text1
stringlengths 1
3.21k
| text2
stringlengths 1
3.21k
| label
float32 0
1
|
|---|---|---|
. sustained rates of broad money growth reflect ongoing bank credit creation for the private sector and low opportunity costs of holding m3. the narrow monetary aggregate m1 continues to be the main contributor to broad money growth on the components side. the annual growth rate of loans to non - financial corporations remained unchanged at 3. 8 % in june 2019. notwithstanding some moderation from the peak recorded in september 2018, the annual growth rate of loans to non - financial corporations continues to be robust. the annual growth rate of loans to households also remained unchanged at 3. 3 % in june, continuing its gradual improvement. overall, loan growth is still benefiting from historically low bank lending rates. the euro area bank lending survey for the second quarter of 2019 indicates that loan growth continued to be supported by increasing demand across all loan categories. at the same time, credit standards for loans to enterprises tightened in the second quarter amid concerns about the economic outlook, while they remained broadly unchanged for loans for house purchase. our monetary policy measures, including the forthcoming new series of targeted longer - term refinancing operations ( tltro iii ), will help to safeguard favourable bank lending conditions and will continue to support access to financing, in particular for small and medium - sized enterprises. to sum up, a cross - check of the outcome of the economic analysis with the signals coming from the monetary analysis confirmed that an ample degree of monetary accommodation is still necessary for the continued sustained convergence of inflation to levels that are below, but close to, 2 % over the medium term. in order to reap the full benefits from our monetary policy measures, other policy areas must contribute more decisively to raising the longer - term growth potential and reducing vulnerabilities. the implementation of structural reforms in euro area countries needs to be substantially stepped up to boost euro area productivity and growth potential, reduce structural unemployment and increase resilience. the 2019 country - specific recommendations should serve as the relevant signpost. regarding fiscal policies, the mildly expansionary euro area fiscal stance is providing support to economic activity. at the same time, countries where government debt is high need to continue rebuilding fiscal buffers. all countries should reinforce their efforts to achieve a more growth - friendly composition of public finances. likewise, the transparent and consistent implementation of the european union β s fiscal and economic governance framework over time and across countries remains essential to bolster the resilience of the euro area economy. improving the functioning of economic and monetary union remains a priority. the 2 / | , we are wary of it, perhaps feeling, as karl marx did that β machinery does not just act as a superior competitor to the worker, always on the point of making him superfluous. β such fears can lead to resistance or, in extreme cases, obstruction, to your efforts. merely offering statistics that show that adopting new technology can lead to increased job creation and higher productivity will not be sufficient to prevent this. hr managers and their teams need to counsel staff about the impending changes, offer a vision of what the transformed organisation will look like, and then shepherd them through the process. this means that you, too, must embrace the idea and all that it encompasses. indeed, for you to be truly effective, you must also demonstrate your own ability to adapt your systems. one aspect of this is reskilling. while greater utilisation of technology might not lead to a significant reduction in an organisation β s staff complement, it will inevitably lead to a shift in where and how staff members are deployed. an employee who previously performed a job that can now be made more efficient through automation, could find himself transferred within the organisations to perform a new function. for many employees, especially those who have spent their entire tenure in one department, and potentially in the same post, this can be a tremendous shock. as hr professionals, you will be tasked with making that transition smoother, including by identifying the training they will need. even when employees maintain their current position, they will need to broaden the scope of their abilities. consider our colleagues in our bank supervision departments : how many of them even 10 years ago would have contemplated the regulatory challenges posed by fintech or by new entrants from outside the traditional financial sector into the market? how many would have known how to even approach regulating it? the education and training employees get before entering the workforce is now just the beginning. they will need to commit to lifelong learning, to continually upgrading their expertise. indeed, deloitte estimates that the time it takes for the skills you currently have to become obsolete is a mere two and a half to five years. 2 / 5 bis central bankers'speeches moving beyond β that β s the way we β ve always done it β for us as central banks to effectively fulfil our mandate, we must be able to identify the gaps in employees β competencies and support them as they work to fill them. be mindful, however, that as we look to embrace this transformation, we | 0 |
ardian fullani : overview of albania β s latest economic and financial developments speech by mr ardian fullani, governor of the bank of albania, on the monetary policy decision - making of the bank of albania β s supervisory council, tirana, 28 august 2012. * * * today, on 28 august 2012, the supervisory council of the bank of albania reviewed and approved the monthly monetary policy report. based on the analysis of albania β s latest economic and monetary developments and following discussions on their performance outlook, the supervisory council of the bank of albania decided to keep the key interest rate unchanged at 4. 00 %. the supervisory council deems that the monetary conditions are appropriate to meet the inflation target in the medium run and provide the needed monetary incentive to support the domestic demand. let me now proceed with an overview of the economic and monetary developments and key topics discussed at today β s meeting. * * * annual inflation marked 2. 7 % in july, up 0. 5 percentage points from a month earlier. the inflation rate went up mainly due to higher unprocessed food prices during this month. similarly, non - food consumer prices added their contribution to annual inflation as a result of higher oil prices. regardless of minor fluctuations, the contribution of other goods of the basket to inflation remained steady. despite rising, consumer price inflation remains in the lower interval of bank of albania β s inflation target band. from the macroeconomic viewpoint, it rose due to impact of transient factors, while the poor performance of aggregate demand continues to generate low pressures on consumer prices. furthermore, increase in production costs remains weak, imported inflation remains low, and inflation expectations of economic agents remain anchored. second - quarter data on the economy point to slow growth of economic activity during this period. while some of the indirect indicators signal improvement from the first quarter, consumers β propensity to save continues. this behaviour is reflected in the postponement of substantial expenditures, increase in deposits and investments in securities, and decline in consumers β demand for bank loans. private investments remain weak, reflecting the poor performance of the final demand in the economy. capacity utilisation rate remains low, whereas exports of machineries and equipment fell 9. 5 % in the second quarter, in annual terms, after expanding about 1. 5 % in the first quarter of the year. the banking system continued to grant credits for private investments at rates comparable to those of the first quarter of the current year. the fiscal policy pursued its consolidation during the first | market functioning has improved since the strains experienced in march, we have gradually reduced the pace of these purchases. to sustain smooth market functioning and thereby foster the effective transmission of monetary policy to broader financial conditions, we will increase our holdings of treasury securities and agency mortgage - backed securities over coming months at least at the current pace. we will closely monitor developments and are prepared to adjust our plans as appropriate to support our goals. to provide stability to the financial system and support the flow of credit to households, businesses, and state and local governments, the federal reserve, with the approval of the secretary of the treasury, established 11 credit and liquidity facilities under section 13 ( 3 ) of the federal reserve act. the june monetary policy report provides details on these facilities, which fall into two categories : stabilizing short - term funding markets and providing more - direct support for credit across the economy. to help stabilize short - term funding markets, the federal reserve set up the commercial paper funding facility and the money market liquidity facility to stem rapid outflows from prime money market funds. the fed also established the primary dealer credit facility, which provides loans against good collateral to primary dealers that are critical intermediaries in short - term funding markets. to more directly support the flow of credit to households, businesses, and state and local governments, the federal reserve established a number of facilities. to support the small business sector, we established the paycheck protection program liquidity facility to bolster the effectiveness of the coronavirus aid, relief, and economic security act β s ( cares act ) paycheck protection program. our main street lending program, which we are in the process of launching, supports lending to both small and midsized businesses. the term asset - backed securities loan facility supports lending to both businesses and consumers. to support the employment and spending of investment - grade businesses, we established two corporate credit facilities. and to help u. s. state and local governments manage cash flow pressures and serve their communities, we set up the municipal liquidity facility. the tools that the federal reserve is using under its 13 ( 3 ) authority are appropriately reserved for times of emergency. when this crisis is behind us, we will put them away. the june monetary policy report reviews the implications of these tools for the federal reserve β s 2 / 3 bis central bankers'speeches balance sheet. many of these facilities have been supported by funding from the cares act. we will be disclosing, on a monthly | 0 |
yandraduth googoolye : the importance of financial services to the economy and the need for good governance speech by mr yandraduth googoolye, governor of the bank of mauritius, at the celebration of the 125th anniversary of the mauritius civil service mutual aid association ltd, port louis, 15 november 2018. * * * the honourable prime minister and minister of finance and economic development, mr pravind kumar jugnauth the honourable minister of civil service and administrative reforms, mr cyril eddy boissezon the first deputy governor of the bank of mauritius and chairman of the financial services commission, dr renganaden padayachy the members of the board of directors of the mauritius civil service mutual aid association ltd ladies and gentlemen good afternoon 125 years in the life of a financial institution is indeed an occasion to celebrate especially when the central bank is only 50 years old. as your regulator, we are proud to collaborate and walk alongside to ensure your sustainability. this achievement takes more sense of pride when we consider how the mauritius civil service mutual aid association ltd came into being. from november 1893 to date, the association has undergone changes. launched by a group of civil servants at a time when there was only one bank, the association has carved its way to coexist commendably in the financial sector after obtaining a deposit taking license on 17 june 2005 from the bank of mauritius to mobilise fixed deposits from the general public. over the years, the association has gradually grown to become the largest non - bank deposit taking institution in mauritius, accounting for over half of the sector β s total assets. the association has broadened its customer base, having extended its facilities outside of the civil service with a total assets base of around rs43 billion, about a tenth of our gdp. the deposits mobilized by the association have increased by five - fold, from rs5 billion in 2005 to rs27 billion as at end of september 2018, which resulted into solid increase in advances from the association. the importance of financial services in an economy is undeniable on account of the benefits they provide to the economy at large. financial services facilitate domestic and international transactions, mobilize and channel domestic savings and broaden the availability of credit for firms, including smes, and households. the association has broadened its range of products on offer to cater for the specific needs of its members and the public at large. its attractive interest rates promote healthy competition, whilst contributing to financial access and inclusion | yandraduth googoolye : security and risk regarding the use of cards in mauritius keynote address by mr yandraduth googoolye, first deputy governor of the bank of mauritius, at the launch event of visa card security week 2011, port - louis, 11 october 2011. * * * ladies and gentlemen it is an honour for me to be invited to this audience this morning to share my views on the security and risk environment regarding the use of cards in mauritius. electronic money is projected to take over from physical cash for a large part of small - value payments, and continues to evoke considerable interest both among the public and the various authorities concerned, including central banks. the electronic money developments raise policy issues for central banks as regards the possible implications for their revenues, implementation of monetary policy and payment system oversight role. indeed, it is by virtue of this very last role β maintaining the clearing, payment and settlement system that we take an interest in cards, in the broader context of maintaining financial stability. mauritians increasingly use cards to make payments. in recent years plastic cards ( credit, debit and other cards ) have gained wide acceptance and their use has become popular in the country. the total number of cards issued by banks and outstanding increased from 700, 000 as at end - june 2001 to 1. 3 million as at end - june 2011. likewise, the actual usage has registered increases both in terms of volume and value i. e. from 1. 6 million transactions amounting to rs 2. 4 billion at end - june 2001 to 4. 1 million transactions aggregating rs 7. 7 billion at end - june 2011. these figures are expected to increase even further with the initiative of some banks to provide prepaid cards to an even more sophisticated and demanding clientele. in view of such a widespread use of cards, issues relating to the regulation of this payment mode as well as those relating to customer protection assume considerable importance. the functioning of the card payment system should not present any risks to the payment and settlement systems in particular and to the country β s financial system in general. the use of cards is so entrenched in the habits of the population that a serious disruption that affects the entire card system, or large parts of the system, would have serious consequences for the ability of people to make payments. if card payments do not work, then the entire payment system will be disrupted. the bank β s responsibility for a safe and efficient payment system | 0.5 |
would like to use this opportunity to point out that there is no rule that stipulates that, for example, german banknotes are to be exchanged into norwegian banknotes before being exchanged into euro banknotes. the uk, sweden and denmark have so far chosen to remain outside emu. sweden and the uk have inflation targets and floating exchange rates, while denmark β s monetary policy is oriented towards a fixed exchange rate against the euro. these three countries are important to norway, both because of their geographical proximity and because they account for close to 40 per cent of norway β s foreign trade. if these countries join emu some time in the future, it is possible that the use of the euro by norwegian households and businesses will increase somewhat. however, extensive use of the euro as a means of settling domestic payment transactions is unlikely. in those cases where we have seen partial or total currency substitution, such as in some countries in eastern europe and latin america, it has usually been a result of strongly deteriorating confidence in the local currency. confidence can deteriorate when inflation is high and variable or when government finances are on the verge of collapse. by influencing the volume of nok in circulation, norges bank will always be able to ensure that the internal value of the norwegian krone is maintained in line with the guidelines for monetary policy. if the introduction of the euro increases efficiency and economic growth in the participating countries, this will have positive spillover effects on the norwegian economy. stable economic developments in the euro area are also very important for the norwegian economy. thank you for your attention. | net debt position and many are now facing funding problems related to an aging population. if the global economy is to recover from the crisis, government debt must be stabilised fairly soon in order to prevent a string of crises in state finances. norway is in a unique position due to government petroleum revenues. monetary and fiscal policy have stimulated domestic demand and output. growth in mainland gdp was higher in the second quarter than projected in the june monetary policy report. household consumption seems to be picking up again. petroleum industry activity has also had a stabilising effect on the norwegian economy. there are plans to develop a number of oil fields on the norwegian continental shelf in the years ahead, but it is likely that these investments will require an oil price of more than usd 60 β 70 per barrel to be profitable. the events of september 2009 spread rapidly to the firms in norges bank β s regional network. in august 2009, manufacturing enterprises reported that growth would hold up. in november, the turnaround was described as a β heart attack β. norges bank established its regional network in 2002. regular interviews provide information about enterprises β assessment of the economic outlook before other official statistics are available. this information is therefore an important part of the decision - making basis in the formulation of monetary policy. statistics norway β s quarterly national accounts are available about 50 days after the end of the quarter. the regional network provides figures for the same quarter far earlier. in 2008, the regional network was able to provide clear evidence that mainland output fell markedly in the fourth quarter as early as december of the same year. national accounts figures for the fourth quarter were published more than two months later, on 19 february 2009. employment in norway has held up well through the downturn. it appears that unemployment will be considerably lower than expected. seasonally adjusted registered unemployment was 2. 9 per cent in august. over the past year, the level of unemployment has risen most in the counties of aust - agder, sΓΈr - trΓΈndelag, ΓΈstfold and vestfold and least in sogn, akershus and finnmark. unemployment is highest in oslo, at 3. 9 per cent in august. unemployment may be low because firms have chosen to retain their employees. perhaps firms are opting to keep a certain labour reserve because of recruitment problems and high costs experienced during the previous cyclical turnaround. higher government expenditure has contributed to holding up public sector employment. unemployment may move up if global developments deteriorate | 0.5 |
ben s bernanke : fostering financial literacy speech by mr ben s bernanke, chairman of the board of governors of the federal reserve system, at the national bankers association foundation financial literacy summit reception, washington dc, 13 april 2010. the original speech, which contains various links to the documents mentioned, can be found on the us federal reserve system β s website. * * * it is a distinct pleasure to visit with the national bankers association foundation this evening. i am very pleased to be among your honorees. the foundation does important work, including helping consumers make wise financial choices, connecting the β unbanked β with mainstream providers of financial services, and providing assistance and support to minority bankers and entrepreneurs. april is financial literacy month, and so it is fitting that you are hosting this event. i note that you also plan to hold a financial literacy summit later this year on the howard university campus. the summit will bring scholars, bankers, community activists, and others together to brainstorm strategies for educating consumers of financial products. many american families are struggling in the aftermath of the financial crisis, which reinforces the need for reliable and useful information to facilitate good financial choices. helping people better understand how to borrow and save wisely and how to build personal wealth is one of the best things we can do to improve the well - being of families and communities. the foundation is making great contributions to this effort, for example, through your online library of personal finance educational materials. 1 the federal reserve very much shares your abiding interest in helping consumers successfully navigate the financial marketplace. our approach is two - pronged. first, we work actively to foster financial and economic education. second, recognizing that basic financial knowledge is not sufficient to keep people safe from fraud and deceptive practices, we are committed to developing and enforcing strong rules to protect consumers. on the financial education front, examples of the federal reserve β s many resources available to the public are an online credit card calculator that helps consumers estimate how long it will take to pay off a credit card bill under different payment scenarios, 2 concise brochures β in both english and spanish β offering consumer tips on such topics as avoiding mortgage foreclosure scams and protecting their checking accounts, 3 and interactive websites that provide consumers with what they need to know about new protections for credit card accounts and overdraft protection programs that recently took effect. 4 see nba foundation, inc., β financial literacy β, webpage | these improved economic conditions leading to higher employment rates2 β and the full effects are still materialising. nevertheless, over the past five years structural reform implementation in the euro area has, overall, been sluggish at best. very few reforms identified in the european semester have been substantially implemented. reversing this trend and putting our economy on a higher convergence trajectory is thus a priority. in parallel, national policymakers should make it a priority to build up fiscal buffers to ensure policy space for future downturns. this is particularly important in countries where government debt is high and for which adherence to the stability and growth pact is critical for safeguarding sound fiscal positions. national authorities should therefore be the first ones to step up their efforts. nevertheless, european policies can be a significant catalyst and provide a strong engine for both growth and employment, in various ways. first, there is scope for a better use of the eu β s budget. the discussions on the 2021 - 27 multiannual financial framework offer an opportunity to enhance its role in addressing europe β s structural challenges, and i welcome the commitment made by leaders at the euro summit to pursue this avenue. second, the single market as an engine for convergence should be used to its fullest potential. this means expanding its reach into new areas, especially those relevant for innovation, such as the digital economy. this is an essential driver of economic progress, benefiting consumers, businesses and the economy as a whole, and will also provide a healthy ecosystem for financial services. it also means increasing the depth of the single market. in the area of financial services, the completion of the banking union and the capital markets union agenda offer an opportunity to do this, and would also provide the cross - border private risk - sharing mechanisms required to underpin the resilience of our economy. 2 / 4 bis central bankers'speeches this is because deeper and more efficient bond and equity markets in europe would allow economies of scale to be achieved and capital to be allocated to its most productive uses at the european level, in line with the single market objectives. in countries such as latvia, this is particularly relevant because capital markets are less developed and intermediation remains largely bank - based, which results in fewer options for financing business start - ups and expansion. 3 creating a genuine banking union where banks operate across borders and diversify their sources of income would also enhance cross - border private risk sharing, with the result that banks would be able to continue lending to the real | 0 |
you can get more at the same price. what is the problem ( chart 2 )? decline in aggregate demand due to deferred spending at the outset, we need to acknowledge the difference between prices in general and those of individual goods and services. as for the former, there are indicators such as the cpi and the domestic corporate goods price index. price stability that the bank aims at is defined by the cpi. the cpi shows changes in the total amount of expenditure required to purchase the equivalent goods and services purchased by households at a given time, which is called the β reference period β. the cpi is calculated by giving a value of 100 for the reference period and comparing prices of the observation period with those of the reference period. inflation is defined as a situation bis central bankers β speeches in which the cpi persistently rises ; on the contrary, deflation is defined as a situation in which the cpi keeps falling. a price rise or fall of individual items such as vegetables and television sets does not constitute either inflation or deflation. keeping that in mind, let me now explain what the consequence of a persistent decline in general prices β rather than price declines in individual goods and services β will look like. to be sure, a decline in prices itself will have the effect of raising your real income. however, a persistent decline in prices means that the more you wait, the more goods and services you can get at the same price. in other words, it means that the value of cash and deposits increases just by holding them. thus, firms and households will hoard money as much as possible and defer actions that are associated with spending, such as consumption and investment. put in the jargon of economics, aggregate demand will decline. that is a problem. if aggregate demand declines and sales of goods and services decrease, firms will reduce production to a level consistent with the decline in sales. as corporate profits will decline and employee income will fall accordingly, people β s consumption and housing investment β as well as firms β business fixed investment β will further stagnate. namely, aggregate demand will further decline, and that will induce a further decline in price levels. thus, the economy will be trapped in a vicious cycle of price declines and recession ( chart 3 ). increase in effective debt burden in addition, as a decline in prices means that the value of money for goods and services will increase, for those who borrow money, the value of money that they will have to repay in the future will increase | of its asset purchases. an increase in quantity requires massively increasing the amount of money the bank directly supplies to the financial system β this is called β the monetary base β β at an annual pace of about 60 β 70 trillion yen. measures to increase the monetary base are mainly through the purchases of japanese government bonds ( jgbs ), and the bank will purchase jgbs so that their outstanding amount will increase at an annual pace of about 50 trillion yen. a change in quality requires purchasing assets with a higher risk profile. among the jgbs, the bank has started purchasing those with longer remaining maturities. in addition, it has increased the amounts of purchases in exchange - traded funds ( etfs ) and japan real estate investment trusts ( j - reits ) in order to reduce risk premiums on assets. bis central bankers β speeches when we decided to introduce the qqe last april, we used the expression β a new phase of monetary easing both in terms of quantity and quality β. the bank has been pursuing monetary easing in exactly that manner, at an unprecedented scale. b. working on expected real interest rates while the qqe consists of those two pillars, as far as its transmission channels are concerned, the most important factor of all in terms of having an effect on the economy is lowering expected real interest rates. the following explanations will become somewhat complicated, but please bear with me ( chart 7 ). expected real interest rates are obtained by subtracting the expected rates of inflation from the nominal interest rates actually observed in financial markets or over the counter. while nominal rates β that is, objective interest rates β are visible, expected real interest rates are those that people forecast subjectively, based on their respective price projections, and thus various rates exist on a person - by - person basis. viewed from the borrowers β side, real interest rates are equivalent to borrowers β subjective expectations regarding their real costs of borrowing, taking into account price changes, when they borrow money at a certain nominal interest rate. consequently, the lower the expected real interest rates of an economic entity, the more subdued the entity expects its real cost of borrowing to be. the qqe has the effect of reducing nominal interest rates and the effect of lifting each economic entity β s inflation expectations, and both will exert downward pressure on expected real interest rates, which are derived from subtracting the expected rates of inflation from the nominal rates ( chart 8 ). c. spillover effects on | 1 |
the ecb and the european parliament. the ecb has made a proposal to the european parliament and looks forward to finalising an agreement between our two institutions. thank you for your attention. i am now looking forward to listening to your views during today's debate. 1 the final outcome could be slightly higher than the flash estimate when the official data for germany are included. 2 standard eurobarometer 97. 3 lagarde, c. ( 2022 ), " a new global map : european resilience in a changing world ", keynote speech at the peterson institute for international economics, 22 april. 4 / 5 bis - central bankers'speeches 4 ecb ( 2022 ), " ecb supports eu issuance service ", press release, 12 july. 5 ecb ( 2021 ) " eurosystem reply to the communication from the european commission " the eu economy after covid - 19 : implications for economic governance " of 19 october 2021 ", 1 december. 5 / 5 bis - central bankers'speeches | of the euro area economy, as discussed by the governing council earlier this month. euro area growth slowed in the fourth quarter of 2022. the outcome was better than we had initially expected, as the adverse economic effects from russia's unjustified war were partly buffered by improving supply conditions and fiscal support related to the energy crisis. while confidence is rising and energy prices have fallen, we expect activity to remain weak in the near term. according to eurostat's flash estimate β calculated using eurostat estimates for germany β, inflation was 8. 5 % in january. 1 the decrease compared with december was mainly due to a sharp drop in energy prices. at the same time, the prior surge in energy prices and other input costs is still feeding through to consumer prices. overall, price pressures remain strong and underlying inflation is still high β excluding energy and food, it remained at 5. 2 % in january. looking at the labour market, wages are growing faster, supported by robust employment dynamics, with the main theme in wage negotiations becoming how wages can to some extent catch up with high inflation. and even though most measures of longer - term inflation expectations currently stand at around 2 %, these measures warrant continued monitoring. the risks to the growth outlook are now more balanced than they were in december. russia's war against ukraine and its people continues to be a significant downside risk, but a faster resolution of the energy shock would support growth. the risks to the inflation outlook have also become more balanced, especially in the near term. the ecb's monetary policy against this backdrop, at our latest meeting on 2 february we decided to raise the key ecb interest rates by 50 basis points and we expect to raise them further. in view of the underlying inflation pressures we intend to raise interest rates by another 50 basis points at our next meeting in march, and we will then evaluate the subsequent path of our monetary policy. keeping interest rates at restrictive levels will over time reduce inflation by dampening demand and will also guard against the risk of a persistent upward shift in inflation expectations. our future policy rate decisions will continue to be data - dependent and follow a meeting - by - meeting approach. at our february meeting, we also decided on the modalities for reducing the size of the eurosystem's balance sheet under the asset purchase programmes ( app ). as communicated in december, the app portfolio will decline at a measured and predictable pace, with the decline amounting to β¬15 | 1 |
would be poorer and in the short run there would be immense disruption. β 11. the indian forex markets have been fairly stable in recent months. as you know, the reserve bank is mandated to maintain orderly conditions in the foreign exchange market. its intervention in the forex market is solely directed at curbing sudden turbulences not backed by the economic fundamentals. as has been said repeatedly, market operations are not intended to achieve any target exchange rate or band of rates. it must be pointed out that the exchange rate dynamics in india for more than a decade has been driven by capital flows rather than current account balances. as an aside, india has mostly run a current account deficit, notwithstanding a bilateral trade surplus with the us, marginally more than usd 20 billion during 2018. though long - term flows related to fdi and long - term debt have been fairly stable keeping in tandem with the economic fundamentals, the portfolio flows have their own dynamics depending as much on 2 / 3 bis central bankers'speeches attractiveness of returns of indian assets as the global factors determining their risk appetite. gyrations in the forex market in these circumstances leave no option other than market intervention to restore orderliness in the market. one also need to bear in mind that india β s forex reserves are borrowed reserves and not built out of export surplus. inasmuch as it provides a bulwark against sudden flow reversals, it enhances the country β s ability to cope with the fall out and indeed, contributes to global stability as well. 12. the policy regime is also oriented to providing adequate instruments of hedging to all resident economic agents who have exposure to a foreign currency as well as all non - residents who have a rupee exposure. the onshore markets are fairly deep and liquid but needs further strengthening. there is a wide menu of hedging instruments available and further expansion would be in keeping with understanding of their risk implication. in recent times, global institutions and investors have shown a healthy appetite for rupee denominated assets, which while ensuring flow of foreign exchange protects the indian issuers from exchange risk. this trend needs to be given further policy nudges. 13. in fine, i would like to say that though there are discouraging portents for the global economy and uncertainties arising from trade tensions and geopolitical developments, i am optimistic that coordinated policy response and dispute resolution within a multilateral framework will see us through the day. 14. | one issue that bedevils public sector banks is that of compensation. how do they attract new talent and match the salaries and the compensation flexibility being paid by consultants, by it firms, by multinationals, by private sector banks? is the quest for talent lost ab initio? here it may be stated that while the traditional psychological contract of long term employment for loyalty may have been undermined, quantitative solutions of the 1990s are not necessarily the answer. money can be matched and topped by competitors β the pay packet may not be the only compensation that attracts talent. the monetary, social and psychological needs of talent today are in a melting pot. it is this ambiguity that can be a source of opportunity for public sector banks. today, the β loyalty contract β is being replaced by a complex mix. there are a host of non monetary benefits that an organisation can offer ranging from job content, work exposure, project challenge, working at the cutting edge, working with a charismatic leader, flexible work environment, early leadership roles and positions of accountable influence, high - value, visible or high - profile assignments, cross - functional roles, training facilities, opportunities for personal growth, opportunities to build a resume in a particular work area, community bonding, location benefits or for that matter independence and space amongst others. understanding what it takes to foster a productive work environment, often alluded to as the " employee value proposition ", essentially entails non - discriminatory, hostile - free workplaces with flexible and dynamic hr policies that enable an environment where employees feel included and valued, where commitment and motivation is maximized and where an organization needs to spend fewer resources on managing employee grievances. it is up to the creativity of the public sector banks to turn their constraints into an opportunity to create such employee value propositions that appeal to the talent these banks wish to recruit. it also forces them to revamp their own talent requirements, their job content and reposition themselves as more agile players in the talent market. in fact, effective recruiting is the beginning of effective retention. matching between tasks and talents is a challenging problem and it is essential for allocational efficiency that people get allocated to right occupations. refashioning the recruitment process may well therefore be the precursor of an effective talent management strategy. this may include identification of key positions and turnover risks associated with these positions, and competency / behavioural - based selection criteria that support the retention strategy and business drivers. only a carefully designed and integrated set of initiatives that | 0.5 |
reviews, six reviews have now been completed and published. building a new system of international peer review is a major accomplishment. but heavier lifting lies ahead. as new, higher standards come into force, ensuring equivalent implementation will become increasingly important. three critical areas stand out : basel iii, resolution regimes and central clearing for otc derivatives. we will need rigorous and effective assessment of implementation across all jurisdictions to ensure that they are living up to their commitments. the goal is to create a race to the top in national adherence to international standards. agreement on these three elements β higher standards, new tools and strengthened enforcement mechanisms β will substantially enhance financial stability at the core of the system. agreement in these areas has been hard. but the truly tough work of consistent, rigorous and relentless implementation is just beginning. now that we have largely agreed on the reforms to reduce the likelihood of failure at the core of the system, the reform agenda is turning appropriately to two further priorities : expanding the perimeter of oversight and regulation, and reducing contagion and harmful international spillovers. expanding the perimeter of supervision and regulation the existing prudential regulatory framework was designed around banks whose credit - intermediation activities are closely regulated and supervised, as well as backstopped with deposit insurance and central bank liquidity. by contrast, the shadow banking sector is less regulated and does not have access to public liquidity support. however, like the bis central bankers β speeches credit - intermediation activities of banks, shadow banking also involves liquidity and maturity transformation, and often with some degree of leverage. the label β shadow banking β is unfortunate. it is not shadowy. market - based financing, as it is more appropriately called, provides competition for the banking sector and is an important source of innovation and diversification. and it is also big. in the united states, market - based financing was roughly twice as large as traditional bank intermediation at the peak of the credit boom and is still about 25 per cent larger today. in several other advanced economies, including canada, the sector is at least as large as the banking sector. the crisis highlighted the systemic vulnerabilities market - based financing can pose. the opaque and excessively levered securitization of u. s. mortgages, combined with undue reliance on short - term wholesale funding, greatly intensified the consequences of the u. s. housing collapse. with the capital and liquidity standards applied to banks set to increase, we can expect to see further | a significant strengthening of the global rules. the combination of greater emphasis on true loss - bearing capital β namely tangible common equity β and increased minimum capital levels has effectively raised the minimum global capital requirement seven times. moreover, for the largest and most interconnected global banks, this is being supplemented with additional loss - absorbing capacity. the group of governors and heads of supervision just agreed on a proposed methodology for assessing systemic importance, the amount of additional required capital, and the timeline over which this will be phased in. these additional measures will further strengthen the resilience of global systemically important banks and create incentives for them to reduce their systemic importance over time. bis central bankers β speeches tools the crisis taught us that while regulating on an institution - by - institution basis is important, it is not enough. the risk to the financial system is not equivalent to the average risk to individual firms. this was strikingly illustrated in the crisis, as it was individual institutions β attempts at self - preservation that transmitted and amplified stresses throughout the global system. addressing system - wide risks requires new tools, and here, too, there has been considerable progress. the countercyclical capital buffer included in basel iii is a giant step forward. the bank of canada played an important role in the development of the buffer, which provides for additional capital to be built up during periods of excessive credit growth in anticipation of a future downturn. this broad macroprudential instrument complements other tools designed to contain financial imbalances in specific markets. these include mortgage loan - to - value ratios and amortization periods, as well as countercyclical margin requirements. what remains is much work on implementation. in particular, how best to combine, sequence and implement these tools, how they will affect financial intermediation, and their implications for other policy instruments, including monetary policy. enforcement new rules are only as good as their application and adherence. last year in seoul, g - 20 leaders endorsed recommendations to strengthen the mandate, capacity and resourcing of supervisors. they also reviewed the powers required to monitor, identify and address excessive risk - taking, including early intervention. it is imperative that these recommendations are now translated into new standards for supervision and implemented on the ground. international assessment and review are also being strengthened. financial stability board ( fsb ) member jurisdictions are living up to their commitments to undergo regular assessments under the imf β s financial sector assessment program. and under the fsb β s new system of international peer | 1 |
##trants. conventional wisdom holds that banking business is intricately tied to economies of scale. size, scale and barriers to entry are thus traditional key determinants of competitiveness. this conventional wisdom or axiom is very much dated. in the future, competitive advantage will come from those who are able to harness the power of technology and be bold enough to venture into uncharted territories. the rules of the game have been reset, and more players are getting into the game. regulators around the globe are very mindful of this trend and are willing to take calculated risks on innovative ventures, going beyond the banking system for solutions. there is thus, a more level - playing field and more business opportunities for non - traditional companies that are responsive and effective in meeting the financial services needs of consumers. for example, new robo - advisory businesses are now providing high quality investment advice at low cost, while payment technology companies are making cross - border payments cheaper, 1 / 5 bis central bankers'speeches quicker and more efficient. transferwise, a cross - border payment company is now moving to offer β borderless β bank accounts for businesses that operate across border. this is a challenge for many incumbents. the second observation is that data could be the β king - maker β of finance. companies that are able to control and leverage on data to deliver superior customer experience will possess the greatest advantage. successful startups over the past decade such as airbnb, grab, snapchat and uber have all utilised technology and data to improve business models and customer interactions. for the financial sector, this could potentially mark a highly interesting shift of mantra in the future from β cash is king β to β data is king β. the arms race of the 21st century is really big data. firms on wall street and the city of london are now employing data scientists en masse. they are the new breed of β bankers β. the bankers of the future. the use of data with superior software will enable financial services to be unbundled and increasingly custom - made for individual consumers. data will enable increased transparency and better assessment of credit worthiness as well as reduction of risks, thus extending financing to previously underserved segments of society. the third observation is that finance may display β winner takes all β characteristics over the long term. this characteristic is apparent in silicon valley and the digital economy in general. market leaders such as google and facebook control over two - thirds of the market. this is due to β | would include underserved groups and segments that are currently deemed too β risky β by traditional risk metrics. advancements of any sort always come with trade - offs. for one, with the rapid progress of genetic sciences, it is only a matter of time before chronic diseases such as cancer and diabetes can be predicted even before birth, thereby potentially denying affected individuals of insurance coverage. automation and artificial intelligence may also result in the displacement of certain segments of the workforce or some segments of society being denied medical protection. finance, when used properly is an enabling tool. but if abused, it can be a destructive tool with devastating consequences. finance without ethical considerations will magnify the negative aspects and lead to lasting consequences as the global financial crisis demonstrated. technological progress would mean excesses can be magnified even further, spreading the risks to a wider segment of the society. regulators, therefore, stand at the nexus between magnifying the benefits of access to finance and managing the excesses of finance. there are moral and ethical considerations that regulators and policymakers will have to confront as we go forward. four possible future scenarios let us conceptualise these themes into four scenarios, an approach that could provide a peek into what is in store, as we visualise the future. the first scenario is β tech - savvy incumbents β a. the pace of technology adoption by incumbent banks is high, while level of fragmentation among finance providers is low. this is a more ambitious, albeit possible, scenario where banks successfully adopt the best strategies and emerge as the dominant winner in all finance segments ; b. here we see banks as incumbent institutions responding quickly to technology shifts, realigning their business processes and delivery channels to meet customer expectations. they succeed in nurturing both tech - literate management personnel and digitally - savvy talent ; c. emerging tech firms remain important sources of innovation but are acquired by the incumbents. as a result, these institutions can successfully retain and expand their customer base ; and d. in this scenario, although we will not see a dramatic change in terms of players in our financial system, the functions and ways in which they conduct businesses will be dramatically different. the second scenario is β plugged - in finance β a. both technology adoption by incumbent banks and fragmentation among finance providers are high. finance is marked by an ecosystem of β co - dependence β between banks and tech start - ups that target specific, profitable segments of the market rather than the whole suite of financial services | 1 |
card lines may strain their cash flow and force them to cut spending or require them to use more expensive forms of short - term credit, such as trade finance. changes in the use of payment instruments consumer credit pricing and availability also appear to affect consumer preferences for different payment methods. when consumers decide how to pay for their purchases, they may have a variety of payment options to choose from, including cash, checks, debit cards, credit cards, prepaid cards, and even, increasingly, their mobile phones. the federal reserve has tracked changes in consumers β use of payment instruments in a number of studies over the past decade. these studies cast an interesting light on the effects that weakened economic conditions have had on the mix of payments. the number of checks processed in the united states has been declining since the late 1990s, as consumers, businesses, and governments have shifted away from checks and toward electronic payment methods. the annual number of checks dropped from more than 40 billion in 2000 to 30 billion in 2006, and we expect the data for 2009 to show continued declines. at the same time, the use of debit and credit cards has risen. debit card payments, in particular, have grown remarkably : between 2000 and 2008, the number of debit card transactions grew at an annual rate of more than 17 percent, while the value of debit card transactions grew 15 percent per year. credit card transactions have grown at a slower pace than debit card transactions over the same period β about 2 percent per year in number and roughly 5 percent per year in value. for smaller - value payments, both types of cards, but especially debit cards, have served as substitutes for checks and, very likely, cash. although the nature of cash makes direct measurement of aggregate cash payments difficult, we can infer a trend in usage from changes in the level of small - denomination currency that is most frequently used in cash payments. the amount of small - denomination domestic currency in circulation has been steadily declining since the 1970s, leading us to believe that cash payments have similarly declined. most interestingly, the recent period of economic weakness appears to have caused some consumers to shift away from credit cards not only as a source of credit but also as a method of payment. as i said earlier, between late 2008 and early 2010, the value of credit card purchases declined 10 percent. in comparison, although the rate of growth in debit card use slowed during the recession, debit card transactions did not decline in either volume or | in the absence of a cbdc, some of these risks i noted may still exist as the private sector continues to innovate, including the risk of substitution from commercial bank deposits to digital wallets, and the migration to less regulated digital assets, including stablecoins. with such significant potential opportunities, risks, and tradeoffs, it is essential that the federal reserve continue to thoroughly research and engage with stakeholders to further understand these issues. future decisions about the implementation of technology innovations in money and payments, including a potential u. s. cbdc, must be informed by a deep and thorough understanding of potential intended and unintended consequences, as well as understanding whether a cbdc would be the most effective and efficient means to improve the payment system and address identified problems. the federal reserve has continued its independent research and technical experimentation on digital innovations, including digital assets and cbdc. specific to cbdc, the federal reserve established a program of work that aims to ( 1 ) carry out policy analysis to provide perspectives on issues articulated in the board β s january 2022 discussion paper ; ( 2 ) conduct technology research and experimentation to inform potential cbdc designs ; and ( 3 ) invest in engagement with the public, industry, academia, and the public sector to bring along stakeholders and obtain needed expertise. concluding thoughts : the potential future of cbdc in the united states of course, as the evolution of money and payments continues, it is important for the federal reserve to continue looking ahead to anticipate potential changes to money and - 13 payments well into the future. with this in mind, our consideration of other potential innovations to money and payments, including a potential u. s. cbdc, must be viewed through the lens of whether and how the payment system would be improved beyond what instant payment services will achieve. we should ask β what current frictions exist or may emerge in the payment system that only a cbdc can solve, or that a cbdc can solve most efficiently? β in my view, it is important that the federal reserve is a part of the ongoing conversations around cbdcs, whether or not a cbdc is ultimately created in the united states. as the federal reserve continues to monitor developments in other jurisdictions, we will work closely with international counterparts on payments innovation, cbdc, and other related topics. this includes work with multilateral institutions such as the bank for international settlements, the g7, and the financial stability board, as well as bilateral engagements with other central banks | 0.5 |
would include underserved groups and segments that are currently deemed too β risky β by traditional risk metrics. advancements of any sort always come with trade - offs. for one, with the rapid progress of genetic sciences, it is only a matter of time before chronic diseases such as cancer and diabetes can be predicted even before birth, thereby potentially denying affected individuals of insurance coverage. automation and artificial intelligence may also result in the displacement of certain segments of the workforce or some segments of society being denied medical protection. finance, when used properly is an enabling tool. but if abused, it can be a destructive tool with devastating consequences. finance without ethical considerations will magnify the negative aspects and lead to lasting consequences as the global financial crisis demonstrated. technological progress would mean excesses can be magnified even further, spreading the risks to a wider segment of the society. regulators, therefore, stand at the nexus between magnifying the benefits of access to finance and managing the excesses of finance. there are moral and ethical considerations that regulators and policymakers will have to confront as we go forward. four possible future scenarios let us conceptualise these themes into four scenarios, an approach that could provide a peek into what is in store, as we visualise the future. the first scenario is β tech - savvy incumbents β a. the pace of technology adoption by incumbent banks is high, while level of fragmentation among finance providers is low. this is a more ambitious, albeit possible, scenario where banks successfully adopt the best strategies and emerge as the dominant winner in all finance segments ; b. here we see banks as incumbent institutions responding quickly to technology shifts, realigning their business processes and delivery channels to meet customer expectations. they succeed in nurturing both tech - literate management personnel and digitally - savvy talent ; c. emerging tech firms remain important sources of innovation but are acquired by the incumbents. as a result, these institutions can successfully retain and expand their customer base ; and d. in this scenario, although we will not see a dramatic change in terms of players in our financial system, the functions and ways in which they conduct businesses will be dramatically different. the second scenario is β plugged - in finance β a. both technology adoption by incumbent banks and fragmentation among finance providers are high. finance is marked by an ecosystem of β co - dependence β between banks and tech start - ups that target specific, profitable segments of the market rather than the whole suite of financial services | mohd razif bin abd kadir : islamic banking products β theory, practice and issues opening remarks by mr mohd razif bin abd kadir, deputy governor of the central bank of malaysia, at the 2nd foundations of islamic finance series conference : β islamic banking products β theory, practice and issues β, kuala lumpur, 8 march 2011. * * * i am delighted to be here today and would like to thank the organisers for inviting me to deliver the opening address at this 2nd foundations of islamic finance series conference. following the success of the inaugural conference held last year in dubai, this years event is a commendable collaboration between the organisers ; the international centre for education in islamic finance ( inceif ), the international shariah research academy for islamic finance ( isra ) and the university putra malaysia, to provide an avenue for discussions on various literatures in islamic finance by eminent practitioners and scholars, with the aim to produce quality publications for the industry. the theme of this years conference, β islamic banking products : theory, practice and issues β is most timely as waves of innovation are pervasive in islamic finance in the recent years, fostering the generation of a wide spectrum of islamic financial products and services. as the next frontier of development in islamic finance evolves through innovation, we have to be mindful that innovation within an environment of constant change and increasing uncertainties is indeed a challenge. joint efforts between academia and industry to conduct research, to explore and deliberate on issues relating to the development of new islamic financial products, such as the efforts that have led to this conference can therefore provide a point of reference for the industry in ensuring that new and better products are developed to match the diverse and discerning needs of customers, while meeting the requirements of the shariah. the ability of islamic finance, as a form of financial intermediation that provides a range of high quality financial products and services, reflect the innovative and dynamic nature of the industry that contributes to its role as a facilitator of economic activity. together with the fundamental requirements in islamic finance that an underlying productive economic activity accompanies financial transactions, a close link is formed between financial transactions and productive flows. given that islamic financial instruments reflect the underlying economic activities and that such instruments inherently have the potential to provide tangible returns to investors, there have been significant demands on such products. this gives rise to the competitiveness of islamic finance, which is further spurred by the | 0.5 |
christopher kent : after the boom speech by mr christopher kent, assistant governor ( economic ) of the reserve bank of australia, at the bloomberg breakfast, sydney, 13 september 2016. * * * introduction today i want to talk about some important developments shaping the australian economy, focusing on the sharp fall in commodity prices over the past few years. in 2012, just after taking on my current role, some colleagues and i were looking at how the australian economy had been adjusting to the unprecedented boom in commodity prices. 1 by the time i presented that work, prices of australia β s key commodities had begun to turn down and mining investment had just peaked at a record level. 2 since then, commodity prices have fallen much further and so australia β s terms of trade ( the price of our exports relative to imports ) have fallen significantly. the fall was more than we, and most others, had expected. more recently, though, commodity prices have risen. and more than three - quarters of the anticipated decline in mining investment is now behind us. the adjustment of the economy to the decline in the terms of trade and the large fall in mining investment has been a drawn out process, adversely affecting a range of industries and regions. but growth in the economy overall has been close to trend, and while the unemployment rate rose, it reached only a little above 6 per cent in 2015. 3 more recently, inflation has declined. before talking about the period after the boom, i want to set the scene. first, i β ll briefly review the boom years. second, i β ll describe what we anticipated four years ago would be likely to happen after the boom. the boom years the rapid industrialisation and urbanisation of the chinese economy underpinned the strong rise in commodity prices from around the mid 2000s. as global demand for commodities began to outstrip supply, the prices of australia β s key commodity exports rose dramatically. australia β s terms of trade rose by 85 per cent from the average of the early 2000s to the peak in late 2011 ( graph 1 ). that implied a significant boost to the real purchasing power of domestic production. some of those gains were retained by foreign owners of mining assets, but a share of the gains stayed at home in the form of higher wages, tax revenues and profits for australian owners of mines and of firms supporting mining activity. 1 / 16 bis central banker's speeches the rise in australia β s terms of trade was associated with a large appreciation of the nominal exchange rate ( | demand, we thought that commodity prices and, therefore, australia β s terms of trade would decline ( but remain higher than their preboom levels ). that would normally be associated with a depreciation of the australian dollar. we anticipated that demand in the non - mining sectors would pick up and that labour and capital would be drawn back to that part of the economy. any depreciation of the nominal exchange rate would facilitate that transition by improving the competitiveness of the β other tradable β sector. the movement of labour would also be facilitated by some decline in wage growth, as the labour shed by companies that had undertaken the mining investment looked to move back into the nonmining sectors. in other words, we thought that the requisite real exchange rate depreciation would occur largely via the nominal exchange rate, but might also be assisted by a decline in domestic cost pressures. these developments were expected, at least in part, to reverse some of the effects on consumer price inflation seen during the investment phase of the boom. in particular, a gradual depreciation of the exchange rate would put upward pressure on tradable inflation for a time, while a reduction in wage growth and domestic costs more generally would put downward pressure on nontradable inflation. these opposing effects could potentially result in little net change to overall inflation, but given that inflation had been above average during the boom, it would not be surprising to see inflation below average after the boom. but having made some predictions about the direction of some key variables, we also noted the considerable degree of uncertainty, including that related to the global economic outlook. after the boom β what actually happened? many of our predictions have been borne out. mining investment declined significantly and resource exports grew strongly. mining investment has further to fall, although the largest drag on gdp growth from that source is likely to have come and gone over the financial year just passed. the decline in mining investment from 2012 led to lower growth in overall mining activity ( mining investment plus resource exports ; graph 2 ). more recently, growth of mining activity has picked up. mining activity is set to continue to grow for a time as the drag from mining investment wanes and production of liquefied natural gas continues to ramp up. 3 / 16 bis central banker's speeches as had been anticipated, mining - related employment has contracted and wage growth in those industries has declined to be noticeably below that of other sectors. 6 in the non - mining sector, growth in activity | 1 |
rameswurlall basant roi : tackling vulnerabilities and emerging risks in an uncertain external environment address by mr rameswurlall basant roi, governor of the bank of mauritius, at the annual dinner for major economic stakeholders, point aux piments, 25 november 2016. * * * distinguished guests ladies and gentlemen good evening this is the 19th annual dinner being hosted by the bank of mauritius for major economic stakeholders and it β s my 11th address to this august gathering of decision makers in the private sector. this evening i will dwell briefly on the state of the external environment the mauritian economy has to interact with and on an area of risk in the mauritian economy that makes it highly vulnerable to a conceivable development that could throw our financial industry out of balance with consequences deleterious to the economy. we have all been seeing in recent times that even those who are exceptionally gifted with horizon - scanning capacity are left flabbergasted and totally disarmed by unexpected twists and turns of events. unexpected outcomes have hit hard the business community at home and abroad. every one of us, whether we are in the business of manufacturing for exports, trading, fund management or macro - economic policy making, faces heightened risks of going utterly wrong, not because of recklessness or incompetence but because of developments beyond our cerebral capacity to foresee. volatility is a phenomenon we have to reckon with. surprises are unusually aplenty. it β s a complex external environment β taxing to the brain β that we have to cope with. the convolutions of happenings abroad are characterized by a phenomenon known as β knightian uncertainty β : β there are known knowns ; there are things we know we do know. we also know that there are known unknowns ; that is to say, we know that there are some things we do not know. but there are also unknown unknowns β the ones we don β t know that we don β t know. β if there is one thing investors and the market do not like, it is uncertainty. we are in a world fraught with surprises the outcomes of which defy conventional thinking. utterances that sound prophetic are a risky business to get into. it β s a fool β s game to predict that everything is going to be fine. either it β s going to be fine, in which case none of you will ever remember who made the prediction or something painfully | unacceptable happens in which case all of you will remember β without fail. i will try not to make any forecast, projection or prediction. the optimist says, β the glass is half full. β the pessimist says, β the glass is half empty. β the rationalist says, β this glass is twice as big as it needs to be. β i will stick to facts and lay bare the disruptive forces underlying the emerging external economic environment for your appreciation. models from the ricardian comparative advantage to the heckscher - ohlin factor endowment theory tell us that free trade is a win - win game for trading partners. free trade is widely believed to make countries better off. gross domestic product goes up and the standards of living of the trading countries improve as a result. as we know it, free trade is the core constituent of globalisation. in the past three decades, as the pace of globalisation accelerated to a sustainable gait, all over the world, people were made to believe that globalisation will keep on lifting human conditions to heights never seen before. in fact, it did lift hundreds of millions of people out of poverty in developing countries. what proponents of globalisation did not openly admit is that free trade also creates victims. poor people have been elevated at the expense of wealthier nations, thus creating a good deal of resentment. the wealthier nations β coloured perceptions of the benefits resulting from globalization have ultimately cracked. built into the trade models is the 1 / 7 bis central bankers'speeches conclusion that free trade will have potentially adverse distributional consequences. in other words, it will have winners and losers. it punishes those who do not have the required skills or do not have appropriate training or are victims of poor macro - economic management that prices them out of the market by the forces of competition stemming from low wage economies. those of us familiar with paul samuelson β s factor price equalization theorem in trade theory will better appreciate this point. as is aptly said, β free markets are not pain - free markets. β the standard response to this problem is to argue that the gains from free trade are sufficient to more than adequately compensate the losers by way of training that will equip them with new skills. but it has never been clear what kind of training can transform a 50 - year old factory worker into a computer programmer or a web designer. as though factory workers in our export sectors would retool, re - equip and | 1 |
channels for interaction with global financial markets would broaden and become more efficient. over the past decade or so, as china rose to become the second largest economy, we have all seen the changes to world economic relationships brought about by china β s integration into the global economic system. we are now beginning to see china β s integration into the global financial system in a more prominent way. 6. until now, the channels for cross - border flows are only open to current account items such as trade, and to direct investments under the capital account. portfolio investments under the capital account into and out of china are mainly confined to designated channels and are subject to quotas, for example, the qualified foreign institutional investor ( qfii ) scheme with quotas totalling us $ 150 billion, and the qualified domestic institutional investor ( qdii ) scheme with quotas of us $ 87 billion. it can be reasonably expected that a further opening of the capital account would entail liberalisation of these channels and the addition of new avenues. these would result in an increase in cross - border capital flows. bis central bankers β speeches 7. although it may not be easy to provide a precise estimate of the magnitude of the flows, given that china β s economy is the second largest in the world, and taking into account the size of both its domestic savings and its capital markets, one can probably say that the size of capital flows resulting from china β s capital account liberalisation would likely be felt in the global financial system. 8. from the perspective of chinese savers, given their high level of savings and the fact that their investment options are mostly limited to domestic markets at present, there would be a desire on their part for investment diversification into international markets. the resulting investment flows, as they are liberalised, could be substantial for individual markets where these funds flow into. 9. in the other direction, with china being a dynamic and sizable economy, the world β s investors would be increasingly keen about participating in china β s capital markets, thereby gaining exposure to new investment opportunities. the experience of many other economies also suggests that capital - account liberalisation brings along with it a deepening of financial markets, making them even more attractive to investors. 10. in all of this, the role of the rmb will be crucial. notwithstanding the current, only partial convertibility of the rmb, it is already the ninth most actively traded currency according to the latest bank for international settlements triennial survey. and | in conditions of a pandemic, there is an increasing propensity of households to invest in real estate. actually, in conditions of low interest rates, relatively stable disposable income, reduced possibilities and needs for consumption, change in the models of work, globally there is an increase in the demand for real estate and in the real estate prices. unlike most economic indicators, which collapsed during the pandemic, real estate prices are increasing. in the eu countries, in the first half of this year, real estate prices registered an average growth of nearly 7 %, compared with the growth of around 4 % in the past few years. in our country, the price growth is more moderate of about 4. 4 % during this year, but with signs of acceleration. in the entire region and in our country, housing lending is accelerating and the growth rates are more dynamic compared to the growth of consumer loans. it appears that currently in our country the real estate market developments are in accordance with the shifts in the supply and demand, and the price pressure exists, but it is not that pronounced, as it is in the european union countries. however, this " pandemic syndrome " should be carefully monitored, given that the exposure of the banking system to the real estate market is increasing more and more. hence, there is a need for enhanced monitoring also of this part of the portfolio and keeping of the banks'capacity to deal with the possible future shocks. 2 / 3 bis - central bankers'speeches the banking systems in both the region and in our country are passing the test imposed by the pandemic crisis well, and the challenge for maintaining the capacity for credit support and also maintaining stability will remain in the next period. the indicators of solvency, liquidity, profitability of banks and the quality of the credit portfolio remain stable, and some of them further improved. but, the crisis is getting a prolonged dimension and may have lasting consequences and impose a need for restructuring in some of the sectors of the economy. at the moment, the disruption of the global value chains globally and the growth of costs are creating interruptions in certain industries and are one of the major risks to the expected economic recovery. hence, timely monitoring of all risks and their timely identification is a current priority, in order to reduce the burden on the banks'balance sheets. according to the latest eib survey, some of the banks in the wider cesee region expect a certain increase in nonperforming | 0 |
njuguna ndung β u : the importance of the banking sector in the kenyan economy remarks by prof njuguna ndung β u, governor of the central bank of kenya, at the bank of india, kenya branch, diamond jubilee celebrations, nairobi, 12 april 2013. * * * mrs. v. r. iyer, the chairperson and managing director of bank of india ; dr. manu chandaria, chairman, bank of india local advisory committee ; mr. r. k. verma, chief executive, bank of india, kenya ; the local advisory committee members ; management and staff of bank of india, kenya ; distinguished guests ; ladies and gentlemen : i am delighted to join you on this auspicious occasion to celebrate the diamond jubilee of bank of india β s operations in kenya. as the regulator for the banking sector, central bank is pleased to be associated with the achievements of the banks we regulate, particularly where these developments lead to increased access to banking services for the kenyan public. in this regard, bank of india, kenya certainly has made its mark on the kenyan market. ladies and gentlemen : bank of india, kenya branch, was established in mombasa in 1953, it has four branches. with regard to its performance, i note that as at february 2013, the bank had a total asset base of ksh. 27 billion. net loans and advances stood at ksh. 11. 5 billion while customer deposits were ksh. 20. 8 billion, supported by a core capital base of ksh. 3. 9 billion. the bank returned a profit before tax of ksh. 568. 4 million for the year ended december 2012. this impressive performance of bank of india is consistent with the continued commendable performance of kenya β s banking industry. ladies and gentlemen : the banking sector and the totality of the financial sector is very important to the economy. let me share with you some key highlights of the banking industry β s performance for the last 10 years that is the period 2002 to december 2012 to consolidate the importance of the banking sector in the kenyan economy : β’ assets grew from ksh. 456. 7 billion to ksh. 2. 35 trillion ; β’ total deposits grew from ksh. 360. 6 billion to ksh. 1. 76 trillion. β’ net advances increased from ksh. 222. 8 billion to ksh. 1. 27 trillion, β’ profit before tax of ksh. 5. 8 | billion increased to ksh. 107 billion. β’ the number of bank accounts has increased from 1. 9 million accounts to 17. 6 million. β’ deposit insurance has evolved to cover fully 94 % of the total deposit accounts. this phenomenal growth has been supported by the expansion of banks into new market segments, prudent risk management and enhanced economic prospects underpinned by a stable macroeconomic environment. the central bank expects the banking sector to continue on this growth trajectory. ongoing reforms and initiatives by the government and cbk will serve to further propel the banking sector to new frontiers of financial inclusion for more kenyans to access these services. ladies and gentlemen : kenya β s financial industry is currently one of the fastest growing not only in the east african region but in the continent. the government is committed to the implementation of sound policies towards financial deepening and overall economic development of this country as captured in vision 2030. it goes without saying that the banking industry is and will remain a major player towards this end. bis central bankers β speeches ladies and gentlemen : we need now to concentrate on reducing costs of doing business for banks so that we can bring down costs of financial services. for example, the recently introduced credit information sharing platform has enabled banks via reduced risk, to extend more credit to productive sectors boosting wealth and employment creation. the information sharing platform will support development of information capital as a new collateral technology in the market and reduce the information search costs and hence the risk premium over - load in the lending rates. in addition, the introduction of positive information sharing with credit reference bureaus will allow good debtors to leverage on this and bargain for lower costs of borrowing. the second area in reducing cost of doing business is the cost of rolling out branch networks to reach kenyans cost - effectively. this has worked and will continue to work well with the introduction of agent banking. the cbk has so far licensed 16, 333 agents since the roll out in may 2010. the third area that has lowered the cost of doing business is banks introducing innovative products to the market by leveraging on advanced technology and the mobile phone financial services platform. lower cost on these products has ensured uptake and volumes have grown. finally, the currency centres have helped to de - congest services at the branch and headquarters of cbk and physical distances, lowering costs for banks. in addition, the central bank will continue more forcefully with its four dimensional approach : advise ; cultivate partnership ; agent of development, but | 1 |
aim is for the purchase of various risk assets by the bank to act as a catalyst to increase the demand for and supply of riskier financial assets in the market and spur the effective use of the ample funds that have been already provided to the market so as to provide a boost to the economy. the bank β s decision to encourage a decline in longer - term interest rates and various risk premiums through comprehensive monetary easing was based on its experience with the quantitative easing policy16 during the five years from march 2001 through march 2006. since one of the ways in which quantitative easing worked was through the policy duration effect, it is difficult to clearly isolate the effects of quantitative expansion itself in assessing the overall effect of the policy. however, most subsequent empirical studies suggest that although quantitative easing contributed to stabilizing the financial system, the impact on economic activity and prices was limited. 17 moreover, preliminary assessment indicates that the extent to which the decline in interest rates resulting from the policy duration effect of the quantitative easing policy affected the yields of other financial assets β the so - called β portfolio rebalancing effect β β was limited. given these results, the bank judged that β in a situation where there was little room for a further decline in short - term interest rates β the most effective policy to achieve additional monetary easing would be to try to directly effect a decline in longer - term interest rates and various risks premiums, meaning that this policy pursues the first and the third of the objectives outlined earlier, that is, to lower interest rates and achieve qualitative easing. however, i did not concur with all the measures of the bank β s comprehensive monetary easing policy. specifically, i disagreed with the inclusion of government securities as assets to be purchased through the program. the main reason is that i believe it would be more effective to strengthen efforts to effect a decline in risks premiums, which remain at a high level β that is, to focus on qualitative easing β than to focus on longer - term interest rates at a time when financial institutions were raising the weight of government securities in their the bank β s quantitative easing policy consisted of four measures : ( 1 ) the main operating target for money market operations was changed from the uncollateralized overnight call rate to the outstanding balance of the current accounts at the bank ; ( 2 ) the new procedures for money market operations would remain in place until the rate of change in the cpi ( excluding perishables, on a nationwide statistics ) | on a year - on - year basis was stable at or above zero percent ; ( 3 ) the bank raised the target for the balance outstanding at the bank β s current accounts to around 5 trillion yen ; and ( 4 ) the bank would increase the amount of its outright purchase of long - term government bonds from the then 400 billion yen per month, if it considered this to be necessary for the smooth provision of liquidity. see hiroshi ugai, β effects of the quantitative easing policy : a survey of empirical analyses, β monetary and economic studies, 25 ( 1 ), institute for monetary and economic studies, bank of japan, 2007. bis central bankers β speeches portfolios and both short - and long - term interest rates were declining anyway ( the yield on 2 - year instruments in the past month has been in the range of only 0. 130 β 0. 200 percent ). in fact, i think that even before the implementation of comprehensive monetary easing, a lowering of longer - term interest rates had already been achieved to a substantial extent through the bank β s lowering of the policy interest rate to 0. 1 percent, through policy duration effects from previous policies, and through the provision of ample funds. therefore, i felt that increasing the purchase of government securities to achieve a further decline in longer - term interest rates would only have limited positive effects18 and would increase the risk of overheating in the bond market ; moreover, excessively low interest rates could deprive financial institutions of profit opportunities and instead hamper the effects of monetary easing, so that any positive effects might be outweighed by the potential negative side effects. another reason why i disagreed with the purchase of long - term government bonds through the program is that β in a situation where there is uncertainty over government finances in the medium to long term β making an exception to the principle that the outstanding amount of the bank β s holdings of jgbs should be kept below the outstanding amount of banknotes in circulation could arouse suspicions in the market that the bank had taken a step toward engaging in government debt financing, which in turn could adversely affect long - term interest rates. 4. ensuring the bank β s financial health next, i would also like to mention the disadvantages of risk asset purchases by the bank. excessive intervention by the bank may distort price formation in the market and deprive financial institutions of profit opportunities. moreover, the bank, too, may ultimately incur losses from the purchases. as you | 1 |
, market actors have also taken steps to operationalize and make open banking functional in practice. thus, in november 2024, upon meeting the legal and regulatory requirements, the bank of albania approved for the first time the activity of open banking by granting the first license to one of the electronic money institutions operating in albania. also, currently, applications from several other entities are in the process of being reviewed to receive approvals to conduct the open banking activity. i would like to point out that the citizen is at the heart of this initiative, as it empowers them with more choices to make simpler, faster, and lower - cost payments and transfers. therefore, the bank of albania encourages applications from financial institutions to obtain open banking license, aimed at providing greater added value for albanian citizens in their daily financial activities. the operationalization of openbanking is the first and fundamental step towards the functioning of open - finance, which will enable the digitalization of lending, investments, and other financial services for clients. 2 / 3 bis - central bankers'speeches in addition to personal benefits for the consumer, on a broader context, this innovation brings many advantages on the path to the formalization of the economy and in enhancing financial inclusion. the bank of albania will always remain a promoter of advanced initiatives and innovations that time demands for the growth of the albanian society well - being. dear participants, following the long - standing global trends for the inclusion of digital transformation in the financial industry, the legal and regulatory framework in the republic of albania has also been amended in a timely manner and at the right speed in this regard. in this context, the bank of albania encourages banks to be as oriented as possible towards innovative projects, which aim to offer and increase the volume of remote banking services, particularly those with a direct impact on facilitating financial inclusion, or simply, the opening of a bank account remotely. investments in these initiatives yield mutual benefits, both for banks and for clients and the public in general, in terms of reducing costs, saving time, and increasing customer satisfaction, consumer's education and development, as well as optimizing work processes. certainly, advancing in this regard triggers a particular challenge. consequently, the implementation of digitalization strategy must be secure, yet cautious, keeping in consideration the need to safeguard a balance between providing the best customer experience and ensuring the security of services. confident in our common vision and joint commitment to progress, i invite you to work with dedication towards building a better future for the economy | ardian fullani : overview of albania β s latest monetary and economic developments and outlook speech by mr ardian fullani, governor of the bank of albania, on the monetary policy decision of the bank of albania β s supervisory council, tirana, 25 june 2014. * * * the supervisory council of the bank of albania reviewed and approved today the monthly monetary policy report. based on the most recent economic and monetary developments in albania, and following the discussions on their outlook, the supervisory council decided to keep the key interest rate unchanged, at 2. 50 %. the council considers that the gradual transmission of earlier interest rate cuts to the financial markets will provide adequate monetary conditions for inflation to return to target over the medium term. let me now proceed with an overview of the economic developments and key issues discussed at today β s meeting. * * * annual inflation rate was 1. 6 % in may, slightly down from the previous month. inflation fell due to the reduction of health care prices, while prices of other items in the basket recorded low volatility. as with previous months, annual inflation continues to be determined by unprocessed food prices, which contribute around 88 % to its final rate. from the macroeconomic perspective, the performance of consumer prices continues to reflect weak inflationary pressures, both from the domestic economy and the external sector. the negative output gap does not favour an increase in employment and wages, leading thus to a low increase of other production costs. imported inflationary pressures remain subdued ; inflation in albania β s trading partners and the rise in commodity prices are at low levels, while the exchange rate is stable. inflation expectations and the liquidity situation in the economy are in line with the low inflation rates for the period ahead. indirect available data on economic activity signal for positive growth rates in the first months of the year. aggregate demand improved, driven by both private domestic and foreign demand, while the consolidating fiscal policy pursued during this period did not contribute to an increase in demand. incoming data for june have not changed our assessment on the performance of private consumption and investments. while these important components of aggregate demand were upward during the period, their performance remains weak. their steady recovery continues to be impeded by uncertainties faced by households and businesses and reflected in the greater risk aversion of the real and financial sectors of the economy. the bank of albania expects further improvement in private consumption and investments for the rest of the year, reflecting, among others, its easing monetary | 0.5 |
are at stake. at the end of the crisis, when it is economically justified to downsize those measures, economic nationalism will be lurking again, albeit unintended. at the end of the crisis we may enter a period in which governments cannot sell their stakes in banks or downsize the coverage of the insurances schemes, without the risk of putting their institutions at a comparative disadvantage to their protected peers abroad. it β s time to start thinking about a credible exit strategy. again, coordination and timing are important. selling or reducing stakes in banks too early could reduce investors β and depositors β faith in those banks. getting out too late would cause a prolonged period of market disruption as institutions ( partially ) owned by governments are at a competitive advantage over privately owned banks. prolonged government intervention hampers the healthy effects of competition. normalization of the markets is far more difficult under those circumstances. even if unintended and socially justifiable, substantial state interests in financial institutions is effectively protectionism. guarantee schemes are a powerful tool to create confidence in banks and protect depositors, but the downside is that they stand in the way of market normalization. and the threat is not just that some governments may choose to maintain their policies longer than others. the terms and conditions of state withdrawal will materially affect a bank β s competitiveness vis - a - vis its peers. in other words, the level playing field is at risk. everyone can rationally envision the problems of downsizing crisis policies, and the subsequent reluctance of governments to reverse nationally orientated measures. especially if this puts their financial institutions at a comparative disadvantage. since all governments are going to face this dilemma, the only way out is coordinated action. if we fail to coordinate towards the end of the crisis, distortions will emerge and some governments will keep substantial stakes in credit institutions for a long time. while i don β t say governments shouldn β t hold stakes in financial institutions, i think it is time to discuss the terms and conditions, including the exit strategy. fighting this crisis has been a learning process. and i guess we are still on the steep part of the learning curve. we have definitely experienced that it can always get worse, and to be prepared for that. we have seen that measures labelled as β too drastic β may at some point become the appropriate response. and we have learned that you can β t fight a crisis like this on your own. by many standards this crisis has been, and still is | of their banks hoping to collect their savings lives on forever, even in movies. who can forget the american christmas classic it β s a wonderful life, when jimmy stewart and donna reed used their honeymoon savings to keep the bank open. we have seen the three elements of systemic risk at work many times since then. for example, during the asian crisis of 1997, the russian default crisis of 1998, and of course the global financial crisis of 2008. having been a witness to all these three crises in the course of my professional career, i must say each one of them was a fresh eye - opener. throughout history, financial policies have aimed to contain systemic risk and build resilience in the financial system. for example, after the financial crisis of 1907, the federal reserve was established to act as a lender of last resort. and after the banking crises of the 1930s, we saw the birth of capital requirements and deposit insurance, in the us and elsewhere. the reforms after the 2008 global financial crisis can be seen in that historic context. capital and liquidity requirements for banks were raised to increase their loss - absorbing capacity and to withstand an outflow of funds. capital requirements were raised even further for highly interconnected global banks. and counterparty credit risk was reduced by increasing margin and collateral requirements and by establishing central clearing counterparties. despite this historic tradition, there was also something new about the post - 2008 reforms. this time the reforms were a truly international effort. the g20 nations established a financial stability board that coordinated the development of new policies. the fsb also encouraged these policies to be implemented in a coherent manner across sectors and countries. the fsb was also given the task of monitoring the global financial system for new weaknesses and springing into action at short notice once a new crisis hit. since modern financial markets do not stop at national borders, that was a very important step. we still reap the benefits from this today, and i will discuss this aspect later on. so we have identified the elements of systemic risk and how this has shaped financial crises and policy responses. let us now look at how the financial system has weathered the covid storm. first and foremost, the bold policy response by governments, central banks and supervisors, helped maintain global financial stability and sustain the supply of credit to the economy. also, the global financial system, at least its core parts, is more resilient than it was ten years ago. this is largely due to the financial reforms in the | 0.5 |
β, summary of a speech given by toshihiko fukui, governor of the bank of japan, to the japan chamber of commerce and industry in tokyo on 16 march 2006. woodford m. β for not only do expectations about policy matter, but ( β¦ ) very little else matters. β β interest and prices : foundations of a theory of monetary policy, princeton university press, 2003. been followed recently by the norgesbank 21. at first ( since 2003 ) the norwegian mpc published its monetary policy intentions only for the next four months in the form of an interest rate forecast interval. last november it went further and started publishing a forecast for interest rates three years ahead in the form of a central forecast ( with two alternative scenarios ) along with a fanchart ). these bold steps made new zealanders and norwegians push the frontier of central banking ahead and set a new benchmark for inflation targeters 22. are we ready to follow? in 2000 mahadeva and sterne measured central banks transparency 23. back then the polish central bank was below the average among inflation targeters. however since then the nbp has made considerable progress. major changes to communication have been introduced such as publication of inflation forecasts, modification of inflation reports and decision statements in order to make them more forward - looking. Εyziak et al. have applied the mahadeva - sterne and eijffinger β geraats indices to assess current transparency of the nbp and showed that it has markedly improved 24. nevertheless, we are not resting complacently. there are still ways to go and things to learn. later today marek rozkrut will present results of an empirical study conducted at the nbp 25 showing that central bank communication strategies in the czech republic, hungary and poland exhibit large differences. the czech national bank seems to do a much better job than the other two banks in matching words with deeds. there is also some evidence that pursuance of too many targets under it framework leads to inconsistencies also in central bank communication, as in the case of the hungarian national bank. finally, to those of you, who intend to adopt it in the future let me say one last thing. a standard view is that it should not be introduced unless a number of criteria are fulfilled. as piotr szpunar will tell you in the first presentation, at the time poland adopted it one could claim we were not ready | . real rates decreased from 3. 0 to 1. 7 in the same period. this in turn helped to accelerate credit growth and fuelled asset bubbles. the amount of loans granted to households increased 3. 5 times since 2004 and almost 10 times since 2000. low deposit rates and economic upturn in cee after eu accession encouraged both financial institutions and individuals to move toward more risky forms of investment. as a result, real estate prices soared after 2004 and equities listed on stock exchanges reached historical highs. since 2003 major stock exchange indexes in cee increased on average by almost 300 percent. while part of this asset price and credit growth may be explained by structural factors often referred to as β convergence β, the observed rates of growth are clearly unsustainable and they contribute to economic imbalances. with the benefit of the hindsight one could argue that monetary policy in the last few years did not properly take into account the possibility that prolonged period of historically low interest rates may contribute to asset bubbles and hence contribute to greater inflation see imf czech republic, estonia, latvia, lithuania, hungary, poland, slovenia, slovakia. volatility in the future. as argued by rogoff ( 2006 ) when faced with a tail wind monetary authorities in both developed and developing world should have temporarily lowered the inflation target rather that reduce interest rates too much for too long. but there is another issue. it seems that globalisation tail wind is reversing these days and that in the coming few years central banks can face β globalisation headwind β amid rising food and energy prices. 1. agflation is the rise of inflation due to increase of food prices. in recent months we have witnessed a significant increase of food prices, grain and oilseeds being the leaders. prices of food products on international markets has risen by almost 40 per cent within last two years and prices of grain and oil seeds has almost doubled within this period. many forecasters suggest that this trend will not end in the nearest future. there are several explanations of such situation. firstly, rising oil prices increase demand for alternative sources of energy, biofuels being high on the agenda in many regions. in effect industrial demand for food commodities will further rise. by the way, it is worth to mention what may be the ecological consequences of growing biofuels production. spiegel online on 26th september 2007 described a research led by the nobel - price winning chemist paul crutzen which had found that biofu | 0.5 |
peter praet : creating an enabling environment for pan - european banks in the banking union remarks by mr peter praet, member of the executive board of the european central bank, at the eurofi financial forum 2018, vienna, 5 september 2018. * * * in recent years, the european union has achieved major progress towards financial integration. we now have a single supervisor and a single resolution authority, and banks are subject to the same european rulebook. the banking union contributes to providing effective mechanisms for cross - border risk - sharing and broadening the sources of funding within a country, thereby promoting macroeconomic stability and growth. however, we still observe a number of obstacles that hinder the fungibility of capital and liquidity of banking groups. very often, these obstacles relate to regulatory fragmentation and ring - fencing of national markets. further harmonisation would help to address many of the issues, while appropriate prudential safeguards can be put in place to address possible financial stability concerns by national authorities. first, a number of national options and discretions are hindering the practical application of cross - border liquidity waivers within the union. while such waivers are explicitly allowed by the crr, and already contain prudential safeguards, so far the ecb has received almost no application for their use from the banks it supervises. an important reason for this lack of applications is the existence of national large exposure limits on intragroup exposures in several european countries. these limits prevent institutions in these countries from transferring liquidity within the group in a flexible manner and thus represent practical obstacles to the use of liquidity waivers. effectively, they are hindering the free flow of liquidity in the banking union and should be harmonised further. second, the proposal to have cross - border capital waivers within the eu was not taken forward in the on - going review of the crr, which is a missed opportunity. such waivers would be consistent with the establishment of the ssm and the banking union and help to support the free flow of capital across the union. on the one hand, it is understandable that some national authorities are concerned about the possible financial stability implications of the proposal. on the other hand, such concerns could be addressed by making the waivers subject to additional prudential safeguards, and by putting in place appropriate transition arrangements that account for the planned further progress on the banking union. third, the major progress we have made in our banking union needs to be recognised also in the international | crisis. this was the case both for the total volume of lending and its contribution to the consolidated result, while the depreciation of emerging countries β currencies also came into play. 11 in any event, the weight of external business in the main spanish banks β ordinary net income has increased. hence, without taking into account the however, behaviour was uneven in firms ( with an increase of 6. 6 % ) and in households ( where there was a decline of 5. 6 % ). see, for example, the october 2020 bank lending survey in spain. menendez - pujadas and mulino ( 2020 ) summarise the results of the survey for the participating spanish banks. see d. rodriguez - miera and r. vegas ( 2021 ), β impact of the dividend distribution restriction on the flow of credit to non - financial corporations in spain ", analytical articles, economic bulletin, 1 / 2021, banco de espana. the return on equity ( roe ) stood at - 3. 1 % ( 10 pp down on the figure of 6. 9 % recorded a year earlier ), and at 4. 8 % if extraordinary adjustments are stripped out. in particular, as discussed in the previous fsr, the two biggest banks made adjustments to their goodwill for an amount of over β¬12 billion in the first half of the year, and one of them made further adjustments to its deferred tax assets. moreover, in its end - of - year accounts, one bank, as a result of its merger being approved, recorded a fair value correction for an amount exceeding β¬5. 5 billion, in accordance with accounting regulations. net interest income and fees also showed year - on - year declines, of around 10 %, while gains on financial assets and liabilities ( up 35 % ) and operating expenses ( a decline of almost 11 % ) were the only items that improved compared with the previous year. the fall in operating expenses led net operating income to increase slightly β by 0. 7 % β on the previous year. the crisis affected unevenly those countries where spanish banks'main exposures are to be found ( gdp fell by 8. 5 % in mexico, 4. 5 % in brazil, 1. 5 % in turkey, 3. 5 % in the united states and 9. 9 % in the united kingdom ). adjustments made by the main spanish banking groups to the goodwill of their uk and us subsidiaries, net ordinary earnings on external business stood above 80 % | 0 |
accountable to the european parliament, and it is becoming more and more transparent. it nowadays also explains its actions to national parliaments. we have also increased transparency regarding our decisions by publishing the minutes of monetary policy meetings. one day, i am sure, we will publish how the different members of the governing council vote. we have already come a long way in this regard, and we will continue to follow this path. will the ecb save the euro? the euro is no longer in danger in the way that it could have been three years ago. but your question is revealing β it shows that society β s expectations of central banks are still excessive. in one respect, the fact that the ecb is independent of political constraints means that everyone pins their ( unrealistic ) hopes on it in terms of economic policy. but this is unreasonable! if too much is asked of central banks, they will become beholden to vested interests and less effective, losing their legitimacy in the process. but isn β t this evolution of the role of central banks irreversible? the best response is to show that we can consolidate growth without relying on monetary policy. this is the biggest issue for the coming months and years. to fulfil their goals in an extraordinary economic environment, central bankers have had to take no less extraordinary decisions that have placed them centre stage. as soon as stability returns, i have no doubt that they will return to their ploughs, like cincinnatus in roman times. are you a candidate for the position of governor of the banque de france? this is a decision for the french president alone. the banque de france is the ecb β s second - largest shareholder. it is a magnificent institution that should continue to make its voice heard in the euro area and in global financial debates. bis central bankers β speeches | governments, not the ecb, to make decisions in this regard. could the ecb make some kind of gesture? the ecb β s claims on greece stem not from loans that have been granted to the country, but from bonds purchased in the capital markets at the height of the crisis to improve the transmission of our monetary policy decisions. we are not allowed to restructure them, as the treaties prohibit us from providing financial assistance to states. the negotiations between greece and its creditors seem to be a dialogue of the deaf β¦ the goal is to strike a balance between the programme of a newly elected government that has strong democratic legitimacy and the interests of the other euro area countries, which are also democracies. the issue is not just the reforms that are necessary for greece, but also the fact that these reforms are financed by taxpayers in other countries, who have also been affected by the crisis. bis central bankers β speeches would a greek exit from the euro area trigger the demise of the single currency? the ecb, i reiterate, wants greece to remain in the euro area. if, one day, a country were to leave the euro area, that would be a serious warning sign for europe, because the question would inevitably arise as to whether such a scenario could be repeated. but the answer to this question is widely known β it seems to me that there is a broad consensus concerning the conditions that enable each country to benefit from the advantages of the euro on a lasting basis. these conditions include accountability before, and solidarity towards, peers. these common values should be reflected in national and european institutions. incidentally, the countries that have committed themselves to these values have successfully overcome the crisis ( notably spain and ireland ). so i am not at all worried about the cohesion of the euro area. but if a country were to decide to depart from this consensus, that would undoubtedly oblige the other countries to unequivocally consolidate their commitment to the values i just mentioned by accelerating the process of strengthening the euro area. this would entail the acceleration of a process of institutional reflection which is currently a longterm endeavour. is the imf being too demanding? the imf has a different mandate and different shareholders from the european institutions. it works on behalf of 188 countries, most of which are not in the euro area and have a standard of living lower than that of greece. so the imf has concerns regarding equal treatment that i think are entirely legitimate. 4 | 1 |
economies β share of global activity has risen from 40 % to 60 % and their share of global trade from one fifth to one third. yet at present, their financial assets make up only 10 % of the global financial system. this will quickly change. as emerging market economies continue to open up, their share of global financial assets could treble to around a third by 2030. maintaining the uk β s share of cross - border capital flows during this process could plausibly increase the balance sheet of our financial sector we host from the current 10 to 15 times gdp by 2030. this will significantly boost uk prosperity β provided the associated risks of such an open system are managed responsibly. responsible openness rests on three pillars. the first is strong global standards. the uk has been at the forefront of g20 reforms to create a global financial system that is safer, simpler and fairer. implementation is now being regularly assessed and transparently reported by the fsb and the imf. this second pillar is deep supervisory cooperation. to manage cross - border challenges to financial stability, international authorities must share relevant information and work together. as the home to four, and host to the other 26, globally systemically important banks, the bank of england participates actively in all major supervisory colleges, sharing information and expertise gained from overseeing the multitude of complex risks unique to london. we expect the same from those whose firms operate and take on large risks here. the pra β s open, cooperative approach to supervision means wholesale activity in london can remain globally - integrated and highly efficient, without compromising resilience. the third pillar of responsible openness is ending β too big to fail β. with enhanced resolution powers and planning, the bank of england now has the ability to resolve failing banks. the uk β s major banks are on track to complete this year the ring - fencing of their critical domestic high - street businesses from their riskier wholesale activities. and they already hold loss absorbing resources of 25 % of their risk - weighted assets against a 2022 requirement of 29 %. as a consequence of this progress, market discipline is returning, with the public subsidy enjoyed by the largest banks having fallen by 90 %. now is the time to reap the benefits of these enormous efforts. platforms are being created for deference to each other β s approaches when they achieve similar outcomes. with the three pillars in place, an open, resilient global financial system is possible. see the bank of england | economic dynamics. although they are likely to play out over a period that is longer than the bank β s typical policy horizon, these trends will have profound implications for central banks. they include changing demography, increasing longevity, inequality, climate change, the increasing importance of emerging economies and the development of digital currencies. by affecting a range of phenomena β from the evolution of real interest rates to risks to the financial sector to the future of money and banking itself β all of these trends have the potential to re - shape our policy challenges. we need research to set us on the front foot to face them. bis central bankers β speeches competitions before concluding, to catalyse interest in the one bank research agenda, i am delighted to announce that today the bank of england is launching two competitions. the first is on data visualisation. to coincide with the release of the new bank data sets, we want to see what novel insights they can yield. the visualisation could be a static description of an interesting pattern or relationship in the data or the creation of an interactive app. entrants are free to focus on whatever they like, as long as it employs some of the newly available data in some way. the second competition is for the best research paper β the β one bank research β competition. we are particularly keen to engage early career researchers across the academic world. for our inaugural competition, the paper should be on some aspect of β the interaction between microprudential, macroprudential, and / or monetary policy β. the winners of each competition will be decided by separate judging panels of bank staff and external academics. the prize for both competitions will be Β£5, 000. further details on how to apply are now live on our website. conclusion economies are complex, dynamic and constantly evolving systems, underpinned by social interactions and behavioural change ; shaped by fundamental forces like technology and globalisation ; and supported β or at times disrupted β by finance. policymakers need research to help understand these phenomena and to craft our responses to them. and research can make some of its most effective contributions by addressing the priorities of policymakers. by focussing on a clear set of research priorities, by opening up our datasets, and by creating tighter links between policymakers and researchers, both within the bank and across the broader research community, we can all help advance the bank β s mission β promoting the good of the people of the united kingdom. thank you. bis central bankers β speeches | 0.5 |
unemployment drops below 4 percent. in the late 1960s, unemployment remained at or below 4 percent for four years, and during that time inflation rose steadily from under 2 percent to almost 5 percent. by contrast, the late 1990s episode of below - 4 - percent unemployment was quite brief, and during the episode and surrounding quarters inflation was reasonably stable and remained below 2 percent. to explore the phillips curve relationship in these two periods more closely, we need to bring in the concept of the natural rate of unemployment. in standard economic thinking, an unemployment rate above the natural rate indicates slack in the labor market and tends to be associated with downward pressure on inflation ; unemployment below - 5the natural rate represents a tight labor market and is associated with upward inflation pressure. figure 3 repeats figure 2 but replaces unemployment with labor market slack as measured by unemployment minus the cbo β s current estimate of the natural rate of unemployment at each point in time. 6 periods of tight labor markets are shaded. during the great inflation, inflation generally rose in the tight, shaded periods and fell in the unshaded ones, just as conventional phillips curve reasoning predicts. from 1995 to today, the large and persistent swings in the gap between unemployment and the natural rate were associated with, at most, a move of a few tenths in the inflation rate. comparing the shaded and unshaded regions, you might see some association between slack and the minor ups and downs in inflation, but the pattern is not at all consistent. it is evidence like this that fuels speculation about the phillips curve β s demise. whether dead, sick, or merely resting, many of the questions about the phillips curve come down to figuring out what changed between these two periods, and why. let us turn to a conceptual framework for examining these questions more systematically. a simple framework for understanding changes in the jobs - inflation relationship a natural starting point is the simplest form of a phillips curve equation, which posits that inflation this year is determined by some combination of current labor market this estimate is the cbo β s current assessment of what the natural rate was at each period in the sample, not a measure of the natural rate as perceived in real time. i discuss the importance of this distinction in powell ( 2018 ). - 6slack, inflation last year, and some other factors that i will leave aside for this discussion ( figure 4 ) : 7 inflation ( t ) = - b slack ( t ) + c inflation ( t - 1 ) + other | to which cost pressures have been restrained by substantial slack in the utilization of productive resources. notably, the unemployment rate remains fairly close to last fall β s peak and is currently about 5 percentage points above the rates that prevailed just before the onset of the financial crisis. trimmed - mean and median cpi measures are published regularly by the federal reserve bank of cleveland ; these indicators are constructed using the distribution of monthly price changes for the disaggregated components of the cpi. the median cpi inflation rate is the price change at the center of this distribution, and the trimmed - mean cpi inflation rate is a weighted average of all components excluding the most extreme price increases and decreases. for further information, see www. clevelandfed. org / research / data / usinflation / chartsdata / index. cfm. in gauging the magnitude of prevailing resource slack and the associated restraint on price and wage increases, it is essential to consider the extent to which structural factors may be contributing to elevated rates of unemployment. for example, the continuing high level of permanent job losers may be a sign that structural impediments β such as barriers to worker mobility or mismatches between the skills that workers have and the ones that employers require β are hindering unemployed individuals from finding new jobs. the recent behavior of unemployment and job vacancies β somewhat more vacancies are reported than would usually be the case given the number of people looking for work β is also suggestive of some increase in the level of structural unemployment. on the other hand, we see little evidence that the reallocation of workers across industries and regions is particularly pronounced relative to other periods of recession, suggesting that the pace of structural change is not greater than normal. moreover, previous post - world - war - ii recessions do not seem to have resulted in higher structural unemployment, which many economists attribute to the relative flexibility of the u. s. labor market. overall, my assessment is that the bulk of the increase in unemployment since the recession began is attributable to the sharp contraction in economic activity that occurred in the wake of the financial crisis and the continuing shortfall of aggregate demand since then, rather than to structural factors. 3 the public β s expectations for inflation also importantly influence inflation dynamics. indicators of longer - term inflation expectations have generally been stable in the wake of the financial crisis. for example, in the federal reserve bank of philadelphia β s survey of professional forecasters, the median projection for the annual | 0.5 |
eddie yue : the development and future of the offshore renminbi market welcome remarks by mr eddie yue, deputy chief executive of the hong kong monetary authority, at the third meeting of the hong kong β london rmb forum, hong kong, 26 september 2013. * * * the right honourable greg clark mp, distinguished guests, ladies and gentlemen : 1. i would like to extend a very warm welcome to all of you to this seminar, which is organised as part of the third meeting of the hong kong β london rmb forum. the forum was launched in january 2012, and it aims to foster cooperation between hong kong and london on the development of offshore rmb business. by improving linkages between our two financial centres, it is hoped that the forum could help to further deepen and broaden the offshore rmb market, and to better enable businesses and financial institutions to capture the opportunities arising from the increased channels for transacting with china. 2. significant progress has been made in the development of the offshore rmb market since our first meeting in may 2012. it is encouraging to see that market practitioners are making use of the policy headroom to develop rmb products and services to meet their customers β needs. opportunities in rmb are also being factored into the decision - making of many businesses and financial institutions. 3. here, instead of focusing on recent developments in rmb, i would like to take a broader and more forward - looking view. in particular, china β s financial sector reforms and specifically the eventual opening up of its capital account would likely have profound implications for the global financial landscape. it would be interesting to view rmb developments from the perspective of these potential changes β what do they mean for the global financial landscape and what would be the role of the rmb amid these developments. 4. as we are all aware, china has been moving steadily with financial sector reforms and capital account liberalisation, taking steps towards allowing market forces to play a greater role in its financial system. recently, the chinese authorities re - affirmed their commitment to further financial reforms, including the easing of market access, the liberalisation of interest rates, as well as working towards eventually making the rmb convertible under the capital account. and this process has reached an interesting juncture. the future reform and liberalisation efforts will arguably have a greater impact on the global financial landscape than that of measures undertaken so far. 5. as china moves further along the path to open up its capital account, the | the rmb has advanced to rank eleven as world payments currency according to swift, a financial messaging service provider. meanwhile the rmb is being added to the foreign exchange reserves of an increasing number of economies. 11. in terms of international transactions where rmb can already play a role, such as in trade settlement and foreign direct investment, transactions in rmb have climbed steadily. today, some 13 percent of all of china β s trade transactions are settled in rmb and about 15 to 20 percent of foreign direct investment into china is conducted in the currency. bearing in mind that the rmb trade - settlement pilot scheme was only introduced in 2009, this is an impressive achievement in such a short space of time. and there is plenty of room for further expansion of these numbers. 12. the greater use of rmb in international transactions will be closely related to china β s financial reforms and liberalisation, with new fund flow channels being opened up in rmb. for example, the rmb qfii scheme allows offshore institutions to use rmb funds to invest in chinese capital markets, and it is a new channel in addition to the us dollar - based qfii scheme. and further to a recent relaxation, outflows under the qdii scheme can also be made in rmb. such developments, in turn, will bolster the use of the rmb in trade, foreign direct investment and international transactions, thereby supporting the further development of the offshore rmb market. 13. while recent developments in rmb have been exciting, given the possible scope of future expansion, we are probably still only at the early stage of what could be more significant changes in the years to come. after all, rmb deposits and bonds outstanding in the offshore market only account for about one percent of onshore deposits and outstanding debt respectively. the possibility for expansion remains substantial. 14. one of the aims of the hong kong - london forum is to assess what all this means to the financial institutions and to corporates β many of whose representatives are gathered here today. 15. for corporates, especially those already having business links with china, it is important to get prepared for the increasing use of rmb as a currency for transaction, financing and investments. indeed some companies have already begun to adapt their internal systems and processes so that they are able to make greater use of rmb, both in dealing with their chinese counterparts and in their own financial management. this integration of rmb in their business decisions has | 1 |
remaining the core source of financing. with this mind, we are looking forward to an accelerated timeframe for the review of the overall size of the imf quotas. we would also support an initiative discussed at the executive board to make better use of existing sdrs for the benefit of poorer members, and repeat our call for a new general allocation of sdrs. 2 / 2 bis central bankers'speeches | but there are a number of indicators that suggest it has been a positive experience. one way of looking at it is to compare the pre - and post - inflation targeting period outcomes. while this approach gives us some indications, the causal relationships may be unclear, and the different periods were subject to different shocks which may distort the picture. nevertheless, the data does show that inflation targeting has been consistent with an average inflation rate lower than in the previous decade, and accompanied by lower volatility and lower nominal and real interest rates. similarly, growth outcomes have been more favourable, which undercuts the argument that is sometimes made that inflation targeting is inimical to growth. we have adopted a flexible inflation targeting approach, conscious of the trade - off between short - term inflation variability and output variability. this approach has been appropriate both in dealing with exogenous shocks, as well as responding to periods of slow growth, as is currently the case. while growth does have a positive weight in the mpc β s objective function, and consideration is given to the real economy in making monetary policy decisions, we believe that monetary policy, whatever the framework, does not impact significantly on long term potential output growth. bis central bankers β speeches looking at some of the comparative data, we see that in the 10 years before inflation targeting was adopted, inflation averaged 9, 7 per cent, and this declined to 6, 3 per cent in the full inflation targeting period, while average gdp growth improved from 1, 6 per cent to 3, 3 per cent. the average nominal policy rate declined from 15, 5 percent to 8, 5 per cent, while the average real policy rate declined from 5, 7 per cent to 2, 2 per cent. if we simply look at the period from 2010, inflation has averaged 5, 3 per cent, real gdp growth 2, 6 per cent, the repo rate 5, 5 per cent and the real repo 0, 3 per cent. the volatility of all these variables is also lower in the inflation targeting period. other positive indicators are the increased contracyclical nature of monetary policy ( as noted inter alia in work by ben smit and stan du plessis ), as well as the relative stability of inflation expectations, albeit, in the last three years, at the upper end of the target range. this topic will be explored further in the presentation by alain kabundi. but it has not all been plain - sailing, and | 0 |
. in order to have a responsible approach in this regard, the bank of albania has approved the strategy on financial education and inclusion ( boasfei ). this document, as compiled in compliance with the best international practices, makes official the efforts of the bank of albania in promoting financial education as a public good for everyone, for bolstering financial inclusion, consumer protection and increasing financial welfare of individuals as well as the stability of entire financial system. we are pleased to share this objective with various public and private institutions and organisations engaged in the area of finance, education and development, which focus their work on the enhancement of financial literacy. the common work may transform the bank of albania strategy on financial inclusion and education into a national one, which would coordinate at a national level the initiatives of all stakeholders, driving to more tangible results. i am optimistic that we will reach this objective sooner rather 2 / 3 bis - central bankers'speeches than later. the activity today is part of this strategy'the action plan, allowing these important collaborators to present and display their work and projects and coordinate their visions and objectives. as we work together for accomplishing these common objectives, a special thank is addressed to public institutions that adopt policies which promote financial education and inclusion ; financial institutions that develop and provide all - inclusive financial products and services ; educational institutions which integrate financial education in their curricula and programs ; non - government organisation that work in the field to educate and empower their communities ; as well as the information technology companies and fintech innovators who work to digitally transform the financial sector. before concluding, i would like to express my gratitude to the world bank, seco and the swiss embassy in tirana, and absolutely the albanian government, as they are important partners in the process of drafting and implementing these challenging projects. together, we could build an inclusive society in a financial manner, where each individual can develop and realise its own potential. thank you! 3 / 3 bis - central bankers'speeches | gent sejko : albania's path to sepa integration, financial inclusion and education address by mr gent sejko, governor of the bank of albania, at the bank of albania and world bank workshop " albania's path to sepa integration, financial inclusion and eduction ", tirana, 14 june2024. * * * dear ladies and gentlemen, i am delighted to warmly welcome you in this workshop, focusing on two important topics : submission of application for integration in the single euro payments area ( sepa ), and the importance of financial inclusion and education, as crucial issues for the development of albania. these topics might, at first glance, seem unrelated to each other, but they share a single objective : improving the well - being and financial stability of albanian families and businesses. if handled with responsibility, both of them might contribute to the financial and macroeconomic stability of albania. more than ever, the economic growth and economic stability depend on the financial empowerment of all our citizens. due to the rapid developments in the field of : finance, artificial intelligence, digitalisation ; as well as in economy and money, our commitment towards these objectives has become purposefully. allow me first to list some of the most important developments taking place in payment systems. the bank of albania, in the past year, has considerably intensified the efforts for accelerated membership of albania in the single euro payments area - sepa. these efforts have been materialised in touchable measures and quite optimistic. two days ago, the bank of albania officially submitted the application to the european payments council for albania's membership in sepa, ranking the first country in the region to successfully complete this important phase of integration into the euro payments area. it is important to highlight that the drafting of the application has been a laborious task led by the bank of albania, but thanks to our preparatory work and cooperation with other several public institutions, this project is being carried out successfully. the accelerated membership in sepa is one of the measures laid out in the project " payment systems modernization in the western balkans ", which has become a national priority in the framework of fulfilling the new growth plan for the western balkans of the european union. it has the support of the european commission, the regional cooperation council and the world bank. membership in sepa brings multidimensional benefits to albania in the framework of the integration process in the european union, also as regards the albanian economy and the domestic payment market. simplification | 1 |
it can affect is demand, which can be applied to reduce the volatility of output. more technically, as long as prices are fairly stable, changing a nominal variable such as interest rates can temporarily affect real variables, including quantities of goods and services. this is useful when demand is too weak, during downswing phases of business cycles. where a central bank aims for a growth rate which requires more output than an economy can produce, however, the results are troublesome. for a small open economy such as south africa, this typically means that we experience unsustainable imports, currency depreciation and rising inflation. in modern central banking practice, we formalise these intuitions using a concept called β potential growth β, which is an estimate of the amount an economy can produce at full capacity. to the extent an economy is not at potential, we say it has an output gap. if output is below potential, then the output gap is negative ; if it is above potential, the gap is positive. for every mpc meeting, the forecast team prepares estimates of south africa β s potential growth and the output gap. they are unobservable concepts and must be estimates using imperfect techniques, which makes them uncertain. so, when i look at these figures, and how they shape the forecast and the policy advice, i do not quibble about the exact numbers, but i think about what kind of problem these numbers describe, how this information squares with the other information available, and how policy should then respond. as of the january 2023 mpc forecast round, those numbers told an extraordinary story. i have already mentioned that our growth projections are very low, but our potential growth estimates are even lower. the team estimates potential growth at 0 % this year, then 0. 6 % in 2024 and 1 % in 2025. because the economy performed better than expected last year, and because expected growth is above potential, the forecast now sees a small positive output gap developing this year. in other words, in the interpretation of our quarterly projection model ( qpm ), we have an economy operating modestly above its potential. and this, in turn, supports policy advice to raise rates not only because inflation is above target, but also because growth is too high. in assessing this forecast story, i am struck by two plausible but competing interpretations. the first interpretation is that potential growth must be 0 %, or worse, given the scale of supply - side dysfunction in the economy. | after all, isn β t it hard enough for people just to achieve the output they delivered last year, let alone produce more? we know electricity shortages have intensified ; we expect to have 250 days of load - shedding this year, from 157 days last year and 48 days in 2021. on top of that, the freight rail system has, for the most part, not been functioning optimally, removing another pillar of the economy β s productive potential. there are many other constraints in the economy that also suppress potential growth. for our forecast team, these are facts that must be faced squarely, and it β s better to accept them up front than gradually mark down the projections as disappointing data come in. of course, it is reasonable to expect that south africans will find ways to cope with these challenges, and that there will be policy steps to address them with time. for this reason, potential growth rises over the forecast period, reaching 1 % in 2025. but the narrative for this year is that the economy does not have the supply - side capacity to produce more than it did last year. at the same time β and this is the second interpretation β is it possible for the economy to be at full potential when unemployment is over 30 %? the quarterly employment survey recorded 10. 57 million formal jobs at the end of 2019, against 9. 98 million now. 9 were all those workers unproductive, so that recovering those roughly half - amillion jobs would add nothing to output? are all sectors in the economy at full capacity? can potential realistically be at zero? these competing views are not wholly incompatible. they both capture important truths. the main point of the comparison is to illustrate how the economy is short of some inputs, like electricity, but there is slack in other areas, such as employment. in these conditions, what the mpc is trying to gauge is the space to satisfy additional demand and follow through on what that means for monetary policy. the difficult part, for the mpc, is judging how much we can do to help on the demand side when the supply side of the economy is in such a perilous state. in common with many other central banks, we are flexible inflation targeters. we aim to achieve our inflation targets while also considering growth ; if inflation is above target but there is a negative output gap, then we can tolerate a somewhat slower disinflation path for the sake of supporting demand. no one really targets inflation exclusively, | 1 |
all of these tools in place, lvrs, dtis, interest rate floors, and enhanced prudential buffers, we would have a number of different ways of enhancing the resilience of the new zealand financial system to deal with different challenges as they appear. _ _ _ _ _ _ _ _ _ _ _ _ 11 on the prudential side, we are increasing the prudential buffers that banks are required to maintain. these prudential buffers will include a countercyclical capital buffer ( ccyb ). our approach to administering the ccyb is somewhat different to other countries, as we do not intend to be as active as other countries in adjusting it, as it will be fully incorporated in the capital requirements. this is consistent with our understanding that macroprudential policy tends to be less effective in managing the top and bottom of cycles but rather as through - the - cycle policy to add to overall resiliency. next steps looking ahead, there are two main next steps on our macroprudential agenda. consulting on additional tools to complete the suite we are currently consulting with banks and the general public on adding debt β to - income ( dti ) tools to our framework. some banks have expressed their preference for a floor on test interest rates instead of a dti. they have argued that an interest rate floor would be much easier for them to administer and it could, in the end, achieve similar results. while we have taken on their argument, a dti continues to be our preferred option. we feel that a dti produces a better control on the probability of default as a complement to the reduction in loss given default provided by existing lvr restrictions. by contrast, test interest rates are only one input into banks β serviceability assessments, and there is a risk that a test rate floor could be offset by adjustments to other elements of banks β calculations. however, an interim test rate floor could be put in place in the short term if necessary to address financial stability risks. we are currently looking for banks to be operationally ready to introduce a debt servicing tool by mid - 2023, if they are required12. enhancing our framework and communications for monetary policy, so - called β neutral interest rates β provide a sense for whether the current settings for interest rates are expansionary or contractionary. in a world where macroprudential tools have turned out to be a more permanent feature of the landscape than we initially expected, | a breakfast discussion, with or without my college diet of eggs. so let β s get to work on the subject you have given me through your chairman, my friend georges leung shing : β improving corporate governance in the financial services industry in the world and, in particular, in mauritius from the regulators β point of view β not a narrow topic, i see. each one of these elements might perhaps justify a lecture in its own right, if not a book! corporate governance is far from being a narrow subject but going into the intricate details might, i fear, provoke some indigestion this morning. i thought that, in his introductory remarks, my friend georges has done a good job of setting up the boundaries within which to conduct our discussions on corporate governance. among the previous guests that your institute has invited at similar events in the past, i noted the names of alex berg and prof bob garratt, who are well - known for their contribution in the area of corporate governance. i also see in the audience my good friend, tim taylor, who chaired a major committee locally on the subject. i understand some time ago bis central bankers β speeches mervyn king β not governor king from the bank of england, but prof king from south africa β also paid us a visit and talked to many of you about corporate governance. he has been taking a key role in his own country, south africa, which has established a name for itself in the area of corporate governance, with the king i, king ii and king iii reports. what is corporate governance? the modern focus on corporate governance traces its origin at least as far back as the cadbury report. cadbury, with his own quaker background, would obviously be concerned with issues of corporate governance, with its ethical and moral dimensions. we don β t need to discuss corporate governance in great detail here this morning. your institute has been paying considerable attention to the subject over the years and you all know what it is. you are all aware of the various issues that crop up in this particular area. but i would all the same like to remind ourselves of the half a dozen or so key elements in corporate governance, which cut across different forms of organisation and areas of economic activity. those elements are : efficiency, openness, participation, accountability, transparency, probity, effectiveness and coherence. these key elements stand out in the different treatments of the subject in any report on corporate governance that you may come across. in addition to | 0 |
relatively well ( chart 25 ). the number of initial public offerings β which showed a large decline in recent years β is gradually on a recovery trend, and such movements are now also being observed outside large metropolitan areas. i am quite encouraged by this development. iv. regulatory and institutional reforms, corporate governance reform, and social values so far, i have talked about the outline of the measures toward strengthening competitiveness and growth potential. in principle, this should happen in an economy as a result of individual firms β rational choice. the fact that this is not happening in reality must be the result of economic, institutional, or social factors. accordingly, there is a need to improve the economic environment, i. e., remove those obstructing factors. regulatory and institutional reforms first, there needs to be an improvement, promoted by the government, in the environment that will serve to back firms β efforts aimed at bringing about change. more specifically, it is necessary for the government to carry out bold regulatory reform in order for firms to broaden the areas in which they may embark on new challenges, and to make institutional improvements to the labor market so as to allow workers to move more smoothly into businesses and industries with high growth potential. in order to avoid an increase in excessive social friction arising from responses to changes in the economic environment, it is also necessary to provide support for career changes and to enhance the safety net. corporate governance reform second, it is necessary to ensure the appropriate functioning of corporate governance by stockholders and investors. 5 on this issue, germany is a good source of reference. until the for details on the effects of various legal institutions including corporate governance on corporate profits, please see nobuyuki kinoshita, β the institutional background to characteristics of japanese firms β including low profitability β ( available only in japanese ), imes discussion paper series 2012 - j - 12, institute for monetary and economic studies, bank of japan, 2012. http : / / www. imes. boj. or. jp / research / papers / japanese / 12 - j - 12. pdf bis central bankers β speeches beginning of the 2000s, germany was named as a country putting off essential structural reforms, and the country indeed suffered from slow economic growth in the first half of the 2000s. under such circumstances, however, it engaged in various reforms surrounding corporate activity, including institutional reforms that allowed for flexible adjustments to employment as well as enhanced information disclosure to investors. on this point, japan falls behind | germany, especially when it comes to reforming enterprise law in such areas as corporate rehabilitation, as well as mergers and acquisitions. this is said to hinder dynamic corporate restructuring, thereby eroding the international competitiveness of industries across the board. it is also said that such an environment has accentuated the anxiousness over legal liquidation or removed the fear of being taken over, and encouraged to some extent the excessive accumulation of cash and deposits at firms. social values third, society needs to face possible trade - offs between stability and change. japan has been somewhat dominated so far by a perspective that stressed the importance of stability. the method of adding gradual β improvements β to one β s company β s products in accordance with consumer needs in the existing domestic market can be considered a business management style that puts importance on stability. merely making improvements focused on the domestic market amid a population decline, however, carries the risk of the economy falling into a shrinking cycle. corporate profits will suffer even more in the long term if firms continue to keenly compete in terms of prices while maintaining their commitment to securing employment. if i may make a sweeping generalization, firms are facing a judgment call of choosing between β improvement β, which represents continuity, and β innovation β, which represents discontinuity. if the shock against the economy is temporary, there may be a point to overcoming any difficulties in the immediate future via β improvements β, thus prioritizing stability in the long term. confronting long - lasting shocks such as globalization and population aging by means of the same β improvement β as before, however, may delay responses to significant changes. reform cannot proceed without public consensus. bringing about innovation requires firms β willingness to take on challenges as well as the transfer and reallocation of necessary resources. frictions may well be experienced in the process. while this is not necessarily an issue with one indisputable solution, if environmental change is long - lasting, i find it extremely important for society as a whole to accept such changes and adopt a view that encourages any and all efforts to take on new challenges, in order to successfully carry out reforms toward strengthening growth potential. v. relationship with prices so far, i have talked about the efforts to strengthen the economy β s competitiveness and growth potential. next, getting slightly off track, i will touch upon the relationship between economic growth and prices. the year - on - year rate of change in the consumer price index ( cpi ) is currently around 0 percent, but is | 1 |
. these concern the doubts expressed with regard to the definition of price stability, the importance that the first pillar should be given in our strategy and the role of projections under the second pillar. the governing council of the ecb has defined price stability in the euro area as " year - on - year increases in the hicp for the euro area of below 2 % ", and has stated that " price stability has to be maintained over the medium term ". the definition provided by the governing council ensures accountability and gives clear guidance to expectations of future price developments. the phrase " below 2 % " clearly defines the upper boundary of the rate of hicp increases which is consistent with price stability. this upper boundary is in line with the practice of the national central banks of participating member states before the start of the stage three of emu. in addition, the word " increase " clearly signals that prolonged declines in the level of the hicp index would not be deemed consistent with price stability. there should be no doubt that the commitment of the ecb to maintain price stability is compatible neither with inflation above 2 % in the medium term nor with deflation. in this sense, the monetary policy of the ecb is fully symmetric, fighting both upward and downward pressures on prices which may result in outcomes not in line with our definition of price stability. within our monetary policy strategy, the first pillar assigns a prominent role to money. this reflects the fundamental monetary nature of inflation β as supported by empirical evidence, much of which is available from our working paper series β which indicates a stable long - run demand for m3 and good leading indicator properties of m3 growth for inflation in the medium term. the need to follow monetary developments is therefore key to analysing risks to price stability in the euro area in the medium term. i should also emphasise at this point that the quality of monetary statistics is among the highest of all statistics available in the euro area. these monetary statistics are based on a fully harmonised reporting scheme across all monetary financial institutions in the euro area. the quality of monetary statistics has recently been improved by identifying, as a separate item, non - resident holdings of money market funds. furthermore, we expect that it will be possible for the non - resident holdings of other negotiable paper to be appropriately measured and published towards the end of the year. for all these reasons, m3 will continue to play a prominent role in the monetary policy of the ecb. with regard to the projections, and in | of the planet do not represent a response to a call for β optimal β stability, but they have set the basis for an evolutionarily fit regime. it is not just a matter of quantity, as suggested by current arguments about calibration and by newspaper articles focusing on overregulation. confronted with an adaptable financial system, important improvements in supervisory and regulatory regime include : β’ addressing incoherent regulation across countries and closing regulatory loopholes bis central bankers β speeches β’ extending our supervisory lines of defence to circumvent the risk of putting all our eggs in one basket β’ exploiting the possible synergies of the supervision in the euro area to make sure that existing incentives match the original intentions the evolutionary approach to financial stability amounts to more than an academic dry run. it shines a light on regulatory strategies which have come about as a high - priced lesson from past crises. financial stability is not a narrow concept and it cannot be achieved through a singular, ideal set of policies and institutions. there is constant evolution wherever we look. instead of directing our energies to identifying some unknown optimal state, we need to strive for plausible processes and a robust set of institutions. the current narratives criticising over - regulation and over - supervision need to reflect these aspects as well. for representatives of the financial industry who are suspicious of overprotective administrative bodies as the force behind recent reforms, the evolutionary perspective should offer some alternative explanations. suffice to say, the precautionary measures that have been taken do not render criticism from the banking industry entirely meaningless. input from the industry is welcome, as this helps to better understand the permanently evolving financial system. but we should be wary of distorted arguments based on partial calculations and a selective approach to the various pros and cons. rather than looking at the status quo and asking whether there has been toomuch or too little regulation and supervision thus far, we should recognise that we have a common interest in achieving better regulation. this is not a matter of mere quantity, but of quality and prudence, too. just as our own health is not defined solely by the number of pills we take, the health of the financial sector, alive as it is, cannot be safeguarded by simply prescribing a narrow set of financial and supervisory remedies. thank you. bis central bankers β speeches | 0 |
inflation on public finances in the euro area, ecb ( european central bank ) occasional paper no 2023 / 332, p. 32. 4. arslanalp, s. and b. eichengreen ( 2023 ), living with high public debt, jackson hole symposium, august 2023, p. 25. 5. international monetary fund, fiscal monitor, april 2023, p. 29. 6. international monetary fund, fiscal monitor, april 2023, p. 17. 7. international monetary fund, fiscal monitor, april 2023, p. 40. 8. deutsche bundesbank ( 2021 ), federal debt : allocate premia on accruals basis in budgetary interest expenditure, monthly report, june 2021, pp. 47 - 51. 9. deutsche bundesbank ( 2023 ), the growing significance of central government β s offbudget entities, monthly report, june 2023, pp. 63 - 81. | jens weidmann : challenges for the euro area : what progress has been made β what still needs to be done? speech by dr jens weidmann, president of the deutsche bundesbank, at the swiss institute of international studies, zurich, 9 march 2015. * 1. * * introduction dr meyer, thomas, ladies and gentlemen thank you for inviting me to this event. it gives me great pleasure to be here with you today in this beautiful city on the river limmat. being a monetary policymaker is rather like trying to swim at a constant speed. if you dive into the water at the upper letten, you will simply be swept along by the current without any effort β in fact, you may actually have to actively slow yourself down. if you take a swim in lake zurich, on the other hand, you can usually progress at your own pace in a leisurely breaststroke. but, of course, even there you may encounter more turbulent waters β waves churned up by a passing boat, for example. i β m sure you β ll agree, thomas, that we central bankers are currently faced with a fairly strong countercurrent. euro - area inflation has been below the target of just under 2 % for months now, with another negative rate of β 0. 3 % recorded in february. and the consensus is that the inflation outlook will remain subdued for some time to come. the ecb governing council has therefore decided to make extensive government bond purchases, thus progressing to an even more expansionary monetary policy stance. in terms of monetary policy, the eurosystem is undoubtedly facing a difficult situation at the moment. failing to meet its inflation target for too long could have negative repercussions, as the various players in the economy have adapted to this pace of inflation. as a case in point, both private and public borrowers have based their contracts on the benchmark of inflation of below, but close to, 2 % over the medium term. if inflation remains below this level for a long time, it will become more difficult for them to service their debt. and that could have implications for price developments and the credibility of monetary policy. the dangers associated with inflation staying too low for too long therefore have to be taken seriously. but is that really cause for us to loosen our monetary policy? i have my doubts. despite the horror scenarios evoked in some quarters, the risk of a self - reinforcing spiral of falling wages and prices β of deflation | 0.5 |
can reduce the costs by economising on energy use. and fiscal policy can play an important part in determining how the cost is spread across the economy, or across generations. but it cannot alleviate all the costs. the distributional evidence builds the case for targeted, temporary supports for certain households and businesses in more precarious financial situations. targeted supports also cushion the hit to overall economic activity since lower income households have a higher marginal propensity to consume out of additional income. and at the same time, they limit any knock - on inflationary effects compared to across the board interventions as well as being more fiscally sustainable. the challenges in relation to fiscal sustainability were set out in very clear terms in the recent report of the commission on taxation and welfare. it highlighted that given ireland β s demographic profile, our level of public debt, the need to meet our climate targets and other fiscal risks, the total amount of taxation required to fund public services will increase in the years ahead. it will be critically important that policy can help to build resilience in the economy, reducing the impact of future adverse shocks, by sustainably addressing these structural challenges. monetary policy also has an important role to play in returning inflation towards its medium term target. a return to low, stable inflation will assist families and firms in managing their budgets and planning for the future. to conclude, the economy faces a challenging period ahead in the face of ongoing high inflation and global uncertainty. this will weigh on demand and consumption, particularly in the short term, with 2023 projected to have a slower growth and higher inflation profile than previously expected. not all shocks are felt equally. some are better prepared to weather the storm. some are simply less exposed to the storm in the first place. policymakers must be aware of these important differences if we are to help everyone navigate a path through. thank you for listening and i am available for any questions. [ 1 ] cso ( 2022 ). labour force survey β q2 2022. [ 2 ] boyd l., byrne s., kennan e., and mcindoe - calder t., ( 2022 ). labour market recovery after a pandemic. quarterly bulletin 3 β signed article. central bank of ireland. [ 3 ] cso β s population and migration estimates indicate total net migration measured 61, 000 in the year to april 2022. [ 4 ] kbc consumer sentiment index, september 2022. [ 5 ] the full | philip r lane : globalisation and innovation in finance - policy challenges address by mr philip r lane, governor of the central bank of ireland, at the european financial forum, dublin, 24 january 2017. * * * acknowledgements : i thank camille blackburn and laura moretti for their assistance in preparing this speech. i am delighted to have the opportunity to speak at today β s european financial forum. the agenda for today β s event is quite broad but globalisation and innovation are two primary themes that are set to recur throughout today β s sessions. of course, the forces of globalisation and technological disruption have wide - ranging economic, social and political implications but i will focus more narrowly on the analysis of these themes in the context of the financial sector and the challenges for financial regulators and central bankers. i will first discuss financial globalisation before turning to financial innovation in the second part of this speech. while i discuss these topics sequentially, it is also clear that these forces interact. in one direction, information technology is a primary facilitator of financial globalisation. in the other direction, an integrated global financial system increases the potential rewards to financial innovation, in view of the importance of scale economies in the rollout of new technologies. in addition, internationally - diversified investors are an important source of risk - absorbing funding for innovating firms. 1 financial globalisation in the aftermath of the global financial crisis, the nature of financial globalisation has shifted. 2 international financial flows to and from advanced economies have been weaker than during the pre - crisis period, especially in relation to cross - border banking activity. in contrast, international financial flows to and from emerging economies have increased in importance, which is reinforced by the expanding share of emerging economies in global gdp. foreign direct investment ( fdi ) positions have continued to expand, in contrast to the portfolio equity, portfolio debt and non - portfolio debt categories. a striking pattern is that the recent expansion in fdi has been concentrated in positions vis - a - vis international financial centres, suggesting that the increased complexity of the corporate structures of multinational enterprises is playing an important role in determining the pattern and composition of direct investment flows. more generally, the global intermediation role of international financial centres poses analytical challenges in understanding the implications of measured international financial flows for the real economies of individual countries. for instance, the role of international financial centres makes it trickier to assess the underlying interconnections between national macro - financial conditions, national macro - financial | 0.5 |
financial markets is that hedge funds, private equity firms and the banks financing these institutions all strongly rely on techniques for credit risk transfer ( crt ) to manage their risks. while crt markets have obvious benefits in terms of allowing effective risk sharing in the financial system, excessive reliance on the functioning of such mechanisms can lead to complacency on risks. in addition, crt markets operate in a rather opaque manner which does not allow for monitoring of concentration and counterparty risks by other market participants or by public authorities. moreover, the growing spreading of more complex structured credit products raises the issue that investors in such instruments may not be able to properly assess the risks they assume. unanticipated changes in the macro - financial environment can cause model assumptions to fail and this may contribute to pricing dislocations and market liquidity problems if many investors decide to exit their positions simultaneously. all in all, i see scope for further cooperation between public and private sector entities to gather information on the crt market to improve the ability to assess potential systemic risks. the state of the fundamentals in the credit markets, crt and unregulated financial institutions can together be described as a potential β triangle of vulnerability β in that a shock at any corner of this triangle could have implications for the other two. for instance, a significant turn in the credit cycle could mean that credit protection - sellers, such as hedge funds, could become unable to make due payments to banks. similarly, if widespread problems were to emerge at hedge funds or private equity firms which are active in crt markets, this could even spark a downturn in the credit cycle, if it were to impair the β originate and distribute β business model adopted by many banks involving securitisation and hedging of lending exposures. let me conclude by saying that ultimately the triggers for any potential adjustment cannot be predicted with any degree of certainty. all that we know is that the present state of global finance β where we are observing a level of risk pricing which is historically low β is not necessarily sustainable in the long run. all parties concerned should therefore contribute to an orderly and smooth adjustment, when the time comes, and avoid an abrupt and sharp adjustment which would be adverse for the global economy. all parties concerned, public and private, have in this respect a very important shared responsibility. i thank you for your attention. | from hedge funds, the industry has both grown ( us $ 1. 4 trillion of total assets managed at the end - 2006, in accordance with some sources ) and developed in sophistication considerably over the past decade. while we all recognize that the growth of hedge funds has had clearly a positive impact on the efficient functioning of financial markets, it can also pose threats to the stability of the financial system. these risks can take two main forms. first, hedge funds are a direct source of counterparty credit risk for a number of large banks for which hedge funds are also an increasing source of revenues. second, hedge funds have become, through active trading, important drivers of liquidity in a number of markets, including credit and derivative markets, and it is uncertain whether this could make these markets less stable in some circumstances. a suitable way to address these risks remains a close scrutiny of hedge funds by their counterparties and investors. therefore, i fully support the recommendations put forward in a report by the financial stability forum, which are addressed to supervisors, hedge funds β counterparties and investors and the hedge fund industry itself. on the latter aspect, i strongly believe that the hedge fund industry should review and enhance sound practices benchmarks as recommended in the report by the fsf, and that a set of principles voluntarily prepared by the industry itself under its own responsibility could be a suitable tool to pursue this objective. over the past couple of years, leveraged buy - out ( lbo ) activity has intensified considerably, both globally and in the euro area. as in any fast - growing markets, and particularly in circumstances where credit market fundamentals are very strong and market liquidity is seen as abundant, the rapid expansion could raise some concerns from the financial stability point of view. in particular, risks could be building up if regulated financial institutions, which provide the debt financing to lbo undertakings, softened their lending standards in the pursuit of market share and fee income. while available evidence suggests that lenders are managing their risks broadly appropriately, it cannot be excluded that some of the pricing models and risk management techniques currently applied could rely on overly benign assumptions. moreover, some of the features of the recent lbo financing arrangements, such as loan contracts where covenant clauses have been all but eliminated, may limit the ability of creditors to intervene in the businesses of the lbo target firms even in case where there is a material change in the capability of the firm to service its debt. a new characteristic of today β s | 1 |
the euro area. as the ssm changed the way supervision addresses problems and communicates what it expects to be done by banks, it also changed the timing and the way banks, their management and their owners acknowledge shortcomings and find solutions. one important step led to a common methodology for the supervisory review and evaluation process, the core of supervisory activities and the basis for the capital level the ssm expects a bank to hold according to its individual risk profile. starting with 19 different supervisory practices and information levels, it was pivotal to set a basis of quantitative as well as qualitative information about individual banks and the differences in national banking systems. we can now reap the fruit from bis central bankers β speeches having a single european supervisor by moving our capacity for benchmarking to a european level. but it was not only a busy year, it was a very special year, too. everything we decided, we decided for first time. everything we did set a precedent. thus, everything had to be discussed in the supervisory board of the ssm, consisting of the representatives of the 26 national supervisory authorities as well as of 6 ecb representatives. we formulated supervisory policies in all major areas, for example large exposure limits, the fitness and properness of board members, conditions for changes in qualifying holdings, prerequisites for capital reductions and issuances, model approvals, capital and liquidity waivers, ips etc. we also discussed and agreed on concepts and processes for supervisory planning, onsite inspections, risk analysis, reporting of banks. integrating 19 national supervisory cultures and traditions with a wide range of administrative practices demanded and still demands organisational and methodological rigour. this rigour is sometimes misinterpreted as being not proportional or not in line with qualitative supervision. but common concepts and methods have helped and are helping us to put in place the fundamental pillars of a truly european supervisory approach. some stakeholders had grown fond of some habits and customs. those customs had to be abandoned to make room for a new common approach, as the objective of the ssm is not to preserve 19 national approaches but to foster convergence towards best standards of supervision. it is not my intention to only look back at our past achievements. we cannot lean back and hope for easy wins in the years to come. there are still a lot of challenges ahead of us, which we have to face and address. firstly, there are issues for which we still lack a common approach. for | of the bank. this is a key part of the governance structure. of course, these arrangements are not unique in any way. they are designed both to meet requirements for commonwealth authorities and also to be in line with good practice at commercial entities. they do, however, give us at the reserve bank an insight into some of the practical challenges facing other financial organisations. of particular importance to this audience, we also recognise the challenges involved with appointing, training and keeping an audit staff capable of assessing whether the controls are working as they should. our audit team has continually to improve its understanding of the breadth and depth of our business and changes to it. to help us maintain best practice, our auditors need to ensure that their technical skills remain up to speed. the iia β s training and certification processes play an important role in assisting this process. fostering improvements to the practice of identifying and managing risks, and to the audit processes that are an integral part of that, are central to development of policies aimed at bis central bankers β speeches fostering greater financial stability, both in australia and internationally. the financial stresses of the past few years have placed much greater emphasis on this aspect of our policy work in the reserve bank. there are few signs that the additional focus is going to lessen any time soon. if anything, it will increase. domestically, we have worked closely with the other members of the council of financial regulators on a number of initiatives including the financial claims scheme, the structure of financial market regulation and the role of central counterparties in the settlement of securities and derivatives transactions. internationally, through our membership of the financial stability board, the basel committee on banking supervision and the g - 20, along with colleagues in apra and the treasury, we have been involved in efforts to strengthen the international financial architecture, the rules governing the risks to which financial institutions are exposed and the buffers they are obliged to maintain in case things go wrong. the implications of these initiatives on the way in which financial institutions are managed are potentially far reaching. they are also important for internal auditors, in two respects. first, they are designed to make the institutions you are working for more resilient in the face of a wide range of pressures. if the changes are made effectively, they should help you sleep a little better at night. but second, many of the changes are complex and challenging, requiring important shifts in the way institutions operate, with even more emphasis on controls focused on risk than in the past | 0 |
there has also been a considerable decline in confidence in the world economy ( see figure 5 ). so what is it that is causing so much unease? let β s begin by looking more closely at the situation in europe. europe β from financial crisis to debt crisis in connection with the financial crisis of 2008 β 2009, problems relating to major budget deficits and sovereign debts became apparent in several countries : primarily in greece, but also in ireland, spain and portugal ( see figure 6 ). bis central bankers β speeches one could say that the position of several countries was already too weak when the crisis began, but also that their situations differed somewhat in nature. greece had long been struggling with a budget deficit and a high sovereign debt ( see figure 6 ). in the case of ireland the sovereign debt was not so large when the crisis began, but the combination of a burst property bubble and a large banking sector meant that the costs of supporting the financial sector became enormous ( see figure 6 ) since the end of last year, a number of support measures have been implemented by the ecb, the eu and the imf. these measures have been vital to the effort to manage the acute problems. on the other hand, it is absolutely clear that neither the european financial stability facility ( efsf ) nor the other support programmes can do anything about the longterm problems. in the longer term, structural measures are instead required to strengthen competitiveness in the countries with debt problems. costs have increased far too much in several of these countries ( see figure 7 ). as these countries have adopted the euro, weakening the currency is not a possible escape route for them, providing that they wish to remain within the monetary union. the best way for these countries to increase their competitiveness is instead to employ what is usually called internal devaluation. this means that wages and prices must increase at a slower rate than abroad for a while. another important measure in this context is to implement reforms that increase long - term growth and productivity. there are also various political problems that have to be resolved. difficult dilemmas arise when economic cuts lead to discontent on the part of the public, whose support is needed. in this context the politicians also have to meet a number of pedagogical challenges. they have to be able to explain the choices the country is facing and the consequences of various courses of action. there is a great difference between what you want to achieve and what you can achieve. for example, the desired standard | and mariathason ( 2014 ) ). think of the benefits of global supply chains and global interbank networks for trade and financial risk - sharing. this provides a powerful secular incentive for non - decomposable socio - economic systems. moreover, if these hyper - connected networks do face systemic threat, they are often able to adapt in ways which avoids extinction. for example, the risk of social, economic or financial disorder will typically lead to an adaptation of policies to prevent systemic collapse. these adaptive policy responses may preserve otherwise - fragile socio - economic topologies. they may even further encourage the growth of connectivity and complexity of these networks. for example, policies to support β super - spreader β banks in a crisis may encourage them to become larger, and more complex, still over time ( haldane ( 2009 ) ). the combination of network economies, and policy responses to failure, means socio - economic systems may be less darwinian, and hence decomposable, than natural and biological systems. it is against this backdrop that a complex, socio - economic β system of systems β may emerge. this can defined as one comprising an interlocking set of individually complex webs ( ( gorod et al ( 2014 ) ). the system of system concept initially emerged for engineering and enterprise systems, which involved the multi - layered assembly of component parts. but it has since found its way into a number of other domains including military planning, ecological evolution, power grids, transport networks and neurological structures ( gao et al ( 2014 ) ). although still in its infancy, there are some general properties of a β system of systems β perspective that are worth bringing out. for example, kurant and thiran ( 2006 ) look at the behaviour of a particular topology β a layered complex network. specifically, they focus on the behaviour of transport networks with a two - layer structure. simulations of this network suggest that monitoring risk on a layer - by - layer basis is likely to understate significantly the risk facing each individual layer. layered complex networks may also be less robust to failure than might be apparent from assessing the resilience of each layer in turn. in other words, the risks in a layered network are strikingly different than the sum of their parts. the greater the complexity of each layer, and the stronger the correlation between layers, the greater is this vulnerability ( kurant and as an example, early tv sets were built in a non - decomposable way | 0 |
cent in 2013. let me elaborate a bit on this projection. bis central bankers β speeches if executed as envisaged, the 2012 / 2013 budget could stimulate a firm recovery in construction activity and, by extension, economic growth through certain public construction projects and tax incentives for construction of residential and commercial buildings. however, contracts would need to be awarded soon and the pace of project execution would need to be accelerated if the planned programs are to be implemented on schedule. continued delays in settling the long - standing payment of arrears to contractors could dampen these expectations. in principle, the sluggish recovery should not have a significant impact on employment creation. however, the projects that the government has targeted for implementation do have a high labour intensive component, and could help to somewhat ease the current tightening we have seen in the labour market. i should also point out that the revival of growth and substantial fiscal deficit programme for fy 2013 should not re - kindle underlying inflationary pressures because considerable slack still exists in various parts of the economy, as evidenced by excess capacity in manufacturing and other activities. nonetheless, bottlenecks in key sectors such as construction could lead to escalation of prices in these areas while the level of wage settlements would also influence the pace of household spending. barring any weather - related setbacks or a new round of commodity price shocks, inflation is projected to remain below double digits in 2013. budget 2013 announced the removal of vat on food. based on analysis done at the central bank, we estimate that the immediate impact of the removal of vat on certain food items could reduce by 2Β½ per cent the cost of food for an average consumer ( based on the cso β s basket of goods in the retail price index ( rpi ) ). it should be noted, however, that the most volatile food items driving inflation, fruits and vegetables, are already zero - rated. budget 2013 also removed the fuel subsidy on premium gasoline. again, based on the bank β s analysis, we do not expect the reduction in the subsidy of premium gasoline to significantly impact inflation in the short term. the higher price of premium gasoline could increase the rpi by around Β½ per cent in the first round, with the impact concentrated on the users of higher - end vehicles unable to substitute to other fuels. however, as the petroleum subsidy is cut across the board over the next few years, the cost of transportation and some related goods and services will increase. ladies and gentlemen there are | loi m bakani : the state of the economy and monetary policy address by mr loi m bakani, governor of the bank of papua new guinea, to the national development forum, port moresby, 18 august 2010. * * * thank you chairman, mr brown bai. honourable paul tiensten, m. p. minister for national planning and rural development, leader of the opposition, sir mekere morauta kbe, deputy opposition leader hon. bart philemon mp, acting chief secretary mr manasupe zurenuoc, heads of government departments and state agencies, members of the consultative implementation monitoring council, my fellow colleagues on the panel, mr. simon tosali secretary department of treasury, mr. joseph lelang secretary department of national planning, monitoring and rural development, and mr. henry parakei, secretary department of transport, distinguished participants. papua new guinea is enjoying the fourth year of relatively high economic activity as measured by the real growth in gross domestic product ( gdp ). the average annual growth in gdp for the four years 2007 to 2010, is estimated at 6. 7 percent which translates to a per capita growth of 4. 3 percent per annum. to put it in another way, at the end of 2010 our people will be 18. 3 percent better off from where they were at the beginning of 2007. this trend is likely to continue for the next three years, during the construction period of the liquefied natural gas ( lng ) project. even more important then the overall growth in gdp is the estimated non - mineral sectors growth of 7. 2 percent per annum. this translates to a per capita growth of 4. 7 percent, the highest and longest period of growth on record since independence. it is estimated that at the end of 2010 the great majority of our people, those in the non - mineral sectors will be 20 % better off from where they were at the beginning of 2007. despite the global financial crisis and meltdown in 2008 and the slow recovery from it in 2009 and 2010, the papua new guinea economy continued to grow and performs exceptionally well. we managed to avoid all the financial problems and at the same time have the best and longest stretch of growth in economic activity from the time of independence. the country is enjoying a mineral boom through the increase in international commodity prices, which resulted in large government surpluses up to 2008, and high accumulation of funds in trust accounts, that reached a peak of above k5 billion. | 0 |
as important for public trust, but also because it preserves an emotional bond with the content of the images. that is why in the new series we still see the engraved portraits of naim frasheri, ismail qemali, pjeter bogdani, king gent, and scanderbeg, concluding with asdreni, the author of our national anthem, on the 10 000 leke banknote. on each denomination, the portrait on the obverse blends harmoniously into the design on the reverse. the portraits account for most of the banknote design area and are engraved in raised print. in 200 and 500 leke banknotes, the portraits of naim frasheri and ismail qemali have been notably improved. 1 / 2 bis central bankers'speeches the designs on both the obverse and the reverse of the banknotes have been reconfigured and enriched with new or improved security features. the dominant colours have been preserved, but they have been given a fresh look, with more vivid and balanced colours for the eye. the design composition of each banknote is in harmony with the rest of the series. the overarching goal was to create a series of banknotes that are modern and easy to use, still in balance with tradition. the personalisation, versus unification, of some of the security features for each denomination is a new approach. the reduced dimensions make the banknotes more user friendly. special attention has been paid to features for the visually - impaired. the nominal value on each side of the banknote is easier to read, the dimension of each denomination are different, and the raised print that may be felt on the edges of banknotes has been kept to help identify different banknotes. for the first time in albania, the new series introduces polymer banknotes. this plastic material, which is more durable than cotton paper, was selected to be used for the 200 leke banknote, taking into account the higher frequency of changing hands and a lower paper quality evidenced in this denomination over the years. polymer banknotes are more resistant to dirt and moisture, as well as more secure and difficult to counterfeit, as they allow for the insertion of a number of advanced security features, among others, the transparent window. importantly, the existing banknotes of all denominations will continue to be circulated along with the new banknotes. they will continue to be legal tender and serve as means of payment. dear ladies and gentlemen, banknotes may seem | gent sejko : albania's economic and financial developments in 2019 address by mr gent sejko, governor of the bank of albania, presenting the annual report 2019 to the parliamentary committee on economy and finance, tirana, 1 june 2020. * * * honourable madam chair of the committee, honourable members of the committee, allow me, to thank you, notwithstanding the unexceptional circumstancing, for the invitation and the opportunity to present the main messages of the annual report for 2019 of the bank of albania. the annual report describes the work performed by the bank of albania for fulfilling its legal mandate, the strategic development objectives, and the recommendations left by the assembly of the republic of albania in the resolution β on the assessment of the activity of the bank of albania β. i am pleased to affirm that our work has provided a positive contribution in strengthening the financial and monetary stability of albania. as always, i would like to emphasise that the bank of albania considers the financial and monetary stability as an indispensable precondition for the sustainable and long - term growth, and for successfully overcoming the challenges lying ahead. honourable members of the committee, while preparing the annual report, our assessments on the current situation and the economic and financial outlook of the country have changed substantially. the covid - 19 pandemic outbreak was a severe shock on the albanian economy and finances. for this reason, in my address today, i found it appropriate to speak, not only about the directions and main outcomes of the work of the bank of albania throughout the previous year, but also in the light of the current situation and our expectations for the future. our main message is that the albanian economy has the premises to successfully withstand this challenge, by only temporary deviating from the sustainable and long - term growth path. nevertheless, the minimisation of coronavirus pandemic costs requires for a strong and coordinated response by public authorities, as well as flexibility and courage by the private sector. allow me, to start this presentation with the main achievements of the bank of albania over 2019. * * * 1. albanian economy and monetary policy in 2019 according to the law β on the bank of albania β, the main objective of the bank of albania is to achieve and maintain price stability. to fulfil this objective, the bank of albania has continued to implement an accommodative monetary policy throughout 2019. this stance was dictated by the still undershooting inflation values | 0.5 |
context of basel iii requirements, would also be able to raise resources easily. development of government and corporate debt market may be approached within a framework of seven key components, viz., issuers, investors, intermediaries, infrastructure, innovation, incentives and instruments β what i have called a 7i framework. sovereign securities dominate the fixed income markets almost everywhere. in india too, the central and state governments remain the main issuers. the large supply of securities, due to enhanced borrowings, has enabled creation of benchmark securities with sufficient outstanding stock and issuances across the yield curve. the issuances across the risk - free yield curve in turn, have provided benchmarks for valuation of other bonds / financial assets and benefitted the corporate bond market. fiscal consolidation efforts of the government of india and the state governments enhance the quality of the issuers. in the field of corporate bonds besides financial sector entities, large well rated non - finance companies have also been issuers. the traditional investor base for g - sec in india comprised banks, provident funds and insurance companies with a dominance of domestic investors and limited foreign participation. in the corporate debt market, investor base is mostly confined to banks, insurance companies, provident funds, pds and pension funds. an approach of gradual opening of the domestic bond market to the foreign investors has been adopted in india keeping in view the macro - economic risks involved in providing unfettered access to them. intermediaries play an important role in development of the market by facilitating the transactions, providing value - added services and increasing efficacy of the processes. in india, the major intermediaries are the pds, industry associations like fixed income money market & derivatives association / primary dealers association of india, gilt mutual funds and the infrastructure development funds ( idfs ). infrastructure plays an important role in development of markets and want of an efficient, transparent and robust infrastructure can keep market participants away on one extreme or cause market crisis on the other. india can boast of being one of the few emerging countries with such a state of the art financial market infrastructure for the g - sec market. a state - of - the - art primary issuance process with electronic bidding and fast processing capabilities, dematerialized depository system, dvp mode of settlement, electronic trading platforms ( negotiated dealing systems and negotiated dealing systems - order matching ) and a separate central counter party in the clearing corporation of india ltd. ( ccil ) for guaranteed settlement are | , etc. taking into account government β s needs, market conditions, and preferences of various segments while ensuring that the entire strategy is consistent with the overall macro - economic policy objectives. reserve bank also undertakes the conduct of auctions and manages the registry and depository functions. 7. decisions on the implementation of the borrowing program, based on proposals made by the reserve bank, are periodically taken by the monitoring group on cash and debt management. this is a standing committee of officials from the mof and the reserve bank. while this represents a formal working relationship between the mof and the reserve bank, it is further complemented by regular discussions between the ministry and the reserve bank. 8. with regard to accountability and reporting, the operations of the debt management functions in reserve bank are subject to the statutory audit, internal audit and concurrent audit. recently, the comptroller and auditor general ( cag ) have started a performance audit of debt management operations in the mof and the reserve bank focusing on three β e β s of process excellence viz. economy, efficiency and effectiveness. while the internal debt management activities are reported in the annual report of the reserve bank, which is a statutory report and is placed before the parliament ( through mof ), the external debt management functions are reported in the annual status report on external debt presented to the parliament by the finance minister. further, the mof is publishing an annual report on government debt, the middle office in the budget division is publishing quarterly reports on the debt issued. therefore, a robust reporting of debt is in place in our country. 9. as can be seen, we have sound institutional mechanism with roles and responsibilities clearly entrusted to the reserve bank and the government. this has helped in discharging our mandate effectively. debt management strategy policy objectives 10. the main objective of debt management is to ensure that the government β s financing needs and its payment obligations are met at low cost over the medium to long run consistent with a prudent degree of risk. prudent degree of risk ensures that no problems exist in rollover of debt. further, the debt structure must be sustainable to ensure financial stability across time periods. another important objective is to promote deep and liquid bis central bankers β speeches financial markets to minimize long term borrowing cost markets. the debt management policy must also be consistent with other macro - economic policies including monetary policy. 11. debt management strategy ( dms ) comprising objectives, various benchmarks & portfolio indicators and yearly issuance | 0.5 |
no longer allowed the ecb, under its rules, to waive its minimum credit requirements and accept greek governmentlinked securities as collateral in its monetary policy operations. nevertheless, the eurosystem provided all the liquidity necessary for the greek economy to function, with adequate safeguards against monetary financing of the government. as a result, central bank funding rose from β¬56 billion to over β¬125 billion, more than two - thirds of greece β s gross domestic product, demonstrating our commitment to the greek economy. by the end of june, uncertainty and concerns about the economic policies of the government were mounting, culminating in the announcement of the referendum on 5 july 2016. the introduction of bank holidays and capital controls in late june had eased immediate liquidity pressures, but further impaired economic activity. 1 / 4 bis central bankers'speeches in such an environment, once the third programme had been agreed by the greek authorities and their euro area partners, one of the immediate priorities was to regain depositor and market confidence in the greek banking system. to this end, a comprehensive assessment was conducted of the four significant greek banks between august and october 2015 by the supervisory arm of the ecb. it was followed by a successful recapitalisation exercise. the identified capital shortfall was largely covered by private funds, while the reliance on public funds was limited to β¬4. 5 billion. measuring progress so far the conclusion of the programme negotiations and the successful recapitalisation of the banking system led to a stabilisation of economic conditions. real gdp in 2015 turned out to be only slightly negative, but more than one percentage point better than expected after the imposition of capital controls. the stabilisation of output was supported by the resilience of private consumption, positive net exports and an acceleration of public investment at the end of the year. the achievement of the primary budget balance target for end - 2015 was supported by a series of important policy actions, especially on the revenue side. supporting and at the same time benefiting from the macroeconomic stabilisation, the situation in the greek banking sector has also gradually improved during the first year of the programme, although it has not yet regained the ground lost in the first half of 2015. following the recapitalisation in october 2015, the aggregated cet1 ratio for the four significant greek institutions increased from 11. 2 % in september 2015 to 17. 9 % in june 2016. while the ratios may appear high compared with the european banking sector | the effort in conducting this exercise. all these statements are mere speculation. the comprehensive assessment is an extraordinary opportunity to rebuild confidence in the banking sector and promote the long overdue repair of bank balance sheets, which in turn is a precondition for a sustainable economic recovery. one particular point needs to be stressed : credible national backstops must be put in place. if not, the credibility of the whole exercise is put at risk as the outcome will then almost certainly be negatively perceived by market participants. doing this balance sheet assessment without a backstop in place would be a bit like getting on a boat in rough weather conditions, and not taking a life jacket on board. any recapitalisation needs uncovered by the exercise should of course first and foremost be covered by the market. national budgets and national resolution funds may intervene as a second line. finally, a european backstop, the esm with its existing instruments, meaning a banking sector programme like in the case of spain, may be available. the second key element of a banking union is the single resolution mechanism, a european equivalent to the federal deposit insurance corporation. the crisis has shown that simple coordination among member states has been inadequate to organise the resolution of crossborder banks in an efficient, quick and least - cost manner. the single resolution mechanism contains three essential elements : first, a single regulatory framework. this will be established with the bank recovery and resolution directive ( brrd ). the trilogue of the council, the european parliament and the commission is currently ongoing and from an ecb perspective a desirable trilogue outcome would contain two elements. first, bringing forward bail - in to 2015 as markets will anticipate bail - in anyhow. having the rules in place earlier will give investors β bigger security. second, the flexibility and scope for national solutions should be somewhat reduced so that market participants will have sufficient confidence about the rules of the game in europe. the second element of the single resolution mechanism is the single resolution authority and the third, a single resolution fund, funded by contributions from the financial industry. the last two elements are currently in the legislative process and we strongly support the envisaged timeline for their entering into force ( 1 january 2015 ), as it ensures that the establishment of the single resolution mechanism would follow shortly after the effective start of the single supervisory mechanism. private banking union the β private banking union β in the us is created by its integrated financial market, which includes both the banking sector and capital markets. in the | 0.5 |
itshkhoki, o., and konings, j. ( 2018 ). β international shocks, variable markups and do mestic prices β. the review o f eco no mic studies, february, 2019. all in all, the main conclusion from current research is that, overall, the development of globalisation over the past few decades has led to disinflationary pressures in advanced economies, including the euro area. it has also increased the transmission of foreign shocks and contributed to a lower sensitivity of inflation to domestic factors. however, these effects are found to be quantitatively small. looking ahead should we expect symmetric effects from a deglobalisation process? i will argue that there are several reasons that prevent us from assuming that this process is going to be symmetric to the globalisation phase. first, it appears that for the time being there is no consistent trend towards β deglobalisation β, but rather a change in the nature of globalisation, leading to a rise in the regionalisation of trade and supply chains, a diversification of sourcing and a certain slowdown in global value chain fragmentation. 22 while the marked slowdown in firms β decisions to relocate part of their production processes abroad ( β offshoring β ) or to repatriate previously offshored activities ( β reshoring β ) is compatible with a deglobalisation phase, other factors qualify this view. the flattening of trade in goods does indeed hint at a trend slowdown, but the continued growth of international trade in services seems to signal a continuation of globalisation trends in these sectors, driven by technological progress, including data trading and the expansion of artificial intelligence. second, the impact of these new trends β as opposed to purely globalisation or deglobalisation trends β are far from obvious. as an illustration, while offshoring is usually related to job displacement, several recent studies highlight that it is also related to the upgrading of jobs, towards more competitive and innovative varieties, and to changes in employment composition in favour of high - skilled workers. 23 third, the globalisation process lasted for several decades. the current location decisions and choice of providers are the result of long - run economic forces, which might work differently in a deglobalisation phase, especially if this is more abrupt and takes place in a short period of time, which could lead to non - linear effects on growth, inflation or monetary policy transmission. four, | identifying and assessing the key risks within an organization and determining the appropriate response to those risks. companies should determine the level of risk they are willing to accept given the return they can achieve. management then must implement effective processes to limit risk to the acceptable level. once these steps have been taken, business line managers are expected to monitor actual risk levels and test the effectiveness of the risk responses. several elements are essential to the successful implementation of enterprisewide risk management. one is clearly articulated risk - management goals which provide a foundation for the enterprisewide risk management program and for related training and communication. a second is a common risk language which is critical because it enables individuals throughout the organization to conduct meaningful cross - functional discussions about risk. a third element essential to the implementation of successful enterprisewide risk management is that individuals clearly understand their roles in the risk - assessment and risk - management framework. in today's environment, all organizations should consider embracing this discipline. indeed, the federal reserve is currently considering how enterprisewide risk management can better be integrated into its management processes. tone at the top it is also important that a strong culture of compliance be established at the top of the organization and that a proper ethical tone be set for governing the conduct of business. in many instances, senior management must move from thinking about compliance as chiefly a cost center to considering the benefits of compliance in protecting against legal and reputational risks that can have an impact on the bottom line. the board and senior management are obligated to deliver a strong message to others in the firm about the importance of integrity, compliance with the law, fair treatment of customers, and overall good business ethics. leaders should demonstrate their commitment through their individual conduct and their response to control failures. while the ethical tone of a financial institution comes from the top, a successful ethics program must be demonstrated by staff at all levels and throughout the organization. the environment should empower any employee to elevate ethical or reputational concerns to appropriate levels of management without fear of retribution. in other words, the culture of the organization should raise issues to senior management that they may not be aware of ; management can then demonstrate their commitment by responding appropriately. role of internal audit this leads me to the importance of the role of the internal audit function within an organization. the federal reserve is very supportive of an independent audit function at financial services companies. as indicated in our amended interagency policy statement released last year, the audit committee a copy of the draft can be obtained at the | 0 |
emerging risks in the banking sector, to exchange information on standards and best practices on new or increasingly relevant topics, and to work on a minimum convergence of supervisory practices. and if i am informed correctly, many of the topics i will mention can be found in the 2019 work programme of the bcbs. first and foremost, the bcbs should monitor how the new basel rules are implemented in national laws and ensure it has a thorough overview of how these are then translated into supervisory practices. it should also foster an intensive exchange of information about the risks and vulnerabilities we see in today β s and, in particular, tomorrow β s macroeconomic environment. these discussions should also cover the approaches supervisors could use to analyse, assess and react to these upcoming risks via pillar 2, or other instruments. after all, a us supervisor β s challenge today may be a european supervisor β s concern tomorrow. i believe that supervisors from around the world would benefit from sharing views and experiences. the one thing we have to keep in mind is this : good supervision is a positive - sum game β everyone wins. the bcbs could and should be a hub for exchanging supervisory knowledge, tools and approaches regarding cyber risk. and finally, the bcbs could be of great help for supervisors regarding operational, legal and reputational risks in banks which are linked to conduct risks or anti - money laundering. the same is true for green finance or climate - related risk. here, too, a structured exchange of information about different tools and methods would help to strengthen supervision globally. 2 / 2 bis central bankers'speeches | sabine lautenschlager : the evolution of banking regulation panel remarks by ms sabine lautenschlager, member of the executive board of the european central bank and vice - chair of the supervisory board of the european central bank, at the financial stability institute 20th anniversary conference, basel, 12 march 2019. * * * the crucial challenge with basel iii was to get the balance right between risk sensitivity and simplicity. overall, i believe we did a good job. i know there are many complaints coming from the industry for a few of the asset classes, but i doubt that it is possible to establish a perfect balance for such a heterogeneous group. a perfect balance cannot be our objective as it would be impossible to deliver. but let β s start from the beginning. i remember the often passionate discussion in the basel committee on banking supervision ( bcbs ) about balancing risk sensitivity and simplicity. not all of us believed in risk sensitivity as a basis for capital requirements. so first of all, i am glad that we still have a risk - sensitive capital framework, although restricted by important backstops. i am convinced that risk sensitivity is the only way to give banks effective incentives. bigger risks need to be accompanied by higher capital buffers. lower risks need smaller capital buffers. if we were to de - link capital requirements from risks and, therefore, potential losses, we would have to deal with unhealthy consequences. in a crisis there would not be sufficient capital to cover increasing risks and losses, as we would incentivise weak banks to take on high risks in pursuit of high returns. although i am convinced by the idea of making capital requirements more risk - sensitive, i acknowledge that estimating actual risk weights is very hard. thus, it was very important to combine greater sensitivity with backstops. so, with basel iii we introduced the input and output floors, which will limit the influence of modelling choices. and we prohibited the most complex model choices for some specific asset classes. and then there is the leverage ratio, of course, which serves as an additional backstop to the risk - sensitive capital requirements. overall, i think we managed to strike a balance by combining a risk - sensitive approach with solid backstops. but did we manage to keep the framework simple? well, it is not actually simple ; that much i admit. but we must remember that basel iii is targeted at a financial sector that is very complex. it is a grave mistake to believe that there are | 1 |
a crucial objective. 3. no kingmakers large networks joint - venturing with specific financial institutions could extend the former β s market power and concentration to financial markets. 4. business continuity with systemic foreign providers the failure of a fintech or bigtech firm with systemic financial services operations, or the interruption in the service it provides, could have substantial spill - overs for both the domestic economy it serves and other economies in the region. the source of such risks β particularly those related to legal or operational issues β could also originate in a jurisdiction different from that affected by said issues. 5. jurisdictional gaps bigtech firms operating across multiple jurisdictions could increase the risk of gaps in supervisory oversight. in order to ensure effective monitoring of bigtech financial services activities, efficient cooperation between regulators across jurisdictions is extremely important. in order for regulators to ensure that new risks are regulated equally, new frameworks and standards need to be developed. 6. client protection given that risks concerning consumer protection may be larger in the case of bigtech firms β activities, the use of financial data must be regulated to avoid its misuse and also because once bigtech firms have access to the whole set of data it will be difficult to constrain its use. it is just as relevant to promote robust and transparent data governance frameworks to provide clarity regarding the use of consumer data, thus enhancing consumer confidence. 7. cybersecurity since the number and severity of cybersecurity incidents that affect the operation of all types of companies have been increasing, information technology security is a priority issue for all industries, and for the entire financial system. setting minimum standards is crucial to avoid contagion and risks to the systems. thus, cyber and operational security should be addressed through three layers : i ) the owner ( s ) of the infrastructure ( s ) ; ii ) the participants ( setting minimum requirements to them ) ; and, iii ) the users. even when all layers require the implementation of measures aimed at making cybersecurity robust, the users β layer could be the weakest link of the chain and addressing their inherent problems would require creative solutions. i want to conclude emphasizing that the cornerstone for a healthy payment ecosystem is a safe and robust infrastructure for low, medium and large value payments, with 24 / 7 services, 3 / 4 bis central bankers'speeches extremely high levels of availability and capable of acting as a hub for the innovation of payment services to final users. developing this public infrastructure should be at the top of the | njuguna ndung β u : workshop on the compilation of banking statistics in kenya address by prof njuguna ndung β u, governor of the central bank of kenya, at the opening of the workshop on the compilation of banking statistics, kenya school of monetary studies, nairobi, 12 june 2007. * * * mr. kevin o β connor, consultant imf mr. oliver chinganya, regional advisor, gdds project the representatives of : kenya banker β s association ( kba ), institute of certified public accountants of kenya ( icpak ) and central bureau of statistics distinguished participants, ladies and gentlemen, let me first and foremost welcome you all to the kenya school of monetary studies and to this very important workshop on the compilation of banking statistics. i must thank you for taking time off to attend this function. i wish to thank the imf consultant in particular for finding time to participate in this workshop as a resource person. as you may be aware, the imf has played a major role in the development of monetary statistics in kenya and in countries around the world. in particular, the fund, in collaboration with the department for international development ( dfid ), continues to support the general data dissemination system ( gdds ) project which aims at improving the availability and quality of data in developing countries to conform with international standards. kenya, as a country, being part of the gdds project, provides an important avenue for database improvements. this workshop is therefore part of the greater plan towards the improvement of statistics in kenya with the support of these organisations. i thank them for this contribution. ladies and gentlemen, my task today is to open this workshop but before i do that let me draw your attention to the importance of this workshop and statistics in general. you will recall that the financial crisis that hit the asian economies in the early 1990s was partly occasioned by lack of sufficient statistical information on what was going on in the banking system. i am glad therefore that thereafter, the world economies have taken initiatives to ensure that statistical capacities and developments are at the forefront so as to inform decision making at all levels. we at the central bank have not been left behind. over the past few years, the bank has been working on the improvement of monetary and financial statistics to meet the international compilation standards guided by the recommendations of the imf mission on report for observance of standards and codes ( rosc ), and plans for improvements under the gdds project | 0 |
for those who follow, β while president obama has described it as follows : β a child β s course in life should be determined not by the zip code she β s born in, but by the strength of her work ethic and the scope of her dreams. β one β s destination in life should not depend on where the journey begins. equal opportunity does not imply equal outcomes β some people may work harder, be more fortunate in terms of their disposition and endowments, or just be luckier in how their lives evolve. but it does require that income mobility β in particular, upward mobility β be widely evident and remain part of the fabric of the nation. it is important to keep in mind the distinction between income mobility and income inequality. income mobility is a dynamic concept β the degree to which individuals or families can move rajashri chakrabarti, andrew haughwout, giorgio topa, joseph tracy and wilbert van der klaauw assisted in preparing these remarks. bis central bankers β speeches up or down in the income distribution over time. income inequality is a static concept β how unequal are individual or family incomes at a particular point in time. recognizing that rising income inequality in the united states is an important issue, my focus today will be mainly on income mobility. i don β t think the issue of income mobility receives the attention it deserves. it is a foundational element for a well - functioning democratic society and provides evidence about the ability of an economy to provide opportunities for its citizens. a standard approach to measuring income mobility is to compare where a child is in the income distribution relative to where the parents were in the income distribution. a striking result is that intergenerational income mobility in the u. s. β a child β s chances of moving up in the income distribution relative to her parents β has remained stable over the past half century. however, because of the increase in income inequality, the consequences of being born to low - versus high - income parents are larger today than in the past. one explanation for the lack of a correlation between income inequality and income mobility in the u. s. is that income inequality is strongly influenced by the top one percent of the income distribution, but there is little correlation between income mobility and this top income percentile. 2 while income mobility in the united states has been relatively unchanged, it remains well below several other nations. according to stanford economist raj chetty, the probability of moving from the bottom quinti | ( 2015 ), hellerstein et al. ( 2011 ), aslund et al. ( 2011 ). chetty et al. ( 2015 ). bis central bankers β speeches zoning can also be used to promote affordable housing β to include, rather than exclude lowand moderate - income families by setting aside space for those families in exchange for the right to develop market - rate units. this is a strategy that new york and other large cities have pursued for many years, and in these cities it is easy to point to units that were developed under the program. nonetheless, these programs are often controversial β some economists and others argue by increasing the cost of development they restrict supply. thus, while some percentage of new units developed will be affordable, fewer new units will be developed with uncertain effects on affordability overall. it β s perhaps informative to contrast this kind of program with one that has historically been the main mechanism by which the supply of affordable housing has increased. the program i have in mind here isn β t a housing program, but, in my view, it has extremely important effects on the housing market. i β m talking about intra - urban transportation, which can serve to dramatically increase the locations available for development, and thus promote the availability of affordable housing. 13 i believe that safe, reliable, affordable and efficient transportation to job locations should be a crucial element in an effective housing policy. such a program indisputably increases the supply of sites available for development, which is a key way to get the benefits of lower prices to a broader set of families. indeed, it is clear that cities β ability to grow and attract new residents requires them to either increase density β essentially meaning taller buildings β or to expand outwards by increasing transportation access. access to affordable credit is yet another pillar of a policy program that promotes housing affordability. we at the federal reserve have long worked to ensure that credit flows equitably and that financial services are available to all u. s. citizens. the fed β s research on these subjects ranges from the pioneering study of redlining by a team of boston fed economists, to a very recent new york fed study on β banking deserts β that appeared in our liberty street economics blog just last month, as well as ongoing community credit work. we understand the importance of credit in allowing communities to grow, and the importance of the community reinvestment act in requiring financial institutions to make investments in their communities. but, as my remarks here have indicated, | 1 |
that momentum in the market, and an associated increase in indebtedness, can be hard to check, particularly if expectations of a rapidly rising market become deeply entrenched. a number of countries have had to take a series of actions over time to slow fast growth in housing market activity to more sustainable rates. see the box on page 22 of the may 2013 inflation report. bis central bankers β speeches to return to where i started. the financial policy committee of the bank of england is charged with looking ahead to identify and to counter risks to financial stability. there will always be a number of blinking warning lights β risks generated at home and risks coming from abroad β on our dashboard. the growing momentum in the market is now in my view the brightest light on that dashboard. it has not yet been accompanied by a substantial increase in aggregate mortgage debt, though gross mortgage lending is growing and there are signs that debts are becoming more concentrated. this could fade as affordability and lender constraints act increasingly as a brake on momentum. but other outcomes are very possible and the financial policy committee will need be both vigilant and ready to act. bis central bankers β speeches | d'amico, don h. kim, and min wei ( forthcoming ), " tips from tips : the informational content of treasury inflation - protected security prices, " journal of financial and quantitative analysis. figure 3 : fitting the term premium percent 10 - year term premium predicted value ( based on regression against spf inflation expectations and rolling capm beta ) - 1 note : capm is capital asset pricing model. source : federal reserve board staff calculations ; federal reserve bank of philadelphia, survey of professional forecasters ( spf ). low interest rates and the financial system β’ banking sector o low rates can hurt net interest margins and may promote greater risk - taking and leverage β’ shadow banking sector o low rates may also encourage intermediation outside of the regulated banking sector β’ other financial firms o pension funds with fixed target rates or insurance companies selling products with embedded rate floors will be less profitable and may take greater risks to meet their targets β’ asset markets o low rates may lead to a reach for yield, decreasing risk premiums β’ nonfinancial sector o households low rates may create housing price bubbles and encourage a run - up in household debt o nonfinancial corporations low rates may promote leverage and excessive risk - taking or low underwriting standards to nonfinancial corporates percent of interestearning assets ( s. a. a. r ) figure 4a : net interest margins 5. 5 figure 4b : return on assets percent of assets ( s. a. a. r ) ccar banks other banks 4. 5 3. 5 - 1 ccar banks - 2 other banks 2. 5 - 3 1. 5 - 4 note : net interest margin is equal to net interest income divided by average earning assets. ccar is comprehensive capital analysis and review. source : federal reserve board, form fr y - 9c, consolidated financial statements for holding companies. note : return on assets is equal to net income divided by average assets. ccar is comprehensive capital analysis and review. source : federal reserve board, form fr y - 9c, consolidated financial statements for holding companies. june 1, 2007 = 100 figure 5 : equity prices of life insurers versus the s & p 500 snl life index s & p 500 index source : bloomberg. figure 6a : forward price - to - earnings ratio of s & p 500 firms figure 6b : equity risk premium percent historical median - 2 note : aggregate forward price - to - earnings ratio of s & p 500 firms | 0 |
roskilde bank's operations. representatives of any association or similar organisation that may be established by old shareholders in roskilde bank to safeguard a significant part of their interests would be welcome to participate in regular meetings to discuss the activities of the new bank and the discontinuation process in general. i would like to emphasise that this is indeed an extraordinary situation. roskilde bank suffered from very substantial exposure to the property market, unfavourably combined with a lenient credit culture. as a result, the bank was unable to survive on its own, and we had to step in to ensure responsible discontinuation. | how rapid and strong their effect, if any, is. this applies regardless of whether such measures are aimed at productivity or incentives to work more. for some time, the number of people in employment relative to the number of 20 - 64 - year - olds has been close to a level not previously seen, even in an international context. one option could be to increase average working hours, which are not high by historical or international standards. however, working hours are determined by complex interaction between individual choice, collective agreements and cultural norms. even if it was possible markedly to change the incentives to work more β e. g. through a sizeable reduction of the marginal tax rate β this would take effect with a lag, and we have very little knowledge about how long this lag would be. moreover, uncertainty about the ultimate impact is considerable. if the marginal tax rate would be reduced to provide an incentive to work more, and this would be done by way of fiscal easing, i. e. not fully financed, it is very unlikely that the capacity - enhancing effects would balance the additional increase in demand. obviously, a lower marginal tax rate should not necessarily be unfinanced. it could be implemented as part of an actual tax reform and funded by increasing the tax base, i. e. by reducing existing tax deduction options and reducing selective tax benefits. as a main rule, reduction of tax deductibility in itself entails structural improvement, as tax deductibility often provides an incentive to engage in economic activity where the motivation is tax savings rather than other economic advantages. but there are considerably fewer tax deductibility options left to weed out than there used to be. another way to finance a lower marginal tax rate is to reduce ( growth in ) public sector spending. in that case, the net impact on capacity pressures in both the short and long term would depend on the actual tax and expenditure cuts introduced. if funding is achieved by reducing public sector spending, this can be expected to have a dampening effect, in net terms, on overall demand in the economy. this is mainly because the import share of public consumption is lower than the import share of private consumption triggered by lower taxes. as regards the issue of labour market pressure, the short - term question is whether the type of labour released via e. g. lower growth in public sector spending can fully or only partially make up for the extra labour required when lower income taxes push up private consumption. the lion | 0.5 |
implement such directives related to aml / cft. ( for instance, the financial penalty that normally applies for noncompliance ranges from one to fifty million rupees. ) ladies and gentlemen, 5. money laundering can take different forms, and is not limited to tax evasion, cybercrime, identity fraud, phishing, card fraud, skimming, advance fee scams, fund transfer schemes, fake prizes, international lottery fraud, wills and legacies and loan fraud and international transfers etc. the technologies adopted by bfis are making them increasingly vulnerable to various risks in money laundering. generally, vulnerability to money laundering is greater when there is inadequate internal control system, poor risk management practices, weak good governance, inadequate board and senior management oversight, inadequate policy, procedure and monitoring the functional activities and breach of contract and trust etc. although the banking system is stringent in know your customer ( kyc ), it is not sufficient as expected to identify the beneficial owner and to apply the risk based approach. nrb has observed that money laundering is largely the result of weak internal control and poor risk management and practices of the respective banks. this highlights the need of efficient internal audit, strong internal control system and better risk management practices within the bfis in addition to compliance to regulation and supervision for prevention, control and detection of financial crime. 6. bfis must adopt strategic approach and also comply with the kyc regulations based on risk based approach, real time transaction monitoring and transaction analysis for prevention and timely detection of financial crimes. the board and senior management of bfis should be proactive in understanding the potential risks and also put in place a crime prevention, control and detection mechanism. they should have a deep understanding of the institution β s strengths and weaknesses and be able to move their respective bfi in right direction. the prevention and corrective measures should also be a key concern to minimize the impact of financial loss that impact our economy. ladies and gentlemen, 7. nepal has established legal and institutional foundation to comply with aml / cft standards. the whole of the legal and organizational framework of aml / cft revolves around fatf's 40 recommendations. in that regard, nrb has been extensively working to strengthen its legal and organizational framework. in this regime bfis can play a very important role, not just because launderers have been abusing the financial system but also because as victim of such crimes, they are always at various risks such as legal, | regulatory, concentration and reputational. 8. in the case of nepal stakeholders including the nrb and fiu - nepal, have been proactively working to implement the preventive measures of financial crime, so as to investigate and disseminate the cases of money laundering and terrorist financing ( ml / tf ) to law enforcement agencies ( leas ). fiu - nepal received 45, 93, 5817 ttrs'and 887 str's in fy 2017 / 18 and out of the total strs'that has been received ; almost 312 were disseminated to the leas. i hope that fiu - nepal and leas will continue to coordinate to further investigate the cases for prosecution and convictions. i understand that fiu - nepal has already installed the goaml system for strengthening the receiving, reporting and dissemination mechanism of information and reports from commercial banks and is now reporting under the test environment. i am confident banks will soon move to live environment of goaml in reporting of str and ttr to fiunepal. 9. hence, leadership of government of nepal and joint and coordinate efforts among the regulators, bfis, leas, fiu, civil society and support agencies such as isp, telecommunication companies, vendors, etc. including with the public private partnership can play an important role to control the financial crime and help to maintain the financial stability in country. ladies and gentlemen, 10. at last, but not least, i would convey my best wishes that the conference will be successful and reach a concrete conclusion about the implementation of robust mechanism of aml compliance. in addition to this, i believe that, this program will able to help improve your knowledge on the risks associated with of ml / tf. it will also help to further continue discussions on plan of action to help prepare for the upcoming mutual evaluation scheduled in 2020. 11. with this note, let me close my remarks by congratulating and thank you all for your gracious presence and attention. thank you. | 1 |
##z officially opened. thank you and god bless you. | by changes in physical storage devices, it platforms and software. the theory and practice of building archives in the big - data era is in its infancy ; it needs to grow up fast. third, the emergence of big data has raised the importance of data integrity, confidentiality and privacy to a level never seen before. protection of personal data is central to our societies ; one could say that it helps to define them, to the extent that it is inextricably linked to the protection of individual rights more generally. the sheer amount of personal data now available, and the growing ease of connecting individual information across databases, have far - reaching implications for fairness and freedom ; they have thus spurred much digital - privacy regulation. the connections with the previous point are, i think, rather obvious ( data integrity, for instance, is central to both ) ; so are the implied trade - offs. for instance, the right to be forgotten, increasingly ( and, i think, rightly ) granted to individuals, conflicts with society β s desire to keep records. no wonder that rules are sometimes inconsistent across different jurisdictions, data domains or legal purposes. a systematic way of weighing conflicting principles against one another should be found. ideally, one would like to have global standards ; international cooperation is therefore to be encouraged as far as possible. however, there are limits to this, at least as long as different societies protect individual freedom to a different extent. for the time being, we have to live with this limitation. the challenges of big data require continuous organisational and technological innovation in the institutions that want to use them effectively and fairly. at the bank of italy we have taken several steps in the past few years to enhance our ability to collect, store and exploit huge amounts of data, using state - of - the - art hardware and software. other institutions are surely doing the same. this workshop is a good opportunity to share experiences. preserving the confidentiality of individual data is one specific challenge that many institutions represented here will often face. the issue is not just that the social value of statistical analysis cannot override the legal obligation to refrain from infringing on personal privacy, but also that the quality of the data itself is often premised on confidentiality being guaranteed : without it, proprietary data would be impossible to collect, and much sensitive data, such as data on personal wealth, would be next to useless. we are cooperating with other institutions to find ways to reap the value of merging data from different sources | 0 |
##prudential framework in europe and in the euro area is specifically tailored to reflect the european institutional features and financial architecture. as elsewhere in the world, also in the european countries the national macroprudential authorities play the key role in macroprudential analysis and policy - decisions : they are, or at least should be, best informed of the cyclical and structural macroprudential risks and vulnerabilities in their countries. in the countries belonging to the banking union, the macroprudential powers are shared between national designated macroprudential authorities and the european central bank. more specifically, the ecb has a right to apply stricter requirements for certain macroprudential tools than those proposed by the national macroprudential authorities. the role of the european systemic risk board ( esrb ) is, in turn, to monitor cross - border and cross - sectoral systemic risks in the whole eu area, and provide macroprudential warnings and recommendations to national authorities and european bodies. last but not least, the european capital adequacy framework ( crd iv / crr ) provides a common regulatory rulebook directing also the use of most macroprudential tools. the european macroprudential set - up is generally appropriate for europe β s bank - based, highly integrated and thereby potentially fragile financial system. research suggests that banking oriented financial systems β like that in europe β may be particularly prone to systemic risks and crises. 4 in highly integrated markets these risks and crises can rapidly spread across borders and markets. one of the strengths of the euro area macroprudential policy, as i see it, is that the joint responsibility between the ecb and national authorities is likely to reduce the inaction bias inherent in taking unpopular and intrusive macroprudential actions. the esrb, by closely monitoring and evaluating national macroprudential frameworks and policies, plays a similar role in the whole eu area. there are also weaknesses in the european framework. some eu - level regulatory rules and procedures concerning the use of macroprudential tools are, as i see them, overly complicated and bureaucratic. for example, the european capital adequacy framework does not yet provide national authorities with fully satisfactory ways to increase residential mortgage risk - weights for macroprudential reasons. given the inherent inaction bias in macroprudential policy - making, a too complex regulatory rules may provide national macroprudential authorities a convenient excuse for def | today. the 1960s'idea that greater prosperity could be achieved if only we were willing to accept higher inflation had its origins in an academic study, although the author likely did not intend that outcome. in 1958, a. w. phillips, using british data, showed that historically inflation had tended to be high in years in which unemployment was low. similar results were subsequently reported for the united states. 4 phillips did not draw strong policy conclusions from his findings. but that did not stop others from doing so. in the decade following the publication of his paper, his empirical finding was sometimes interpreted ( including, for example, by members of the kennedy and johnson administrations ) as showing that policymakers could choose ( permanently ) lower unemployment if they were willing to accept ( permanently ) higher inflation in exchange. scholars disagree somewhat about the extent to which policymakers of the time tried actively to take advantage of this supposed tradeoff, but these ideas likely provided part of the intellectual rationale that made the authorities willing to allow inflation to rise throughout the 1960s and in the early 1970s. the idea of the permanent tradeoff did not go unchallenged, however. in 1967, economists milton friedman and edmund phelps independently produced influential critiques of this view. their key contribution was to observe that, if inflation expectations react to changes in actual inflation in an economically reasonable way, then any tradeoff between inflation and unemployment would be shortlived at best. to illustrate their argument, let us suppose that firms and workers set nominal wages once a year but that, sometime during the year, the prices of firms'output rise unexpectedly as a result of stronger - than - expected demand. the combination of higher prices for their output and fixed nominal wages would raise the profitability of increasing production ; thus, assuming that more workers are available at the previously fixed wage, firms would respond to the rise in prices by adding workers. over a short period, then, higher inflation might bring lower unemployment, consistent with the empirical results found by phillips. however, this logic applies only during the period in which wages and workers'expectations of inflation are fixed. if inflation were to rise persistently, friedman and phelps argued, workers'expectations of inflation would not remain unchanged but would adjust to match the actual rate of inflation. higher inflation expectations would in turn lead workers to bargain for commensurate raises in nominal wages to preserve the real value of their earnings. with nominal wages rising as well as prices, firms would no longer have an incentive to | 0 |
and national authorities ), they are still relevant to the provision of liquidity to euro area markets over the longer term. 1 uk - based investment banks are also key providers of advisory and financing services related to securities issuance, m & a activity and syndicated lending to euro area clients. they play an active role in debt and equity issuance for euro area non - financial corporations, including book running and underwriting services. between 2012 and 2018, almost half of all debt and equity issuance for euro area non - financial corporations was carried out by global banks serving our market from london. our reliance on london also stems from the fact that, in some cases, the city represents a gateway to global financial markets for euro area financial and non - financial firms, allowing them to tap into global capital and liquidity pools. in other areas, however, reliance on london is quite limited. for instance, uk - domiciled banks play a marginal role in direct lending to euro area households and non - financial companies. had it not been for brexit, certain global and regional trends might even have led to an increase in the eu β s reliance on the city of london as a centre for market - based finance. indeed, the 1 / 5 bis central bankers'speeches balance between banks and non - bank financial institutions in the eu has been evolving in recent years : although still very much bank - based, our economy is increasingly financed by non - bank institutions. in the euro area, total assets held by non - banks have almost doubled over the last ten years, growing from β¬23 trillion in 2008 to β¬45 trillion in june 2019. non - banks currently account for around 55 % of the euro area financial sector. their fast growth reflects their expanding role in financing the euro area real economy. whereas in 2008 non - banks accounted for 14 % of the euro area financial sector β s loans to non - financial corporations, that share roughly doubled in a decade. non - banks provide a steady net flow of financing to non - financial corporations through the purchase of debt securities. regulatory decisions and economic drivers will affect the status quo these examples give a sense of the level of integration between uk and continental financial markets, in particular for certain complex and sophisticated financial services linked to derivatives markets and investment banking activities. however, brexit will change this status quo and a degree of decoupling is likely. it is difficult to make firm predictions about the extent to which our two financial systems may drift apart or remain | , under the current commission proposals β would be too heavy for the country. there is already a debt rule in the maastricht treaty! and experience demonstrates that it is necessary to enforce it, because excessive debt might trigger instability. a simple calculation shows that, assuming an inflation rate of below 2 %, but close to 2 %, as in the ecb β s definition of price stability, and a reasonable average yearly real gdp growth rate β for instance, slightly over 1 % β a balanced budget β which is the β normal β position according to the stability and growth pact β might reduce the debt outstanding as a proportion of gdp by more than 3 % each year for a debt level of around 120 % of gdp. by the way, the imf also says a reduction of public debt in a number of advanced economies is urgent. a balanced budget is the objective of the stability pact, but some euro area countries have never even come close. and the imf, while recommending debt consolidation, admits it will be very painful in the early years. we must take fully into account the confidence channel. when a country moves in the direction of fiscal soundness, this is not only good for growth from a medium and long - term perspective, but it might also be beneficial for growth in the short term. because it enhances confidence in segments of the economy that had lost some of their confidence, and that is good for consumption, investment and job creation. people would not engage in more consumption, entrepreneurs would not invest actively, and savers would not be forthcoming if fiscal stability was impaired or threatened. other choices could be painful. the bundesbank president, axel weber, some days ago hinted that a rise in interest rates could not be as far away as markets seem to think. as you know, i never comment on remarks made by fellow members of the governing council. what is important, of course, is that there is only one single currency ; there is one governing council, only one monetary policy decision, and one president, who is also the porte - parole of the governing council. at the last ecb press conference, i said very clearly that current interest rates are appropriate. the needle in our compass is price stability β annual inflation of less than 2 % but close to 2 % β and on this we have a very, very remarkable track record : a yearly average price increase of 1. 97 % in the 11Β½ years that the ecb has been in charge of monetary | 0.5 |
thanking all participants for their very valuable contribution in promoting financial education. i particularly wish to thank mr boucher, it is a great honour, richard, to have you here at the bank of italy. thank you, for letting us host this important symposium. | which savings - investment imbalances, the growth of complex securitised credit intermediation, changing patterns of maturity transformation, rising embedded leverage, a burgeoning shadow banking sector, and rapid credit - fuelled growth, had created large systemic vulnerabilities. in the future, we need β at national and global level β to be in a much better position to understand and address trends in credit growth, in system - wide leverage and maturity transformation, and in the inter - linkages within the financial system, to identify and constrain emerging risks. for this we require additional system - wide prudential as well as other tools. creating the prudential tools, regulatory set - ups and policy tools required to better constrain system - wide risks, including generating the transparency needed for authorities and markets to be better informed about the risks to the system, is the focus of much of the reform agenda. these changes do of course need to be implemented at national levels. but there is work internationally to generate the tools and policies needed, to promote coherence in implementation and to conduct the monitoring that is required. let me speak to some of these. one central lesson of this crisis is that the system entered it with too little capital, far too small liquidity buffers, and a capital and valuation regime with significant pro - cyclical consequences. much work is underway on bank capital and liquidity that will address these issues. the basel committee proposed last year changes that by end 2010 will expand basel ii risk capture and very significantly increase trading book capital requirements. and the committee β s much strengthened liquidity guidelines are in the process of being implemented nationally. further work is underway to strengthen guidance for and monitoring of liquidity management at large cross - border banks. the fsf and its member bodies also produced a set of recommendations to mitigate procyclicality. these call for ( i ) regulatory capital requirements to increase the quality and level of capital in the financial system during strong economic conditions so that they can be drawn down during periods of economic and financial stress ; ( ii ) a revision of the market risk framework of basel ii to reduce the reliance on cyclical value - at - risk based capital estimates ; and ( iii ) to supplement risk - based capital requirements with a leverage ratio to contain the build up of leverage in the banking system. regarding provisioning, we β and now g20 leaders β called on the iasb and fasb to reconsider | 0.5 |
bank of japan β s monthly report of recent economic and financial developments bank of japan, communication, 21 / 1 / 99. the bank β s view the economic deterioration in japan is easing gradually mainly due to the increase in public investment. with respect to final demand, business fixed investment has been declining significantly, and housing investment continues to be sluggish. private consumption, as a whole, remains stagnant. meanwhile, net exports ( exports minus imports ) are basically increasing at a moderate pace, and public investment has turned to follow a distinct upward trend. reflecting this development of final demand and the progress in inventory adjustments, the decline in production is slowing. corporate profits continue to worsen. employment and household income conditions have deteriorated as the unemployment rate has reached a new historical high, the ratio of job offers to applications remains at its lowest ever level, and winter bonuses have decreased significantly. financial conditions are improving with the effects of the policy measures taken by the government and the bank. nonetheless, firms apparently cannot eliminate their anxiety about the availability of funds toward the end of fiscal 1998. consequently, corporate and household sentiment remains cautious, and a recovery has not yet been observed in private demand. as for future developments, the increase in public investment is likely to underpin the economy toward the first half of fiscal 1999 with the implementation of the government β s economic measures. furthermore, the bank β s monetary and financial measures and the government β s measures to alleviate the credit crunch will remain in effect. nevertheless, an immediate selfsustained recovery in private demand is hardly expected since corporate profits and household income are deteriorating and the constraints from corporate finance are likely to persist for some time due to the cautious lending attitudes of private banks. moreover, attention should be paid to the effects of the continued appreciation of the yen since autumn 1998, and to the uncertainty in financial and economic developments abroad. to lead japan β s economy into a steady recovery, it is important to prepare an environment where firms and households can regain confidence in japan β s economic future by, for instance, promptly restoring the stability of the financial system. with regard to prices, reflecting the large output gap, domestic wholesale prices are on a downtrend, and corporate service prices are weakening. consumer prices have increased above the previous year β s level due to the rise in prices of perishables. excluding this effect, however, consumer prices basically continue to be weak. as for the outlook, the economic deterioration is likely to continue easing mainly due to | trade surplus as part of cyclical dynamics, and thus a decrease of the current account surplus. however, aside from cyclical components, underlying current account trends were little changed. the attempt to make further adjustments through macroeconomic policies, especially through prolonged accommodative fiscal and monetary policy was unsuccessful. it rather had the detrimental side - effect of being one of the factors that fueled the expansion of the bubble and hence led afterwards to the serious predicament. incidentally, depending on the structure of the current account balance, surpluses and deficits can be to a large extent predetermined. in japan β s case, as mentioned above, the large income account surplus has driven the current account surplus in recent years. when we look across the g20 countries, this is not an isolated case. australia β s current account deficit can to a large extent be explained by its income account deficit. the trade balance does have a large share of the current account in many countries, but other components such as the income account often have non - negligible and sometimes significant impact on the overall picture of the current account balance ( chart 3 ). this is a reflection of the structure of their economies and needs to be well understood when assessing the evolution of the current account. bis central bankers β speeches chart 3 current account balances of g20 members ratios to nominal gdp β 2005 β 2009 average second, was the current account surplus indicative of β imbalances β? the current account surplus may have been indicative of β imbalances β, but does not provide sufficiently granular information to make an effective assessment. the emergence of unsustainable imbalances seems to be better and more clearly captured through other indicators such as large jumps in asset prices and the rapid expansion in corporate sector debt ( charts 4 and 5 ). japan β s continuously large current account surplus itself did not provide clear hints with regard to the bubbles that turned out to be the root cause of serious damage to economic stability. chart 4 major economic indicators of japan ( 1980 β 1992 ) exchange rate and official discount rate bis central bankers β speeches asset prices and bank lending real gdp and cpi bis central bankers β speeches chart 5 japan β s corporate sector debt ratio to nominal gdp third, how does exchange rate policy influence the overall economy? an excessive focus on preventing the appreciation of the currency and on easing the negative effects of exchange rate appreciation fostered expectations that a low interest rate environment would continue. this became one of the factors | 0.5 |
of the main jurisdictions which first implemented basel ii and basel ii. 5, and remains committed to promptly implementing basel iii, which i consider as a cornerstone of the g20 reform agenda. timely and consistent implementation of the new regulatory standards as well as uniform assessment of the implementation process based on common evaluation standards around the globe are crucial for strengthening the resilience of financial systems and restoring confidence in markets. delayed implementation of basel ii. 5 and basel iii by any major jurisdiction would weaken the incentives for financial institutions to comply and also cast serious doubt on the overall reform effort. finally, an area where, in my view, enhanced coordination is required concerns the structural measures being proposed in different jurisdictions. since recent initiatives in the us ( volcker rule ), the uk ( vickers report ) and the eu ( liikanen report, on which the european commission will now follow up ) will mainly target internationally active banks, coordination at global level in this policy area is important to ensure a level playing field and to avoid regulatory arbitrage by banks with significant cross - border activities. clearly, regulators, supervisors as well as financial institutions are facing several challenges in the years ahead both as regards policy design and implementation. there is a risk that weak economic growth and an increasing focus on domestic policy priorities can weaken the incentives and appetite for coordinated reform efforts. but well - integrated and well - regulated financial markets are needed more than ever for sustainable and stable growth, both at global and at regional level. but i β m confident that a successful accomplishment of the reform agenda and a consistent implementation of the policy measures will help to achieve this goal. i thank you for your attention. cpss and iosco : principles for financial market infrastructures. april 2012. bis central bankers β speeches | conditions are met. let me elaborate. first, we should have the appropriate policy tools to ensure that financial integration does not result in the development of opaque instruments and business activities which diminish transparency and undermine confidence in financial markets. second, we know that financial markets are prone to short - sightedness, herd behaviour and sudden changes in market sentiment which may be detrimental to financial integration and stability. it is therefore important that the incentives of managers and employees are aligned bis central bankers β speeches with the risks they are taking in order to ensure that the long - term viability of financial institutions is appropriately taken into account in business decisions. third, we have to prevent financial integration from leading to an excessive concentration of risks and leverage in the balance sheets of financial institutions. this may pose a risk to systemic stability. fourth, we should have the tools to mitigate the risks of contagion across institutions and jurisdictions and, should problems arise, we need to be in a position to be able to resolve ailing banks in a timely manner within an efficient framework of crisis management and resolution. finally, we have to ensure that all types of risk and all types of financial activity that may imperil financial stability and financial integration are monitored, assessed and supervised in a comprehensive way. overall, all the steps taken to enhance financial integration need to be complemented by efforts at international level to design and implement consistent policy measures that can help to strengthen the resilience of the global financial system and reduce global systemic risks. in 2009, g20 leaders agreed that all systematically important financial institutions, markets and instruments should be subject to an appropriate degree of regulation and oversight. the policy agenda has made good progress and i particularly welcome the latest financial stability board ( fsb ) report on the shadow banking industry. 1 financial integration, financial stability and monetary policy i would like to stress the importance of a well - integrated financial system for the effectiveness of the single monetary policy in the euro area. financial integration is one of the key preconditions to ensure that the ecb β s monetary policy stance is appropriately reflected across the euro area countries, thereby reducing heterogeneity in the monetary policy transmission mechanism. the most immediate impact of changes in key policy rates is transmitted via money markets. hence, to have a broadly homogeneous impact across banks and jurisdictions, fully integrated money markets would allow full access to markets and similar marginal costs for banks with similar creditworthiness. likewise, the integration of further wholesale funding market segments, | 1 |
yandraduth googoolye : credit risk and market risk β the journey ahead opening and closing remarks by mr yandraduth googoolye, first deputy governor of the bank of mauritius, at the working session on β credit risk and market risk β the journey ahead β at the federation of indian chambers of commerce and industry and indian bank β s association conference on β global banking : paradigm shift β theme : β navigating successfully in an uncertain world β mumbai, 7 november 2008. * * * ladies and gentlemen it is a pleasure for me to chair this afternoon session on credit risk and market risk, a subject whose importance is gaining momentum among policymakers these days. economic theory tells us that credit risk and market risk are intrinsically related to each other and are not separable ( jarrow and turnbull : 2008 ). with financial innovation, the interaction between credit risk and market risk has itself become even more complex today. the recent financial crisis has indeed showed us how a credit risk event can trigger other market related and liquidity related risk events. the sub - prime crisis in the united states, which has its origin in protracted low interest rate policy, has shown us how our interest rates setting decisions impact on credit risk β a linkage that has been somehow neglected over recent times. as we coordinate our efforts to ease monetary conditions to curb the growing risk that our economies would dip into recession ; we need to be vigilant on the long term consequence of our decisions today, to avoid another financial turmoil in future. financial innovation has spurred the development of risk management tools but it has also brought together various other forms of risk into financial products, making the art of risk management even more sophisticated. the rapid growth of derivative instruments blurs the dividing line between the established concepts of credit risk and market risk. the trading of credit derivatives and other exotic securities has transformed credit risk into market risk. when the credit conflagration morphed into a fully - fledged panic in financial markets over the last few weeks, the major stock markets plunged. a decade or so ago, technological innovation produced securitized and other credit derivatives to help financial institutions to manage risks ( credit or liquidity ). those instruments quickly gained popularity among practitioners as they promised to transfer credit risk to those who were supposedly in a better position to bear those risks while contributing to financial stability. as these instruments grew in complexity, existing risks were transformed into other risks and new risks emerged. those risks were typically | driver of the increased capitalisation has been the post - crisis strengthening of the regulatory framework. but it is also important to note that the shocks that have hit european economies in recent years have largely been buffered by fiscal and monetary policy, thus shielding the banks from their full impact. the third factor at play is robust liquidity. banks'liquidity coverage ratio increased from 138 % in 2015 to 158 % in 2023. effective liquidity risk management is becoming even more important in the current environment. the monetary tightening that began in july 2022 followed years of highly accommodative monetary policy and ample liquidity provision. moreover, heightened geopolitical risks are not fully priced in by markets, which may lead to abrupt market reactions following negative news. 2 / 7 bis - central bankers'speeches however, even if banks may meet capital and liquidity requirements, this will not shield them from the impact of adverse shocks if risk management systems and governance are ineffective. this is one of the key lessons from the turmoil on international banking markets in march 2023. the fourth factor is thus improving governance and risk management, which has been a priority for european banking supervision in recent years. while progress has been made here, more needs to be done. strong internal governance and effective strategic steering remains one of our top supervisory priorities. we will soon publish a guide on governance and risk culture, including examples of good practice in this field. overall, there is no room for complacency. risk management in banks needs to continue focusing on forward - looking risk assessments and sustained resilience, including capital, liquidity and operational resilience. european banking supervision needs to foster this sound risk management in banks and ensure sufficient resilience. the risk environment in which banks operate has evolved substantially in recent years. it and cyber risks, for example, are on the rise : the number of reported cyber incidents at european banks doubled from 2022 to 2023. 5 and these attacks have become more sophisticated. they can heavily disrupt the functioning of banks, with potentially significant financial, reputational and legal implications. this is why european banking supervision has flagged this topic as a key priority. the results of this year's cyber resilience stress test will be published later this summer. it is important to note that many changes are not merely cyclical ; they are in fact structural. becoming climate neutral requires changes in relative prices for co2intensive activities and in the patterns of production and consumption | 0 |
jean - claude trichet : lessons from the crisis and steps towards economic stability keynote speech by mr jean - claude trichet, president of the european central bank ( ecb ), at the 9th munich economic summit, munich, 29 april 2010. * * * sehr geehrter herr bundesprasident, lieber horst kohler, sehr geehrter herr chrobog, sehr geehrter professor sinn, meine sehr verehrten damen und herren, ich danke den veranstaltern dieser konferenz recht herzlich fur die einladung. besonders dankbar bin ich fur die gelegenheit, im anschluss an meinen langjahrigen freund horst kohler sprechen zu durfen. wir sind uns uber einen langen zeitraum hinweg in verschiedenen positionen immer wieder begegnet und haben oft sehr eng zusammengearbeitet. it has always been an enormous pleasure to talk with him and to work with him. both of us were engaged in the negotiations of the maastricht treaty. that is where we met nearly twenty years ago. we were also heavily involved with the handling of the european monetary system crisis in 1992 / 93. i remember that episode very well. it was a defining moment not only for the monetary integration of europe. it remains in our memories as a vivid example of what close and friendly cooperation can do in very exceptional and demanding circumstances. in my remarks today i would first like to reflect on the lessons that i believe we can draw from today β s financial and economic crisis. in the second part, i will touch on the current situation, and describe the three key steps that i believe we need to take to return to the path of economic stability. lessons of the financial crisis the financial crisis has taught us painful lessons. it has revealed fundamental weaknesses in our global financial system. in the years that led up to the crisis, the european central bank was among those institutions that warned against the under - pricing of risk in financial markets. but the growing complexity of the global financial system and specifically its international linkages made it difficult to predict how and when developments would turn. with hindsight we know a great deal about the causes of the crisis. financial innovation led to the development of new instruments that were | european central bank : press conference β introductory statement introductory statement by mr jean - claude trichet, president of the european central bank and mr lucas papademos, vice - president of the european central bank, frankfurt am main, 4 june 2009. * * * ladies and gentlemen, the vice - president and i are very pleased to welcome you to today β s press conference. we will now report on the outcome of today β s meeting of the governing council, which was also attended by commissioner almunia. on the basis of its regular economic and monetary analyses, the governing council decided to leave the key ecb interest rates unchanged. the current rates are appropriate taking into account our decisions of early may, including the enhanced credit support measures, and all the information and analyses which have become available since then. we confirmed our expectation that price developments over the policy - relevant horizon will remain dampened by the marked weakening of economic activity in the euro area and globally. recent survey information indicates that, following two quarters of very negative growth, economic activity over the remainder of this year is expected to decline at much less negative rates. after a stabilisation phase, positive quarterly growth rates are expected by mid - 2010. this assessment incorporates adverse lagged effects, such as a further deterioration in labour markets, which are likely to materialise over the coming months. at the same time, available indicators of inflation expectations over the medium to longer term remain firmly anchored in line with the governing council β s aim of keeping inflation rates below, but close to, 2 % over the medium term. the outcome of the monetary analysis supports the assessment of moderate inflationary pressure, as money and credit growth have further declined on an annual basis. against this background, we expect price stability to be maintained over the medium term, thereby supporting the purchasing power of euro area households. let me now explain our assessment in some more detail, starting with the economic analysis. reflecting the impact of the financial market turmoil, and in particular a sharp fall in global demand and trade, economic activity weakened considerably in the first quarter of 2009. according to eurostat β s first estimate, economic activity in the euro area contracted by 2. 5 % quarter on quarter, after a decline of 1. 8 % in the fourth quarter of 2008. this will have a significant negative impact on the average growth rate for 2009. however, more recently, there have been improvements in survey data, albeit at very low levels. in line with such evidence, after the | 0.5 |
when the bsp issued the electronic money regulation. fast forward to 2017, during the time when most institutions were hesitant and unsure of the cloud services, the approach was again used to further explore the new technology, resulting in the first cloud deployment for core banking services under a pilot implementation. in line with the objectives of the nsfi, he bsp now seeks to formalize the existing test and learn 1 / 3 bis central bankers'speeches approach into a comprehensive and structured regulatory sandbox framework. under the proposed framework, the bsp shall ( 1 ) evaluate sandbox applications as to completeness and eligibility based on standards ; ( 2 ) determine the viability of the proposed solution by evaluating the test plan ; ( 3 ) monitor the implementation of the approved test plan ; and ( 4 ) assess whether the sandbox activity should be terminated or approved for full commercial roll - out. this framework will help direct bsp β s approach to encourage greater participation in our regulatory sandbox, especially for promising businesses that may be hesitant to raise groundbreaking ideas to existing regulators. the bsp has also implemented fintech - related policies and digitally driven initiatives to complement the test and learn approach and regulatory sandbox. first, on digital banking β¦ the bsp has approved six digital banking licenses which we expect will drive greater efficiency in the delivery of financial products and services, especially for the unserved and underserved. second, on open finance β¦ in january this year, the open finance framework was formally launched, along with the threeyear open finance roadmap 2021 β 2024. the roadmap outlines priority actions, including the adoption of industry - accepted standards, capacity - building for regulation, and cooperative oversight, which are all fundamental to establishing an open finance ecosystem. lastly, r & d of frontier technologies β¦ the bsp also conducts research and development activities on frontier technologies, such as central bank digital currency ( cbdc ). moving forward, the bsp plans to roll out project cbdcph, which is the bsp β s pilot project to build organizational capacity and hands - on knowledge of cbdc design, architecture, technology, and policy implications. to promote the adoption and frequent use of digital financial services, trust in the system must be present. the success of digitalization initiatives rests upon ensuring that consumers are protected online and that they have adequate financial and digital literacy. accordingly, the bsp has actively supported the proposed financial consumer protection act ( fcpa ). the bill is now awaiting | signature of president rodrigo duterte. when signed into law, the fcpa will provide protection to consumers of financial products and services β including those delivered via digital channels. specifically, the fcpa requires financial service providers to adopt and implement information security standards to ensure the safety and protection of the financial transactions and data privacy of their clients. the bsp has also created an internal technical working group to proactively address cybersecurity concerns on financial transactions and data privacy of their clients. the bsp has also created an internal technical working group to proactively address cybersecurity concerns on financial transactions and consumer complaints. among the tw g functions is to coordinate with law enforcement agencies, relevant government authorities, and other stakeholders on cybersecurity management, prosecution of scammers ; and prevention of cyber - related threats and scams. lastly, t he bsp continues to implement a digital literacy program ( dlp ) to increase public trust and confidence in the digital financial ecosystem and encourage the massive usage of digital 2 / 3 bis central bankers'speeches financial services. as the bsp continues to champion financial digitalization initiatives, everyone is called to join this journey of transformation. let us work together in building an economy that is characterized by a robust, secure, and resilient digital financial infrastructure, with tech - savvy consumers and an innovation - embracing public sector. these collaborations among various stakeholders are what we envision in platforms such as alibaba cloud β s sandbox program. together, let us continue the financial digitalization journey toward a resilient and inclusive future. thank you very much. 3 / 3 bis central bankers'speeches | 1 |
the more widely quoted standard share price index. the difference comes from the fact that the australian listed company sector has maintained a dividend yield of around 4. 5 per cent, on average, since 2007. bis central bankers β speeches about future returns. that β s what we need if we are to experience a long and sustainable expansion in housing investment that houses our growing population at acceptable cost, and pays reasonable returns on the capital deployed. that β s the sort of outcome we want, as part of the more balanced growth path for the economy we are seeking over the years ahead. another part of the balanced growth path would involve an expansion in some of the tradeexposed sectors that have been squeezed by the high exchange rate. the foreign exchange market is perhaps another area in which investors should take care. while the direction of the exchange rate β s response to some recent events might be understandable, that was from levels that were already unusually high. these levels of the exchange rate are not supported by australia β s relative levels of costs and productivity. moreover, the terms of trade are likely to fall, not rise, from here. so it seems quite likely that at some point in the future the australian dollar will be materially lower than it is today. the high exchange rate has also had a significant impact on the reserve bank β s own balance sheet. it led to a decline in the value of the bank β s foreign assets and hence a diminution in the bank β s capital, to a level well below that judged by the reserve bank board to be prudent. this has been a topic of some interest of late. our annual reports have made quite clear over several years now that, while this rundown in capital in the face of a very large valuation loss was exactly what such reserves were designed for, we considered it prudent to rebuild the capital at the earliest opportunity. it has been clear that the bank saw a strong case not to pay a dividend to the commonwealth during this period, preferring instead to retain earnings, so far as possible, to increase the bank β s capital. that rebuilding could in fact have taken quite a few years, given the low level of earnings. that is the background to the recent decision by the treasurer to act to strengthen the bank β s balance sheet, in accordance with a commitment he made prior to the election. the effect of this is that instead of it taking many years to rebuild the capital, it will occur in the current year | past year, the stock market, as measured by the asx 200 accumulation index, has returned about 25 per cent. 1 the median price of a dwelling in australia has risen by about 8 per cent over the past 18 months, reversing a previous decline. overall, the net worth of australians has increased by around 15 per cent, or more than $ 800 billion, since the end of 2011. it is not yet clear to what extent, or when, these more favourable trends in β confidence β will translate into intentions to spend, invest and employ. the pace of new dwelling construction is starting to respond to higher prices in the established property market, as we need it to. but at this stage, the available information suggests that broader investment intentions in the business community remain subdued. it may be a while yet before we can expect to see conclusive evidence of a change here. in the interim, some commentators have taken the view that the property market dynamics are worrying. my own view, thus far, has been that some rise in housing prices is part of the normal cyclical dynamic, that it improves the incentive to build, and that a price rise reversing an earlier decline probably isn β t something to complain about too quickly. moreover, credit growth, at between 4 and 5 per cent per annum to households, and less than that for business, does not suggest that rising leverage is so far feeding the price rise. hence it has been a little too early to signal great concern. there are, however, two caveats. the first is that, notwithstanding the above comment, credit growth may pick up somewhat over the period ahead. so this is an area to which we will, naturally, pay close attention. secondly, while overall credit growth remains low at present, borrowing is increasing quite quickly in some pockets. investor participation in housing in sydney, in particular, is becoming noticeably stronger. over the past year, the rate of finance approvals for this purpose has increased by 40 per cent. we have certainly experienced higher rates of growth of finance than that in the past, and it may be that we are seeing some catch - up from a delayed initial response to fundamentals favouring more investment in housing. nonetheless, as this activity continues, lenders and borrowers alike would be well advised to take due care. it is very important that strong lending standards remain in place, and that decisions be based on sensible assumptions this index, by the way, exceeds the 2007 peak, unlike | 1 |
transactions in the offshore markets. 7. as i said earlier, the pace of the development of offshore rmb business and markets also crucially depends on the third factor, that is the role that the private sector can and should play in the process. it is not likely that a market can thrive just with policy headroom and financial infrastructure. banks and other financial institutions must develop their capability to satisfy their customers who have a need or an interest in using rmb. trading companies need trade finance in rmb. corporates investing in china need direct or indirect financing in rmb and asset owners need a variety of rmb financial products. many of them need to use instruments to manage or hedge their rmb exposures. all these rmb related financial services and products can only be developed by the markets and financial institutions because they are closest to their customers and understand their needs best. that is why it is so important for the hkma to collaborate with our official sector counterparts in australia to create this private - sector led dialogue. the first dialogue was held in sydney in april last year, which was highly successful. i am very pleased that it is hong kong β s turn to host the second dialogue and i am confident that it will be equally if not more successful. i note that today β s dialogue has a very rich agenda and i look forward to hearing useful and practical ideas and suggestions on what the private sector can do on its own or in collaboration with the official sector to further develop the offshore rmb markets in australia and hong kong. 8. thank you very much. bis central bankers β speeches | eddie yue : opening remarks - hong kong monetary authortity - dubai financial services authority joint climate finance conference opening remarks by mr eddie yue, chief executive of the hong kong monetary authority, at the hkma - dubai financial services authority ( dfsa ) joint climate finance conference, hong kong, 16 september 2024. * * * ian [ johnston, chief executive of the dubai financial services authority ( dfsa ) ], colleagues from the dfsa and friends joining us in - person and online, good morning and good afternoon. greetings and introduction welcome to the inaugural hkma - dfsa joint climate finance conference. it was in the summer of 2023 when ian and i talked about having a joint conference together. ian has always been a very active contributor to the global dialogue on sustainability, and his visions for climate finance resonated a lot with me. we quickly came to an agreement that we should have a mechanism where key stakeholders in hong kong and dubai can meet regularly to discuss our shared challenges in scaling climate finance, explore and pilot innovative solutions, and coordinate a regional response to net - zero. and now, here we are, just over a year since our discussion, at the inaugural joint conference. let me first take this chance to express our appreciation for ian, dfsa colleagues and our industry friends who all help make this meaningful initiative happen. importance of collaboration our concerted efforts speak volumes about the growing recognition of collaboration between public and private sectors, financial institutions and corporations, and international organisations and local communities. none of us, by acting alone, can move the needle on decarbonisation. our collaboration needs to extend beyond borders as well. climate change is a global challenge that requires a global response. hong kong and dubai, as the sustainable finance hubs in asia and the middle east, can do and should do more together. collaboration between hong kong and dubai when it comes to climate finance, hong kong and dubai have a lot in common. we are the key gateways between east and west ; both with very vibrant sustainable bond markets ; encouraging technology adoption, actively participating in global standardsetting and fully committed to local alignment. 1 / 2 bis - central bankers'speeches more importantly, we both are very proactive in taking the initiative. in the race against climate change, we cannot afford to wait until we have a perfectly robust approach. the like - minded need to join hands and embark on the sustainable finance journey knowing that there will be hurdles or | 0.5 |
jerome powell : welcoming remarks " expanding the impact : increasing capacity and influence " welcoming remarks by mr jerome h powell, member of the board of governors of the federal reserve system, at " expanding the impact : increasing capacity and influence ", the 2017 interagency minority depository institution and community development financial institution bank national conference, los angeles, california, 5 april 2017. * * * thank you, donna. good morning and welcome to the federal reserve. we are honored to have you here today as we host the biennial interagency minority depository institution ( mdi ) and community development financial institution bank conference. my colleagues from the federal reserve bank of san francisco and i are especially honored to be hosting you in los angeles. as you probably know, all of the previous interagency mdi conferences have been held on the east coast, mainly in washington, d. c. however, because the largest concentration of minority banks is located here in southern california, it seemed natural to bring this conference west. the federal reserve seeks to support mdis in a number of ways, including our partnership for progress, our program for outreach and technical assistance to mdis. both the office of the comptroller of the currency and federal deposit insurance corporation share our goal of preserving and promoting mdis because you are critical institutions to the communities you serve and the larger u. s. economy. and i note that congress has also recognized your importance, mandating our respective agencies to help support mdis. from the perspective of someone who sits on the federal open market committee, i see many ways that the federal reserve can not only support mdis but is itself also supported by them, and i would like to talk about four of these ways today. first, half of our monetary policy mandate is maximum sustainable employment. that means that we need to be aware of employment trends across all communities in america, not just the top - line averages, since unemployment rates vary significantly across races and geographies. for the first time, last year, we put into our monetary policy report to congress a section that detailed how post - recession economic gains have been distributed across races. 1 you, as mdis, are committed to understanding and serving these diverse communities. i know that, for example, your small business loans to minority business owners make a difference in the employment rates of minority communities. i thank you for that work, and we will continue to work closely with you to better understand the employment dynamics of underserved | references an annual inflation rate of 2 percent as most consistent with our price - stability goal over the longer run. the fed pursues its monetary policy goals using a variety of tools, but the main policy tool is the federal funds rate, a key interest rate for overnight borrowing by commercial banks that influences other interest rates throughout the economy. lower interest rates tend to stimulate demand β for housing, cars and other durable goods, and business investment, for example β which boosts economic activity and has the potential to push up inflation. higher interest rates tend to slow the economy and tend to push inflation down. in normal times, monetary policy decisions are made eight times each year through votes of members of the federal open market committee ( fomc ). 2 in preparation for each meeting, the fomc participants analyze the latest economic data and assess where the economy stands relative to our two mandated goals. and, because monetary policy decisions take some time to flow through to, or have their full effect on, the economy, fomc participants must form a view about how they think the economy will evolve in the coming months and years. in addition to understanding where the economy is at any given point in time, making a judgment about where it is headed is also crucial to monetary policy. 1 / 6 bis central bankers'speeches as i have learned in my nearly three years and almost 20 meetings as an fomc member, economic forecasting is challenging, to say the least. despite all of the data and economic models at our disposal, the economy is exceedingly complex, the product of countless decisions made every day by human beings, who have varied goals and motives. economic data, sometimes received with a considerable time lag, can give us only a rough, backward - looking picture of the economy, and judging where the economy is headed in the future is even more difficult. even the most accurate forecasts about the economy are often wrong, simply because of the uncertainty that is inherent in the task of interpreting and predicting future economic conditions. yet our responsibility is to do just that β make predictions about how economic activity will evolve, and act on those forecasts in real time, to ensure that monetary policy can help support a strong economy. as part of this process, fomc members also consider the different ways that our outlook may be wrong. we consider a number of alternative scenarios for the future and try to manage the relative risks of a policy decision if the future does not turn out as expected. i | 0.5 |
us real gdp fell by around 5 %. in the euro area the recession was equally severe but, again, not comparable in scale to the events of 1929 β 1933. the great recession was painful but it was not a second great depression. while β ex post β policies are an important part of policy - makers β toolkit, they are by no means a β free lunch β. dealing with the recent financial crisis carried a substantial fiscal cost9. in particular, debt - to - gdp ratios have increased as a result of bank bail - outs as well as due to the effect of the economic downturn on fiscal revenues and social expenditures. for advanced economies, the imf reports a median increase in the ratio of debt to gdp of 25 percentage points and a median direct bail - out cost of 6 % of gdp. these fiscal strains are keenly felt throughout europe at the current juncture. the policy conclusion i want to draw from these facts is : even when the β ex post β policy response is successful at attenuating the immediate impact of a financial crisis on the real economy, the build up of public debt carries substantial costs of its own. in matters of financial stability ( just as in medicine ), β prevention β is always better than β cure β. let me now turn to discussing β ex ante β preventative policies. the crisis revealed that our β ex ante preventative β policy tools were insufficient to deal with the build up of systemic risk. many of the post - crisis efforts by central banks, regulators and national governments have, therefore, focused on rectifying this deficiency. an important lesson from recent crisis was that policies aimed at ensuring the stability of individual institutions ( which is what micro - prudential regulation does ) were not sufficient to prevent the under - pricing of risk and excessive balance sheet growth. even though individual banks looked healthier than ever in 2007, the system as a whole was more fragile than ever. this is why, in january 2011, the european systemic risk board ( esrb ) was established and charged with ensuring the integrity of the eu β s financial system. the esrb β s main tasks are threefold : to identify and prioritise systemic risks ; to issue early warnings when significant systemic risks emerge ; and to issue policy recommendations for remedial action in response to the risks it identifies. in addition, today β s globalised financial market implies that the efforts aimed at crisis prevention must have a global dimension. this is why agreeing | medium term. developments within m3 clearly reflect market participants'specific investment responses to the intensification of the financial turmoil, but increasingly also the impact of the past reduction in the key ecb interest rates. as this reduction has narrowed the gaps between the interest rates paid on the different categories of short - term deposits, it has fostered shifts in the allocation of funds. for example, the demand for overnight deposits further strengthened in february and contributed to the rise in the annual growth rate of m1 to 6. 3 %, while the demand for short - term time deposits weakened considerably. the flow of mfi loans to non - financial corporations and households has remained very subdued. the slightly negative flow of lending to non - financial corporations in february reflects a decline in the outstanding amount of loans with a shorter maturity, while the net flow in loans with longer maturities remained positive. the decline in short - term lending may be indicative of a reduction in loan demand related to the weakening of economic activity. however, supply effects have probably also affected loan developments. in this respect, developments over the past few months may in part reflect ongoing efforts of banks as well as the corporate and household sector to reduce the highly leveraged positions built up in past years. to sum up, today's decision takes into account the expectation that price pressures will remain subdued, reflecting the substantial past fall in commodity prices and the marked weakening of economic activity in the euro area and globally. the latest economic data and survey information confirm that the world economy, including the euro area, is undergoing a severe downturn. both global and euro area demand are likely to remain very weak over 2009, before gradually recovering in the course of 2010. available indicators of inflation expectations over the medium to longer term remain firmly anchored in line with the governing council's aim of keeping inflation rates at levels below, but close to, 2 % over the medium term. a cross - check with the outcome of the monetary analysis confirms that inflationary pressure has been diminishing. after today's decision we expect price stability to be maintained over the medium term, thereby supporting the purchasing power of euro area households. the governing council will continue to ensure a firm anchoring of medium - term inflation expectations. such anchoring is indispensable to supporting sustainable growth and employment and contributes to financial stability. accordingly, we will continue to monitor very closely all developments over the period ahead. regarding fiscal policies, it is necessary that countries'commitments to a path of consolidation | 0.5 |
zeti akhtar aziz : reflections on financial reform β malaysia β s experience speech by dr zeti akhtar aziz, governor of the central bank of malaysia ( bank negara malaysia ), at the 2013 china business news ( cbn ) annual meeting and finance summit β reflections on financial reform β malaysia β s experience β, beijing, 8 december 2013. * * * it is my honour and pleasure to be invited to speak at this 2013 china business news finance summit. as the globalisation of finance intensifies, the world is becoming increasingly more inter - connected and integrated. this has largely been due to the trend towards increased financial liberalisation by most parts of the world. it has been maintained that such deregulation and liberalisation would facilitate the development of more efficient and robust financial systems and that it would result in a more efficient allocation of financial resources across borders. while such financial liberalisation may indeed bring such wide ranging benefits, it also brings with it increased risks that needs to be effectively managed. it was for these reasons that malaysia adopted a conscious effort to put in place the financial and economic pre - conditions so as to enable us to benefit from such financial reforms involving the deregulation and liberalisation of our financial system. allow me to share our experience in pursuing this agenda. following the asian financial crisis, malaysia embarked on strategies for an orderly development of the financial sector. focus was first placed on strengthening the institutional capacity of the domestic financial intermediaries so as to narrow the performance gap between the domestic and international financial intermediaries. in parallel with this was the intense effort to develop the domestic bond market. during this phase of the development of the financial system, significant advancement in the banking sector was made in terms of capitalisation, risk management and governance practices, delivery channels and in human capital development in the industry. this paved the way for the interest rate reform to move to greater market orientation, thereby supporting a more efficient pricing of financial products and services. the more competitive environment that it generated also became an important driver of productivity gains, customer centricity and innovation in the financial system. equally important, was the attention that was given to the development of a deep and vibrant domestic bond market as an alternative channel for the efficient raising of funds, particularly by the corporate sector. the development of the bond market has enabled better matching of long - term projects with long - term funds, and by reducing the over - reliance on the banking system, it has contributed significantly to financial | a policy mistake, creating substantially more inflation than can be explained by the supply shock itself. this point cannot be emphasised enough. the goal of ensuring that inflation does not go well beyond the inevitable price rise called for by the supply shock, through second - round effects, largely explains why the mpc has to respond despite low demand pressures. to take a simple example, imagine an economy where there is a small supply shock, such as a modest increase in world oil prices. the central bank observes inflation somewhat above target in the near term. however, other items in the inflation basket remain stable, so the price increase is confined to fuel and immediately related items such as transport. firms, households and workers do not change their views of inflation, except for the near term. wage settlement rates do not pick up and firms do not seem to be raising mark - ups. financial markets do not start to price more inflation compensation into instruments such as government bonds. in these circumstances, it is an easy choice for the central bank to rely on its credibility and make no policy changes. inflation will very likely return to target after a year without further action. of course, not all policy decisions are so easy. they become harder when the shocks are large and persistent, or when there are multiple overlapping shocks. it is also not always straightforward to determine, given data lags, if inflationary pressures are broadening. there are no definitive sources you can trust for early warning. at the same time, it can be dangerous to wait too long for perfect information because delays can make the problem page 3 of 8 worse. furthermore, it is never clear how much credibility one has until you have lost it. these situations pose some of the most challenging balancing acts for monetary policy. what are the data telling us? let me now put aside the textbook and talk about our real - world decisions. as we went into the july mpc, we were confronted with tighter global financial conditions or higher global funding costs for countries like south africa. in addition, we faced lower global economic growth projections due to factors that included slower growth in china, the continuing war in ukraine, necessary monetary policy tightening synchronised across the world, and the tapering of commodity prices. while growth globally has been revised downwards, inflation has been revised upwards in most countries and has turned out to be more persistent. inflation is expected to be above targets in most advanced and emerging market economies, both this year and next year. south africa has not escaped | 0 |
result of their function, the currency reserves encompass large financial risks, while the comparable returns are relatively low. compensation for the gold price risk and the dollar exchange rate risk, in particular, is relatively poor. it is therefore inevitable that tighter bounds will be set on snb profit distribution, once the existing distribution reserve has been exhausted. | of oil. the evidence thus far is that demand has slowed a little, but supply has increased rapidly in recent years and is expected to remain at a high level this year. this matters because, usually, more supply of something and a cheaper price is good news, not bad. to be sure, lower oil prices require adjustment on the part of producers β corporate and sovereign. but this has always been so and an increase in the availability of energy and cheaper prices has generally, in the past, been seen as a plus for overall global growth β a positive β shock β. this was because the response of consumers of oil to a decline in its price was to consume more β not just more oil but other goods and services as well, using the higher real income afforded by lower oil prices. it was thought that this outweighed the negative effects of spending cutbacks in oil - producing countries. it seems people are less confident this time of a fall in oil prices being expansionary. why so? the fact that the united states has become a larger oil producer ( and a significant producer of the short - run β marginal barrel β ) is clearly relevant. so is the possibility that consumers both there and in europe may, for particular reasons, be more inclined to save any windfall from lower oil prices than they used to be. these factors may, for a time, work against the traditional positive effect. in addition, the price for oil was high enough, for long enough, that many investment and spending decisions were taken around the world that look, perhaps, not quite so sound in hindsight. hence, producer countries have budget strains ; some sovereign wealth funds are liquidating financial assets ; spreads on debt instruments issued by energy companies have widened sharply ; exploration and new investment is being curtailed rapidly. it seems as though the sheer strength and longevity of the preceding period of very high oil prices prompted behaviour that made some players more vulnerable to a price decline. that, of course, is not unknown in the history of commodity markets. having said all that, people might be being a little too pessimistic about the effects of the fall in oil prices. it is still equivalent to a reduction in taxes for a very large number of consumers around the world who now have more disposable income to spend or to repay debt. the shareholders and state owners of the producing assets, who gained from the higher prices, are wearing most of the costs of the lower price, along with those who provided | 0 |
over decades guarantees a stable currency. this constitutes a perfect numeraire for banking activities. second, the money issued by the snb, i. e. deposits that banks hold at the snb and banknotes, is the swiss legal tender. it represents the anchor of the swiss monetary system. if their customers wish, banks exchange the money in customers β deposits against banknotes issued by the snb. third, banks use the snb β s infrastructure, the swiss interbank clearing system, for their payment transactions. and fourth, the snb provides liquidity to the banks, which they hold in the form of deposit accounts or banknotes. in this way, the snb ensures that the payment system functions well and the demand for banknotes can be satisfied. by fulfilling its mandate, the snb thus provides fundamental services for the operations of banks and the financial sector. at the same time, the snb needs the financial sector in order to fulfil its mandate. the financial sector transmits the snb β s monetary policy actions to the swiss economy through its lending and borrowing decisions. based on short - term money market conditions set by the snb, banks adjust the cost of borrowing for households and firms. through their core business, banks thus contribute to monetary policy transmission. more generally, the financial sector transmits changes in the short - term policy interest rate to other assets of different maturities. the resulting change in overall yields on swiss assets influences their relative attractiveness. this also affects swiss franc exchange rates. both exchange rates and interest rates then determine monetary conditions in switzerland, and thus eventually output and inflation. although short - term interest rates are the main monetary policy instrument, the snb has, in recent years, been using exchange rate interventions as an additional tool. due to the safehaven status of the swiss franc, the snb has been active on the foreign exchange market. we are also willing to intervene, as required, as part of our current monetary policy. once again, banks have been at the heart of monetary policy transmission. they have acted as intermediaries of the snb β s foreign exchange interventions. 4 with depressed international demand and a strong swiss franc weighing on gdp, credit availability has been crucial for the domestic economy. low interest rates and ample liquidity provision by the snb have facilitated banks β intermediation activities. in short, the snb β s for further details, cf. lukas altermatt and roma | thomas jordan : monetary policy in the financial markets crisis summary of a speech by mr thomas jordan, member of the governing board of the swiss national bank, at an event for banks and pension funds, berne, 2 april 2008. the complete speech can be found in german on the swiss national bankaβ¬β’s website ( www. snb. ch ). * * * the origin of the turbulence on the international financial markets which has persisted since august 2007 is mainly to be found in the us housing market. on the one hand, a long period of low usd interest rates had boosted the demand for residential real estate in the us. on the other hand, the structure of the us mortgage market with the associated rapid increase in mortgage debtors with poor credit ratings, and the subsequent securitisation of their mortgages, had proved to be problematic. between 2001 and 2006, residential real estate prices in the us doubled. at the end of 2006, there was a reversal in the price trend which triggered crises in both the real estate and mortgage markets. the substantial expansion in sub - prime and alt - a mortgages, and a deterioration in the credit ratings of debtors within these segments, led to a rise in the level of overdue payments and defaults. as a result, even securities that gave the appearance of being gilt - edged, but were backed by us sub - prime mortgages, lost considerable ground. since the banks themselves have massive investments in this market, they were obliged to make writedowns which, in some cases, were hefty. there is still uncertainty about the volume of additional bank writedowns that will be needed, so that the situation on the international money markets remains tense. in this crisis, central banks have reacted fast and flexibly in order to secure the supply of liquidity to banks and counter distortions on the money market. by means of various measures, the swiss national bank was able to stabilise the three - month libor within the target range, thereby keeping fluctuations in the relative restrictiveness of monetary policy low by comparison with other countries. however, it is not possible to solve the fundamental problems in the banking sector through the flexible deployment of an expanded range of monetary policy instruments ; neither can they be resolved by means of coordinated actions on the part of central banks alone. the banks themselves must make a substantial contribution to solving the problems which triggered the current crisis. in this respect, the most urgent matters are transparency with regard | 0.5 |
has proven indispensable in conditions where monetary policy transmission is impaired or where space for interest rate cuts is limited. third, we have seen the importance of a strong accountability framework, particularly when central banks have to use new tools that are not well - understood by the public. central banks are powerful and independent, but they are unelected. this combination can only be squared if they are held accountable by elected authorities. in light of this, we have stepped up our efforts to improve our communication and strengthen our accountability in recent years. the governing council has started to publish the accounts of its monetary policy meetings. the ecb and the european parliament have increased the intensity and focus of their exchanges. 2 all this has provided us with more opportunities to explain our decisions and demonstrate how the ecb is acting in accordance with its mandate, which is a fundamental pillar of its legitimacy. the crisis has offered many lessons beyond monetary policy, too. the euro area entered the crisis with an incomplete institutional and regulatory framework, not only for the banking sector but also in other areas of economic policy. the creation of the banking union and the european stability mechanism has strengthened the ability of eu authorities to intervene decisively in future crises. reforms at national level, and the strong political commitment to the euro shown by european policymakers, were equally instrumental in strengthening the foundations of our common project. but the necessary changes took time, and it was time that the euro area lost in its recovery. our monetary union is now in better shape, but further progress can and should be made. as i had the opportunity to discuss during my regular hearing before the committee on economic and monetary affairs, and as your draft resolution points out, the priority now is to increase the resilience of the euro area. this would also strengthen the transmission of monetary policy in future downturns. 3 resilience depends on the euro area being able to use a broad policy mix involving monetary, fiscal, prudential and structural instruments. 4 conclusion let me conclude. the first two decades of the euro area have seen an evolution in the way the ecb conducts its monetary policy. faced with unprecedented threats to price stability, the ecb adapted its policy instruments to continue delivering on its mandate. we will continue to do so if and when needed, in compliance with our mandate as defined by the eu treaties, and with all the independence over our tools as defined by our legal framework. today, we can say that the euro area has emerged from | from an inflation perspective, we cannot be satisfied yet. we need patience and persistence. we need to be patient because inflation convergence needs more time to show through convincingly in the data. and we need to be persistent, because our baseline for future inflation remains crucially contingent on very easy financing conditions which, to a large extent, depend on the current accommodative monetary policy stance. the bank for international settlements ( bis ) says that we should increase interest rates so as to keep some ammunition in reserve in case we encounter difficult times again. but if we increase interest rates and tighten policy too quickly, we could jeopardise the recovery and end up further away than ever from our ( inflation ) target. the ecb has pumped more than β¬2 trillion into the market. how confident are you that all those funds can be absorbed in an orderly manner? the ecb governing council will discuss the conclusions for monetary policy and what this 1 / 5 bis central bankers'speeches means for quantitative easing. i can β t say anything about that yet. we do say that we still need a long period of accommodative policy before we are ready. as the economic prospects brighten, higher expected returns on business investment will make borrowing conditions increasingly attractive. this will reinforce accommodation and make sure that inflation sustainably converges towards our objective of below, but close to, 2 % over the medium term. growth is picking up and unemployment is going down, but wages are not really increasing. doesn β t that totally contradict traditional economic theory? wages are also a reflection of the past. wage increases are partly based on current inflation rates and they are relatively low at the moment. let us also not forget that the level of unemployment is still high. that merely underlines that the process of reflation is a long one that remains highly dependent on accommodative monetary policy. but will the wages still evolve in the same way as before, now that all kinds of new factors are emerging such as computerisation, flexible jobs, etc? are the ecb β s instruments still reliable? well, how do you measure the impact of china on international competition, of e - commerce, of automation? we have many internal discussions about that, about whether something in the inflation process has broken down. the phillips curve ( which shows that wages rise when unemployment falls ) is not broken, but it is flatter and the process is slower. wage inflation is on the way, but we | 0.5 |
and capital to be more efficiently managed at the group level. and with the single supervisory mechanism ( ssm ) and the new resolution framework barriers to entry and exit into national markets are expected to fall. all this should meaningfully lower the cost of doing business for cross - border banks and increase efficiency in the sector. at the same time, a more integrated banking landscape implies greater risk - sharing within the sector, which should in turn support the stability of credit provision. cross - border integration entails greater geographical diversification. 11 and the local affiliates of crossborder banks are also less likely to be exposed to the kind of market funding dry - ups we saw during the crisis, as intragroup funding acts as a shock - absorber. 12 that said, we of course do not want to move from a situation of too low concentration towards a banking landscape dominated by large banks with excessive market power. recent research looking at the pre - crisis period suggests that where banks face limited competition in their domestic markets, financing constraints for smes are higher. moreover, the effect of bank market power on financing constraints increases in financial systems that are more bank dependent. 13 this underscores the general need, as i mentioned earlier, to create a more balanced financing mix between banks and capital markets. but it also points again to the particular importance of securitisation. with well - functioning securitisation markets some of the benefits of cross - border banks β for instance risk - sharing β can be replicated by having small, local banks originate - to - distribute loans while larger, global banks securitise and market them. in see for example anna kovner, james vickery, and lily zhou, β do big banks have lower operating costs?, β federal reserve bank of new york economic policy review, volume 20, no. 2, forthcoming. β financial integration in europe β, march 2007. in line with this, carletti, e., hartmann, p., and ongena, s. ( 2007 ), β the economic impact of merger control : what is special about banking? β, ecb working paper no 786, july, find empirical evidence that the opacity of national bank merger reviews entered elements of inefficiency in banking relative to non - financial corporate sectors. for a discussion on why retail bank integration may be a particularly attractive risk - sharing mechanism, see e. g. fecht, f., gruner | , h. p. and hartmann, p. ( 2007 ), β welfare effects of financial integration, β cepr discussion paper no. 6311. see for instance reinhardt, d. and riddiough, s. ( 2014 ), β the two phases of cross - border banking flows β, mimeo, bank of england. ryan, r., o β toole, c. and mccann, f. ( 2014 ), β does bank market power affect sme financing constraints? β, journal of banking and finance. bis central bankers β speeches other words, it creates the conditions for diversity and competition within the sector so that an optimal market structure can evolve. conclusion let me conclude. repairing bank lending channel after a major financial crisis is inevitably a long and difficult process. monetary policy has an important role to play, but the agenda is also broader : it involves supply and demand factors, and multiple aspects of national and european policy. the steps we have taken so far to strengthen the banking sector are necessary conditions for a stronger recovery in credit, and i am confident that we will see increasingly positive effects. but as banks transition to a new business environment, ensuring that they continue to have microeconomic incentives that coincide with our desired macroeconomic objectives is essential, as is developing a banking landscape that is sufficiently efficient and diversified to sustain credit supply. bis central bankers β speeches | 1 |
associated with corporate rehabilitation and realignment such as m & a finance and dip finance and of fund demand from emerging companies that challenge new areas. moreover, needs for asset management mainly by elderly people are expected to diversify and increase. changes in business models for globally active major financial institutions third, business models of globally active major financial institutions might change. specifically, the originate - to - distribute business model that had been actively used prior to the crisis will relatively decrease in number and the proportion of commercial banking business that put more emphasis on the relationship with customers is likely to increase : that is called β back to basics. β moreover, as business regulations such as the volcker rule will be implemented and regulation and supervision will be reviewed in order to restrain β too - big - tofail, β it is likely that the moves toward mere scale expansion and toward excessive risk - taking will be restrained. in terms of funding, as awareness about liquidity risk heightened considerably through the experience of the financial crisis, more emphasis would be put on retail deposits, which have more stability than short - term wholesale funding such as repo transactions. such changes in business models of globally active major financial institutions could have an impact on the business models and the competitiveness of japanese financial institutions. b. future of japan β s financial system : macro perspective i will next touch on how japan β s financial system should be in the future from a macro perspective, namely, a perspective of financial system structure. needless to say again, japan β s financial system has long been characterized by financial intermediation centering on banks. in this situation, from a perspective of improving the functioning and stability of the financial system, many have argued as follows. it is desirable to have not only bank - based financial intermediation but also financial intermediation through the capital market, inclusive of the so - called market - based financial intermediation. to that end, it will be necessary to increase the supply of risk money and eventually enhance the diversification of households β asset investment. in fact, many policy measures have been taken to bolster such moves, including enhancement in market infrastructure, improvement in market transparency, and investor protection. if we revisit the discussions based on the experience of the recent crisis, it can be summarized as follows. first, the complementarity of functioning between banks and capital market is important. while the functioning of corporate bond and cp markets declined significantly in japan during the crisis, bank lending substituted the financial | tarisa watanagase : the road ahead for central banks β meeting new challenges to financial stability luncheon talk by dr tarisa watanagase, governor of the bank of thailand, at the foreign correspondents club of thailand, bangkok, 20 july 2010. * * * distinguished fcct members and guests, ladies and gentlemen, first of all, i would like to thank the fcct board for inviting me to deliver this luncheon talk as part of the club β s newly established speaker β s lunch series. to this, i am honored as well as delighted to be back. it was exactly two years ago when i was here for the club β s dinner program in july 2008, and let me tell you that i very much enjoyed our q & a session then. i certainly look forward to participating in such a lively exchange again this afternoon. the topic of my talk today is β the road ahead for central banks : meeting new challenges to financial stability, β in which i will share with you my views on the roles of central banks regarding the maintenance of financial stability, with particular reference to those at the bank of thailand during the past few years and going forward. this talk will be divided into three parts. the first part will be about the changing global view on financial stability policies as a result of the recent global financial crisis. the second part will be a summary of what the bank of thailand has done with regard to the maintenance of thailand β s financial stability. the final part will be a discussion about the challenges ahead. ladies and gentlemen, since my previous fcct address, things have changed dramatically. two years ago, the main policy issue surrounding the economy was the sharp acceleration in inflation due to drastic increases in oil prices. two months after my talk, starting with the fall of lehman brothers, the world went into the deepest recession never seen since the great depression. thailand was not spared, as the thai economy last year experienced negative growth for the first time since the 1997 crisis. in tandem with the slowdown of the global economy, oil prices collapsed and inflation was no longer an issue. over the past two years, policy focus would be on how to restore the stability of the global and individual country β s financial systems and how to prevent such a systemic crisis from happening in the future. in other words, the spotlight has turned from price stability to financial system stability, or in short, financial stability. 1 the global financial crisis has a significant impact on central banks β thinking of | 0 |
8 per cent in 2003 and 2004. it is widely recognized that the contribution of asia to global growth has generally been very impressive in recent years, and may continue to be so, for several years in future. the current account on the balance of payments has been in surplus for many if not all asian economies. the private capital flows to the emerging asia have recovered from an outflow of us $ 52 billion in 1998 to an inflow of us $ 151 billion in 2004. at the same time, the reserve build up in the region has been significant. in the backdrop of the resilience of the asian economies and their ability to bounce back after a deep financial crisis, there is resurgence of confidence in their future. strategies in the form of having mutual swap agreements under the chiang mai initiative, to guard against speculative attacks, could now be enlarged, and could also be supplemented by greater co - operation and co - ordination in the exchange rate regimes and policies. indeed, from a longer - term perspective, we must note that asia is appropriately poised in terms of abundance in factors of production β labour and capital β particularly labour, as the demography is clearly in favour of asia to sustain a long - term growth. the emergence of surplus factors of production in asia combined with financial strength would impact prices, wages and exchange rates. asian economies could explore strategies to evolve a system whereby they could not only prevent and, if necessary, manage financial crises on their own to the extent possible, but also play a more active role in co - ordinating policies with other major developed economies. these arrangements could be consistent with continued and an active role of imf in international monetary cooperation. 2 / 4 it is useful to recall that the acute sense of interdependence aroused by the financial β contagion β in 1997 convinced the asian economies of the importance of economic cooperation, one that reflected their common interests and priorities as well as strengthened their voice in the global arena. among others, this led to two parallel movements β one in south asia in the form of the saarc initiative and the other in east asia reflecting the asean + 3 initiative. the idea of having an integrated financial system so as to provide viable β safety net β in times of crisis germinated. as a result, the idea of β asean + 3 β initiative1 gained prominence. this, in turn, was reflected in two correlated developments. first, in 2000, asean + 3 countries mutually agreed to form a network of | conference has only further matured. it has grown both in audience and in breadth of topics. and this year β s program is, once again, testimony to that. i wish you all an inspiring two days. 1 national bank of the republic of north macedonia, accessed on 7 december 2021, rnm fintech survey final report clean 211220. pdf ( nbrm. mk ) 3 / 3 bis central bankers'speeches | 0 |
of financial stability, we must also acknowledge that both the public and private sectors have a critical role to play. while the perspectives of market participants and official supervisors may differ from time to time, our objective is the same - to maintain a strong and vibrant financial system over the long term. indeed, it is clearly evident to me, as a former commercial banker and now as a supervisor, that only if we work together, each meeting our responsibilities and reinforcing the other, will we be able to successfully manage and supervise a rapidly evolving, ever - more complex financial services industry. | and upheld by market participants β can produce positive externalities that benefit all industry stakeholders, thereby serving as a public good. if used well, best practices can be adapted quickly as market structures, practices, and participation evolve and thus offer timely guidance to market participants. on occasion, they may also help inform regulation. best practices can be broadly categorized into those that are quite narrow, targeting very specific conduct or processes, and those that involve broad principles. those that are narrow in scope are usually more straightforward to implement, and relate to outcomes that are easier to measure. for example, it is fairly easy to assess adherence to the best practice recommendation to implement a fails charge when a seller fails to deliver a treasury security, or to use a payment - versus - payment settlement mechanism for fx transactions. in contrast, best practices that propose broad principles can be implemented differently across institutions and have outcomes that do not lend themselves to easy measurement. for instance, it is difficult to gauge the extent to which an individual market participant behaves in a manner that supports market liquidity or whether market participants as a group apply this recommendation consistently. nonetheless, such principle - based best practices can be quite powerful in motivating market participants to think carefully about their internal policies and procedures and consider whether they are consistent with broader principles. both types of best practices are important. successful best practices are almost always developed using a collaborative and inclusive approach. ideally, with respect to financial markets, the process should include a wide range of market participants, including dealers, banks, buy - side firms, and market infrastructures, representing different areas of expertise, including the core business lines, legal, compliance, operations, technology, and custody. a public consultation process may be helpful in further enhancing the development process. 5 these types of approaches can bring a wide array of some examples of best practices in these sectors include : the national education association, which develops pedagogical standards based on its research ; the best manufacturing practices center of excellence, which helps businesses identify, research, and promote exceptional manufacturing practices, methods, and procedures ; and the food and agriculture organization of the united nations, which develops and shares β good agriculture practices β for a range of commodities. during the development of the first phase of the bis fx global code, a large number of detailed comments and useful suggestions were received from market participants that were integral to the drafting process. in april 2015, the tmpg solicited comments on its proposed best practice updates related to automated trading | 0.5 |
fundanga : islamic banking β building partnerships for development opening remarks by dr caleb m fundanga, governor of the bank of zambia, to the islamic banking conference β building partnerships for development β, lusaka, 20 october 2008. * * * the guest speaker, mr. ahmad zaini bin othman chief executive officers of banks and non bank financial institutions ; distinguished invited guests ; colleagues ; ladies and gentlemen ; on behalf of the bank of zambia and indeed on my own behalf, i would like to extend a very warm welcome to you all to this important conference on islamic banking. to our guest speaker, mr ahmed zaini othman, i wish to extend a special welcome to you to zambia and in particular to lusaka, the capital city. like the rest of zambia, lusaka is a city of tranquility with an easygoing african charm. the city is not short of interesting sites and places to visit. i therefore urge you to find time or indeed stay an extra day or more to sample this special menu that lusaka offers. i also wish to extend my sincere thanks to standard chartered bank zambia plc, the islamic council of zambia and the eastern province chamber of commerce and industry for graciously accepting to make presentations at this conference. ladies and gentlemen, the bank of zambia is honoured and delighted to host the first islamic banking conference in zambia that begins today, the 20th and ends on 21st october, 2008. this conference on islamic banking could not have come at a more opportune time than now, when the financial sector in the country is called upon to widen financial inclusiveness. banks and non - bank financial institutions are being encouraged to increase availability of, and access to financial services to the population through the design of new and affordable products. it is through conferences and fora of this nature, among other events, that bank of zambia endeavours to disseminate information and share experiences with stakeholders about the importance of developing the financial sector. ladies and gentlemen, the last few decades have witnessed a rapid growth in islamic banking both in terms of size and the number of players. islamic banking is currently practiced in more than 50 countries worldwide. in some countries only islamic banking is allowed while in others islamic banking coexists with conventional banking. islamic banking is not limited to islamic countries. in august 2004, for instance, the islamic bank of britain became the first bank licensed by a non - muslim country to engage in islamic banking. according to recent industry estimates, islamic banking is set to | grow at an annual rate of 15 %. the increased trade between the sub - saharan region and islamic nations in the middle east only reinforces our view that partnerships among the corporate players between the two regions will foster more development. the government of the republic of zambia ( grz ) recognizes that the limited access to financial services and low number of products available to the different sectors of the economy has hindered the development potential of zambia β s economy. there is need therefore, to revitalize the financial sector so that it meets the challenges of accelerated and sustained investments in key sectors of the economy. recent developments in the financial sector world - wide offer some encouragement that working together could extend the range and reach of financial services that are available to our people. still a lot remains to be done to extend financial services to the majority of our people and foster ongoing sustainability of our financial institutions. it is against this background that bank of zambia found it necessary to hold this conference to deliberate on the topical concept of islamic banking under the theme β building partnerships for development β. the main objectives of this conference are to get a general understanding of the operations of islamic banking and to share views on promoting partnership for development through islamic banking, draw lessons, and recommend strategies for implementing islamic banking in zambia in order to improve access to financial services. the rapid growth of islamic banking raises a series of important questions, such as whether islamic banking should be regulated differently from conventional banking. because modern islamic banking is relatively new to most countries rules for financial accounting, bank governance, and lending standards are continually evolving as business practices are refined. however, a basic understanding of the concept of islamic banking should provide a basis for determining an appropriate regulatory framework for islamic banking. of particular importance to zambia is an arrangement where borrowers can borrow without paying interest. lending rates are very high in this country, thus making borrowing for capital investments prohibitive. this is one issue we have been grappling with for a long time. therefore, an arrangement where borrowers can access funds for investments without paying interest, offered by islamic banking is worth exploring. mr. chairman, over the past two years, we have noted with delight that financial institutions in zambia are beginning to rise to the challenge by broadening the scope of their financial services beyond the traditional customers to include previously unbanked segments of society. ladies and gentlemen, the need to foster an enabling environment cannot be overemphasized. in this regard, the bank of zambia will continue to ensure | 1 |
jean - claude trichet : in memory of wim duisenberg speech by mr jean - claude trichet, president of the european central bank, on the occasion of the memorial service for mr wim duisenberg, amsterdam, 6 august 2005. * * * it is with great sadness and emotion that we all are here in the concertgebouw after the terrible loss of wim duisenberg, our first president and our dear friend. the french writer chateaubriand said : β in my eyes, nobody is going down in the grave ( β¦ ). death, in touching us, does not defeat us ; it only makes us invisible β. wim is, and will for ever continue to be, present with us, in our heart and soul, with each and every one of us, and with our dear european central bank. he will be with us as a great central banker, a great first president of the european central bank, and a great european and friend. as regards the central banker, i would like to say very simply that, seen from my own perspective hen i was governor of the banque de france, the monetary policy of de nederlandsche bank was a role model for an institution and a currency wanting to inspire confidence, to improve credibility and to be state of the art in the handling of monetary policy in the uncharted european waters of that time. can i also say, gerrit, en passant, that the netherlands β economic strategy was also a role model for france β s economic strategy. and as a natural consequence, wim, as president of de nederlandsche bank, was a role model for fellow central bankers in europe. at the helm of the national central bank of the netherlands, as president of the committee of governors, as president of the bis, as a key member of the delors committee, as president of the european monetary institute, wim always displayed three unique qualities : β’ a fantastic capacity to synthesise the most complex situations ; β’ an exceptional gift for taking clear decisions in an expeditious way ; β’ and, finally, a strong determination to stick to the decision and stand firm in all circumstances, even when going through unexplored and difficult territory. each of these three qualities can be possessed independently of the others. what is absolutely exceptional in the case of wim is that he had all three of them simultaneously. as far as demanding circumstances and exceptional challenges are concerned, wim had | dream that, in my case, has become reality. however, it would never have become reality without the support, commitment, resolve and efforts of all of you. i really feel privileged having worked with you. you have all the reasons in the world to be proud of your achievements β. never did this sentence have a better application than to yourself, wim : β you have all the reasons in the world to be proud of your achievements β. wim, je kunt met recht trots zijn op alles wat je hebt bereikt in je leven. | 1 |
. the real gdp growth rate for the july - september quarter of 2015 increased by an annualized quarter - on - quarter growth rate of 1. 4 percent, which exceeds the potential growth, due mainly to an increase in domestic private demand. that for the octoberdecember quarter registered minus 1. 1 percent on an annualized quarter - on - quarter basis, due partly to the effects of irregularly warm weather. as for the outlook, although the sluggishness in exports and production will probably remain for some time, domestic demand is likely to follow an uptrend, with a virtuous cycle from income to spending being maintained in both the household and corporate sectors, and exports are expected to increase moderately on the back of emerging economies moving out of their deceleration phase. thus, japan β s economy is likely to be on a moderate expanding trend. specifically, the economy is expected to continue growing at a pace above its potential through fiscal 2016. thereafter, through fiscal 2017, it is projected to maintain its positive growth, although with a slowing in its pace to around a level somewhat below the potential growth rate, due mainly to the effects of a front - loaded increase and subsequent decline in demand prior to and after the consumption tax hike planned in april 2017. according to the bank β s january 2016 outlook for economic activity and prices ( hereafter the outlook report ), the medians of the policy board members β forecasts for the economic growth rate β 1. 1 percent for fiscal 2015, 1. 5 percent for fiscal 2016, and 0. 3 percent for fiscal 2017 β were more or less unchanged from the forecasts presented in october 2015. 2. prices next, i will talk about price developments. the year - on - year rate of change in the consumer price index ( cpi ) for all items less fresh food has generally been about 0 percent, with the decline in energy prices and the increase in non - energy prices broadly offsetting each other. the rate of change for all items less fresh food and energy β one of the indicators that capture the underlying trend in the cpi β has remained positive for 28 months and has been at a level above 1 percent recently. in addition, looking at annual price changes in all cpi bis central bankers β speeches items less fresh food, the share of price - increasing items minus the share of price - decreasing items has shown a marked increase since spring 2015, albeit with some fluctuations. with regard to the outlook, the year - on | - year rate of change in the cpi for all items less fresh food is likely to be about 0 percent for the time being, due to the effects of the decline in energy prices, and, as the underlying trend in inflation steadily rises, accelerate toward 2 percent. meanwhile, assuming that crude oil prices will rise moderately from the recent level, it is likely that the negative contribution of energy prices to the year - on - year rate of change in the cpi will decrease gradually. based on this assumption, the timing of the yearon - year rate of change in the cpi reaching around 2 percent β the price stability target β is projected to be around the first half of fiscal 2017. specifically, the medians of the policy board members β forecasts of the year - on - year rate of increase in the cpi for all items less fresh food presented in the january 2016 outlook report were 0. 1 percent for fiscal 2015, 0. 8 percent for fiscal 2016, and, on a basis excluding the direct effects of the scheduled consumption tax hike, 1. 8 percent for fiscal 2017. comparing these with the forecasts presented in october 2015, that for fiscal 2016 is lower and that for fiscal 2017 is more or less unchanged. the downward revision of the forecast for the cpi is due to the assumption of lower crude oil prices. 1 ii. keys to assessing the outlook for economic activity and prices in what follows, i will discuss the keys to assessing the outlook for economic activity and prices in japan, including several points that i think deserve particular attention in terms of realizing the outlook that i mentioned earlier. a. employment and income situation first, i will talk about developments in the employment and income situation. supply - demand conditions in the labor market have continued to improve steadily, and employee income has increased moderately. according to the labour force survey, the number of employees has been increasing, and the labor force participation of women and the elderly has been rising. against this backdrop, the active job openings - to - applicants ratio has risen steadily and a perception of labor shortage suggested by the diffusion index for employment conditions ( the proportion of firms responding that employment was β excessive β minus the proportion of those responding that employment was β insufficient β ) in the december 2015 tankan ( shortterm economic survey of enterprises in japan ) has heightened. the unemployment rate has declined moderately, albeit with some fluctuations, and recently has been in the range of 3. 0 β 3. 5 percent. the supply - demand conditions in the labor | 1 |
my view, it represented the committee's final step in the policy recalibration phase. the target range now reflects 100 basis points of cuts since september, and the policy rate is now closer to my estimate of its neutral level, which is higher than before the pandemic. but given the lack of continued progress on lowering inflation and the ongoing strength in economic activity and in the labor market, i could have supported taking no action at the 1 / 9 bis - central bankers'speeches december meeting. still, i am pleased that the post - meeting statement continued to reference a flexible and data - dependent approach for considering future policy adjustments. it is important that we remain focused on returning inflation to 2 percent. i expect that the coming months should bring clarity on the incoming administration's policies and the carry over of inflationary pressures from 2024, reflecting private spending decisions and an apparent faster spend - out of existing federal government appropriations in recent months. it will be very important to understand how these factors will affect economic activity and inflation going forward. the economy towards the end of 2024 and risks to the outlook the u. s. economy remained strong through the end of last year, with solid growth in economic activity and a labor market near full employment. however, core inflation remains elevated, and i continue to see upside risks to inflation. the rate of inflation declined significantly in 2023, but this progress appears to have stalled last year with core inflation still uncomfortably above the committee's 2 percent goal. the 12 - month measure of core personal consumption expenditures inflation - which excludes food and energy prices - moved back up to 2. 8 percent in october and november, only slightly below its 3. 0 percent reading at the end of 2023. progress has stalled since the spring of last year mostly due to a slowing in core goods price declines. persistently elevated core inflation continues to reflect pressures on housing services prices, possibly due to an increase in demand for affordable housing amid an inelastic supply. it also appears to be originating from a few other major components in recent months, such as in goods and in services with imputed prices. gross domestic product increased at a solid pace in the third quarter, maintaining the momentum from the previous four quarters. growth continued to be driven by private domestic final purchases, as personal consumption, and retail sales in particular, strongly increased in the third quarter, more than offsetting further weakness in housing activity due to high mortgage rates. the latest data suggest continued | strength in consumer spending in the fourth quarter as retail sales and sales of light vehicles continued to rise appreciably. post - election consumer sentiment appears to be improving, but it remains well below pre - pandemic levels likely because of higher prices. and since housing, food, and energy price increases have far outpaced overall inflation since the pandemic, lowerincome households have experienced the negative impacts of inflation hardest, especially as these households have limited options to trade down for lower - cost goods and services. the most recent labor market report shows that payroll employment gains rebounded in november, following a temporary drag in october from hurricanes helene and milton and the boeing strike. on balance, job gains averaged about 130, 000 over those two months, a pace only slightly below the average gains in the second and third quarters. the unemployment rate rose to a still low 4. 2 percent in november, but it has moved sideways since july. while unemployment is notably higher than in 2023, it is still at a historically low level and below my and the congressional budget office's estimates of full employment, and we will receive the december employment report tomorrow. 2 / 9 bis - central bankers'speeches the labor market has loosened from the extremely tight conditions of the past few years. the ratio of job vacancies to unemployed workers has remained close to the historically elevated pre - pandemic level in recent months. but there are still more available jobs than available workers, a condition that before 2018 had only occurred twice for a prolonged period since world war ii, further signaling ongoing labor market strength. wage growth remains indicative of a tight labor market and above the pace consistent with our inflation goal. the rise in the unemployment rate last year largely reflected weaker hiring, as job seekers entering or re - entering the labor force took longer to find work, while layoffs remained low. although there has been some cooling in labor demand and the labor force participation rate declined a bit further in november, the household survey may have failed to capture the usual seasonal hiring ahead of the holidays due to the unusually early survey week and the late thanksgiving holiday. more concerningly, the labor market data have become increasingly difficult to interpret, as surveys and other measurements struggle to incorporate large numbers of new workers and to accurately account for other influences. as the dynamics of immigration and business creation and closures continue to change, it has become increasingly difficult to interpret the monthly data from the payroll and household surveys. it is crucial that | 1 |
capability and integrity to produce high quality and secured materials. under the moa, the bsp shall produce one hundred sixteen million pieces of blank cards for the phil id for three years. we will print the id at less than $ 1 a piece β 60 cents to be exact. we will provide the needed equipment and space for the embedding of personal information onto the blank cards, which will be done by the philippine statistics authority. the card issuance will start in april 2020. i β ll stop here and i look forward to a meaningful conversation regarding the national id system for all. thank you. 1 / 1 bis central bankers'speeches | for development and influencing the impact of borrowings on the profile and structure of total external debt. a continuing review of bangko sentral regulations governing external debt and other foreign exchange transactions is likewise undertaken to keep our rules attuned with current global and domestic conditions and to foster a regulatory environment that supports the objective to achieve inclusive growth for the country. in all these undertakings, a good monitoring system is indispensable. flares allows us to perform all these with relative ease and accuracy. conclusion i have, on a number of occasions in the past, said that the philippines managed to β survive β today β s crisis, because we purposed to invest in the reforms yesterday β¦. and today, ladies and gentlemen, we add flares to the list of governance reforms we have instituted. as we enlist public and private sector entities to enroll in flares and encourage more banks to participate, it is my hope that flares would indeed help us better manage our external debt. in turn, i hope this will ensure and protect our desired trajectory of sustained higher economic growth. maraming salamat sa inyong pagdalo at pakikinig. bis central bankers β speeches | 0.5 |
christine lagarde : welcome address - ecb conference on monetary policy welcome address by ms christine lagarde, president of the european central bank, at the european central bank conference on monetary policy : bridging science and practice, frankfurt am main, 4 october 2023. * * * it is my pleasure to welcome you all to the 2023 ecb conference on monetary policy. the last few years have been an incredibly challenging time for monetary policymakers around the world. we have faced a succession of overlapping supply and demand shocks that have created a complex and fast - changing macroeconomic landscape. and as a result, we have seen a paradigm shift in monetary policymaking. where central banks in advanced economies once wrestled with overcoming the lower bound on interest rates, they have more recently been engaging in the fastest hiking cycle on record. but policymaking, by nature, operates in real time. we make decisions based on the best analysis and data at hand. however, it is exactly when rapid shifts in the macroeconomic environment occur that prior, unforeseen knowledge gaps are suddenly exposed. this is why policymakers β who are practitioners at heart β can benefit greatly from cutting - edge research. fresh insights and innovative approaches can go a long way in closing those knowledge gaps, helping policymakers to navigate this new terrain more effectively. that is why this conference is called " bridging science and practice " β because the issues we are discussing are truly those that are informing our policymaking. today's event captures four such topics. the first topic is how the transition from the low inflation regime, which prevailed before the pandemic, to the high inflation rates we are seeing today affected the pass - through of shocks. the papers to be presented over the next two days provide important contributions to that important debate. in particular, we will see evidence that the propagation of adverse supply shocks is nonlinear : when inflation is high, the propagation is stronger. and we will see how firms'pricing strategies can become state - dependent and make prices more flexible in response to large shocks. 1 / 3 bis - central bankers'speeches the second topic on which the conference focuses follows naturally from the first. with such a rapid shift in the inflation outlook, there has been an equally rapid shift in the stance of monetary policy. and this has raised questions about how best to calibrate policy when accommodation must be quickly withdrawn after a long phase of loosening. we will see research that highlights some of the challenges | deposits and credit to the private sector continued to expand rapidly. a protracted monetary expansion was thus evident. at the same time, the external environment strengthened as the asian economies stabilised and then started to recover, while concerns for financial crises in other emerging markets receded. in this environment, economic activity in the euro area progressively recovered. in addition, the effective exchange rate of the euro weakened further and oil prices continued to rise. these two factors were gradually feeding through to consumer prices. therefore, information contained in both pillars provided evidence that the balance of risks to future price stability had been progressively moving upward since the beginning of the summer. the downside risks which were present at the time of the cut in ecb interest rates in april no longer prevailed. on 4 november the governing council decided to raise the interest rates on the main refinancing operations by 50 basis points to 3 %. the increase in interest rates at that point in time was aimed at helping to counter the upward pressure on future prices and at contributing to keeping inflation expectations safely below 2 %. the interest rate decision was taken in a timely manner so as to avoid the need for stronger measures later. this is consistent with the focus on maintaining price stability and would thus contribute to sustaining non - inflationary economic growth in the euro area over the medium term. in late 1999 and by 2000 risks to price stability moved again to the upside. both pillars were indicating increased risks to price stability. considering the first pillar of the monetary policy strategy, monetary and credit growth continued to signal generous liquidity conditions. monetary expansion remained high as evidenced by the latest three - month average of annual m3 growth of 6. 1 % for the period covering october to december 1999. the expansion of credit to the private sector continued to be strong with rates around 10 %. these developments were indicative of a continuation of a generous liquidity situation. as for the second pillar of the monetary policy strategy, the oil price and exchange rate movements observed in late 1999 and january 2000 have added to upward pressure on prices in the euro area. in fact, price and cost increases were larger and more protracted than foreseen earlier and hence indicated renewed upward risks for price stability. the latest price developments for the euro area were reflecting this pattern, given a pick - up in the hicp inflation rate to 1. 7 % for december 1999. adding to these risks was the fact that the international environment has been showing continuous signs of improvement and the prospects of a cyclical ups | 0.5 |
is the strain it puts on resources. this is also going to put a lot of strain on central bankers : how should central bankers respond via monetary policy to what could be a secular long - term increase in the price of raw materials? globalisation is a janus with a double face. you have on the one hand this formidable challenge of volatile oil and commodities prices. on the other hand you have the formidable disinflationary trend of manufacturing goods, which are produced at lower prices. we have to deal with these simultaneous trends that are very complex and are accelerating changes of relative prices. it is a formidable challenge for all central banks of the world, not only in the advanced economies of course. that is something that i trust central banks can do in the medium term if they are vigilant, if they are attentive. in the very long run, i tend to be optimistic. i was trained as a scientist at the beginning. i trust that we will find technological ways to get rid of this incredible dependency on fossil energy or on the large number of minerals and commodities. it is an absolute must for our world, our environment and our civilisation. i therefore trust that we will deliver. what are your plans after you retire after the ecb? i have no plan. i will see after the end of my mandate. at the present moment i still have close to five months ahead of me and quite a lot of challenges obviously. bis central bankers β speeches | aggregate supply and demand balance. in such efforts to strengthen growth potential, it goes without saying that private economic entities will play the most important role. recently, as seen in an increase in consumption by the elderly and in renewable energy - related investment, the move to convert challenges japan β s economy is faced with into an opportunity to tap new demand has been gradually taking place. it is important to grow such bud of growth and nurture it to a larger market. in doing so, the role of financial institutions in providing funds necessary for firms β activity, including in their startups, and the role of the government in preparing an environment that facilitates firms β activity, including promotion of deregulation, are also important. also the bank, from the viewpoint of making utmost contribution that a central bank can do, has been implanting the extraordinary β fund - provisioning measure to support strengthening the foundations for economic growth β since june 2010. the measure is for the bank to provide long - term funds at a low interest rate to financial institutions carrying out lending and investment that contribute to japan β s economic growth, and the total amount of line of credit has now reached 5. 5 trillion yen, inclusive of the u. s. dollars. while the measure is an extraordinary one, given the intrinsic role of a central bank, the reason the bank dares to do it is that the bank expects the measure to play the role of a β catalyst β in strengthening growth potential. in addition to the impact of actually providing funds, significance of sharing the recognition that strengthening growth potential is important is not small at all. in fact, since the introduction of the measure, there have been not a few examples of promoting voluntary initiatives toward strengthening foundations for economic growth, such as some financial institutions setting up a dedicated fund for the regions β promising businesses. if such efforts further develop and, as the moves to take advantage of the current accommodative financial conditions increase, the effects of monetary easing will be further exerted. while accommodative monetary conditions have reached a state of saturation as i have explained earlier, from the viewpoint of taking advantage of such accommodative financial conditions, a strong possibility still remains for monetary easing exerting greater effects. assessment of the economy and the timing of monetary easing as for this time β s measures, i have explained a grand view of the assessment of underlying economic activity and prices and the aim, the specifics of the measures, assumed transmission channels, | 0 |
. fourthly, is the uncertainty related to the implementation of the structural reforms to address the structural rigidities and deficiencies that surfaced during the global financial crisis. fifth and finally, are also considerable geopolitical uncertainties prevailing in the world today. cumulatively, these developments have compounded the uncertainties surrounding the global economy. in this environment of great uncertainty, a more moderate recovery of the global economy has been projected for 2015. the most pressing challenge, therefore for the global economy, is to generate an economic recovery that is balanced and sustainable. although the growth momentum has improved in a number of major economies, the growth has thus far been modest. in addition, weaknesses in several major economies continue to point to a global economy that remains vulnerable to downside risks. while the growth performance in most emerging economies is projected to moderate, collectively emerging market economies remain an important driver of growth of the world economy. a less robust external sector, bis central bankers β speeches slower domestic demand and specific domestic factors are amongst the reasons for this growth performance. in asia, the growth for 2015 is projected to be sustained at 6. 4 %, while growth in the asean - 5 is projected to be in the region of 5 %. a further phenomenon affecting the global economic performance is the significant decline in global oil prices. while this has partially offset the weaker - than - expected growth momentum in some of the advanced countries, it has, in different degrees, adversely affected the oil exporting economies resulting in divergent growth performance across and within regions. overall, however, the global economy is expected to benefit from the lower oil prices. a further recent development is the consequences of the unprecedented and divergent monetary policies being pursued in the major economies which have now resulted in significant policy spillovers to other parts of the world. against this backdrop, the financial markets are therefore expected to remain in a state of heightened volatility during this year. given the degree of openness of the malaysian economy and the financial system, we are of course affected by these global developments. these effects, however, need to be seen from the perspective of our underlying conditions. malaysia is affected by these external developments through trade and capital flows. the diversified structure of our economy and of our exports has reduced the impact of the effects of the plummeting oil prices on the economy. while the current account of the balance of payments is expected to narrow, it is projected to remain in surplus. the global shifts in liquidity have caused size | the development throughout malaysia. the emergence of new growth areas in malaysia such as renewable energy ( e. g. solar ) and semiconductors in fast - growing segments such as automotive, medical devices and telecommunications, has enabled malaysia to be plugged into the global supply chain. investment in the manufacturing sector has moved towards higher value - added activities, shifting from basic production and assembly to producing goods which have advance applications such as in the automotive and healthcare sectors. as a country which is strategically located within close radius of two of the most populous economies in the world, china and india, malaysia is centrally located in asia, more broadly, and in asean, in particular. with the conception of the asean economic community ( aec ), companies would benefit from the stronger economic inter linkages through greater cross bis central bankers β speeches border liberalisation and increased intra - asean trade. firms in this region will gain greater market access to 630 million people that are generating economic region that is worth usd2. 4 trillion. the increasing importance of asia in the global economy has raised international interest to better understand asia β the economies, businesses and the people that comprise the region. on that note, i would like to mention that bank negara malaysia has entered into a collaboration agreement with the massachusetts institute of technology sloan school of management ( mit sloan ) to establish the asia school of business ( asb ) in kuala lumpur. asb is envisioned to be a premier business school that develops transformative and principled leaders that will contribute to a better future and the advancement of the emerging world. conclusion let me conclude my remarks. we are now experiencing a phase of modest growth in the global economy, in an environment that is characterised by heightened uncertainty and volatile financial markets. the malaysian economy has withstood these challenging times, supported by our strong initial conditions and early and comprehensive policy responses. the intrinsic strength of the economy, reinforced with policies to encourage greater investments that would serve to ensure greater economic sustainability for the future. finally, active regionalisation is an important strategy for asia to enhance regional economic prosperity. malaysia actively participates in the efforts to strengthen linkages within the asean community and to creating opportunities to foster greater economic integration. these efforts will place asean on a path to realising its economic potential and enable the region to collectively prosper. bis central bankers β speeches | 1 |
ngfs climate scenarios | precision. this can be unhelpful and unnecessary for decision - making. sound qualitative assessments supported by some quantitative analysis and reasonable assumptions can be even more insightful. that is why, for the bank β s own climate biennial exploratory scenario exercise which we formally launch next month, we are putting emphasis on the qualitative questionnaire and an assessment of business model changes, rather than the traditional capital - adequacy metrics. 9 look at both physical and transition risks coherently as you undertake your analysis and as you determine your strategic response. some combination of these risks will materialise. if you are assuming there is no price on carbon in your risk models, you β re implicitly assuming a high degree of warming. if you do believe some policy action is inevitable but don β t know what the shadow price of carbon is, don β t assume it is zero. that is equivalent to not knowing for sure how bank rate will evolve but assuming it away when discounting over 30 years. given the sensitivity to core assumptions, there is considerable value in running credible, independent, standardised scenarios. that will make your results more easily comparable to others, even if you use in addition other scenarios and models that you find more relevant to your business. don β t be afraid to share lessons learned, disclose key assumptions and limitations in your analysis and where possible work together to improve understanding. here it is worth highlighting the excellent work being done by the climate financial risk forum in the uk which brings together senior financial sector representatives to build capacity and share best practice in managing climate - related risks and opportunities. the working group on scenario analysis has produced some really useful guidance and tools that should be useful both to financial firms and to businesses. 10 next steps it is critical that financial firms recognise now that the race to net zero has started. indeed many have. 11 see climate biennial exploratory scenario. see climate financial risk forum. the glasgow financial alliance for net zero includes 87 asset managers representing us $ 36. 95 trillion in assets under management ; 43 banks with us $ 28. 5 trillion in assets ; and 58 asset owners with us $ 7. 4 trillion in assets under management. in support of their ambitions, and consistent with our expectations, they need to run climate scenarios as part of business as usual risk management and embed climate risk management within day - to - day decision - making. time is running out. perfection tomorrow cannot be the enemy of progress today. | 1 |
the competition for high - end customers. in the mid and long term run, we are confident in china β s banking reform and hope that more foreign - funded financial institutions will participate in this market to promote competition, innovate and improve services and strengthen economic prosperity and development. | management were not qualified, then through replacement of the management team would there be a fundamental turn for the better in terms of operation of the banks? on the basis of better operation and with profit accumulation for some time, would reform of corporate system and share - holding arrangement improve the bank performance? experience for many years indicates that the effect was not optimistic as with the reform of state - owned enterprises by following the above perception. to trace the problem to its source, we find that the problem of state - owned entities lies not only in weak management but also in the more fundamental problem of corporate system. hence, the 16th congress of the cpc and its third plenary session both emphasized once again the direction of the reform of state - owned enterprises. comparing state - owned banks with state - owned enterprises, it will be easy to find out the high similarity between them. if in the past state - owned enterprises acted like government organizations or featuring β quasi - bureaucratic system β to some extent, then state - owned commercial banks are more like government organizations instead of commercial entities. state - owned commercial banks have instituted apparent administrative hierarchy and officialdom in terms of personnel system, remuneration system, staff benefits, social security and internal incentives system. decision - making power of the persons in charge of state - owned commercial banks is more than often limited, and lacks market - oriented incentives. although there is big difference in the responsibility assigned to a bank clerk for savings counter and to a credit officer with high ability of risk control, there is no big difference in terms of remuneration. with inadequate internal incentives and deficient outside pressure, reform of state - owned commercial banks might long protract if solely emphasizing on the improvement of management. documents of the 16th congress of the cpc have clearly stated the direction of share - holding reform. efforts shall be made to change the operation mechanism of enterprises in real earnest through changes in the structure of corporate governance. this idea should also fit in with the reform of stateowned commercial banks. the reform of state - owned commercial banks is also reform of state - owned enterprises in its very nature. ( ii ) whether or not to actively push state - owned commercial banks to be public listed companies? one opinion mistakes listing in the stock market as the ultimate target of the reform. some people believe that going public is aimed at financing for capital infusion of banks and for internal incentives of the management team. it is certain that the purpose of listing of state - owned commercial banks | 1 |
one - third of a percentage point in 2018. 4 inflation in the euro area reached 1. 5 % in 2017 and is expected to decline slightly to 1. 4 % in 2018, largely a reflection of developments in international oil prices. inflation is expected to move gradually up thereafter to 1. 7 % in 2020, reinforced by the ecb β s accommodative monetary policy, robust economic activity and projected labor cost increases, as the level of underemployment of the workforce will decrease. 5 the governing council of the ecb is more confident that inflation will reach a level of below, but close to, 2 % over the medium term. at the meeting of march 8, the governing council of the ecb introduced a further gradual adjustment to the monetary policy stance, removing from the official communication the so - called app easing bias 6. however, the governing council still needs to see further evidence that inflation dynamics are moving in the right direction. so monetary policy, as president draghi and other members of the executive board of the ecb have put it, will 1 / 9 bis central bankers'speeches remain patient, persistent and prudent. t h e risks surrounding the forecasts for the global and european economies appear to be balanced in the short term, under the positive effect of accommodative monetary policy in advanced economies and the recovery of international trade. however, they are tilted to the downside in the medium term as interest rate hikes as a result of the normalization of monetary policy in advanced economies ( which is under way ) are expected to burden the service of high total public and private debt and to dampen growth dynamics. downside risks relate to : - rising protectionism and in particular the possible spillovers of the new trade measures announced by the us administration. an escalation of trade tensions, the intensity of retaliation and their potential negative confidence effects, would weigh on world trade. these measures already affect stock markets. - the possibility of tighter global financial conditions as well as potential sharp correction in financial markets, triggered by a faster than expected tightening of us monetary policy and / or a reassessment of investors β risk appetite. in this context, talking down currencies exacerbates exchange rate volatility which is harmful for global and euro area growth. - the outcome of brexit negotiations. - geopolitical tensions in the middle east, the korean peninsula and iran, as well as a possible resurgence of the | . oil prices rallied to above usd50 per barrel from an average of usd33 per barrel in the first quarter of the year, and today, oil prices have settled back to around usd48 per barrel. the oil price is likely to remain volatile over the next few years due to oversupply and recordhigh oil inventories against slow demand especially in china. lng prices are also expected to remain low for a protracted period of time. lng capacity start - ups in australia and north america which will boost new lng supplies amidst stagnating demand will put more pressure on lng prices, hence further disrupting the lng market. due to low oil and lng prices, the profitability of oil majors and national oil companies ( nocs ) has been severely eroded. the impact has been pronounced. more than 300, 000 oil and gas workers have been laid off globally since mid - 2014 ; some usd 380 billion of global oil and gas projects have been deferred or cancelled ; and more than usd 150 billion worth of assets have been planned for disposal or divestment. given malaysia β s openness and high financial and trade integration with the rest of the world, the malaysian economy is not isolated from these developments. on the external front, lower global demand continues to weigh down on malaysia β s export performance. investment activities especially in the upstream oil and gas sector, contracted for the first time since the global financial crisis in 2015, after expanding by an average of 16 % from 2010 to 2014. however, investment activity in the manufacturing and services sectors remained bis central bankers β speeches resilient, and is expected to underpin investment growth moving forward. private consumption remained relatively resilient and anchored domestic growth, especially during the first half of the year, driven by sustained income and employment levels. going forward, domestic demand is expected to remain a key driver of economic growth in malaysia. we should expect malaysian economic growth to range between 4. 0 to 4. 5 % for 2016. amid the changes in the financial landscape, there have been equally significant developments in the auditing standards both globally and locally. the standards and regulations are becoming increasingly tighter and more stringent. the institute of internal auditors ( iia ) for example, has proposed several changes to the internal audit standards, which are expected to take effect in january 2017. the changes to the standards are aimed at reinforcing the fundamental principles of internal auditing practices, promoting a broad range of | 0 |
bank of uganda remarks by prof. emmanuel tumusiime - mutebile governor, bank of uganda uganda banker β s association informal dinner piato restaurant 2nd december, 2016 good evening ladies and gentlemen, thank you all for coming here this evening for our informal uba dinner. i spoke last week at the institute of banking and financial services annual banking dinner about the current challenges facing the banking industry. tonight i would like to make a few brief remarks about the current macroeconomic situation and prospects, notably as regards economic growth, the exchange rate and inflation. real economic growth, over the last five years, has averaged about five percent per annum. this is very likely close to the economy β s sustainable potential growth rate, given growth of the labour force, capital stock and productivity. in the last fiscal year, which ended in june 2016, real gdp growth was 4. 8 percent, which is slightly below potential, but is far from being a recession as some people have claimed, although i appreciate that trading conditions have been difficult for many businesses. there were factors which probably depressed economic growth in fy 2015 / 16, such as the increase in market interest rates, the exchange rate volatility in the first half of the fiscal year and the election in the third quarter. without an election, and with probably lower interest rates and hopefully less volatile exchange rates ( although that is hard to predict ) i would expect that conditions in the current fiscal year will be more conducive to growth and so i would expect that we will experience a small rise in the real gdp growth, to five percent or even slightly higher. let me now turn to the exchange rate, which has depreciated in recent weeks, after a long period β nearly 11 months β of stability. against the us dollar, the shilling has depreciated by 4. 7 percent since the end of october. however, more than half of that depreciation is attributable to the strengthening of the us dollar against major currencies since the presidential election in the us, which has led to expectations of higher interest rates in that country. my staff calculates an index of the uganda shilling against a weighted basket of uganda β s trading partners. this index β called the nominal effective exchange rate index β has depreciated by only 2. 3 percent since the end of october. furthermore, a nominal depreciation of the exchange rate has been necessary to ensure that uganda remains competitive against its trading | gent sejko : oversight, analysis and vision of public governance in albania speech by mr gent sejko, governor of the bank of albania, at the presentation of the supreme state audit annual review 2015, tirana, 1 february 2016. * * * your excellency president of the republic of albania, dear chairman of the supreme state audit institution, honourable chairman of the parliamentary committee on economy and finance, your excellency ambassador lu, your excellency minister, dear representatives of public institutions, honourable mps, dear professors, dear participants, it is a special pleasure for me to be here today on the occasion of the annual review of the activity of the supreme state audit ( alsai ) for 2015. alsai is among the most important constitutional institutions in albania, whose objective β ensuring good management of public finances β is highly significant. the effective use and certification of public funds in conformity with the laws regulating the economic and financial activity of the public sector, on - going public communication, in relation to irregularities and relevant responsibilities have been at the focus of alsai β s work in recent years. in this perspective, the role and mission of the alsai are highly important ; therefore, the issues raised in alsai β s reports should be thoroughly analysed. they are both necessary and preventive instruments for the institutions subjected to alsai β s audit. notably, the bank of albania and alsai have had a fruitful cooperation, in line with both current and prospective dynamics and developments. we have made constant and joint efforts so that the conclusions and recommendations left by alsai become a useful, guiding, helpful, and corrective tool. in view of the insofar experience, this combination is an essential component in the work of audit institutions. i have believed and still do believe that auditing is a key instrument, which serves to further perfecting public sector governance. the alsai has contributed and will continue to contribute to identifying various problems facing public institutions, divergences from legal and regulatory framework, with subsequent financial effects, and their correction, in accordance with legal requirements and international standards. focusing on the future role of alsai, i am confident it will increase the contribution to perfecting the three main dimensions β oversight, analysis, and vision β of public governance. more specifically, β’ with regard to the oversight dimension, the great dilemma is whether public entities are accomplishing their mission in detecting and preventing corruption ; β’ with regard to the analysis dimension, the | 0 |
during the training and continue encouraging and supporting one another. i sincerely wish you all the very best on your leadership journey. thank you. 2 / 2 bis - central bankers'speeches | average almost exactly 2 % per year in the euro area. by comparison, inflation from 1961 to 1991 ( when the convergence criteria for participation in economic and monetary union were decided ) averaged over 10 % in portugal, greece and spain, but also 6. 6 % in france and 3. 4 % in germany. 6 the euro reduces transaction costs for producers, their employees and end clients. it facilitates price comparisons and bank transfers, while eliminating currency risks in intra - euro area trade and investment. note that close to 50 % of france β s exports go to other members of the euro area. finally, and above all, the interdependence and shared responsibility implied by the euro create a european solidarity imperative in the face of the crisis. this β de facto solidarity β is the greatest challenge that the european union faces today, against the background of a greater disparity across countries. if i may turn schuman β s formula on its head, it now calls for β concrete achievements β. the temptation to go it alone in economic affairs, so evident in the past ( remember the competitive devaluations of the 1980s and 90s ) is no longer this logic also underpins the gradual integration of countries that emerged from the yugoslav wars. in particular, the so - called β copenhagen criteria β notably require that national institutions guarantee β democracy, the rule of law, human rights and respect for and protection of minorities β. it also makes membership conditional on β adherence to the aims of political, economic and monetary union β. presidency conclusions, copenhagen european council, 21 β 22 june 1993. β europe will not be made all at once, or according to a single plan. it will be built through concrete achievements which first create a de facto solidarity β, robert schuman β s declaration, 9 may 1950. standard eurobarometer 77, european citizenship, spring 2012. source : ameco database ( european commission ). bis central bankers β speeches appropriate. this does not preclude countries from having different views or different interests, but it creates a duty to overcome these differences and act together. 2. reducing unemployment the current crisis, with its associated fall in incomes and rise in unemployment, has however bred misunderstanding and sometimes anger in many parts of europe. unemployment in the euro area stood at 12. 2 % in september 2013, compared with 7. 6 % at the beginning of the financial crisis in the second quarter of 2007. young people have been hit especially hard : more than 3 | 0 |
collateral damage. i hope and anticipate that trust and integrity again will be amply rewarded in the marketplace as they were in earlier generations. there is no better antidote for the business and financial transgressions of recent years. | and portfolios. it is commonly observed that hedge funds are " opaque " - - that is, information about their portfolios is typically limited and infrequently provided. it would be more accurate to say that the opacity of hedge funds is in the eye of the beholder ; the information a fund provides may vary considerably depending on whether the recipient of the information is an investor, a counterparty, a regulatory authority, or a general market participant. from a policy perspective, transparency to investors is largely an issue of investor protection. the need for counterparties to have adequate information is a risk - management issue, as i have already discussed. much of the recent debate, however, has focused on the opacity of hedge funds to regulatory authorities and to the markets generally, which is viewed by some as an important source of liquidity risk. liquidity in a particular market segment might well decline sharply and unexpectedly if hedge funds chose or were forced to reduce a large exposure in that segment. concerns about hedge fund opacity and possible liquidity risk have motivated a range of proposals for regulatory authorities to create and maintain a database of hedge fund positions. such a database, it is argued, would allow authorities to monitor this possible source of systemic risk and to address the buildup of risk as it occurs. various alternatives that have been discussed include a database maintained by regulators on a confidential basis, a system in which hedge funds submit position information to an authority that aggregates that information and reveals it to the market, and a public database with nonconfidential information on hedge funds. i understand the concerns that motivate these proposals but, at this point, remain skeptical about their utility in practice. to measure liquidity risks accurately, the authorities would need data from all major financial market participants, not just hedge funds. as a practical matter, could the authorities collect such an enormous quantity of highly sensitive information in sufficient detail and with sufficient frequency ( daily, at least ) to be effectively informed about liquidity risk in particular market segments? how would the authorities use the information? would they have the authority to direct hedge funds or other large financial institutions to reduce positions? if several funds had similar positions, how would authorities avoid giving a competitive advantage to one fund over another in using the information from the database? perhaps most important, would counterparties relax their vigilance if they thought the authorities were monitoring and constraining hedge funds'risk - taking? a risk of any pre | 0.5 |
fills a gap identified at the global level. although the esrb does not have direct binding powers, the effectiveness of its β comply or explain β mechanism builds upon the high reputation of the esrb β s members and the quality of its analysis. in its last meeting in june, the esrb underlined the threat to financial stability stemming from the interplay between the vulnerabilities of public finances in certain eu member states and the banking system, with potential contagion effects across the union and beyond. to ensure the resilience of the eu financial system and limit the potential for adverse spillovers, bis central bankers β speeches the esrb at the time also stated that backstop plans should exist, starting with resources from private markets and, if necessary, with public funds. as we also said at the time, we are furthermore working on specific issues such as fx lending, complex financial products and mismatches in the funding structure between various currencies. let me mention that we have our next esrb general board meeting next wednesday. basel iii implementation as regards basel iii, compared with basel ii, the new framework envisages higher minimum capital requirements, better risk capture, stricter definition of eligible capital elements and more transparency. these elements should substantially improve banks β capital position and loss absorbing capacity, thus enhancing the resilience of the financial sector. the new basel framework also introduces entirely new concepts, such as a non - risk - based leverage ratio and mandatory liquidity requirements. it has been agreed that these measures will be introduced gradually during a transition period. it is essential that prior to their introduction the potential impacts of these new elements on financial markets are carefully assessed to ensure that these measures do not hinder banks providing funding to the real economy. a major challenge ahead is the consistent and timely implementation of the basel iii framework. it is of the essence that we all adhere to the agreed timeline, ensuring that our banks have a strong capital base. only when implemented in a consistent manner across jurisdictions will the expected significant net social benefits, including reduced volatility of credit and gdp growth as well as the lower probability of occurrence of systemic crises, be achieved. to reap the benefits of the new framework, a consistent implementation of basel iii is essential. in this context, i welcome the european commission β s proposal on the implementation of basel iii in the eu, issued in july in the form of a fully - fledged capital requirements regulation. with this step, the eu has demonstrated | ##ality associated with the functioning of global finance. i thank you for your attention. | 0.5 |
launch of the ngfs conceptual framework β to guide action by central banks and supervisors on nature - related risks β β paris, 7 september 2023 speech by francois villeroy de galhau, governor of the banque de france page 1 sur 5 ladies and gentlemen, it is a great pleasure to introduce, together with dnb β s president klaas knot, this ngfs conference that launches its conceptual framework on nature - related risks. one year ago, we were together in amsterdam for a pioneering conference on biodiversity from a central bank and supervisor perspective. at the time, our grasping of nature - related risks was roughly the same as on climate change some years earlier, and we acknowledged the need to refine our understanding and methodology. indeed, our economic reliance on natural resources such as wateri, and more broadly on services provided by nature and, at the same time, the impact our economies have on nature, are becoming more and more obvious and are increasingly documented. as ravi menon, chair of the ngfs, stressed it recently, β along with the climate crisis, the nature crisis is the existential challenge of our times. we cannot focus on one and hope the other will take care of itself. β ii the new conceptual framework released today by the ngfs therefore marks an important milestone. it offers a shared language and sketches out a common method to assess nature - related financial risks and ensure that our collective work is both consistent and joined up. the common understanding we have reached together is both science - based and geared toward bridging the gap with assessing the economic and financial implications of nature - related risks. as frank elderson recently put it, β this is not some kind of a flower power, treehugging exercise. this is core economics. β iii according to one estimate, reversing the decline in nature loss could require approximately 500 billion dollars per year until 2030, while the world currently spends less than 150 billion dollars on nature conservation and harmful subsidies represent 300 billion dollarsiv. whatever the right figures, the gap is such that it is all the more important that financial actors start acting on nature - related risks to shift nature - blind financial flows. at banque de france, we have started doing so through our sustainable investment policy by partnering with a data provider to page 2 sur 5 carry out a detailed assessment of impact on biodiversity of the equity and corporate bond components of our non - monetary portfolios. as you can see, the impact of our equity portfolios | their new freedoms well - in particular if they do not develop the credit skills and risk management techniques which are required in the kind of lending boom that may develop after deregulation. 17. the pressures on the existing banks is increased if liberalization also allows new entrants into the market. competition in some asian economies has already intensified as a result of the granting of new domestic banking licences and more liberal policies on the admission of foreign banks. the need to meet wto obligations will give further impetus to this process. but while the long - term impact on the efficiency of the banking system may be favourable, the short - term impact can be to narrow interest margins and erode franchise value. this can drive the local banks to take on more high risk business. 18. i should stress, however, that the answer to this dilemma is not to stop or reverse the process of deregulation. there are examples around the region of bad debt problems embedded in banks which are either owned by the government or, even if they are privately owned, have been granting policy loans on behalf of the government. such banks should be encouraged to develop their own credit judgment in order to play an effective role in the process of credit allocation in the economy. so liberalization is the right approach. it must, however, be properly handled if the problems of the banking sector are not to intensify during the transition to a more commercialized system. in particular, the supervisory framework should be strengthened in advance of liberalization. maintenance of asset quality 19. let me turn to the challenge of the maintenance of asset quality. this applies across a wide spectrum in asia from banks that are emerging from tight state control to those that operate on a fully commercial basis. a particular focus of concern, as i have already indicated, is that banks in some economies may have lent too freely to booming property sectors which are now suffering from over - supply. it remains to be seen whether the fears will be realized. a number of supervisory authorities around the region have tried to take measures to limit their banks β exposure to the property sector. this is a sensible move, though the difficulties of enforcing limits should not be underestimated. 20. however, property lending is not the only problem area. in korea, for example, the slowdown in export demand in industries such as semiconductors and in economic growth has exposed fragility in those companies which have over - extended themselves by taking on too much debt. banks which have become | 0 |
david dodge : inflation targeting - a canadian perspective remarks by mr david dodge, governor of the bank of canada, to the national association for business economics, washington dc, 21 march 2005. * * * good afternoon. three years ago, when i last addressed this group, i spoke about the conduct of monetary policy in the presence of economic shocks. in those remarks, i made passing reference to the bank of canada's inflation - targeting framework. today, i am happy to accept your invitation to return and talk in more depth about how we use inflation targeting as our monetary policy anchor. the invitation is timely, given that the bank of canada's inflation - targeting agreement with the canadian government is up for renewal next year. at the bank, we are always reflecting on our framework, deciding what works well and what we can improve. against that backdrop, we have watched with interest the debate taking place here in the united states - inside and outside the federal reserve - about whether that institution should join the ranks of inflation - targeting central banks. as part of that debate, the minutes of the february fomc meeting show that my colleagues at the fed had a discussion about the merits of inflation targeting last month. according to the minutes, arguments were made both for and against the adoption of an explicit inflation target. those in favour spoke of how such a target can anchor inflation expectations, add clarity to monetary policy decision making, and help with communications. those opposed said that the benefits of adopting a target were unlikely to be large, that adopting a target might bias or constrain policy, and that it might appear - and i stress the word " appear " - to be inconsistent with the fed's dual mandate to promote price stability and maximum employment. before i proceed with my remarks today, i want to make it absolutely clear that my purpose here is not to weigh in on the debate within the federal reserve. i would not presume to tell the fed what it should or should not do. rather, i want to talk about the canadian experience with inflation targets. however, in doing so, i will address some of the arguments raised at the fomc meeting that i just mentioned. i will begin by discussing the bank of canada's legislated mandate, and how inflation targeting helps us to meet the objectives of that mandate. i will then talk about some of the choices that we have made to establish and refine our particular framework. i'll discuss some of the benefits that we | independent central banks, governments could not credibly commit to maintaining low and stable inflation, since they subsequently had the incentive to violate that commitment by engineering a growth - boosting inflation surprise. this time inconsistency led to the unfavourable stagflation equilibrium of the 1970s, and ultimately resulted in the widespread operational independence of central banks. see f. kydland and e. prescott, β rules rather than discretion : the inconsistency of optimal plans, β journal of political economy 85 ( 3 ) ( 1977 ) : 473 β 92. see, for instance, c. l. evans, β perspectives on current economic issues, β a speech delivered to the bank of ann arbor breakfast, ann arbor, michigan, 18 september 2012. in most jurisdictions, including canada, a change in the policy framework would require the approval of the political authority. in some others, it would require a change in the constitution. bis central bankers β speeches targeting, bygones are not bygones and the central bank is compelled to make up for past misses on the path of nominal gdp ( chart 4 ). bank of canada research shows that, under normal circumstances, the gains from better exploiting the expectations channel through a history - dependent framework are likely to be modest, and may be further diluted if key conditions are not met. most notably, people must generally understand what the central bank is doing β an admittedly high bar. 20 however, when policy rates are stuck at the zero lower bound, there could be a more favourable case for ngdp targeting. the exceptional nature of the situation, and the magnitude of the gaps involved, could make such a policy more credible and easier to understand. 21 of course, the benefits of such a regime change would have to be weighed carefully against the effectiveness of other unconventional monetary policy measures under the proven, flexible inflation - targeting framework. conclusion companies can talk about their future performance, but cannot guarantee its delivery. central banks can talk about the future path of policy, and we can, at least on the surface, deliver. however, in ordinary times, achieving our objective will mean delivering a path of policy that adjusts as economic circumstances evolve. therefore, that path cannot be predicted with certainty in advance. in the bank β s view, this limits the effectiveness of policy guidance to relatively special circumstances. in extraordinary times, policy guidance may be more appropriate, and, as the bank has demonstrated with its conditional commitment, it can | 0.5 |
end of september 2008. in addition, i have been asked to consider the inclusion of any matter that i feel should be brought to the minister β s attention which might help or inform the preparation of the terms of reference of the statutory inquiry. i intend to submit my report no later than the end of may 2010. i have assembled a small team of experts to help me prepare this report. ( if the members of the committee are interested, i can furnish them with particulars of the staff helping me in this work ). already in train is an examination of the most relevant files, beginning with the documents prepared both for the regulatory authority and for the board of the central bank, and drilling down from these to trace the pattern of work of the relevant units. following this it is intended to interview a number of officials of the regulator and the bank who were intimately involved over the period under examination. i also intend to discuss the key issues with members of both the regulatory authority and the board of the bank. i met with mr regling and mr watson last week and we agreed to cooperate as our parallel work proceeds. this cooperation is to ensure that there is no overlap and duplication of work in our respective reports. my team will be meeting mr regling and mr watson later this week. it might be considered surprising that it falls to me to enquire into my own organisation. obviously any surprise will be tempered by the consideration that i am in place for less than six months. still, it is not the easiest of balancing acts to ensure that i find out what needs to be known, without damaging the functioning of the organisation. nevertheless i am confident that i can do the job effectively, and it is on that basis that i agreed to the minister β s request. i have begun this task with a presumption that the situation that has emerged in our banking system does reflect a failure of the regulatory system. however, i would like to stress that the organisation which i lead, the central bank and financial services authority of ireland, has over the years delivered a wide range of key services to the irish economy, including consumer protection, consumer information, effective electronic payments systems, avoidance of excessive inflation as part of its eurosystem objectives, the supply of liquidity to the banking sector, and the production and issuance of bank notes and coins, to mention just a few, none of which is called into question by the terms of reference of this report. when i last appeared before an | oireachtas committee in december, i said that β we understand some of what happened, but some of it is still hard to understand β. we are already putting in place new procedures and arrangements that take account of what we have learnt to date. i hope that my report can help develop that understanding further and help us all emerge from our current difficulties with a degree of restored confidence. | 1 |
. an immediate challenge is for the firm to assess whether conducting certain types or levels of business activity in a new country would cause it to become subject to various laws of that jurisdiction. if so, then the firm becomes subject to more legal and regulatory requirements, some of which may be inconsistent with those applicable elsewhere. the result of the geographic expansion then is to increase the risk of possible compliance problems and to make the management of a global business that much more difficult. deregulation within individual countries is also something of a two - edged sword. clearly it affords greater business opportunities to a firm, but it also raises challenges in managing compliance risk across a firm β s business units. for example, as a result of the passage of the gramm - leach - bliley act in the us, a single firm can now engage in commercial banking, investment banking, and insurance activities. the implication for the compliance function is that it must not only keep on top of issues within each of these diverse business lines but also the interactions between them - for example, in policing potential conflicts of interest across the firm. somewhat similarly, the overall compliance challenge for the firm is more than just the sum of the challenges from financial innovation, from globalization and from deregulation. there are interplays between these developments that add additional layers of complexity to the compliance challenge. level of scrutiny the second broad consideration i mentioned is the increased level of scrutiny of compliance in the u. s. and in other major financial markets - scrutiny that is driven by major industry and political events that have changed the legal and regulatory environment over the past five years. β’ the start of this decade saw a number of high - profile corporate scandals involving misconduct at the highest levels and breakdowns of internal control and compliance processes. in the u. s., extensive accounting fraud at enron and worldcom contributed to the passage of the sarbanes - oxley act, which clearly places new obligations on covered firms. other countries have not been immune to instances of accounting mismanagement, as evidenced by the example of parmalat in italy. β’ the events of september 11, 2001 and subsequent emphasis on terrorism were the impetus for the usa patriot act, which substantially increased the compliance obligations of banks and other financial services firms. in particular, while firms have long been expected to have knowledge of the people that they do business with, title iii of this act - which focuses on international money laundering - puts an even stronger onus on financial firms to | gradually spill over into nearby areas. with both commercial and residential rents, not to mention sales prices, high and rising in manhattan, northern new jersey has an opportunity to capitalize on its widening cost advantage by attracting companies and residents that value an urban location, but find new york city to be too pricey. and if preferences are indeed in the midst of a long - term shift toward urbanization, this bodes particularly well for new jersey β s own cities. with a major international airport and seaport, a 20 β 30 minute train ride from most of manhattan β but much cheaper rents β as well as a number of universities and a solid infrastructure, newark has strong potential to develop its prominence as a major local business, economic and cultural hub. concluding thoughts to conclude, i would like to say a few words concerning proposals to reform the federal reserve system. first, i concur with chair yellen that the federal reserve already is very transparent and accountable to congress and to the public. i share her strong belief that the independence of the central bank to make appropriate policy decisions consistent with its legislated mandates is essential to a nation β s economic well - being. with regard to the structure of the federal reserve system and the role of the regional banks, including the new york fed, i also agree with chair yellen that the system is working well, and i do not see a need for any substantive changes. i believe that the system has been designed appropriately so that a wide range of regional views are represented. at the same time, i believe that the federal reserve system β s monetary policy responsibilities are allocated appropriately by the federal open market committee, with new york playing an important role to ensure that monetary policy is executed effectively even during periods of duress. of course, the federal reserve system and the new york fed are not perfect institutions. that is why we always must strive, in an open and transparent manner, to improve what we do and how we do it, for the benefit of the american people. thank you for your kind attention. i would now be happy to take some questions. bis central bankers β speeches | 0.5 |
a recovery and resolution regime for insurers with the sapin 2 law of 9 december 2016. the order of 27 november 2017 also gave the acpr β s resolution college the power to start resolution proceedings for failing insurers and take steps to maintain their critical functions or safeguard financial stability. the framework comprises a preventive arm, under which the largest insurers are obliged to draw up preventive recovery plans. at the european level, there is currently no shared approach to the resolution of insurers. however, there is clearly a need for such a framework to facilitate the resolution of insurers, in particular cross - border groups, and help strengthen the european insurance market for the benefit of policyholders ( c ) finally, and most of all in my view, it is also β time for macroprudential policy β. the numerous instruments developed since the crisis should now be put to work in preserving financial stability. this is what is being done in france, for example, with the gradual activation of countercyclical capital buffers or measures limiting the exposures of the main banks to large, highly indebted corporations. 2. 2. 2. adapt the framework to new risks in addition to applying the regulatory standards, the supervisor is also, of course, paying close attention to how business models evolve, in order to identify emerging risks, monitor them and 5 / 7 bis central bankers'speeches devise possible solutions. several new areas of risk are coming under particular scrutiny : with regard to cyber risk, the planned solutions, especially to increase cyber resilience, need to be harmonised and coordinated at the international level to maintain a clear and coherent regulatory framework for all financial sector participants. the banque de france made the rationalisation and harmonisation of current regulatory efforts a key theme of its g7 presidency this year. as part of this, 23 global authorities ( finance ministries, central banks, bank supervisors and markets ) took part in a cyber resilience exercise in june 2019, with the aim of strengthening their operational resilience to a major cyber incident impacting the global financial system. the exercise, which was by nature highly complex and the first of its kind in the world, marked a huge step forward in terms of global cooperation. thanks to its success, g7 countries agreed to draw up a programme of exercises for the coming years. the fintechs and bigtechs ( especially the big us and asian companies that are driving the digitalisation of | denis beau : ten years after lehman, is the financial system safer? speech by mr denis beau, first deputy governor of the bank of france, at a conference at sciences po bordeaux, bordeaux, 18 october 2019. * * * i would like to thank the financial stability unit for their contributions to this speech, and particularly e. rocher and s. frappa. a little over ten years after the collapse of lehman brothers, and with the financial system facing new challenges, how successful have the reforms undertaken after the 2008 crisis been? is the financial system now safer? in view of the magnitude of the work carried out by regulators and supervisors and the efforts of intermediaries to adapt to the resulting renewed regulatory and supervisory framework, at the international, european and national levels, the answer is undoubtedly yes. i would like to devote the first part of my presentation to developing the reasons why i believe this is the case. but i think we need to take a more in - depth look, which i propose to do in the second part of my presentation by asking the following question : is the financial system now safe enough? in view of the development of the sources of vulnerabilities in the financial system, it does not seem to me to be a given that the strengthening we have observed is sufficient and efforts therefore need to be pursued. 1. ten years after lehman brothers, the financial system is now safer the crisis that followed the lehman collapse demonstrated the importance of a sound financial system that could withstand shocks without hampering the financing of the economy. the economies that, after a macroeconomic shock, suffer a financial shock because their banking sector is too fragile, experience more serious and protracted crises. this lesson led to a vast reform programme of financial system regulation and supervision in order to address the many shortcomings that led to the development of significant vulnerabilities. 1. 1 many of the shortcomings in the regulatory and supervisory framework have been reduced a comprehensive reform was thus carried out, covering practically all the areas of the financial system, focusing on four main areas : ( a ) shoring up the resilience of financial institutions for banks, under the impetus of the g20 and the financial stability board ( fsb ), the basel committee has established new prudential rules, β basel iii ", whose main features aim to enhance the level and quality of capital, limit the use of financial leverage and introduce new liquidity requirements. these rules must ensure that banks are | 1 |
. in order to restore confidence, policy - makers in the euro area need to push ahead with great determination with fiscal consolidation, structural reforms to enhance competitiveness and european institution - building. at the same time, governments must stand ready to activate the efsf / esm in the bond market when exceptional financial market circumstances and risks to financial stability exist β with strict and effective conditionality in line with the established guidelines. the adherence of governments to their commitments and the fulfilment by the efsf / esm of their role are necessary conditions for our outright transactions to be conducted and to be effective. details of the outright monetary transactions are described in a separate press release. furthermore, the governing council took decisions with a view to ensuring the availability of adequate collateral in eurosystem refinancing operations. the details of these measures are also elaborated in a separate press release. let me now explain our assessment in greater detail, starting with the economic analysis. recently published statistics indicate that euro area real gdp contracted by 0. 2 %, quarter on quarter, in the second quarter of 2012, following zero growth in the previous quarter. economic indicators point to continued weak economic activity in the remainder of 2012, in an environment of heightened uncertainty. looking beyond the short term, we expect the bis central bankers β speeches euro area economy to recover only very gradually. the growth momentum is expected to remain dampened by the necessary process of balance sheet adjustment in the financial and non - financial sectors, the existence of high unemployment and an uneven global recovery. the september 2012 ecb staff macroeconomic projections for the euro area foresee annual real gdp growth in a range between β 0. 6 % and β 0. 2 % for 2012 and between β 0. 4 % and 1. 4 % for 2013. compared with the june 2012 eurosystem staff macroeconomic projections, the ranges for 2012 and 2013 have been revised downwards. the risks surrounding the economic outlook for the euro area are assessed to be on the downside. they relate, in particular, to the tensions in several euro area financial markets and their potential spillover to the euro area real economy. these risks should be contained by effective action by all euro area policy - makers. euro area annual hicp inflation was 2. 6 % in august 2012, according to eurostat β s flash estimate, compared with 2. 4 % in the previous month. this increase is mainly due to renewed increases in euro - denominated energy prices. on | proposal. to propel the recovery forwards, europe has a strong engine at its disposal : the single market, the eu β s greatest achievement for its citizens. as recognised by this parliament just a few weeks ago, the single market is the source of our collective prosperity and well - being. so it is crucial that we repair, strengthen and deepen it in the coming months. and this is even truer for the financial sector. a genuinely integrated and resilient market is essential to ensure financial stability and the financing of our economy. so progress on the capital markets union agenda is crucial. priority should be given to initiatives and proposals aimed at mobilising private savings and improving transparency and information for investors at the european level. given the urgency of the situation, we should be open to any new and innovative ideas which can accelerate progress on the capital markets union. as members of the european parliament and the committee on economic and monetary affairs, you have an important role to play in bringing forward the legislative work on these dossiers. thank you, and i look forward to your questions. 4 / 4 bis central bankers'speeches | 0.5 |
cent in january 2000. this increase in non - resident participation in the foreign exchange market could be explained by the decline in the number of foreign banks which provide rand liquidity in london and possibly also by increased trading in the rand. 6. conclusion notwithstanding the volatility in the exchange rate of the rand, we are convinced that there is every reason to be confident regarding the future path of the rand. with prudent fiscal and monetary policies in particular, and good economic policies in general, being in place, we are expecting the current relatively modest but sustainable economic growth to continue. in these circumstances the current account should be a positive factor with south african exports performing relatively well. inflation is coming down slowly but surely and, of importance to you, by no stretch of the imagination can the rand be regarded as overvalued. may i conclude by quoting a press release by the bank for international settlements : " maintaining price stability is the best contribution central banks can make to continued prosperity. " we reiterate our commitment to pursue the appropriate monetary policy to achieve the target range of 6 to 3 per cent in cpix ( mu ) on average in 2002. thank you. | ; and possibly once - off inflows of a permanent nature as may accrue from the corporate sector. the exchange rate of the rand is far more of a two - way risk than many market participants realise. perhaps it would also be appropriate, having touched on the nofp issue, to reiterate the successful reduction in this position which has occurred over the past number of months. as at 31 december 1998, the nofp stood at us $ 22, 5 billion and it has steadily been reduced to a level of us $ 9, 0 billion as at 30 april 2001. this is, in our view, an important milestone in the implementation of our policy. the reasons mentioned above, and others, have culminated in higher volatility levels for the rand. in 1997 the average one - month historical volatility of the rand was 4, 5 per cent. it increased to an average of 12, 6 per cent in 1998 β having been around 35 per cent in the midst of the asian crisis β before decreasing to an average level around 9 per cent for 2000. for the current year to date, the average one - month historical volatility is 12, 3 per cent, much higher than in previous years. but as mentioned before, we are in good company. 4. the impact of currency volatility on monetary policy before turning to the impact of currency volatility on monetary policy, it is important that we spend a few minutes refreshing our memories about the recent economic developments in south africa. economic growth appears to have levelled off in the first three months of 2001, although activity has remained at a relatively high level. still, the creation of employment opportunities for south africa β s growing population remains the major challenge facing the country. south africa β s overall balance of payments position remained sound during the first quarter of 2001, with a further small surplus being recorded on the current account of the balance of payments and the value of the international reserves of the country rising slightly. the growth over 12 months in the broadly defined money supply ( m3 ) accelerated from 7, 5 per cent in december 2000 to 9, 4 per cent in february 2001 and further to 12, 8 per cent in march. the growth in bank credit extension also accelerated in the first quarter of 2001. continued discipline was maintained in the finances of the fiscus with expenditure only marginally exceeding the budgeted amount for fiscal 2000 / 2001 and revenue rising rapidly largely owing to improved administrative procedures. although the depre | 1 |
##s over recent decades ; growth differentials may partly be reflecting these improvements. as is evident in the right - hand chart, the relationship between the growth differential and capital inflows to emes seems to be quite strong. in particular, the rise in capital flows following the global financial crisis coincided with stronger relative growth performance in emes. and in 2011, capital inflows diminished along with the growth differential. another key driver of eme capital flows is global attitude toward risk. swings in sentiment between β risk - on β and β risk - off β have led investors to reposition across asset classes, resulting in corresponding movements in capital flows. 8 indeed, as shown in chart 3, the most common measure of uncertainty and the market price of volatility β the vix β is strongly correlated with net inflows into emes. although the causes of movements in global risk sentiment are uncertain, the ebb and flow of potential crises and policy responses, such as we experienced during the european crisis, are clearly important. of course, movements in risk sentiment may not be fully independent of monetary policy. an interesting line of research has begun to consider how changes in monetary policy itself may affect risk sentiment. for example, some studies indicate that an easing of u. s. monetary policy tends to lower volatility ( as measured by the vix ), increase leverage of financial intermediaries, and boost eme capital inflows and currencies. 9 see, for example, ahmed and zlate ( 2013 ), bluedorn and others ( 2013 ), fratzcher and others ( 2013 ), ghosh and others ( 2012 ), and imf ( 2011 ). see chen and others ( 2012 ), fratzscher and others ( 2013 ), hausman and wongswan ( 2011 ), imf ( 2013b ), and moore and others ( 2013 ). see ahmed and zlate ( 2013 ), forbes and warnock ( 2012 ), fratzcher and others ( 2013 ), and ghosh and others ( 2012 ). see ahmed and zlate ( 2013 ), bluedorn and others ( 2013 ), forbes and warnock ( 2012 ), and imf ( 2011 ). see bruno and shin ( 2013 ) and rey ( 2013 ). bis central bankers β speeches a second point to bear in mind when assessing monetary policy spillovers is that expansionary policies in the advanced economies are not beggar - thy | do not jeopardise the stability of the world economy. today i intend to cover four items : the implications of the single currency for exchange rate policy, the institutional arrangements for the euro area β s exchange rate policy, exchange rate developments during the crisis and, finally, some other dimensions of international monetary cooperation. a single currency β a single exchange rate policy what did the creation of the euro mean for exchange rate policy? prima facie, the answer is straightforward. having a single currency automatically implies having a single exchange rate and thus also a single exchange rate policy. yet the repercussions of emu go beyond these β automatic β consequences. prior to emu, europe consisted of open and, for the most part, small economies. because of the very large size of the external sector compared with the national economy, the exchange rate played a very important role in the economic performance of these countries. the move to monetary union implied the creation of a new economic entity β β euroland β β which is much bigger and much more closed than its component states. this obviously reduces the importance of the exchange rate for β domestic β economic developments. in addition, monetary union β by definition β did away with nominal exchange rates between its participants. as a result, gone are the days when an economic or financial crisis could also trigger an exchange rate crisis. by setting up a bigger and less open economic entity and by eliminating intra - area exchange rates, the euro acts as a shield against external turbulence.. the economic crisis has clearly demonstrated this. in rough financial waters, it pays off to be on a large, solid and stable ship rather than on a small vessel. size matters in a global world. allow me therefore to make a bold point : the euro has arguably been the best exchange rate policy decision which europe has ever taken. institutional arrangements for exchange rate policy in the euro area this brings me to my second topic : the institutional arrangements for the euro area β s exchange rate policy. in describing these arrangements, we should distinguish between three categories of countries : eu countries which do not take part in erm ii, eu countries which are part of erm - ii, and non - eu countries. first, consider the eu countries which do not take part in erm ii. as eu member states, these countries are subject to the treaty. and the treaty is crystal clear : each country must treat its exchange rate policy as a matter of common interest. 1 this obligation should not be taken lightly | 0 |
. i would like to express my sincere gratitude to god for the opportunity to serve our nation with members of staff through the year. at the same time, my condolences go out to staff members who lost their loved ones in 2011. may the almighty god comfort them with grace and mercy as they continue serve the bank. i would like to encourage each one of us to celebrate life and strive to excel in our different roles here at the bank knowing that god is indeed with us. as dorothy sayers put it, β work is not primarily a thing one does to live, but the thing one lives to do. it is or it should be, the full expression of the worker β s faculties, the thing in which he finds spiritual, mental, and bodily satisfaction, and the medium in which he offers himself to god. β finally, with a heart full of gratitude to the almighty god, i wish to congratulate members of the board, senior management and all members of staff for coming to the end of the year. i am eternally grateful for the contributions you have made to enable the bank to carry out its responsibilities very effectively during the year. i also wish to thank the bank of uganda christian fellowship, for their continued prayers and intercession for the bank. may the grace of god that enables you to take charge of this responsibility continue to abound in your lives. bis central bankers β speeches i thank god for all our customers including government, projects, financial institutions, the public and all other stakeholders who enrich bou β s purpose of existence. i wish you all a merry christmas and a prosperous new year 2012. last but not least, i take this opportunity to thank dr. steve ogan for accepting our invitation to come and minister to us today. i now invite him ( dr steve ) to share with us the word of god. i thank you. bis central bankers β speeches | , our latest financial stability soundness indicators for the period ended december 2015, indicate that uganda β s banking sector continues to be resilient and financially sound. the supportive financial infrastructure also remains safe and efficient. the banking sector registered a strong asset and capital base with the capital adequacy ratio of 18. 6 percent as of december 2015, far higher than the statutory minimum of 8 percent. the sector β s asset quality remains good with the ratio of non - performing loans to total loans recorded at 5. 3 percent during the period under review. bis central bankers β speeches just like the bustling economic activity of the bugolobi area established the right context for a new stanchart branch here ; the timing of this branch opening is a resounding endorsement of the durability of price stability and financial sector soundness in the ugandan economy. it is the synergetic combination of forward - looking and pre - emptive monetary policy, through our inflation targeting lite monetary policy framework, together with risk - based regulation and supervision of banks as well as macroprudential financial stability management that have enabled the bank of uganda to foster the evident price and financial sector stability. in this effort, we acknowledge the supportive fiscal environment that has been established through implementation of the public finance management act. the institutional framework exists, to ensure long - term macroeconomic stability in uganda. the public has good grounds to have confidence in the economy ; just like standard chartered is demonstrating by expanding its branch network today. this is the sort of stability that alan greenspan advocated. with these few remarks, let me conclude by congratulating the shareholders, board of directors, management, and staff of standard chartered bank uganda for opening a branch in this village mall of bugolobi. i encourage you to use your growing branch network as well as technological innovation to boost financial inclusion and take advantage of the imminent introduction of bancassurance, agency banking, and islamic finance. it is now my honour to officially open the bugolobi branch of standard chartered at the village mall. i wish you great success at this new location. thank you for listening to me. bis central bankers β speeches | 0.5 |
of a back seat over the past two decades in both our countries : but they are essential for both lowering inflation and increasing growth in europe. in addition to major adaptations of our production systems, they require very significant investments β of around 2. 5 % of gdp 2030 in france ( eur 70 billion in 2021 constant euro ) for the climate transition, according to jean pisani - ferry, 3 to be financed essentially by the private sector. it is in this sense that joachim nagel and i have just published a joint appeal : a " political accelerator " is needed for the capital markets union ( cmu ), so that the new action plan established in 2020 can at long last transform europe into a genuine single financing market. further integration would contribute to preserving our financial stability through different channels : geographical diversification of our funding sources to better absorb external economic shocks, and increased equity funding. european venture capital is to be boosted, in order to provide european startups with the funds that they otherwise seek from the united states. more generally, it is the capital markets union and the banking union that must now make progress, and progress together, because they are complementary and offer synergies. 4 while we are working together seriously to achieve a " green deal ", we must also do so to establish a " green financing union " : the latter is a prerequisite for the former, and is not just a matter of financial technicalities. i will conclude by quoting konrad adenauer, who was chancellor from 1949 to 1963 : " if two people always have the same opinion, both are of no use ". 5 the franco - german couple ( or engine ) has always been the driver for finding common ground from positions that were often initially at odds. these very disagreements are what makes this relationship valuable, and also provide it with its potential for momentum. in this current, severe crisis, it is up to us to revive it and help europe get back on track. thank you for your attention. 3 / 4 bis - central bankers'speeches 1 support to mitigate unemployment risks in an emergency 2 update on business conditions, published on 9 november 2022 by the banque de france. these aggregate figures weigh each of the three sectors ( market services, industry and construction ) following their importance in global added value. 3 pisani - ferry, j., mahfouz, s., l'action climatique : un enjeu macroeconomique, november 2022 | accepted and adopted by the global financial services industry as a gold standard. with this, let me congratulate the board of fspb with this launch. in taking this important initiative forward it is necessary for fspb to reflect the business needs of the financial services industry whilst balancing the interests of the community that the industry serves. bank negara malaysia and the securities commission malaysia will continue to be committed in supporting this important agenda of the financial services industry. bis central bankers β speeches | 0 |
##saggregated information in terms of national time series is more useful for forecasting than aggregated information ( area - wide time series ) in the euro area. 14 concerning the forecast methods, various approaches are employed, and the eurosystem pursues a suite - of - models approach. regarding the level of aggregation, the eurosystem employs econometric models for single euro area member countries in addition to area - wide approaches. traditional structural macroeconometric models still play a key role in forecasting β for example, the area - widemodel ( awm ) of the ecb β and the econometric models of the euro - area central banks. recently, dsge models have been developed in the eurosystem. some of these models are still under construction and some are already used for policy simulations. however, they have not been widely used for forecasting so far. in addition, eurosystem staff makes use of time series models for shortterm forecasting, such as different var models and large factor models. however, eurosystem forecasts are not fully model - based. in the forecast exercises conducted by the eurosystem, a complex interaction of information takes place between models and judgmental information from outside the models. 3. 1 the role of short - term interest rates in central bank projections one practical difficulty in forecast exercises is the appropriate conditioning of the forecasts. a particularly subtle problem for central banks concerns the appropriate choice of a consistent shortterm interest - rate projection. this topic plays a key role in the recent discussion on central bank forecasting. the short - term rate is the policy instrument under the control of the central bank ; via the expectation channel, its future path influences current economic circumstances and decisions. specifying a trajectory of future rates in today β s projections is therefore a delicate problem with regard to the signals about the future course of monetary policy given to outside observers. there are basically three ways of specifying the future interest rate path. firstly, a constant short - term interest rate ( cir ) assumption can be employed. the inflation projection being higher ( lower ) than the inflation target at some given horizon has been interpreted as indicating that, sooner or later, the instrument rate needs to be raised ( lowered ). 15 an advantage of this assumption is that it can easily be communicated. cir is an obviously technical assumption with no risk of central bank commitment to follow the assumed constant interest rate path. one drawback is that | when forecasts use the correct conditional expectation in a weakly - stationary process. in other words, a departure from perfect knowledge is necessary to explain gains from combination, see clements and hendry and timmermann ( 2005 ) : see granger and jeon ( 2004 ), pp. 324 - 5. see spanos ( 2001 ). taking into account more than one benchmark model makes the null of equal forecast accuracy harder to reject. see, for example, white ( 2000 ), table 1, p. 1113. construction of an mcs involves a sequence of tests for equal predictive ability. this restricts the set of candidate models by deleting models that are found to be significantly inferior, and the set of remaining models is the mcs. an mcs can be used to construct combination forecasts by pooling the forecasts of the models in the mcs. if the number of models in the mcs is large, a reasonable way to proceed is to weigh the individual forecasts equally. the reason for this is that the mcs consists precisely of the models that cannot be rejected as being equally good. see hansen, lunde and nason ( 2003 ), p. 841. β’ a pro - diversification argument states that some combination of two - model forecasts might perform better than either alone, if the two models provide partial, but not overlapping, explanations. 10 β’ owing to model uncertainty, using the correct conditional expectation for forecasting is unrealistic, and, in reality, departures from the correct model may be expected to be the rule rather than the exception. β’ if structural breaks occur, forecasts from individual models may be affected differently, possibly on account of differing degrees of misspecification. combinations of forecasts might then outperform forecasts from individual models. 11 to summarize : there are good reasons why monetary policy pursues fullinformation strategies and β looks at everything β in terms of a broad set of information from data and models. the recent sizable literature on robust policies in various model environments also emphasises the merits of model combination and averaging. 12 therefore, selecting a single model for monetary policy may be inappropriate, since conditioning monetary policy decisions on one model ignores the role of model uncertainty. it also disregards the favourable empirical results from the forecast combination literature, and thus leaves aside potentially important information. eurosystem forecasting the governing council of the eurosystem bases its comprehensive assessment of the risks | 1 |
ii. we have reviewed comments on the anpr and are working on a notice of proposed rulemaking. we are mindful that amendments to the basel i rules should not be too complex or too burdensome for the large number of small - and midsized institutions to which the revised rules might apply. indeed, a number of those commenting on the anpr advocated leaving existing rules unchanged. with regard to both the basel ii proposals and the proposed basel i amendments, we understand the need for full transparency. for that reason, we expect to have overlapping comment periods for the see basel committee on banking supervision, β results of the fifth quantitative impact study ( qis5 ), β table 3, the bank for international settlements. basel ii npr and the npr for the proposed basel i amendments. in fact, we want all interested parties to compare, contrast, and comment on the two proposals in overlapping timeframes. accordingly, either of our proposals could change as a result of comments received or new information gathered. conclusion from the federal reserve β s perspective, the publication of interagency proposals relating to basel ii is a very positive development and demonstrates the ability of the agencies to work cooperatively to modernize our regulatory capital framework. the federal reserve β s commitment to the basel ii process remains as strong as ever, even as we recognize that the proposals remain subject to further comment and that there is likely much more work to be done. we encourage comments from all interested parties and will give them careful consideration. i would like to emphasize that the federal reserve desires to ensure that the final rule for basel ii is a substantial enhancement over existing basel i rules, appropriately capturing the risks of our largest, most complex banks, and encouraging continual improvement in risk - measurement and - management systems. we look forward to working with the other agencies as we enter into the final rule phase of the basel ii process. we recognize that many institutions have been diligently preparing for basel ii implementation and we understand our obligation, as supervisors, to support institutions wanting to adopt basel ii at the first available date. we suggest that those institutions continue to move forward with implementation planning, including identification of gaps in their own preparation. finally, i would like to assure the committee members that we at the federal reserve are pursuing basel ii because we believe it will help to preserve the safety and soundness of our nation β s banking system. in our dual role as the central bank and supervisor of banks, bank holding companies, and financial holding companies | not require banks to increase capital as their potential for losses rises. basel ii addresses this by including in pillar 2 the requirement that the bank have a plan in place to ensure that sufficient capital will be available in the downturn of the economic cycle. thus, for the largest organizations, we need to move beyond basel i to a more risk - sensitive and more comprehensive framework for assessing capital adequacy. basel ii represents the concerted efforts of the international and u. s. supervisory community, in consultation with banks and other stakeholders, to develop such a framework, drawing upon wellknown economic capital concepts that the largest banks already employ as part of their risk management efforts. in addition to its supervisory authority, the federal reserve, as the nation β s central bank, has responsibility for maintaining stable financial markets and ensuring a strong financial system. that responsibility mandates that we require banking organizations to operate in a safe and sound manner with adequate capital that appropriately supports the risks they take. this is especially critical in today β s environment where we have a growing number of banking institutions with more than $ 1 trillion in assets, complex balance sheets, opaque off - balance sheet transactions, and far - reaching operations that pose significant risk - management challenges that are fundamentally different from those faced by smaller institutions. naturally, we must also ensure that our regulations and supervisory oversight are in tune with bank practice, are able to identify the risks being taken by banks today, and have enough flexibility that they will continue to be prudent and relevant in an everchanging risk environment. as chairman bernanke has noted, a regulatory and supervisory system that is not in tune with the financial marketplace may increase the costs of regulation, stifle efficiency and innovation, and ultimately be less effective in mitigating the moral hazard problems associated with the federal safety net. the advanced approaches of basel ii are much more risk sensitive, cover more areas of potential risk facing banking organizations, and provide better incentives for institutions to improve risk measurement and management. in addition, basel ii provides supervisors with a more conceptually consistent and more transparent framework for evaluating systemic risk in the banking system, particularly through credit cycles. in sum, basel ii will establish a more coherent relationship between regulatory measures of capital adequacy and day - to - day supervision of banks, enabling examiners to better evaluate whether banks are holding prudent levels of capital given their risk profiles. continuing the implementation process the agencies β proposed rulemakings, representing our view about | 1 |
can be broken down into prices of goods and services. i then choose to exclude oil, electricity and mortgage interest, which we already know has contributed to the low cpi inflation. goods prices ( chart 2 ) rose weakly in 2003, but since the end of the same year they have been falling. the rate of price increases for services has diminished in recent years and currently stands at roughly 2 per cent. so this does not appear at first sight to be a contributory factor to the low cpi inflation. it is important to remember, though, that productivity growth in the services sector is normally assumed to be somewhat lower than in the goods sector. given an inflation target of 2 per cent, therefore, services prices should, on average, be increasing slightly more than 2 per cent and goods prices by somewhat less. with the exception of short periods this has also been the case since 1995, as services prices have risen on average by 2. 5 per cent and goods prices by 0. 6 per cent. so, developments in services prices have also contributed, at least in the most recent period, to the low inflation. the chief remaining explanation for the low cpi inflation appears, however, to be found in the developments in goods prices. falling goods prices contributing to the low inflation when it comes to goods prices it is natural to distinguish between price developments for domestically produced goods and goods that are imported from other countries. prices of imported consumer goods have dropped since the middle of 2003. but inflation for domestically produced goods has also been low, with prices even falling during the second half of last year ( chart 3 ). consumer prices for both domestically produced and imported goods depend on many factors, e. g. the competition situation both abroad and in the home market and developments in costs and profit margins for both producers and distributors. to better understand why inflation is so low, the next step is to analyse the various stages from the production or importing of goods until the goods are put up for sale to consumers in shops. allow me to begin by looking at developments in the producer prices of domestic goods and in the prices of imported goods at customs, i. e. the prices paid by wholesalers in the distribution sector. i will then analyse how the path through the distribution sector can be thought to affect the final price of the goods that customers buy in shops, i. e. the price in the cpi. producer prices of domestically produced goods the rate of increase for producer prices of domestically produced consumer goods has been | to investigate this in greater detail is limited, however, by insufficient data. the part of the distribution sector that involves transportation saw a fall in unit labour costs in 2003 and 2004, while profit margins have recovered somewhat. in the statistics this sector includes a number of less relevant groups, such as restaurants, hotels and communication. in wholesale and retail trade, unit labour costs have increased at a lower and lower rate in recent years, and didn β t rise at all in 2004. meanwhile, profit margins rose slightly after having fallen from 23 to 15 per cent in the past ten years ( charts 8 and 9 ). in addition, competition in the retail sector has increased considerably in recent times due to the establishment of more and more low - price chains. among other things, that is being reflected in large - scale marketing campaigns in which one big chain store after another is advertising price cuts. food prices in the cpi have also dropped. nevertheless, profit margins appear to have increased slightly in 2004. that may be attributable to increased efficiency as a result of larger shop space, a higher proportion of own brands and possibly a more effective use of it. supply factors behind the low inflation this shows that supply factors are the main force driving the low inflation. the low domestic inflation is due in large measure to the high productivity growth in the economy. structural changes, too, such as the stiffening competition in the retail food sector, which has recently resulted in a drop in food prices, have played a part. the slack in resource use that has been evident in the economy for some time has of course also contributed to the low domestic inflation. we can also observe that the prices of imported goods have fallen in recent years. that is partly due to the krona β s appreciation and partly to low price increases for consumer goods in the international market. increased imports from low - cost countries have also led to greater downward pressure on prices of imported consumer goods than we previously expected. having looked back at these developments i now intend to look ahead and touch upon the assessment of the economic and inflation outlook that we presented in our latest inflation report in light of the information received since then. the current economic situation in the inflation report that was published in the middle of march we forecast that economic growth in both sweden and abroad would remain high in the coming years. for sweden we predicted a growth rate of roughly 3 per cent a year, which is higher than we deem sustainable in the long run. export demand was expected to | 1 |
dimitar bogov : what could sepa bring for the banking and the real sector in the republic of macedonia speech by mr dimitar bogov, governor of the national bank of the republic of macedonia, at the event β what could sepa bring for the banking and the real sector in the republic of macedonia β, organized by the banking association at the economic chamber of macedonia, in cooperation with the european banking federation ( ebf ), skopje, 13 may 2014. * * * honorable mr. stavreski, vice president of the government of the republic of macedonia and minister of finance, honorable mr. janchevski, chairman of the banking association of the macedonian economic chamber distinguished guests from the banking sector in the czech republic dear representatives of the banking and the real sector in macedonia ladies and gentlemen, one of the primary functions of each central bank is to create conditions for stable, reliable and efficient operation of the payment systems. to achieve this function, and according to the best practices of central banks of the eu member states, the national bank performs four basic roles in the payment systems : operational, supervisory, development and catalyst role. the successful performing of these functions is closely related to the importance of payment systems for a national economy. the proper functioning of the systems for large payments, which are owned and managed by central banks, is important for the effective monetary policy conduct. in circumstances of permanent changes in the infrastructure of financial markets, the supervisory role of the central bank regarding the payment system contributes to the maintenance of financial stability. additionally, the systems for large payments contribute to the coordination of the direct participants in the national payment system, such as the treasury of the ministry of finance, banks and clearing institutions, ensuring finality of all payments in the national economy. in this way, the national bank maintains the vitality of the payment systems as one of the most important components of the financial and economic infrastructure. in terms of achieving the development and catalyst role, allow me to affirm the strategic approach of the national bank, the ministry of finance and the banking association in the development of the national payment system of the republic of macedonia through the adoption and implementation of the strategy for the development of the payment system of the republic of macedonia for the period 2013 β 2017. our shared vision for the development of the payment systems of the republic of macedonia until 2017 is the modernization and improvement of the operations of payment systems through the application of high - tech achievements and gradual harmonization with the standards and | rules of operation of payment systems in the european union. in this way, we expect to increase the reliability and efficiency of payments and the acceptance of non - cash payment instruments, simultaneously ensuring gradual compliance with the requirements for integration into the single european payment area β sepa. finally, let me once again welcome our guests, the experts from the czech republic, who will pass on the czech experience in the realization of the decade - long eu project β the establishment of the single european payment area β sepa. i believe that today β s panel discussions will encourage all stakeholders in the national payment system of macedonia in creating realistically achievable integration initiatives in the area of cross - border payments in euros, which would open new opportunities for macedonian companies and citizens for effective and cheap payments in the economic exchanges with the european union. bis central bankers β speeches | 1 |
world of integrated capital markets one may also have good reason to argue the other way round. why are long - term capital flows, driven by perceived rates of capital productivity, less " real and fundamental " than trade flows? would it not also be possible to argue - based on recent experience - that capital flows to the united states were, for a long time, the fundamental causative change which effected - as a consequence - the deterioration in the current account? be that as it may, traders, investors and central bankers would be well advised to accept the fact, and be prepared for it, that in the short - and medium - term surprises are always possible in the forex markets. this was so in the past and will continue to be so in the future. smallness and connectedness : some facts let me now talk about the sfr, about its main features as a currency which is traded and held in international portfolios. the sfr plays a minor part on the stage of the global currency game - it is a dwarf among giants, so to speak. its position may be described by means of three indicators. first, by the sfr's share in the global turnover in foreign exchange trading. volume composition in forex ( daily foreign - exchange transactions, $ billion tradi ng wi t h ot her currenci es tradi ng wi t h us dol lar Β£ y dm aud ffr chf this chart is based on data collected by the bis in 1998, i. e. during the period prior to the introduction of the euro. the columns illustrate the composition of an average daily volume of approximately 1. 5 trillion usd by currencies. the usd clearly predominates. this is shown by the size of the lower areas, which represent the respective trading volume vis - a - vis the usd. it seems very likely that the advent of the euro has not significantly changed the pre - eminence of the dollar. the new figures to be expected this year will be instructive in this regard. the sfr accounted for usd 100 billion, i. e. approximately 7 % of the total daily volume in 1998. this may seem modest, but relative to the size of our economy it is a very respectable figure. the swiss franc is trading currency number 5, ranging behind the big three and sterling, but well ahead of the currencies of much larger countries like australia and canada. economically more important than the | is needed between, on the one hand, inclusive rules and institutions, and, on the other, compensatory transfers. both must be constantly calibrated, given that o the destructive power of each shock depends on its intensity and duration, and o there will always be a shock that no rule or institution may ever prevent β and that is technological innovation. the most effective strategy to overcome the challenges posed by technological innovation consists of ensuring an inclusive growth of potential output. this means promoting the sustainable growth of gdp per capita while simultaneously involving all the communities and classes of the working age population in the production process. entrepreneurs and managers are particularly prominent actors in such a strategy. so, let me stop here, and congratulate the bank for its increasingly relevant mission, and for bringing us together today to reflect on it. thank you. www. bportugal. pt bibliography : alexandre, fernando, helder costa, miguel portela, miguel rodrigues ( 2018 ), asymmetric regional dynamics : from bust to recovery, working paper series, nipe, universidade do minho amador, joao ( 2017 ), portugal e o comercio internacional, essays series, francisco manuel dos santos foundation associacao empresarial de portugal ( 2019 ), dinamicas socioeconomicas regionais, aep estudos e estrategia baldwin, richard ( 2016 ), the great convergence : information technology and the new globalization, harvard university press coady, david and allan dizioli ( 2018 ), income inequality and education revisited : persistence, endogeneity and heterogeneity, applied economics, vol. 50, no. 25, pp. 2747 β 61 de mello, luiz, dutz, mark a. ( 2012 ), promoting inclusive growth : challenges and policies, paris : oecd and the world bank farole, t., m. roberts, j. park, and c. hooton ( 2018 ), assessing the economic potential of europe β s regions, washington, dc : world bank gill, indermit s., raiser, martin ( 2012 ), golden growth : restoring the lustre of the european economic model ( vol. 2 ) : main report ( english ), europe and central asia studies, washington dc, world bank. international monetary fund ( 2017a ), government finance statistics yearbook, 2016, vol. 40, international monetary fund, washington d. c. ( | 0 |
tool in furthering the cause of a level playing field between countries and across institutions. ladies and gentlemen, let me conclude. looking back in history, we are a far cry now from where we were fifty years ago, when our predecessors introduced formal banking supervision in the netherlands. looking forward into the future, i am pretty sure that our successors will not be celebrating the centenary of the act on the supervision of credit systems, or even the centenary of insurance supervision 20 years from now. we will have entered a cross sectoral world long before then! and as to the topic they will be discussing, that could well depend on the turning we take on the crossroads that we are at now. thank you for your attention. i wish you all an interesting and entertaining conference. | nout wellink : 50th anniversary of the dutch act on the supervision of credit systems opening remarks by mr nout wellink, president of de nederlandsche bank and president of the bank for international settlements, at the conference on the occasion of the 50th anniversary of the dutch act on the supervision of credit systems, amsterdam, 24 april 2002. * * * it is a great privilege to welcome you here in amsterdam at the conference β banking supervision at the crossroads β. this conference has been organised to celebrate the adoption of the act on the supervision of the credit system in the netherlands 50 years ago. that was when banking supervision in our country was first formalised. it replaced a system of voluntary arrangements between de nederlandsche bank and the private banks. in my opening remarks today, i will look back at the past half century, that has taken us from informal gentlemen β s agreements to the phenomenal complexity of basel ii. we still aim for agreement and most of the time try to behave like gentlemen, but the world has become a different place. and it will continue to change rapidly! the question we are faced with is how supervisory practices should respond and in particular - and that is the theme of the conference - to what extent they should converge. i am very happy that we have a number of prominent speakers that are willing to shed light on this important question. first of all, i must inform the audience that due to unforeseen obligations in parliament, minister gerrit zalm will unfortunately not be able to join us this afternoon. however we are happy that in his place mr kees van dijkhuizen is willing to deliver the keynote speech this afternoon. as the highest civil servant at the ministry of finance, mr. van dijkhuizen takes a keen interest in financial supervision in this country. we furthermore are very honoured to have in our midst mr william mcdonough, president of the federal reserve bank of new york and chairman and of the basel committee on banking supervision, mr jochen sanio, chairman of the new federal office for the supervision of financial services in germany and mr tom de swaan, chief financial officer of abn amro. as mentioned, the dutch act on the supervision of credit systems formalised the supervisory task of de nederlandsche bank. it was a response to the major changes in the financial and economic environment that took place between the two world wars. the banking crises of the nineteen twenties, the glass steagall act in | 1 |
in today β s world of banking. retail banking in india retail banking in india is not a new phenomenon. it has always been prevalent in india in various forms. for the last few years it has become synonymous with mainstream banking for many banks. the typical products offered in the indian retail banking segment are housing loans, consumption loans for purchase of durables, auto loans, credit cards and educational loans. the loans are marketed under attractive brand names to differentiate the products offered by different banks. as the report on trend and progress of india, 2003 - 04 has shown that the loan values of these retail lending typically range between rs. 20, 000 to rs. 100 lakh. the loans are generally for duration of five to seven years with housing loans granted for a longer duration of 15 years. credit card is another rapidly growing sub - segment of this product group. in recent past retail lending has turned out to be a key profit driver for banks with retail portfolio constituting 21. 5 per cent of total outstanding advances as on march 2004. the overall impairment of the retail loan portfolio worked out much less then the gross npa ratio for the entire loan portfolio. divanna, joseph a. ( 2004 ) : the future of retail banking, new york : palgrave macmillan. within the retail segment, the housing loans had the least gross asset impairment. in fact, retailing make ample business sense in the banking sector. while new generation private sector banks have been able to create a niche in this regard, the public sector banks have not lagged behind. leveraging their vast branch network and outreach, public sector banks have aggressively forayed to garner a larger slice of the retail pie. by international standards, however, there is still much scope for retail banking in india. after all, retail loans constitute less than seven per cent of gdp in india vis - a - vis about 35 per cent for other asian economies - south korea ( 55 per cent ), taiwan ( 52 per cent ), malaysia ( 33 per cent ) and thailand ( 18 per cent ). as retail banking in india is still growing from modest base, there is a likelihood that the growth numbers seem to get somewhat exaggerated. one, thus, has to exercise caution is interpreting the growth of retail banking in india. drivers of retail business in india what has contributed to this retail growth? let me briefly highlight some of the basic reasons. first, economic prosperity and the consequent increase in purchasing power has given a fillip to a | challenge that may arise is that of proxy disintermediation, with the attendant risks of financial activities taking place outside the regulatory perimeter. the recent guideline on digital lending is an attempt to have an enabling framework, balancing competing considerations. most of the innovations in the delivery of financial services have an inherent aspect of conduct β the choice between exploitative vs responsible conduct. it is important to establish a common denominator of what is'responsible '. this dimension has a lot more subjectivity while seeking to address the issue. ethical and responsible banking, being sensitive to the needs of people we are serving, being inclusive in our approach to vulnerable sections of the society, taking prudent financial decisions - these all are the choices which are always available to each one of us engaged in the financial sector. banking fraternity being the trust bearer of the society owes it to people and the country, to be sensitive, inclusive, responsible, and prudent. our financial institutions have navigated and will continue to navigate through these choices. adopting unfair means, oblivious to the consequences may push top line in the short run but will potentially harm organisation in the long run. after all, financial institutions are not in this business for few years but for a long haul. hence, purely from a business point of view, it makes a lot of sense to act in the interest of all stakeholders. all aspects - affordability, accessibility, and especially the appropriateness should, therefore, be adhered whenever we design a financial product or deliver it. breaching any of the above cannot be a choice at all. vi. concluding remarks i have tried to briefly highlight the critical dualities of indian financial system. as mentioned earlier, i do not intend to judge any of these categories. the only intention to bring forth these dualities is to emphasize the largely organic evolution of indian financial system in response to our growing economy and highlight that the regulatory 6 / 8 bis - central bankers'speeches frameworks of rbi have facilitated meeting the ever - changing needs of the country. at every juncture of growth in financial system, at every kink, there are innumerable policy choices for a regulator. the decisions we make today have the potential to shape the present and future of our economy and our nation. but sometimes, we can wonder on what could have been the counterfactual and answering such a counterfactual is difficult. but it can be most certainly stated that the depth, size, and resilience | 0.5 |
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.