reserve could raise the interest rate paid on excess reserves β the ioer rate. a higher ioer rate encourages banks to raise the interest rates they charge, putting upward pressure on market interest rates regardless of the level of reserves in the banking sector. while adjusting the ioer rate is an effective way to move market interest rates when reserves are plentiful, federal funds have generally traded below this rate. this relative softness of the federal funds rate reflects, in part, the fact that only depository institutions can earn the ioer rate. to put a more effective floor under short - term interest rates, the federal reserve created supplementary tools to be used as needed. for instance, the overnight reverse repurchase agreement ( on rrp ) facility is available to a variety of counterparties, including eligible money market funds, government - sponsored enterprises, broker - dealers, and depository institutions. through it, eligible counterparties may invest funds overnight | 0 |
berhad β. saya dengan sukacitanya merasmikan pelancaran terima kasih. | of islamic securities further diversifies the asset classes and the investment alternatives available to investors, expanding the breadth and depth of the islamic financial market and enhancing its liquidity. the comprehensive shariah and legal infrastructure that has been put in place has also increased the level of confidence in conducting islamic financial transactions. in addition, the conducive tax regime which accords neutrality in treatment between islamic and conventional financial products sets the stage for greater innovation to take place to support the progressive development of the islamic financial services industry going forward. with this strengthened islamic financial infrastructure now being firmly achieved in the first phase of the financial sector masterplan, the islamic financial services industry is poised to tap new growth opportunities and maximize the full potential of islamic banking and finance. the entry of commerce tijari bank berhad into the islamic financial services industry at this juncture is indeed timely. the challenge that lies ahead calls for strategic positioning to maximise the potential that a universal islamic banking licence accords in tapping new growth areas. while islamic retail, corporate and investment banking product offerings have grown in sophistication, financial activities such as private equity investments, real estate investments, private wealth and fund management are now rapidly gaining prominence. there is therefore a need to allocate adequate resources to build distinct capabilities in these newly emerging areas. the move into these strategic niche markets would also increase the diversity of new asset classes for islamic investment. this would not only contribute to further enhance the effectiveness and efficiency of the financial intermediation process in the islamic financial system but also enhance malaysia β s potential as an attractive international hub for islamic finance. in addition to tapping the vast growth opportunities that reside within the domestic environment, the enhanced economic and financial linkages between malaysia and the rest of the world has also opened up the potential for new opportunities by venturing abroad and thereby strengthen the global integration process. on this note, it is my pleasure to congratulate the commerce group on this occasion of the official launch of commerce tijari bank berhad. significant potential exists for commerce tijari bank berhad to achieve a quantum leap by leveraging on the integrated financial services and operating infrastructure of the commerce group. i wish commerce tijari bank berhad every success in this endeavour and i look forward to its contribution to the further development of the islamic financial services industry in malaysia. ladies and gentlemen, dengan lafaz bismillahirrahmanirrahim, β commerce tijari bank | 1 |
presented by the institutions represented, there are also lots of giveaways for the children and the entire family. i urge you to make this a day where you take away something new in terms of your understanding of finance. please visit all the stalls where our stakeholders and colleagues are waiting eagerly to serve and assist you. and most importantly, please enjoy the day! with these few words i would like to kindly introduce mrs. lorine tevi, a member of the national financial inclusion taskforce, to enlighten you further in the vosa vakaviti. but before i do so, i have much pleasure in declaring the korovou microfinance expo open. vinaka vaka levu. end bis central bankers β speeches | and climate change which, apart from damaging infrastructure and basic utilities and eroding years of development in a few hours, can significantly affect domestic production, exports and our services and tourism sector. nevertheless, a notable upside risk to our growth outlook is the still relatively low international fuel prices which have resulted in windfall gains for fiji through lower import costs and lower total gross trade as share of gdp = 80 % ( average for 2012 β 14 ) bis central bankers β speeches inflation. this is particularly pertinent when you consider mineral fuels make up almost 30 percent of our total imports bill. recent developments in the fiji economy ladies and gentlemen, despite the sizeable devastation from the category 5 tropical cyclone ( tc ) winston packing winds in excess of 300 kmph in february and the floods associated with tc zena in april, i am pleased to say that the fiji economy is still poised to grow this year, by 2. 4 percent, our seventh straight year of growth ( something which we have not enjoyed since the early 1970 β s ). this growth reflects robust activity in our tourism - related industries, including the transport, wholesale, retail, accommodation & food services industries, which were relatively unscathed by tc winston. moreover, this growth also assumes a strong expansion in the construction sector due to post cyclone reconstruction activity, which will also boost retail activity. however, on the downside, a significant decline is expected in agricultural output this year, particularly for sugar, which had earlier also been impacted by el - nino drought conditions. furthermore, the extreme devastation to many household dwellings and livelihoods especially in the maritime areas, damage to schools and health facilities, water supply and power supply disruptions which to date have not been fully restored, have exacerbated the situation. nevertheless, ladies and gentlemen, the quick response and immediate and tremendous assistance by our development partners β including australia and new zealand, the business community and family members and friends of fiji both locally and abroad, are making a tremendous difference in helping our people get back on their feet through inflows of grantsin - aid and kind. government efforts were nothing short of swift in facilitating access to the worst affected areas and also in implementing measures to assist financially stricken businesses and households. some of these initiatives include the β help for homes β and β adopt a school β campaigns. we know that the many military and civilian personnel from your countries who came in immediately after tc winston played a huge role in turning the lives of many of our people around | 0.5 |
be a catalyst for the going abroad endeavor. promoting the two - way interaction of foreign enterprises coming to china and chinese ones going abroad is conducive to the economic complementarity and helps promote common prosperity, global harmony and progress. on this front, the financial sector definitely will do a lot more to provide support. in conclusion, i wish the forum a complete success. thank you. | zhou xiaochuan : providing financial support to enterprises β going abroad β speech by mr zhou xiaochuan, governor of the people β s bank of china, at the 11th china international fair for investment and trade and the international investment forum 2007, xiamen, 8 september 2007. * * * your excellency vice premier wu yi, distinguished guests, ladies and gentlemen, good morning! it is a great pleasure to attend the 11th china international fair for investment and trade and the international investment forum 2007 in particular in the beautiful coastal city of xiamen. on behalf of the people β s bank of china, i would like to extend warm congratulations on the convocation of this forum. thanks to rapid economic globalization, the trade links between china and the rest of the world are expanding, and investment cooperation is deepening with each passing day. since the initiation of reform and open - up, china has made remarkable achievements in attracting foreign capital and learning advanced technology and management expertise from other countries. at the same time, the chinese enterprises are making good progress in their endeavor to invest and operate abroad. indeed, this β going - abroad β endeavor has become a strategic measure of major importance as china β s open - up reaches a new stage. the financial sector has played an important role in these two - way interactions. but, the work of financial sector is not yet sufficient, in particular in terms of supporting enterprises going abroad. on this front, the financial sector has not fully adapted to the new developments in implementing the strategy of going abroad. therefore, the people β s bank of china attaches great importance to this matter and is intensifying research and study. in the future, measures will be taken to deepen and broaden the financial markets to satisfy demand of enterprises for foreign exchange products and risk management instruments, and change the foreign exchange administration policy that is strict with capital outflow and easy with inflow ; greater convenience and facility will be provided in financial services to support enterprises going abroad in a better way. first of all, the financial market will play a bigger role. we will actively foster foreign exchange market growth and encourage product development to help enterprises manage interest rate and exchange rate risks in their overseas investment and operation. in recent years, the people β s bank of china has worked hard to foster foreign exchange market development. the products in the foreign exchange market are increasingly diversified. with the launch of rmb foreign currency swap transactions, and availability of future and swap foreign exchange sale and purchase | 1 |
ashraf mahmood wathra : strengthening pakistan β s economy and financial services speech by mr ashraf mahmood wathra, governor of the state bank of pakistan, on independence day, karachi, 14 august 2015. * * * ladies and gentlemen, assalam - o - alaikum, it is my pleasure and honour to speak to you on the 69th independence day of pakistan. first of all, i congratulate you. the day is celebrated in the memory of those leaders who rendered innumerable sacrifices for the liberty of the nation from shackles of slavery. it was their untiring struggle and perseverance which delivered the fruit of independence for the muslims of the subcontinent. the muslims of the subcontinent followed the call of the quaid - e - azam muhammad ali jinnah and the dream of a new homeland became a reality at a time when it seemed almost impossible to win it. pakistan was created for lofty ideals. to win freedom was the first step in that direction. the real freedom means achieving the goal of becoming a self - reliant nation β one that is able to guard her interests and promote her values. freedom will really be freedom only when we follow the principles taught by our founding fathers and remain united in confronting the challenges the country faces in its move towards growth shared by all pakistanis. it is our collective responsibility to play our roles to transform pakistan into a strong, prosperous and thriving country. this may require some sacrifices on our part but if we keep the principles taught by our great leaders in mind, we will have the vision to see that such sacrifices effect great advancement for the future of a nation. a strong economic system based on strong institutions is the key to progress. no nation can hope to grow without a robust financial system and powerful economy. despite challenges pakistan managed established a central bank and a viable economic system early on. although our economy has had many rises and falls and has sometimes seen crises, i believe there is still enormous potential for growth and the economy is now headed in the right direction. on this auspicious occasion the state bank is launching its five - year strategic plan. we have titled this plan sbp vision 2020. the plan has devised by the management and officers of the sbp after months of ceaseless work. sbp vision 2020 has been developed through a participative and consultative process. sbp took the vision 2025 into account. moreover, as a part of the process, surveys | has increased china β s and the people β s bank β s role in the global financial system. great reserves build - up, smooth sailing during the global recession page 5 of 7 and sustained high growth are all hallmarks of his era. christine lagarde, the imf β s managing director, has commended dr. zhou β s role in, and i quote, β successfully steering monetary policy while structural transformation was in full swing, contributing importantly to china β s sustained growth to become the second largest economy in the world. β end quote. 11. dr. zhou is currently a member of the group of thirty ( g30 ) and chinese economists 50 forum, and also holds teaching responsibilities at tsinghua and other institutions. he has written several books and over one hundred academic articles on various aspects of financial and economic policy. some of his important articles, such as β rebuilding the relationship between the enterprise and the bank β and the β social security : reform and policy recommendations β touch upon development and inclusive growth. i would also strongly recommend his book β marching toward an open economic system β to the audience here, as it offers relevant insights about china β s successful journey in the age of globalization. 12. given dr. zhou β s extensive experience at the highest levels of central banking, as well as his intellectual and research output, i am sure that his unique perspective and insights will be of enormous relevance for developing economies like pakistan. 13. we are therefore delighted that dr. zhou xiaochuan has joined us today as we honor the memory of one of our country β s finest civil servants. i would page 6 of 7 like to thank dr. zhou, on behalf of this forum, for taking time out of his very busy schedule and speaking to us here today. 14. i would also like to thank all of you all for attending today β s lecture. in keeping with our past lectures, i hope this one will also challenge your beliefs, encourage you to think outside your comfort zone, and hopefully trigger a lively, thoughtful and constructive debate. 15. without further ado, let me now invite dr. zhou to share his thoughts with us. dr. zhou xiaochuan β¦! - - page 7 of 7 | 0.5 |
official launch of the financial stability council and signing of the memorandum of understanding opening remarks by moses d pelaelo governor, bank of botswana february 26, 2019 good morning and welcome to the signing ceremony for launch of the financial stability council. ladies and gentlemen, as i look back, the launch is the culmination of several significant steps and consultations. among these are : first, the initial assessment by the bank of the need and prospective role of a financial stability council, articulated in the monetary policy statement ; second, consultations by officials within the auspices of the bank of botswana / ministry of finance and economic development working group, and also involving the non - bank financial institutions regulatory authority and the financial intelligence agency ; third, approval for honourable establishment of the council minister finance and of by the economic development obtained in april 2018 ; and fourth an inaugural meeting to consider an outline of the macroprudential policy framework and review of the draft memorandum of understanding in september 2018. the financial stability council comprises the leadership of the ministry of finance and economic development ( mfed ), the bank of botswana ( the bank ), non - bank financial institutions regulatory authority ( nbfira ), and financial intelligence agency ( fia ), institutions that are involved in developing legislation and regulations, policymaking and supervision with respect to the whole or facets of the financial sector. it is acknowledged that the respective institutions have unique statutory mandates, objectives, oversight frameworks and operational spheres, albeit mostly related. in this regard, the financial stability council is not established to usurp or dilute the role of the respective institutions, which is neither feasible nor desirable. rather it is to share information and where, desirable, facilitate collective and coordinated approach to financial sector monitoring resolution. frameworks and crisis ladies and gentlemen, to reiterate, as indicated in the 2018 monetary policy statement, coordinated oversight is necessary because while the relevant institutions are distinctly and individually supervised at a micro level, the financial system encompasses interconnected relationships and activities and is subject to common and transferable risks. therefore, the council is designed to foster collaboration and coordination in the four areas of : sharing of data and information for purposes of monitoring and risk assessment ; overseeing and guiding macro - prudential policy framework and implementation ; regular briefings, consultations and policy review with respect to relevant developments ; and structured and coordinated response to any financial system imbalances and resolution as may be necessary. todayaβ¬β’s signing of the memorandum of understanding by the | the most prominent examples of for example, the survey of consumer finances ( scf ) data show that the average wealth of individuals in low - and moderate - income areas declined on a percentage basis more than that in higher - income areas ( 21 percent versus 17 percent ). see the 2007 - 09 scf panel data. raven molloy ( 2013 ), β long - term vacant housing units : an aggregate view, β speech delivered at β renters, homeowners, and investors : the changing profile of communities, β a conference sponsored by board of governors of the federal reserve system and federal reserve banks of philadelphia and cleveland, washington, february 26. alan berube ( 2012 ), β the continuing evolution of american poverty and its implications for community development ( pdf ), β in federal reserve bank of san francisco and low income investment fund, investing in what works for america β s communities : essays on people, place, and purpose ( san francisco : frbsf and liif ), pp. 55 β 71. bis central bankers β speeches well - meaning but misguided efforts to revitalize decaying inner - city neighborhoods. in practice, these policies often devastated neighborhood cohesion, leading their critics to argue for local, bottom - up solutions. perhaps the most influential critique of urban renewal and top - down planning was jane jacobs β s 1961 book, death and life of great american cities. 4 in that book she celebrated the complexity and organic development of city neighborhoods in which intricate social networks enhance safety, quality of life, and economic opportunity. in jacobs β s view, a police force was not as effective at maintaining order as a neighborhood filled with β public actors β such as storekeepers, doormen, and interested neighbors acting as street watchers at all hours. the development of this sort of community self - monitoring is most likely to emerge, she argued, in neighborhoods with a rich mixture of activities taking place in buildings of varying age, character, and use. for the most part, social science research has vindicated jacobs β s perspective. for example, sociologists studying community resilience in the wake of natural disasters mapped deaths caused by an extreme heat wave in chicago in 1995. 5 they found, not surprisingly, that death rates were higher in poor areas where air conditioners were scarce. but they also noticed a remarkable difference in the fatality rate in two adjacent neighborhoods β englewood and auburn grisham β on chicago β s south side. these neighborhoods | 0 |
the guidelines for account aggregator ( aa ) in 2016, are examples rbi's proactive developmental role. the focus of the digital lending guidelines ( dlg ) on fair treatment of customers demonstrate the prioritisation of innovation with suitable guardrails. it is important to recognize that regulation plays a crucial role in managing the pace of change and allows the financial system to adapt to new innovations without threatening the stability of the system. self - regulation as regulators continue to contemplate, implement, and refine regulations for the orderly development of the fintech sector, self - regulatory organizations ( sros ) could play a pivotal role in the fintech industry by promoting responsible practices and maintaining ethical standards. these industry - led bodies establish guidelines and codes of conduct that foster transparency, fair competition, and consumer protection. sros can facilitate collaboration between fintech firms, regulators, and stakeholders, creating a framework for innovation with guardrails. by proactively addressing issues like market integrity, conduct, data privacy, cybersecurity, and risk management, sros help build trust among consumers, investors, and regulators. their voluntary compliance mechanisms contribute to a more sustainable and reputable fintech ecosystem, ensuring growth while minimizing potential risks and negative outcomes. in the context of a new and evolving sector like fintech, it is the industry participants who possess the deepest understanding of the processes and practices within the trade. therefore, they are bestsuited to establish common rules, enforce them, and effectively handle disputes that may arise from non - compliance with these rules. conclusion in conclusion, it is crucial for fintechs to continue collaborating and innovating to enhance the effectiveness of the financial sector. collaborating and competing with fintechs is essential for traditional financial entities too, in order to adapt. while innovation is vital, it should also support social and economic goals. regulation should play the role of guiding the sector to those goals. self - regulation needs to play a far more active role too. together, industry participants β fintech and banks alike -, regulators, and self - regulatory organizations can work harmoniously to shape a vibrant and resilient financial landscape that promotes inclusivity and progress for all. 3 / 4 bis - central bankers'speeches thank you for your attention and wish you all the best. 1 chapter 7 : extracting value through the innovation economy in the value of everything by mariana mazzucato 4 / 4 bis - central bankers'speeches | name'fintech '. it would be useful to remember that, apart from the difference in speed and scope, neither the older innovations nor the current fintech innovations change the basic nature and functions of the financial system. the major transformation that characterises the fintech ecosystem is the increased efficiency with which financial products and services are delivered and consumed. this efficiency is driven largely by ( a ) digitisation of information which can then be accessed, processed and transmitted with ease, ( b ) more direct interface between buyers and sellers, between borrowers and lenders and between payers and receivers, which optimises transaction chains, and ( c ) democratisation of fast communication channels that expands the reach of the financial system. put together, these efficiencies lead to lower cost, quicker transactions and better inclusion. this is clearly a desirable outcome 1 / 4 bis - central bankers'speeches and one that should be actively encouraged and promoted, which is what the focus of policy making and regulation currently is. but innovative developments raise different issues, not undesirable in themselves, but which need to be addressed nonetheless. one issue is the relative roles of traditional financial institutions, especially banks, vis - avis the fintech entities. should their interaction be driven by motives of collaboration or competition? the second issue is what should be the approach of financial regulators. how is fintech ideally regulated, same as traditional finance or differently. i shall try and talk about these two issues briefly in what follows. collaborate or compete traditional financial players ( let us use the term'banks'for simplicity ) have come to acknowledge the impact of fintechs on their functional roles and they are reacting in one of two ways. the first way is by internalising innovations, thereby placing themselves in competition to fintech entities. the second way is by collaborating with fintechs β either by engaging in one - to - one partnerships or by purchasing the services of fintech players. the latter kind of collaboration can be functional, in the sense that fintech entities can perform functions where they have the competitive advantage and banks focusing on areas of their expertise. while customers benefit from an improved experience with curated products and services at competitive prices, regulators also draw comfort in these arrangements as traditional financial entities like banks / nbfcs which are well regulated and continue to discharge the primary responsibility of risk management through their balance - sheets. perhaps the sweet spot lies in fintechs acting as both competitors as well as collaborators. the existence of | 1 |
to do. first, we are enhancing our tools to strengthen market intermediation and integrity. among others, the usage of islamic fx swap as an additional liquidity management tool, which will help us to manage interbank liquidity more effectively. also, operating frameworks are already undergoing studies to address market fragmentation in the interbank market. similarly, efforts are underway to align our markets with global standards. the transition from klibor to myor is a notable example. a discussion paper published last quarter outlines the roadmap for this transition, with enhancements to myor expected in 2025 and the cessation of klibor by 2028. these changes will undoubtedly improve the integrity of our markets, while aligning them with international best practices. second, next year is a significant year for malaysia as we assume the asean chairmanship. this is a unique opportunity to advance regional collaboration, including 4 / 6 bis - central bankers'speeches for the financial sector and position malaysia accordingly. for example, malaysia currently accounts for 25 % of the total issuance of asean green, social and sustainability debt securities. as we pursue catalytic projects under the national energy transition roadmap, green sukuk will play a crucial role in meeting funding requirements with estimated rm1. 85 trillion by 2050. leveraging our global leadership position in islamic finance, with the presence of the mifc leadership council ( mlc ) and islamic financial market committee ( ifmc ), we aim to scale up green sukuk adoption, grow islamic assets and position malaysia as the gateway to asean. finally, i might add, this also provides malaysia with a unique opportunity to offer ourselves as a centre for regional currency trading and liquidity management. for example, one key area where we have made considerable progress is in promoting the settlement of cross - border transactions in local currencies. settling transactions in local currencies reduces the additional costs of dual - leg currency conversions and lowers reliance on the us dollar. our local currency settlement frameworks with countries like thailand and indonesia provide harmonised rules that make bilateral transactions in local currencies more accessible. local currency settlements also figure significantly in our trade and investment with china and singapore, where accessibility to rmb and sgd has long been facilitated. this allows businesses to better manage their foreign exchange risk while promoting the resilience of regional currencies and trade against external shocks. building on this foundation, malaysia has the potential to further expand its role by lever | systems. these developments have also seen the growing presence of asian financial institutions in the region. in 2011, central banks in the asean region have endorsed an asean financial integration framework which will pave the way for greater market access and operational flexibility for qualifying financial institutions. this represents the collective commitment of the region in the efforts to strengthen the region β s capacity to intermediate regional and international financial resources to productive activity in the region. a third imperative is the alignment of the financial sector to asia β s demographic trends. demographic profiles vary widely across asia and have a significant impact on economic potential of the region. for many parts of asia, demographic developments foreshadow significant changes in consumption, health and educational patterns. these changes have reinforced the significance of domestic sources of growth. asia β s rising domestic demand has been supported by the development of a much broader range of financing options. going forward, the access to financing for healthcare, education and retirement will reduce the need for high levels of precautionary savings, and thus strengthen further domestic demand in the economy. the fourth imperative relates to ongoing efforts to expand financial inclusion. financial inclusion has been, and must continue to be, a key component of asia β s overall strategy to achieve balanced and equitable growth. indeed, in the advanced economies, there is a now greater focus and attention on expanding financial inclusion to support the strength of recovery. emerging asia has achieved remarkable progress on this front. the period of higher growth has been accompanied by lifting millions out of poverty. asia however still remains the home of two - thirds of the world β s poor. therefore, much still remains to be done. the imperative is to arrest the widening income disparities and in inequality through providing more households and small businesses with meaningful access to financial products and services, thus bringing them into the economic mainstream. another is ensuring that as asia develops, households, particularly in the lower income groups, do not become financially excluded because financial products and services become increasingly unaffordable or complex, or due to practices of financial institutions which increase barriers to access. finally, asia is now building on the progress that has been made in strengthening the resilience of our financial systems. authorities in asia are at various stages of translating the global financial reform measures into local standards. in a number of countries in asia, the global financial crisis has also sharpened the focus on risks in financial institutions which are more systemically important. this includes having the regulatory reach that extends to institutions outside the formally regulated | 0.5 |
are two problems. the first are also inflation concerns, particularly if inflation expectations are less well anchored. the second are balance sheet effects in the form of unhedged foreign exchange denominated liabilities. this is the genesis of the fear of floating and was critical in the asian crisis. paul krugman β s second generation models capture this well. does the model in the paper here capture this? mostly. it captures the issue of the exchange rate not moving in line with the fundamentals. it doesn β t capture this balance sheet channel though, where the exchange rate depreciation hurts so much. why doesn β t the standard macro response work? that is, when the exchange rate appreciates, lower interest rates to ameliorate its impact. mundell - fleming would say to do that. it would also say use fiscal policy, which is not discussed in the paper. extreme reductions in interest rates can cause problems of excessive price rises in domestic asset markets. so could one turn to β macro - prudential β measures? these are effectively domestic capital controls on the locals, rather than the capital controls on the foreigners that the paper proposes. basically one is trying to make yourself less attractive to foreign capital inflow. that β s the fundamental issue here in this paper. that has posed an interesting conundrum in australia in recent years. we have been experiencing a β boom with gloom β. we have had the difficult balancing act of trying to tell foreigners that the economy is not as good as they think it is, so stop sending us so much capital, while at the same time trying to convince the locals that the economy is not as bad as they think it is. now that β s a real dilemma! in the end i see the model in this paper as proposing capital controls to address the distortion of the exchange rate moving out of line with the fundamentals. basically it boils down to the tinbergen principle. with only monetary policy, there is one instrument and two objectives. give me another policy instrument and it is easier to hit the two objectives. but other potential instruments are not considered in the paper. for example, intervention in the foreign exchange market in the form of reserve accumulation, which has been used in many emerging markets. this is helpful on the way in, in terms of dampening the inflows, but it also helpful in dealing with the outflows when they come. bis central bankers β speeches moreover, the paper is silent | the rest of the world which experiences an exchange rate appreciation as capital flows to earn a higher yield. even if the global portfolio reallocation that comes about from this is small from the us β perspective, it can be large from the point of view of a small open economy that is the recipient of these flows. in the emerging market world, the concern is often that the capital inflows will become capital outflows. in australia β s case, an exchange rate appreciation that is not in line with the fundamentals, if persistent enough, can lead to dutch disease. this is the fundamental problem, be it a trilemma, or dilemma, as helene rey labels it. farhi e and i werning ( 2013 ), β dilemma not trilemma? capital controls and exchange rates with volatile capital flows β, paper presented at the 14th jacques polak annual research conference, washington dc, 7 β 8 november. bis central bankers β speeches but, you might say, isn β t a stronger us economy good for the rest of the world? or in other words, β suck it up sunshine β. that may well be true for the rest of the world as a whole, but it is not necessarily true for every other country. there is an income and a substitution effect at work here. the income effect is the boost from a stronger us in terms of greater global demand. the substitution effect is the negative effect of the exchange rate appreciation. the substitution effect can outweigh the income effect, particularly if you don β t trade that much with the us and / or if the capital flows are large relative to the size of your economy leading to a relatively large appreciation of the exchange rate. that is the fundamental problem that the authors are getting at in their paper. though, so far, mundell - fleming has done just as well in getting to this point as their more advanced technology. now let β s think about what happens when the capital flow reverses. ( i would note that the term β sudden stop β maybe isn β t the right term to use, being a hold - over from a fixed exchange rate world. ) in australia β s case, the exchange rate depreciates and the main concern is inflation. this is manageable if the appropriate macro framework is in place, such as an inflation targeting framework. this is one of the points of fischer β s 2001 lecture at the first incarnation of this conference. in the emerging markets world there | 1 |
this is at a time when huge resources are required for implementation of the sustainable development goals ( sdgs ) as well as the african union commission β s 2063 agenda and individual national goals. but as these traditional public funding decline, private financial flows have grown β from 63 percent of total external resources in 2002 - 06 to over 70 percent in 2010 - 14. for the african governments to achieve the noble aspirations enshrined in the sdgs, and the au agenda into realities on the ground, they will need to adopt innovative ways to leverage on the rising private investment to fill the large projected financing gap. this forum β s focus is on impact investment in the context of the agricultural sector ; and this is a sector whose importance in our economies cannot be over - emphasized. apart from its gdp contribution, critical is the high concentration of the poor and those who are financially excluded in rural areas. many of us engage in agriculture even as we live our lives in the city. most of us, let β s be honest, plan to retire to a life of agriculture, as many have done before us. the efficiency of agriculture is thus of vital, and personal, importance to us. of more importance to central banks is managing the volatility of food prices. concerns about price volatility have a huge effect on business decisions and investments. modernizing agriculture is critical to managing this risk and finance is at the centre. despite the great strides made by the african banking sector in digital financial services, the typical offer for financial products and services for the actors in the agricultural sector has been limited. most agricultural investments, and impact enterprises, in particular, find it challenging to obtain capital from the commercial banking sector due to a number of constraints. although impact investments are identified today as constituting one of the more promising approaches to the funding of inclusive and green businesses, the field of impact investing is also relatively young. as such, many undertakings have not had time to mature and demonstrate results. there is also a lack of awareness and understanding among banking practitioners on the peculiarities of impact businesses. so, what strides has kenya made towards developing market - based solutions to addressing environmental and social challenges? the kenya bankers association ( kba ) and the nairobi securities exchange ( nse ) partnered with market players to fast - track the kenya green bonds programme. kenya β s green finance initiative was strengthened during the united nations conference on trade and development ( unctad ) that took place in nairobi in july 2016. | to avoid complacency. it is often said that in life you should expect the best but be prepared for the worst. likewise, as supervisors we should strive to avoid financial crises, by applying supervisory tools to mitigate risk accumulations as well as reinforcing banks β management capabilities ; but, at the same time, we should work with a longer - term perspective to complete the institutional framework, in case a crisis still occurs. thank you. 5 / 5 | 0 |
vitor constancio : the macroeconomic and the financial landscape in the aftermath of the 2007 crisis β new challenges and perspectives speech by mr vitor constancio, vice - president of the european central bank, at the high level policy seminar, european university institute, florence, 7 june 2011. * * * ladies and gentlemen, thank you very much for the invitation to join you today at the european university institute for this high level policy seminar. it is an apposite time to take stock of the lessons of the recent crisis ; the actions that have been taken in response ; and the measures that are needed for the future. i believe that the recent financial and economic crisis has revealed some fundamental lessons about the functioning of the euro area β lessons which policymakers have been obliged to learn and act upon to build tomorrow β s european structure. we learned that preventing future crises requires action across a range of policy areas encompassing fiscal, economic and financial policies. on the other hand, we learned that these policy areas are interconnected β fiscal imbalances can undermine the financial sector ; financial sector imbalances can weigh on the credibility of the sovereign ; both can spillover into the real sector, and vice versa. responding to these lessons requires a holistic encompassing concept of economic governance. this implies a high degree of institutional coherence and co - ordination which is not easy to achieve β even unitary states like the u. s. have struggled to put in place such a comprehensive approach. in the euro area, it requires establishing a comprehensive set of rules and institutions to guide economic policies towards mutually beneficial outcomes. in the absence of a central political authority, such rules and institutions are essential to overcome collective action problems and prevent free riding β to maximise the common good as opposed to private utility. the key to effective rules and institutions is as follows : their scope must be commensurate with the scope and degree of economic and financial integration in the euro area. otherwise, authority lags behind integration and crises cannot be efficiently forestalled. in general, policymakers have recognised that fundamental changes to economic governance are needed after the crisis. but my main contention today is that the reforms put forward in response, whilst very important, do not yet meet sufficiently the criterion for effectiveness. if we truly recognise the lessons of the crisis for the euro area, economic governance must be more ambitious. let me begin by recalling these lessons and their implications for economic governance. lessons from the crisis by now we know all | stability and growth pact. in this respect, let me say that the current crisis has taught us an important lesson about the importance of preserving the public β s trust in the soundness of public finances. at the current juncture, euro area governments must make credible commitments to return to sound fiscal policies. doing so in full compliance with the stability and growth pact is the most credible exit strategy. this requires, first, a full reversal of the fiscal stimulus measures taken so far. this is necessary to ensure an efficient allocation of resources by minimising distortions in the incentives of economic agents and by avoiding a permanent increase in the size of the public sector. second, governments must live up to their commitment to maintain fiscal discipline. this means that credible fiscal consolidation plans have to be implemented as early as possible, including a consolidation effort of at least 1 % of gdp per annum where necessary. if euro area countries do not practise fiscal restraint seriously, the debt dynamics will be in danger of spiralling out of control. the current crisis has shown how important it is for countries to consolidate during good economic times and to build a β fiscal reservoir β from which they can draw in periods of β drought β. many euro area countries failed to do so. they suddenly found themselves in this turbulent environment burdened by high fiscal deficits and debt ratios. their room for fiscal manoeuvre was very limited, as was their capacity to adopt effective counter - cyclical measures when they were most needed. in addition, the developments in government bond yield spreads since last autumn have shown that, in uncertain times, financial markets increasingly discriminate between countries on the basis of their creditworthiness, including fiscal fundamentals. we are seeing the first, timid signs of an economic recovery ; investors are regaining their appetite for risk. it is critical that euro area governments boost confidence in the soundness of public finances as an element to support both the recovery and long - term economic growth. as regards monetary policy, it is equally important to draw up a strategy for withdrawing in due course the extraordinary measures that have been implemented or announced. the ecb obviously cannot maintain the current degree of support indefinitely. we are providing substantial short - term support to the financial system and the real economy, and thereby ultimately maintaining price stability. but what if macroeconomic conditions warrant a removal of monetary stimulus? in fact, we are prepared to take appropriate actions once the macroeconomic environment improves. we will ensure that the measures taken can be | 0.5 |
individuals and businesses to thrive. in practice, this means that those working in government must have the right incentives to provide the appropriate framework - one that facilitates higher productivity and innovation in the private sector. the flip side of the coin is that we should also have the right incentives for the private sector to work towards enhancing the public good and the productivity of collective action by governments. the bottom line is that we cannot afford to have the private and public sectors operating as two solitudes. to work efficiently, individuals and businesses need a well - functioning public sector and the appropriate framework that provides the right incentives. the public sector has a responsibility to understand how businesses and individuals work in order to provide the appropriate setting and support. while this applies to all parts of the public sector, it is perhaps most critical for those who are responsible for the country β s economic and financial framework - including us at the bank of canada. creating and maintaining this framework, in the context of a changing global environment, will be a daunting challenge indeed. part of that challenge will come from developing a public policy framework that has two dimensions. first, it must have enough consistency with the rest of the world so that we remain open to competition and to the flow of ideas from abroad. second, our policy framework must create unique strengths for canada so that our public sector is a source of competitive advantage and does not detract from our other advantages. what does this mean for students in terms of opportunities for tomorrow? it means that you should be thinking of careers that combine public and private sector experience, as well as academic. the lessons you learn in one place will give you a greater ability to work and contribute elsewhere. and this diversity of experience will give you a set of skills that you will find are in great demand. and it really doesn β t matter where you begin. for example, if you want to make a real contribution as an academic, some experience in either the private or the public sector will be tremendously important in letting you bring more to the table as a teacher. in the private sector, academic or public sector experience will let you view the world strategically, which is difficult if your experience is confined to just one firm or industry. and if you want to contribute in the public sector, as i have already said, it is extraordinarily important to have private sector experience so that you can better understand how business functions. why? because, in the end, public policies must foster the effective and efficient | just as much about inflation falling below target as we do about inflation rising above it. this symmetric approach helps keep the canadian economy near its production potential, thus encouraging strong, sustained growth in output and employment. i'm not arguing that all countries should copy every detail of our inflation - targeting regime. but it is important that central banks follow policies that anchor inflation expectations and thus prevent a buildup of deflationary as well inflationary pressures. as i mentioned before, both canada and the united kingdom operate with a flexible exchange rate. much has been said recently about floating exchange rates in relation to certain asian economies β china in particular β and global imbalances. the policies of some asian economies to encourage export - led growth, including the fixing of their exchange rates to the u. s. dollar, have caused a buildup of large foreign exchange reserves, thus exacerbating global imbalances. it's important to point out that, in theory, there is nothing wrong with countries having fixed exchange rates. but in practice, there is a major problem. through " sterilization, " certain asian countries β including china β have been trying to offset the domestic price effects of their foreign exchange intervention. this is inhibiting economic adjustment. at the bank of canada, we have argued that it is very much in china's own economic interest to float its currency. by having a flexible currency, china could gear its own monetary policy to its own domestic considerations. if the external value of the renminbi were allowed to rise, the global purchasing power of chinese citizens would also rise. this, in turn, would help to spread the gains from integrating into the world trading order throughout chinese society and would allow that country to boost its consumption, thus helping to resolve global imbalances. floating exchange rates are not the whole answer to the problem of global imbalances, but they are an important part of the solution. as i just said, when countries offset the effects of intervention, they delay domestic economic adjustment. they also delay global adjustment. just as worrying, such intervention is provoking threats in certain political quarters of protectionist measures. such wrong - headed measures could choke off the growth of international trade that has led to rising incomes worldwide. and so it is very important that all countries work to protect and enhance the free flow of goods and services by pushing the doha round of trade talks to a successful conclusion, and by strengthening the world trade organization to ensure proper compliance with the | 0.5 |
, and the european commission among others β is a step into the right direction. however, the esrb will contribute effectively to systemic risk control only if an unpoliticised open analysis and discussion is ensured. therefore, central banks should have sufficient representation on this board and be given adequate weight. there are two more arguments why central banks should play a key role in banking supervision. first, the interdependence of monetary policy and the financial system means that central banks have a strong and natural interest in financial stability. second, central banks in most countries are strongly involved in banking supervision and can therefore bring their expertise to bear in this field. having said that, i do not want to skim over the fact that central banks, too, have their own lessons to draw from the financial crisis. one of the lessons which certainly has to be learned is that the stability of the financial system is an essential condition in its own right which has to be taken into account in the conduct of monetary policy. in this context, the paper borio and zhu presented at this conference points to a very important link between monetary policy and the perception of risk by economic agents β something which has, so far, been neglected. although more research is undoubtedly needed before we can speak of risktaking as a new channel in the monetary policy transmission process, major lessons for monetary policy can be drawn from the findings of this paper. in particular, the conclusions support the call for a more symmetric monetary policy that tries to look through the financial cycle in stabilising monetary policy. conclusion ladies and gentlemen safeguarding financial stability has been the paramount objective of banking regulation. unfortunately, it has usually been only the painful experience of financial crisis which has been a catalyst for implementing the necessary regulatory changes. from history and not least from the current financial crisis we should learn that banking regulation is exposed to permanent change, and so the debate on the future of banking regulation must and will go on. thank you very much for your attention. | , including, of course, germany and spain. according to our survey, apple pay is the most popular wallet service in germany. there is a danger for banks of being sidelined as interchangeable settlement agents. at the moment, bigtechs in europe rely on cooperation with banks for the settlement of payments. a payment made using apple pay or google pay is mostly settled via the credit card stored in the wallet, but issued by a bank. the next step could be to create closed payment systems that are no longer based on established payment instruments and actors. the idea here is to issue one's own " platform money ", notably in the form of a " stablecoin ". the most prominent example of such a concept was probably the diem initiative ( formerly known as libra ) launched by meta. stablecoins often peg their value to an existing currency or to a currency basket. moreover, their value is backed by suitable collateral. stablecoins therefore mimic the functions of money, owing to their dependence on widely accepted currencies. however, if the reserve assets are insufficient or if stablecoins can only be converted to other forms of money to a limited extent, this entails the risk of losses. the turbulences 2 / 6 bis - central bankers'speeches in the crypto market in recent months, during which stablecoins also lost massively in value, have shown just how high these losses can be. for instance, terrausd almost lost its full value compared with the us dollar. instabilities can also arise if many holders want to exchange their stablecoins back into " real " money due to a loss of confidence. in this case, a scenario similar to a typical bank run might occur. this risk might further increase as a result of strong interdependencies between stablecoins and other crypto assets in decentralised finance ( defi ) markets. in this context, europe is working at full speed to finalise the markets in crypto assets regulation β mica. with mica, the european union is creating a single european regulatory framework for crypto assets. mica will protect european customers investing in crypto assets and prevent misuse of crypto assets, while being innovation - friendly and maintaining the attractiveness and competitiveness of the european market. 3 speeding up existing infrastructures but legislation is only one part of the puzzle. what steps should we, as central banks, take in response to the challenges posed by digital | 0.5 |
credible in the shorter run, too. that is a prerequisite for a stable development during the period in erm2. that in turn presupposes, for example, that the rate functions properly in relation to the prevailing level of economic activity, the current fiscal policy and so on. the underlying inflationary tendencies that are discernible in labour costs, for instance, also play a part. in these respects it is also possible to produce various numerical examples and simulations. alternative assumptions can be made, for example, about what would be a reasonable exchange rate in the long run and test them against different underlying cyclical developments. an important issue for the riksbank here is the effect on inflation. if it is found that inflation would be unduly high, for example, fiscal policy might have to be tighter. the interaction of the business cycle, for example, and the choice of fiscal policy and exchange rate can be studied in this way. the discussion would benefit from several independent analyses of this kind. economic policy in erm2 if sweden becomes a full participant in the monetary union, the conditions for swedish stabilisation policy will change. the task of conducting a stabilisation policy for swedish needs would then rest - to the extent that it is considered desirable - entirely on the swedish parliament or riksdag and the government. i want to underscore that this change already takes place essentially during the period in erm2. it should be noted that a good state of readiness is absolutely essential. at the riksbank we usually reckon that it takes between 1 and 2 years for changes in monetary policy to elicit their maximum effect on the rate of inflation. we do not know exactly what the corresponding time lag is for the real economic impact of fiscal policy. but there is much to suggest that fiscal policy as early as next year that is, the policy which is being decided this autumn - will be important in this context, at least if the timing that is now being discussed, with full participation in 2005 or 2006, is achieved. thus, more and more of stabilisation policy's burden is transferred to fiscal policy. but this does not mean that the riksbank should refrain from using the scope for monetary policy that may exist during the erm2 period. it is up to the riksbank to do what is possible to make sweden's accession to the monetary union smooth and stable. low and stable inflation in sweden is one important | eli m remolona : protecting the banking system as a whole speech by mr eli m remolona, jr, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the philippine deposit insurance corporation stakeholders'appreciation night, manila, 20 june 2024. * * * magandang gabi po. president bobby tan, members of the pdic ( philippine deposit insurance corporation ) board of directors, members of the pdic management, pdic's institutional partners, good evening. as the pdic's 60th anniversary celebration draws to a close, we would be remiss if we did not express our gratitude to our stakeholders. the pdic's relationships have been crucial to the organization's success. so, tonight is a stakeholders'appreciation night. as president bobby tan said, when the pdic was established in 1963, it was the first institution in east asia to offer deposit insurance. since then, it has stood as a bulwark against banking crises. yes, the pdic provides depositor insurance. but its most important role, by far, is to protect the banking system as a whole. when a mass of depositors decide to withdraw their money, even when they do not need it, then you have what constitutes a bank run. this bank run can have catastrophic consequences for the financial system, the economy as a whole, and our people. we look to the pdic to stop such a run in its tracks. in the late 1990s, the asian financial crisis shook the region's economies to their core. a decade later, the philippine banking system itself was shaken by the legacy group scandal, which led to the collapse of 48 banks across the archipelago. the pdic plays its most critical role during times like these. it does this by restoring confidence among depositors. today, i am proud to say that the bsp itself is one of the pdic's stakeholders. we work very closely together and try hard to maintain the stability and resilience of the philippine banking system. together, we are stronger in facing the challenges ahead. so, cheers to our enduring partnership. and cheers to our stakeholders. maraming salamat po at mabuhay tayong lahat! 1 / 1 bis - central bankers'speeches | 0 |
: review of experience with the institutional view, published in december 2016, the average number of easing measures introduced between 2013 and 2016 amounted to 851, with almost 60 % representing easing by emerging market economies. china, colombia, india, indonesia, malaysia, south africa and thailand introduced about 127 easing measures. during the same period, only 233 tightening measures were introduced, with more than half representing emerging market economies. in order to rationalise this behaviour, it is perhaps at this point worth recapping some benefits of capital flows. countries with a liberalised capital account tend to be able to tap into foreign savings to invest in infrastructural projects that contribute to sustainable domestic employment creation and generate income to service the underlying debt. the other benefit relates to the typically ensuing technology transfer and financial market development and innovation that assist countries in increasing the absorption capacity of flows without distorting the macroeconomic fundamentals. needless to say, opening a country β s capital account also increases its vulnerability to the changing conditions in global financial markets. the most fundamental and intricate rule about the liberalisation of the capital account is that the process has to be well thought through in terms of timing and sequencing in order to minimise costs and unintended consequences. the manner in which these controls are eased should be tailored to a country β s specific circumstances and economic objectives. careful planning ensures that macroeconomic stability is maintained over time and that the benefits outweigh the costs. the imf has recommended a phased approach to capital flow liberalisation, prioritising the liberalisation of stable flows such as foreign direct investment, which are closely correlated with growth, before more volatile and short - term portfolio flows. it further recommends that the relaxation of controls on capital inflows be prioritised before capital outflows. as napoleon bonaparte once said : β forethought we may have, undoubtedly, but not foresight. β some countries which may have planned the process of capital account liberalisation and subsequently met some macroeconomic preconditions to liberalisation ( like strong and stable growth, low inflation, and high levels of foreign reserves ) might in retrospect discover that they have liberalised prematurely or too rapidly. while the liberalisation of the capital account is generally associated with the abolishing of capital flows measures that confine capital mobility, the reimposition of temporary controls in instances where the openness was prematurely or too rapidly undertaken or posed a risk to macroeconomic and / or | miroslav singer : the czech republic outside emu β a success story born from painful lessons. a czech view on resolving the euro crisis speech by mr miroslav singer, governor of the czech national bank, as part of the omfif ( official monetary and financial institutions forum ) golden series on world money, reform club, london, 28 june 2011. * * * a horrible end is better than endless horror. lieber ein ende mit schrecken als ein schrecken ohne ende. ferdinand von schill ( 1776 β 1808 ) ladies and gentlemen, as we all know, the eurozone is facing serious problems at the present time. it is my opinion that there are important lessons to be learned from the collapse of the bretton woods system in the early 1970s. the czech policy authorities learned these lessons β often the hard way β first of all after the split of czechoslovakia 1993, and again during the financial and currency crisis that hit the czech republic later in the same decade. in my speech today i will recall these lessons and examine how they can be applied in order to minimise the costs of resolving the eurozone debt crisis. before going any further, however, i β d like to draw your attention to four basic β and surprising, perhaps even shocking β facts about the czech republic. first of all, it may come as a shock to some of you to learn that the czech republic is not an eastern european country. in fact, its capital, prague, lies more than 90 miles west of vienna. in the words of a famous londoner β the actor michael caine β β not a lot of people know that β. what is more, the czech economy is further west than you might think not just geographically, but also economically. this brings me to shocking fact number two. despite tepid real growth averaging 3 %, the czech economy has grown by 10 % on average in recent years thanks to appreciation of its exchange rate. therefore, the czech economy has multiplied in size more than 4. 5 times since 1993 in nominal terms in euros. consequently, it could have bought on average more than 7 % p. a. of the core european countries β real gdp over the last 18 years. and now for shocking fact number three. despite, or maybe thanks to, our first - hand experience with financial crisis ( bad loans exceeded 40 % of gdp in the late 1990s ), no bailout has been needed and no taxpayers β money has been used to save any czech | 0 |
for all items excluding fresh food is likely to increase toward the end of this year due to rises in prices of such items as energy, food, and durable goods, and the average for fiscal 2022 is expected to exceed 2 percent, at 2. 3 percent. however, unless we assume that prices of commodities such as crude oil will continue rising in the future, it is projected from the beginning of 2023 that the positive contribution of the rise in energy prices to the cpi will wane and the pass - through of cost increases will weaken gradually. as a result, the year - on - year rate of increase in the cpi for all items excluding fresh food is expected to decelerate from fiscal 2022 to 1. 4 percent for fiscal 2023 and 1. 3 percent for fiscal 2024. in terms of inflation that also excludes energy, for which prices see significant short - term fluctuations, the year - on - year rate of change in the cpi is likely to increase moderately in positive territory on the back of improvement in the output gap, rises in medium - to long - term inflation expectations, and in wage growth. that said, even in fiscal 2024, which is the end of the projection period, the rate of increase is expected to only be at around 1. 5 percent. in sum, achievement of the price stability target of 2 percent in a sustainable and stable manner is not yet envisaged at this point. iii. the bank's conduct of monetary policy basic thinking on monetary policy let me now talk about the bank's conduct of monetary policy. the bank conducts monetary policy with the aim of achieving the price stability target in a sustainable and stable manner. achieving the price stability target does not mean that the year - on - year rate of change in the cpi temporarily reaches 2 percent due to an exogenous increase in import prices such as energy, but rather that the rate registers 2 percent on average over the business cycle. from this perspective, it is necessary to examine the sustainability of price increases by comprehensively assessing the outlook for prices, as well as the underlying output gap, medium - to long - term inflation expectations, and wage developments, in addition to various measures of core inflation, which exclude temporary fluctuations. what is important is to achieve a virtuous cycle where wages and prices rise simultaneously and people's living standards improve amid continued growth in the economy. in this regard, japan's economy is still on its way to recovery from the down | report on the economic governance framework. thank you for your attention. bis central bankers β speeches | 0 |
olli rehn : economic outlook and monetary policy β a european perspective talk by mr olli rehn, governor of the bank of finland, at the council on foreign relations, new york city, 17 april 2019. * * * ladies and gentlemen, good morning to everybody. many thanks for the invitation to give a talk at the council on foreign relations, which does immensely valuable work to keep the flame of rules - based multilateralism and the liberal international order alive, in a rather challenging political environment. hence it is a great honor and pleasure to address and discuss with you today. in my opening remarks i will focus on the economic outlook and monetary policy in europe. after that i am glad to take questions and comments. let us recall what has happened since we tamed the crisis. during the euro area recovery since 2013, over 10 million new jobs have been created, and unemployment has fallen from its peak of over 12 percent to below 8 percent. the banking sector is now more resilient, the amount of nonperforming loans in banks have decreased significantly, and lending to households and nonfinancial corporations have increased. the ecb β s accommodative monetary policy has been very important in facilitating and supporting the recovery. following the economic recovery and the then positive economic outlook, the discussion on monetary policy normalization began to proceed in the euro area in 2018. in june 2018, the ecb governing council expected to end the net purchases of monetary policy at the end of 2018. at that time, the decision was still conditional and dependent on inflation. at its meeting in december 2018, the governing council of the ecb decided to end net purchases in the asset purchase program at the end of the year. at the same time, the governing council announced that it will continue to invest the maturing bonds fully for an extended period of time after the ecb governing council has raised the ecb β s key interest rates, and in any case as long as it is necessary to maintain a favorable liquidity situation and accommodative monetary policy that supports growth and converges inflation to the ecb β s goal of close but below 2 percent. the policy rates were expected to remain at their current levels through the summer of 2019. since then, the incoming data during the first months of 2019 have confirmed that global economic activity has slowed down, which is now felt also in the euro area. prevailing uncertainty, stemming from the us - china trade tensions, slow | ##down of growth in china and europe β s internal problems, have all weakened the outlook for the economy. the growth forecasts for the current year have broadly been revised downwards, also for the euro area by the ecb staff in march. while some indicators hint for stabilization, much of the recent data continue to be weak, especially for the manufacturing sector. there are both country - and sectorspecific factors, and the impact of these factors is turning out to be somewhat longer - lasting, slowing down growth momentum during the current year. the slowdown of growth has been accompanied with moderating inflation. in march 2019, the ecb staff forecasted inflation to slow down to 1. 2 percent in 2019 and then reaching 1. 6 percent by 2021. consistently with the weaker outlook, the market - based inflation expectations have declined. as a consequence of the slowdown, ( almost ) all major central banks have had to put monetary policy normalisation on hold and instead to maintain an accommodative policy stance. this holds 1 / 2 bis central bankers'speeches true for the ecb as well. on the back of the weakened economic outlook, the ecb governing council in march and again last week, on april 10 th, took a number of decisions in the pursuit of its price stability objective. first, a commitment to keep the key policy interest rates at their present low levels at least until the end of 2019. second, a commitment to continue reinvesting maturing securities under the asset purchase programme for an extended period of time, beyond the first rate increase β thus we apply chained forward guidance on these two policy instruments. and third, launching a new series of targeted longer - term refinancing operations ( tltro - iii ), starting in september 2019. hence, the ecb governing council maintains an ample degree of monetary accommodation to support the economic expansion. significant monetary policy stimulus is indeed being provided by our forward guidance on the key ecb interest rates, reinvestments by a sizable stock of acquired assets, and the new series of targeted long - term refinancing operations. moreover, as president draghi said, the governing council stands ready to adjust all of its instruments, as appropriate, so that inflation converges to our aim, which is below but close to 2 % in a sustained manner. it is worth noting that our inflation aim does not imply a ceiling at 2 %, since inflation can deviate from our target in both directions | 1 |
not confined to the financial services sector. what i propose to do now is to highlight a couple of key β soft β infrastructure that is uniquely important to hong kong β s future development as the wealth and asset management hub in asia : ( a ) as we all know, the existence of an inheritance tax or estate duty, even at low rates, is a material impediment to the development of wealth and asset management businesses. back in 1998, the hkma started to lobby the hksar government to abolish the estate duty in hong kong in order to foster hong kong β s development as a wealth management centre. the lobbying efforts met with considerable resistance initially but we did not give up and continued with such efforts under the terms of three successive financial secretaries. in 2005, after seven years of relentless appeals, we finally convinced the financial secretary to include the abolition of estate duty proposal in his budget speech. this was followed by the legislative council β s passage of the bill implementing the abolition from february 2006 ; ( b ) modernisation of the trust laws : the amendment bill seeking to modernise hong kong β s trust laws was passed by the legislative council on 17 july 2013. this was an important milestone to revamp hong kong β s antiquated trust regime which had not been substantially reviewed and modified for decades. this is again something that the hkma had advocated and pushed strongly within the government in the past few years so that our trust law regime can catch up with the other financial centres ; ( c ) promotion of islamic finance : the legislative amendments to provide a comparable taxation framework for common types of sukuk vis - a - vis conventional bonds were passed by the legislative council on 10 july 2013. it was a key policy proposal made in the study jointly led by the hkma and the tma in late 2007, following the announcement in the 2007 policy address of the initiative to develop an islamic financial platform in hong kong. last week, hkma also announced jointly with bank negara malaysia ( bnm ) the establishment of a private - sector led joint forum for advancing the development of islamic finance in hong kong, and we are glad to have assistant governor bakarudin ishak of the bnm attending the panel discussion of the summit this afternoon ; ( d ) open - ended investment company ( oeic ) : the hkma has intensively lobbied for a legislative framework and regulatory regime for oeic in hong kong. we were very encouraged that this initiative was announced by the | uncertainties for the transition, all banks and corporations should keep updated of the latest development and understand what aspects of their business would be affected β this is a fundamental first step. undertaking detailed risk assessment and formulating an action plan would be next. for now, some banks may hesitate to trade in products using the new alternative reference rates, as they want to see better market liquidity before they start. but this is a β chicken and egg β scenario β if everyone plays a waiting game, the market will never be developed. more importantly, going into the market in a manageable scale would enable your people to learn the rope early before these trades become more main stream. client education is also important 10. while banks are gearing up their own preparation, the wide - spectrum of ibor users is adding further complexity to the transition process. switching to alternative reference rates is not something that can be done unilaterally. banks need to work closely with their counterparties to develop the necessary fall - back arrangements. 11. it may be relatively easy to discuss the transition plans with counterparties that are also financial institutions, as everyone is more or less on the same page. but ibors are also used by banks β different clients, both corporations and individuals. there is a big gap among these ibor users on the awareness of the benchmark reform, so the situation becomes less straightforward. 12. therefore, client education is another vital task. banks should begin outreach to their clients, and educate them about the benchmark transition early. this could help to minimise misunderstanding and costly litigation in the future. raising market awareness in hong kong 13. closer to home in hong kong, the treasury markets association ( tma ) has been working with bank representatives on benchmark reform for many years. more recently it has intensified its reach - out to other sectors. it has set up a working group to engage a wider spectrum of stakeholders including accountants, lawyers, bank customers and industry 2 / 4 bis central bankers'speeches associations like isda. it is important that different market participants understand what the transition will mean for their business operations and how they should prepare for these changes. the working group is now looking at issues like the implications on accounting and the transition of cash products. it will further engage stakeholders to explore means of encouraging the adoption of alternative reference rates in their day - to - day transactions and business activities. 14. at the same time, the hkma supervisors has also been actively engaging banks. in | 0.5 |
yves mersch : remarks at the " challenges in understanding the monetary transmission mechanism " conference remarks by mr yves mersch, member of the executive board of the european central bank, at the " challenges in understanding the monetary transmission mechanism " conference, warsaw, 22 march 2019. * * * should we radically rethink the role of cash to deal with the lower bound on interest rates? the lower bound on interest rates has been a major challenge for central bankers in the multiple crises over the last ten years. it threatens the effectiveness of monetary policy by preventing it from steering financial conditions. moreover, the continuous decline in both the real rate and confidence in the central bank, as well as resistance at the retail level, raises the question of whether negative rates should be part of the standard toolkit of central banks. in the context of the eurosystem β s asset purchase programmes, the combined package of negative nominal interest rates and lending schemes that incentivise banks to increase lending ( e. g. the targeted longer - term refinancing operations, or tltros ) have been an effective and appropriate way to combat these challenges. while cash represented the largest part of central bank balance sheets before the crisis, other elements of the balance sheet have since gained more prominence in the operational framework of monetary policy. some people want to abolish cash by taking advantage of recent technological advances, such as distributed ledger technology ( dlt ), or replace public money with private money, in total denial of people β s trust in liabilities issued by central banks and the fact that their continued demand for cash exceeds gdp growth. others argue for the introduction of a dual currency scheme where the central bank would divide the monetary base into two separate local currencies β cash and electronic money ( e - money ). e - money would be issued only electronically and would pay the policy rate of interest, and cash would have an exchange rate β the conversion rate β against e - money, which could be manipulated to match negative rates on emoney by setting the conversion rate for cash lower than one to one. 1 i have experienced the nightmare of dual exchange regimes before the euro and i have doubts about these arguments. our unconventional measures have proven sufficient to meet the challenges of low inflation. the governing council has confidence in the sustained adjustment in the path of inflation. recent evidence supports the hypothesis that there is some substitutability between conventional and unconventional monetary policies. 2 additionally, while being able to set significantly negative | joachim nagel : too low, too high - what's next for inflation? speech ( virtual ) by dr joachim nagel, president of the deutsche bundesbank, at the j oint spring conference 2024 " structural changes and the implications for inflation ", eltville am rhein, 7 may 2024. * * * check against delivery 1 introduction ladies and gentlemen, i am delighted to welcome you to the conference today. i truly regret that i cannot be there in person to speak to you at the conference dinner that awaits you shortly. six weeks ago, harvard economist stefanie stantcheva kicked off a conference by asking : why do we dislike inflation? 1 she presented new survey - based evidence, corroborating previous findings that inflation attracts a high degree of attention among the public. its largest impact on the lives of the survey participants has been the increased cost of living in general. in second and third place, they answered that it is harder to afford food and gas. i see stantcheva's findings as additional motivation to continue working on a timely return of inflation in the euro area to our target level of 2 % in the medium term. yet, once the high inflation phase in the euro area is over, will we see weak inflation rates like we did before the pandemic? or will structural forces put upward pressure on inflation rates in the years to come? 2 starting point : pre - pandemic inflation inflation in the euro area was persistently too low in the period between 2013 and 2019. as measured by the hicp, the average inflation rate in this period amounted to 1 %, which was clearly below the eurosystem's aim. at the beginning of this too - low inflation period, some economists called this phenomenon a missing inflation " puzzle. 2 according to empirical research, this weakness resulted from a combination of cyclical and structural factors. 3 with respect to the cyclical factors, the financial crisis and, later on, the sovereign debt crisis caused recessions in the euro area in 2009 and 2012. however, structural factors may well have played a role, too : globalisation, digitalisation and demographic change. globalisation is β or maybe was β accompanied by higher global value chain participation and increasing financial openness. it might therefore have lowered inflation by reducing costs and diminishing the bargaining power of employees as well as firms'market power. 1 / 4 bis - central bankers'speeches in the context of digitalisation | 0 |
technical adjustments to some components of the consumer price index ( cpi ) basket, particularly the adoption of a new billing system by the botswana telecommunications corporation. although overall inflation increased sharply in the second half of the year, an analysis of the inflation trend that discounts the impact of vat and other technical adjustments to data suggests that underlying inflation was around 6 - 7 percent for 2002, which was a little above the upper end of the bank β s policy objective for that year. a closer look at the sources of inflation in 2002 provides further support to the conclusion that, while headline inflation was influenced by vat and other price adjustments, the underlying rate was mostly contained. prices of almost all categories of commodities rose at a higher rate in 2002 compared to 2001 as had been expected, given the wide - ranging impact of vat. food prices, however, rose at a much faster rate than the average, due in part to drought conditions in the region. food price inflation rose from approximately 4 percent in december 2001 to over 14 percent by the end of 2002. this accounted for almost half of the rise in overall inflation during the year, and reinforces the view that, after taking account of the impact of vat and other exceptional factors, such as volatile food prices, underlying inflation was largely contained during 2002. the relatively moderate rise in underlying inflation was to some extent supported by a fairly benign inflationary environment in the world β s major economies. although all major economies experienced moderately higher inflation, mainly as a result of rising energy prices, especially oil, average inflation rose by less than 1 percentage point, from 1. 2 percent in 2001 to 2 percent in 2002. the inflation trend in south africa was somewhat different ; price increases were sharp, mostly due to the effects of the depreciation of the rand that had occurred towards the end of 2001. inflation in south africa was also affected by increases in food prices and labour costs. core inflation in south africa was 12. 2 percent in december 2002 compared to 5. 8 percent at the end of 2001. the combined effect of all these developments was that average inflation of botswana β s trading partners rose from 4. 2 percent at the end of 2001 to 8. 4 percent at the end of 2002, and was reflected in a rise in the cost of imports. in this connection, it should be pointed out that botswana β s inflation briefly fell below that of trading partner countries in the middle of the year, although it was subsequently higher due to the impact of va | related to vertical and horizontal equity even as taking the process of fiscal consolidation further. state finance commission the constitution ( 73rd and 74th ) amendment acts, 1993 have respectively, accorded constitutional status to rural and urban local bodies as the third tier of government. the amendments provide for constitution of state finance commissions every five years. following the recommendations of the state finance commissions ( sfcs ) and taking into account the devolutions made by the central finance commission ( cfc ), the state governments are required to devolve resources to their local bodies. not all states have constituted sfcs. and a fewer states have submitted action taken reports ( atrs ) on the recommendations made by the sfcs as noted by the twelfth ( central ) finance commission ( twfc ). the twfc, inter alia, recommended that sfcs should follow a normative approach in the assessment of revenues and expenditure in order to arrive at the gap that may be considered by the cfc and that the principal recommendations of the sfcs may be accepted without modification as in the case of cfc. v. role of the reserve bank of india in sub - national finances the rbi has, over the years, closely interacted with the state governments in its developmental role β particularly in areas of development of agriculture, and small industries. the rbi was specifically entrusted with an important promotional role, since its inception, of financing agricultural operations and marketing of crops. in fact, the agricultural credit department was created simultaneously with the establishment of the rbi in 1935. study of state finances the reserve bank prepares and publishes an annual study on the state government finances. this is a unique study since it compiles, consolidates and analyses detailed data on the budgets of all the state governments. it also documents the policy initiatives on state finances and debt management by the state governments, the government of india and the reserve bank. the study has been well received by policy makers and academicians, both in india and abroad, and is an important reference document. model fiscal responsibility legislation the rbi played a facilitating role in the states β endeavour for rule - based fiscal reforms by providing the secretariat support to a group of state finance secretaries for preparing a model fiscal responsibility legislation for the states. the final report was submitted to the reserve bank in january 2005. the group recommended that the model legislation would generally follow the pattern of the central frbm act, and build upon the state fiscal responsibility legislations already enacted. the group also took into account | 0 |
##2. 9 million as at end of december 2004. the growth in asset values reflects good performance by the board and management of those institutions and on - going supervision by the central bank. membership also increased significantly from 131, 000 in 2004 to 216, 000 as at end of march 2009. the national development bank ( ndb ) is an important development institution that provides credit to development projects such as those in the agriculture sector. development lending is usually targeted towards individuals with low capital and longer grace periods for the repayment of loans. efforts to commercialize the ndb from its mandated function may not assist in achieving the developments objectives of the government. payments system the central bank is also undertaking a strategic project to improve the payments system of papua new guinea. an efficient payment system is therefore a vital component of a modern economy and society. conclusion ladies and gentlemen, in an environment where many banks and financial institutions around the world affected by the global financial crisis are contracting, it is pleasing to note that we in papua new guinea are still expanding. our banking system is sound, liquid and prudentially managed and is prepared to take on the challenges offered in the advent of global financial crises, the fast pace of private lending growth, development of the lng project and a changed risk landscape of png. everyone must play its part in upholding these hard fought gains. thank you. | pressure on the kina. this bold move now allows for a smooth and free movement of capital into and out of the country, and encourages better financial planning by investors. the remaining controls are those for approvals on private capital account contracts between residents and non - residents, approvals to open and operate foreign currency accounts outside png, and licensing of authorised foreign exchange dealers and gold exporters. policy let me turn now to the policy aspect of the financial system infrastructure. early this morning, the bank of png released its july 2005 monetary policy statement, outlining its monetary policy stance for the remainder of 2005 and the medium term. the central bank β s monetary policy objective is to achieve and maintain price stability. we have to an extent achieved this, given the low inflation and interest rate levels, as well as a stable exchange rate. not only was these positive outcomes due to favourable international commodity prices but most importantly to sound fiscal and monetary policies. this has resulted in renewed confidence in the economic management of the country as well as expansion in business activities by the private sector. for 2005 and the medium term, we forecast inflation to remain low as the stability in the kina exchange rate will be sustained over the medium term. combined with prudent fiscal management by the government and confidence in the market, the central bank will maintain a neutral monetary policy stance, as announced this morning. achieving and maintaining price stability is not only our monetary policy objective, but is also important for financial planning by all of us. it provides some certainty in price levels for budgeting and investment purposes, particularly on interest rates, exchange rate and inflation. conclusion to conclude, the bank of png is committed to implementing and fulfilling its mandated role of ensuring a sound and stable financial system for the people of papua new guinea and those who conduct business here. we now have in place the necessary legislations and strong independence to safeguard the institutions that we licensed under the various legislations. however, we still have more work to do to in ensuring that the financial system infrastructure continues to be sound and reliable. the economy is in a better shape than it has been for a number of years. but we cannot afford to be complacent and must continue to work towards ensuring these gains are sustained. working together with the private sector, government and the general public, we can all ensure that these gains are passed on to tangible benefits for the rest of the country and its people. the government has been able to undertake significant reforms in | 0.5 |
be subtle. for example, sargent and wallace β s β unpleasant monetarist arithmetic β suggested that a near - term tightening of monetary policy, by making the long - term fiscal situation less tenable, could ( in principle at least ) lead to inflation, because the public will anticipate that the fiscal deficit must be financed eventually by money creation. more recently, woodford β s fiscal theory of the price level suggests that nonsustainable fiscal policies can drive inflation, even if the central bank resists monetization. following woodford, olivier blanchard has recently argued that tight money policies in brazil, by raising the government β s financing costs and thus worsening the fiscal situation, might have had inflationary consequences. although this subsequent work has refined our understanding of the relationship between monetary and fiscal policy, these analyses are not inconsistent with the spirit of monetarist propositions, which place the blame for inflation on overissuance of nominal government liabilities. another area of pressing current interest derives from friedman β s tenth proposition, that monetary policy works by affecting all asset prices, not just the short - term interest rate. this classical monetarist view of the monetary transmission process has become highly relevant in japan, for example, where the short - term interest rate has reached zero, forcing the bank of japan to use so - called quantitative easing methods. the idea behind quantitative easing is that increases in the money stock will raise asset prices and stimulate the economy, even after the point that the short - term nominal interest rate has reached zero. there is some evidence that quantitative easing has beneficial effects ( including evidence drawn from the great depression by chris hanes and others ), but the magnitude of these effects remains an open and hotly debated question. the only aspect of friedman β s 1970 framework that does not fit entirely with the current conventional wisdom is the monetarists β use of money growth as the primary indicator or measure of the stance of monetary policy. clearly, monetary policy works in the first instance by affecting the supply of bank reserves and the monetary base. however, in the financially complex world we live in, money growth rates can be substantially affected by a range of factors unrelated to monetary policy per se, including such things as mortgage refinancing activity ( in the short run ) and the pace of financial innovation ( in the long run ). hence, it would not be safe to conclude ( for example ) that the recent decline in m2 is indicative of a tight - money | . quits are back to pre - pandemic levels, and the same is true of the wage premium earned by those who change jobs. 3 surveys of 1 / 3 bis - central bankers'speeches workers and employers show a return to pre - pandemic levels of tightness. 4 and indicators of wage growth show a gradual decline toward levels that would be consistent with 2 percent inflation over time. 5 growth to date, declining inflation has not come at the cost of meaningfully higher unemployment - a highly welcome development, but a historically unusual one. healing of supply chains in conjunction with the rebalancing of demand and supply in the labor market has allowed disinflation without substantially weaker economic activity. indeed, economic growth has consistently surprised to the upside this year, as most recently seen in the strong retail sales data released earlier this week. forecasters generally expect gross domestic product to come in very strong for the third quarter before cooling off in the fourth quarter and next year. still, the record suggests that a sustainable return to our 2 percent inflation goal is likely to require a period of belowtrend growth and some further softening in labor market conditions. 6 geopolitical tensions are highly elevated and pose important risks to global economic activity. our institutional role at the federal reserve is to monitor these developments for their economic implications, which remain highly uncertain. speaking for myself, i found the attack on israel horrifying, as is the prospect for more loss of innocent lives. monetary policy turning to monetary policy, the fomc has tightened policy substantially over the past 18 months, increasing the federal funds rate by 525 basis points at a historically fast pace and decreasing our securities holdings by roughly $ 1 trillion. the stance of policy is restrictive, meaning that tight policy is putting downward pressure on economic activity and inflation. given the fast pace of the tightening, there may still be meaningful tightening in the pipeline. my colleagues and i are committed to achieving a stance of policy that is sufficiently restrictive to bring inflation sustainably down to 2 percent over time, and to keeping policy restrictive until we are confident that inflation is on a path to that objective. we are attentive to recent data showing the resilience of economic growth and demand for labor. additional evidence of persistently above - trend growth, or that tightness in the labor market is no longer easing, could put further progress on inflation at risk and could warrant further tightening of monetary policy. along with many other factors, actual and expected | 0.5 |
, has been implementing two ecb regulations on enhanced monetary financial institutions β balance sheet statistics and on securitisation vehicles. 6 these regulations introduced reporting requirements for loan securitisations, in particular, and new statistics on the assets and liabilities of these vehicles. the aim is to compile more detailed monthly and quarterly data to be published for the first time in june 2011. in addition, new statistics on euro area money market funds and on other investment funds, including hedge funds, 7 were released in december 2009. following the adoption of the new ecb regulation addressing banks β interest rate statistics, 8 the monthly banks β interest rate statistics are now produced more quickly and are available already one month after the governing council β s monetary policy decisions. further new and enhanced statistics are being compiled based on data already available at the national level, such as data from credit registers and supervisory data. a key example is detailed statistics on insurance companies and pension funds, which are also expected to be published from june 2011 onwards. as you can see, there is considerable and very tangible progress in the area of monetary and financial statistics. all these developments will contribute to enhanced monetary analysis and are also available for in - depth financial stability analysis. the economic analysis of our monetary policy strategy benefits from much more consistent statistics on the euro area balance of payments. the size of the statistical discrepancy in balance of payments statistics has been decreasing substantially in recent years. the quality of these statistics has also improved, in particular by drawing on the centralised securities database ( csdb ), 9 phase 2 of which went live in spring 2009. the csdb also supports the compilation of investment fund statistics, the residual maturity of government debt securities and new statistics on securitisation vehicles. the ecb will publish the results of the third wave of the joint ecb and european commission survey on the access to finance of small and medium - sized enterprises in the euro area later this week, and fieldwork is being carried out for the eurosystem survey on household finance and consumption. the flagship of the cooperation between the escb and the ess on european statistics remains the quarterly euro area accounts. these provide a consistent statistical framework for the ecb β s monetary and economic analysis, both for transactions and balance sheets. the euro area accounts are also widely used in the ecb financial stability review. the main challenge remains more timely delivery, no later than 90 days after the end of the an updated overview of all available ec | would be best complemented by a public reference data utility providing standardised ecofin council conclusions on eu statistics of 4 november 2008 and on 10 november 2009. see also the article entitled β update on developments in general economic statistics for the euro area β, in the february 2010 issue of the ecb monthly bulletin. information on instruments and entities that would be operated on the basis of an international agreement. the fourth type of statistical deliverable is ad hoc information obtained via one - off surveys where it is undisputed among statisticians that only regular and tested data flows that are connected to the internal accounting systems of reporting agents limit the reporting burden with a lasting effect, and produce a timely and reliable output. concerning the β input β β namely the collection of data β the reporting burden of financial institutions could be reduced by improving processes to ensure that information is only reported once. one example of this streamlining is the use of supervisory data to compile macro - financial statistics. here, the ecb and the committee of european banking supervisors ( cebs ) have published a bridging manual aligning the ecb β s monetary and financial statistics requirements with the supervisory reporting templates developed by cebs and have created a relational database identifying similarities and differences between the two frameworks. 12 it is even more important to reach a common understanding on the regular flow of data from the reporting agents in the eu financial system, via national and european databases, to the esrb. in this context, i also welcome the fact that the ecb and ceiops 13 are working on an optimised usage of the future data reporting by the insurance sector under the solvency ii directive 14. clearly, there is a difference between the use of confidential micro - data for statistical purposes and their use for policy purposes. this distinction is respected in the dayto - day business of any developed statistics function. to achieve detailed agreements on the flow of data, i count of a very fruitful cooperation between the three future european supervisory authorities and their predecessors, cebs, ceiops and cesr 15 with the esrb preparatory secretariat recently established at the ecb and our directorate general statistics. the statistics departments of the national central banks of the eu member states are involved via the escb statistics committee. 4. european statistics as a model for global statistics the financial crisis not only had an impact on individual economies and groups of countries ; it also had a global dimension. the group of twenty finance ministers and central bank governors ( | 1 |
xml standard. payment service users will be relieved of the requirement to specify bic for these payments. small - value payment systems in euro must ensure that they are operationally compatible with other similar systems in the eu. at the end of 2015, in bulgaria the share of sepa credit transfers in the total number of customers β credit transfer orders in euro was 59 %, and the migration to the emv standard for bank payment cards and pos terminals is over 90 % and is nearly complete. β’ with effect from 1 february 2016, member states must remove settlement - based national reporting obligations on payment service providers for balance of payments statistics relating to payment transactions of their customers. soon the national assembly is going to pass amendments to the currency law, introduced with the law on consumers β real estate loans, and the related changes are going to be made to ordinance no. 27 on the balance of payment statistics. therefore, payment service providers will no longer be required, for the needs of the balance of payments statistics, to keep registers and provide the bnb with information on transactions and payments between residents and non - residents and on bis central bankers β speeches cross - border transfers of over bgn 100 000. we expect that these changes would be passed by the end of july this year. β’ in relation to the agreement reached between the mof, bnb and market participants, the bnb as the fiscal agent of the government works on a project for the technical implementation of direct connection of the government securities depository with the ebond system to the bloomberg professional platform and the system of the bulgarian stock exchange. thus, additional development and modernization of the bulgarian government securities market is expected to be achieved and its further integration into the european union β s single market to be encouraged. this will allow by the end of next year financial institutions to freely select the place where they trade in government securities issued in bulgaria, in compliance with the requirements under regulation 2015 / 61 concerning the assessment of liquid assets in the form of government securities. this would possibly provide the prerequisites for additional diversification of the investors in bulgarian government debt instruments. these changes are conceived in line with the debt management and financial markets security policy in the context of our future euro area membership and are necessitated by regulatory reforms at eu level. finally, i would like to mention a project successfully completed recently. on 31 may 2016 bulgaria subscribed to the special data dissemination standard plus of the international monetary fund ( imf ). bulgaria is the 11th | country worldwide to adhere to this highest tier international data dissemination standard. adhering to this standard is the result of the joint efforts of the bulgarian national bank as coordinator for bulgaria, the national statistical institute, and the ministry of finance. the bnb oversaw the adherence efforts and was responsible for developing the so - called national summary data page, which is already available on the bnb website. the greater part of the new statistical indicators included in the standard are compiled by the bnb. adhering to the special data dissemination standard β plus indicates to the local and foreign investors, the rating agencies, the international financial institutions and all other users that the quality and reliability of the statistical data that are used to make important macroeconomic and business decisions are up to the highest international statistical requirements. in conclusion it could be stated that the country has achieved considerable progress in the implementation of financial and payment services innovations. of course there are still a lot of challenges in relation to the requirements of information and communications technologies development, and the enhanced requirements to the payment infrastructure and payment instruments related to the single euro payments area. in our work we will keep striving towards these standards and best practices. i wish successful, interesting and constructive work to the forum participants! bis central bankers β speeches | 1 |
/ uploads / p120718. pdf > see isda ( 2018 ), β isda publishes final results of benchmark fallbacks consultation β, press release, 20 december. available at : < https : / / www. isda. org / 2018 / 12 / 20 / isda - publishes - final - results - of - benchmark - fallback - consultation / >. see fsb ( 2019 ), β fsb letter to isda about derivative contract robustness to risks of interest rate benchmark discontinuation β, 15 march. available at : < http : / / www. fsb. org / 2019 / 03 / fsb - letter - to - isda - about - derivative - contractrobustness - to - risks - of - interest - rate - benchmark - discontinuation / >. also see schooling latter e, β libor transition and contractual fallbacks β, speech at the isda annual legal forum, 28 january. available at : < https : / / www. fca. org. uk / news / speeches / libor - transition - and - contractual - fallbacks > see arrc ( 2019 ), β fallback contract language β. available at : < https : / / www. newyorkfed. org / arrc / fallbacks - contractlanguage > see international accounting standards board ( 2019 ), β ibor reform and its effects on financial reporting β, available at : < https : / / www. ifrs. org / projects / work - plan / ibor - reform - and - the - effects - on - financial - reporting / # about > see bcbs and iosco ( 2019 ), β bcbs / iosco statement on the final implementation phases of the margin requirements for non - centrally cleared derivatives β, press release, 5 march. available at < https : / / www. bis. org / press / p190305a. htm > and < https : / / www. iosco. org / library / pubdocs / pdf / ioscopd624. pdf > for more details on recent benchmark developments in australia, see kent c ( 2019 ), β bonds and benchmarks β, speech at the kanganews dcm summit, sydney, 19 march. see european commission ( 2019 ), β sustainable finance : commission welcomes agreement on a new generation of low - carbon benchmarks β | to turn to the board β s monetary policy decisions over recent months. the board is committed to doing what is necessary to ensure that inflation returns to target over time. high inflation is a scourge. it damages our standard of living, creates additional uncertainty for households and businesses, erodes the value of people β s savings and adds to inequality. and without price stability, it is not possible to achieve a sustained period of low unemployment. it is important, therefore, that this current surge in inflation is only temporary and that we once again return to the 2 to 3 per cent range. the board is committed to the return of inflation to target. it is seeking to do this in a way that keeps the economy on an even keel ; it is possible to achieve this, but the path here is a narrow one and it is clouded in uncertainty. i would like to highlight three sources of this uncertainty. the first is the global economic environment. in the united states, the federal reserve has indicated that a period of tight monetary policy and below - trend growth will be required to get inflation under control. in europe, real incomes are suffering very big declines because of sharply higher energy costs, and this will weigh on spending and growth. and in china, the economy is being affected by the authorities β approach to covid, major stresses in its property industry and drought in parts of the country. some slowing in the global economy will help bring inflation down, but a sharp slowing would make the job of delivering a soft landing here in australia much harder. the second source of uncertainty is domestic in nature β and that is how inflation expectations and the inflation psychology in australia adjust to the period of high inflation. if workers and businesses come to expect higher inflation, and wages growth and price - setting behaviour adjusts accordingly, the task of navigating that narrow path will be very difficult, if not impossible. a shift higher in inflation expectations will require higher interest rates. in time that would mean a sharper slowing of the economy. it is in our national interest that we avoid this. the third source of uncertainty is how households respond to higher interest rates. interest rates are increasing for the first time in 12 years and they are rising quickly. the full effects of this are still to be felt. household budgets are also under pressure from higher inflation, and housing prices are declining after large gains r e s e r v e b a n k o f au s t r a l i a ( graph 8 ) | 0.5 |
, respectively, of risk - weighted assets. while there is heterogeneity across banks, these results highlight, first, that banks have faced this crisis with bigger safety margins. further, the results show the effectiveness of the measures implemented to date to mitigate the impact of the crisis. banking sector resilience must be maintained during the crisis there is no room for complacency with this initial, positive diagnosis. as we all know, the scale of this shock is very high. even given the horizon resulting from the distribution of vaccines, we know that the duration of the crisis is uncertain, as we have seen with the emergence since last autumn of fresh outbreaks of the virus practically worldwide. to date, the crisis caused by the pandemic has considerably impacted non - financial corporations β profits and household income, and has impaired their solvency. however, we have not seen any increase in non - performing loans, due largely to the wide range of measures the various authorities have adopted. the ultimate impact of the crisis on the banking industry will indeed hinge on its scale and duration, but also on the effectiveness of economic policies in alleviating its effects on households and firms. in this respect, in the current situation of incomplete, uncertain and uneven economic recovery, retaining a large part of the exceptional measures to support the economy is warranted, in particular for certain sectors. in any event, projections suggest that there will be a significant increase in the ratio of nonperforming loans in the coming quarters, even under the most benign scenario. against this backdrop, i have three important considerations to make with a view to maintaining the sector β s resilience in the coming months, beyond keeping the extraordinary measures in place. firstly, much of the downturn in banks β results in the first three quarters of 2020 was due to greater provisioning in anticipation of future asset impairment, which has still not materialised but which will do so in the coming quarters. specifically, spanish banks have increased their provisioning by 75 % in the first nine months of 2020 compared with the same period a year earlier. sustaining this effort in the coming quarters would enable the bulk of provisioning needs anticipated by the stress tests under the most likely scenario for this and the coming year to be met. this has led to a significant decline in banks β profitability, but it has also raised their loss absorption capacity, something which investors should particularly value in these circumstances. the message i wish to convey is that | banks should persist with their early recognition policy, as this will enable them to continue to fulfil their task of providing funding to the economy. it is important that banks analyse situations individually, distinguishing between temporary and more permanent effects. automatic reclassifications that result in excessively procyclical behaviour should be avoided. however, above all, banks must be prudent, assessing provisioning needs in accordance with plausible and conservative scenarios for the coming years. in short, especially should the crisis be prolonged, banks must ensure timely and proper recognition of the effective quality impairment of their credit exposures in compliance with the supervisory guidelines. secondly, i wish to refer to the capital buffers built up and their use during this crisis. as i mentioned earlier, solvency levels are now significantly higher than in the run - up to the global financial crisis. at the start of this crisis, prudential supervisors decided to release many macroprudential buffers β the capital, countercyclical and systemic risk buffers β and, at the same time, the microprudential authority temporarily allowed banks to operate below the level set for certain structural requirements. these decisions sought to help banks continue to provide the financing that households and firms need in such an adverse environment as the present one. our empirical analysis shows that the use of these buffers will enable banks to provide more funding to the real economy. this in turn has a positive impact on economic growth, encouraging its recovery or moderating its decline. and this positive impact is such that it, in turn, boosts credit demand and banks β income, which ultimately translates into higher solvency levels. in any event, it is important to note that it may be difficult for banks to use buffers if they fear they may be penalised by the financial markets for reaching certain capital ratios, which would increase their funding costs and could, therefore, affect their solvency levels. this market stigma effect could lead banks to avoid using capital buffers, which in accordance with the above analysis would have a negative impact on the economy. 1 in addition, the use of these capital buffers may be more difficult if there are doubts about how they will be rebuilt post - crisis. the difficulty would be if banks were obliged to rebuild the buffers at a time when their capacity to generate profit was only modest or when the market might not be very receptive. in this setting, clear communication by the macroprudential and microprudential | 1 |
the parallel market to the formal market. we have streamlined fx requirements for the banking system to reduce market fragmentation and increase fx liquidity. we expect responsible behavior among market players. we have a collective responsibility to consistently build our markets to rise above the desire for short - term gains. on the regulatory front, we are pursuing continuous improvement aligned with global standards and best practices. the bsp is rolling - out the enhanced liquidity risk management framework. we are prescribing guidelines on the adoption of accounting standards to promote transparency and fairness in both financial and prudential reporting. the bsp is also continuously working to ensure that financial industry participants are sensitive to, and proactive in, addressing emerging cyber threats. we are enhancing as well our aml - cft compliance posture. the bsp continues to create a supportive policy environment for financial inclusion. banks are now allowed to use third party cash agents for increased on - boarding of the unbanked. we allow reduced know - your - customer ( kyc ) rules for certain low - risk accounts and use technology for face - to - face contact requirements to promote bank account ownership. we have created the framework for opening basic bank accounts. the bsp is also working closely with the national government for the implementation of a biometric - based national identity system to facilitate maximum access to financial services. we are also making big leaps in developing the country β s payment system even as we continuously improve the existing arrangements. today, we are capable of producing 43 million pieces of high quality currency notes per month, up from just 6. 5 million pieces 25 years ago. we also produce 200 million pieces of coins per month. our real time gross settlement system, philpass, processes 6, 000 transaction valued at php 1. 4 trillion per day. but we are upgrading it further to do more as we roll out the national retail payment system that will pave the way for the digitalization of our financial system. already, we have together launched pesonet and instapay. more inter - operable and cooperative payment schemes will follow soon. closing remarks as i close, i remind that as market stakeholders, to better navigate a more interconnected and sophisticated financial market system, we must be mindful of changes that are reshaping it. we must embrace the work that needs to be done, to stay... not only abreast, but ahead of developments. this task of navigation is, and has, never been an easy | will entail systematic market research, as well as an innovative mindset. the g in big is for guide. guide your banks in navigating through this dynamic and constantly shifting operating landscape. banks will need to keep abreast of developments and adjust to the changing demands of the market. ladies and gentlemen. this is my big challenge to baiphil. with big in place, i believe our banks will be able to drive and optimize the benefits and opportunities that financial inclusion and integration stand to generate. finally, i thank baiphil once again for its continuing support to the bsp in promoting good money habits among teachers, parents of our schoolchildren and other adults from the marginalized sector, through your personal finance management lectures. we have been receiving good feedback for this bsp - baiphil program. therefore, let us commit to continue working together, let us be faithful to what we set out to do β big or small, and then we can look forward to bigger and better things that are yet to come. for your information, this is the 11th time i have attended baiphil β s induction ceremony. i have been faithful and consistent to baiphil. the bsp has been faithful and consistent to bis central bankers β speeches baiphil. therefore, insofar as staying true to your theme of β building capacity for financial inclusion and integration β, we, at the bsp expect nothing less than enduring commitment from baiphil. ladies and gentlemen. you have it in you to help unlock the growth potential in our people, in our economy, and in our country, if you continue to pursue financial inclusion and integration with unwavering dedication. if we succeed, then the market for banking services expands, deepens and strengthens the philippine banking industry in the process, even as we help improve lives, liberate millions of filipinos from poverty, and bring prosperity to filipino homes. let this be our goal and our enduring legacy. i look forward therefore to baiphil remaining faithful and steadfast, like a diamond, in its pursuit of capacity building for financial inclusion and integration. thank you for your kind attention. mabuhay ang ating mahal na bansang pilipinas! mabuhay po tayong lahat! maraming salamat! bis central bankers β speeches | 0.5 |
speech jointly shaping europe β s tomorrow introductory remarks by christine lagarde, president of the ecb, at the franco - german parliamentary assembly, 21 september 2020 frankfurt am main, 21 september 2020 dear president schauble, dear president ferrand, honourable members of the franco - german assembly, i would like to thank you very warmly for inviting me to join you today. as president of the european central bank and a french citizen living and working in germany, it is an honour to speak at this historic forum. this parliamentary assembly is an embodiment of the special relationship between our two countries and their commitment to european integration. i find it essential that the ecb constantly engages in two - way communication, especially with citizens β representatives. we need to make sure that the ecb β s voice is heard by the people and that the people β s voice is heard by the ecb. this is why events like today β s are so important for me. our regular interlocutor is the european parliament, to whom we are accountable under the treaty for our monetary policy tasks. transnational settings like this one give us a further chance to look past nation - specific concerns as we discuss europe β s future. the coronavirus ( covid - 19 ) pandemic is a crisis of unprecedented magnitude. many of you will recognise the famous words of jean monnet, one of the founding fathers of the european project, who said : β europe will be forged in crises and will be the sum of the solutions adopted for those crises β. this pandemic has proven him right once more. undoubtedly, europe has been strengthened during this crisis. but europe now has the opportunity to show that it can be more than the sum of the solutions adopted in this crisis. once again, monnet β s words offer inspiration : β europe itself is only a step towards the forms of organisation of the world of tomorrow β. with these words in mind, we must seize this invaluable opportunity to strengthen our union. we must shape the recovery from this crisis in such a way that our economies are fit for the world of tomorrow. the unique strength of the european project the pandemic and the measures to contain the spread of the virus have caused a contraction in euro area economic activity that is unprecedented in peacetime. while incoming data suggest that we will see a strong rebound during the third quarter, the strength of the recovery remains very uncertain, as well as uneven and incomplete. it | 4, 000 per person in australia. this is despite cash being used less and less for transactions. our analysis is that most of these banknotes are being held as a store of value. on average, there are 18 $ 100 notes and 38 $ 50 notes on issue for every person in australia. i don't have my share of these or know many people who do. as interest rates have risen recently, i thought that the attractiveness of holding banknotes as a store of value might decline, but there is little sign of that yet. time will tell, though. the reserve bank is also responsible for the design of australia's banknotes. given this, we are currently considering the design of the $ 5 banknote following the passing of queen elizabeth ii. we recognise that this is an issue that is of national interest and there is a long tradition of the monarch being on australia's banknotes. indeed, the monarch has been on at least one of australia's banknotes since 1923 and was on all our notes until 1953. given this tradition and the national significance of the issue, the bank is consulting with the australian government regarding whether or not the new $ 5 banknote should include a portrait of king charles iii. we will make a decision after this consultation with the government is complete. again, thank you very much for joining us this evening. we are looking forward to learning more from you over dinner about how things are going here in tasmania. 4 / 4 bis - central bankers'speeches | 0 |
5 percentage points, and the swiss franc has appreciated significantly since mid - 2021. this tightening of monetary conditions was necessary to bring inflation back within the price stability range. inflation has been below 2 % again since june this year. at 1. 4 % in november it was even lower than we had expected in september. inflation is likely to increase again somewhat in the coming months. nevertheless, underlying inflationary pressure has continued to decrease slightly compared with september, and our conditional inflation forecast is now within the price stability range over the entire forecast horizon for the first time in some time. we have decided today to leave the snb policy rate unchanged. at the same time, we are no longer focusing on foreign currency sales. this reflects that monetary conditions are currently appropriate. page 3 / 6 berne, 14 december 2023 thomas jordan, martin schlegel and thomas moser news conference however, uncertainty about the development of inflation going forward remains high. on the one hand, there are still upside risks, although these have abated somewhat of late. for example, there could still be second - round effects in many domestic goods and services. on the other hand, there are also downside risks with regard to inflation. it could, for example, decrease more strongly than expected in the wake of the economic slowdown. at present, our assessment is that the upside and downside risks for inflation are approximately balanced. against this backdrop, we will monitor the ongoing development of inflation closely. if necessary we will adjust our monetary policy and in this context we are also prepared to be active in the foreign exchange market. our goal remains to keep inflation within the range consistent with price stability on a sustainable basis over the medium term. ladies and gentlemen, thank you for your attention. i will now hand over to martin schlegel. ensuring the supply and distribution of cash i would like to inform you today about the snb β s current efforts in the area of cash. according to our payment methods survey, more than 95 % of the population would like to retain the option of using cash as a means of payment in the future. consumers want to be able to choose whether to pay with cash or electronic payment methods. it is true that this freedom of choice is largely a given nowadays. however it is not to be taken for granted, especially when less and less is paid for with cash. in order to retain cash as a payment method in the future, it must remain readily accessible, e. | transparency for the confidence in the quality of the money. transparency and accountability are also key elements in how we think about policy in the eurosystem today. in the 19th century, the privileged austrian central bank evolved from a bank that mainly financed the government to a central bank of the banking system of the monarchy. in 1847, the bank had opened its first branch office in prague. by 1913, the network comprised some 100 offices all over the monarchy. these branch offices were not only useful when it came to stemming local banking crises, they also helped facilitate the flow of capital within the monarchy, thus forging together this vast, yet highly heterogeneous economy. this way, the bank β which had for its first forty years been mainly active in vienna β became a truly β national β bank, in the original sense of encompassing all the people of the empire. by that time, however, β national β already referred to a rather exclusive concept, which opposed rather than united different groups of the population. the bank could not escape the national struggles that marked the habsburg monarchy during the last decades of its existence. in 1867, hungary obtained a significant degree of independence within the empire, now renamed austria - hungary. as a consequence of this β compromise, β most competences of the central government were devolved to the levels of the austrian and the hungarian parliaments and governments, respectively, notably fiscal policy. only few areas of policy continued to be run jointly : including foreign policy, the army, the navy, foreign trade and β last but not least β the common currency. the bank faced an environment that had fundamentally changed. before 1867, the bank had negotiated with just one counterparty, the imperial government, about its statutes, which had to be renewed at regular intervals, and all other laws pertaining to the monetary system. now, the bank faced two interlocutors, which more often than not found it difficult to agree. the austrian central bank was renamed the austro - hungarian bank, budapest was promoted to become the second head office equal to vienna and a common, but independent decision - making process was installed. in the following years, the relationship between austria and hungary was not always harmonious, to put it mildly. more often than not, important decisions were blocked. within this difficult setting, the bank operated quite successfully. in the 1890s, after almost 50 years of floating exchange rates, austria - hungary succeeded in pegging its currency to gold, then seen as the seal of prude | 0 |
to internalize the costs that their potential failure would impose on the broader financial system and thus on businesses and households. this means that firms face higher costs through more stringent regulations as they grow in complexity, size, and interconnectedness. and rightly, that community banks face simpler regulations. we are looking holistically at our capital tools to understand how they are supporting the resilience of the financial system, individually and in combination. when calibrating requirements, we will work to minimize unintended consequences, limit opportunities for gaming, and avoid excess compliance costs that do not result in risk reduction. taking a holistic view will help us consider adjustments, if any, to the supplementary leverage ratio, needs, in concert with a greatly improved regulatory framework for capital that more accurately assesses risks to individual institutions in a complex, dynamic, and interconnected financial system. - 4countercyclical capital buffer, and stress testing. within this context, i am also committed to implementing enhanced regulatory capital requirements that align with the final set of β basel iii β standards or the so - called the β basel endgame. β this process will involve working with other federal banking agencies and soliciting public input, and i β ll have more to say about this later this fall. resolution sufficient capital in the financial system helps support the resiliency of individual banks, but it is still important to ensure that, if a large firm gets into trouble, it can be resolved without a costly bailout. the dodd - frank act established the framework necessary to end bank bailouts. it provides the federal deposit insurance corporation ( fdic ) with the authority to resolve any firm whose failure would pose substantial risks to our financial system, in a way that will protect the economy while ensuring that large financial firms β not taxpayers β bear any costs. in addition, the fed and fdic require large banks to develop living wills to demonstrate that they can be resolved in an orderly way. many gains have been made from this process. while recognizing these gains, we need to continue to analyze whether firms are taking all appropriate steps to limit the costs to society of their potential failure. as such, we will continue to work with the fdic to rigorously review firms β plans, making clear when firms do not meet our expectations and when remediation is necessary. in addition, beyond globally systemically important banks, or g - sibs, we will be looking at the resolvability of some | , soundness, and financial stability. tiered regulatory and supervisory experience the federal reserve also takes a tiered approach to supervision. we organize the firms we supervise into portfolios based predominately, although not exclusively, on asset size. we have four such groups : ( 1 ) community banking organizations, which are generally those with $ 10 billion or less in total assets ; ( 2 ) regional banking organizations, which have total assets between $ 10 billion and $ 50 billion ; ( 3 ) large banking organizations, which have total assets over $ 50 billion but are not among the largest and most complex banking organizations ; and ( 4 ) firms overseen by the large institution supervision coordinating committee ( liscc ), which are the largest and most complex banking organizations. 1 as with tiered regulation, our tiered supervision is intended to take into account differences in business models, risks, relative regulatory burdens, and other salient considerations. where specific regulatory goals for the different portfolios vary, the supervisory programs reflect those differences. and even where the goals are similar across portfolios, supervisory programs should nevertheless take account of the differences among the firms in the four portfolios. in general, we shape our supervisory expectations for each portfolio by considering the increase in safety and soundness that we are likely to achieve through a specific practice or requirement, in light of the regulatory costs for the banking organizations in the portfolio and the impact that the stress or failure of those institutions would likely have on credit intermediation, the deposit insurance fund, and financial stability. so, for example, there are heightened expectations with regard to corporate governance for large banking organizations that are not applied to regional or community banking organizations. among other areas, the federal reserve expects the boards of directors of these larger firms to set direction and oversight for revenue and profit generation, risk management, and control functions ; to ensure that senior management has the expertise and level of involvement required to manage core business lines, critical operations, banking offices, and other material entities ; and to maintain a corporate culture that emphasizes the importance of compliance with laws, regulation, and consumer protection. while strong corporate governance is important at all banking organizations, it is vital at large banking organizations, given that their systems and operations are typically much broader and more for more information supervision. htm. on the liscc, see http : / / federalreserve. gov / bankinforeg / large - institution - bis central bankers β speeches complex than those of the smaller | 0.5 |
risks to the transmission mechanism related to the pandemic. later in july, we also announced a new monetary policy tool, the transmission protection instrument ( tpi ), complementing our existing tools. this tool has been designed to counter unwarranted, disorderly market dynamics, with sufficient flexibility to respond to the severity of the risks facing policy transmission. it will safeguard the singleness of our monetary policy as the governing council proceeds on its policy rate normalisation path, helping us ensure price stability over the medium term in line with our mandate. the tpi is subject to a list of eligibility criteria which the governing council will use to assess whether a jurisdiction pursues sound and sustainable fiscal and macroeconomic policies. conclusion to conclude, inflation continues to rise across the euro area, affecting citizens in all areas of life. the latest eurobarometer indicates that almost two out of three citizens see rising inflation as one of the two most important issues at the moment. [ 2 ] higher energy and food prices are weighing in particular on the most vulnerable households and the situation is expected to get worse before it gets better. in this environment, it is essential that fiscal support used to shield those households from the impact of higher prices is temporary and targeted. this limits the risk of fuelling inflationary pressures, thereby also facilitating the task of monetary policy to ensure price stability, and contributing to preserving debt sustainability. the best contribution monetary policy can make to the euro area economy is to ensure price stability over the medium term. this means ensuring inflation expectations remain well anchored and that demand conditions are consistent with our target. as i pledged to keep the european parliament and the general public informed about our progress, let me end by providing you with a brief update on our ongoing work to incorporate climate change considerations into our monetary policy operations. as of next monday, the eurosystem will take into account a climate score of issuers in all purchases of corporate bonds, in the context of the eurosystem β s ongoing reinvestment purchases. this will result in the purchase of more bonds issued by companies with a good climate performance and fewer bonds from those with a poor climate performance. these measures will reduce the eurosystem β s exposure to climate - related financial risk, as well as support the green transition of the economy in line with the eu β s climate neutrality objectives. as of the first quarter of 2023, we will start publishing climate - related information on our corporate bond holdings, and we will regularly report on the | speech hearing of the committee on economic and monetary affairs of the european parliament speech by christine lagarde, president of the ecb, at the hearing of the committee on economic and monetary affairs of the european parliament brussels, 26 september 2022 it is a pleasure to be back here in brussels with you for our third hearing this year. russia β s unjustified war of aggression on ukraine continues to cast a shadow over europe. my thoughts are with the ukrainian people suffering the senseless atrocities of the war. the economic consequences for the euro area have continued to unfold since we last met in june and the outlook is darkening. inflation remains far too high and is likely to stay above our target for an extended period. at our meeting earlier this month, the governing council therefore took the major step to frontload the transition from the prevailing highly accommodative level of policy rates towards levels that will ensure the timely return of inflation to our two per cent medium - term target. in line with the topics chosen for this hearing, i will provide you with a brief overview of the economic outlook and then explain our recent monetary policy decisions in greater detail. the outlook for the euro area economy the euro area economy grew by 0. 8 per cent in the second quarter of 2022, mainly owing to strong consumer spending on services as the economy reopened. economies with large tourism sectors benefited especially, as people travelled more over the summer. the still robust labour market also continued to support economic activity. notwithstanding this, we expect activity to slow substantially in the coming quarters. there are four main reasons behind this. first, high inflation is dampening spending and production throughout the economy, and these headwinds are reinforced by gas supply disruptions. second, the strong demand for services that came with the reopening of the economy is losing steam. third, the weakening in global demand, also in the context of tighter monetary policy in many major economies, and the worsening terms of trade will mean less support for the euro area economy. fourth, uncertainty remains high, as reflected in falling household and business confidence. these developments have led to a downward revision of the latest staff projections for economic growth for the remainder of the current year and throughout 2023. staff now expect the economy to grow by 3. 1 per cent in 2022, 0. 9 per cent in 2023 and 1. 9 per cent in 2024. inflation rose further to 9. 1 per cent in august. energy and food price | 1 |
way. the european economy is coming back and recovering from the recession. but monetary policy cannot create long - term growth. long - term growth will be driven by productivity gains, well - functioning economies and a reformed economic and monetary union. it is the responsibility of the democratically elected governments to propose and implement the right reforms. mario draghi has insisted in his press conferences that fiscal policy and structural policy are also important, yet some european countries still continue to pursue austerity. could you tell us your opinion on that? as regards fiscal policy, the discussion in the g7 should not just be about increasing spending, it should also be about improving the quality of the budget. the ecb agrees with the idea that β countries that have fiscal space should use it β, but many countries do not have this fiscal space. reducing unproductive expenditures and cutting taxes or increasing bis central bankers β speeches investment in productive infrastructure, such as education and research, can lead to growth without increasing the deficit. what about foreign exchange policy? the uk pound and japanese yen have been increasing and volatility is very high. what will the g7 do to reduce volatility? the g20 countries have committed not to use the exchange rate for competitive purposes, as confirmed in recent meetings in shanghai and washington. all of us should act in a way consistent with this commitment and which does not add to global uncertainty. emerging markets are slowing down and advanced countries have very low growth rates. what should the g7 and advanced countries do for the world economy? in a low - growth environment globally, there might be a temptation for some countries to grow at the expense of other partner countries. so it is precisely the role of the g7 or the g20 to resist such temptation. there is no β magic bullet β for increasing growth. for the g7, it is crucial to send the message to support domestic demand and focus on those structural policies that will be most conducive to growth. you cannot just rely on other countries. the message that we would like to hear is that β growth starts at home β. bis central bankers β speeches | benoit cΕure : interview in the yomiuri shimbun interview with mr benoit cΕure, member of the executive board of the european central bank, in the yomiuri shimbun, conducted by mr tadashi isozumi in japan and published on 20 may 2016. * * * you are attending the g7 finance ministers β meeting in sendai. what do you think the most important topic for discussion will be? the group of seven ( g7 ) countries are faced with a common challenge : how can they escape from this low growth, low inflation environment? what is important is that they cooperate and act together. to address future challenges, there needs to be a combination of multiple policies. in order to prevent euro area inflation from being too low for too long, the ecb has brought short - term interest rates to levels close to zero or negative, and is providing forward guidance on the future monetary policy stance. we are also implementing quantitative monetary easing of β¬80 billion [ about 10 trillion yen ] per month at least until march 2017, primarily by purchasing government bonds but also, starting next month, by purchasing bonds issued by non - financial companies. these actions are mutually reinforcing and in particular negative rates are reinforcing the impact of qe. negative rates are also hurting the financial industry β¦ negative interest rates impose direct costs on some industries : the banking industry, the pension funds industry and the insurance industry. but so far the overall impact on bank revenue has been positive, thanks to higher loan volumes and lower risk provisions. in addition, the money market in europe has been functioning at negative rates for almost two years without any disruptions. the ecb is currently applying a β 0. 4 % interest rate to money deposited by banks on their central bank account. it is in principle possible to cut this rate further, but there is currently no plan to do so. in march the ecb decided to lend money at a fixed rate over four years to banks which increase their loans to households and companies. we have a lending volume benchmark, and the rate will be as low as β 0. 4 % for those banks which outperform their benchmark by a sufficient margin. we are convinced that these credit easing measures are even more important than the negative interest rate, even if they complement each other. what is the impact of your monetary policy on the real economy, so far? this package of monetary easing policies is supporting short - term growth in a visible | 1 |
hu xiaolian : law on real rights of the people β s republic of china speech by ms hu xiaolian, deputy governor of the people β s bank of china, at the symposium on judicial interpretation of law on real rights, beijing, 27 may 2010. * * * i am delighted to attend the symposium on judicial interpretation of the law on real rights of the people β s republic of china organized by the supreme people β s court and the people β s bank of china with the support of international finance corporation. we have gathered here today to discuss the experiences of reforming the legal system on security interest, security interests in personal property and innovative practices on warranty of titles, so as to promote the drafting of judicial interpretation of the law on real rights part four on security interest. secured credit accounted for more than 80 percent of china β s aggregate credit. therefore, reform and innovation of legal framework concerning security interest is an important part of financial infrastructure. security interest in personal property is one of the most frequently discussed area in property law system and it is closely related to economic development and restructuring. based on the four pillars of an ideal framework of security interest in personal property, namely wide range of eligible collateral, a centralized registration and public display system, well - defined rule of priority and streamlined process for implementation, the pbc put forward 8 proposals, i. e. making account receivables and inventory eligible collaterals, establishing a floating charge system, protecting bona fide purchase, expanding party autonomy, defining the rule of priority in a clear - cut manner, designating the institution for the registration of account receivables, defining the principles for the registration of floating charge and rules for the registration and charging of security interest, which have already been written into the law on real rights enacted on march 16, 2007. the launch of the law on real rights is of great significance to the development of the credit market, prevention and mitigation of financial risks and easing the financing difficulties of smes. sme financing is a worldwide challenge, and it is more difficult in developing countries. out of multiple problems such as large smes β exposure to operational risks and lack of financial transparency and banks β difficulties in managing lending to smes, the lack of legitimate collateral is the real bottleneck. approximately 70 percent of the credit collateral received by commercial banks in china is real estate, while more than 70 percent of the assets of smes are account receivables and inventory. it was estimated | 31 march 2022 governor β s speech at the 61st annual meeting of the central bank of iceland, 31 march 2022 madame prime minister, other ministers, chairman of the supervisory board, and other honoured guests : this is my third annual meeting as governor of the central bank, but the first one that has taken place in the presence of guests. at the first two meetings, fewer than ten people were present and there was nothing on the tables to quench their thirst but hand sanitiser. yes, i have twice delivered annual meeting speeches to an audience comprising the prime minister and the supervisory board chairman and very few others. they are a wonderful audience, to be sure, but it is undeniably more fun to address a full auditorium. but i will take the liberty of saying that i believe those speeches delivered their message effectively. both of them focused on the covid - 19 pandemic and its implications, and the merger of the financial supervisory authority and the central bank. it is hardly surprising that these two topics should have dominated the bank β s work over the past two years. in addition, the central bank turned 60 in 2021, but we were unable to celebrate that milestone because of the pandemic. the pandemic delivered a massive shock to the economy when iceland β s largest export sector evaporated more or less overnight and unemployment soared to nearly 12 %. with a joint endeavour, the bank and the government faced down the challenge, focusing on households with targeted support measures and interest rate cuts. the bank also used its international reserves to maintain exchange rate stability throughout the pandemic, thereby supporting the implementation of wage agreements. the economic recovery is now well underway, and unemployment has subsided. but even though the pandemic is more or less over, the fallout from it is still in evidence β fallout that was not entirely foreseen. consumer demand has shifted worldwide. the household is now a workplace and a gathering place to a greater degree than before, and people have chosen not only to kit out their homes more fully but also to move into larger space. at the same time, production has been disrupted in various ways, and delays in shipping over longer routes have led to shortages of a range of goods. and many people who lost their jobs during the pandemic have remained outside the labour force even though new jobs have been created, although this has not been the pattern in iceland. it appears that a labour shortage is in the offing throughout the west | 0 |
the purpose of limiting legal liability rather than facilitating understanding by retail investors. mas therefore seeks to ensure that information disclosed is not only adequate but also transparent. transparency mas has sharpened the focus on providing investors information in a clear and concise manner to aid understanding. earlier this year, we introduced a new regulatory requirement for a product highlights sheet to accompany offers of investment products that come with prospectuses. its purpose is to convey key risks and product information in plain language and in a simple question - and - answer format. let me give an example. in one recent prospectus, the right of the investors to cancel their subscription within seven days was spelled out in two rather technical paragraphs using a total of 170 words. in the product highlights sheet, the same point was made in two simple sentences. financial advice the third aspect of investor protection is the provision of sound financial advice by intermediaries when they sell investment products. the fair dealing guidelines issued by mas require intermediaries to conduct their own internal assessment to ensure that a new product being launched for sale is suitable for its targeted investor base. intermediaries must also ensure that their representatives have the competencies to understand and explain the product features to their customers. mas has introduced new rules requiring intermediaries to assess their customers β investment knowledge or experience before investing in complex products. the rules will come into effect in january 2012. where an investor does not possess the requisite knowledge or experience, intermediaries must provide appropriate advice. investors who choose not to heed their advice or insist on buying a product which has been assessed to be unsuitable for them must take responsibility for their decision. this approach recognises that investors β capacity to understand complex products is uneven, while respecting their right to invest as they see fit. bis central bankers β speeches over the last two years, mas has conducted surveys and inspections to assess intermediaries β delivery of these fair dealing outcomes. we will use our findings to fine - tune the guidelines on fair dealing. while mas has taken these steps to ensure that the financial advisory industry is able to help investors make informed decisions, the best way to instill discipline on the industry is for investors to demand good advice. singapore β s investing public should seek good financial advisers who are prepared to even advise them against buying an unsuitable product. they should be prepared to pay a fee for such advice. investor education even with the best of disclosure and transparency, investors can make informed decisions only if they have the knowledge and skills to do | ##mining compliance, not to mention efficiency and innovation. all components of the capital market ecosystem must play their part. a well - functioning capital market is a shared responsibility. if all stakeholders do their part well, not only will we have fair and efficient capital markets that everyone has confidence in, but we will also make singapore a competitive and vibrant financial hub in asia. thank you for your attention. bis central bankers β speeches | 1 |
it does a wide range of different circumstances, sometimes including extended family arrangements. it would be unwise to generalise, but there are many circumstances in which there is less reason to be inhibited about repossessing buy - to - let properties. where loan delinquency relates to pure investment type β buy - to - lets β, it is surely now past time for the banks to be dealing more proactively with the situation of overindebted buy - to - let borrowers no longer able to service the debts they assumed in order to take investment positions β now loss - making β in property. it is in the long - term interest both of the banks ( and therefore the state ) and the borrowers that the banks continue to ramp - up their capacity to engage with and process such debtors in order to determine, on the basis of actual and prospective income, what repayment they can realistically be expected to service fully, repossessing the collateral where necessary. while this may involve the banks in having to manage a portfolio of repossessed buy - to - let properties, this is not an insurmountable task and should in any event facilitate the improved functioning of the property market and getting closer to a market - clearing price by bringing to the market ( in an orderly and managed way ) many of those properties which at present are implicitly hanging over it as an excess supply. overall, systematic and effective engagement can bring predictability to hopelessly overindebted borrowers, restoring their ability and motivation to become productive members of society. bis central bankers β speeches with almost β¬100 billion of mortgage debt in the republic outstanding in the banks guaranteed by the government, the working - out of troubled mortgage debt is a matter of immense national importance. achieving the right balance between realism in what can be collected and prudence in managing the limited but adequate capital resources that have been provided to the banks by the government is vital. failure in this regard would press on the already fragile finances of the state. the new personal insolvency arrangements could underpin a good outcome here, but the final form of their precise architecture and especially the operational parameters ( how to define affordability etc. ) will be crucial. much also falls on the banks, whose role in ensuring a realistic and effective approach to loan recovery β in effect for the benefit of the state β must continue to be developed alongside the resumption of a less timorous approach to new loan approval | . while the bitcoin may have risen in value over time, storing value in bitcoin has been compared to gambling in a casino. [ viii ] these stories highlight the role that money and official currency play in our society, providing stability in value when we trade goods and services. * * * while today money is no longer linked to gold, it is used every day when we buy things, in shops, in restaurants or to buy concert tickets online. we can trust in its value, we know what we will get for 20 euro, this week and next. for the central bank of ireland, public trust is critical. a key element of our vision is be trusted by the public - a trusted organisation that is working in the interests of the public every day. [ ix ] this includes ensuring that citizens can trust in their currency and that they can trust that the bank is fulfilling its mandate for financial stability, consumer protection and prudential regulation. historically many coins had a face depicting the power of the monarch, president, or state. today the central bank of ireland will add the face of rock royalty to one of our coins. * * * the national side of all euro coins allows the countries that use the euro to also recognise the uniqueness of their own cultures and identities. for irish coins, minted by the central bank, we feature the celtic harp. the use of the harp as our national symbol very succinctly reflects the importance of music and culture to the people of ireland. however, it is not only the tail side of our euro coins where euro member states are able to depict our national identities. all eurozone countries issue their own commemorative coins that reflect a rich and diverse range of national heroes, events, and cultural icons. [ x ] across europe, even though we no longer print punts, pesos or francs, the issuance of these commemorative coins in our common currency reflects our uniqueness whilst also embodying the spirit of the european union where we are β united in our diversity β. the central bank acts as an agent for the minister for finance and public expenditure and reform in issuing all irish coin β both the circulating coins we use every day and commemorative ones. collector coins have more than just monetary value. they are issued to honour people, events and achievements that we value as part of our history, culture and heritage. [ xi ] the themes that are commemorated in ours coins are as diverse as the themes of thin lizzy β s | 0.5 |
still needs strong support from monetary policy. the policy stimulus that is in place is working its way through the economy and is expected to support growth and job creation, a key precondition for inflation to move towards our medium term inflation aim. hence, at the last meeting, the governing council confirmed its forward guidance on the ecb β s policy interest rates, asset purchases and reinvestments. according to our guidance, we expect to maintain the key ecb interest rates β at their present or lower level until the inflation outlook robustly converges to a level sufficiently close to, but below, 2 % within the projection horizon. β while rate guidance has been effective in steering rate expectations along the short - to mediumterm portion of the term structure, our ongoing net purchases, at a monthly pace of β¬20 billion, act primarily on the longer end of it. we also continue reinvesting, in full, the principal payments from maturing securities purchased under the asset purchase programme for an extended period of time β past the date when we start raising the key ecb interest rates β. in current conditions of uncertainty, investors β reading our rate guidance β tend to anticipate a more extended period of time to the date of a rate hike. by the chained structure of our forward indications of all instruments, this automatic adjustment mechanism extends the horizons for full reinvestments too, and thus reinforces the impact of rate guidance on longer - term interest rates. moreover, our new series of long - term refinancing operations ( tltro - iii ), which started in september 2019 and will end in march 2021, help to ensure favourable bank funding conditions in support of an efficient bank - based transmission of monetary policy in the euro area. the combination of our monetary policy measures continues to prove effective in stabilising the economy and in ensuring very favourable financing conditions. this is evident in the successful pass - through of our policy measures to financing conditions that matter for the real economy. in fact, bank lending rates for both firms and households have continued to decline in the recent months and remain close to historical lows. loan growth to non - financial corporations, while moderating in tandem with the slowdown in the economy, is still supporting capital creation and the mortgage market. our recent bank lending survey confirms that credit supply conditions are favourable. 2 / 3 bis central bankers'speeches overall, the present monetary policy stimulus lends substantial support to growth and inflation developments, buffering to | luis de guindos : the euro area economic outlook and the current monetary policy stance remarks by mr luis de guindos, vice - president of the european central bank, at the european banking federation committee meeting, frankfurt am main, 20 february 2020. * * * it is a pleasure to be here today at the european banking federation. i will use this opportunity to provide an overview of the economic situation in the euro area and on the current monetary policy stance. recent economic developments although the expansion has moderated in the recent quarters, euro area growth continues to be supported by the underlying strength of domestic activity, bolstered by strong labour market dynamics and favourable financing conditions. after the gradual worsening over the past two years, the outlook for global economic activity outside the euro area has been showing some signs of improvements recently. the global sentiment indicators, like the manufacturing output purchasing managers β index, stabilised in the past few months following its persistent deceleration since early 2018. nevertheless, international trade remains weak and uncertainty around the future trading relationships among major global partners remains elevated, despite receding somewhat after the us - china β phaseone β agreement. this global weakness continues to weigh on manufacturing that remains a drag on the euro area growth momentum. some forward - looking survey indicators show tentative signs of mild improvements. for example, the purchasing managers β index manufacturing business expectations in twelve months β time has increased in the five consecutive months through january. likewise, the european commission β s economic sentiment indicator improved for the third consecutive month in january. however, the latest figures on industrial output in the euro area are a reminder that overcoming the manufacturing recession that has weighed on the euro area growth performance in the last couple of years is still challenging. we draw some comfort from the fact that, as yet, we do not see spillovers from the manufacturing weakness to the service sector. in the third quarter of 2019, euro area consumption increased by 0. 5 % quarter - on - quarter, while resilient retail sales and broadly stable consumer confidence indicate robust consumer spending also in the following months. the services sector continues to be strong and survey indicators remain in expansionary territory. consumption is supported by solid labour markets dynamics. according to eurostat β s flash estimates, in the fourth quarter of 2019, employment expanded by 0. 3 % quarter - on - quarter, while unemployment declined further to 7. 4 % in december, the lowest level since may 2008. the number of people employed has increased by more than | 1 |
to prevent potential risks from building up in the payment system and to moderate effects of problems that have already arisen. departures of this type from the rule of action should, however, be made restrictively. when the clarification was presented at the beginning of 1999, the executive board made a point of the fact that deviations from the normal rule are to be stated clearly and justified. the riksbank β s rule of action and some of the aspects i have mentioned have direct counterparts in current laws and their prefatory documents. the riksbank act states that " the objective of the riksbank β s operations shall be to maintain price stability. in addition, the riksbank shall promote a safe and efficient payment system. " moreover, the government bill ( 1997 / 98 : 40 ) lays down that in order to increase the possibility of democratic control, the statutory objective should be given its specific content by the riksbank. furthermore, in the prefatory documents it is said that as an authority under parliament, the riksbank shall self - evidently support the general goals of economic policy, for example sustainable growth and full employment, in so far as they do not conflict with the objective of price stability. it was not considered necessary to legislate these obligations. 2. the inflation target and price effects of deregulations market deregulation can have considerable effects on price formation. the immediate effect of a deregulation is often that the price falls, sometimes almost at once, so that the rate of inflation is lowered for the time being. all else equal, the rate of inflation then returns to the initial level as the months on which the statistical comparison is based move forward. normally, however, deregulations also affect the conditions for competition and price formation in the longer run. i should add here that rising competitive pressure can also affect productivity but the economic effect of productivity growth is something i shall be considering later. a particular, limited deregulation need not call for measures of monetary policy. if a deregulation stems from political decisions that could not be predicted, or its effects on inflation are calculated to disappear in less than one to two years, it will not elicit a reaction from the riksbank as long as the rule of action is adhered to. the situation is different, however, if the economy goes through a series of deregulations or the price effects of a single deregulation continue for several years. | case of the emerge of a need to issue liquidity bills, information on auctions will be announced at reuters β β cbtl β page at 10 : 00 one working day prior to the auction rather than on the same day, to provide investors a longer time for evaluation. information on auctions will continue to be announced to banks and financial intermediaries by electronic fund transfer ( eft ) system. liquidity bill auctions will be held at 11 : 00 with the value date of the following working day, and the results will be announced until 11 : 30 at reuters β β cbtm β page. auctions will be held by the traditional method. x ) information on new turkish lira deposit buying auctions will be announced at reuters β β cbty β page ; while information on reverse repo auctions will be announced at β cbtf β page at 10 : 00 on the same day. in case of an accelerated credit expansion in the banking system in such an extent that would create inflationary pressure despite the active use of the said open market operations to drain the excess liquidity in the market, required reserves may also be used effectively to support liquidity management. the central bank, the primary goal of which, entrusted to it by law, is to achieve and maintain price stability, will continue its practices to enhance the effectiveness of the monetary policy and liquidity management, also in 2008. accordingly, the central bank may change not only its liquidity management strategy, but also the borrowing and lending interest rate margins in cases of unpredictable changes in market conditions and emergence of needs that may arise. as always pointed out, the central bank deems the stability and development of financial markets as a supportive objective for the efficient implementation of the policies pertaining to price stability. obviously, under the floating exchange rate regime, the central bank is able to implement the ytl liquidity policy in a more flexible manner than it can under a fixed currency peg regime and can act more promptly and flexibly to meet the ytl liquidity needs of the banking system. also, the central bank can prevent excessive fluctuations in money market interest rates as long as they are consistent with the inflation target. furthermore, the central bank provides the banking system with foreign exchange liquidity via short - term foreign exchange deposit auctions, albeit at limited amounts. however, it is worth mentioning once more that the banking system should not slacken risk management principles by simply relying on the more flexible and effective new turkish lira liquidity management | 0 |
expand, even though it has only become truly universal from the 1980s, following the total collapse in 1989 of the economic system aiming to rival it, based on the centralised planning of the economy. the bretton woods system was also able to overcome the challenge posed by the project ( or rather, the utopia, perhaps ) of the β new international economic order ', put forward by the developing countries, following their political pronouncement at the bandung conference, which would gather great international prominence in the 1960s and β 70s as a result of the work of the united nations conference on trade and development ( unctad ) and the political backing of the united nations general assembly. gatt faced this challenge without overlooking the importance of its central underlying theme β the specifics of the developing countries β situation β and was even able to adapt, as shown for example by the addition of part iv to gatt and the acceptance of the generalized system of preferences created under unctad. however, all this was done without compromising the core validity of its founding principles. while reforming the monetary system proved impossible β and the bretton woods monetary system collapsed irreversibly in 1971 β reform of international trade was nevertheless achievable, shown by the creation of the wto at the uruguay round. the creation of the wto, as i wrote about many years ago, was an ending as well as a beginning. an ending, in that it marked the completion of a long journey and the ultimate materialisation of the vision of the bretton woods ideologues, who did not manage to build the international trade organization in their time. a beginning, since the defining of a single institutional framework to administrate trade relations between members in domains as vast as those covered by the set of agreements concluded under the uruguay round in fact marked the start of a new phase. for example, the path was 2 / 4 bis central bankers'speeches cleared for the first time for financial services to be included in a multilateral trading system, through the conclusion of the general agreement on trade in services ( gats ). in turn, the strengthening of the dispute settlement system increased expectations of the prevalence of law over sheer power, also helping to depoliticise and dedramatise matters of international trade. it was a new framework, therefore, that justified high expectations, but also held significant risk of disappointment, in a context in which the great changes, at all levels, in world trade were | , or, worse still, by the disorderly overlapping of states β unilateral actions. 7. many of these issues will be debated in this symposium, which will surely be a great success. impressed by advances in technology, which surprise us every day and open up new possibilities that were unimaginable before, we tend to underestimate the power of ideas, of knowledge in its broadest sense, of beliefs and of institutions. nothing could be further from the truth. there is no greater power than that which originates from these factors, as it is they that will ultimately decide the direction taken by technological progress. in a recent book, stephen d. king states that β globalisation is driven not just by technological advance, but also by the development of the ideas and institutions that form our politics, frame our economies and fashion our financial systems both locally and globally. when existing ideas are undermined and institutional infrastructures implode, no amount of new technology is likely to save the day. " that seems to me a key insight into our current problems. i wish everyone two days of intense and fruitful discussion. thank you very much for your attention. 4 / 4 bis central bankers'speeches | 1 |
but also in the region and beyond. reserve bank of fiji today i thought of sharing some of my personal experiences with siwa. i first met siwa at the central monetary authority in dominion house in late 1980 when he took over from mr. tomkins as general manager after his return from the imf. he was the first local at the position. so naturally there was a lot of interest on how a local was going to perform in one of the last key national positions to be localized in fiji. very quickly, siwa dispelled any concerns on his ability to lead the central monetary authority. siwa became the first governor of the reserve bank of fiji when the transition occurred in 1984. we honor siwa for his humility, caring and down to earth qualities. but in my assessment, underneath all that was a firm and strong leader. for us that worked under him, we came face to face with his strong leadership qualities in our work. while he mixed easily amongst us, he applied the rules very strictly. i remember the strike that i led when i was a trade union representative at the bank in 1983. at the end of the two week strike, while the union did not get all that we wanted, everyone acknowledged that the resolution was a fair one and was made possible by siwa β s compassion and goodwill to the workers. during this rather difficult negotiation and tension, siwa was very calm as he always was in any kind of situation. i could clearly witness the clarity of his thinking and his strong belief in fairness and consistency. siwa was our boss and also our father. i recall one day when he called me into his office. i had applied for a loan for my first car, a small honda civic. you know, siwa adopted a slow drawl when he told people off. when you heard that drawl you knew you were in trouble. in that telling off voice he said β savenaca, why are you buying a car when you don β t have a house. you should buy a house first when you are still young. β this signified the caring personality that siwa had for everyone. he was strict but ever concerned about our welfare! by the way i got the loan but with the condition that i buy a house within five years which i did. siwa rose in the public limelight as the governor of the reserve bank, a position that he held for 7 years. at that time, the reserve bank was a new | sada reddy : grow your company, grow the economy β have you considered the capital markets opening address by mr sada reddy, governor of the reserve bank of fiji, to the capital markets & listing seminar, suva, 18 august 2010. * * * good afternoon ladies and gentlemen. i thank you all for accepting the rbf β s invitation to today β s seminar on the topic β grow your company, grow the economy : have you considered the capital markets. β just a little over 12 months ago, on august 19, 2009, the administration of the capital markets development authority ( cmda ) was transferred to the reserve bank under the capital markets decree 2009. i am pleased to say that the work on developing the capital markets has continued and in many respects strengthened by the change that has occurred. the capital markets unit has successfully integrated into the reserve bank family and has added a different dimension and skills - set to the bank. i am happy to say that we can expect some major activities and events for the capital markets in the future. in march this year, the reserve bank established the first capital markets development taskforce. the members are daryl tarte, bob niranjan, norman wilson, pradeep patel, lisa apted and myself as chair. this taskforce is a β think tank β for the capital markets development work of the reserve bank. let me now turn to today β s event. the development of the secondary trading and the stock exchange is a key factor to developing the capital markets in fiji. one of the core functions of a stock exchange is to connect entities with surplus funds to others who require capital. an exchange also facilitates the entire continuous trading and wealth creation process ; thus stimulating economic growth and development. the stock market fulfils a number of vital functions. these include : 1. price discovery through the generation of transparent prices 2. facilitate efficient allocation of resources 3. promote sound risk management and corporate governance structures within publicly listed organisations. consequently, a well functioning capital markets requires the support of strong institutions backed by a well developed legal, accounting, legislative and regulatory framework and a supportive private sector. ladies and gentlemen, the spse has been challenged and continues to be challenged with many issues, some of which are : 1. a number of investors in the share market are large institutional investors who buy and hold, instead of making market with their stocks ; 2. our mums - and - dads investors, who are generally risk averse, have not embraced | 0.5 |
industries that have contributed the most to employment growth over the past two years are health care & social assistance, construction and ( perhaps more surprisingly ) manufacturing ( graph 2 ) : the increase in health - related jobs reflects both longer - term trends, such as the ageing of the population, as well as the rollout of the national disability insurance scheme over the past couple of years. construction employment is close to 10 per cent of total employment, and this is around its highest share of employment since the 1920s. construction employment has been supported by the large amount of activity in residential and infrastructure construction, particularly in the eastern states. more recently, there has been a noteworthy increase in manufacturing employment. this is a result of export demand for high - quality food and beverage products, demand for manufactured goods from mining - related activity as well as the high levels of residential and infrastructure construction. this more recent pick - up in manufacturing employment takes it back to its level around 2011. professional, scientific and technical ( pst ) services employment has also grown strongly over the past year, driven by computer system design and management consulting. https : / / www. rba. gov. au / speeches / 2018 / sp - dg - 2018 - 10 - 17. html 3 / 13 10 / 17 / 2018 the state of the labour market | speeches | rba graph 2 the labour account data provide an alternative perspective on where the jobs growth has been. for example, businesses report that the number of jobs in construction has not increased anywhere near the extent that households have reported over recent years. this may be because construction workers hired or contracted out by labour hire or business services companies will not be recorded as construction workers in the labour account. similarly, in answering a household survey, someone working for a professional services company who is deployed to a bank may think of themselves as working in the finance sector rather than in professional services. there is no β right β way of measuring this. it depends on who you ask and what question you are trying to answer. what sorts of jobs have been created in terms of pay? drawing on the data from the ( more than ) 450 occupations tracked by the abs, our assessment is that employment growth has been reasonably evenly distributed across pay levels over the recent period. there has been relatively strong employment growth in occupations with above - average rates of pay, such as jobs within health care, it and engineering. but within the household services sector, employment growth has been strongest in occupations with below - average | beveridge curve. a possible explanation for this would be an increasing skill mismatch between unemployed workers and available jobs. structural changes in the labour market as a result of changes to participation, technological change or those stemming from a shock such as the mining boom can contribute to a mismatch. lower mobility, either geographical or at the job level, can also reduce the ability of firms to find the appropriate worker. this last explanation seems unlikely given the relatively large net interstate migration flows we have seen as conditions in the state labour markets have varied, most notably the large flows in and then subsequently out of western australia. finally, it may reflect underinvestment in training over recent years, including in technical skills. that said, the vacancy rate is currently at its highest relative to the size of the labour force. that too is a very positive signal for the labour market outlook. https : / / www. rba. gov. au / speeches / 2018 / sp - dg - 2018 - 10 - 17. html 11 / 13 10 / 17 / 2018 the state of the labour market | speeches | rba graph 10 conclusion to sum up, the labour market is in pretty good shape : employment growth is above average, the participation rate is at a high level, the vacancy rate is at an all - time high and the unemployment rate is falling. however, the long - term unemployment rate has been little changed of late and wages growth remains low. the near - term indicators suggest demand for labour remains above average and the expected growth in the economy over the next few years should gradually reduce the spare capacity in the labour market. as we have stated many times, we expect that will lead to a gradual increase in wages growth and, in turn, inflation. there are a number of uncertainties around the extent and timing of the decline in the unemployment rate and the pick - up in wages growth. the recent international experience indicates that the unemployment rate could decline further than historical experience would suggest before we see a material increase in wages growth. but against this, further increases in labour demand may be met more from the pool of unemployed rather than from people not currently in the labour force. that is, the unemployment rate may decline faster than we expect, rather than the participation rate increase further. https : / / www. rba. gov. au / speeches / 2018 / sp - dg - 2018 - 10 - 17. html 12 / 13 10 / 17 / 2018 the state of the | 1 |
radovan jelasic : remittances to serbia speech by mr radovan jelasic, governor of the national bank of serbia, on the occasion of the international conference on remittances, berlin, 29 november 2007. * * * dear mrs. minister, mr. minister, your excellency, ladies and gentlemen, it would be true to say that citizens of serbia are its main article of export since no other β article β brings in more foreign currency than the serbian diaspora sending remittances from abroad. this is particularly true of the serbian diaspora in germany as over 700, 000 serbian nationals still live there β let us be clear on this, i am referring to those still holding serbian passports, or better to say, yugoslav passports! though our fellow citizens have left serbia, and done so for various reasons of economic or political nature, in order to obtain better employment opportunities or to flee the war - torn regions, etc. β they all share a common denominator. all of them are sending money to serbia. and, they are sending lots of it! based on our estimates, around usd 3, 0 billion or 8. 1 % of the gdp was sent to serbia in 2006, of which over usd 300 million from germany alone! these transactions have two important aspects : social β assistance to those who had stayed behind, care for the elderly, supporting relatives, and economic β investment in the smes, residential building, purchase of property, investment in their own or their children β s education, etc. however, our estimates show that only half of all remittances take the formal route, i. e. reach serbia through banking channels, which certainly has nothing to do with the quality of the banking sector in serbia since 80 % of the sector is in majority ownership of well ranked strategic owners from the eu countries - austria, italy, france and greece. this means that the majority of such money is brought into serbia by people crossing borders, which naturally has a negative impact on all those participating in such dealings : β’ there are side - effects to money senders in terms of undesirable costs, safety exposure and loss of tax benefits ( if the aim is to support relatives ) ; β’ money recipients must pick up the money and hopefully take it to a bank, which is not a simple matter as they do not fully qualify for use of banking products, such as credit cards, mortgage loans, etc. why is money still being | moreover, indirect effects of past oil price increases and euro depreciation are still coming through as witnessed by the continued rise in producer price increases for consumer goods. other short - term factors, such as increases in indirect taxation or in administered prices, may also prevent consumer price inflation from falling rapidly below 2 % over the next few months. i should also like to emphasise that market participants consider the current level of consumer price inflation as temporary. bond yields in the euro area indicate that the general expectation is for inflation to be within the ecb's definition of price stability in the medium term. the ecb is committed to fulfil this expectation. the current uncertainty regarding the prospects for world economic growth heightens the need to maintain the foundations for strong non - inflationary growth in the euro area as well as to strengthen the potential of the economy. the ecb shares the objective of the governments and citizens of the euro area of a growing prosperity in the euro area. by focusing on the maintenance of price stability over the medium term, the ecb is making an essential contribution to the achievement of this objective. at the same time, it is of paramount importance that all policy actors help to maintain the current favourable outlook for growth and inflation in the euro area. first, it is crucial that social partners continue the process of wage moderation seen in the past. this will not only facilitate the task of monetary policy, but will also contribute to continuing the process of reducing unemployment in the euro area. in addition, long - term growth perspectives for the euro area will benefit if governments intensify their efforts to progress along the path of fiscal consolidation. i consider that budgetary plans recently expressed in countries'updated stability programmes are not very ambitious as tax cuts are not accompanied by appropriate expenditure restraints. if the macroeconomic environment remains as favourable as expected, the envisaged fiscal policy stance could add to demand pressures. fiscal policy could, thus, become an additional source of upward risks to price stability. in addition, the stability programmes do not make the necessary progress in addressing long - term fiscal challenges. these challenges include, inter alia, the budgetary adjustments needed in many countries to cope with population ageing. more efforts are also needed in the ongoing process of implementing structural reforms to foster the growth potential of the euro area. this is of crucial importance to promote the supply of labour and capital and to innovate and disseminate new technologies and production methods. more flexibility in labour markets and | 0 |
##edibly their medium - term plans to restore fiscal sustainability, in order to limit upward pressure on their funding costs and to retain their ready access to global markets. that is important not only to deliver fiscal prudence, but also to avoid adverse spill - over to the rest of the financial system given their pivotal benchmark status. on the funding front, there are also heightened risks of crowding out. global refinancing needs are firmly skewed towards shorter term maturities. estimates differ, but bank and corporate bond redemptions hover around usd 3 to 4, 000 billon annually from 2010 to 2012, double the annual amount of the mid - 2000s. roll - over of government debt will come on top of those needs. leveraged borrowers such as high - yield companies also face refinancing pressure. and securitization markets are thawing only very slowly. overall, markets will need to refinance higher debt levels with lower average quality and with a reduced tolerance towards leverage, in a time window when support schemes will progressively unwind. such absorption pressure may well lead to higher and more volatile funding costs. therefore, it is now time that financial institutions and corporates engage proactively in lengthening their debt profile and tapping global markets in an orderly fashion given the risk that they may otherwise be forced to raise funds under less attractive terms. amidst these challenges, restoring a well functioning market - based economy also requires exiting from the exceptional financial sector support measures introduced since 2007. clearly, the timing, speed and modalities of exit involve important trade - offs, and judgment will need to be used. implementing exit strategies will require striking an uneasy balance between exiting too early and too late. this underscores how important it is that we resolve the regulatory issues in front of us, which will be part and parcel of our ability to exit this crisis with confidence in the resilience of our financial system. bolstering the resilience of the financial system is a broad project encompassing a considerable number of related measures. it involves multiple layers of policy authorities across countries and sectors. and it requires coordination and a joined - up international response, both for making our policies effective and for establishing a level playing field. driving forward a coordinated global regulatory response has been the key role of the g20 leaders and of the financial stability board, which i have the honour to chair. much policy development has been achieved β more than meets the eye β that when implemented, will | svein gjedrem : financial crisis β lessons from the nordic experience article by mr svein gjedrem, governor of norges bank ( central bank of norway ), in the financial times, 3 february 2009. * * * with the financial crisis gathering strength and spreading to the real economy, it is instructive to learn the lessons from the nordic crisis of the mid - 1990s. there are some important similarities today : but also some important differences. the financial strength of the banks, and hence their ability to continue to supply a steady flow of financing, can be bolstered in either of two ways : by injecting capital ; or by removing highrisk loans from the banks β balance sheets β and in turn creating a β bad bank β. in the nordic banking crisis 20 years ago, we did both, and learned three important lessons : first, government crisis resolution measures do not have to be costly for the taxpayer. the state injected equity capital, while private share capital was written down on the basis of a realistic assessment of loan losses. this ensured that the equity capital injected by the state could benefit from upside opportunities. in norway, the state assumed 100 per cent ownership of the three largest banks. the board of directors and senior management in each bank were replaced. then, in the years following the crisis, the state gradually sold its shares in the nationalised banks β at a profit. second, it is not always necessary to take the bad loans off the banks β balance sheets. in norway, the banks dealt with the problem loans themselves, and there is good reason to try to achieve this, where possible : the originating banks themselves are the best placed to deal with the problem loans. however, this presupposes that the problem loans account for only a limited proportion of total lending, so that the banks are able to continue to operate normally. sweden and finland established a β bad bank β that took over the high - risk loans. but this was in most cases done only after the state had nationalised the banks and was thereby able to control the kinds of loans that were transferred to the β bad bank β. third, banking crises do not need to be prolonged. in the nordic economies the prompt and extensive writing down of problem loans and recapitalisation of the banks limited the economic downturn, which lasted only around a few years. this experience stands in contrast to that of japan, where loan losses were recognised too slowly, with substantial and decade | 0 |
jobs and business opportunities for enterprises, and encourages the development of infrastructure. in 2014, tourism generated approximately us $ 1. 4 trillion in global foreign exchange income, approximately 30 % of the export of services. according to the world travel and tourism council, tourism contributed 9 % of global gdp and global employment. tourism has risen significantly in recent years and the world trade organization ( wto ) expects this trend to continue, reaching 1. 8 billion tourists by the end of 2030. as one of the world β s fastest growing industries, tourism has brought about more diversification and competition among destinations. also, due to innovation and continuous technological developments, tourists have become more hands - on, sophisticated, and demanding. this shift in tourist behavior has led to new tourist destinations in addition to the more traditional destinations of europe, north america, and the caribbean. tourism is also one of the most resilient global industries. through the years, it has proven capable of handling setbacks and adapting to the changing environment in which it has to operate. moreover, tourism helps preserve and stimulate countries β natural and cultural heritage. today, investments in tourism even take into account environmental aspects, particularly the prevention of environmental degradation. bis central bankers β speeches ladies and gentlemen, moving now to our region, the caribbean is commonly referred to as the world β s most tourism - dependent region. tourism constitutes the region β s most important economic pillar, contributing 14 % of caribbean gdp and 11 % of its total employment. also, the sector generates the largest share of foreign exchange income. in spite of its small scale and vulnerability to external shocks, our region has registered continued growth in the number of tourist arrivals. in 2014, for example, 26. 3 million tourists traveled to the region, representing a 5. 3 % growth compared to 2013. similar to most caribbean economies, tourism is the most important pillar of the curacao economy. this sector directly contributes 9. 2 % of gdp and 9. 6 % of employment. moreover, 26. 5 % of foreign exchange earnings from the export of goods and services are generated by the tourism industry. the industry also has indirect spin - off effects across all sectors of the economy, particularly the hotels & restaurants, wholesale & retail trade and transportation sectors. furthermore, the tourism sector contributes to the economy in terms of investments and government income. in this context, the tourism industry is highly labor intensive and, therefore, creates opportunities for many small and medium enterprises that provide goods and services to | 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 | 0.5 |
willem f duisenberg : maastricht and the future of europe speech by dr willem f duisenberg, president of the european central bank, at the presentation of a stamp commemorating the ten - year anniversary of the maastricht treaty, bundesfinanzministerium, berlin, 22 october 2003. * * * dr eichel, dr genscher, dr waigel, excellencies, ladies and gentlemen, it is a great honour for me to make one of my final public appearances as president of the european central bank on the occasion of the launch of a β sonderpostwertzeichen β - a special stamp - to commemorate the treaty on european union, better known as the maastricht treaty. it is not as a dutchman that i consider this treaty to be one of the most important milestones of the european integration process, but as a truly convinced european. together with the governing council of the ecb, i have been responsible for managing the single monetary policy and the single currency of the euro area, and i will not deny that my job has been inextricably linked to the wider historical process of building an β ever closer union β of the peoples of europe. in this respect, i consider that the maastricht treaty embodies the most decisive impulse in the deepening of the european communities established in the 1950s and strengthened by the treaty of rome. the move to economic and monetary union ( emu ) was a profoundly political act - despite the fact that the underlying rationale was predominantly economic, namely that a single market requires a single currency. having been instrumental in laying the foundations for the euro, the principles of the maastricht treaty will remain vital for the successful functioning of emu. the medium - term macroeconomic policy framework laid down in the maastricht treaty has contributed to a stable macroeconomic environment, and will continue to do so. in addition, the treaty provides for a clear allocation of responsibilities between eu institutions and member states, as well as clear mandates for all involved. the maintenance of price stability ( the ecb β s primary objective ), the independence of the eurosystem and the provisions safeguarding fiscal discipline, in particular as enshrined in the stability and growth pact, are among the hallmarks of this framework. furthermore, the path towards participation in the euro area mapped out in the maastricht treaty, focusing on sustainable economic convergence as | and a lack of liquidity in the ο¬nancial system might dangerously aggravate the crisis. adverse feedback loops between the economy and the ο¬nancial system could also pose a risk to price stability. that is why the eurosystem responded quickly in spring with a whole bunch of measures. this contribution to stabilisation in the crisis was and is important. however, ο¬scal policy has taken the lead. and quite rightly so. it has both the democratic legitimacy for heavy interventions and the custom - ο¬t instruments. lockdowns and voluntary social distancing led to massive revenue shortfalls in some industries. these shortfalls can disrupt the overall ο¬ow of payments in the economy and severely constrain the spending of many households and ο¬rms. fiscal policy, unlike monetary policy, can address this problem in a targeted manner by substituting lost income with transfers. now, the pandemic has forcefully resurged and stricter containment measures are back in force in many places, including germany. clearly, this will place a strain on the economy in the current quarter. the ο¬rst wave of the pandemic has showed in some countries that, even in the absence of tight government restrictions, the economy suffers as people become more cautious on their own account. this time, the economic fallout is likely to be less severe than in spring, since the containment measures are more targeted and ο¬rms have gained experience. we have also learned that, when the protective measures were relaxed and people regained their conο¬dence, the economy quickly revived. the rebound in summer was, in fact, signiο¬cantly stronger than expected. on the other hand, it may take a while until covid - 19 is contained in a sustained manner. from today β s point of view, a succession of lockdowns and subsequent resurgences cannot be ruled out. to protect the economy beyond the very short term, it is imperative that the pandemic be kept in check and eventually overcome. moreover, ο¬scal policymakers need to ensure that a quick and strong recovery is possible again by stabilising the economy now, supporting a rebound and counteracting second - round effects. in particular, a broad wave of corporate insolvencies would cost jobs and destroy production capacity for good. it could also spill over to the banking sector by way of rising credit defaults. through lending constraints, it could have repercussions for the real economy. in spring | 0 |
2000 - 2005 ( compared with rates of 2. 0 % and 2. 6 %, respectively, in the us ). one important factor constraining euro area productivity growth has been the slowdown in capital deepening. as you know, capital deepening is the increase in the volume of capital per unit of labour input. during the last decade the contribution to growth from capital deepening in the euro area was below that observed in the early 1990s, and significantly below that in the us. at a more disaggregated level, recent studies have highlighted the role of the information and communication technology ( ict ) in explaining the acceleration of productivity growth in the us in the mid - 1990s. we have all witnessed the profound change of the economy in the domain of the production of goods and services that has been brought about by lower costs of computing and communicating information. overall, the different incorporation in the economy of the ict revolution helps explain the diverging trends in labour productivity growth between the euro area and the us in recent years in two ways. first, we observe lower productivity growth in the ict - using sectors in the euro area compared with the us. in particular, key ict - using services, such as retail, wholesale and financial services, missed out to raise productivity growth in recent years in the euro area. the deceleration in labour productivity in these sectors seems primarily related to strong employment growth, which reduced the pace of capital deepening. second, ict - producing sectors have made a smaller contribution to overall labour productivity growth in the euro area compared to the us ( approximately 0. 5 percentage points between 1996 and 2002 in the euro area, compared with 0. 8 percentage points in the us during the same period ). this can be in part attributed to a relatively small output share of the ict - producing sector of 5. 3 % in the euro area, compared with 7. 0 % in the us. the latest empirical studies have found evidence that economic growth is associated with the degree of development and structure of the financial system. well - developed financial systems help to channel resources towards the most rewarding activities and therefore encourage the most efficient allocation of capital. a further development of the euro area financial system can be achieved via deeper financial integration. in this regard, one requirement for increased cross - border financial flows is the establishment of pan - european payment systems. the banking payment system put in operation at the same time the euro was introduced β target β has successfully linked up all national payment systems | feeding into price and wage setting in a more persistent way. what is clear is that our monetary policy measures have been successful in avoiding a deflationary spiral and securing the anchoring of inflation expectations. in the past, as interest rates approached zero, some did question our ability to add sufficient accommodation to combat a prolonged period of too - low inflation. we answered those doubts by demonstrating that we would take any measures necessary within our mandate to deliver our mandate, and that those measures were effective in further easing financial conditions. deflation risk premia, which had been growing in 2014 and 2015, have now been more or less priced out of market - based inflation expectations. that being said, a prolonged period of low inflation is always likely to be exacerbated by backward - lookingness in wage and price formation that occurs due to institutional factors, such as wage indexation. this has plainly happened in the euro area. ecb analysis finds that, compared with long - term averages, low past inflation dragged down wage growth by around 0. 25 percentage points each year between 2014 and 2016. the evidence as to whether backward - lookingness has increased recently is mixed. there were signs that indexation had fallen in the early part of the crisis, and ecb empirical estimates 4 / 7 bis central bankers'speeches suggest that the weight of past inflation in current inflation has decreased. yet there is also evidence that indexation has returned in some large euro area countries. in italy, for example, backward - looking indexation of wages now covers around one - third of private sector employees. 7 still, even if indexation rose, it would only create inertia in price formation : it would not obstruct the transmission process. as economic slack shrinks, upward pressure on prices will materialise and gradually enter the indexation ratchet. so once again we see temporary forces at work that should not affect medium - term price stability. and this assessment is broadly what we see in market - based inflation expectations today. interpreting with some caution, they are now consistent with the picture that our policy is effective, but that its full effects will take time to materialise. accompanying the recovery so what do these various explanations imply for our monetary policy stance? the first point to make is that we face a very different situation today from the one we encountered three years ago. then, we also faced global shocks and significant labour market slack. but the recovery was still in its infancy. global growth was slowing, | 0.5 |
lesson we have learned from microfinance : our borrowers may be poor, but they have good paying habits! repayment rates for microfinance loans in the philippines are hitting as much as 98 %! nobel peace price awardee muhammad yunus of bangladesh is another case in point. if you recall, mr. yunus parlayed his microfinance model into the successful grameen bank, with a total loan portfolio of $ 6 billion for 7 million borrowers. in other words, he has proven repeatedly β¦ that the entrepreneurial poor are bankable. he said : β conventional banks look for the rich ; we look for the absolutely poor. all people are entrepreneurs, but many don't have the opportunity to find that out. β providing credit access to smes is another challenge. according to the ups survey of sme competitiveness in asia, philippine smes consider access to funding and working capital as obstacles to their competitiveness. i hope therefore that cmap will find ways to help address these concerns. on our part, we at the bangko sentral ng pilipinas have launched electronic rediscounting to spur lending activities down to the countryside and also to lower transaction costs of banks. with erediscounting, banks may conduct their rediscounting transactions with the bsp in an online, realtime basis from their own bank premises. at the same time, the system allows bsp to process rediscounting applications within 10 minutes, release loan proceeds on line, and accept online payments for banks β rediscounting obligations. in addition, the bsp is advocating the passage of the corporate recovery act to update the insolvency law by putting in place procedures for liquidation, and thereby strengthen the framework for quick resolution of financially - distressed enterprises. this should balance the rights of creditors visa - vis debtors. i hope cmap will support this as well. another area for cooperation with cmap is financial education. in this regard, i am pleased to inform you that the bangko sentral and the department of education are principal partners in the incorporation of money management in elementary curriculum. the earlier children can learn about money management, the better. the bangko sentral is also conducting money management seminars for ofws and their dependents. we believe that learning the basics of money and credit management can help filipinos make smart decisions that will transform them into net savers and investors, fostering in the | there is no international consensus on the appropriate width of the corridor, a narrow corridor provides clearer guidance for the market and also helps to limit volatility in short - term interest rates. by introducing auction - type instruments, the irc system is intended to ensure more equitable access for all participants. in addition, we hope to ultimately aid in the development and deepening of the country β s capital and money markets. over time, as more liquidity is absorbed by the bsp, market participants will be encouraged to be more active and more prudent in managing their own day - to - day and short - term liquidity positions. it is our hope that, in the process, we will encourage counterparties to reduce their reliance on central bank facilities and instead transact more with each other through interbank markets, in order to meet liquidity requirements. the more immediate benefit of the new auction - type instruments under the irc is that the price discovery process will be facilitated by the bids we receive from market participants, which will by june 3, all rrps under the current facility would have matured and all term placements under sda would have been wound down to give way to the new facilities under the irc. bis central bankers β speeches provide information for the bsp and for the market on the prevailing cost of and demand for liquidity. in turn, better price discovery will allow the industry to establish more accurate interest rate benchmarks in the future. ladies and gentlemen, let me emphasize that the new irc system is not a departure from the bsp β s current monetary policy framework. in fact, the irc system is envisioned to further support the inflation targeting framework by reinforcing the bsp β s policy stance as represented by the overnight reverse repurchase rate that will remain our key policy rate. more importantly, the shift to the irc system does not represent a change in the bsp β s stance of monetary policy. the irc reforms are primarily operational in nature and will not materially affect prevailing monetary policy settings upon implementation. at the same time, short - term liquidity conditions are expected to remain broadly unchanged, as funds will continue to be absorbed through monetary operations under the new irc system. moreover, the rate adjustments in the bsp β s instruments under the irc system remain consistent with the outlook for inflation and growth. our current domestic environment of manageable inflation, a stable financial sector and firm economic growth prospects affords us | 0.5 |
##s, the proceeds would presumably be employed to redeem gse debt. in effect, a private investor whose holding of gse debt has been redeemed receives, in exchange, either the mortgage - backed security sold by the gse or other assets sold by those who acquire the mortgage - backed security. in either case, the grossing - up or its reversal does not affect the net demand for high - quality securities. 6 the concern of some observers that large sales of mbs will be difficult to absorb runs counter to the evidence that gse - backed mbs, being aaa - rated securities, already trade as part of the large worldwide market for high - quality corporate debt and u. s. treasury issues. gse sales of mbs, matched with redemptions of debt, will be readily absorbed in the vast market without a significant change in the relative interest rate spreads of such investments. at the most, the grossing - up and liquidation of mbs and the corresponding gse debt might conceivably affect the mbs - gse interest rate spread at the margin. moreover, unwinding mbs financed by gse debt does not affect the level of home mortgage debt outstanding or of mortgage interest rates. indeed, we have found little, if any, evidence that the spread of home - mortgage interest rates over comparable - maturity u. s. treasuries are affected at all by variations in the size of gse portfolios. 7 in fact, contrary to the expectations that mbs portfolio accumulation lowers home mortgage interest rates, the spreads apparently widened as the portfolios grew from 1995 to 2003. in any event, since the development of the mbs market, the determinants of interest rates that finance home purchase have exhibited little, if any, response to the size of gse portfolios. the past year provides yet more evidence of this independence, with gse portfolios not growing and mortgage spreads, as well as the spread between yields on gse debentures and treasury securities, declining further. despite the turmoil at fannie and freddie during the past two years, home mortgage markets have functioned well. indeed, as an indication that the yield on debt owed by gses is wholly a function of the yield's perceived status as government guaranteed, the credit default swaps of both fannie and freddie have barely budged as the disruption in the markets for gse equities has deepened. the mbs - gse or gse - treasury | on the size of the gse balance sheets, we put at risk our ability to preserve safe and sound financial markets in the united states, a key ingredient of support for housing. financial instability coupled with the higher interest rates it creates is the most formidable barrier to the growth, if not the level, of homeownership. huge, highly leveraged gses subject to significant interest rate risk are not conducive to the long - term financial stability that a nation of homeowners requires. | 1 |
risks we might think are low but in fact are not. since the end of 2007, major banks in the united states and europe have increased their common equity capital by $ 575 billion and their common equity capital ratios by 25 per cent. canadian banks are setting the pace. since withstanding the financial crisis, they have become considerably stronger. their common equity capital has increased by 77 per cent, or $ 72 billion, and they already meet the new basel iii capital requirements six full years ahead of schedule. clarity greater clarity, the second β c, β is critical to well - functioning capital markets. in the run - up to the crisis, financial institutions became increasingly opaque. their balance sheets were stuffed with mark - to - model assets, massive undisclosed contingent exposures, and debt classified as regulatory capital. annual reports ran over 400 pages in some cases, leaving investors exhausted but no better informed. in the past few years, there have been some improvements, including better accounting for off - balance - sheet securitisations, and enhanced disclosures of credit risk and the transfers of financial assets. encouraged by the g - 20, u. s. and international accounting standard - setters have made progress toward a single set of high - quality reporting standards, particularly in the areas of revenue recognition and asset valuation. but more is required. the two boards have not yet been able to agree on a common approach for asset impairment based on expected, rather than incurred, losses. the g - 20 has now called on them to redouble their efforts. one of the most important initiatives to improve clarity is the work of a private sector group, the enhanced disclosure task force ( edtf ), which was formed at the encouragement of the financial stability board ( fsb ). 3 it has made a series of recommendations to improve annual financial reporting by banks based on seven principles. disclosures should be clear, β enhancing the risk disclosures of banks, β report of the enhanced disclosure task force ( 29 october 2012 ). bis central bankers β speeches comprehensive, relevant, consistent, comparable, and timely. finally, annual reports should explain how risk is actually managed. once adopted, enhanced disclosure will contribute to effective market discipline, better access to funding, and, importantly, improved market confidence in banks. the bank of canada joins the office of the superintendent of financial institutions in encouraging major canadian banks to implement the edtf standards as soon as is possible. better disclosure of a bank β s current financial condition can be | framework. * * * ladies and gentlemen, i believe the discussions you are going to have today and tomorrow will provide important insights for addressing these issues too. i would like to thank the organizers of the workshop : francesca lotti and francesco manaresi from the bank of italy, salome balsandze from the einaudi institute of economics and finance and the cepr, and luigi marengo from luiss - guido carli university. i also thank alessandra piccinini from the bank of italy for taking care of the logistics. i welcome you once again and wish you a fruitful exchange of ideas, as well as a pleasant stay in rome. designed by the printing and publishing division of the bank of italy | 0 |
. therefore, the wallet has emerged as a safe and secure mode of payment. such wallets are vying for the space which was earlier occupied by debit cards. reserve bank has been bis central bankers β speeches authorizing banks / non - banks for issuing e - wallets / mobile wallets which is being used extensively for bill payment, recharge apart from e - commerce transaction. in fact, we are already at the stage, when the e - commerce has encroached in to the banking territory. the day is not far off when the banks would be viewed more as technology companies offering banking products and services. while this will be a new challenge for the sector, i see this as opportunity for banks to find new growth driver. prime minister β s digital india initiative 20. the recently launched prime minister digital india initiative aims at integrating the government and related departments and the public with the objective of making public services available to citizens electronically by reducing paperwork. the digital india initiative aims at creation of nationwide digital infrastructure ( broadband / high speed internet ), delivery of government services digitally and also increasing digital literacy. this initiative, in my view, will bring in enormous opportunity for banks to innovate and expand services to vast majority of rural population though electronic deliverables. as discussed in the last year β s banking conclave ( gyan sangam ) in pune, the top 30 processes in a public sector bank account for around 50 % of costs in back office and over 80 % of customer facing activities. if banks can take steps to digitise the top 30 processes quickly to improve customer experience and cut costs then they can reap huge efficiency and profitability gains. this would involve : a ) defining the revised workflow, b ) redefining technology where needed to transform the processes, and c ) driving change management across the bank to adopt new processes. big data 21. as the participants would be aware, big data ( bd ) is a broad term for data sets so large or complex that traditional data processing applications are inadequate to handle such data. an example of big data might be petabytes ( 1, 024 terabytes ) or exabytes ( 1, 024 petabytes ) of data consisting of billions to trillions of records of millions of customers. with the amount of data generated today, one would not be surprised that very soon all of us have to deal with bd in day - to - day operations. in the scenario, | financial inclusion and human resources. if one looks in to these seven areas, one would notice that it plays a very significant role for achieving strategic goals in all these areas of focus. therefore, it governance and it strategy by themselves also need to be a major responsibility of the board. unfortunately while the concept of corporate governance is well appreciated for long, the it governance has started getting the rightful attention by banks only recently. why and what of it governance 6. in one way it governance can be defined as the decision rights and accountability framework for encouraging desirable behavior in the use of it 1. the it governance provides a framework for ensuring that the information technology decisions take into consideration the business goals and objectives of an organization. as is the case with corporate governance which aids an organization to ensure that major decisions are in alignment with the organizational vision, mission and strategy, it governance ensures that it - related key decisions match the organization - wide objectives over a long term horizon. 7. the it governance exists within corporations to guide it initiatives and ensure that the performance of it meets the corporate objectives. a well placed it policy and structured it governance set - up along with corporate managers combine to ensure that it is synchronized with the business and delivers value to the firm. in the it governance framework, issues and strategic importance of it need to be clearly understood so that the organization can implement its strategies effectively to face the growing market competition on a sustained basis. a bank β s vision for it governance must incorporate ideas and information about the way it executes its business strategy. it is about how one operationalises the strategy and subsequently capitalizes on market opportunity. it is only at the lower levels of framework that the it governance is about decision rights, compliance with regulations, setting standards, etc. and while i do not intend to minimize the importance of these operational elements in the it governance, i do feel that if a bank β s it governance is primarily about being compliant and secondarily about business execution, then banks β business is not likely to benefit strategically from the it. one would then miss out on the larger opportunity that it governance offers. weill, p. & ross, j. w., 2004, it governance : how top performers manage it decision rights for superior results β, harvard business school press, boston. bis central bankers β speeches board driven it strategy 8. it strategy being a part of corporate strategy, should be driven by the board. all the aspects of technology management, namely, cost, human capital | 1 |
capital controls, for the longer term we see it very much as a third line of defence after macroeconomic policies, and micro and more usual macropru. it is no panacea and comes with distortions. all of this remains a work in progress, and history will tell whether it will be sufficient to preserve monetary and financial stability in the rougher seas of freer capital movements that we intend to embark upon. 2 / 2 bis central bankers'speeches | earlier situation, so the bank must reiterate its words of warning. at the same time as the central bank announced its interest rate decision yesterday, it published monetary bulletin. this outlines the main assumptions behind the bank β s decision along with indications about its policy in the near future and the viewpoints it considers important to bear in mind for economic policy. in the current edition, major changes were made to the assumptions behind the baseline forecast, which enhance both the credibility of the forecast and monetary policy transparency. by doing so, the central bank of iceland joined the vanguard of the inflation - targeting central banks. monetary bulletin reveals that inflation developments have turned rather more favourable than the bank β s previous forecast had indicated, and although underlying inflation was somewhat higher in february and march than was hoped, the bank expects both headline and underlying inflation to decrease rapidly in the next months. by both measures, inflation will be close to target from the middle of 2008. there is no doubt that this outcome is largely thanks to the tight monetary stance, which included raising the policy rate by 3. 75 percentage points last year. as usual it should be pointed out β and especially in the current climate β that exchange rate uncertainties can complicate this picture. the exchange rate has been relatively stable after the adjustment that took place in the first half of last year, and the krona is currently somewhat stronger than historical measures would warrant, although it should be admitted that determinism is probably not the most suitable approach for assessing currency developments. one reason for uncertainty about the exchange rate is the large current account deficit, as well as the fact that it can easily be driven by factors over which we have no control, given how closely iceland β s financial sector is now integrated with global financial markets. a central bank with a legislative and regulatory remit to target inflation is of course pleased with such inflation developments, but would prefer them to be built on a more solid foundation. domestic demand growth has declined, but rather more slowly than the bank had hoped. the current account deficit is large and will also contract more slowly than the bank would have desired. demand remains buoyant in the housing market and there are indications that the rate of credit growth may be on the increase again. for these and other reasons, the bank will remain on the alert and not ease its monetary stance until even clearer signs emerge that a lasting change has been established. equity prices have soared in iceland in recent years. one explanation for the increase may be that | 0.5 |
areas would also give financial inclusion the much desired fillip. ours is a bank led model for financial inclusion because in our view only banks can provide a comprehensive inclusion programme β deposit and loan products and remittance facilities. hence banks bear very large responsibility in making the financial inclusion programme a success. ( ii ) infrastructure financing 29. india β s infrastructural financing needs are not only huge but also vital. the targeted annual spend on infrastructure during 2007 β 12 is about usd 500 bn which is estimated to double in the next five year plan ( usd 1 trillion during 2012 β 17 ). shortfall in infrastructure financing, according to an estimate, would cost about 4 % of gdp every year1 which is too costly for a growing country like india. banks, traditionally, have been the major source of infrastructure financing and their exposure to infrastructure is already high at 17 per cent. infrastructure projects involving long term funding plans have, however, severe implications for the asset liability management at banks. there are some alternatives to bank financing such as development of corporate bond markets, infrastructure debt funds etc. the challenge before banks in the fast evolving landscape is to realign their position in meeting the infrastructure finance needs, at the same time, however, not significantly increasing their risks. take - out financing could be one option in achieving this balancing act. government and rbi have recently come out with a structure for infrastructure debt funds ( idfs ) which would facilitate take - out financing, development of the corporate bond market etc. ( iii ) financing of housing and real estate 30. financing of housing and real estate is another challenging area for banks. with a high rate of population growth, coupled with increased urbanization and growing incomes, there is a tremendous business opportunity for banks to participate in this segment. the emergence of demand for housing finance is expected to be the key driver of bank credit in future. however, real estate, owing to its imperfection in terms of information asymmetry and opacity, poses great challenges and banks need to tread with utmost caution and should avoid falling prey to irrational exuberance. real estate is highly sensitive and prone to easy build up of bubbles, which could be mistaken for growth momentum. the global crisis bears a striking testimony to the disastrous impact the excesses in real estate sector could pose to the financial system and banks have to resist the lure of quick but risky returns. c. challenges in correcting the fault lines ( i ) asset quality 31. non - performing assets | . moreover, there are reputational issues too if large banks continue with standardized approaches. however, the implementation of the advanced approaches raises several issues relating to development of human resource skills, technology upgradation, branch interconnectivity, availability and management of historical data, robustness of risk management systems, etc. though rbi has set an indicative time schedule for implementation of the advanced approaches, banks β response has not been encouraging so far. it is high time for larger banks to seriously upgrade their systems and skill sets and migrate to the advanced approaches. ( ii ) migration to basel iii ( a ) capital 11. basel ii was designed because its predecessor i. e. basel i was considered risk insensitive and too preliminary to cope up with the rapid developments in the financial sector resulting in substantial regulatory arbitrage. the basic purpose of basel ii was to leverage on the risk management systems of internationally active banks and use that for enhanced risk management architecture and, in the process, have better measurement of capital requirements. it is ironical that when the crisis took place, basel ii was either not implemented or just implemented in the jurisdictions. and yet we have had to leapfrog and go in for enhancements under basel ii. 5 and basel iii. under basel iii, an assessment of indian banks in terms of capital requirements has revealed that, notwithstanding some issues with a few individual banks, the system, as a whole, is very well capitalized and the transition to the revised capital norms of overall capital adequacy, tier i component or equity component would be smooth. the stress point, however, would be that banks will be required to adjust the unamortized portion of pension and gratuity liabilities in the opening balance sheet on april 1, 2013 on transition to ifrs. 12. going forward, the capital requirement on account of increased coverage of risks would not be so material for indian banks as either those activities are not allowed ( i. e. re - securitisation ) or their magnitude is quite small ( i. e. trading book ). 13. however, capital requirements, including equity, would be substantial for supporting the high gdp growth and the fact that credit to gdp ratio, which is currently quite modest at about 55 per cent, is bound to increase substantially on account of structural changes in the economy i. e. financial inclusion program, increase in loan requirements from more credit intensive sectors such as manufacturing, infrastructure, etc. 14. the large | 1 |
institutions, with pan - european banks playing an important role in private risk - sharing. for this to happen, it is essential to complete the banking union. in this union, both supervisory responsibility and the fiscal backstop need to be at european level to underpin confidence in the area - wide financial system in a sustainable way. just as necessary is the establishment of a european deposit insurance scheme. the current situation, where supervision is common, but the consequences of any bank failures are still predominantly national, should not last. in this incomplete framework, national considerations inevitably continue to affect supervisory decisions. this acts as a disincentive for banks to become more european. concrete examples include a lack of fungibility of liquidity or capital. the fact that the euro area is not considered as a single jurisdiction may result in the application of higher capital buffers to global systemically important banks in the region. the banking union is both an objective and a process of fundamental structural change in the eu financial architecture. the next steps are clearly set out in the ecofin roadmap to complete the banking union. agreement on an ambitious timetable for its implementation is now urgently needed. 3 / 4 bis central bankers'speeches 1 see, for example, oecd economic outlook, volume 2016, issue 2 and european commission, european economic forecast, winter 2017. 2 see the ecb β s euro area bank lending survey, april 2017, and the ecb β s survey on the access to finance of enterprises in the euro area, october 2016 to march 2017. 3 for more details on the impact of the tltros, see β the targeted longer - term refinancing operations : an overview of the take - up and their impact on bank intermediation β, economic bulletin, issue 3, box 5, ecb, 2017. 4 for further discussion, see β recent wage trends in the euro area β, economic bulletin, issue 3, box 2, ecb 2016. 5 see, for example, β wage dynamics amid high euro - area unemployment β, deutsche bundesbank monthly report, december 2016. 6 see financial integration in europe, european central bank, may 2017 and european financial stability and integration review 2017, european commission, may 2017. 4 / 4 bis central bankers'speeches | glenn stevens : latest economic and financial developments in australia opening statement by mr glenn stevens, governor of the reserve bank of australia, to the house of representatives standing committee on economics, sydney, 24 february 2012. * * * when we last met with the committee in august, we had entered a period of heightened uncertainty about the global economy and financial system. the investment community was focusing increasingly on the high levels of public debt in major countries, and especially on the situation in the euro area, where budgetary pressures, banking pressures and competitiveness issues within the single currency area make for a very difficult set of problems. there was considerable instability in markets. but our view at that time β tentatively β was that we were not witnessing a repeat of the events of late 2008. admittedly, the second half of 2011 saw some very anxious moments. there was a flight from risk that pushed up borrowing costs for major countries like spain and italy, but pushed them down for countries like germany and the united states to the lowest levels for more than 50 years in spite of the fiscal challenges the us itself faces. funding markets for european banks in particular effectively closed for a few months, and for other banks became much more difficult and certainly more expensive. the palpable fear before christmas that europe was on the brink of some sort of very bad financial event has lessened over our summer. the anxiety has not gone entirely away, and nor will it for some time. but the worst has not happened. financial markets, while hardly brimming with confidence, have recovered somewhat over the past couple of months. banks are able to access term funding markets again, albeit at higher cost. high - frequency gauges of business conditions and confidence have stabilised over the past couple of months in asia and north america, and even in europe. we have not seen the very steep fall that we saw in all these indicators in late 2008. the actions of the european central bank contributed greatly to the stabilisation of financing conditions, essentially by removing, for a time, questions over the funding of european banks. the efforts of european leaders to craft a stronger framework for euro - wide governance on the fiscal side have also continued. a great deal more needs to be done to place european banks and sovereigns onto a stable footing, and to boost potential growth in europe. but progress is being made. forecasts for the global economy in 2012 have been marked lower, mainly due to the effects of the problems in the euro area. revisions to | 0 |
ratio has actually been falling since the turn of the century just as the coverage ratio has been rising. for universal and commercial banks, our latest number is an npl ratio of 2. 06 % and a coverage ratio of 135 %. all of these metrics converge into the capital adequacy ratio which is the central, though not exclusive, metric under the basel accord. the often - cited statistic is that our banks have consistently maintained, on average, capital ratios well above the regulatory thresholds. on a consolidated basis, system car is hovering at 17 %, of which 14 percentage points pertain to the tier 1 ratio. most will leave the system review to the measures that i just shared. however, it is important for the bsp to make a point about access to the banking market because financial inclusion is much more than just a buzz word to us. today, we have a wider reach not only from the significant increase in physical banking officers ( which surged from 21, 394 at end 2007 to 26, 057 at end 2011 ) but also through atms ( which grew from 7, 155 to 10, 659 over the same period ) and the active use of technology through our mobile banking framework. indeed, it can be said that we now have a wider footprint of banking services that caters to the needs of our differentiated public. ladies and gentlemen, all of these positive developments neither happened overnight nor happened on their own. we believe that they reflect the enabling environment which we have invested in with the active support of and coordination with market stakeholders. while we bis central bankers β speeches can itemize each and every circular and policy prescription we have issued, i believe that we can categorize them into six main areas. β’ i would start with governance. this is most critical because without these overarching guidelines, the conflicts of interest inherent in finance would prove to be untenable. β’ risk management comes to mind next because of our deliberate shift from transactions review to a risk - based supervisory framework. β’ microfinance and financial inclusion are advocacies which we have pursued well before it became popular to do so. β’ to complement the prudential framework, there needed to be improvements in the delivery of banking services. β’ we certainly could not and would not neglect contributing to the development of the capital market. β’ as the other facets involved direct improvements of market components, we have not forgotten the needs of the banking public either for redress mechanisms or | haruhiko kuroda : quantitative and qualitative monetary easing remarks by mr haruhiko kuroda, governor of the bank of japan, at the international council meeting of the bretton woods committee, washington dc, 10 october 2013. * * * introduction it is my honor to take part in this wonderful meeting as a panelist today. when i first looked at the list of questions prepared by the committee to shape my remarks, i was stunned by the sheer number and scope of the questions. this points to the fact that we are surrounded by daunting challenges in this interconnected world, and it is our responsibility to sincerely meet those challenges. given the time constraints today, my focus will naturally be on monetary policy. the steering of policy has become increasingly difficult in recent times, and many of my fellow central bankers have found themselves in uncharted waters. since the outbreak of the lehman crisis, major central banks around the globe have introduced unconventional monetary policy measures, including asset purchases, amid the constraints of a zero lower bound for nominal interest rates. the bank of japan has also implemented unconventional monetary policy several times, since more than a decade ago, and has successfully accumulated ample experience. however, we have not been successful in overcoming deflation. to this end, in april, immediately after i became the governor of the boj, we introduced quantitative and qualitative monetary easing, dubbed the qqe. the qqe is markedly different from the policies the boj implemented in the past and from unconventional monetary policies other central banks have been carrying out. today, in the time allotted to me, i would like to explain the uniqueness of the qqe. challenges and economic situation japan β s economy has been mired in deflation for the past 15 years. in the meantime, people β s inflation expectations declined and the recognition that prices will not increase β namely, deflationary expectations β became entrenched. amid the situation of prices not increasing, the holding of cash or deposits became a better investment, and thus firms and households hoarded cash and did not make other productive investments. persistent deflation encouraged behavior to stay status quo, and this deprived japan β s economy of vitality. there were phases of economic recovery in the meantime, but they did not lead to a sustainable increase in prices. the phillips curve, which shows the relationship between the output gap and inflation, shifted downward in tandem with a decline in inflation expectations. the average inflation rate | 0 |
costs to central banks in emerging markets. these may include possible moral hazard from investors β expectations of being protected from losses in risk positions, increased uncertainty regarding policy measures, as well as damaged progress towards the attainment of price stability. see nikolsko - rzhevskyy, a. et al. ( 2014 ). β deviations from rules - based policy and their effects, β journal of economic dynamics and control, 49. this idea has been put forward by john b. taylor. see, for example, taylor j. b. ( 2015 ). β getting back to a rules - based monetary strategy, β speech given at the conference getting monetary policy back on track, organized by the shadow open market committee princeton club, march. see chen, q., et al. ( 2015 ). β financial crisis, us unconventional monetary policy and international spillovers, β bis working paper, 494, march. see hofmann, b. and b. bogdanova ( 2012 ). β taylor rules and monetary policy : a global β great deviation β? β bis quarterly review, september ; and pasricha, g. et al. ( 2015 ). β domestic and multilateral effects of capital controls in emerging markets, β ecb working paper 1844, august. bis central bankers β speeches in fact, in some cases, it has become clear that imbalances have largely resulted from misguided domestic policies, such as excessively stimulative fiscal and financial measures. thus, blaming problems on foreign lax monetary stances may have distracted countries from correcting internal fragilities in a timely way. a challenge in the current global scenario is for central banks to pursue price stability in the face of upcoming monetary normalization in the united states, while at the same time taking into consideration possible spillovers to the extent that they may have some bearing on achievement of their inflation targets. concluding remarks the recent global financial crisis has generated increasing demands on monetary policy. the top risk of overburdening monetary policy with possibly incompatible objectives is diminished credibility. hence, setting realistic expectations of what it can and cannot do is all the more important. the greatest contribution monetary policy can make to society is price stability. given the long - term neutrality of money, any attempt to use it to boost growth is by nature limited. with respect to financial stability, the best monetary policy can do is to avoid provoking problems, notably, by neglecting inflation control. monetary policy can obviously | ravi menon : getting in all the cracks or targeting the cracks? securing financial stability in the post - crisis era opening remarks by mr ravi menon, managing director of the monetary authority of singapore, at the asian monetary policy forum ( ampf ), singapore, 24 may 2014. * * * monetary policy at the crossroads professor tan chorh chuan, president of the national university of singapore, distinguished guests, ladies and gentlemen, good morning, and welcome to the inaugural asian monetary policy forum. thank you all for coming. i would like to particularly thank steve davis of chicago booth and bernie yeung of nus business school. it was your vision and tireless effort that made this forum possible. you have assembled here a dazzling array of eminent economists and respected practitioners to discuss and debate the most pressing questions in monetary policy today. one of these questions must be : what role should monetary policy play to help secure financial stability? for two decades before the global financial crisis, central bankers thought they had found the secret sauce of monetary policy. the recipe was simple β an independent central bank, a single target ( price stability ) and a single instrument ( the interest rate ). monetary policy was directed at achieving price and output stability, with the central bank β s reaction function well - characterised by the taylor rule on an ex - post basis. the recipe worked brilliantly. sustained price stability and steady economic growth were the order of the day. the result was the great moderation. indeed, monetary policy was getting boring. monetary policy was unencumbered by financial stability considerations. to be fair, central bankers were not unconcerned about financial stability. but financial stability was seen as the preserve of prudential regulation and supervision. academic thinking reinforced policy practice : the macroeconomic models central banks relied on did not map clear linkages between financial and real variables. economists warned that it was difficult to identify a financial bubble. how does one tell if the value of an asset reflected economic fundamentals or speculative fever? so, when faced with potential financial vulnerabilities, it was deemed better to clean up after a bubble had actually burst than to try to lean against suspected bubbles. but beneath the still waters of macroeconomic stability, deadly financial whirlpools were forming. financial imbalances built up steadily in the advanced economies from the mid - 1990s to mid - 2000s and culminated in the global financial crisis of 2008 / 2009. the crisis sent financial systems into a tailspin and plunged economies | 0 |
. 2 / 5 bis central bankers'speeches but an increase in npls must be viewed in perspective. banks are in the business of intermediating risk. when risks materialise β as they sometimes do when those who borrow get into difficulties β npls must rise. this may be odd for a regulator to say β but if npls did not rise at all during difficult times, then the banks are probably not lending enough or taking on sufficient risk to promote business expansion or enterprise. what is important is : is the rise in npls manageable and contained? are problem loans being monitored closely and classified prudently? are provisions made proactively and conservatively? take for example singapore. npls have risen amidst a weakening economic environment and emerging asset quality risks in the oil and gas ( o & g ) sector, which has been weighed down by low oil prices. but our banks β exposure to the o & g sector is contained. the banking system β s aggregate exposure to the o & g sector is around 10 %. for local banks, this figure is lower at 6 - 7 %. banks in singapore have also made adequate provisions for their overall npls. the overall provisioning cover for the banking system, as a percentage of total unsecured npls, is above 100 %. the local banks β provisioning cover is even higher, at above 200 %. the good news for asian banks is that these cyclical headwinds should pass in time. growth is recovering, monetary policy is normalising, and commodity prices are stabilising. asian banks are positioning for asian growth and a digital future and that takes us to the medium to long term. the prospects for asian banks are good β chiefly because the prospects for asian economies are good. the region is expected to continue registering relatively high growth rates in the medium term β about 6 % on average over the next 5 years, compared to the global average of 3. 7 %. higher asian incomes will drive demand for financial services, leading to more opportunities in banking. at the same time, financial inclusion remains low in many parts of asia. a 2015 world bank study found that of the 2 billion adults on the planet with no bank accounts, more than half were in east and south asia 3. a more recent study by the adb covering cambodia, indonesia, myanmar and the philippines found significant gaps between demand and supply in several financial services, including payments, savings, and credit4. interestingly, the authors estimated | trading partners. a strong relationship with india will complement our rapidly growing links with china, and help us to realise the strategy of growing two external wings in the region, with the two emerging economic giants. on the part of india, since singapore is already nearly completely tariff free, major gains will be in investment and services. india β s economic reform and liberalisation has brought in foreign investments and benefited india for over a decade. similarly, a ceca that opens up more opportunities to investors from singapore, improves the business environment and strengthens the protection that their investments enjoy, will encourage more high - value investments to flow from singapore into india. with india β s growing strengths in services, a comprehensive agreement in services will open up new opportunities for indian companies in singapore and the region. strategically, a ceca will anchor india β s position in southeast asia. it will ensure that india joins in the opportunities that southeast asia offers, just as companies from the us, japan, and china are already doing. it will also spur other asean countries to expand their ties with india. this is exactly what happened with the us - singapore fta, and with the japan - singapore economic cooperation agreement. after singapore made these two agreements, other asean countries started to pursue similar arrangements with the us and japan. singapore is happy at this, as we will benefit when our neighbours too are promoting freer trade and investment flows. i hope our ceca negotiators will complete their work soon, and deliver a comprehensive and substantive agreement that both countries can be proud of. singapore as a launchpad from the business point of view, a ceca is the ideal platform for both countries to broaden and deepen bilateral co - operation, and advance our shared interests. singapore makes an excellent partner for indian companies embarking on a strategy of regionalisation or globalisation. because of our historical and cultural ties, indians are very comfortable in singapore β s social and corporate culture. singapore is a good base for indian companies to engage southeast and east asia. they can take full advantage of singapore β s trade and business networks in these growth markets, in particular china. singapore is also a major transportation, logistics and financial centre in asia. we welcome indian companies to make use of our international network of air, sea and telecommunications linkages, and tap the network and resources of 6, 000 mncs in singapore. already over 1, 000 indian companies are in singapore. in the last 3 years alone, over 150 indian companies have | 0.5 |
t t mboweni : the challenge of employment equity with specific reference to transformation at the south african reserve bank address by mr t t mboweni, governor of the south african reserve bank, at the black management forum annual conference, durban, 13 october 2006. * * * the president of the black management forum, former presidents and executive members of the black management forum, members of the black management forum executive, ordinary members of the bmf, distinguished guests, ladies and gentlemen, when we were approached by the bmf leadership to address this august gathering on challenges of employment equity with specific reference to the transformation process at the south african reserve bank, we were more than pleased to oblige and grabbed the opportunity with both hands primarily because the progress we have made at the bank since 1999 has been remarkable. this does not in any way imply that our current transformation milestones are a destiny already reached, but we thought that we could share with you how we have embraced transformation as a journey which will hopefully someday help us realise the desired south african end - state 1. when one takes into consideration that the bank comprised mainly, but not only, of afrikaner white males in technical and strategic decision making positions in 1998 at the bank, we are certain that all might concur that the road to transformation at the bank was paved with many serious challenges / obstacles and presented an extremely steep gradient of resistance. it is against this opening scene and milieu that we can lay claim that the progress made has been indeed remarkable and to some extent ( maybe ) exemplary. allow me to share with you the facts and figures of employment equity and transformation at the bank. this will entail a little walk back in the history of the bank β s workforce movements and composition, but the historic walk will serve as empirical support of the bank β s transformation and equity successes. a historically significant starting point would be the year 1994. in that year the bank β s total staff comprised 21 per cent blacks and 38 per cent females. the management levels, however, comprised 1 per cent blacks and 12 per cent females. when we joined this transformation journey after 1998 2, we had a workforce that, in total comprised 36 per cent blacks and 42 per cent females, but the management levels comprised only 13 per cent blacks and 19 per cent females. the strategic general management level comprised only 15 per cent blacks and 7 per cent females. thus the workforce composition of 1998 will effectively serve as the starting point of numerical transformation | the sadc rtgs system, formerly known as siress, was developed as a catalyst to support the regional financial integration agenda towards the realisation of sadc β s aim of facilitating trade and investment in the region. prior to the implementation of the 1 international standards organization page 3 of 10 sadc rtgs system, regional cross - border transactions were settled via correspondent banking arrangements, which are prone to counterparty risk, lags in the settlement of these transactions on a t + 1 or t + 2 basis, and short cut - off times. the system was implemented through a public - private partnership between central banks and the commercial banking industry. the role that other partners played in the project β partners like the finmark trust, the european union, the world bank, the bill and melinda gates foundation, and the international monetary fund ( imf ) β is also appreciated and valued. the system currently settles transactions for 82 participating banks drawn from 14 countries across the sadc region. since july 2013, it has settled over 1. 2 million cross - border transactions and a cumulative peak value of r5 trillion, which was reached in october 2018. a project is currently underway to replace the sadc rtgs platform with a solution based on modern technology, which will provide, among other things, multi - currency capabilities, flexible settlement windows per currency, and re - engineered business processes to support the possible future business needs that could utilise distributed ledger technology ( dlt ). vision 2025 it is imperative that we continue to build on our legacy in our quest to enhance the safety, efficiency and accessibility of the nps in a manner that promotes competition and minimises risk to the payments ecosystem. as outlined in vision 2025, we will pursue this objective by leveraging technological developments to extend the availability of digital payment services to all sectors of society while meeting domestic, regional and international requirements for the benefit of all members of south african society. the nps affects the lives of all south africans. essentially, it exists to serve the economy and, through it, the people of south africa. it is a crucial enabling factor for page 4 of 10 economic activity among consumers and businesses. payment systems can, for example, enable seamless links to public transportation. a recent study by visa titled the cashless cities : realising the benefits of digital payments 2 reveals that, should johannesburg reach a state where 100 % of transactions are digital, the city would gain just under us $ 500 million in net benefits cumulative | 0.5 |
thomas jordan : swiss national bank β s monetary policy decision and assessment of the economic situation introductory remarks by mr thomas jordan, chairman of the governing board of the swiss national bank, at the media news conference of the swiss national bank, berne, 18 june 2015. * * * ladies and gentlemen it is a pleasure for me to welcome you to the swiss national bank β s ( snb ) news conference. as usual, i shall begin by outlining the governing board β s monetary policy decision and our assessment of the economic situation. this will be followed by jean - pierre danthine β s presentation of our annual financial stability report and fritz zurbrugg β s comments on financial market developments. after that, we will be happy to take your questions. monetary policy decision let me begin with our monetary policy decision. the snb has decided to leave the target range for the three - month libor unchanged at between β 1. 25 % and β 0. 25 % and interest on sight deposits at the snb is to remain at β 0. 75 %. negative interest rates in switzerland make holding investments in swiss francs less attractive and will help to weaken the swiss franc over time. overall, the swiss franc is significantly overvalued. in formulating our monetary policy, we take account of the exchange rate situation and its impact on inflation and economic developments. we will therefore remain active in the foreign exchange market, as necessary, in order to influence monetary conditions. our new conditional inflation forecast does not differ greatly from the one we presented in march. inflation will reach its low point in the third quarter of 2015, at β 1. 2 %. for the subsequent period, the new inflation forecast is slightly higher than in march due to the rise in oil prices. the short and medium - term forecast is up slightly, by 0. 1 percentage points to β 1. 0 % for 2015 and to β 0. 4 % for 2016. the forecast continues to indicate that inflation will move back into positive territory at the beginning of 2017 ; there will be a slight slowdown in the rate of increase as the year progresses. the inflation forecast for 2017 is down by 0. 1 percentage points, to 0. 3 %. the conditional forecast assumes that the three - month libor will remain at β 0. 75 % over the entire forecast horizon, and that the swiss franc will weaken. global economic outlook as our inflation forecast is heavily influenced by economic developments abroad, let me | now present our assessment of the global economy. global economic growth was weaker than expected in the first quarter of 2015, and this development had a detrimental impact on world trade. in the us, gdp declined slightly, partly due to special factors. moreover, the strong us dollar weighed on exports. in the euro area, however, the economy continued to pick up, supported by persistent euro weakness and improved lending conditions. in contrast to the previous quarter, all of the large member states contributed to growth. italy reported gdp growth for the first time since entering a multi - year recession. in japan, too, the economy gained momentum. in the emerging economies, performance remained uneven, while growth continued to cool in china. the global economy is expected to gather pace again, reinforced by expansionary monetary policy around the world and ongoing low oil prices. for instance, after a disappointing first bis central bankers β speeches quarter, the two large economies, the us and china, are starting to show signs of improvement. nonetheless, uncertainty about the future development of the global economy remains high. various risks β first and foremost the difficult financial situation in greece and geopolitical tensions β could jeopardise the recovery. swiss economic outlook according to initial estimates, switzerland β s real gdp declined slightly in the first quarter. as expected, goods exports suffered from the strong swiss franc appreciation, but also from a downturn in global trade. domestic demand, by contrast, developed robustly. having said this, the situation varies considerably from one industry to another. profit margins are under significant pressure in several sectors, and this is forcing companies to take steps to reduce production costs and raise efficiency. against this backdrop, unemployment has increased slightly on a seasonally adjusted basis. over the coming months, the global economic recovery is likely to lead to a gradual upturn in demand for swiss products ; this will cushion the impact of the exchange rate shock somewhat. as the global economy gathers momentum, we expect switzerland to return to positive growth in the second half of the year. the snb continues to anticipate growth of just under 1 % for 2015 as a whole. monetary and financial conditions allow me to move on now to monetary and financial conditions. since the discontinuation of the minimum exchange rate, inflation has moved well into negative territory. this is chiefly attributable to imported goods prices, which in may were down roughly 5 % year - on - year, mainly due to the fall in oil prices. domestic inflation | 1 |
monitors a broad set of non - monetary economic and financial variables, such as wages, unit labour costs, fiscal policy statistics and financial market indicators like stock prices and exchange rates. most of this analysis focuses on cost pressures and on the interplay between supply and demand in the goods and labour markets. it also helps to ascertain whether shocks to the euro area economy and the resulting risks to price stability have an external or domestic origin, are of a temporary or permanent nature, and arise from the supply or demand side. within the framework of the second pillar, the eurosystem staff also produce macroeconomic projections which are published in the ecb monthly bulletin twice a year. the macroeconomic projections elaborated by the eurosystem staff do not represent the ecb's predictions of the most likely macroeconomic outcomes, but are built on the assumption of unchanged short - term interest rates and exchange rates of the euro. it is important to recognise that the eurosystem's projections are produced on the basis of models that do not assign a relevant role to money and that there is also a host of other economic and financial indicators whose information could not be adequately conveyed by a simple figure or a statistical range. in its decision - making the governing council therefore assesses the staff's projections together with all the other information under the second pillar, in conjunction with the monetary analysis developed within the first pillar. it is important to understand that the process of monetary policy formulation of the ecb is not centred on any forecast or projection and thereby departs from the practice followed by inflation - targeting central banks. the monetary policy decisions of the ecb have not responded mechanistically in the past, and will not do so in the future, to deviations of staff's inflation projections from any numerical target. the governing council, moreover, does not take any responsibility for the staff's projections which, as with forecasts produced by other institutions, are regarded as just one of the inputs into its deliberations. given the uncertainty and different views about the appropriate model of the economy, it would not be productive for the governing council to produce its own single projection. the governing council instead focuses directly on setting policy rates, taking into account all information, and the uncertainty surrounding this information, in such a way that price stability can best be maintained over the medium term. the robust and cross - checking assessment of information which characterises our two - pillar strategy has proved so far to be providing the governing council | when their risk appetite drives prices higher relative to economic fundamentals, there may be a greater risk of outsized drops in prices that can be destabilizing. 4 the fed looks at a broad range of asset markets, including equities, treasury securities, corporate bonds, loans, and real estate. this table from our fsr shows the sizes of the asset markets discussed in this section as of q2, the most recent data available. the largest asset markets are those for residential real estate, equities, treasury securities, and commercial real estate ( cre ). 5 this year, asset valuations have generally risen notably above their historical levels. in particular, prices of residential and commercial properties remain above levels historically associated with fundamentals. house prices, relative to rents, are near alltime highs. further, prices have started increasing again in recent months after falling for more than a year. commercial property prices also remain high relative to rental income. i am watching closely the extent to which post - pandemic supply and demand patterns see the box β vulnerabilities from asset valuations, risk appetite, and low interest rates β in board of governors of the federal reserve system ( 2021 ), financial stability report ( washington : board of governors, may ), pp. 15 β 18, https : / / www. federalreserve. gov / publications / files / financial - stability - report20210506. pdf. see board of governors of the federal reserve system ( 2023 ), financial stability report ( washington : board of governors, october ), pp. 5 β 6, https : / / www. federalreserve. gov / publications / files / financialstability - report - 20231020. pdf. - 4normalize. demand in the office sector has remained weak, particularly in central business districts and coastal cities, with vacancy rates increasing further and rent growth declining. finally, average delinquency rates for commercial mortgage - backed securities have moved up recently, as office and retail loan performance has deteriorated. if delinquency rates generate selling pressure or increase notably further and result in forced sales of properties, then cre prices could decline sharply. another notable market development has been the significant increase in longerterm bond yields since june. decompositions between changes in expected rates and term premiums depend on the specific models and assumptions used, but i would say that an expectation of higher near - term policy rates does | 0 |
eastern caribbean central bank opening remarks by timothy n. j. antoine governor, eastern caribbean central bank single insurance and pension market project ( sipmp ) change management strategy meeting 2 july 2018 ( eccb headquarters ) salutations : this meeting has been in the making for some time and i am pleased that we are all finally here. i apologise for my physical absence, but i am nonetheless happy to join you by phone for, at least, part of today β s proceedings. colleagues, two weekends ago i was in basel, switzerland for the annual meetings of the bank for international settlements. those meetings, as some of you are aware, bring together regulators from all over the world and the following standard setting bodies : financial stability board, basel committee on bank supervision, committee on payments and market infrastructure, international organisation for securities commissions, international association of insurance supervisors ( iais ) and the international association of deposit insurers. though acknowledging noteworthy progress, the meetings focused on the need to complete, the post global financial crisis reform agenda. in short, there is still some unfinished business β not just to minimise the risks of certain recurrences but also to prepare for the next crisis. those of us who have toiled in the vineyard of financial sector regulation know only too well, that like hurricanes, crises will occur from time to time. but we must do our utmost to minimise those risks and we must build resilience. we must be prepared. johnathan dixon, secretary general of the international association for insurance supervisors indicated that the current priorities of the iais included : developing a common framework for groups, developing a framework for the migration of systemic risk, and fintech and cyber - resilience. page 1 of 3 eastern caribbean central bank regarding the latter, i commend your attention to the iais report on fintech developments in insurance that was published last year ( 2017 ). against this backdrop and from my vantage point, my key messages to you, this morning, are as follows : 1. we too have unfinished business in the eccu. following the debacle of baico and clico, the monetary council determined that we should proceed to establish a single regulator for insurance, pension funds and, ultimately, for credit unions to be called the eastern caribbean financial services commission. to that end, we would also need a uniform insurance law. colleagues, the stark reality is that almost 10 years after the global financial crisis and the ensuing baico / | has always been what the political traffic could bear after the demise of the ill - fated west indian federation. lloyd best at the 30th monetary studies conference in the bahamas, in a truly outstanding tribute to alister mcintyre remarked on the fact that the β independence movement within the single territories of the caricom community, has not had the local machinery for exploiting or converting opportunities for development and transformation at home. β he also stated that the integration movement had been hopelessly short on implementation. the movement lacked the required instruments ; a view he claimed was shared by the west indian commission in 1992. i now quote fully from lloyd best, in one of his most controversial assertions in a style, which is uniquely lloyd β s. β if, in 1992, the west indies commission felt bound to declare time for action, what was the reason? was it not that the trade unions and the labour congresses had gone off the stage fifty years before? wasn β t it that organized units had effectively disappeared, almost blocking all political trade ( as distinct from industrial relations bargaining ) above all, when it involved transactions across the borders of newly independent states with insanely jealous leaders β. lloyd went on - β within the islands and territories, this gap was difficult to fill without breeding consistent new conflict. in many places, industrial stabilization became a surrogate for slowing or even stopping the development of new community forces with political potential. however, at the regional level, certain accidents of federation did make it possible to envisage the emergence of an effective network of active as well as passive participants of caribbean integration, exchanging ideas as well as promoting concrete measures. let us call this the west indian party. i am sure that today it is very well represented here. β finally, in paying tribute to mcintyre and demas, lloyd delivered this very stirring oration. β over the years, mcintyre and demas have consistently and without fail, provided this party with inspiration and leadership, policy, programme and plan. they have worked selflessly. they have worked tirelessly, whether out of the multilateral institutions operating in the region, including the uwi and the wider system of higher education, the caricom secretariat and regional agencies, the cdb and the un system. mcintyre and demas have had no other business - not academic life, not administration, not the university, not the regional development bank. the pair has had one transcendental concern, which has not been economics, which they have practiced expertly, when | 0.5 |
various institutions and fora have produced a remarkable convergence of ideas concerning domestic economic management. the general approach to economic management within developing, emerging, and transition economies as well as within the industrial world can perhaps be summed up as β macro - economic stability and supply - side flexibility β. these objectives pertaining to both monetary and fiscal policy were agreed to at the 1994 annual meeting of the imf in madrid. the emphasis since then is on price stability as the immediate goal of macro - economic policy. this is not simply an end in itself but measures the balance between aggregate demand and underlying supply in the economy as a whole. in effect the aim of monetary policy in particular is to moderate, rather than aggravate, the economic cycle, and so to provide the basis for sustainable growth at around the underlying rate of potential growth. in relation to fiscal policy, the emphasis is to limit public sector borrowing, and the outstanding level of public sector debt, to levels that can be sustained into the medium and longer term without the need for increasing taxes or the imposition of rising real interest rates. you will have noticed that these principles, already formalized before the madrid declaration, are also the ones underlying european monetary union. this aim of macro - economic stability brings into sharper focus the structural, supply side, of the economy. here, too, there has been a strengthening international presumption in favor of open markets and free competition - both domestically and internationally - with a continuing strong presumption against predatory trade or the use of competitive devaluation. the justification is that undistorted competition contributes to potential global economic growth through increased efficiency and the more effective allocation of productive resources. faster growth in turn provides a more favorable context for addressing social concerns, including the issue of poverty. monetary union : the european dimension with the introduction of the euro, the economic weight of the single market has risen to a level matching that of the usa. and the single currency has gained an important international dimension : the euro segment of the global money market has risen to about 25 %. in the bond market, too, the euro plays a crucial role in fostering a deeper and more liquid market. the introduction of the euro paved the way for issuers to access a broader base of investors. investors too have gained access to a wider spectrum of investment opportunities. the euro β s share in net issuance currently amounts to 39 %. regarding its use as an official reserve currency, the euro has already attained the same weight | as its predecessors. within the euro area, monetary union has kept member countries from being exposed to harmful intraeuropean exchange rate tensions of the type that many countries used to suffer when external shocks occurred. it has become quite obvious that austria β s inclusion in the stability - oriented economic and monetary union has protected our country from negative shocks much more adequately than was possible under past regimes. moreover, the almost four years of emu bear impressive testimony to the fact that the stability - oriented interplay between monetary and fiscal policy provides a solid foundation which was well suited to weathering the economic policy challenges of this period. with the euro the eu successfully supplies an important international public good in the form of a stability anchor with deep and attractive financial markets. this is especially relevant with a view to enlargement of the eu. european integration will only be truly successful if it reaches out to the whole of europe. if the eu manages the enlargement process successfully, this will also be conducive to the eurosystemΒ΄s goal to guarantee stability for the whole euro area. such a mutual improvement is desirable in a very broad sense : political stability, financial market stability, macroeconomic and - in the particular interest of the eurosystem - price stability. already today, the euro is a key currency in central and eastern europe. in most of the ceecs β monetary policy strategies, exchange rates play a vital role and, wherever they are not a formal or informal intermediate target, they are at least a key monetary policy indicator. it is the euro upon which the ceecs β currencies are oriented, or to which they are formally linked. thus, emu and the euro are already an anchor for stability for ceecs. moreover, enlargement will thus extend the zone of stability in europe, strengthen europe β s international competitive position and will contribute substantially to prosperity, security and peace in the long term. integration of financial services markets in the eu beyond monetary union a huge amount of work has been undertaken in the eu to improve the functioning of the single market and the international financial system. by abolishing national boundaries and harmonizing different legislations, european integration has fostered the development of a single financial market in europe. but the current regulatory and supervisory framework still strongly relies on national responsibilities. the eu β s brouwer report found that there is a need to enhance arrangements for cross - border and cross - sectional co - operation, to improve the alignment of | 1 |
costs to consumers. moreover, unit labor costs ( labor costs per unit of output ), although currently still declining, are likely to stop falling as wages begin to show a gradual upward trend. with these understandings, the year - on - year rate of change in the cpi ( excluding fresh food ) is likely to be around 0 percent in the short run, but is expected gradually to rise in the longer run. however, the pace of increase is likely to be moderate, given that the sensitivity of prices to changes in the output gap is declining due to factors such as economic globalization and deregulation. the rate of increase is projected to be around 0 percent in fiscal 2007 and around 0. 5 percent in fiscal 2008. ii. developments in overseas economies i have so far outlined the most likely projection. however, any kind of projection is subject to upside and downside risks. the first risk concerns developments in overseas economies. the global economy has been expanding strongly, registering high growth of around 5 percent since 2004. it is the first time since the early 1970s that the global economy has registered such high growth over a period of this length : until 2003, the growth rate was around 3 to 4 percent. the high growth of the global economy is to a great extent attributable to the fact that emerging economies have taken off one after another and have been increasing their presence in the global economy. in the u. s. economy, the correction in the housing market is continuing, but business fixed investment and private consumption continue to be on a moderate increasing trend although the pace of increase is decelerating. if the housing correction does not spread to other areas of the economy and the economic slowdown is only moderate, the global economy is likely to continue to expand steadily with the slowing of u. s. economic growth being offset by high growth in emerging economies such as the brics. this was also the consensus view among delegates at the g - 7 and international monetary fund meetings in october. as you all know, global financial markets have been volatile since the summer due to the heightening of concern about the u. s. subprime mortgage problem. this recent volatility in global financial markets could be regarded as laxity in risk evaluation in the continued benign global economic and financial environment being reversed by market forces of selfcorrection. however, if the correction in the u. s. housing market intensifies or the effects of swings in financial markets become unexpectedly widespread, private consumption | s basic thinking has been that ( 1 ) given the extremely accommodative financial conditions, the level of interest rates is to be raised if japan β s economy is to follow a path of sustainable growth under price stability, and ( 2 ) the pace of increase in interest rates should be determined in accordance with improvements in the economic and price situation without any predetermined view. so far, weak inflationary pressures have given the bank latitude in conducting monetary policy. the actual interest rate adjustments have therefore been slow based on a thorough assessment of the future path of the economy and prices and its likelihood, as well as both upside and downside risks. the bank β s basic thinking in this regard will remain the same in the conduct of future monetary policy. that is, while confirming that the japanese economy remains likely to follow a path of sustainable growth under price stability and assessing relevant upside and downside risk factors, the bank will adjust the level of interest rates gradually in accordance with improvements in the economic and price situation. we believe that, from the long - term perspective, the conduct of monetary policy in such a manner will prevent the risk of larger swings in economic activity and prices from materializing and will help to realize sustainable growth under price stability. conclusion japan β s economy is expanding moderately. corporate activity has been increasing due partly to strong exports, as can be seen here in the kansai region, and the positive influence is clearly spreading throughout the wider economy as evident in the declining unemployment rate. in order for japan β s economy to continue sustainable growth in the face of various challenges including the declining population, it is crucial for all regions and industries to persist with their efforts to innovate. since, along with the kanto and tokai regions, the kansai region is pulling japan β s economy forward, i fully anticipate that your originality and inventiveness will continue to play a leading role. as for the bank, we will continue to support your efforts through our conduct of monetary policy. | 1 |
##a has had quite a bit to say about it. a misconception that we still see from time to time is that some people seem to think we have been concerned mainly about excessive rates of construction. construction has been very strong, and there may be over - supply in some areas. but our main concern has not been about the addition of 130, 000 to 150, 000 new dwellings each year. rather we have been worried by the market for the existing 7Β½ million dwellings and the way in which they were changing hands for higher and higher prices, with an associated build - up in debt levels. that is, we have been worried about the housing market as an asset market, and about the borrowing behaviour of participants in that market. the concern was not out of a desire to target house prices, but more over the potential risks to macroeconomic stability from a major boom - and possible bust - in the household sector β s main asset class. on the most recent readings, there has been a distinct softening in most of the major housing markets, with more than one data series showing an outright fall in prices in the march quarter in several cities. this was associated with a decline in the demand for credit, though on the most recent data that demand still seems very strong. house prices in brisbane and the gold coast declined a little on these measures, though not by as much as those further south. median house prices $'000 $'000 sydney gold coast melbourne brisbane source : australian property monitors in our judgement, this is a welcome development. while various fundamental reasons can be advanced for dwelling prices to have risen noticeably in the 1990s, it was hard to avoid the conclusion that strong speculative forces were at work over the past couple of years. that was not a healthy state of affairs and the sooner it passed, the better. it is just about impossible, of course, to predict with any precision how all of this will unfold from here. much will depend on what else is occurring in the economy. in individual cases, the extent of leverage will be very important. my own view is that the palpable sense of disappointment being felt by many leveraged investors in residential property is likely to grow further for the next year or so, possibly longer. for many owner - occupiers, on the other hand, a moderate decline in prices should not create major discomfort, in an environment of ongoing growth in employment and wages, as well as reduced taxes. in fact, it is hard | the mandate bis central bankers β speeches dashboard. of course, no contingency plan can ever be definitive. inevitably, the fomc will learn things that it did not expect to learn. and so there may be conditions that force the fomc to deviate from a chosen plan. however, having a public plan, and couching its decisions against the backdrop of that plan, will enhance federal reserve transparency, credibility, accountability and consistency. in may 2010, chairman bernanke stated, β transparency regarding monetary policy β¦ not only helps make central banks more accountable, it also increases the effectiveness of policy β. 4 i agree completely with this sentiment. and i see a public contingency plan, based on the explicit use of metrics like the mandate dashboard, as promoting exactly the kind of transparency that chairman bernanke then described. thanks for listening. i β m happy to take your questions. see chairman bernanke β s may 25, 2010, speech, β central bank independence, transparency, and accountability β. bis central bankers β speeches | 0 |
, which was only visible to the mpc in real time. 15. this transmission occurred via the ofgem mechanism for setting the β price cap β on uk household utility bills, as explained here β energy price cap explained, β ofgem. 16. between september 2021 ( when i first joined the mpc ) and its peak at the end of august, the january future price of uk wholesale natural gas rose by a factor of eleven. 17. in the mpc β s forecasts, our initial technical assumption was that gas prices would follow a random walk ( in other words, they would stay at their then high level permanently ) and then shifted to assuming they would follow the ( downward ) path implied by market futures prices. 18. for a critical assessment of this approach, see beaudry, p., t. j. carter and a. lahiri ( 2022 ). β looking through supply shocks versus controlling inflation expectations : understanding the central bank dilemma, β bank of canada working paper no. 22 - 41. 19. the bank of england employs a suite of wage and price models as part of the analytical machinery underpinning the mpc β s quarterly macroeconomic forecasts. these models capture variants of the phillips curve, with spot wage or price developments depending on measures of inflation and inflation expectations, as well as import prices and measures of economic slack. see, for example : speigner, b. ( 2014 ). β long - term unemployment and convexity in the phillips curve, β bank of england working paper no. 519 and esady, v., b. speigner and b. wanengkirtyo ( 2023 ). β revisiting the effects of long - term unemployment on inflation : the role of non - linearities, β bank of england working paper no. 1018. 20. see pill, h. ( 2023 ). β uk monetary policy outlook, β speech by huw pill at the money market association of new york university, 9 january. 21. response to the bank of england β s decision maker panel ( dmp ) survey shed light on the potential for such changes in corporate pricing behaviour. the slides accompanying this talk illustrate these data. 22. this point has been well - articulated in the euro area context in a recent ecb blog : arce, o., e. hahn and g. koester ( 2023 ). β how tit - for - | to have important negative effects on aggregate demand and, in turn, on the medium - term inflation outlook. while both monetary and fiscal policy may, in principle, counter the inflationary effects of energy costs, only the latter is able to directly influence these costs, also offsetting the loss in disposable income β at least in part and to the extent that it does not jeopardise debt sustainability β and limiting their impact on the economy. that said, the main response to what is essentially a tax cannot come from monetary policy, especially in the absence of a wage - price loop and with inflation expectations re - anchoring to the central bank β s objective. however, these issues emphasise the importance of swiftly designing a strategy, particularly at the european level, that, while in the short run helps to curb the unjustified spike in energy prices, on a more structural basis takes into consideration the issue of energy source diversification, energy storage and the identification of common resources for managing energy crises. it is a challenge that, today, goes hand in hand with the one posed by climate change and its resolution is essential also for avoiding uncontrolled and dangerous increases in the relative prices of fossil fuels. * * * the russian invasion of ukraine implies some very important changes in the economic outlook of the euro area and in the assessment of risks. further increases of energy prices will not only affect the short - term inflation outlook, but will also determine significant headwinds to domestic demand, while the announced sanctions and the sharp deterioration of russia β s economic conditions will weaken external demand and cause potential risks to financial stability. household and business confidence may be strongly shaken. this would result in a worsening of the prospects for gdp growth and, in turn, greater downside pressures to inflation in the medium - term, which could follow the large price increases observed so far and, perhaps, still to come over the rest of the year. the ecb staff has made some new baseline projections available β which were discussed by the governing council last week β built on the assumptions that disruptions to energy supplies and impacts on confidence are only temporary, while global supply chains are not significantly affected. overall, gdp growth is projected to 3. 7 per cent in 2022 and 2. 8 per cent in 2023, a downward revision of, respectively, 0. 5 and 0. 1 percentage points compared to december 2021. on the other hand, inflation is set to average 5. 1 per cent | 0 |
that third - country banks establishing subsidiaries will benefit from the level - playing field in the euro area. this may possibly be even a competitive advantage compared to other financial centers such as the uk. concerning ratings, i really am curious whether the ssm will provide more confidence in the european banking sector and thereby lead to better ratings for ssm banks. these are only some of the topics i am looking forward to discussing in the following panel. thank you. bis central bankers β speeches | structural policies on the global role of the euro. ii. the evolving international use of the euro the international importance of the euro can be measured and assessed by the role it plays in global financial markets and international trade, the extent of its use by authorities ( and official institutions ) as a reserve, intervention and anchor currency, and its possible use by the public or firms outside the euro area as a parallel currency. a bird β s eye view of the evolution of the international use of the euro over the past ten years is presented in chart 1 ( slide 3 ), which shows the share of the euro in international trade and in a number of financial markets for debt securities, derivatives, official foreign exchange reserves, foreign exchange, and bank loans and deposits. in all of these markets, except for the foreign exchange market, the use of the euro has increased over the past ten years, particularly in international debt security markets, global official foreign exchange reserves and as a trade invoicing and settlement currency. an examination of how the international use of the euro has evolved over time complements the abovementioned conclusions. this involves assessing the implications of valuation effects resulting from exchange rate movements on the measurement of its international use and identifying the geographic or regional character of the euro β s international use. chart 2 shows that the euro β s share in global official foreign reserves ( the currency composition of which is known ) reached around 25 % at the end of december 2007. this was considerably higher than the corresponding share of the sum of all legacy currencies at the end of 1998, which accounted for about 18 %. overall, the evolution has been gradual : the share of the euro increased during the first five years following the introduction of the euro and has since remained relatively stable. if we adjust for valuation effects stemming from exchange rate movements ( notably the significant depreciation of the us dollar against the euro ), we see that the overall increase in the euro β s share over the past ten years has been smaller, and its time profile smoother. 1 when interpreting these figures, it should be borne in mind that no official statistics are available on the currency composition of about one - third of global foreign exchange reserves, since a number of countries with large holdings of reserves β mostly in asia β do not disclose their composition by currency. it is interesting to note that the share of the euro in the total official foreign exchange reserves held by the emerging market economies that provide the relevant statistics rose from around 18 % in 1999 to | 0 |
heads. we have also organized a β seminar on liquidity management in rtgs environment β to apprise you of the challenges that you may face on the operationalisation of the rtgs system and the manner in which you have to control and co - ordinate your liquidity management measures to derive optimal benefits from the rtgs system. it cannot be disputed that that the technological innovations, in general, have been at the core of the reform process in the services sector globally and the financial sector, in particular. for the last so many decades, it has been driving the business re - engineering process in our banking industry. we, at the rbi, have been actively studying these developments and readying ourselves to provide for a technology framework and operating environment, conducive to the banks. let me share with you some of the initiatives that we have undertaken. a reliable communication backbone to facilitate improvement in financial services, the reserve bank of india has, through idrbt, set up the infinet - a β closed user group β network as the exclusive domain for the applications of the entities in the banking and financial sector. as you all know, the infinet is a blend of vsat technology and terrestrial leased line technology based wide area network. infinet provides for the robust and reliable communication backbone for the implementation of all the systemically important payment system applications. reserve bank β s concerns and focused attention on the twin issues of security over the infinet and message standards for intra / inter - bank applications have led to the development and implementation of the structured financial messaging system ( sfms ), a standard messaging protocol, which would be riding on the infinet communication backbone. sfms has adequate in - built security and with public key infrastructure ( pki ), provides for a security solution of international standards. sfms will also act as an alternative for accelerating the integration of the branches of the banks. secondly, a state - of - the - art, robust and secure platform - ibm s - 390 system with a complete standby installation - has been made operational in mumbai centre to ensure the availability of the requisite technical infrastructure, capable of robustness, operational resilience and redundancies to ensure business continuity. the disaster recovery site is being set up at a geographically distanced location from mumbai. you will all agree that these efforts are incomplete without the total involvement and participation of the end - users of the payment and settlement system. the proverbial β | ##phasing β connectivity β and β security β as the core and critical pre - requisites, to be duly addressed by the banking sector for participation in the rtgs system. the rtgs system will be a mode for large value inter - bank settlement, to be widely used, for enhancing your risk control measures, for faster and efficient settlement of your liabilities and for better customer services for the ultimate users in the value chain. the success of this system will be one more step towards realizing our objectives of a modern, secure, resilient and integrated payment and settlement system in the country. we are sure that all of us will be partners in this step forward. | 1 |
were regarded as just one out of a long list of political and economic objectives - rather than as a common goal and a precondition for the successful pursuit of other objectives - then there would be no legitimacy for entrusting this task ( and only this task ) to independent central banks. making value judgements when trading - off different objectives and balancing conflicting interests is the legitimate job of elected politicians with a popular mandate and not of appointed technocrats. an independent central bank thus pre - supposes a broad consensus on the β quasi - constitutional β nature of the common good of price stability. assigning the central bank a clear overriding objective also imposes limits on its discretionary exercise of power and makes it easier for the public to hold the central bank accountable for its mandate. this is important to keep in mind if we entertain the possibility that while, yes, β money is too important to be left to the politicians β one could similarly concur with poincare that β money is too important to be left to central bankers β ( as quoted by milton friedman in his 1962 essay on β should there be an independent monetary authority? β ). in other words, why should one trust central bankers more than politicians? friedman, at least at the time he wrote, trusted neither of the two and advocated a constitutional rule for constant money growth as his preferred solution of the long - standing debate on β rules versus authorities in monetary policy β ( which is the title of the classic paper by henry simons from 1936 ). his concerns reflect what i would regard as a healthy distrust of the unfettered β rule of men β as opposed to the β rule of law β which he much prefers - in line with the long and venerable tradition of british liberal thinking. friedman, at the time, was quite sceptical on central bank independence and asked whether it was β really tolerable in a democracy to have so much power concentrated in a body free from any kind of direct, effective political control? β this is why i believe it is important to stress that, if an independent central bank is assigned a clear and limited mandate, this represents a constraint on the discretionary exercise of power by the government but also by the central bank itself. in the absence of a complete and universally applicable rule for monetary policy an independent central bank which focuses firmly on the single overriding goal of price stability is the closest realistic and credible substitute for a literal β rule of law β. in particular such a central bank | opportunity to obtain financing by issuing sdos against mortgage loans as collateral. this sharpens competition and also gives the banks a new and stable source of financing to counter the growing deposit shortfall, to the benefit of financial stability. i don't want to deny that at danmarks nationalbank we believe that the current mortgage - credit legislation, of which one cornerstone is a tight balance principle, has functioned well. the purpose of a balance principle is to limit the issuers risk to credit risk. both the present and the proposed new balance principle fundamentally entail the rule that no interest - rate risks, option risks or exchange - rate risks may be taken. today, risks are mainly covered by selling bonds that exactly match the mortgage loans, and this will naturally still be possible under the new balance principle, if wished for. however, the new balance principle also makes it possible to cover the risks using modern financial instruments to a greater extent. the new legislation on sdos also comprises a tightening of mortgage - credit legislation, required by eu - legislation, namely that throughout the duration of the loan no mortgage loan may have a value that exceeds 80 per cent of the value of the home that is mortgaged. today, this only applies at the point in time when the loan is raised, as you will know. if house prices fall, the credit institutions must to the extent necessary, re - establish the collateral behind the issued sdos, e. g. by raising loans and buying government securities to use as collateral. this means that the new sdos will always be backed with sound collateral, and this will limit the refinancing risk. overall, danmarks nationalbank assesses that the regulation on sdos provides a basis for a mortgage financing system that is just as safe as today's mortgage - credit system. now it remains to be seen how the market will receive the new bonds. in principle, the introduction of a new mortgage financing instrument that can also be used by banks must be expected to increase competition. this is by no means detrimental, but it does require consumers to be active and capable of understanding the opportunities made available to them. the extensive work of devising methods to ensure transparency still remains to be undertaken. the cross - border integration of the financial markets is one of the more striking phenomena of the last 30 years. this integration makes high demands of the underlying infrastructure. cross - border securities trading still entails considerable costs. on this basis, the european central bank, ecb | 0 |
falling. and we expect inflation to increase gradually to the 2 per cent target. but with inflation persistently below target, we are more concerned about downside risks to inflation than upside ones. it is forward looking. monetary policy actions take time β about two years β to work their way through the economy and to have their full effect on inflation. for this reason, monetary policy must always be forward looking, with the bank setting the policy rate based on its judgment as to how inflation is likely to evolve. making that assessment requires a careful examination of the economic evidence pertaining to the balance of supply and demand in the economy and other factors affecting inflation. to help us see through temporary fluctuations in inflation, the bank uses core inflation, which strips out the volatile components of the cpi, as an operational guide for setting policy in pursuit of the target for total cpi inflation. 5 in our baseline forecast, demand is expected to strengthen, gradually absorbing excess capacity in the economy. as this slack is taken up, core and total inflation are expected to increase to target over the next two years or so. it is flexible. in assessing whether the stance of monetary policy is appropriate to achieve the inflation target, the bank must make a judgment regarding the horizon for returning inflation to target. flexible inflation targeting provides the scope to consider financial stability risks and to manage the volatility that monetary policy actions may induce in the economy and financial markets. in the current context, an important element in our monetary policy decisions β which has been highlighted in our recent policy announcements β is the need to weigh the risks of exacerbating elevated household imbalances against the downside risks to inflation when inflation is already below target. the bank β s record of inflation control over more than 20 years is impressive. since1991, inflation in canada has averaged 2 per cent, as measured by total cpi, and its standard deviation has fallen by roughly two - thirds compared with the 1970s and 1980s ( chart 2 ). moreover, the persistence of inflation, as measured by the serial correlation in inflation, fell from 0. 8 between 1975 and 1990 to only 0. 1 since 1995. nowadays, fluctuations around the target are typically short - lived, so the best forecast for inflation is 2 per cent β the target. what could be simpler? low inflation is also a means to an end β better economic performance. low, stable and predictable inflation has been associated with more stable economic growth in canada and lower and less - variable unemployment ( table 1 | went up everywhere, including here in canada. it took monetary authorities around the world a while to realize that rising inflation was not just the product of a series of temporary special factors. by the time most central banks reacted, inflation had become entrenched and proved very difficult to bring down. the persistent inflation of the 1970s and 1980s undermined economic performance worldwide. canada did not escape unscathed. because inflation creates uncertainty, it makes it much more difficult for households and businesses to judge future prices and to make sound economic decisions. high inflation encourages speculation rather than productive investments. it raises interest rates. and, in the end, it exacerbates both the booms and the busts. restrictive monetary policies in the united states and in canada during the early 1980s finally brought inflation down from its double - digit levels. but fears of inflation lingered, encouraging continued debtfinanced speculation in real estate and other assets. by the late 1980s, inflation pressures were on the rise again. in canada, those pressures, and the fears of ongoing inflation that had been undermining our economic performance, finally eased after the successful implementation of the inflation - reduction targets adopted in february 1991. inflation promptly declined to around 2 per cent, and inflationrelated hedging and speculation gradually disappeared. i believe that the low - inflation environment that was firmly established in the first part of the 1990s contributed significantly to canada's improved economic performance later in the decade. since the early 1990s, there has been greater certainty about future prices. investment and savings horizons have, consequently, lengthened. interest rates have come down. and, in contrast to our experience during the mexican crisis, canada rode out the impact of the asian financial turbulence of 1997 β 98 with only a limited slowdown in output and employment growth. the way ahead partly because of the difficulties we experienced in the 1990s, many canadians remain sceptical about our economic future. they look at the extraordinary performance of the u. s. economy through much of the past decade, and canada's record looks lacklustre by comparison. but i believe that there are considerable grounds for optimism. i say that primarily because of the improvements in our economic fundamentals that i have described. indeed, good economic performance starts with a foundation of prudent economic policies. in this regard, low and stable inflation, together with a declining public sector debt, now provides a stronger base for the canadian economy than we have had in three decades. in addition, there | 0.5 |
preserve their prosperity with patience, pragmatism, and persistence. dear angela, you were an exceptional leader in exceptional times. congratulations. 1 adenauer, k. ( 1946 ), die demokratie ist fur uns eine weltanschauung - aus einer grundsatzrede zum programm der cdu, 6 march 2 merkel, a. ( 2021 ), speech to mark the day of german unity, 3 october. 3 naim, m. ( 2022 ), the revenge of power β how autocrats are reinventing politics for the 21st century, st martin's press, new york. 4 roll, e. ( 2009 ), die kanzlerin β angela merkels weg zur macht, ullstein, berlin, p. 108. 5 weber, e. ( 2022 ), merkel β macht der freiheit, netflix. 6 merkel, a. ( 2005 ), government policy statement, 30 november. 5 / 5 bis - central bankers'speeches | strengths β and something i could tell you also enjoyed. during g20 meetings, for example, you would get up and talk to other leaders around the table. you would listen, discuss and negotiate. you would walk over to the colleagues drafting the communique for the meeting, taking out your pen, crossing out sections and making sure that key sentences were included. i have never seen any other leader do this β and at many key moments it proved critical. thanks to your inclusive and consensus - driven style, you were instrumental in forging a compromise when greece's future in the euro area was on the line. we held a crisis 3 / 5 bis - central bankers'speeches meeting during one weekend in july 2015. the meeting went on well into the early hours. many leaders had already left the room, but you stayed until a solution was found, together with me and a few others. i was there as managing director of the international monetary fund. we managed to find a way to keep greece inside the euro area, and you played a crucial role in getting us there. the consequences of greece exiting would have been much greater than any risks posed by another rescue package. it was the right decision, as we now know, even if some at the time were not convinced or had their doubts. your keen interest in understanding complex issues, often completely immersing yourself in the matter in question, helped you during those intense meetings. i remember one occasion when you pored over the imf's model assumptions about greece's debt sustainability. thankfully our calculations broadly survived your scrutiny, but you made sure to question and fully understand them. it was rare to see this kind of attention to detail from someone in your position. it impressed me. but it was no coincidence that you were always the best prepared person in the room. you were the best in class at school, and that work ethic never left you. yet knowing your brief inside out had another benefit for you : it meant that you didn't have to rely on others. you could take matters into your own hands β and deliver the outcomes that no one else could. the moral force your pragmatism, however, never drifted into opportunism. the clarity of your moral compass made sure of that. and this is the third attribute, angela, that stands out : your moral force. you served four terms as chancellor, a total of 16 years. everything you did during those 5, 860 days | 1 |
also recognised that good corporate governance reinforces sound regulation and supervision. it contributes towards maintaining market confidence, and strengthens transparency and accountability. for corporate governance to work, good corporate practices need to be instilled and embedded in all aspects of the operations and at all levels within the organisation. to succeed in the new environment, institutions will require qualified board members and management teams that exhibit a high degree of professionalism. in addition, transparency and disclosure is essential, particularly in a rapidly changing environment and greater attention is being accorded to make banking systems more transparent. while the comprehensive and timely availability of financial information will enhance market discipline in emerging market economies, the disclosure of information must be complemented with the ability of the market players to analyse, digest and appropriately interpret the information to achieve the desired results. closely related to this is the need to strengthen the framework for consumer protection to provide an avenue for redress in cases where consumers are placed in a disadvantaged or unfair position resulting from financial transactions taken due to lack of transparency and understanding. the move towards the adoption of the supervised market approach requires continuous efforts to enhance product disclosures and to elevate the level of financial literacy of consumers. dealing with consumer awareness and education require considerable time and commitment. while recognising the potential benefits of liberalisation to the domestic financial system, the need to ensure the proper sequencing, and to manage the liberalisation process must be accorded importance. financial systems in emerging economies have and are expected to continue to play a significant role in the economy. as such, the process of international integration of the domestic financial system has to be paced with developments in the domestic system so as to ensure that the system is adequately prepared to cope with the challenges arising from the liberalisation process without destabilising effects on the domestic economy. the liberalisation process must be managed with respect to identifying the potential sources of risks to the system. experience has shown that the timing for opening up of the financial system will need to be sequenced and guided by the objectives to develop a more diversified economy where the respective sub - sectors and segments of society have access to adequate financial services ; and to ensure the enhanced and meaningful contribution by domestic financial institutions to the economic growth and transformation process through capacity building. in achieving these objectives, a key trade off is between the need to enhance institutional capacity and the need to phase in competitive forces through the appropriate sequencing of market liberalisation. it is therefore, important that the liberalisation process is sequenced | patrick honohan : financial regulation in ireland β past, present and future speech by mr patrick honohan, governor of the central bank & financial services authority of ireland, at the financial services ireland annual dinner, dublin, 1 december 2009. * * * this evening i want to say a few words about the past, the present and the future of financial regulation in ireland. as far as the past is concerned, it is conventional to assume that, in the recent words of judge richard posner, applied to the us regulatory agencies in the run - up to their own crisis, β ignorance and inattention β were at the heart of regulatory failure. whatever else about that assessment, it hardly represents an explanation. nor is it credible that a few simple rules like β no 100 % mortgages β would have prevented the disaster that has occurred. in seeking a deeper understanding of why things went wrong, i have been struck by the disruptive effect in ireland of the attempt to adopt the new international fashion in supervisory practice that emerged in the late 1990s. this new fashion, which later underpinned aspects of the basel 2 standard, involved a shift from scrutinising the accounts, the loan portfolio and other aspects of the books of financial firms, to focusing on procedures and models. the motivation for this shift was the rapidly growing complexity of banking and other financial business, including the use of derivatives and complex hedges. precisely because of the rapidly growing complexity of banks β business models, a supervisor who only looked at individual parts of a bank β s business ( i. e., their exposures ) on a piecemeal basis, without reference to the correlation of risks across those parts, would have a false picture of the institution β s overall risk. in addition, the wider range of instruments being traded and held in bank portfolios meant that, not only could an institution β s exposure to market risks change dramatically from day - to - day ( or even hour - tohour ), but there were growing operational risks related to the difficulties of controlling a complex portfolio. this approach envisaged the supervisor standing back from individual transactions and loans. instead, the supervisor looked in a holistic way at the banks β systems, at their corporate governance and their risk procedures and models and control structures and confirmed they were in place and in operation. the champions of the this approach rightly pointed to the importance of ensuring that banks had good systems and incentives for remaining safe and sound. there is much | 0 |
mario draghi : ecb press conference β introductory statement introductory statement by mr mario draghi, president of the european central bank, and mr vitor constancio, vice - president of the european central bank, frankfurt am main, 10 march 2016. * * * ladies and gentlemen, the vice - president and i are very pleased to welcome you to our press conference. we will now report on the outcome of today β s meeting of the governing council, which was also attended by the commission vice - president, mr dombrovskis. based on our regular economic and monetary analyses, we have conducted a thorough review of the monetary policy stance, in which we also took into account the new macroeconomic projections by our staff extending into the year 2018. as a result, the governing council has decided on a set of measures in the pursuit of its price stability objective. this comprehensive package will exploit the synergies between the different instruments and has been calibrated to further ease financing conditions, stimulate new credit provision and thereby reinforce the momentum of the euro area β s economic recovery and accelerate the return of inflation to levels below, but close to, 2 %. first, as regards the key ecb interest rates, we decided to lower the interest rate on the main refinancing operations of the eurosystem by 5 basis points to 0. 00 % and the rate on the marginal lending facility by 5 basis points to 0. 25 %. the rate on the deposit facility was lowered by 10 basis points to β 0. 40 %. second, we decided to expand the monthly purchases under our asset purchase programme from β¬60 billion at present to β¬80 billion. they are intended to run until the end of march 2017, or beyond, if necessary, and in any case until the governing council sees a sustained adjustment in the path of inflation consistent with its aim of achieving inflation rates below, but close to, 2 % over the medium term. to ensure the continued smooth implementation of our asset purchases, we also decided to increase the issuer and issue share limits for the purchases of securities issued by eligible international organisations and multilateral development banks from 33 % to 50 %. third, we decided to include investment - grade euro - denominated bonds issued by non - bank corporations established in the euro area in the list of assets that are eligible for regular purchases under a new corporate sector purchase programme. this will further strengthen the pass - through of our asset purchases to the financing conditions of the real | and adjectives. this old mantra remains true in the facebook age : facebook posts are more likely to be shared the more frequent nouns and verbs and the less frequent adverbs and adjectives. the ratio of nouns and verbs to adverbs and adjectives in an elvis song is 3. 3. in my speeches it is 2. 7. smart ( 2016 ). in their classic elements of style ( 1979 ), william strunk and e b white write : β write with nouns and verbs, not with adjectives and adverbs. the adjective hasn β t been built that can pull a weak or inaccurate noun out of a tight place. β all speeches are available online at www. bankofengland. co. uk / speeches the behavioural dimension to public language involves speaking in ways which best connect the receiver with the sender. behavioural science has given us plenty of insights into how to do that. messages wrapped in real - world narratives are more likely to stick than those wrapped in numbers. messages which are personalised are more likely to stick than those that are anonymous. and messages that are local are more likely to stick than those that are national. these maxims have been borne out in real - world experiments. personalising and localising messages has been found to increase their reach, and their chances of being acted on, in a wide variety of public policy settings : in everything from encouraging tax payments to discouraging carbon emissions ; from encouraging school attendance to discouraging crime ; from encouraging charitable giving to discouraging sugar consumption. linguistic β nudges β appear to work. yet localised and personalised messages often flow less easily from the mouths of central banks. for understandable reasons, they have tended to have a national rather than local focus, to weigh the objective over the emotional, to be fact rather than anecdote - based. that is all well and good. but it does carry a cost. it is hard to engage with a building. the view from 30, 000 feet can feel a little distant. excel spreadsheets do not emote. this can inhibit building trust and improving understanding. localising the message can certainly help. here, the work of the regional feds in the us and the bank β s regional agents in the uk is crucial. more generally, analysis of the regional and distributional split is important for understanding the economy and localising messages about how it is performing. even though monetary policy acts nationally, | 0 |
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.