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16 i thought one response to the csbs survey said it best. the banker wrote, β [ t ] he future of consumer banking seems to be as a participant in the ecosystem of lifestyle technological solutions rather than as a standalone banking relationship. β the problem is, as the banker continued, β [ i ] t β s hard to imagine what exactly that will look like and how it will change the banking business model. β 17 see, for example, the independent community bankers of america, fintech strategy roadmap for community banks ( washington : the independent community bankers of america, march 2018 ), https : / / www. icba. org / docs / default - source / icba / icba - fintech - strategy - roadmap - ( 03 - 12 - 16 ). pdf? sfvrsn = 6a0e7117 _ 4. fintech strategy roadmap. see csbs community bank survey in note 5. - 6what can the federal reserve do to foster prudent community bank innovation? i believe that if a bank has not started thinking about how innovation may impact its business, it is very late to the game. this does not mean that every bank has to run out this afternoon and partner with a fintech firm β there may be all kinds of thoughtful reasons not to engage with them. what matters is that banks, particularly community banks, have gone through the process of thinking about the relevant issues. 18 but there are many questions about how community banks are adjusting to the changing environment. for instance, about 40 percent of community banks say that they do not currently offer online loan applications and have no immediate plans to do so. 19 that 40 percent may represent bankers who have not gone through the process of thinking about the way innovation impacts their business. but it could just as easily include bankers who have looked at the issue carefully and concluded that online loan applications do not fit within their business model. most importantly, though, it may indicate that some community banks may feel that they are simply not able to leverage new technology. most small banks are dependent on partnerships with third parties to make use of new technologies. 20 i am concerned that some banks are not innovating because they feel they lack the ability to navigate the complex regulatory and compliance issues that may arise. among the national risk committee at the office of the comptroller of the currency ( occ ) warns that, β [ f ] ailure to appropriately | frederic s mishkin : the importance of economic education and financial literacy speech by mr frederic s mishkin, member of the board of governors of the us federal reserve system, at the third national summit on economic and financial literacy, washington dc, 27 february 2008. the original speech, which contains various links to the documents mentioned, can be found on the us federal reserve system β s website. * * * as an educator myself, it's a pleasure to be here today to take part in this important event that brings people together from educational organizations all over the country, with the common goal of educating students and citizens in the fundamentals of economic and financial literacy. as many of you know, the federal reserve has had a long and fruitful relationship with the national council on economic education ( ncee ), through our many reserve bank collaborative efforts around the country, and through leadership at the national level. this leadership is evidenced, in part, by the involvement of my former and present colleagues on the federal open market committee, cathy minehan and gary stern, who currently serve as ncee board members. cathy, of course, is the former president of the federal reserve bank of boston, a bank that under her leadership has played a key role in furthering economic education in our new england states. gary is president of the federal reserve bank of minneapolis, from where he has served not only as a long - time member on ncee's board, but also as its chair. and they are just two of the many federal reserve bank presidents and officials who have worked to foster and improve economic education with the national council over the years. there can hardly be a better time to make the case for economic and financial literacy than right now. others have doubtless stood before an audience like you in years past and made the same case, but now we face a downturn in our housing industry fueled, at least in part, by unwise mortgage borrowing and, at times, abusive lending practices. improving consumers'knowledge of the home mortgage process will better equip them to avoid unsuitable mortgages in the future. our national economy has been strained by this housing slowdown and other forces, causing policymakers and others to debate what response is necessary. also, during this election season, we are reminded of the importance of economic issues. just a brief consideration of these three cases shows that a better - educated citizenry can not only contribute to a better functioning economy, but also to a more | 0.5 |
and that the so called β grey β or β independent β directors are truly β independent β. 20. how to improve the liquidity of banks β assets β both loans and investments? for the securitisation markets to develop we need to improve the quality of loan origination, which solely depends upon β ownership of decisions β relating to loan origination. directed lending in whatever form and outsourcing the loan appraisal function dilutes the concept of owning up this crucial decision and hence impacts effective monitoring and asset quality while those who have outsourced the loan appraisal have no commitment to the quality of the loan. coming to investments, how do we convert a β directed investment β portfolio of government securities into a liquid and desirable part of the asset portfolio aligning the same with the new liquidity coverage ratio ( lcr ) norms while making way for an effective yield curve off which corporate bonds and loans can be priced out and also aiding better monetary policy transmission. debt overhang 21. let me turn to the issue of debt and financial leverage in general and in particular the corporate leverage in the post crisis context. businesses all over the world were impacted in general due to demand slump. indian companies too have been hit given the fact that they went ahead with their expansion plans before the crisis, unaware of what was unfolding. in the developed economies, the ultra - easy monetary policy measures, which also had a quasi - fiscal side to them, provided an outlet for the liquidity of the corporate bonds β either directly through purchase of corporate paper or through the massive purchases of government and agency bonds in turn providing liquidity to the corporate bonds thanks to β search for yield β strategies. this was besides the corporate bailouts, like the auto industry in the us. leverage in its extension can be debt overhang. interesting though is the larger issue that jurisdictions where interest rates are negative or close to zero, the concept of β debt overhang β becomes meaningless, rendering high debt - to - gdp economies and their highly leveraged corporate solvent, which otherwise are not. we do however recognise the risks that reckless corporate leverage poses to the financial system and the systemic stability, but the issue needs to be tackled with solutions and timelines that are non - disruptive. looking for the triggers 22. that brings us to the point that the triggers of financial instability can lie outside the financial system and our illustrative list of β macro prudential factors and tools β can still be insufficient. | of collateral to the eurosystem, in turn allowing counterparties to optimise the use of their collateral assets with central banks and in the market. to enhance this process even further, the eurosystem is also cooperating with the market to achieve interoperability between the different tri - party offerings. another very important initiative in this respect is target2 - securities or t2s, which is a single platform for the settlement in central bank money of potentially all securities transactions in europe. the idea of consolidating numerous systems into a single platform managed by the eurosystem was triggered β on the cash side β by target2, which brought about an upheaval in terms of banks β ability to manage their liquidity in central bank money throughout the euro area. furthermore, target2 made it even more apparent that a fragmented securities settlement landscape, such as the one we have in europe, can give rise to serious inefficiencies and risks. as of 2015, t2s will complement the integration already in place at the payment system level, and contribute to creating a true single market for post - trade services. it will increase competition in the provision of those services and thus reduce fees for end users and investors. t2s will foster financial stability by allowing seamless cross - border as well as domestic securities settlement in central bank money across all participating markets. it will reduce the complexity and fragmentation that characterise the current infrastructure. moreover, t2s will support the eurosystem collateral management framework by simplifying the cross - border exchange of securities eligible as eurosystem collateral, meeting the increasing need for high - quality collateral that we are witnessing in the market today. t2s is the proof that, in spite of the current crisis, there is still an integration momentum. we are striving to build a stronger euro area and in particular stronger euro area markets. one final point on the subject of lvps : given the importance of sound payment systems and market infrastructures for the effective implementation of monetary policy and financial stability, robust oversight arrangements with adequate central bank involvement are critical. we have recently seen decisive progress in this area. the april 2012 cpss - iosco principles, agreed by central banks and securities regulators worldwide, have strengthened respective international requirements. similarly, at eu level, the new european market infrastructure regulation ( emir ) provides for the close involvement of central banks of issue, such as the ecb, and central bank overseers in | 0 |
remarks by the governor on the launch of the 2023 banking industry survey report by pwc august 2024 presentation outline introduction state of the local economy liquidity risk cybersecurity financial performance and condition of the sector introduction βͺ the survey is a very useful tool to many stakeholders, including ourselves. βͺ the 2023 report is the eighth edition. we commend pwc for this initiative and we appreciate the cooperation of the respondents. βͺ the 2023 survey report raises a lot of important issues. however, will focus our brief comments on three top issues raised by respondents : o o o state of the local economy ; liquidity risk ; and cybersecurity state of the local economy βͺ will look at the state of the local economy through the lens of our recent monetary policy committee meeting. βͺ the mpc maintained the monetary policy rate at 13. 5 percent. while actual and projected inflation remain elevated relative to the 6 - 8 percent target band, the committee judged that the current monetary policy stance is appropriate. βͺ inflationary pressures have persisted, with inflation rising to an average of 14. 6 percent in the second quarter of 2024 from 13. 5 percent in the first quarter. βͺ persistent depreciation of the kwacha against major currencies and rising prices of food ( maize grain, maize products, and vegetables ) and energy, particularly fuel, due to constrained supply continued to drive inflation up. βͺ these factors remain key risks to the inflation outlook, exacerbated by extended hours of electricity load management, continued geopolitical conflicts and tight global financial conditions. βͺ inflation is, however, forecast to moderate to 12. 7 percent in 2025, albeit higher than the 9. 8 percent reported in the may 2024 monetary policy report. βͺ in the first half of 2026, inflation is expected to average 10. 8 percent. state of the local economy ( cont. ) βͺ the mpc decision further considered the impact of the drought and that of the past successive increases in pr, increases in srr, and the recent reforms in fx market. βͺ in maintaining the pr as opposed to raising it, the committee also considered the impact on financial stability and growth, particularly in 2024, in the wake of the drought. βͺ continued implementation of fiscal consolidation measures and structural reforms remains critical to lowering inflation, maintaining financial stability, and creating growth enabling environment and resilience of the economy against shocks. βͺ to safeguard macroeconomic stability needs concerted efforts and strengthened | foreign exchange exposures and an absence of or inadequate risk management frameworks. in other banks, the board chairman was also the majority shareholder and the chief executive of the bank. such basic risk management failures, to a large extent reflect a breakdown in corporate governance. chairperson, you may wish to note that the zambian banking system is stronger and properly regulated today than it was in the 1990s. the bank of zambia has been periodically reviewing the banking and financial services act ( bfsa ) to bring it up to date with international standards and current global practices. one of the areas the banks has continued to strengthen is the corporate governance provisions to ensure that the board of directors and senior management of banks and financial institutions conduct the affairs of their institutions prudently. in particular chapter iii, part iii and iv of the bfsa deal with the boards of directors of banks and financial institutions. under these parts : every bank or financial institution is expected to have a board of directors in which shall vest all the powers of management and control and which shall be responsible for the formulation of policies of the bank or financial institution ( section 30 ( 1 ) ; the board of directors shall consist of not less than 5 members ( section 30 ( 2 ) ; every financial service provider must have a chief executive officer and chief financial officer who shall not qualify to hold office unless it is shown that ; they are fit and proper persons, above 21 years old, have not been convicted of a felony or offence involving dishonesty, are not mentally incompetent, have never been removed from office under the bfsa, have not managed a company that has gone into liquidation or entered into a composition with creditors ( section 31 ) ; the majority of directors must be from outside the bank ( section 32 ( 1 ) ; directors, chief executive officers and chief financial officers are expected to act honestly, in good faith and in the interest of the company whilst exercising due care, diligence and skill ( section 33 ) ; a director is required to declare in writing to the board annually, the names and addresses of the director β s associates and full particulars of every material interest ( section 35 ) ; a director who ( a ) negligently or with intent to deceive, makes any false or misleading statement or entry or omits any statement or entry that should be made in any book, account, report or statement of the financial service provider, or ( b ) obstructs or endeavours to obstruct | 0.5 |
depth. product range has also increased significantly. structured products now account for more than half of the singapore dollar bond market. the asset securitisation market has also gained traction, recording a fivefold increase since 1999. to further enhance the attractiveness of asian capital markets, mas has, over the past year, worked with various governments in the region to encourage investor demand, and to address market access and market infrastructure issues. the asian bond fund or abf is one such initiative. after the successful launch of abf 1, the executives β meeting of east asia - pacific central bankers or emeap is making good progress on abf2 to invest in local currency - denominated asian bonds. the emeap group believes that abf2 will promote the development of index bond funds in the regional markets. we are also working with our asean counterpart on an investors seminar to take place later in the year to raise global awareness of our capital markets. the treasury industry continued to grow robustly. foreign exchange and credit trading activities were underpinned by market volatility and a slew of bond issuance in asia. to support the broad - based growth in the financial services sector, much attention was placed over the past year on manpower and skills development. the financial sector manpower conversion scheme, launched recently, will contribute to ensuring a ready supply of skilled manpower in relevant growth areas. v playing a more active role in the international arena over the last year, we have continued our active role in regional cooperation, formulation of international regulatory standards, and active dialogue with our regional and international counterparts. this reflects our recognition of the importance of closer cooperation in a highly interconnected global market. these efforts are also in keeping with singapore β s role as an international financial centre. we work closely with our asean counterparts to speed up financial sector liberalisation in the region. beyond asean, we are actively involved in emeap. last week, we successfully hosted the emeap governors β meeting as well as the first emeap - eurosystem high - level seminar. in the international regulatory front, we recently assumed the chair of the asia pacific regional committee ( aprc ) of the international organisation of securities commissions ( iosco ), and sit on the iosco executive committee. we have also assumed the chair of the emeap working group on banking supervision, which will facilitate the region β s discussion on implementation of basle ii. we are committed to regional and international co - operative efforts | helps to sharpen a company β s strategic goals. as such, it is beyond dispute that hedge funds and private equity contribute to the functioning of the economy. in what follows, i am restricting myself to hedge funds. for three reasons there are concerns that hedge funds may exert a destabilizing influence : β’ the first concern is the potential impact on regulated firms of a sudden collapse of highly leveraged hedge funds. banks and other regulated financial institutions are heavily involved in investing and extending credit to hedge funds. this exposure implies that large losses at one such institution could have knock - on effects for institutions closer to the heart of the financial system. in times of market stress, such effects may even threaten the stability of the financial system, as illustrated by the ltcm case in 1998. there is no certainty that such an event will not happen again. β’ the second concern relates to market dynamics associated with the potential for large and concentrated positions or " crowded trades " that can seriously amplify market pressures. crowded trades can arise when hedge fund managers take similar investment positions on a large scale. especially in combination with high leverage, this concentration could contribute to price instability if market conditions force hedge funds to unwind their positions simultaneously. β’ a third concern relates to the intense form of shareholder activism associated with some hedge funds. the prominent role of shareholders today is a direct result of two developments ; the first is the deregulating measures that have been taken in recent years by regulators. the second development concerns the changing corporate governance structure at private firms, including the relaxation of protection constructions. amid the ensuing public debate, regulators and supervisors are being called upon to assess the risks associated with shareholder activism, such as the potential violation of market integrity and uncompromising behaviour with the sole aim of maximizing shareholder value. particularly the latter may have broader financial stability implications in so far as a single - minded pursuit of shareholder maximization may in some cases undermine the stability of, and public confidence in, a financial institution, such as a bank. such institutions do after all also provide a public good, which should be taken into account when deciding upon the future strategy, and which explains why they are subject to supervision. these examples illustrate that hedge funds are generally beneficial but may under certain circumstances have a destabilizing influence. therefore, the call is on those responsible for safeguarding financial stability to ensure that checks and balances are in place to limit the risks these entities pose, while avoiding restrictive measures that may prevent | 0 |
hand views from governor β s interactions in various multilateral fora on global developments and outlook, and the implications of global spillovers for the indian economy and for the setting of monetary policy. in hindsight, these insights turned out to be invaluable. in a situation in which several emes were jumping on to the bandwagon of tightening monetary policy and aes were announcing normalisation or joining their emes in raising policy rates, india held its ground and is among a few countries that have retained an accommodative monetary policy 7, despite some views that we have fallen behind the curve. only time will tell whether or not india has got it right but so far, this approach has served us well and helped in charting a course into the future which is different from the world. conclusion in the hallowed tradition of central banks, the rbi as an institution shuns the glare of the limelight, preferring to remain unglorified and grounded. yet when the chips are down and crises loom, it rises up from the depths that it inhabits and flings itself at the gathering storm. when the job is done, the recovery secured and macroeconomic and financial stability ensured, it falls back, usually unsung, but always on guard. the pandemic continues to shape the future, but the rbi remains armed and battle ready. continuously evaluating highly volatile and uncertain conditions and remaining prepared to protect the economy from shocks, the rbi has committed all its instruments to this objective, using conventional measures and fashioning new ones, as the pandemic experience showed. the lessons of the pandemic will be imbibed and the rbi will emerge stronger and more resilient than before, and committed to its mandate of price stability, keeping in mind the objective of growth. in fact, the statement of december 8, 2021 states that β our motto is to ensure a soft landing that is well - timed. β | the rules we already have today is paramount before we engage in major new integration steps. to cut a long story short : a fiscal union, which would require member states to surrender substantial national sovereignty, hardly seems feasible at the moment. and as long as there β s no willingness to transfer national sovereignty to the european level, there will be no basis for mutualising sovereign risks β and that β s why the proposal to establish a european deposit insurance scheme ( edis ) isn β t the right institutional response to restore the balance between liability and control in the euro area. as long as actions taken at the national level, such as drafting insolvency law or very high stocks of government bonds on banks β balance sheets, can have a substantial impact on the health of financial institutions, edis would allow risks to be shifted to the european level. this would send the wrong incentives to banks and investors alike. the mutualisation of risk would not go hand in hand with the necessary mutualisation of control rights β irrespective of the single supervisory mechanism that was put in place. the second way of restoring the balance between liability and control, meanwhile, would be to strengthen the maastricht approach based on individual responsibility. this would leave economic and fiscal policy, as well as ultimate liability for public debt, in the hands of the individual member states. but how could such a decentralised approach work better in future than it has done in the past? one of the problems in the run - up to the crisis was that the fiscal rules were incapable of effectively limiting the increase in public debt. although the rules were changed after the crisis, the european commission was granted more flexibility in interpreting them. and it has used this flexibility quite a few times so far β and always to interpret the rules very loosely. as a result, the binding force of the budgetary rules is weaker than ever before, as we can see, for instance, in the budgetary developments in france, spain and portugal. one way of ensuring that the rules are binding would be to install a new and independent authority, a fiscal council. this institution would not be exposed to the same political conflicts of interest as the commission, which has to assess whether national budgets comply with the stability and growth pact and hammer out political compromises between the interests of the different member states. " debt is a two - edged sword. used wisely and in moderation, it clearly improves welfare. but, when it is used imprudently | 0 |
to be compatible with our mandate, any new instrument would have to be justified solely on monetary policy grounds, comply with the principle of proportionality and contain sufficient guarantees to prevent it from entering into conflict with the ban on monetary financing of governments. there would also need to be an explanation of what sets the new instrument apart from omt. the final condition, relating to economic incentives, is that it is crucial that member states continue to have sufficient incentives to conduct their fiscal and economic policies in a sustainable manner and reduce their debt levels. effective fiscal conditionality is indispensable in this case. it is clear that our current focus must be on the very high inflation rates. it is important to concentrate all of our efforts on combating this high level of inflation. i would now like to thank you for listening and wish you fruitful discussions, an insightful exchange of ideas and all the best for the event. footnotes : 1. european central bank, eurosystem staff macroeconomic projections for the euro area, june 2022, footnote 10. 2. draghi, m., monetary policy in the euro area, opening keynote speech at the frankfurt european banking congress, frankfurt am main, 21 november 2014. | which has helped make up for the large number of baby boomers who are retiring and leaving the labor force. another piece of good news is that the robust conditions in the labor market are being felt by many different groups. for example, the unemployment rates for african americans and hispanics have fallen sharply over the past few years and are now near their lowest levels since the bureau of labor statistics began reporting data for these groups in 1972. groups with higher unemployment rates have tended to benefit the most as the job market has strengthened. but jobless rates for these groups are still higher than those for whites. and while three - fourths of whites responded in a recent federal reserve survey that they were doing at least okay financially in 2017, only two - thirds of african americans and hispanics responded that way. incoming data show that, alongside the strong job market, the u. s. economy has grown at a solid pace so far this year. the value of goods and services produced in the economy β or gross domestic product β rose at a moderate annual rate of 2 percent in the first quarter after adjusting 1 / 3 bis central bankers'speeches for inflation. however, the latest data suggest that economic growth in the second quarter was considerably stronger than in the first. the solid pace of growth so far this year is based on several factors. robust job gains, rising after - tax incomes, and optimism among households have lifted consumer spending in recent months. investment by businesses has continued to grow at a healthy rate. good economic performance in other countries has supported u. s. exports and manufacturing. and while housing construction has not increased this year, it is up noticeably from where it stood a few years ago. i will turn now to inflation. after several years in which inflation ran below our 2 percent objective, the recent data are encouraging. the price index for personal consumption expenditures, which is an overall measure of prices paid by consumers, increased 2. 3 percent over the 12 months ending in may. that number is up from 1. 5 percent a year ago. overall inflation increased partly because of higher oil prices, which caused a sharp rise in gasoline and other energy prices paid by consumers. because energy prices move up and down a great deal, we also look at core inflation. core inflation excludes energy and food prices and generally is a better indicator of future overall inflation. core inflation was 2. 0 percent for the 12 months ending in may, compared with 1. 5 percent a year ago. we will continue to | 0 |
of september 2013, non - performing loans accounted for 3. 5 per cent of gross loans, against 3. 1 per cent a year earlier. we are closely monitoring the evolution in credit quality. the cover ratio ( specific provision to non - performing loans ) was 41. 3 per cent in september 2013. bis central bankers β speeches 39. 3 banks continued to expand their domestic network with six additional branches set up in 2013. this brought the total number of branches, including head offices, of banks operating in mauritius to 227 at the end of december 2013, while there were a total of 450 atm β s compared with 441 at the end of december 2012. click here to return to main document 41. 1 macroprudential measures. the global financial crisis underscored the necessity to rely on macroprudential regulation, in addition to other measures, as a policy tool to curb potential systemic risk. the bank introduced the following five macroprudential measures in october 2013 : a. the loan - to - value ( ltv ) ratio aims at constraining excessive credit growth and restricting losses in the event of customer default, or decline in property prices, by imposing a cap on the size of the loans relative to the value of the properties financed. the bank introduced the maximum ltv limits as a macroprudential measure to discourage speculation, prevent excessive leverage, and reduce systemic risk associated with the rapid expansion of credit in the construction sector. customers borrowing from banks to purchase property for the first time will not be affected by these measures. b. the debt - to income ( dti ) ratio provides protection to households from debt traps and aims at containing housing credit growth. banks in mauritius use the dti as a microprudential measure to assess borrowers β repayment capability. concerned with the growing level of household indebtedness, we introduced the dti ratio to ensure that borrowers are not overleveraged whenever they borrow for the purchase or construction of a property. c. the three additional macroprudential measures consist of risk - weighted assets, additional portfolio provisions, and sectoral limits. the measure on risk - weighted assets requires banks to maintain higher risk weights in the targeted borrower segments. the additional portfolio provision ensures early provisioning against future credit losses in more vulnerable sectors. the objective behind the sectoral credit limits is to contain exposure of banks to three sectors, namely, commercial, residential and land parceling, tourism and personal. overall, these | rate, libor, rigging foreign exchange markets, and collusion among banks to undermine a government programme as in hungary. bank executives, directors, and traders have been fired or jailed. regulators are becoming unyielding in bringing offenders to justice. over time, it is expected that banks and other financial institutions will have to improve their internal controls to prevent irregularities and improper behaviour. 12. trends in global and domestic monetary policy. the recent years of global economic mayhem have put monetary policy to a severe test. central bankers everywhere have been scratching their head, reflecting on the ideal approaches to monetary policy formulation in the post - global - financial - crisis era. faced with tough monetary policy dilemmas, many large central banks, grappling with the zero lower bound, resorted to β forward guidance β as an additional tool in their arsenal, with a focus on signalling their monetary policy intentions through an enhanced communication strategy. the prolonged period of ultra - loose monetary policies around the world brought to the forefront issues such as asset price bubbles, volatile capital flows, dollarization, and imported instability. the twists and turns of monetary policy in major economies have rocked the boat for smaller central banks, pushing them in uncharted waters, and forcing them to intervene to combat currency appreciation that threatened to throw their economies out of kilter if left unchecked. 13. such has indeed been the case for mauritius, where the situation is further complicated by two idiosyncratic factors. first is the entrenched divergence of opinion among monetary policy committee ( mpc ) members, which surfaced during the year, pitting bank executives against β external β members. unlike the situation in most developing economies, our mpc comprises a majority of external members who outnumber the bank members 5 β 3. a second issue is the raging controversy around growth versus inflation, with the bank resolutely sticking to its last and not allowing itself to stray from its core mandate of price stability. mercifully, the vociferous calls from some policy quarters and interested exporters β lobbies for currency depreciation, which engulfed the bank in the first half of 2012, were no longer heard. the voting pattern in the mpc inevitably weighs on the overall credibility of the monetary policy decision - making process. the time is ripe for a review of legislation to give bis central bankers β speeches the bank operational independence in the formulation and implementation of monetary policy as is the case not just in most developing economies, | 1 |
equity can have harmful effects. to meet the financial challenge, savings have a central role to play. i will focus on two avenues for steering them into productive investment. first, savings should be reoriented towards the long - term, more easily than towards direct risk - taking. french and, more generally, european savers are more risk - averse than american ones β and this is probably not going to change. the first savings motive in the euro area is indeed insurance against unexpected events ( mentioned by more than 50 % of households ). viii but at the same time, savers are more and more concerned by the increase in life expectancies and the need to prepare for retirement : old age provision ranks as the second most important savings motive ( nearly 40 % ). ix therefore it makes sense to offer savers new, complementary forms of savings products, that are less liquid during the first years, but that include some form of longterm capital guarantee. these new products would provide financial intermediaries β in particular life insurers β with liabilities long enough to take pooled risks β in the form of equity investments essentially β and savers with the higher returns offered by equity over the long run. to promote these new products, we also need, at the very least, to avoid any tax distortions that might penalise them more than liquid and risk - free investments. second, savings should better circulate across europe, to where investment needs are. a large part of the solution lies at the european level, with the building of what i call a β financing and investment union β ( fiu ), rather than just a β capital markets union β ( cmu ). this fiu would merge together the initiatives already in place β the cmu of course, but also the juncker plan and the banking union β in order to magnify their impact through synergies and more ambitious measures. let me mention two measures for tackling obstacles to cross - border investment. firstly, the fiu would encourage the development of a pan - european venture capital ecosystem. one of europe β s most obvious limitations is indeed the size of its funds compared with us ones : the size scale varies from at least 1 to 10 given the national borders and the domestic bias in europe. this unfortunately limits european funds β ability to take on big enough equity stakes, especially in β scale up β companies β successful start - ups at a later stage. the second example concerns the regulatory | people. a crucial driver of this is the paris climate agreement. the agreement establishes a global commitment to limit global warming to well under two degrees celsius. very importantly, it provides for monitoring the reduction of emissions, and forges a pathway for more ambitious efforts, if current policies fall short of that goal. the paris agreement has sent out a very strong signal that policymakers and regulators will intensify their efforts over the coming years. the fact that the united states has withdrawn its support is of course no small setback. but i am confident that the international community will rally together, set the right example, and press on with implementing the paris agreement. today β s announcement of a climate accord between the state of california and china is a vivid example of this. china, once being amongst the world β s largest polluters, is now becoming one of the global champions of renewable energy. just a few days ago, the eu and china reinforced commitments to the paris agreement, pledging to : - cut back on fossil fuels - develop more green technology and - help raise $ 100 billion a year by 2020, to help poorer countries cut their emissions. so despite the setback, this is an encouraging development. numerous other initiatives, both on the national and international level, are already underway. allow me to name a few. at the end of 2015 the financial stability board launched a private sector task force on climate - related financial disclosures ( tcfd ). led by michael bloomberg, the task force also draws its members from the british financial sector, including ubs. the consultation period for the report ended just a few days ago. the report contains recommendations for an efficient and voluntary framework for climate - related financial disclosures. and these recommendations can be used by companies across all sectors. the potential impact of this framework, when put in practice, can hardly be overstated. for the first time, it will provide investors, lenders, insurers and other stakeholders with information about the concentrations of carbonrelated assets in the economy and exposures to climate - related risks. reliable, comparable and forward - looking information that will significantly improve your ability to assess, for example, how exposed potential investment targets are to the clean energy transition, and what they intend to do about it. information that is crucial for kickstarting a functioning market for climate - related risk. at a european level, the high level expert group on sustainable finance will submit its interim report to the european commission | 0 |
if an β inner circle β were to emerge inside the eu, finland would be part of it. so, finland joined the erm in october 1996, and introduced the euro in 1999. what has our experience been over the ten years? to what extent have the fears or the benefits materialised? interestingly, many of the asymmetric shocks feared by the opponents to finland's adoption of the euro have already materialised over this relatively short period. the ict industry experienced a strong boom - bust cycle around the turn of the century. in finland the downturn of the cycle was reflected more in growth expectations and asset prices than in production quantities. the helsinki stock exchange price index, which is dominated by the ict industry, tripled between early 1999 and early 2000, compared with an increase of dj euro stoxx of about 50 % over the same period. thereafter, both indices fell. by early 2003 the helsinki index was about 75 % below its peak, compared to about 60 % for the dj euro stoxx. also finland saw large fluctuations in its exchange rates. the exchange rate of the euro visa - vis the dollar first depreciated nearly 30 % and then appreciated by 50 %. contrary to the emu opponents'expectations, neither the positive external shock experienced at the turn of the century nor the initial depreciation of the euro served to push finland's economy into an inflationary spiral. and later on, the finnish economy was also able to weather the recession of the ict industry and the appreciation of the euro relatively painlessly. the finnish inflation rate, which was brought under control during the inflation - targeting regime before joining the emu, has remained modest. on average, since 2000, finnish inflation has been within the range of the ecb's definition for price stability and below the euro area average. the gdp growth in finland has fluctuated more or less in tandem with the euro area, but the average rate of growth has been about one percentage point higher in finland than in the euro area. throughout these years, and until very recently, unemployment continued along a steadily declining path. why have the asymmetries manifested themselves in such a subdued manner? no doubt part of it was luck. the effects of these asymmetric shocks were, to some extent, mitigated by other coincident factors, such as the success of finnish exporters on the growing chinese market. but i believe structural factors have also been significant, and the euro has | so perhaps this should be seen as an interim report. but, given the quite varying challenges thrown at us by this decade, our ride could have been a good deal bumpier. so, at least, i think this qualifies as a good start. | 1 |
affected, generating negative financial loops. we should take into account as well that a high level of corporate debt, even if not leading to defaults, can still be a drag on investment in the following years, lowering productivity and economic growth, as the experience from the global financial crisis indeed shows. these considerations can provide a rationale to use public resources to assist firms with a high level of debt produced by an exogenous shock, such as the current pandemic, but which are viable based on their medium - term perspectives in terms of profitability and productivity. however, the design of public support programmes to help viable firms improve their solvency position poses serious design challenges, related to the selection of the firms receiving the aid and the design of a structure of incentives for those firms participating in these programmes. without adequate selection criteria, there could be a poor redistribution of limited productive resources, keeping low - productivity firms running or providing support to companies that do not need it. also, an inadequate design could leave aside viable firms that face solvency problems. 1 / 2 bis central bankers'speeches this calls for a careful design of these programmes and a permanent real time evaluation of them, which, in the end, requires close monitoring of the financial situation of both non - financial firms and banks. in this regard, the banco de espana has exerted much effort in recent months in assessing the implications of the covid - 19 shock for the corporate sector. new tools based on micro simulations have been developed, making an extensive use of our micro databases, including our central balance sheet data office database, which contains information of the non - financial sector, and the spanish central credit register, which contains information on all loans provided by spanish banks to firms. some of the results of these analyses have been presented today at this conference. we also plan to regularly update these results to take into account the changing economic environment and outlook. in this regard, let me also stress the relevance of firm surveys as a very useful tool for monitoring real time developments in the corporate sector, especially bearing in mind the long time lags of hard data at the micro level. in this regard, last november the banco de espana launched a new business activity survey to compile first - hand information on a quarterly basis about companies β activity in the current quarter and about the immediate outlook. the survey compiles qualitative information about firms β perceptions as to the course of turnover, employment and prices. given the current economic environment, additional | pablo hernandez de cos : how to assess corporate sector developments in real ( pandemic ) time closing remarks by mr pablo hernandez de cos, governor of the bank of spain and chair of the basel committee on banking supervision, at the bank of spain and european investment bank conference " recovering swiftly to limit covid - 19 scarring of spanish corporates ", 29 april 2021. * * * good afternoon. it is a great pleasure for me to close this conference we have jointly organised with the european investment bank. this is the third conference our two institutions have co - hosted on issues related to the spanish corporate sector, and i greatly appreciate the collaboration between our institutions. a collaboration that itΒ΄s now well established. the topic of this conference is most timely and relevant. this morning the european systemic risk board ( esrb ) organized a virtual event on which i had the opportunity to participate as chairman of its advisory technical committee, whose focus was precisely on β corporate insolvencies and public support measures β and where we have presented an esrb report on β prevention and management of a large number of corporate insolvencies β. the motivation of this report is indeed very similar to the discussions you have had in this seminar. economic policies have played an important role in mitigating the impact of the covid19 shock on our economies. and precisely thanks to these policies, and despite the significant fall in economic activity, we have not so far observed a significant increase in business mortality rates for existing firms. however, the corporate sector faces major challenges down the road. against a backdrop of lower expected cash flows and higher debt, the solvency position of some firms has worsened, especially in the case of those operating in sectors more adversely affected by the pandemic that are still facing some restrictions. thus, with the crisis stretching out, concern has now shifted from liquidity risk to the deterioration of the solvency position of firms. therefore, economic policies should now focus on supporting viable businesses whose solvency has worsened as a result of the covid - 19 shock, given that the potential liquidation of these firms would be a drag on economic recovery via different channels. first, due to the loss of employment and capital that follows the closure of any company. second, firms β solvency problems may end up affecting the health of lenders if these problems are significant and widespread within the corporate sector. and third, in extreme scenarios, the ability of of some banks to provide new lending could be | 1 |
70th anniversary today and the new m. p. was juha sipila, who forming a new government today. the agenda has developed but not fundamentally changed. we have three major tasks. 1. we need to restore cost competitiveness of our economy. this is the pre - condition to create growth and jobs. social partners. 2. we need to make structural reforms to promote growth and improve possibilities to create jobs. here the new government needs to move fast with decisions and their implementation. 3. we need to consolidate our public finances. we cannot move a growing debt burden to our children and grand - children. here we need a strong government and functioning relations between social partners. today i want to congratulate oras for its 70 - year history. i want to extend my congratulations to all in the company, the employees, the management, and the owners. the success has required major efforts for a long time from all of them. thank you! bis central bankers β speeches | zhou xiaochuan : the opening - up of chinese economy - from manufacturing industry to service industry keynote speech by mr zhou xiaochuan, governor of the people's bank of china, at the 2017 lujiazui forum " financial reform and steady development from a global perspective ", shanghai, 21 june 2017. * * * distinguished guests, ladies and gentlemen, good morning! it β s a pleasure to attend the 2017 lujiazui forum. china has built a socialist market economy to promote social and economic progress and reach prosperity through competition and optimal resource allocation. during this process, opening - up has played a significant role. i β d like to share my understandings of opening - up based on relevant international and domestic experiences. 1. the opening up of manufacturing industry turned china into a world factory the manufacturing industry of china opened up relatively early. there were different opinions on opening in the early days, but it was relatively easy to reach a consensus. this made the manufacturing industry an adequately opened industry. an observation on the opening - up of the manufacturing industry showed that most industries which participated in opening - up and competition early grew faster and became stronger eventually. opening - up is a process of optimizing the resource allocation by market force and competition mechanism. specifically, in terms of bringing in foreign capital οΌ we opened up via importing foreign products and inviting foreign companies to invest and build factories in china, which in turn competed with domestic companies. before reform and opening - up, chinese companies had no foreign competition and only little domestic competition. the pressure of competition has driven industrial firms to make great progress. in terms of going global, domestic firms compete with global players via export and doing business internationally. at the beginning, chinese companies rarely participated in international competition and only exported commodity related products. in the 1980s, very few believed that chinese manufacturing products export could have a bright future. as a result of opening - up, both processing trade products and manufactured products were able to compete globally and domestic firms started to go abroad. instead of losing the competition, chinese manufacturing industry and chinese firms experienced fast growth. china became a leading manufacturing country and gained the reputation of world factory. many industries have been moving to the higher end of global value chain. it is competition that breaks up monopolies. there was a less competitive environment in china, especially among the foreign trade enterprises. foreign trade companies, including sinochem, china minmetal, cofco and etc. were divided | 0 |
mark w olson : regulatory update - banking industry, insurance and securities activities remarks by mr mark w olson, member of the board of governors of the us federal reserve system, at the bank insurance and securities association legislative, regulatory and compliance seminar, washington dc, 10 june 2004. * * * introduction many thanks to the bank insurance and securities association ( bisa ) for inviting me to speak to you this afternoon. financial modernization, characterized by the ever - increasing ability of financial services firms to offer banking, securities, and insurance products, introduces new challenges as well as new opportunities. from the perspective of the federal reserve board, i β d like to discuss compliance and riskmanagement issues for banking organizations that are beginning new, or expanding existing, insurance sales activities. i β d also like to offer a few observations on the β push - out β provisions being drafted by the securities and exchange commission to require certain securities - related activities previously conducted by banks to be removed from the banks and β pushed out β to an entity that is a licensed, sec - regulated securities broker - dealer. my comments today are my own and do not necessarily represent the views of my fellow federal reserve board members or the federal reserve system. background following enactment of the mccarran - ferguson act in 1945, supervision of insurance was almost exclusively the domain of the states. therefore, for most of the past century, we - that is, the federal reserve and state insurance supervisors - have traveled in different circles. the federal reserve has had very little to do with insurance issues because banks and bank holding companies have generally been involved only in credit - related insurance sales and underwriting activities. in fact, the federal legislation that charges the federal reserve with supervising bank holding companies - the bank holding company act of 1956 - was enacted in large part to prevent the affiliation of one of the largest banks in this country with a large insurance underwriter. congress went on to strengthen the separation of banking and insurance in 1982 with an amendment to that act generally prohibiting bank holding companies from engaging in insurance agency activities. the historic statutory separation of banking and insurance was ended in november 1999 by the gramm - leach - bliley act ( glb act ), which allows well - managed and well - capitalized banking organizations to affiliate with any kind of insurance underwriter and insurance sales and brokerage firms not just those that offer credit - related financial services, such as insurance to pay off a loan in the event of a borrower β s death or disability | of instability, and what reforms, if any, should be considered? as i pointed out earlier, one recurring theme in the debate has been the question of reserve assets. our second panel, chaired by george soros, will examine ways to improve the supply of reserve assets. is a diversification of reserve assets desirable, and if so, should it be actively promoted? is there a greater role for sdrs in the international monetary system, and if so, what reforms would be required to give sdrs a greater role? over the past decades, private capital flows have greatly increased. although capital account liberalization is clearly beneficial in the long run, it entails significant short - run vulnerabilities. the third panel, chaired by duvvuri subbarao, will take up the question of how to deal with these vulnerabilities. what are the appropriate policy responses, and what is the role for regulation and capital controls? one policy response has been the accumulation of reserves, which can provide a temporary shock absorber. however, reserve accumulation entails costs for the countries accumulating reserves as well as for the world economy as a whole. our last panel, chaired by masaaki shirakawa, will discuss alternatives to self - insurance. an obvious question here is the role of imf lending facilities. as already mentioned, the questions we address today are difficult and complex. someone who played an important role in trying to address them over several decades was jacques polak. sadly, he passed away earlier this year. reflecting on the efforts to reform the international monetary system since the bretton woods conference, jacques polak once suggested that β those of us who toil at the international monetary system would do well to adopt sisyphus as our patron saint β. in honor of jacques polak, let us then push the stone back up the mountain once more and start with our first panel. thank you for your kind attention. | 0 |
an equity fund either to inject capital into key companies, especially for those operating in european strategic value chains, as identified by the commission in november 2019. beyond that, several economists β including elena carletti, professor of finance at bocconi university β have proposed the promising avenue of a temporary β european pandemic equity fund, β iii which could be managed by the eib. this could take the form of hybrid capital instruments, with no voting rights but a significant remuneration of the public investment, and a predetermined termination option for the firm. in addition, the recovery fund could consider a specific tool to buy - back some assets from banks. b / a clarification of fiscal rules. the counterpart of financial solidarity is the responsibility of member states. the current sgp [ stability and growth pact ] page 9 sur 10 rules β are at once too complex and not credible enough. obviously, there is a need to maintain fiscal rules β let me stress it, at the risk of unpopularity β but for them to evolve towards greater clarity and better ownership and compliance by member states. the european fiscal board interestingly proposed relying on a ceiling on the growth rate of primary public expenditure, net of discretionary revenue measures iv. c / making headway with a financing union for investment and innovation. private risk - sharing mechanisms, which are less frequently considered than public ones, are just as important and effective, as we can see in the us where capital markets play a more important role as a buffer between states than fiscal transfers. here, solidarity and responsibility are mutually reinforcing. the euro area has an abundant, and rarely mentioned, resource at its disposal : a savings surplus relative to investment, which amounted to eur 360 billion last year. this resource is currently invested outside the euro area, even though our potential investment needs are substantial. a better allocation of european private savings requires more efficient crossborder financing channels β savings are not always where the investment need arises β and more efficient β transformation β : preferred savings instruments are often short - term and safe, while financing needs are often longer - term and riskier. this requires the combination of a more effective banking union and a β capital markets union β, to make a genuine β financing union for investment and innovation β. european governments all agree in principle ; let us now at last walk our talk, as a significant private booster to our collective exit strategy. d / keeping in place an accommodative monetary | , changes in world - wide trends on secured currency, and the costeffectiveness of production and handling. our banknotes began with paper substrate but since 1991 we have moved on to introducing polymer notes, the second country outside australia to do so. we find polymer banknotes more cost - efficient, more durable and last longer, especially in our humid png climatic conditions. the new five kina polymer banknote to be launched this afternoon is the last denomination to be converted and completes the series of polymer banknotes. advanced security features are incorporated in the latest series of our banknotes as protection against counterfeiting. we have also standardized the main theme running throughout all our banknotes. on the back of our banknotes, we retain our traditional forms of money ( for the 2, 5, 10 and 20 kina ), the grand chief sir michael somare appears on the k50 note depicting our road to nationhood and guardianship of our country. the progress in economic and technological development is reflected on the back of the k100 note. on the front of each of the banknotes, you will note that we now have the image of the national parliament. this family of notes using the β parliament theme β shows different aspects of the parliament house together with a smaller image of the national crest. these are symbols of nationhood. papua new guinea is predominantly a cash - based economy and will remain so for some time. the majority of our people will continue to use cash ( coins and banknotes ) as the main form of payment in settling their transactions, in conducting their business activities and meeting social obligations. we at the bank of papua new guinea will therefore ensure that our currency are of an acceptable standard, are durable, and longer lasting, given our tropical humid conditions and the frequent and rough handling of currency by the public. for this reason, the bank has introduced a clean bank note policy to maintain the standards and increase public awareness of the quality of our currency. with these few remarks, ladies and gentlemen, it gives me great pleasure to invite our minister, honourable patrick pruaitch to officially launch the new five and ten kina banknotes. | 0 |
of $ 40 billion per month, and has stated its intention to continue purchasing assets until it sees substantial improvement in the outlook for the labor market, conditional on ongoing assessment of benefits and costs. combined, these actions are intended to ease financial conditions and thereby help to establish a selfsustaining economic expansion. turning to recent developments, incoming data on the u. s. economy have been mixed of late. based on the advance estimate, real gdp declined slightly in the final quarter of 2012, which was below the consensus expectations of an increase of around one percent. in addition, in january payroll employment rose by just 157, 000, below the 200, 000 average monthly gain in the fourth quarter, and the unemployment rate edged up to 7. 9 percent. offsetting these soft indicators, we see evidence beneath the surface that private demand firmed in the final months of 2012 and has been reasonably well maintained thus far this year. taking into account price changes, the january retail sales data were reasonably strong. consumer spending, particularly for durable goods such as motor vehicles, has clearly strengthened. light - weight motor vehicle sales in january were well above the average pace of the first quarter of 2012. this stronger durable goods spending reflects some improvements in labor market conditions, consumer confidence, household balance sheets and access to credit. another major plus for the economy entering 2013 is the housing market, with upward trends evident in housing starts, home sales and home prices. to see why this is so important, in 2009 residential investment was a 0. 4 percentage point drag on growth of gdp, while in 2013 it is likely to provide a boost to growth on the order of 0. 5 percentage point β a swing of nearly a full percentage point. business investment in equipment and software, another component of private final demand, strengthened in the fourth quarter, and orders for nondefense capital goods have moved higher in recent months. indicators of the u. s. manufacturing sector have begun to look a bit brighter as well, with the ism manufacturing index at its highest level since last april. survey - based indicators of manufacturing activity also have begun to improve in several other major economies around the world. of course the quickening pace of auto, home, and capital goods sales and orders, all interest - sensitive goods, is consistent with the highly accommodative stance of monetary policy, which not only lowers interest rates but enhances credit availability as well. along with these positive economic developments, there has been a notable increase | and building a business, and by building better transportation, power and telecommunications infrastructure. and they are about broadening access to and improving the quality of public education. allowing competitive pressures to operate is undoubtedly the best way to foster the investment, innovation and risk - taking that is central to raising an economy's long - run sustainable growth rate. but markets can't solve all problems, and they don't always function perfectly. this means that the policy imperative isn't simply to reduce regulation ; it is to improve the design of the regulations that are important to dealing with market failures. finally, future growth outcomes will depend importantly on the success of governments in fostering the development of the domestic financial system. this requires not only stronger financial intermediaries and better supervisors, but deeper and more liquid capital markets that provide greater access to capital for firms and greater freedom for households to borrow and to invest their savings. certain features of today's emerging economies, notably the size of current account surpluses and the high levels of reserves, tend to be seen principally as sources of comfort against future crises. but you can also look at these phenomena as measures of the incompleteness of the institutional changes achieved in the monetary and financial arena, and as a sign of the persistent ambivalence in the emerging world about financial integration. the current account surpluses are, of course, the mirror image of the high rates of savings relative to investment. there are a range of factors that affect the flows of goods and services across international borders, but the sustained outflow of funds from some emerging economies witnessed in recent years may have as much to do with the limited intermediation capacity of the local financial systems as with the scarcity of profitable domestic investment opportunities. and in this sense you can read a large current account surplus as a sign of financial sector under development rather than of financial strength and maturity. the pattern of intervention in exchange markets and the scale of reserve accumulation provides a similar perspective on the challenges ahead. policymakers in many emerging markets still reveal a substantial degree of reluctance to allow the exchange rate to adjust to market forces. part of this is aversion to appreciation, and part of it aversion to variability in the exchange rate. in this sense, the high level of reserves today could be read less as an indication of fundamental strength than as an indication of the need for more progress toward completing the transition to a modern monetary policy regime. even though reported inflation in most emerging economies has been moderate | 0.5 |
the formal banking system. we understand the role digital transformation will play in our economic growth and financial inclusion but one of the key challenges we face are those of secure identity for our remote citizens. as a png citizen, i know how difficult, costly and time - consuming it can be to secure identity documents and this becomes an insurmountable challenge when you come from a rural village with little access to our formal sector. we worked with the adb and a private company, digizen, to develop the first digital i. d. product made specifically for papua new guinea. 6 / 7 bis - central bankers'speeches through this process we better understood what we, as the regulator, need to consider for the adoption of digital identities for banking. to strengthen our systems and encourage the use of digital ids, the financial analysis and supervision unit, fasu, responsible for overseeing the anti - money laundering and counter terrorism financing act, has issued a guidance document for digital identity that is currently under review by regulated financial institutions. all going well, it should be launched shortly and it will provide direction to our financial institutions on digital identity requirements. we are also working to identify policies and practices that, in the past, would have deterred people from opening and using bank services. these include, but are not limited to, the high cost of transaction fees and account charges. as we identify key barriers, we will implement more initiatives to promote the use of the formal financial system and significantly lower our people's reliance on cash. we also want to introduce more products that help our rural communities. our regulatory sandbox has commenced testing of another new product, pinbox, which will work with insurance and pension providers for all papua new guineans to have the option to save for their retirement through high - quality products from reputable providers β no matter where they are located or what their incomes are. the bank of papua new guinea is taking steps to ensure a modern and inclusive financial system that delivers the best outcomes for our people. we cannot continue to do the same things and expect a different result. we need to adopt policies consistent with a modern, international and growing economy. this may sometimes require bold β and perhaps unpopular β decisions, but we know they are the right ones to build the foundation for the future success of papua new guinea. thank you for inviting me to present today. i look forward to the remainder of this session and the discussion to follow. 7 / 7 bis - central bankers'speeches | more collaborative discussions also in the areas of macro - prudential and general risk - based supervision. such discussions should translate to some initiatives for future capacity building and implementation of frameworks in our respective jurisdictions. financial inclusion and financial literacy ladies and gentlemen, we all know that a greater majority of our people in the pacific are financially excluded or unbanked. there is a clear call for action in the area of financial inclusion and financial literacy. since the setting of the alliance for financial inclusion ( afi ), central banks globally, and clearly in our region also, are taking the forefront in leading efforts to ensure banking services reach the unbanked. almost all pacific islands central banks have announced their commitment to the afi maya declaration with timor leste being the latest in the region to declare its commitment in the recent afi global policy forum this month. bis central bankers β speeches it is not the traditional activity of the central banks to lead this work but we cannot sit back and expect something to just happen, for we know that nothing happen in the past. we have to develop policy frameworks and provide environments conducive for our financial institutions to bring their banking services to the un - banked. the central banks have succeeded in undertaking lead roles due to their institutional credibility to ensure that the unbanked populations in the region is included in the monetization of our respective economies. human capacity development ladies and gentlemen, in order for us to enhance our supervisory approaches and to effectively discharge our supervisory responsibilities as mentioned, we need to develop our human capacity and equip our supervisors well. we have to continue to put emphasis and resources in this area to ensure our human capital is in tune with constant changes in risk profiles of our financial sectors. you would have noticed that the skill set required for supervision has expanded as financial services have become complex. the constant adoption of technological innovations and enhanced financial products being developed and offered by our financial institutions means that we also need to train and develop technically competent supervisors to keep abreast with the changes. conclusion before i finish, i wish everyone a fruitful week. i am sure that at the end of this week, you will have discussed issues, challenges and developments in your respective supervisory jurisdiction and your plans going forward. i presume these discussions and networking with each other will be very beneficial in our efforts to have a sound and stable financial system in our region. having said that i wish everyone who has travelled in a memorable and enjoyable stay in port moresby. | 0.5 |
njuguna ndung β u : first in development address by prof njuguna ndung β u, governor of the central bank of kenya, at the first consultative group meeting, nairobi, 24 november 2008. * * * chair, governing council of the first initiative ; distinguished members of the council here present ; management and staff of the first initiative program management unit ; distinguished guests ; meeting participants ; ladies and gentlemen : i am pleased to be here this morning at the opening of the first initiative consultative group meeting. my thanks go to the governing council and the program manager for the kind invitation. allow me also to thank first initiative for choosing to host both the governing and consultative group meetings in nairobi famed as β the green city in the sun β. i would also wish to welcome you all to nairobi and hope that you will extend your stay to enjoy the varied and scenic delights that kenya offers. ladies and gentlemen : this is indeed a β watershed β meeting that comes after the completion of the first four year mandate of first initiative. i am informed that first initiative began its operations in 2002 with a five year mandate that was successfully completed in 2007. the mandate was to provide technical assistance to support growth and poverty reduction in low and middle income countries by promoting a financial sector that was stable, deep and diversified. this is indeed a noble objective and it is therefore gratifying to note that first will now enter a second phase of operations to run to the end of 2012. role and significance of first in development first mission to deliver flexible, top - quality technical assistance related to financial sector is welcomed in the region where the role of the financial sector is recognized as an engine for development. most of you in this room can remember vividly the days of financial repression when government legal restrictions prevented financial intermediaries in the economy from functioning at their full capacity. the regulations generally included interest rate ceilings, compulsory credit allocation, and high reserve requirements. the development philosophy has shifted away from direction and control. governments of developing countries have now realized the great potential of the financial sector in fostering development. the formation of first as an institution was to help developing countries tap the potential support to the development of the financial sector. the fact that first initiatives always come in after financial sector assessment program ( fsap ) and other assessment have been undertaken by the imf and the world bank signals to governments of developing countries that our partners not only perform a β health check β of our financial system but they also | β the risks and prospects for the global economy and capital markets in 2017 β keynote address by professor john ( iannis ) mourmouras * deputy governor, bank of greece at amundi - omfif asset and risk management seminar entitled β risk and yield management for official asset managers in a multicurrency system β london, 24 january 2017 disclaimer : views expressed in this speech are personal views and do not necessarily reflect those of the institutions i am affiliated with. * ladies and gentlemen, today, as policies and capital markets seem to be moving from the β unconventional era β and β great distortion β towards β gradual normalisation β, i would like to discuss not only the prospects, but also the challenges we face head - on. let me start by offering my own insights into the global market outlook. 1. global economic outlook for 2017 the world economy 2017 will be very different from 2016, in many respects. if 2016 will be remembered as the year of brexit and donald trump β s election, 2017 i foresee may well be remembered for developments in the european continent. i refer to the national elections and the associated political uncertainty that may trigger further changes in the eurozone and the broader european union, as we know it today. two other key topics will be the new us economic policy under president trump and the end of the dominance of central banks, which will pass the torch to fiscal policy across the globe. in 2016, performance in the world β s major capital markets has been low by historical comparison, reflecting the salient events over the course of the previous year. i will show you only one figure depicting 2016 in six charts and refrain from any further comments about last year, as the bank of england β s chris salmon will provide a thorough overview of financial market developments in 2016 later this evening. figure 1. 2016 in six charts the imf β s latest macroeconomic projections, released last week, suggest that recovery is on the way β this year once again. a pick - up in global real gdp growth is expected, from 3. 1 % in 2016 to 3. 4 % in 2017, driven mostly by a rise in emerging markets β growth ( 4. 1 % in 2016 to 4. 5 % in 2017 ) and secondarily by a pick - up in advanced economies β growth ( 1. 6 % in 2016 to 1. 9 % in 2017 ) ( see figure 2 ). also, headline consumer price inflation in advanced economies is forecast to | 0 |
amando m tetangco, jr : the cornerstones of a thriving economy opening speech by mr amando m tetangco, jr, governor of the central bank of the philippines ( bangko sentral ng pilipinas ), at the 2007 awarding ceremony for bsp stakeholders, bangko sentral ng pilipinas, manila, 4 july 2007. * * * members of the monetary board, distinguished guests ; heads, chief executive officers and personnel of our partner firms ; my colleagues at the bsp ; ladies and gentlemen : magandang umaga po sa inyong lahat! on behalf of the members of the monetary board as well as the men and women of the bangko sentral ng pilipinas, i thank all our stakeholders, the media, and other special guests for joining us this morning. today, we give recognition to our partners from the business and government sectors who regularly invest time and effort to provide complete and reliable information to us. these are vital statistics and information that guide the bangko sentral ng pilipinas in formulating appropriate and timely policies and programs. indeed, one cannot overemphasize the importance of having complete and accurate information as basis for making decisions that can significantly affect a big number of our people. in fact, the cornerstones of a thriving economy are reliable, timely and complete information. otherwise, it would be garbage in, garbage out. gaining public recognition for the importance of statistics and information that we produce, monitor and disseminate therefore is a continuing undertaking with you as our information providers. i am pleased to report that the dividends from our partnership have been highly encouraging. among others, this partnership has allowed the bangko sentral to be forward - looking and information - intensive in the formulation of monetary and financial policies. as a result, we have been doing quite well insofar as our monetary policy is concerned. in fact, even as oil prices are hitting historic high levels, we manage to tame inflation at low and stable rates : in june 2005, for instance, our inflation rate was 7. 6 % ; last may, it had dropped to 2. 4 %, a level comparable to those in developed countries. it is also significant to note that even as we continue to experience solid and broad - based economic growth, we have been able to keep the lid on inflation, maintained interest rates at low levels, and the peso stronger. meanwhile, the bangko sentral this year gave a | amando m tetangco, jr : leading the way toward growth and development speech by mr amando m tetangco, jr, governor of the central bank of the philippines ( bangko sentral ng pilipinas ), at the inaugural blessing of the newest branch of one network bank in sasa, davao city, 20 july 2007. * * * archbishop capalla, mayor duterte, the officers and staff of one network bank ( onb ), fellow bankers, special guests, maayong gabi - i sa inyong tanan! on behalf of the bangko sentral ng pilipinas, i congratulate onb on the inaugural of its head office branch, the 65th in its network of branches within mindanao. these 65 branches exclude the five new branches that have just been approved by the bsp. now a leading rural bank, onl has positioned itself as a catalyst for economic growth in mindanao, with a presence bigger than other private banks. one network bank : making a difference in mindanao in particular, onb β s support for the agriculture sector including small farmers is most commendable. i understand that onb β s loan exposure to agriculture is among the highest in the industry and it continues to grow : it was p1. 1 billion in march 2006 and by march this year it had reached p1. 5 billion! we also recognize the bank β s contribution in financing the development of the education, health and services sectors in mindanao through credit facilities that are made available to various institutions such as schools, hospitals, and local government units. in addition, onb has responded positively to bangko sentral β s policy to encourage technological innovations that translate to more efficient and convenient ways of facilitating access to banking services. for instance, onb paved the way for the investments by rural and cooperative banks in automated teller machines. in addition, onb β s focus to expand its remittance services resulted in partnerships with commercial banks and money transfer companies. onb has also applied for its own fcdu license. this is aligned with bangko sentral β s policy to encourage more overseas workers to transact through the banking system. the way forward indeed, judging from its involvement in countryside banking, onb has become a model among rural banks in terms of both financial soundness and social responsibility. tonight, therefore, i ask the men and women of onb to sustain onb β s performance and enhance the bank β s | 0.5 |
on asset prices and would have further reduced credit availability for households and businesses. but we are not out of the woods yet. for many borrowers, credit remains much harder to get and far more expensive than it was in the summer of 2007. some reductions in leverage and tightening of credit conditions relative to earlier this decade clearly were needed, and i expect that lower leverage and tighter lending standards and terms will be enduring features of the financial landscape. but current credit conditions are far tighter than these adjustments would seem to justify. many financial markets remain under considerable stress, asset prices have been reduced by the lack of liquidity in markets, and credit spreads and availability still reflect very high aversion to risk. these conditions are not conducive to a substantial and sustained economic rebound, and the federal reserve will continue to be alert to ways that monetary policy can contribute to economic recovery. we are also conscious of a potential adverse feedback loop between persistent economic weakness and a continuing decline in inflation and inflation expectations. with the federal funds rate about as low as it can go, significant further decreases in inflation as a result of the substantial slack in resources, lower import prices, and declines in the prices of oil and other commodities could imply an increase in the real federal funds rate. indeed, if such a process continued for some time, we could fall into deflation, much as japan did for a time in the 1990s and earlier this decade. then again, the substantial increase in the size of the federal reserve's balance sheet as a result of the credit programs that have been implemented have led some to worry that inflation could rise sharply when the economy recovers unless the federal reserve moves quickly when the time comes to unwind the programs and limit the growth in credit. because inflation expectations play a key role in the setting of prices and wages, firmly anchored inflation expectations can help avoid both of these outcomes. to help anchor inflation expectations, the fomc is now providing extended projections of inflation β along with growth and unemployment β in its quarterly economic projections. to improve transparency regarding its programs to help stabilize the financial sector, as well as its other operations, the federal reserve has established a resource, credit and liquidity programs and the balance sheet, on its website that provides detailed information on credit and liquidity programs and the federal reserve β s balance sheet. to address concerns about its ability to rein in its balance sheet, the federal reserve must be prepared to exit from its various programs when the time is right. we | mr. ferguson speaks on the future of the financial services sector remarks by mr. roger w. ferguson, jr., a member of the board of governors of the us federal reserve system, at the college of management of the university of massachusetts in boston, massachusetts on 27 / 10 / 98. some observations on the future of the financial services sector and related public policy issues let me first thank you for your invitation to speak today at this very topical conference. the future of the financial services sector holds great interest for industry participants as well as bank regulators, given the remarkable changes affecting the industry. developments in this sector will affect all of us. we are all acutely aware of the trend toward the blurring of lines that have separated the various parts of the financial sector, particularly commercial banking, investment banking, and insurance. most recently, we are faced with the prospect of the formation of huge financial conglomerates, composed of amalgams of firms that have previously operated within the roughly defined boundaries of their respective industries. in addition, we have witnessed a substantial degree of consolidation through mergers in the commercial banking and other industries. i will begin my remarks today by discussing historical experience with conglomeration in the us, and the underlying conditions necessary for conglomeration to be a successful business strategy. i will then offer some thoughts regarding what the financial services sector may look like in the future. finally, i will address some of the issues that the federal reserve as a supervisor and regulator will need to consider. there are several conclusions that i would like to highlight. the first is that the movement to financial conglomerate may prove to be transitory. second, basic financial and risk management skills will likely remain the most important determinant of a company β s viability and success. third, even in a world of financial conglomerates there will be room for smaller, and more nimble, participants. finally, the supervisory and regulatory structure will need to evolve to meet these new challenges, but regulatory authorities should remain vigilant to carry out our duties, particularly in enforcing the antitrust laws. ii. will financial service conglomerates be successful? the historical context of conglomeration the concept of the financial conglomerate is receiving a great deal of attention at this time because of the diminishing distinctions across financial industries. however, the success of such conglomerates is certainly not guaranteed, based on historical experience. for an illustration, one need only look back to the conglomerate merger movement in the industrial sector during the 1960s | 0.5 |
andreas dombret : the euro β taking off or staying grounded? speech by dr andreas dombret, member of the executive board of the deutsche bundesbank, at the american council on germany, chicago, 14 october 2014. * 1. * * introduction ladies and gentlemen, i thank you for the invitation and the opportunity to speak here today. there are surely few places more aptly suited for a meeting of the american council on germany than chicago. in the aftermath of the failed german revolution of 1848, chicago welcomed germans seeking political or economic refuge. the german population in chicago rose fivefold in five years, amounting to one - sixth of the total population of chicago in 1850. and the β forty - eighters β, as they soon became known, turned out to be only the vanguard of a sustained wave of german immigration into the us, and into the midwest in particular. in a sense, the person standing in front of you today is also part of this wave, since i originally hail from des moines. but i admit that this ripple is a rather belated one. charles de gaulle once said : β there are no friendships between states, only alliances. β my personal experience is a different one. i believe that in the case of the us and germany, our myriad personal and historical ties do translate into a friendship even in the public domain. but de gaulle is of course right in that relationships between states are defined by interests as much as by anything else. here, too, our countries are bound together tightly. being a central banker, i will confine myself to our shared interests in the economic and financial sphere. and being part of the eurosystem, i will concentrate on what is in the mutual interest of both germany and the us : the conditions for a sustained and stable recovery in the euro area. 2. the economic situation in the euro area the already modest economic recovery in the euro area faltered in the second quarter. seasonally adjusted gdp remained unchanged in spring. the biggest three economies β germany, france and italy β did not provide any growth impetus, with germany and italy contracting by 0. 2 % and france β s economy stagnating. euro - area gdp is still 2. 4 % below its pre - crisis level, and indicators suggest only a moderate upward movement in the coming quarters. looking at the recovery so far, one could be reminded of a starting aeroplane. it has entered the runway and begun to roll, but it not yet | for the biggest banks, these numbers are sizable by any measure, especially considering that the proposed basel iii leverage ratio is 3 %. doing away with the preferential tax treatment of debt could therefore provide a major boon for financial stability. of course, equity still carries a risk premium, since it comes first with regard to absorbing gains as well as losses. but if equity ratios are low, debt must bear a bigger part of total risks, which makes it more expensive β at least when banks are allowed to fail. correspondingly, higher equity ratios will lower the cost of a given unit of equity, since risks will be more widely shared, and the cost of debt will also go down. the total cost of capital will therefore be unchanged, regardless of the equity ratio. 5. conclusion ladies and gentlemen, let me conclude. with regard to macroeconomic imbalances, much has already been achieved in the euro area. but for the recovery to reach take - off speed, more is required in terms of structural reforms. to make sure financial turbulences do not knock the monetary union off course, resolution regimes should be strengthened so that banks do not hold each other β s loss - absorbing liabilities. and to further strengthen banks β equity buffers, the preferential tax treatment of liabilities should be abolished. thank you for your attention. de mooij, ruud a. and keen, michael and orihara, masanori, taxation, bank leverage, and financial crises ( february 2013 ). imf working paper no. 13 / 48. bis central bankers β speeches | 1 |
domestic demand remains robust. more fundamentally, the continued rise of china and the formation of the asean economic community ( aec ) will generate enormous economic opportunities for the region. as will be discussed later, the key challenge for thailand will be how to optimally position ourselves to reap the full benefits of this trend. this brings me to the internal challenges. the overriding focus for thailand this year is ensuring domestic recovery and restoration after the devastating floods in 2011, as well as putting in place short and long - term plans to prevent a repeat of these events. the damage from the floods was severe, with widespread disruptions in the agriculture and manufacturing industries in affected areas. as a result, economic activity contracted by 9 per cent year - on - year in the last quarter of 2011 and the economy barely grew over the year as a whole. bis central bankers β speeches in the face of such dramatic numbers, it is important to remind ourselves of the nature of the shock that thailand faced. floods, like other natural disasters, are temporary one - off events. they hit you out of nowhere, but then disappear. this is very different from growth slowdowns due to inherent weaknesses in the economy, such as financial crises. as we are witnessing in many parts of the developed world, such retrenchment in economic activity tend to be long - lasting as previous excesses have to be worked out from the system. the aftermath of one - off shocks, on the other hand, is generally characterized by rapid resumption of economic activity as things get back on track. thus there is no question that thailand will recover quickly and strongly from the floods. we project that economic growth will rebound to 4. 9 percent in 2012, boosted by private and public spending for post - flood restoration. in 2013, economic growth is projected to gather momentum, expanding by 5. 6 percent. this positive trajectory reflects a number of key fundamental strengths in the thai economy. first, our human capital remains intact and strong. thailand β s flexible and skilled workforce will continue to provide a solid foundation for businesses to flourish and expand. second, the corporate sector boasts healthy balance sheets from accumulated savings and profits, enabling them to rebuild and invest. third, the banking sector is strong and well - placed to provide the financing necessary to sustain the investment cycle. finally, thailand is well positioned geographically to serve as a supply - chain hub for many industries and to reap the benefits of an expanding as well as more integrated asian economic block | , which were adapted after hearing their input. other federal reserve partnerships with indian country include initiatives on access to credit ; native community development financial institutions ; financial education programs tailored to early childhood, secondary, and higher education ; workforce development ; housing ; social services ; and elder programs. and as part of our ongoing effort to deepen our understanding of tribal economies, last year, the federal reserve board announced that we had joined the central bank network for indigenous inclusion, along with the reserve bank of new zealand, the bank of canada, and the reserve bank of australia. this is part of our commitment to learning best practices and expanding our international partnerships with central banks that are similarly invested in supporting indigenous people and communities. - 3the federal reserve works for all of us, and our research and analysis must reflect the specific needs and circumstances of all of our communities. i am grateful for our partnership with the national center for american indian enterprise development, and i want to thank you, as well as all our colleagues, advisors, and stakeholders who help us work toward a stable and inclusive economy for all. thank you. | 0 |
of the data ), new services could be developed to facilitate personalised financial services. more generally, the advent of β big data β analytics to generate insights into behaviours of individual consumers has increased interest in access to data on consumer payments behaviour. but with more data being stored and shared, data security ( and cybersecurity more generally ) will be important ongoing issues for the industry and for regulators. incumbent financial institutions invest a lot in securing their customers β data and in managing fraud in payment systems. mostly they do this without the need for regulators to be involved because it is in their interests to ensure that they maintain the trust of their customers. but with new participants and new technologies, there is a risk that security vulnerabilities and opportunities for fraud will arise. the strength of the system is only as good as its weakest link so it is essential that all participants in payment systems and the financial system more broadly manage and mitigate these risks. regulators may have a role to play in encouraging the adoption of minimum standards. resilience the final area i want to focus on is resilience of payment systems. traditionally, central banks and regulators have paid a lot of attention to the resilience of high - value payment systems because of the systemic disruption that would likely occur if such systems were to suffer from an outage. high - value payment systems are therefore subject to high standards of operational resilience. 4 / 5 bis central bankers'speeches retail payment systems have not usually been required to meet similarly high standards. but, with electronic payments becoming increasingly important, the resilience of the electronic retail payment systems is becoming quite critical to the smooth functioning of economies. with people carrying less cash, an outage in a retail payment system can mean that customers can β t undertake transactions. in australia, for example, an outage at a major bank recently meant that its merchant customers had to turn customers away if they didn β t have cash ( and many didn β t ). these sorts of outages disrupt commerce and erode trust of consumers in payment systems. regulators are therefore starting to focus on the operational risks associated with retail payment systems and whether the operators and the participants are meeting appropriately high standards of resilience. conclusion there is a lot of change happening in retail payments and it is happening quickly. financial technology is facilitating the development of new payment products and the entry of new participants, and potentially transforming the customer experience. it has the potential to enhance competition and increase | addition, we have no contemporary experience as to how labour costs will evolve in a world where the national unemployment rate is below 4 per cent. we do know, though, that wages growth remained modest a number of years ago when the unemployment rates in new south wales and victoria were temporarily around 4 per cent. the point here is that there are many unanswered questions. we are unlikely to know the answers quickly. there are many moving parts on both the demand side and the supply side of the economy and it will take time for these various issues to be resolved. this is relevant to the board's deliberations about monetary policy to which i will now turn. monetary policy i want to start with the decision the board took yesterday to end the bond purchase program. the final purchases under this program will take place on thursday 10 february. in taking this decision, the board considered the three criteria that have guided it from the outset : ( i ) the actions of other central banks ; ( ii ) the functioning of our own bond market ; and ( iii ) most importantly, the actual and expected progress towards our goals of full employment and inflation consistent with the target. all three criteria pointed to the same conclusion : that is to bring the bond purchase program to an end. most other central banks have already completed their programs, or will shortly do so. the federal reserve has announced that it will end its program in march and the bank of canada, the bank of england, the riksbank and the reserve bank of new zealand have all ended their programs. this is relevant because one of the reasons we introduced our program was that other central banks were buying bonds. if we hadn't also done this, our bond yields and exchange rate would have been higher than they have been and this would have impeded the recovery from the pandemic. in terms of the second criterion, our bond market is continuing to function reasonably well and the rba's stock lending activities are supporting this. but there have been some pressure points recently. this is evident around the three - year mark, where there has been a gap between the price of the physical bonds and the futures contract. among the range of bonds we are purchasing, the rba owns 42 per cent of australian government securities on issue and 60 per cent of some individual bond lines ( graph 8 ). our assessment is that the market could accommodate further purchases by the rba, but that there would be a rising probability of additional strains emerging. | 0.5 |
stephen s poloz : unveiling of new $ 10 note remarks by mr stephen s poloz, governor of the bank of canada, at the unveiling of the new $ 10 note, halifax, nova scotia, 8 march 2018. * * * it is the bank of canada β s job to design, produce and distribute bank notes that canadians can use with confidence and pride. bank notes are designed to be not only secure and durable, but also works of art that tell the stories of canada. i am confident that you will agree that this new $ 10 note fits the bill. trust is vital to everything we do as canada β s central bank. and the most tangible way we earn canadians β trust is by supplying the highest quality bank notes. you handle them every day, trusting that they are durable, safe and easy to use. even though people have more ways than ever to make electronic payments, the number of bank notes in circulation continues to climb. and thanks to past innovations, such as the introduction of polymer, counterfeiting rates remain low, and our bank notes last longer and wear better. but at the bank of canada, we continually strive to innovate and improve. i am immensely proud to say that a great deal of innovation went into the note you are about to see. for starters, there was the question of whose portrait would appear on the front. both the minister of finance and i agreed that it was long past time for a bank note to feature an iconic canadian woman. that has been a goal of mine since i became governor. but with so many excellent choices, we took a new approach to involve canadians directly in the decision - making process. and boy, did canadians get involved. we received over 26, 000 nominations from coast to coast to coast. a great national conversation took place β in schools, in the press, and in social media β about the important contributions so many iconic women have made to our history. i thank all canadians for their engagement β it made the journey to develop this bank note truly unique. i would also like to give a special thanks to the independent advisory council that we set up to help us narrow down the nominations. this eminent group of academics, as well as sports, culture and other thought leaders, were invaluable throughout this process. several of them are here with us today β so thank you once again. as you know, nova scotian viola desmond was ultimately chosen to appear on the new note. | with that choice made, our designers and scientists and historians then went to work. as you will soon see, they brought together beautiful design, cutting - edge security features, and meaningful symbolism in an exquisitely balanced way. the job they did was nothing short of brilliant. i could spend hours thanking all the people who worked so hard to bring this innovative note to life β many of whom are with us today or watching this webcast. but there is one person we all owe a debt of gratitude to, and that is viola β s sister, wanda robson. wanda, you worked tirelessly to raise public awareness of the injustice done to your sister. and you made sure that ultimately, justice was done. thanks to your actions, wanda, this important canadian story of your sister β s courage will never be forgotten. developing a new bank note is a huge undertaking, and i am happy and grateful that we got this one done as quickly as we did. and i cannot wait any longer to show it off. it is time for all canadians to see the new $ 10 note. 1 / 1 bis central bankers'speeches | 1 |
canada, the monetary authority of singapore and the bank of england released a report on alternative models that could enhance cross - border payments page 3 of 9 and settlements. 1 this teaming up and collaboration will stand us collectively in good stead as robust analysis is conducted on complex issues, not least due to the cross - border implications of many of these developments. in south africa, a fintech unit has been established within the sarb. national treasury, along with the sarb, the financial sector conduct authority and the financial intelligence centre ( fic ), have jointly established an intergovernmental fintech working group. these are evidence of the importance being attached to staying close to and leveraging the fintech phenomenon. and this will continue to happen in a responsible and proactive manner. we will continue to strive to keep abreast of fintech developments and endeavour to apply a balanced analysis to the fintech phenomenon, thus contributing towards a conducive environment in which fintech, regtech and suptech can thrive in support of our country β s progress and economic development for the benefit of all south africans. new threats my second observation is that it has become clear to central bankers that the fintech phenomenon is not a passing fad and that it does hold significant transformational potential. however, while there may be benefits, new risks may also manifest. on the positive side, fintech firms are often obsessed with being customer - centric, focusing on the needs and pains of the customer, and providing simplified, convenient, on - demand digital services. as has been noted by professors chuen and teo, given their β legacy - free and asset - lite β operating models, fintech firms can innovate speedily through agile approaches. 2 and while there are inefficiencies in any financial service value chain, fintech firms can address these by applying exponential technologies and finding new and innovative ways of providing services. 1 http : / / www. mas. gov. sg / news - and - publications / media - releases / 2018 / assessment - on - emerging - opportunities - for - digital - transformation - in - cross - border - payments. aspx 2 h m treasury, 2016, uk fintech, β on the cutting edge : an evaluation of the international fintech sector β, available at https : / / www. gov. uk / government / publications / uk - fintech - on - the - cutting - edge page 4 of 9 | on the other hand, new threats can be introduced through fintech - inspired innovations. loans can be issued in a matter of minutes using, for example, new scoring techniques by fintech platforms. they leverage social media and apply new techniques such as network analysis, sentiment analysis and natural language processing to unstructured data sources to assess default risks differently. however, in applying new artificial intelligence and machine - learning techniques, concerns arise about the reliability, validity and transparency of the decision - making process. what goes on inside the so - called β black box β of new computational learning algorithms? we have all heard about the significant failures of internet finance companies such as ezubao in china. ezubao had been set up as an online peer - to - peer lending scheme in july 2014. it attracted funds of about 50 billion yuan ( us $ 7. 6 billion ) from 900 000 investors. it ceased to trade in december 2015, just a year and a half later. 3 we have to be vigilant of the new threats that may arise as a result of the application of novel technologies. turning to other innovations such as crypto - assets, there are numerous examples over the last few years of exchanges being hacked and invested funds being lost. as has been reported to the japanese regulator, 5 966 bitcoins were stolen and hackers managed to steal 5 billion yen ( about us $ 44. 5 million ) of crypto - tokens. 4 we have recently seen increased attention by south korean and japanese regulators to this domain as a result of these ever - increasing cyber - incidents. with initial coin offerings, the lack of clarity and transparency, with numerous white papers attempting to raise funds quickly through token sales, is another area of concern. so while these new business models may bring benefits, their longevity may be challenged if financial, business and / or operational risks materialise. the provision of financial services is a heavily regulated industry. the main reason for this is not just the protection of consumers. as services and systems evolve and become more interconnected, the spillover effects of risks to the financial sector and ultimately to the real economy increase. we β ve seen these contagion issues during the global financial crisis. i would therefore encourage that our assessment of both the potential and the 3 gough neil, 1 february 2016, the new york times 4 https : / / cointelegraph. com / news / japanese - cryptocurrency - exchange - hacked - 59 | 1 |
interest rate abo ve zero, it canno t set that rate far belo w this thresho ld, because then ho useholds would simply hold o nto cash β thereby receiving a 0 % interest rate β rather than save at negative rates, and banks wo uld start co nverting their electro nic reserves β yielding a negative return β into currency. banks can o ffer depo sits at zero rates to avo id this risk of β financial disintermediation β, thus absorbing the adverse impact o f negative interbank rates themselves. in the lo ng run, this may reduce banks β pro fitability, which may h amper the bank mo netary po licy transmissio n channel. when the central bank has pushed interest rates do wn as far as it can, we say that the interest rate has reached its effective lo wer bo und ( elb ). by buying government bonds and other securities in the secondary market β an assetpurchasing policy often referred to as quantitative easing ( qe ) β, and through targeted longterm lending to commercial banks. let me now recall briefly how each of these policy instruments works. i will start with asset purchases. the ecb launched its asset purchase programme ( app ) in september 2014. the purpose of asset purchases ( i. e. buying bonds from euro area governments and other public sector entities and from the safest corporate issuers ) is to decrease longer - term interest rates. conventional interest rate policy moves the short - term rate on interbank markets, but medium and long - term rates also have a bearing on investment decisions, be they buying a house or purchasing new machinery. long - term rates are the sum of three components : the expectation of future short - term rates, the term premium and the default premium. asset purchases affect each of these components in different ways. first, the signalling channel, by which bond purchases often signal to markets the central bank β s commitment to engage in expansionary monetary policy. this adjusts market expectations about the future course of short - term interest rates, which in turn affects longterm rates. second, investors demand a term premium over expected short - term rates. this is because long - term lending is inherently riskier than short - term lending, as short - term interest rates ( and, hence, the opportunity cost of long - term lending ) may perform quite differently to what was previously anticipated by market participants. by p | expectations. inflation expectations in normal conditions, longer - term inflation expectations should be unaffected by transitory shocks, which typically dissipate over the medium term. however, recurrent shocks leading to a protracted period of low inflation can be misinterpreted as a lasting decline in trend inflation, and could jeopardise public faith in the central bank β s commitment or ability to deliver on its objective. as a consequence, the shocks can become entrenched in expectations. in such cases, firms and households become more attentive to past inflation outcomes and less attentive to the inflation norm or central bank inflation target when forming their expectations about future price developments. to the extent that these expectations enter wage and price - setting decisions in 3 / 5 bis central bankers'speeches the economy, low inflation may become self - reinforcing : observed disinflation translates into a downgrade of inflation expectations, which in turn feeds back into lasting disinflation. evidence on the evolution of inflation expectations during the crisis indicates that this scenario was a concrete risk that the euro area was facing in mid - 2014. for instance, staff estimates suggest that market - based longer - term inflation expectations became more than 1. 5 times more sensitive to macroeconomic surprises than they had been in pre - crisis times. by contrast, if longer - term inflation expectations are well - anchored, they do not respond to shorter - term macroeconomic developments. instead, they remain entirely determined by the inflation objective that the central bank has committed to attain. but, especially after the oil price shocks in the second half of 2014, most measures for the sensitivity of inflation expectations have edged up. 6 the observation of a weaker anchoring of inflation expectations, in principle, is consistent with different interpretations. it might reflect doubts either with regard to the central bank β s commitment to pursue its objective, or with regard to the central bank β s ability to achieve its aim. available evidence tends to favour the latter interpretation : the sensitivity of inflation expectations has increased more at shorter maturities, which is indicative of agents expecting that it will take longer for the central bank to bring inflation back to levels consistent with its objective ; at very long maturities, by contrast, the increase in sensitivity was contained, which may reveal that agents have never quite lost faith in the intention of the central bank to respect its mandate. this evidence has crucial implications for monetary policy : many forces have combined to bring strong downward pressures to bear on the euro | 0 |
labour costs among other indicators was not sustainable. therefore, i trust that this is where a surveillance framework aimed at preventing and correcting macroeconomic imbalances has to start. of course, these elements are not the only ones we have to analyse carefully. as i have said before, economic reality is much more complex than just a pure set of indicators. nevertheless such basic indicators are central for starting the analysis and for understanding the policy considerations. let me therefore briefly sketch out the key indicators that ecb staff have been selecting after reviewing and assessing the relevance of a much wider set of variables. these indicators shall provide early warning signals when macroeconomic imbalances emerge and when countries are experiencing significant losses in competitiveness, or when there are risks thereof. the seven key indicators in the view of ecb staff are as follows : a long - term measure of the growth of unit labour costs ; the stock of a country β s net external debt as a ratio to gdp ; the national inflation rate ; the current account deficit as a ratio to gdp ; the private and government debt ratios ; and the stock of private sector credit. these variables are all common economic indicators, they are easily available from official statistics and they are broad based. they have been selected to keep the first diagnosis as simple as possible, while still covering the most relevant dimensions of economic fitness. bis central bankers β speeches such a scoreboard of indicators can help focus our attention on the key issues and trigger more detailed surveillance procedures in cases in which indicators rise beyond certain predefined threshold levels. the european commission and the related council working group have been working intensively on such a framework, including an alert mechanism on the basis of a limited set of macroeconomic indicators β similar to those i have just presented β which would initiate more detailed surveillance procedures. the current discussions are based on the commission β s proposal for a new framework that will apply to all 27 eu member states with a preventive and a corrective arm. without going into all the technical details, let me make very clear once again which fundamental elements in its design should be improved. the ecb β s governing council, being responsible for ensuring price stability, has a major interest in the smooth functioning of the euro area economy. in this respect, the ecb considers it fundamental to set up an effective surveillance mechanism in the euro area that avoids the challenges that some countries are currently facing. the ecb published yesterday its opinion on the proposals made by the european commission ( ec | ##b, 2011 ). it regards these proposals as appropriate for the single market, but considers that they need to be strengthened as regards the euro area. with respect to the new macroeconomic surveillance framework, the ecb calls, in particular, for the following specific measures to strengthen the framework for the euro area : first, the specific nature of membership of a monetary union should be indicated more explicitly. this should be reflected in differentiated indicators and thresholds of the scoreboard for the members of the euro area, in comparison with the other members of the european union. tighter thresholds for competitiveness indicators in the scoreboard are required for the euro area countries. the set of indicators for the euro area countries should focus on the detection of macroeconomic imbalances, and therefore they should refer to losses of price competitiveness, private and public sector indebtedness and external indebtedness indicators. they differ by nature from the much wider set of indicators reviewed to assess progress in structural reforms in the context of the europe 2020 strategy to enhance sustainable growth and employment in europe. these are the concepts that will address the β thriving of nations in the dynamic global economy β which i alluded to at the outset. second, a clear focus of the surveillance framework can be maintained best if only cases of macroeconomic imbalances that hamper the smooth functioning of monetary union are addressed. the framework proposed by the european commission is symmetric with respect to detecting, preventing and correcting both excessive losses as well as gains in competitiveness. i think that a totally symmetric approach misses an important point : the european union and the euro area are not closed economies. on the contrary, they are amongst the most open economies in the world. gaining more competitiveness through the improvements in one particular economy is a win - win game for all members : we are not playing a zero sum game. therefore, a totally symmetric approach runs the risk that the surveillance lacks focus and becomes distracted from the most serious challenges to the monetary union, which are significant losses of competitiveness, persistent current account deficits, unsustainable increases in asset prices, including real estate prices, and high external and internal levels of indebtedness. given the magnitude of the imbalances accumulated, the required policy action is urgent in some member states. third, a much greater degree of automatism should be introduced into the macroeconomic surveillance framework. a substantial discretionary power puts the credibility of the macroeconomic surveillance mechanism at risk, if | 1 |
paul jenkins : impact of exchange rate movements on the canadian economy opening statement by mr paul jenkins, senior deputy governor of the bank of canada, to the house of commons standing committee on industry, science and technology, ottawa, 30 january 2008. * * * thanks very much, mr. chairman. i'm pleased to be here with you today and hope to help your committee as it examines the impact of exchange rate movements on the canadian economy. with me is john murray, who was recently appointed as a deputy governor and member of the bank of canada's governing council. to begin, as a little background i would like to quickly review the framework within which we conduct canada's monetary policy. the bank of canada act calls on us to mitigate " fluctuations in the general level of production, trade, prices and employment, so far as may be possible within the scope of monetary action, and generally to promote the economic and financial welfare of canada. " over time, we have learned that the best way to fulfill this mandate is to keep inflation low, stable, and predictable. specifically, that means we aim to keep the annual rate of inflation, as measured by the consumer price index, at 2 per cent. to keep inflation on target, we aim for a balance between total demand and total supply in the economy. by maintaining low and stable inflation, our monetary policy helps to keep the economy operating at full capacity and promotes greater stability in economic output. this is crucial in helping the economy to adjust to changing economic circumstances. now, what does all of this have to do with the exchange rate? well, the exchange rate of the canadian dollar is a key element of our monetary policy framework. without a floating exchange rate, we would not have the ability to conduct an independent monetary policy appropriate to our domestic situation. this means that we do not have a target for the canadian dollar. but the exchange rate is an important relative price in our economy and we pay very close attention to its movements. movements in the exchange rate influence the levels of imports and exports, which can help to keep total demand and supply in balance, and have a direct influence on price levels in our economy. further, exchange rate movements act as a signal to shift resources into sectors where demand is strongest. our floating exchange rate helps to facilitate that process. that said, we recognize that these types of adjustment can be, and have been, difficult for some sectors and regions of the country. when the canadian dollar rises or falls | 4 per cent. in line with the bank's outlook, further monetary stimulus is likely to be required in the near term to keep aggregate supply and demand in balance, and to return inflation to target over the medium term. with that, mr. chairman, john and i would now be happy to take your questions. | 1 |
attentive to incoming data, especially on consumption, which point to a pick - up in growth this quarter. 2 in particular, consumer expenditures rose a strong 0. 6 percent in april, and auto sales edged higher in may. these are encouraging signs, but the data relevant for second - quarter growth are still relatively sparse. in general, demand growth in recent quarters has benefited from a relatively strong household sector β buoyed by a recovering labor market, reduced oil prices, and low interest rates β and has been pulled down by weak business investment and net exports. indeed, consumption and housing investment can more than account for the 2 percent increase in gdp over the past four quarters. by contrast, business investment and net exports together subtracted ΒΌ percentage point. the rise in the dollar and decline in foreign growth reduced demand for american exports, as well as profits and investment at u. s. firms, which were also adversely affected by declines in the price of oil. over the twelve months ending in april, manufacturing output increased only 0. 4 percent, while total industrial production, which also includes the drilling for, and extraction of, oil and gas, fell 1. 1 percent. although the most recent indicators suggest that weakness in investment and net exports has persisted into the current quarter, if the easing in financial conditions since mid - february and the recent firmness in oil prices were to continue, along with stabilization of the dollar, business investment and exporters would benefit. risks to the outlook of course, there are risks to the projection that future gdp growth will be strong enough to deliver progress on inflation and employment. most immediately, there is important uncertainty surrounding the united kingdom β s june 23 β brexit β referendum on whether to leave the european union ( eu ). the international monetary fund has noted that a vote in favor of brexit could unsettle financial markets and create a period of uncertainty while the relationship between the united kingdom and the eu is renegotiated. although the economic effects of this uncertainty and the costs of adjusting to altered trade and financial ties are difficult to quantify, we cannot rule out a significant adverse reaction to such an outcome in the near term, such as a substantial jump in financial risk premiums. because international financial markets are growth in gross domestic income ( gdi ) has not slowed as much as gdp growth recently. however, the average of gdp and gdi growth has still slowed recently from an average annual rate of 2 - 1 / 2 | mark w olson : basel ii remarks by mr mark w olson, member of the board of governors of the us federal reserve system, at the annual washington briefing conference of the financial womenaβ¬β’s association, washington, dc, 16 may 2005. * * * thank you for the opportunity to speak to you today about current status of the basel ii capital revisions. as most of you know, the u. s. banking agencies are working with their counterparts on the basel committee on banking supervision to develop and implement revisions to the original basel capital accord - also known as basel i - which was adopted in 1988. as we earnestly work to develop those revisions, it is instructive to recall the environment in which basel i was created. if we look back at the state of the banking and financial markets in 1988, it is clear that basel i was a major accomplishment. many countries had distinct, and considerably different, capital adequacy requirements. indeed, as banks conducted more and more business across borders, these differences raised significant competitive, if not safety - and - soundness, issues. it soon became clear that supervisors in the industrial countries would benefit from agreement on certain common definitions and minimum standards for regulatory capital. thus was born the first basel capital accord. two factors made basel i particularly noteworthy. first, it contained some common definitions of capital and risk - weighted assets that could be applied across countries. this was no small feat, since, as you know, different jurisdictions often apply a variety of definitions. by agreeing on common definitions, supervisors around the world were more readily able to depend on one another's assessment of capital adequacy without having to determine what the terms meant. second, basel i reflected agreement on what constituted a reasonable minimum ratio of capital to risk - weighted assets - the now - famous 8 percent. although some empirical work went into the derivation of this 8 percent, we should not pretend that this ratio was determined with scientific precision. it did, however, reflect the combined experience and knowledge of all the supervisors around the table. the four risk - weighting brackets, while equally imprecise, were the first efforts to differentiate risk exposures among categories of loan and investment assets. reasons for developing basel ii in looking back, i believe basel i, with its common definitions, common agreement on capital minimums, and the initial risk - weighting categories, has served the banking and financial community well. indeed, there is no reason to replace basel i for | 0.5 |
jorgovanka tabakovic : overview of recent monetary and macroeconomic trends in serbia introductory speech by dr jorgovanka tabakovic, governor of the national bank of serbia, at the presentation of the inflation report - august 2016, belgrade, 17 august 2016. * * * ladies and gentlemen, dear colleagues, welcome to the presentation of the august inflation report. as always, we will give you an overview of monetary and macroeconomic trends for the period since the previous report and set out our expectations for 2016 and 2017. however, before we move on to this, i would like to share with you a few thoughts about a much longer period, because recently it was four years since my appointment as the governor of the national bank of serbia. together with us you were witnesses to the numerous challenges we faced, particularly from the international environment. despite the challenges, the national bank of serbia has achieved admirable results β inflation is low and stable today as it has been for three years straight, which was not the case earlier. our good results are not only due to global circumstances and low inflation abroad, because inflation in the international environment was around 2 % rather long, while at the same time it was much higher and more volatile in serbia. it was the reduction in serbia β s internal and external imbalances and the maintaining of relative stability of the exchange rate that were instrumental to bringing inflation in serbia to a level comparable to that of other countries. at the same time, deflation was averted. expectations of market participants that inflation will remain low for the next two years represent another indicator of confidence in the national bank of serbia and the measures it implements. chart 2 one - year ahead inflation expectations * and target chart 1 consumer prices and target tolerance band ( y - o - y rates, in % ) tolerance band ( y - o - y rates, in % ) 5. 5 4. 0 2. 5 1. 2 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 sources : sors and nbs calculation. corporate sector financial sector ( ninamedia ) financial sector ( bloomberg ) target tolerance band targeted inflation consumer prices ( cpi ) targeted inflation target tolerance band 2, 8 2, 0 2, 0 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 sources : | flat and enable enterprises to purchase new equipment. everybody does well if the saving and credit scheme runs smoothly. 2. economic growth by 3. 5 % in 2009 is very challenging indeed! lower economic growth implies lower income, and in case of no decline in spending, a higher than currently planned growth of 1ΒΎ % in consolidated budget deficit will automatically follow! hence, it is of utmost importance that we design a set of measures to be implemented in case economic growth turns out to be lower than planned for the period ahead. 3. proving that serbia is different than other countries in the region. serbia was the first country in the region to seek financial arrangement with the imf as a precautionary measure. this proves that we are a responsible state and wish to implement transparent economic policy under the imf umbrella. this is certainly a point in our favour and will prove useful in serbia β s attempts to remain an attractive foreign investment destination in the near future of extremely cautious capital spending and restrictions on investments. thank you for your attention! | 0.5 |
/ 2012 / 05 / asean _ stats _ leaflet2016 _ web. pdf 4 asean investment report 2015 ; infrastructure investment and connectivity, asean secretariat and unctad ( page 65 ) http : / / asean. org / storage / 2016 / 09 / asean - investment - report - 2015. pdf in addition, potential growth is hampered by ageing population and large debt overhang. according to united nations β world population ageing report5, the number of people aged 60 years or over is projected to increase by 56 % by 2030. on top of that, debt overhang has undermined private investment and consumption. these conditions could dampen demand and threaten long - term economic growth. along with these challenges, movements towards protectionism and geo - political uncertainties could trigger adverse shocks to the global economy. against this backdrop, we also face profound changes in technology. while technology advancement is needed to improve productivity and our standard of living, its unprecedented speed of change could be disruptive for incumbents in many industries ranging from taxi services to financial services. in the area of exchanges, we see changes in exchange and brokerage business models, the emergence of algorithmic trading, alternative trading, and robo - advisor. distributed ledger technology ( dlt ) could potentially transform payment, settlement and custodial services. we should be mindful that technology advancements also bring along new forms of risks to the financial system ranging from cyber risks to strategic risks of existing business models. ladies and gentlemen, these circumstances pose challenges not only for regulators but also players in the financial market. to ensure that our financial system serves our economy and society well in the vuca world, i believe that there are three imperatives we must focus on. these are ( 1 ) productivity, ( 2 ) immunity, and ( 3 ) inclusivity. allow me to highlight some initiatives that have been implemented to advance these objectives in thailand. first, on the productivity front, we are committed to supporting the use of technology for greater productivity. digitization will help enhance efficiency in financial services. there has been remarkable progress in the electronic payment ecosystem. for instance, our promptpay, which was launched early this year, is among the most efficient faster payment systems in the region. last week, we launched the standardised qr code for payment services. this was the world - first collaboration from the five major global credit card service providers. these payment platforms and standards will improve convenience and efficiency, and provide foundation for | , i strongly urge the audience to ask questions and air your thoughts and / or concerns to the fullest extent possible. your active participation will help us central banks improve our conduct of monetary policy. after all, as boe governor mervyn king puts it, β inflation targeting is a framework designed for a world of learning. β thank you for your attention. | 0.5 |
half of the global end products for a very long time, without raising the export price, hence setting a solid foundation for pandemic containment and global economic recovery. if money printing by the most developed country has triggered global inflation, then the goods made by hundreds of millions of workers in china are the β key anchor β in taming it. why is our central bank able to keep its balance sheet unchanged although the chinese government has extended considerable fiscal and financial support? first of all, it is attributed to big - picture - oriented, well - coordinated, scientific and reasonable macroeconomic decisions by the cpc central committee and practical, well - targeted and effective planning and directions by the state council as well as its financial stability and development committee. secondly, it is attributed to the commitment of the financial sector to containing outflow of funds from the real economy to the virtual economy and lowering internal leverage ratios, which contributed to scaling - back of interbank wealth management, interbank investment, entrusted loans, and trust channeling activities and contraction of high - risk shadow banking. thirdly, it is also attributed to a unique advantage of our central bank β s balance sheet : reserve ratio maintained at a high level through sustained sound monetary policy and legacy burdens relieved thanks to interest rate liberalization. therefore, unlike developed countries where the central banks have purchased assets to expand their balance sheets, china has encouraged banks to extend more loans to the real economy by cutting the reserve requirement ratio and appropriately increasing targeted refinancing. at the same time, china also guided the channeling of private savings into direct and securities investments, thereby significantly enhancing its capacity to produce and supply products urgently needed by china and the rest of world. the transition to a green economy has also been boosted as a result. china has entered a new stage of development and we will fully implement the new development philosophy, actively advance supply - side structural reform, and constantly foster the pattern of mutually - reinforcing domestic and international circulations. as for the financial sector, we must promote greater opening - up, improve corporate governance, accelerate market - based mergers and acquisitions, regulate online platforms, and ensure fair competition. efforts are required to step up digital transformation of conventional financial services to enable more targeted financial services to the real economy and prevent and tackle financial risks with more precision. financial inclusion should be promoted with a view to strengthening financial services to micro and small businesses and vulnerable groups so as to effectively achieve common prosperity. green finance should be developed to secure | not an issue for non - state enterprises. recently, more people have come to realize it needs to be introduced in the non - state sectors as well. enterprise reforms actually have much in common. these are the twelve issues about corporate governance on which i wish to hear your views. i also hope the participants, in particular those from china, could take notice of the major achievements of the revised principles on corporate governance issued by the oecd in 2004. 2. major achievements of the revised principles on corporate governance issued by the oecd in 2004 the five principles on corporate governance issued by the oecd in 1999 has attracted widespread attention from policy makers, investors, companies and stakeholders. with the development of the macro environment and emergence of new events associated with corporate governance, new challenges have arisen to the principles. in this case, the oecd has since 2002 conducted survey and consultations worldwide on how to guarantee an effective implementation of the principles of corporate governance such as the strengthening of the independence of the board in decision making, enhancing the information rights of the shareholders, improving the independence of auditing and the transparency of ownership structure, etc. finally, the revised principles on corporate governance was issued in april 2004. compared with the version of 1999, the revised principles of 2004 is advanced in the following five aspects : first, a new chapter titled β the foundation for an effective framework of corporate governance β was introduced. the chapter elaborates the role of government in establishing the overall institutional and legal framework for corporate governance. it lays out the principles the government should follow in advocating and establishing the framework of corporate governance, including the enforcement mechanism of formulating corporate governance principles, the protection mechanism for the parties involved in corporate governance, and the approach to avoiding rising cost incurred by excess supervision, etc. hence, the principles of 2004 was expanded to six chapters. second, the 2004 version strengthened protection for shareholders β rights. the voice of shareholders is raised in four aspects : ( 1 ) salaries of the executives are determined by the board on the basis of their long - term performance. shareholders have rights to get access to information on the compensation policy of executives and board members. all equity remuneration must be approved by shareholders. ( 2 ) shareholders have rights to change members of the board and participate in the nomination and vote. ( 3 ) institutional investors as fiduciaries shall publish their own corporate governance policy, procedures of voting and the way to fulfill voting rights in case of interest conflicts. ( | 0.5 |
conclusion even when the crisis was at its apex, students of history recognized that the momentum for reform of the financial system that was then so strong could fade quickly. legislators and officials move on to other issues, as does the public. there is some reason to believe this waning of interest and support has already occurred. the reform agenda that variously includes basel iii, administrative implementation of the dodd - frank act, and other initiatives continues, to be sure. but, particularly with respect to the shadow financial system, there is much that remains to be done. bis central bankers β speeches | through common exposures of the firm β s balance sheet with those of other firms. typically, these first two effects will scale with a firm β s size as well. these effects are directly relevant to concerns about the too - big - to - fail ( tbtf ) syndrome that have animated much of the reform debate in the past few years. the views presented here are my own and not necessarily those of other members of the board of governors of the federal reserve system or the federal open market committee. a related effect is liquidity hoarding, whereby firms suspend their normal extensions of liquidity to other firms in anticipation of, and in an effort to insulate themselves from, domino or fire - sale effects. bis central bankers β speeches the traditional tbtf concern is that of moral hazard β the expectation that, when faced with the prospect of either variant of a major blow to the financial system, government authorities will provide funds or guarantees to the firm to keep it functioning. creditors and managers of firms who anticipate such support may not price into their credit or investment decisions the full risk associated with those decisions. as a result, the firms may become more leveraged and thus still larger, an outcome that would only reinforce the belief that the government will not allow them to fail. the consequence can be both a competitive funding advantage for these large firms and more underlying risk to the financial system. important as it is, moral hazard is not the only worry engendered by very large, highly interconnected firms in financial markets. assuming that a government overcomes timeconsistency problems and credibly binds itself not to rescue these institutions, their growth would presumably be somewhat circumscribed. but it is possible, perhaps likely, that some combination of scale and scope economies, oligopolistic tendencies, path dependence, and chance would nonetheless produce a financial system with a number of firms whose failure could bring about the very serious negative consequences for financial markets described by the domino and fire - sale effects. in contrast to these first two effects, the contagion effect is not necessarily a function of size at all. the run on money market mutual funds began in september 2008 after the β breaking of the buck β by the reserve primary fund, less because of its size than because of what its vulnerability told investors about the balance sheets of other funds. earlier that year, stress on the british banking system had increased significantly following the failure and subsequent nationalization of northern rock, a mid - | 1 |
mauritius to ratify the convention. regulations under the financial intelligence and anti - money laundering act 2002 have been promulgated. another law on mutual assistance in criminal and related matters has also been enacted. guidance notes on anti - money laundering and combating the financing of terrorism have been updated and aligned with international standards as acknowledged by the fsap mission. the ambiguity as to whether the bank of mauritius is empowered to issue such guidance notes has been dealt with in the anti - money laundering ( miscellaneous provisions ) act. furthermore, a few additional guidelines are being worked upon. a draft guideline on credit policy has already been finalised and is due to be issued to the industry shortly. in february 2002, at the quarterly meeting of the banking committee, i proposed to chief executive officers of banks, the establishment of a credit information bureau in mauritius. bankers enthusiastically welcomed the project. a sub - committee, comprising senior officials of all commercial banks and headed by the manager legal of the bank of mauritius was appointed to make recommendations on the way forward. the sub - committee submitted their report in august 2002. i am happy to note that the fsap mission is supportive of this initiative. the national bank of belgium houses one of the most sophisticated credit information bureau in the world. i accordingly solicited the assistance of the governor of the national bank of belgium to guide us on this project. a delegation headed by the managing director of the bank of mauritius, comprising bankers, will proceed to the national bank of belgium for a prospecting visit in november this year. in all the assessments that have been made so far a common thread is perceptible. the strong willingness of the authorities in mauritius to co - operate and to promote the country as a sound and clean jurisdiction runs through the assessments. even before the financial sector assessment programme started we, at the bank of mauritius, had already identified certain areas of vulnerability of our banking industry. we did initiate several remedial actions and i am particularly pleased to note that the fsap report does make mentions of the various initiatives. the fsap report is a critical assessment of where we stand today. the recommendations are expressions of views regarding what need to be done now and in the immediate future. but we need to constantly review our supervisory and legal framework in the light of changes taking place in the domestic economy and in the dynamic international financial system as well. we have a panoply of rules, guidelines and laws for the proper conduct of banking business | great extent driven by demand for the goods that were previously postponed. in the same way as swedish exports fell as markets shrank, they are now rising as the markets are growing again ( figure 1 ). good public finances β¦ but to a large part the good developments concern what i just tried to convey : that we actually acquitted ourselves fairly well this time. this includes the good public finances. since the end of the 1990s our national debt has shown a declining trend. there has not been any corresponding decline in, for instance, the eurozone and the united states ( figure 2 ), where the national debt moreover began to increase substantially during the financial crisis. in many areas it is thus necessary to tighten fiscal policy, but this does not apply to sweden.... and a high level of household saving gives scope for growth but swedish households have also acted in a way that has increased resilience during the economic downturn. unlike in many other countries, savings in sweden have shown a rising trend over the past decade ( figure 3 ). during the crisis, saving increased both in sweden and in most other countries. this is largely due to what is known as precautionary saving as a result of increased uncertainty. in many countries this uncertainty concerns the large deficits in public finances and what consequences these may have for household incomes in the future. as this uncertainty can be expected to remain over the coming years, private consumption will probably be held back. but we do not have this situation in sweden. although one can note that consumer confidence has strengthened in many areas in recent years, it is primarily in sweden that it has reached historically high levels ( figure 4 ). the combination of sound public finances and high household savings means there is scope to reduce saving over the coming years. together with relatively large increases in disposable incomes, this means that private consumption is likely to increase at a good pace. sweden is one of few countries in the oecd area where the labour market has clearly begun a recovery. moreover, the upturn in employment is on a broad front. the manufacturing industry has once again begun recruiting and is expected to continue to do so over the coming period. employment in the services sector, which managed the crisis better, is also expected to continue increasing. resource utilisation is rising gradually swedish gdp growth is expected to amount to almost 5 per cent in 2010, before gradually falling back to around 2. 5 per cent at the end of the forecast period. but | 0 |
adelaide bank, the new entity has assets of around $ 50 billion, and is australia β s 11th largest bank. 1 though small in market share, its branch presence is considerably larger. if we were to compile a list of financial institutions of the second half of the 19th century, we would find that few of the names would be familiar ones. not many entities of that time are still in existence today. our major banks, of course, have a long history, in some cases dating back to the early convict era. but a great many financial institutions of the 19th century, particularly victorian building societies, succumbed to one or other of the busts that occurred in the 1890s, the 1930s and the 1990s. the 1890s episode was a particularly severe depression in victoria, with a collapse in land values and widespread closures of financial institutions. nearly half the building societies ranking based on banks β resident assets in australia. closed. this, as always, followed a period of extreme euphoria. consider the way the historian michael cannon describes the general scene in melbourne in the 1880s : the land mania of the 1880s took two main forms. the first was based on a plethora of building societies, whose optimistic officials believed that every family in the colony could simultaneously build their own house, keep up the payments through good times and bad, and support an army of investors who were being paid high rates of interest for the use of their money. the second form of mania was the deeply - held belief that it was impossible to lose money by β investing β in land β a belief which persists to the present day. 2 those words, penned in 1966 about an event a century ago, carry a more than faint echo of more recent times in other parts of the world. if we may paraphrase cannon, too many of the world β s major financial intermediaries thought that loans of dubious quality, originated by salespeople they knew little about, to borrowers whose credit standing, to the extent it was known, was very poor, could be sold in ever increasing quantities to investors looking for aaa security. one day the music stopped, as it always does, and they were left standing. the 1890s were tough for the city of bendigo, as for most of victoria. a number of banks in the city closed their doors. but its main building society remained sound. β the bendigo β had not ventured as far into melbourne real estate as others, nor was it as highly leveraged. | i j macfarlane : overview of the australian economy opening statement by mr i j macfarlane, governor of the reserve bank of australia, to house of representatives standing committee on economics, finance and public administration, warrnambool, 6 december 2002. * * * i would like to endorse the remarks of the chairman and say what a pleasure it is to be in warrnambool, for the second hearing to be conducted outside the sydney - melbourne - canberra triangle. the first was in wagga wagga, and i remember at the time suggesting that the second should be a little further away from canberra. warrnambool passes that test and is an important agricultural and tourist centre, so it is a fitting venue for this meeting. i would also like to thank the mayor of warrnambool, councillor james nicol, for his hospitality in hosting a civic reception for the committee and the members of the bank appearing before it. i would like to start the substance of this statement by observing that in the six months between this hearing and the previous one in may quite a lot has changed, and this has had an important influence on our judgment about what we have needed to do with monetary policy. this change has happened relatively steadily, with the result that the financial markets and the public more generally have had no trouble in adjusting to the changed outlook. we have assisted, where we thought necessary, by way of several speeches and articles on the subject over the past six months ; they have probably helped at the margin, although i think the public was not having any difficulty in recognising the changing outlook as it unfolded. that being so, it could be argued that there is nothing further to add on the subject. however, i am very aware of the fact that i gave some quite frank indications about the expected future direction of monetary policy at the previous hearing, and that those indications have not been followed through. so i would like to place on the record before this committee another account of the changing circumstances, even at the risk of being accused of going over old ground. in may i said to this committee that since the australian economy was behaving normally, and the world economy was getting back to normal, unless unforeseen developments intruded, we should continue the process of getting real interest rates back to normal, while all the time carefully examining incoming data, both from here and abroad, to ensure that developments remained on track. we did continue the process of getting | 0.5 |
##ness could be deprived of the benefits it should enjoy, in terms of increased market share, because of currency depreciation in competing countries. and if some countries were prepared to practice such β beggar thy neighbour β behaviour, why should others permanently open their borders to them? the point was not that the single market could not tolerate small exchange rate adjustments among a few of its members. it was that major currency volatility, of the type we had seen in the 1980s, would severely test the willingness of all to keep their markets open. and we can only imagine how, without the euro, currency markets would have reacted to shocks we have seen since its launch β the dotcom crash, the lehman bankruptcy, the sovereign debt crisis. the conditions for success in emu however, the case for the euro was always based on a trade - off. by reinforcing the single market in this way, it would lock - in the gains of economic integration and thereby benefit the whole union. but it would also deprive individual countries of adjustment tools for short - term shocks, notably their own exchange rate. thus for the trade - off to be beneficial, it was essential that those short - term costs were reduced as much as possible. this depended on certain conditions being fulfilled, which were established by mundell and later authors as part of the theory of optimum currency areas. they included : trade integration, to reduce the incidence of asymmetric shocks ; factor mobility and wage and price flexibility, to accelerate adjustment when shocks did hit ; and a system of risk - sharing, to reduce the costs of that adjustment process for individual members. but, in the euro area, it was clear that the importance attached to each of those conditions would not be the same. large - scale labour mobility was always unlikely, given cultural and linguistic barriers. it was also improbable that fiscal risk - sharing would reach u. s. levels, not least owing to the relatively larger role for national budgets as fiscal stabilisers. hence it was essential that euro area countries substituted for lower integration in these areas with stronger commitments in others. this meant four things in particular. the first was avoiding policy mistakes, such as boom - bust cycles emanating from weak prudential supervision. the second was building resilience to shocks through structural reforms and the continued deepening of the single market. the third was sound fiscal policies to provide sufficient fiscal buffers over the cycle. and the fourth was | two notches even before croatia actually joined the euro area. thus croatia's credit rating, which before the decision was one notch lower than bulgaria's, now is one notch higher than bulgaria. for comparison, before receiving an invitation for euro area membership, croatia's government bonds were bearing higher yields than those of bulgaria. at present, the yield on croatia's government bonds is, on average, about 100 basis points lower than that on the bulgarian government bonds. on the other hand, according to credit rating agencies, the key factor for bulgaria to get a rating downgrade, i. e. for deteriorating terms of its funding, is the delayed or halted process of joining the euro area. therefore, the political decision about the euro area will come with a price and it will not be small. finally, please allow me to address an appeal and a request to the members of parliament : please, get focused on dealing with the political crisis and answering the pending questions with a direct bearing on the matter at hand, specifically : will there will be a regular government and when? because, as i was told only a few days ago by one of the central actors, including on the euro area matters, over the last year or a year and a half he has been constantly meeting with new people representing the executive, and this is a serious challenge, especially when long - term projects are involved. will there be an efficiently working parliament capable of passing the large number of legal acts needed for bulgaria's accession to the euro area? will there be a budget, a macroeconomic forecast and a medium - term fiscal programme and what will be the parameters, a question that has a direct bearing on the maastricht criteria? will there be a decision about the mandate and horizon for action of the central bank's governor and management? because, and let me finish with this, with a caretaker government and an'acting'management of the central bank the entry into the euro area is just not going to happen. mr. speaker, i and my colleagues in the governing council are available to answer the questions that the members of parliament may have. 4 / 5 bis - central bankers'speeches 5 / 5 bis - central bankers'speeches | 0 |
. such approaches were used for more than 80 per cent of the relevant banking assets at 1 january 2008. i would also like to point out that the impact of basel ii on credit institutions β capital goes beyond the capital requirement calculation stipulated in pillar 1 ( even though it provides more comprehensive coverage than basel i of new risks, such as securitisation activities ). regarding pillar 2, the new regulations call for major additional arrangements to refine banks β risk management and planning for capital cushions. this could lead to additional capital requirements, or other appropriate measures to enhance bank stability by considering risks that are not dealt with or are inadequately dealt with under pillar 1. by the end of the year, this approach should lead to individual ratios for each institution that the commission bancaire sets on the basis of structured dialogue with each institution. we have also undertaken a series of major actions that are directly in line with the general framework of the recommendations made by the financial stability forum. many spheres of action have been defined, but i would like to speak about three that i think are priorities, starting with transparency and valuation, followed by adapting the capital requirements set by basel ii for certain instruments, and finally, liquidity risk. first of all, enhancing transparency and financial disclosure was quickly identified as one of the key requirements for ending the crisis. we have urged french banks, in conjunction with the national institute of statutory auditors, the cncc, to provide detailed disclosures of their subprime exposures. a joint working group made up of staff from the commission bancaire, the autorite des marches financiers and the french banking federation has defined best practices in this area. institutions have started implementing them in a satisfactory manner and practices should be further improved in the financial statements for first - half 2008. in 2009, the basel committee is planning to publish recommendations on information to be disseminated under the requirements of pillar 3 of basel ii. in - depth discussions with banks led to a convergence of practices for asset valuation, including the priority on relying on prices and directly observable market data. where banks have had to use valuation models because liquid prices disappeared in some markets, the recommendations deal with consideration of all risks β including liquidity risk and counterparty risk β and the rigorousness of the process for determining such prices. with regard to adapting the basel ii requirements, we are also playing a very active role in the various international working groups led by the basel committee to give greater consideration, | 25 % and at least one characteristic suggesting debt - repayment difficulties. vulnerable unsecured debtors are those with less than 25 % housing equity ( including renters ) and at least one characteristic suggesting debtrepayment difficulties. ( b ) based on historical bhps data and more timely information from the annual nmg survey. differences in survey questions and sample size mean the estimates from the two surveys are not directly comparable. bis central bankers β speeches chart 13 : chart 14 : corporate financial surplus ( a ) percentage of firms with interest payments greater than profits ( a ) ( b ) per cent united kingdom united states euro area per cent firms with turnover > Β£1 million firms with turnover < Β£1 million real estate firms with turnover > Β£1 million + source : thomson reuters datastream, ecb and bank calculations. ( a ) per cent of gdp except euro area which is as a per cent of gva. sources : bureau van dijk and bank calculations. ( a ) percentage of companies in each category with interest payments greater than their profits before interest. ( b ) data include firms reporting turnover, profit and interest paid. these firms may not be representative of the population. total sample size varies over time, ranging from around 14, 000 in 1990 to over 90, 000 in 2000. changes in the composition of the data set may reduce comparability over time. subsidiaries, as identified from company structures, are excluded. company accounts are assigned to calendar years according to the statement date. the real estate sector is identified using sic ( 2003 ) and sic ( 1992 ) codes ( the sample ranges from around 450 to 1, 600 firms ). bis central bankers β speeches chart 15 : chart 16 : changes to uk gross government debt ratio in crisis periods public debt ratios in g7 countries 1929 crash 1990 recession cumulative pp change since start of recession 2008 financial crisis ppp weighted percentage of gdp years since crisis - 5 1940 1950 1960 1970 1980 1990 2000 2010 sources : office for national statistics, thomson reuters datastream and bank calculations. sources : imf historical public debt database, imf world economic outlook ( april 2011 ), angus maddison historical statistics and bank calculations. bis central bankers β speeches chart 17 : chart 18 : real lending growth rates uk credit - gdp gap ( a ) ( b ) percentage points percentage changes on year earlier norway ( 1988 = 0 ) sweden ( 1990 = 0 ) finland ( 1990 = 0 ) united kingdom ( 2007 = 0 ) + 1 - 0 + 1 9 10 | 0 |
workforce of 170, 000. it is the most productive workforce in the economy, accounting for 4. 5 % of singapore β s total workforce but 13. 3 % of our gdp. during 2015 - 2019, the financial sector created 22, 000 net jobs. 70 % of these jobs went to singapore citizens, in line with the overall proportion of singaporeans in the financial sector workforce, also at 70 %. what β s more remarkable is that the financial sector continued to create jobs right through the covid - 19 pandemic crisis. in the first half of this year, financial services created 1, 900 net jobs. 100 % of these jobs went to locals. these are good jobs : the median income for locals in the financial sector is $ 7, 600, compared to the national median of $ 4, 600. of course, the median income of foreigners in the financial sector is even higher, at $ 10, 000. we will address this issue at a later webinar when we talk about job specialisation and job leadership, and how we can enhance the wage prospects of singaporeans in finance. for now, let β s focus on the job opportunities. https : / / www. mas. gov. sg / news / speeches / 2020 / gearing - up - for - new - and - evolving - jobs - in - financial - services 5 / 18 04 / 12 / 2020 " gearing up for new and evolving jobs in financial services " - remarks by mr ravi menon, managing director, monetary authorit β¦ we should not be complacent. just because the sector has done well on the jobs front so far does not mean that it will continue to do so in the future. the economic recovery is uneven and remains highly uncertain. mas is therefore keeping a watchful eye on financial institutions β hiring and retrenchment plans. earlier this year, mas conducted a pilot employment outlook survey for the financial sector. the pilot survey covered over 30 financial institutions on their projected hiring and job losses over 12 months from july 2020 to june 2021. together, these firms account for over 40 % of the financial services workforce. let me share the findings. the survey showed that financial institutions are planning to [UNK] 1, 800 newly created jobs and 2, 000 traineeships during these 12 months. https : / / www. mas. gov. sg / news / speeches / 2020 / gearing - up - for - new - and - evolving - jobs - in - financial | heng swee keat : how the monetary authority of singapore had responded to the crisis and its challenges ahead acceptance speech by mr heng swee keat, managing director of the monetary authority of singapore, on receiving the banker β s β central bank governor of the year in asia - pacific β award, singapore, 11 february 2011. * * * on receiving the award and paying tribute to mas β staff 1. i am deeply honoured and humbled to receive the β central bank governor of the year in asia - pacific β award by the banker. 2. this award is a tribute to the collective contribution of the staff of the monetary authority of singapore ( mas ) who had worked hard to ensure that our monetary policy stance was appropriate for the economy during the downturn and the eventual recovery ; and to foster a sound and progressive financial system, which overall stood well under stress during the global financial crisis. several of our key management team members are here : edward robinson, andrew khoo and ng nam sin. this is also a testament to the collaborative efforts with the industry to build a resilient financial sector. i thank members present here for the roundtable, and in particular mr j y pillay, who as former md of mas, laid a strong foundation of sound central banking and regulation. how mas had responded to the crisis 3. as a small and open economy with strong linkages with the rest of the world, singapore was severely affected by the financial crisis through a sharp falloff in global trade. we experienced four consecutive quarters of sequential contraction with a cumulative output loss of 9 % β our deepest recession since independence. conversely, with the subsequent recovery in the global economy, singapore β s gdp rose sharply and now exceeds the level before the crisis. last year, the economy grew by an estimated 14. 7 %. 4. over the course of the crisis in 2008 / 2009, mas β monetary policy responses were deliberately graduated, underpinned by the objective of promoting price stability in the medium term. we did not react to every single development in the economy or the financial markets as this would have introduced unnecessary volatility and uncertainty. following the significant deterioration in external demand in late 2008, mas eased policy in october 2008 and april 2009 to provide support to the domestic economy. in early 2010, taking into account the strong recovery path of the economy and rising domestic cost pressures amidst high rates of resource utilisation, mas shifted to a modest and gradual appreciation of the s $ nee | 0.5 |
##tarded the process of β churn β between firms that drives resource reallocation. one study found that, in the early phase of the crisis, banks that were lowly capitalised were more likely to maintain credit to less creditworthy borrowers β so - called β ever - greening. 20 this type of behaviour inhibits firm exits and reduces the availability of credit for new entrants. addressing these financing constraints has both a short - and a longer - term dimension. the short - term part concerns dealing with the legacy of the previous financial cycle β that is, repairing bank balance sheets and reintegrating the euro area β s financial markets. this is necessary so that capital can once more flow β downhill β from higher income to lower income buccirossi et al ( 2013 ), β competition policy and productivity growth : an empirical assessment β, in the review of economics and statistics, october 2013, 95 ( 4 ). european commission, product market review 2013 : financing the real economy, european economy 8, 2013. albertazzi, u. and marchetti, d. j. ( 2010 ), β credit crunch, flight to quality and evergreening : an analysis of bank - firm relationships after lehman β, working paper, banca d β italia. bis central bankers β speeches countries, and so that banks in those countries are sufficiently capitalised to be able to allocate credit efficiently. the main policy initiative that will support this is the banking union project and, as part of that, the ecb β s comprehensive assessment. its aim is to dispel doubts about asset quality and levels of capital and provisions, and in doing so to accelerate the process of deleveraging and restructuring in the banking sector that is the inevitable consequence of a major financial crisis. over the longer - term, however, it is important that policy - makers also reflect on the quality of financial integration in the euro area β that is, the incentive structures in the financial sector that can lead to inefficient credit allocation, and the channels for sharing risk when financial crises do arise. indeed, one criticism we could perhaps make of optimal currency area theory is that is does not take account of the financial instability that may arise when capital reallocates across regions, both in terms of inflows and outflows. banking union goes some way towards redressing this, which is why it is essential for the longer term stability of the euro area. in terms of improving | 2375, european central bank ; mellina, s. and schmidt, t. ( 2018 ), β the role of central bank knowledge and trust for the public β s inflation expectations β, discussion paper, no 32, deutsche bundesbank. [ 2 ] see, for example, ehrmann, m. and fratzscher, m. ( 2011 ), β politics and monetary policy β, review of economics and statistics, vol. 93, pp. 941 - 960 ; ehrmann, m., soudan, m. and stracca, l. ( 2013 ), β explaining european union citizens β trust in the european central bank in normal and crisis times β, the scandinavian journal of economics, vol. 115, pp. 781 - 807. [ 3 ] most of these analyses are based on the eurobarometer survey, which is published by the european commission. [ 4 ] please see box 1 developments in trust in public institutions since the global financial crisis in β citizens β attitudes towards the ecb, the euro and economic and monetary union β, ecb, june 2020. [ 5 ] the following presentation builds on the article β citizens β attitudes towards the ecb, the euro and economic and monetary union β, european central bank ( 2020 ), economic bulletin, issue 4. the analysis uses eurobarometer survey data for the period 1999 - 2019. [ 6 ] while the share of ecb - sceptics has recently fallen slightly, this group constituted the largest share of respondents in the euro area over the period from 2013 to 2016. [ 7 ] the decline in support was particularly marked in ireland, greece, spain, cyprus, portugal and slovenia. in these countries, the share of ecb - sceptics and euro - sceptics increased notably. however, the number of monetary union supporters has meanwhile returned close to its pre - crisis level. [ 8 ] these countries include, for example, belgium, luxembourg, the netherlands, malta, austria, slovakia and finland. [ 9 ] at year - end 2019, the share of monetary union supporters had grown again, but the share of ecb - sceptics remained above its precrisis level. compared with the country level, the patterns of support vary across regions β considerably so in places. monetary union supporters were in the majority nationwide in countries such as finland, ireland, the netherlands and slovakia. support for the economic and monetary union varied more strongly across | 0.5 |
the customers. westpac again has been at the forefront of such developments. one product that we are keen to push is the export finance facility where eligible exporters can access bank loans at low interest rates. unfortunately, for some reason, it has not been used much by exporters and the banks. westpac came to us suggesting some changes to the facility and i thank them for the initiative. we have therefore introduced most of the changes that they suggested and we hope that these changes will make the facility more attractive and facilitate the growth in exports β which we sorely need to improve our balance of payments position. i encourage you to talk to your bank commercial bank or the fiji development bank about this facility. there were two cabinet decisions recently that pose considerable interests to the industry. we heard that cabinet has approved the establishment of a financial services ombudsman scheme. there are several countries like new zealand and australia that has such a scheme and we can learn from their experiences in the operation and the funding of their ombudsman. when properly set up, this ombudsman scheme should help both customers and bankers settle disputes in a timely and efficient manner. we have also heard that cabinet has also approved the establishment of a financial services commission. we certainly look forward to government discussing this rather complex issue further with all stakeholders. westpac nakasi let me turn to the branch that we are opening this evening. i am pleasantly surprised at the development happening in nakasi. i know the locality very well as i used to live here in the early eighties. in fact, the apartment that we stayed in was at this very site that this complex has been built. there was only the gulab supermarket and cinema at that time. now, we have major supermarkets and shopping centers that have set up in this area. i am sure that this growth will continue into the future. i am therefore pleased that a commercial bank has decided to establish a branch in this busy part of the suva - nausori corridor. it makes good business sense for westpac to establish a branch here. westpac is the only bank branch for kilometers in any direction. your customers must be glad that they don β t have to travel far towards suva or nausori for their banking services. i am told that this is a fully - fledged branch which offers a dynamic business centre complete with an interview room and a separate business teller β s area. the new branch will cater not only for businesses, but also residents | is expected to contribute to growth in wholesale & retail trade and hotels & restaurants and transport & communication sectors. in addition, better performances are expected from agriculture, forestry and fishing and manufacturing sectors. the re - opening of the vatukoula gold mine will also contribute to economic growth in 2008. government policies i said that predictability and certainty in government policies and their implementation is also important. as you know, the government budget will be delivered in two weeks time. we look forward to the announcement of economic policies that will take us forward in the next two years. in my view, a key foundation of such a policy framework is to allow the private sector to be the growth locomotion. for the private sector to better play this role, it needs certainty and predictability. another important component of the framework would be reforms to allow us to use our scarce resources as effectively as possible. financial system let me now say something on the financial system. i would like to start by emphasizing that the financial system remains sound. with the credit ceiling in place and the slowdown in the economy, the rate of credit growth has declined to around 8 percent compared to the highs of close to 25 percent eighteen months ago. i consider this rate of growth commensurate with our current economic conditions. i wish to clarify that the reserve bank does allow banks to exceed their credit ceiling for lending to priority sectors, for investment and to the micro, small and medium sized enterprises. at the same time, the bank has allowed liquidity in the financial system to rise which has led to lower interest rates. we intend to review the credit ceiling at the end of the year. the efficiency of the financial system is important to everyone particularly businesses and investors. we launched β fijiclear β β fiji β s electronic payment system on 16 october. fijiclear is an important component of the bank β s overall plan to modernise the financial system in fiji β it will improve efficiency in making and receiving payments as well as help safeguard financial stability. the system is secure and its key elements are speed, certainty, reliability and convenience. payments using this system will deliver funds the same day compared to 3 to 6 days required to clear cheques. i invite businesses to start taking advantage of the new system. we worked very closely with laurie in his role as the chairman of the association of banks in fiji on this project and i must thank him and his association for their support and cooperation. rooster poultry it is with this investment and | 0.5 |
brian wynter : financial literacy for jamaica opening remarks by mr brian wynter, governor of the bank of jamaica, at the stakeholders β forum on financial literacy for jamaica, financial services commission in association with caribbean regional technical assistance centre ( cartac ), kingston, 18 august 2010. * * * honourable audley shaw, minister of finance and the public service ; senator basil waite, opposition spokesman on education ; honourable emil george, chairman of the fsc ; mr rohan barnett, executive director of the fsc ; keynote speaker dr adele atkinson, policy analyst, oecd financial affairs division ; panellists from canada, the eastern caribbean, trinidad & tobago, the united kingdom and jamaica ; ladies and gentlemen : it gives me great pleasure to participate this morning in the opening of the stakeholders β forum on financial literacy for jamaica organized by the financial services commission and the caribbean regional technical assistance centre. the bank of jamaica partnered with cartac and the fsc in january this year to launch cartac β s regional financial literacy programme website and public education programme at the jamaica conference centre. we are indeed pleased that today the process has moved one step further and we have gathered here to examine a proposal for a national financial literacy programme. this programme, aimed at formalising and coordinating an approach to achieving financial literacy throughout the length and breadth of the country, is timely. in fact, it may even be overdue. we have seen the successful implementation of a national financial literacy programme in trinidad & tobago and the maintenance of a similar 27 - year programme in new zealand. inflation has been trending down, the exchange rate has been stable in recent months and interest rates in general are declining. as the global economic recovery begins to take shape, jamaica must seek to expedite her own recovery through savings and investments ultimately to achieve strong growth and sustainable development. it is a financially literate people who can, in partnership with established and new institutions, enhance the social and economic development of a country. the proliferation of local ponzi schemes a few years ago is a recent reminder that in jamaica, like everywhere, people have an appetite for high returns on their investments. unless allied with prudence and caution, however, the appetite can lead to personal and social catastrophe. but prudence and caution are themselves easily overwhelmed except in the presence of knowledge and understanding. so, for example, an informed populace is less likely to make impulsive decisions on financial matters. through its website, its money museum, its many | caleb m fundanga : transparent pricing initiative in zambia remarks by dr caleb m fundanga, governor of the bank of zambia, at the official lunch of the transparent pricing initiative in zambia, lusaka, 6 june 2011. * * * the vice president, global programs microfinance transparency, ms alexandra fiorillo ; the president of the association of microfinance institutions of zambia ( amiz ), dr. george mulomboi ; executive secretary of association of microfinance institutions of zambia, mr webby mate ; chief executives and representatives of microfinance institutions ; colleagues from bank of zambia ; distinguished invited guests ; members of the press ; ladies and gentlemen i would like to thank microfinance transparency and the association of microfinance institutions of zambia for inviting me to officiate at this important workshop on transparent pricing. i also wish to welcome our visitors from outside the country. i hope you will enjoy the wonderful zambian weather. madam vice president, the importance of microfinance to an economy cannot be overemphasised. the provision of financial services to the majority of people and the small and medium enterprises who have traditionally been excluded from the formal banking sector is a key element to poverty reduction and economic development. mr president, as you are aware, in zambia, the recent finscope survey confirmed that levels of access to financial services continue to be low with only 37. 3 % of zambia β s adult population reported to have access to a financial services. the survey however showed that the number of people accessing microfinance was on the increase. the role that microfinance institutions play in financial inclusion is therefore very crucial. over the years, the microfinance institutions in zambia have played a significant part in the provision of financial services, particularly for low - income households. although access to finance remains low, microfinance institutions have had a somewhat positive impact on the economic activity of low income households, in both urban and rural areas. i am hopeful that the microfinance sector will continue to bridge the financing gap especially to the unserved population. however, the bank of zambia continues to receive a number of customer complaints on the high cost of micro loans in the country. it has been observed that the interest rates charged by some institutions exceeded 300 % per annum in some cases. furthermore, in most instances the effective rate of interest and other charges are not disclosed to the customers resulting in them paying much more that what was initially publicised to them. | 0 |
increasingly important adjustment mechanism. in order for markets to be flexible and send the proper signals, policy - makers must ensure an institutional framework that sets the right incentives. substantial progress has been made but a lot still needs to be done. in particular, labour market reforms are still lagging in many countries. as a result, the ability of economies to adapt quickly and generate employment is still limited. the lisbon agenda, the β pro - employment and growth blueprint β for europe, sets the right priorities. however, it needs to be implemented more forcefully. this would go a long way towards creating the dynamic and flexible environment that europe needs, not only for the proper functioning of monetary union but also for the attainment of the growth and employment objectives of the lisbon agenda. the stability and growth pact sound fiscal policies are another prerequisite for monetary union to work. as sovereignty over fiscal policies remains at the national level, the eu member countries decided to introduce fiscal rules to help to prevent imprudent fiscal policies and their adverse effects on inflation and expectations. these rules are enshrined in the maastricht treaty and operationalised in the stability and growth pact. in setting deficit and debt targets ( most notably the 3 % deficit limit ) and establishing procedures for budgetary surveillance and control, they are not fundamentally different from appropriate rules at the national level. compliance with the rules in member states will keep deficits low enough to ensure government solvency while providing governments with the necessary room to smoothen economic fluctuations through the operation of automatic fiscal stabilisers. this will also generate an appropriate fiscal environment for monetary policy - making at the euro area level. the growth and stability pact is a fundamental pillar of european monetary union. past problems with its implementation cannot be denied, but the recent reform of the pact aims to remedy this. in order to foster fiscal discipline, the governments of the member states, together with the commission, now need to implement the revised rules in a rigorous and consistent manner. the current excessive deficit procedures, and above all the case of germany as not only the largest economy but also the β source β of the pact are the real test. in this way, confidence in the credibility of the rules and in prudent fiscal policies can be reinforced. this will not be an easy task, admittedly, and serious concerns have been expressed. sound fiscal policies will remain a priority for many years to come. the final stage what does all this imply for the future of europe? given | than in the past. this could be a concern in view of the generally limited price and wage flexibility, low labour mobility and the lack of a risk - sharing mechanism due to the still incipient financial integration. time will judge the severity of this potential effect. montary union with the completion of the single market and european monetary union the economic and the monetary side of the β triangle β have been completed. this raises the fundamental question : can monetary union work and survive without the third side of the triangle, which is without a fully - fledged political union? the answer is clear : yes, it can. it is possible that, over the very long term, strong elements of a political union may ( need to ) emerge, but for the time being economic and monetary union ( emu ) can proceed perfectly well without a political union in the form that we understand today. here are the main arguments : first, monetary union in itself has a clear political dimension. it entails the transfer of national monetary policy decision - making powers to a supranational entity, the european central bank. relinquishing national sovereignty in such an important field is a substantive contribution to political integration. a central bank is, after all, an element of statehood. the maastricht treaty has made the ecb independent of any political influence so that it is able to fulfil its clear mandate of preserving price stability. monetary policy - making is hence not only centralised but also depoliticised. this step was only possible because euro area members had achieved a high degree of convergence in monetary policy attitudes and preferences in the run - up to monetary union. moreover, the way participating countries see themselves and their role as nation states has changed profoundly. in this respect, the launch of the euro marks the most recent and far - reaching step. national sovereignty has not only been transferred in the area of monetary and exchange rate policies but also in other key policy areas, such as competition and trade. finally, a single market has been established. as a result, the euro area countries already share important elements of state formation which are also key to the functioning of monetary union. flexibility second, from a purely economic perspective, what else is needed to make the single monetary policy work? most importantly, flexible markets are needed to enhance the ability of individual countries to respond to specific circumstances and economic shocks. wages and prices in particular may need to adapt more quickly and strongly. the mobility of capital will become an | 1 |
through better co - ordination and collaboration will emerge stronger. thank you. references : www. nkibrics. ru / system / brics /... / brics _ and _ the _ global _ economy. pdf brics and the global economy, dr bandi ram prasad, financial technologies knowledge management. brics insight paper 2, new south - south co - operation and the brics new development bank, by zhu jiejin. the role of emerging markets in a new global partnership for growth, by christine lagarde, managing director, international monetary fund, university of maryland, february 4, 2016. brics joint statistical publication 2015. south africa in brics, www. brics5. co. za /. www. ndbbrics. org. statement of the monetary policy committee, 19 may 2016. world bank global economic prospects 2016. bis central bankers β speeches | the south african economy will always be affected considerably by developments in the rest of the world. any weakness in the us dollar or any of the other major currencies will affect the exchange rate of the rand. our focus can therefore only be to develop an environment favouring greater stability. monetary policy will continue to focus on the objective of price stability. fortunately the world economic outlook has recently improved considerably, which should assist in attaining higher domestic economic growth. in addition, the outlook for inflation looks good. thank you. | 0.5 |
markets, and high rates of firm entry and exit, canada appears to have all the ingredients needed to be an innovation leader. however, it is only 16th among the oecd countries in the intensity of business research and development. 9 our dismal multifactor productivity growth indicates that canadian firms do not effectively use the capital that they purchase. 10 some possible explanations for why we both under - invest and appear to use capital so poorly include : the wrong skills mix : canada has a well - educated labour force but, perhaps as the structure of the economy shifts, not in the areas required ; small firms : compared with the united states, canada has proportionately more small firms that are significantly less productive than large firms ; 11 and in particular, inadequate competition in some sectors, especially network industries that have spillovers throughout the economy, including telecommunications, electricity, and retail. 12 whatever the combination of reasons behind canada β s poor productivity record, there are several avenues available to policy - makers to encourage sustainable longer - run growth. it is important to acknowledge that successive governments have taken many steps in the right direction. canadian businesses benefit from a sound macro - policy environment, including sustainable fiscal policy and credible monetary policy, which delivers low, stable, and predictable inflation. corporate tax competitiveness β particularly for new investment β has improved markedly over the past decade and is now among the most attractive in the industrialised world. canada has also actively pursued trade openness through new agreements and unilateral tariff reductions. 13 staying the course in these regards is likely the single most important contribution of the public sector. this is not related to industrial structure β it is found in most industries. see a. sharpe, β what explains the canada - us ict investment gap? β research report 2005 β 2006, centre for the study of living standards ( csls ), december 2005. a recent report concluded that β too many businesses in canada are technology followers, not leaders β and stressed the need for β innovation - based business strategies. β see p. nicholson, β innovation and business strategy : why canada falls short, β international productivity monitor, no. 18 ( spring 2009 ) : 51 β 71. available at : http : / / www. csls. ca / ipm / 18 / ipm - 18 - nicholson. pdf. using a growth - accounting framework, baldwin and gu show that multi - factor productivity ( mfp ) is the main culprit in canada β s lagging productivity performance | i believe there is scope for greater regional dialogue and greater policy convergence, at all relevant areas of public policy and private sector development. second, i believe there is more to be done in order to finish the job of regional integration. in particular, standards on products and services should be agreed upon. third, beyond the convergence of financial development policies, i remain convinced we should explore the idea of joint financial development projects. although fraught with difficulties, a regional stock exchange is a meaningful potential project. fourth, i believe the region should strive towards establishing the lowest acceptable common denominator in terms of tax, labour market, financial sector, and environment regulation. β beggar - thy - neighbour β policies through constantly undercutting each other in any of these areas are only damaging the region in the long term. fifth, the regional infrastructure remains rather fragmented. this refers not merely to the transport infrastructure, but also the electricity and it network. honourable participants, some of the issues i professed here might seem utopian or unrealistic. however, i remain convinced that through an honest common endeavour, such ideas might, someday, in the nottoo - distant future, become reality. thank you! 3 / 3 bis central bankers'speeches | 0 |
- being of most americans, particularly those who have been struggling and are most 2 / 7 bis central bankers'speeches vulnerable to economic downturns. and, as discussed in the federal reserve β s july monetary policy report and in chair yellen β s accompanying testimony before congress, it is encouraging that unemployment rates continue to fall for most demographic groups, including african - americans and hispanics. 2 at the same time, we should remain concerned that the jobless rates for those groups remain above the unemployment rate for the nation. recent u. s. census bureau estimates of household income growth also provide some reason for optimism. median real household income rose 3. 2 percent in 2016, after strong gains the prior year. gains were particularly notable among african - american and hispanic households, and the poverty rate fell to near pre - crisis levels. while this is good news, i think we can all agree that we have a long way to go to improve income inequality and mobility in the united states. as i see it, these are among the most important issues we face as a nation. income mobility and education now, it is clearly the case that, given differences in individuals β abilities, a free - market society will generate some level of inequality. however, there are persistent trends toward growing inequality and diminished economic mobility β and in my view, these are problematic. 3 first, income inequality has widened notably since about 1980. 4 second, and more distressing, is a relatively low rate of economic mobility, or the degree to which individuals or families can move up or down in the income distribution over time. for example, the fraction of children who earn more than their parents has fallen from 90 percent to 50 percent over the past half century, and only 37 percent of parents believe that their children will be better off financially than they are, according to a recent pew research center survey. 5 high inequality combined with a low rate of mobility is particularly problematic in a democratic society. in short, it means that being born into a low - income family is likely to severely limit an individual β s opportunities and well - being over his or her lifetime. the united states fares notably weaker on both dimensions relative to its oecd peers. 6 that is concerning, and something we should be working to address. one significant initiative we have taken within the federal reserve system is the establishment of the opportunity and inclusive growth institute at the minneapolis fed, which conducts research and makes recommendations on the structural barriers to economic advancement in the nation | william c dudley : the monetary policy outlook and the importance of higher education for economic mobility remarks by mr william c dudley, president and chief executive officer of the federal reserve bank of new york, at the council for economic education β s 56th annual financial literacy & amp ; economic education conference, new york city, 6 october 2017. * * * good afternoon. it is a pleasure to have the opportunity to speak at this council for economic education ( cee ) event, marking the cee β s 56th annual financial literacy and economic education conference. given the hard lessons of the financial crisis β and the economic challenges still facing many americans β there are few goals more worthy than promoting greater financial and economic literacy. as always, what i have to say reflects my own views and not necessarily those of the federal open market committee ( fomc ) or the federal reserve system. 1 personal educational experience before discussing the economic outlook and the role of education in income mobility, i will offer a few remarks on my own educational experience. while it may not be surprising that i have a ph. d. in economics, the path that led me to the university of california, berkeley, is a bit unusual. i started college in the 1970s at columbia university. on the positive side, the professors were engaging, and i had the opportunity to read the great books of the university β s core contemporary civilization curriculum. but, i was troubled by the emphasis on grades and test taking. i wanted something that was more free - form. the idea was to find an environment that fostered learning for learning β s sake. so, in a small act of rebellion β after all, it was the early 1970s and i was a teenager β i decided to transfer to new college in sarasota, florida. new college provided a strong liberal arts, cross - disciplinary, and flexible education program that relied β as it does today β on an unstructured format of evaluations, study programs with individual professors, and contracts rather than grades. i like to call it β graduate school for undergraduates, β because it really is a place that encourages students to engage intellectually, read and think critically, and communicate effectively. this experience made me a strong advocate of a liberal arts education, which i believe is now more valuable than ever, given the greater importance of synthesizing and evaluating the vast array of information we have at our fingertips. the cross - disciplinary approach of a liberal arts program is also vital to understanding and solving complex | 1 |
now, let me briefly touch on how we build the financial safety net in china. china attaches great importance to preemptive prevention and resolution of financial risks. we followed the principle of " prevention of excessive build - up of financial risks ex ante, and swift and efficient resolution ex post ". towards this end, we have made great efforts on the following fronts : the first is to enhance the corporate governance and risk management of financial institutions. sound financial institutions are the groundwork of the financial safety net. at the beginning of this century, the chinese authorities successfully restructured some large state - owned banks. now, these banks have become main pillars of china's financial system in supporting china's fast and sustained economic growth over the years. 2 / 3 bis - central bankers'speeches the second is to strengthen financial regulation. financial regulation is the first line of defense of the financial safety net. we have adapted our financial regulatory regime to changes of the financial market and financial system. the objectives are to optimize the functions and enhance the synergy of macro - prudential, micro - prudential and conduct regulation. the third is to reinforce resources for risk resolution. in china, we have deposit insurance fund, insurance security fund, securities investor protection fund, trust protection fund, and financial stability fund. these funds have already accumulated some financial resources. established in 2015, the deposit insurance scheme now provides full protection for over 99 percent of depositors with a coverage ceiling of rmb500, 000. it charges risk - based differentiated premiums to encourage prudent operation and early risk correction. the fourth is to act as the lender of last resort. the pboc has played a crucial role in large bank restructuring and reform, financial risk resolution, and prevention of systemic financial risks. thanks to the efforts over the years, we have maintained financial stability in china. the fifth is to step up legislative efforts on financial stability. china is formulating the financial stability law. we aim to establish a risk resolution mechanism with wellaligned responsibilities and rights, compatible incentives and constraints, and reasonable cost sharing. ladies and gentleman, strengthening the asian financial safety net requires solidarity and collaboration of all parties. the pboc stands ready for close communication and collective action to build a more effective financial safety net. thank you. 3 / 3 bis - central bankers'speeches | financial safety net. going forward, we should continue to focus on our goal of safeguarding financial stability, further improve the functioning of the cmim, and better defend the region against external shocks. second, the cmim needs to fully capture the new developments of the international monetary system and reflect the regional nature. the introduction of local currency contribution in 2021 provides more financing sources and options in addition to 1 / 3 bis - central bankers'speeches financing in usd. the ongoing discussion on ways to introduce freely usable currencies to the cmim will enhance its regional nature to meet the actual demand of the region. it will also fully tap the potentials of freely usable currencies and improve flexibility and accessibility of the financial support. in addition, we could explore the feasibility of a paid - in structure for a legal entity. in recent years, there have been calls from the market and the academia for establishing a new legal entity to strengthen the asian financial safety net. the asean plus three members are also exploring the necessity and possibility of a paid - in structure. the broadly shared desires are worth greater attention and further study. the introduction of freely usable currencies could also allow for more options on this front and consequent reforms. at the bilateral level, currency swaps would continue to play a supportive role. bilateral currency swap is an important layer of the financial safety net. it can promote bilateral trade and investment, and complement the global financial safety net. for example, during previous episodes of global financial market turbulence or banking crises, emergency liquidity support through bilateral swaps among major central banks effectively reduced market volatility. bilateral currency swaps have been growing in asia over the years. as the asian economic integration deepens, the demand for local currency settlement has been on the rise in asia. now the total size of bilateral currency swaps between asean plus three economies has exceeded usd380 billion. the pboc has signed bilateral currency swap agreements with 29 central banks and monetary authorities. these swaps, totaling more than rmb4 trillion, have played a key role in promoting cross - border trade and investment. some of them were an integral part of the imf - led global bailout efforts. going forward, the pboc stands ready to deepen currency cooperation with our partners in the region to facilitate trade and investment and maintain regional financial stability. at the national level, enhancing financial safety net at home is essential for the economic resilience and prosperity of asian economies. | 1 |
which want to issue green bonds can avail themselves of mas'grant schemes to help defray the additional costs of third - party verification when issuing green bonds in singapore. chongqing and singapore can do more to simplify the application process for qualified companies in the western region to raise sustainable finance overseas. this can leverage on the trials that chongqing and chengdu have done earlier this year to facilitate such issuance. third, we can do more together to align our green taxonomies. asean has embarked on developing a taxonomy to define sustainable and transition activities in six focus sectors as a start. china has also developed a taxonomy. china and asean can work towards greater inter - operability across their taxonomies, especially for transition activities. this will help attract greater cross - border green financing to the region. fourth, we can explore together innovative structures to help scale up transition financing for the asean region. this includes financing structures that blend finance from the public sector, private sector and multilateral development banks to de - risk and fund projects that would otherwise be unable to attract pure commercial funding. in short, there is much that chongqing and singapore can potentially do together in the green finance space. let me wish all participants a fruitful summit, with good exchanges of insights and new opportunities for collaboration. 3 / 3 bis - central bankers'speeches | the inadequate capital requirements that basel i placed on banks in respect of their securitisation activities. on 1 january 2008, all singapore - incorporated banks have adopted basel ii, a more risksensitive capital framework. the greater focus on enhancing internal risk management required under this new framework is especially timely given the volatile and uncertain environment. 14. second, mas has been working on improving liquidity risk management of banks before the current crisis. events in recent months reinforced the critical importance of liquidity management. to enable banks to better manage their liquidity risk, mas has put in place a revised minimum liquid assets framework. banks can apply to adopt a more risk - sensitive methodology for determining their regulatory liquidity reserves, which takes into account their risk management capability. 15. third, at the macro - level, to enhance liquidity management in the system, we will be making some changes to the mas standing facility that has been in place since june 2006. 16. the standing facility allows banks to place excess funds with or borrow from mas against singapore government securities collateral. this has helped to moderate intra - day volatility in interest rates as banks can avoid any undue scramble to square large, and potentially destabilising, positions in the market. the standing facility is currently open to the 11 primary dealer banks which are the most active banks in the singapore dollar money market. non - primary dealer banks could access the facility through the primary dealer banks. 17. while the existing arrangement has worked well, experience in other developed markets has also demonstrated that such a facility is particularly useful in times of unusual market volatility, as this enhances confidence that liquidity needs in the banking system will be met. 18. hence, to enhance the robustness of the system, mas will widen participation in the standing facility to meps + participating banks, subject to necessary documentation. the psa / isma global master repurchase agreement continues to be a requirement for banks to access the borrowing facility which will remain collateralised against singapore government securities. we will provide more details on this to the banks over the next few weeks. corporate governance, market conduct 19. apart from dealing with issues relating to the safety and soundness of banks, and the stability of financial system, mas has also been working on improving the responsiveness of our rules, as well as on improving corporate governance and market conduct. 20. mas is proposing amendments to the securities and futures act and the financial advisers act. the amendments aim to | 0.5 |
result is either that the bank is pushed towards bankruptcy if the state allows it, or has to be supported using taxpayers β money and possibly having them bearing the losses, which as i said before is not right. so the concept of bail - in after all the equity holders and the subordinated debt holders have been wiped out, could involve the transformation of senior debt into equity or semi - equity in a going concern bank. in such a case, it is a very good and important concept. to my mind, bail - in should be part of the extra powers given to the supervisor. that is the only way we can reassure investors that it will be used only when it is absolutely needed to avoid a bankruptcy. that means that ultimately it is in the interests of senior bondholders to know that they won β t be penalised just because it β s beneficial for other stakeholders, but because it can β t be avoided. this is why it is essential that this power should be in the hands of the supervisor. but bail - in needs to apply to the whole of the senior debt. i β m not completely convinced that there is merit in having specific bail - inable instruments like cocos. this is because either it makes the basis of the bail - in very restricted and may not be sufficient in many instances so that in the end you may need recourse to a second layer. or, if it is a big amount, it can be extremely costly because of the specific risk, and therefore it may be better in that event to move directly to equity. in any case, the fact that bail - in is now on the table and can be used by the supervisor will probably be one of the reasons why the banks will be tempted to increase their capital base regularly over time, to demonstrate to the buyers of senior debt that they are sufficiently protected. it will also be a strong incentive for banks to limit and control their risks and clearly communicate to the market how they do so. euroweek : has all this done enough to break the pernicious and highly damaging loop between sovereign and bank risk that was so central to the crisis? or is that loop one that is simply impossible to break? noyer : i think we have reduced that risk. the work is not totally finished. we need to continue in the direction we have taken. but to my mind there were three decisive moves that have addressed the problem of this feedback loop. one was the action that was taken on the consolidation of public | overall balance sheet situation has been substantially improved and they are now in the process of meeting in full the requirements of basel iii with core tier one ratios of 9 % before the end of 2013. this is several years ahead of the schedule that was originally stipulated. by the way, i always felt that the time frame determined by the supervisors in basel for compliance by the beginning of 2019 was always a little bit theoretical, because markets were likely to ask for more rapid implementation, which is what the french banks have done. so when i compare the french banking system with other major banking systems, be it in north america or in europe, i have the clear conviction that the french banks are on track and are among the best performers in terms of their capital ratios. euroweek : has this deleveraging process been at all damaging to the economy, as some people say it has been in the uk and in southern europe, by reducing their lending to the corporate sector? or is the universal banking system such that this is much less of a threat in france than elsewhere? bis central bankers β speeches noyer : the deleveraging of the french banks has been partly done through the reduction of their exposure to sovereign debt markets globally. the remainder has been in areas such as project and trade finance. the french banks haven β t exited from these businesses altogether, because they have very strong franchises in these areas which are a good source of revenue. but they have managed to liquidate a number of operations that were weighing down their balance sheets. that has helped them to reduce their financing needs. they did not reduce their leverage through imposing some kind of credit crunch β absolutely not. actually, the change in the volume of bank lending in france has been less rapid than in almost all other eurozone countries β or almost all other european countries, including the uk. i don β t believe there has been any constraint on the supply of credit to the economy. if there has been a decline in lending volumes this has been a reflection of reduced demand, rather than any decline in supply. possibly in the future there may be a relative decline in the importance of bank lending, because we have worked a lot on developing simple and transparent alternative financing instruments such as securitisation. these may attract more attention from institutional investors and would therefore be a way of providing more credit to the economy without putting as much pressure as there may have been in the past on the balance sheets of the banks. this will be positive as long as we can | 1 |
and this is capping the demand for u. s. exports. on the brighter side, some of these headwinds appear to be subsiding. employment growth has picked up somewhat, which should eventually lead to faster household formation and more demand for housing. u. s. banks are healthier so that credit conditions, while still tight, are gradually easing. and, households appear quite far along in the deleveraging process by a number of important measures. for example, the ratio of household debt service relative to income is back to levels last seen in the early 1990s. for these reasons, i expect that growth will gradually strengthen over the next few years. nevertheless, significant downside risks remain, especially those related to the challenges in europe and how the potential β fiscal cliff β in the united states will be resolved after the fall elections. even if these risks do not materialize, i anticipate only slow progress toward full employment. bis central bankers β speeches on the inflation side, in recent years our forecasts have been noticeably more accurate than on the growth side, and we have succeeded in delivering inflation very close to our 2 percent price stability objective. through march, as measured by the personal consumption expenditures deflator, overall consumer prices have risen 2. 1 percent over the past 12 months, and prices excluding food and energy have risen 2. 0 percent. but price trends have been a bit stickier than one might have anticipated given the large amount of slack in the economy. to some degree, this likely reflects the anchoring exerted by stable inflation expectations. but some of the price pressures can be attributed to other, more temporary, factors : higher oil and gasoline prices and their pass - through into the costs of other goods and services. upward pressure on imputed homeowners rents due to increased demand for rental housing. higher import prices for goods, such as apparel. this reflects many factors including commodity prices pressures and higher wage inflation in countries such as china. some of these upward pressures on inflation appear to be fading. oil and gasoline prices have fallen in recent months. apparel price inflation should gradually ease, given the sharp drop seen in cotton prices. owners β equivalent rent should also eventually stabilize as multi - family construction picks up and programs that shift real estate owned by banks to investors so they can be rented gear up. more generally, there are several reasons to think that inflation will remain moderate and close to our objective. first, and most obviously, the economy continues to | jean - claude trichet : creating an integrated market for the euro area speech by mr jean - claude trichet, president of the european central bank, at the conference β sepa summit β at the euro finance week, frankfurt am main, 13 november 2006. * * * ladies and gentlemen, it gives me great pleasure to welcome you to this conference on the single euro payments area ( sepa ). the ecb is committed to the success of the sepa project and therefore decided to contribute to the organisation of this sepa summit in frankfurt. i am pleased that we could attract some of the key decision - makers in europe ( and beyond ) to this two - day event. i welcome mr mccreevy, commissioner for the internal market, who will share his views on the developments in the creation of an internal market in the field of payments. i also welcome the members of the two panels this afternoon. today β s conference is an excellent opportunity to discuss the opportunities that sepa and, more generally, financial integration offer for europe. on this occasion, the ecb is also distributing for the first time its brochure on sepa, which is intended to provide an informative overview of the project, also for those not involved in this issue on daily basis. our main message is that sepa will only become a reality when all euro payments in the euro area are treated as domestic payments and the current differentiation between national and cross - border payments disappears. i am aware that this calls for everyone to make substantial efforts, as it requires not only the alignment of national practices of the banking industry, but also changes in habits from economic actors in all euro area countries. indeed, the sepa project is β in ambition and size comparable with the changeover to the euro banknotes and coins, although the logistics are quite different. sepa could be seen as an important historical step in the unification of europe after the introduction of the euro banknotes and coins. the progress with the sepa project that has been achieved up to now by the industry is impressive. looking back on the discussions on improving cross - border retail payments less than a decade ago, it was surely difficult to imagine that such a remarkable market - led movement called sepa would be achieved to foster financial integration. the sepa project has activated a real modernisation process which, in turn, will generate other adjustments. it is thanks to many individuals, many of whom are here today, who have continuously driven the project, that | 0 |
. the question is, can we afford to enter the eurozone if this reform is not yet completed? this brings us to the territory of political economy, more precisely to the issue of whether the euro fosters or hinders structural reform. although this issue has received a lot of attention recently in both theoretical and empirical work, my impression is that so far no consensus has emerged. what this means for the euro strategy of hungary is that probably we should not risk entering the eurozone until this crucial structural reform β that is, the scaling back of overly generous the welfare state in order to increase the labour supply, foster potential growth and stabilize public finances β is completed or is at least safely on track. the second risk, which frequently took the centre stage in debates on euro accession, is that of large and potentially disruptive capital inflows. the starting point of the argument here is that the catching - up process of new member states is about to continue for a long period even after they introduce the common currency. the catching - up entails a real appreciation, which, once the exchange rate is irrevocably fixed, translates into higher inflation and lower real interest rates. low real interest rates may in turn trigger excessive demand fuelled by an unsustainable credit boom financed from foreign borrowing. when the inevitable correction comes, there is no independent monetary policy to smooth the adjustment and a serious bust follows the boom. such boom - bust patterns were clearly observable in some first - wave eurozone members like portugal, ireland and spain. better wait with euro adoption, the argument goes, until catching - up is more progressed and the equilibrium real appreciation is smaller. i have one observation to this argument. we cannot ignore the fact that the financial integration of the new member states to a large extent had already taken place. the banking sectors in these countries are owned predominantly by euro area banks. in the past couple of years of abundant global liquidity, cross - border lending by parent banks in foreign currency was available in virtually unlimited quantities. this practically meant that foreign ( euro or swiss franc ) interest rates had become the point of reference for domestic consumption and investment decisions well before the euro was introduced, pushing down the effective real interest rate. it is obvious by now that the credit boom that was envisaged to take place after eurozone entry actually arrived much earlier. the only difference was that, not having the common currency yet, it left us with a sizeable currency mismat | reform carries the risk of a prospective underperformance in the eurozone. all in all, this crisis has evidently demonstrated that the banking sectors of the euro area and the new member states are deeply integrated, has greatly reduced the chances of credit booms in the forthcoming years and may exert an extra disciplining power in countries prone to fiscal misbehaviour in the future. for these reasons, i think it may act as a catalyst for the euro accession process. importantly, it should be let to act as a catalyst, that is, it should not be used as an excuse to make the entry criteria, or their interpretation, more stringent. finally, let me turn to the prospects of meeting the criteria in hungary and, more specifically, what i think this implies for our euro strategy. currently, there is no official target date for euro adoption in hungary. popular support for the euro is relatively strong, and it probably intensified further after the recent currency turmoil. all the major political parties agree on the desirability of introducing the common currency. however, at the current juncture, hungary does not meet any of the maastricht criteria. government and central bank officials, including myself, repeatedly expressed that the earliest date to start talking about a roadmap to eurozone may be somewhere in 2009. given hungary's not too convincing track record regarding the fiscal balance and inflation, an erm ii entry is only reasonable when the prospective meeting of the maastricht criteria is safely on track. hungary's convergence programme envisages meeting the fiscal deficit criterion by 2009, but chances are that this could take place as early as this year ( albeit only by a narrow margin ). as a reaction to the recent bout of the global financial crisis and the deteriorating prospects for external financing, the government decided to withdraw the draft 2009 budget and rewrite it so that the deficit reduction next year is more pronounced. in addition, the imf rescue package came with conditions which implied further expenditure - cutting measures. the central bank β s latest inflation forecasts imply that the maastricht inflation criterion may be met by 2010. these developments mean that the chances of meeting the entry criteria relatively quickly has improved somewhat, which implies that, in principle, we should not wait with erm ii entry too long. on the other hand, the financial turmoil has undoubtedly reached eastern europe. as a result, currently there is extreme uncertainty in the new member states regarding the future course | 1 |
olli rehn : economic outlook and monetary policy β a european perspective talk by mr olli rehn, governor of the bank of finland, at the council on foreign relations, new york city, 17 april 2019. * * * ladies and gentlemen, good morning to everybody. many thanks for the invitation to give a talk at the council on foreign relations, which does immensely valuable work to keep the flame of rules - based multilateralism and the liberal international order alive, in a rather challenging political environment. hence it is a great honor and pleasure to address and discuss with you today. in my opening remarks i will focus on the economic outlook and monetary policy in europe. after that i am glad to take questions and comments. let us recall what has happened since we tamed the crisis. during the euro area recovery since 2013, over 10 million new jobs have been created, and unemployment has fallen from its peak of over 12 percent to below 8 percent. the banking sector is now more resilient, the amount of nonperforming loans in banks have decreased significantly, and lending to households and nonfinancial corporations have increased. the ecb β s accommodative monetary policy has been very important in facilitating and supporting the recovery. following the economic recovery and the then positive economic outlook, the discussion on monetary policy normalization began to proceed in the euro area in 2018. in june 2018, the ecb governing council expected to end the net purchases of monetary policy at the end of 2018. at that time, the decision was still conditional and dependent on inflation. at its meeting in december 2018, the governing council of the ecb decided to end net purchases in the asset purchase program at the end of the year. at the same time, the governing council announced that it will continue to invest the maturing bonds fully for an extended period of time after the ecb governing council has raised the ecb β s key interest rates, and in any case as long as it is necessary to maintain a favorable liquidity situation and accommodative monetary policy that supports growth and converges inflation to the ecb β s goal of close but below 2 percent. the policy rates were expected to remain at their current levels through the summer of 2019. since then, the incoming data during the first months of 2019 have confirmed that global economic activity has slowed down, which is now felt also in the euro area. prevailing uncertainty, stemming from the us - china trade tensions, slow | and especially since 1996, canadian businesses have been investing heavily in machinery, equipment, and software, much of which embodies the latest technologies. this should raise productivity in canada and allow our economy to grow faster than it otherwise would. but, at this point, it is difficult to tell by how much, whether some of the gains are already in, or whether most are still to come. so far, our statistics yield little direct evidence of a substantial pickup in productivity growth, although recent historical revisions to the national accounts show somewhat larger gains than before. because of this uncertainty, the bank is taking a cautious approach to projecting a permanently higher rate of growth in our economy β s capacity to produce. but we certainly do not want to dismiss this possibility either. that is why we are following closely a wider - than - usual range of indicators that could tell us what is happening on the supply side and give us early - warning signs of pressure on capacity and prices. for example, we watch for unexpected movements in the underlying trend of inflation and for changes in expectations of future inflation. we also look at commodity prices, wage settlements, reports of shortages in product and labour markets, the growth of money and credit, and information from the bank β s business contacts across canada. take, for instance, our best estimate of the trend of inflation - what we call core inflation. this is a measure that takes out of the consumer price index the fluctuations caused by the very volatile energy and food components and the effects of changes in indirect taxes. by this measure, inflation has been somewhat lower than we had expected since late last year. this very favourable price performance suggests that our economy has not been pressing as hard against capacity as we had thought. it gives us some more room to explore where the limits of that capacity really are. and this should give businesses a greater opportunity to exploit their new equipment and technology to the fullest. nonetheless, we must not be lulled into thinking that the threat of inflation has disappeared. given the strong momentum and high levels of activity in our economy, and given the time that it takes for monetary policy actions to affect output and prices, the bank must remain vigilant. nothing will bring the present expansion to an abrupt halt more quickly than an outbreak of inflation. assessing the balance between total demand and supply in the economy and the implications for inflation will be an ongoing challenge for monetary policy. i can assure you that the bank is fully committed to the task - because keeping inflation low | 0 |
central counterparty are that securities settlement can be both safer and more efficient. the transactions can be netted out 5 and the counterparty is known. the counterparty risks can be managed by the central counterparty obtaining collateral. moreover, the central counterparty has its own financial resources. the drawback with a central counterparty is that the market risks are concentrated to a single player β a high concentration of risk. provided the operations are properly organised, however, this is not a problem. still, the concentration of risk does mean that central counterparties are often systemically important. supervision and oversight are therefore highly relevant. 6 i shall leave counterparty risks for the moment and turn to the problem in the united states with insufficient market transparency. many american credit derivatives are non - standardised products and have therefore been inherently difficult to understand and value. if attempts were made to cope with the lack of transparency, one way would be to use electronic trading because this enhances market transparency and reduces the risk that access to information is not uniform. another important effect of electronic trading is that concentrating trading to one facility makes pricing more efficient. each order can be matched with the best price. moreover, new players can have better access to the market, which can improve market quality and strengthen competition. 7 so what is the situation in sweden? american credit derivatives have not had swedish owners to any considerable extent. neither is there a swedish credit derivatives market of any size. this is mainly because the swedish market for corporate bonds is small and without corporate bonds it is hard to trade in credit derivatives. so the problem with american credit derivatives that are traded over - the - counter does not exist in sweden. that does not dissuade us from reviewing the swedish securities market in the light of the problems that have been identified in the american market. securities trading can be arranged on an established market or over - the - counter ; in the latter case, the parties to the transaction settle it on their own. netting involves offsetting transactions against each other with a view to making the transactions cancel out as far as possible. the riksbank and finansinspektion ( the swedish financial supervisory authority ) evaluate nasdaq omx derivatives markets in accordance with the international standards in recommendations for central counterparties, published by cpss and iosco. for more information about electronic trading, see the implications of electronic trading in financial markets, report by a working group established by the committee on the global financial system of the central | strive for a good reputation as providers of complete and correction information. still, it is hard to ensure that the markets are liquid under every conceivable circumstance. if the participants suddenly become uncertain about asset values and if the counterparties are unfamiliar, a market can quickly become less liquid, which leads to high risk premiums. the current financial crisis has provided examples of this. investors are averse to putting money into assets whose value is highly uncertain ; they prefer the securities that are safest. rather than doing business with unfamiliar counterparties, investors prefer counterparty risks that can be managed. markets that are illiquid also have consequences for monetary policy because repo rate adjustments do not then have the intended impact. that brings me to this autumn β s financial market developments. events this autumn and measures by swedish authorities in mid september the swedish financial markets became seriously disturbed and swedish banks experienced growing problems with funding. an increasing share of bank funding was arranged at very short maturities. moreover, any funding that could be achieved at longer maturities cost the banks considerably more than normal. prior to this, in 2007 and 2008, the riksbank had no cause to take any extraordinary measures. unlike the case in many other countries, the overnight rate in sweden was stable and close to the policy rate, which meant that the intentions behind monetary policy were visible in the market. moreover, swedish banks still had good possibilities of obtaining funds, though this did cost more than before. 9 when lehman brothers filed for bankruptcy, however, the international financial crisis worsened. in this situation the riksbank and other swedish authorities introduced a number of measures so that markets would function better. the riksbank β s measures in this respect have aimed at making bank funding easier and thereby assisting the banks in the provision of credit to companies outside the financial sector. in order to make corporate funding easier, during the autumn the riksbank has lent more than sek 200 billion and usd 25 billion. besides these measures, aimed at getting the credit market to function more efficiently, the riksbank has taken more conventional monetary policy measures. the repo rate has been lowered during the autumn by a total of one percentage point β starting with 0. 5 percentage points on 8 october in a joint action with the federal reserve, the bank of england, the ecb, the swiss national bank and the bank of canada, followed by another 0. 5 percentage points on 22 october. the purpose of these interest rate cuts was to | 1 |
the country β s productive capacity. consumer spending is low, primarily due to households β uncertainties about the future, but also due to their slowing income. the two other aggregate demand components also show limited ability in providing stable economic growth impulses : public spending is limited, due to lack of fiscal room because of a higher public debt, while albania β s exports suffer the sluggish demand from the international markets and the low degree of diversification. finally, business investments are downward, reflecting businesses β restricted room for boosting their sales and banks β tighter lending standards. bis central bankers β speeches the economy is a complex and interdependent mechanism. all the afore - mentioned factors have led to a sluggish labour market and elevated pressures on public finances. they have also increased vulnerabilities to many businesses and the non - performing loans in the banking system. in bank of albania β s opinion, this situation requires pursuit of stimulating macroeconomic policies. economic theory and practice suggest that the maintenance of macroeconomic balances is a prerequisite to pursue these policies. i have reiterated that these balances do exist in the albanian economy. they constitute a strong point for its future outlook. inflationary pressures remain weak, external balances of the economy are improving and the albanian financial system is healthy. but the macroeconomic balances should be maintained and further strengthened in the future. this objective is a preliminary filter and every macroeconomic incentive should pass through it. every macroeconomic stimulus should also consider another vital equilibrium : that of financial stability in the country, otherwise it is at risk of becoming unproductive. the global crisis has significantly elevated a country β s exposure to risks related to financial stability. therefore, this equilibrium should remain a constant priority and in concert with stimulating development policies. the healthier we are financially, the broader the spaces available to stimulate the development of the country. having said the above and availing myself of the presence of the three main stakeholders responsible for designing and implementing the macroeconomic policies, let me now share with you bank of albania β s opinion about promoting the country β s development in the short term. the bank of albania, being an independent institution, responsible for the monetary policy and for the supervision and regulation of the banking system, has taken concrete actions to boost demand in the economy. we have lowered the key interest rate to record lows and are considering other spaces available in this regard. we have also supplied the banking system with the liquidity needed | let's do that with hope - the thing with feathers. thank you. 3 / 3 bis - central bankers'speeches | 0 |
integrated response by irb banks. focusing irb efforts in a compliance unit that seeks to meet the letter but not the spirit of the irb standards will not be welcome. the details of what we will expect are, of course, still being developed. based on our discussions with banks thus far, areas of special attention may include the breadth and depth of internal audit and loan review and the consistency and timeliness of internal ratings. the overall supervisory review process is likely to be familiar : verification of internal processes and procedures, coupled with some degree of transaction testing. the overarching goal will be to assess the effectiveness of a bank β s processes and systems in achieving sound risk management and adherence to irb standards rather than to dictate the particular form that internal checks and balances must take. supervisors will also carefully review the manner in which loss characteristics are estimated and the estimates themselves β such as the probabilities of default, the losses given default, and the exposures at default β that are provided by irb banks. this is an area where supervisors have not tread very often and with many open issues. the issues include the suitability of internal and external data sources, the appropriate historical period to use in producing estimates, and the manner in which historical data and loss estimates should be linked to the bank β s current exposures. these and other issues will be challenging and will rightly occupy much of our attention over the coming months and years. in this context, the industry and supervisors must work together to develop and use reasonable standards for irb quantification. neither we nor banks can afford a β race to the bottom β in this critical area. the expertise of the rma will be particularly sought and appreciated. supervisors obviously have a lot of work to do. we are at the very beginning of efforts to train our staff to understand all of the issues raised by basel ii and to make sound judgments about banks β adherence to the standards. i hope you will be patient with our examiners as they come up to speed, just as we intend to be patient with you. and you should not interpret my earlier remarks as a signal that we intend to be very inflexible. we recognize that many systems, methods, and organizational forms can satisfy the spirit of the irb standard, and that what is appropriate for one bank may not be appropriate for another. we expect and welcome variety, in part because that is necessary to support further innovation. and innovation is absolutely necessary. | ##quities of many other industries, and one conventional explanation for this is that banks are quite opaque. it has become increasingly clear that investors cannot easily know the level of risk they are acquiring with any particular bank equity position. when it comes to assessing share values, uncertainty can often breed doubt : it seems reasonable to expect, as a long - run proposition, that more - accurate market valuations of bank equities will follow better disclosure. the three pillars discussed in the basel consultative documents flow directly from this multifaceted view, and the rank - ordering of their importance in the long run is not indicated by the number of pages devoted to each in the consultative documents. in the long run, the supervision pillar remains critical, but the supervision must be even more risk - focused and increasingly concerned with validating systems. line supervisors will evaluate the quality of risk management and examine the adequacy of the risk measures. without good supervision, the other pillars cannot stand. for example, accurate internal risk - based ( irb ) inputs are surely crucial to obtaining reasonably accurate regulatory measures of capital adequacy. and the market will not believe or use risk disclosures unless it believes that the underlying risk measures, like ratings and the probabilities of default, have been validated. thus, supervisors must validate the risk measures to support both capital regulation and market discipline. market discipline will become increasingly important. given informative and comparable disclosures of internal risk measures, the market will react more quickly and appropriately than any regulator to variations in risk postures, and such responses will help banks strike the right balance between risk and reward. formal capital regulation is the most familiar of the three pillars, and the one to which the most pages are devoted β no doubt because it, by definition, contains more β rules β that must be explained. capital ratios will serve as a trigger for corrective actions for banks that get into trouble. projecting ahead many years, better risk management may mean that troubled banks will be far fewer than they have been historically. ideally, the three pillars will work in an integrated way to strengthen banking systems. nonetheless, during the transition to a working basel ii, we may have to lean on capital regulation more than we hope to in the long run. in navigating that transition, our overarching goal should be to advance the practice of risk management and encourage its wider adoption. and we all should accept that a lot of work remains both for banks and for supervisors. | 1 |
further towards our target, since it will increasingly dampen demand. taking into account our updated assessment of the inflation outlook, the dynamics of underlying inflation, and the strength of monetary policy transmission, the governing council decided yesterday to raise interest rates again by 25 basis points. that means we have now raised rates by 400 basis points in less than a year. this is testament to our determination to ensure that inflation returns to our 2 % medium - term target in a timely manner. 1 / 2 bis - central bankers'speeches we also confirmed that our future decisions will ensure that the key ecb interest rates will be brought to levels sufficiently restrictive to achieve a timely return of inflation to our 2 % medium - term target and will be kept at those levels for as long as necessary. in other words, we still have ground to cover. barring a material change to our baseline, it is very likely that we will continue to increase rates at our next policy meeting in july. thereafter, we will continue to follow a data - dependent approach to determining the appropriate level and duration of restriction. in particular, our interest rate decisions will continue to be based on our assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation, and the strength of monetary policy transmission. the governing council also confirmed that it will discontinue the reinvestments under the asset purchase programme as of july 2023. 2 / 2 bis - central bankers'speeches | requirement for a successful monetary integration process. inflation rates in many new member states have picked up recently to an average of almost 5 %, following increases in food and energy prices and indirect tax changes. the challenge for the new member states is to contain inflation and inflation expectations in an environment of rapid catching - up. besides solid macroeconomic policy frameworks and prudent wage policies, progress in structural reforms is conducive to price stability by improving the supply side of the economy and enhancing the growth potential. this brings me to the second challenge that i want to mention : the need to achieve sound fiscal positions. fiscal deficits are on average high or even very high in a number of new member states and mostly despite very high economic growth. their governments are confronted with competing expenditure demands, including public investment in infrastructure and the need to strengthen the effectiveness of public administration and the judicial systems. this, however, should not be seen as an excuse to delay fiscal consolidation, but as an additional reason to design and implement a credible consolidation path based on durable and growth - enhancing structural reforms. it is important to bear in mind that fiscal consolidation in the new member states becomes increasingly important in the course of the monetary integration process and it is essential for a smooth participation in erm ii and the eventual adoption of the euro. conclusion let me conclude. the historic enlargement of the eu is now six months ago and i think we can say that is has been a genuine success. following a remarkable transformation in the past 15 years, the further integration of the new member states into the european family has progressed smoothly and without any disruptions. the new member states have shown an impressive economic performance, though various important challenges still remain to be fully tackled, including those relating to the recent pick - up in inflation and to fiscal imbalances. | 0.5 |
banks on a tighter rein so as to avoid any recurrence of a financial crisis such as the last one. in the united states, however, things seem to be moving in a different direction ; the new us president donald trump has signed an executive order for a review of the dodd - frank act, which provides for the tighter regulation of banks. are you concerned that this may open the door to another financial crisis? it is still too soon to make a final assessment because we don β t know exactly what the us government wishes to review or which areas of the dodd - frank act, which numbers hundreds of pages, are being targeted for amendment. overall β yes, it is true that we are keeping european institutions on a tighter rein, as you put it β i think the financial regulation has turned out well. we will need to review some aspects over the next ten years to see if there have been any unintended consequences. but on the whole, i think it is imperative that we do not take a leap backwards, especially not on an international scale, but rather ensure that we continue to provide the banking sector, which is indeed global, with a set of international rules. yes, but when the main player β the united states, which is home to the world β s major banks β deviates and deregulates, what does that mean for us here in europe? we β re not at that stage yet. as i said, it β s too early to judge what exactly will be addressed in the united states. the dodd - frank act contains many national rules, which, if they were to be revoked, would have no impact on europe as such. will there be competition for a more relaxed regulation? not from our side. i don β t believe in more relaxed regulation. nor do i believe in excessively tight regulation ; there must be a happy medium that enables the institutions to provide the real economy with the financing and services that it needs so much. we have seen, precisely in 2007 and 2008, what happens when regulation is too weak, when we trust in the self - discipline of the markets. are you already in talks with the united states? i have been speaking with my us colleagues for many, many years and, of course, over the past month too. and i will also speak with them over the next few years. but again, it is still too early to form a judgement. so far there is just a general tendency and a statement that they want | enabling investors to transfer resources efficiently across time, space and states of the world. but this idea relied on the presumption that the world is basically stationary ( and substantially linear ), that the future is pretty much like the past, that we can extrapolate from relatively small samples, and that there is a single β data generating process β that we can identify and understand. ( we must admit that all this is not limited to finance but also applies more broadly to macroeconomics, econometric modelling and forecasting. ) the real world is different, though ; for many years the big investment banks were able to sustain returns much higher than what was justified by economic growth, but the day of reckoning was bound to come. in a way, innovation, based on the presumption of stationarity, sows the seeds of the non - stationarity that eventually undermines that very presumption. β complexity was also used, somewhat perversely, as part of the case for a sort of benign neglect on the part of regulators. the big financial players argued successfully that financial innovation was too complex and too opaque for the regulators to get their heads around it. indeed, they said, to safeguard the international financial system from systemic risk, the main priority was promoting an β industry - led β effort to improve internal risk management and related systems. this, in a nutshell, was the view espoused by the group of thirty report following the outbreak of the asian crisis ( β global institutions, national supervision and systemic risk β, group of thirty, 1997. see also the article by john heimann, and comments therein, in the special issue of the banca nazionale del lavoro quarterly review on β globalization and stable markets β, march 1998 ). but this thesis was often accompanied by the argument to the effect that β you, regulators and supervisors, will always be behind financial innovation ; it would be better to allow us, the big financial international players, to self - regulate ; we are grownups, we can take care of ourselves β. and, after all, β if someone makes mistakes, some will gain what others lose ; why can β t we be left alone to play this zero - sum game of ours? β accepting this argument was a critical mistake. the regulators did not, in fact, have either the right incentives or the ability to acquire the necessary information, for two reasons. first, the big financial players are global | 0 |
well when you are thirsty. these are some of key issues which have prompted international best practices in the area of resolution regimes, and we are looking forward to understanding these from the historical examples and restructuring case studies that will be shared during the training seminar. the g20 and the fsb are calling on countries to undertake the reforms necessary to implement these standards. in uganda, this will require cooperation amongst authorities, that is, among the bank of uganda, the ministry of finance, planning and economic development, the insurance regulatory authority and the capital markets authority, to review business structures, legal powers, policies and operations to improve recovery and resolution planning as well as the mechanisms employed in resolution of firms. therefore, as a capstone, i am glad that the participants will also have the opportunity to do some handson decision making in the group exercises at the end of each day. over the course of the next three days, the team from deutsche bundesbank which includes mr. peter spicka and mr. martin pontzen, with their wealth of experience will be taking us a step further towards these areas. i believe that the seminar will be enriching as they share their experience in europe on relevant areas including the analytical tools for macroprudential supervision. of particular importance will be the section where the seminar goes into the details of international and european initiatives for developing efficient resolution frameworks for financial institutions and explains fundamental features of the german bank restructuring act. i hope that this seminar, bringing all the players in the financial sector together, will help to facilitate sharing of ideas and experience and will promote the development of an effective framework for the restructuring and resolution of financial institutions, especially sifis so as to safeguard financial stability in uganda. i am very grateful for the opportunity to have addressed you this morning. thank you very much. bis central bankers β speeches | international role of the euro will eventually hinge on the validity of the fundamental idea underlying its creation, namely the idea that important components of sovereignty can be pooled and shared among nations in the pursuit of common economic and political objectives. such a belief, of course, lends itself to being challenged, as do all innovative concepts. money has indeed been the most typical expression of state sovereignty for centuries, so why should this not continue in the future? moreover, although the link between state and money was no longer seen as an intrinsic necessity, does economic and monetary union ( emu ) really work? today i shall first try to answer these fundamental questions relating to the β domestic foundations β of the euro. this will be helpful in providing a better comprehension of the international impact of the euro in three specific areas which, in my opinion, are crucial : β’ the use of the euro by the business community as an investment and financing currency in the global financial system ( market impact ) ; β’ the new role played by the euro area in the process of international cooperation ( first policy impact ) ; and β’ the importance of the euro for the process of regional integration in europe and africa, and the role that this process may play with regard to possible integration in other regions of the world ( second policy impact ). 1. the implications of severing the link between state and money the link between state and money can no longer be considered to be self - evident. indeed, there are three plausible alternative options. a first, nevertheless still hypothetical, option is the privatisation of money. this solution, the most radical, is now becoming conceivable - although admittedly still a remote possibility - as a result of technological innovation. as mervyn king, deputy governor of the bank of england, recently pointed out, electronic transactions in real time among individuals may someday replace central banks β monopoly over cash and bank reserves. this means that all economic agents would carry out final settlements without the need for clearing by the central bank. however, if such a new system were to develop, this would take some time, since the existing technology is far from being in a position to allow the real - time transfer of e - money from one individual electronic account to another. moreover, a development of this kind would not only mean the end of the link between state and money ; it would also mean the end of money as we understand it today. the fundamental issue is whether it would also mean the end of inflation. | 0 |
resilient one. with these words, i now declare the green ribbon campaign week open and wish you great success. thank you. | ministerial approval has been sought for the reserve bank to supervise fiji β s credit unions and we envisage that this will develop them into prudentially sound entities. we have also sought technical assistance from the international monetary fund to review the fiji credit union act. this will establish the requisite governance and policy framework. we are hoping that this engagement will take place soon and we will work closely with all credit union stakeholders in drafting a modern legislation. furthermore, a 10 - year financial sector development plan for fiji is currently being drafted by the reserve bank after wide consultation. i am pleased to announce that the plan contains strategies aimed at removing barriers to development and growing non - bank financial institutions, which includes credit unions. the plan will be implemented from 2015. in 2015, the reserve bank in partnership with the government and relevant stakeholders will formulate a new financial inclusion strategy for fiji. credit unions will be consulted and will bis central bankers β speeches play an important role in this agenda given your role in providing access to affordable financial products and services for fijians. this is an exciting time for the pacific as we establish closer economic relations and have seen positive growth for consecutive periods. the reserve bank believes that this is a crucial time for our financial sector stakeholders to support the real sector in this journey. therefore, we are committed to strengthening our collaboration with credit unions and we encourage our regional counterparts to consider the same. conclusion ladies and gentlemen, i trust that everyone has had an enjoyable and fruitful congress. i hope that your interaction does not end here and encourage you to forge close domestic and regional collaboration amongst yourselves and with government ministries and regulators, to accelerate growth. i hope those of you who are visiting fiji have had a wonderful stay and that our hospitality will always be something to remember. we may be known as the β flying fijians β in the rugby arena, but we pride ourselves in being the β friendly fijians β as well! in fact our tourism slogan is β fiji, where happiness finds you! β in closing, i wish you all a safe trip back home. i also wish you all the success in your credit union developments and hope to see you all back in fiji in the near future. vinaka vakalevu. bis central bankers β speeches | 0.5 |
toshihiko fukui : developments in japanaβ¬β’s economy in 2006 and the outlook for 2007 summary of a speech by mr toshihiko fukui, governor of the bank of japan, to the board of councillors of nippon keidanren ( japan business federation ), tokyo, 25 december 2006. * * * introduction there is now less than a week until the end of 2006. the year has been marked by the sustained recovery of japan's economy, which began in january 2002, exceeding the record of the izanagi boom, the longest postwar economic expansion ( 57 months during 1965 - 70 ). the bank of japan terminated the quantitative easing policy in march and in july returned to pursuing a monetary policy in which it controls interest rates. although japan's economy still faces further structural changes going forward, the year 2006 can be regarded as a year of steady progress toward normalization after the long adjustment phase since the bursting of the bubble. today i will review this year's developments in the economy and prices as well as the conduct of monetary policy, and talk about the outlook for 2007. i. developments in overseas economies one of the factors behind the sustained recovery of japan's economy is the continued strong growth of overseas economies. according to the international monetary fund ( imf ), the global economy is likely to register growth of around 5 percent in 2006 for the third consecutive year. it is a generally accepted view that the global economy will continue to expand in 2007, at around the same pace as in 2006, across a broader range of regions. as a risk factor to this outlook, developments in the u. s. economy should be mentioned. the pace of growth in the u. s. economy has been slowing recently reflecting decreases in housing investment, while private consumption has so far been firm with a limited slowdown in the pace of growth. since the adjustment in the housing market seems to be continuing, attention should be paid to future developments in that market and the possible negative effects on private consumption and production. as for prices, the rate of increase in the core consumer price index is still relatively high, despite a moderate decline in crude oil prices. we basically think that inflation pressures are likely to ease gradually in line with the deceleration of economic expansion and the u. s. economy is likely to realize a soft landing and move toward sustainable growth, but both upside and downside risks should be borne in mind. with regard to developments in other regions, china | resource utilization has been rising. wages are increasing, albeit moderately, particularly in special and overtime payments, and downward pressure on prices stemming from declining unit labor costs has been abating. furthermore, inflation forecasts of households and firms are being revised upward. for instance, in the december tankan, the share of firms that replied their sales prices had risen compared to three months earlier increased to levels not seen since the early 1990s. with such changes in the environment surrounding prices, year - on - year changes in domestic corporate goods prices rose to around 3. 5 percent in mid - 2006, reflecting increases in prices of international commodities such as crude oil. although the pace of increase has recently been slowing somewhat due to a softening of crude oil prices, it is expected to continue its uptrend if there were no large fluctuations caused by commodity prices and foreign exchange rates. on the other hand, although the year - on - year rate of change in the consumer price index ( cpi ) has been on a positive trend, the rate of increase remains very low relative to the improvement in the economic situation. it is possible that the sensitivity of prices to changes in economic activity has been decreasing compared to the past. this tendency has been observed in recent years in economies overseas as well. it is thought that economic globalization as well as deregulation and advances in information and communication technology are behind this phenomenon. if competition with products imported from newly industrialized countries heightens, inflationary pressure is likely to be contained. likewise, if firms, faced with intensified global competition, become more cautious in raising wages, price developments will be influenced. in the case of japan, where year - on - year changes in the cpi have been in the process of improving from negative territory, the rate of increase in the cpi tends to be low compared with other major economies. we project that the rate of increase in the cpi will gradually rise as the economy continues its long expansion. however, the pace at which it rises should continue to be watched carefully. v. conduct of monetary policy in 2006 looking back on the conduct of monetary policy this year, the bank terminated the quantitative easing policy in march, and in july it raised the operating target of money market operations ( the uncollateralized overnight call rate ) from " effectively zero percent " to " around 0. 25 percent, " bringing the zero interest rate environment to an end after five years. an underlying factor that enabled us to make this decision was the fact that structural adjustment | 1 |
, and japan real estate investment trusts ( j - reits ), and the fixed - rate funds - supplying operation against pooled collateral. the total amount of the program will be about 35 trillion yen, consisting of about 5 trillion yen for purchases of financial assets and about 30 trillion yen for the fixed - rate funds - supplying operation against pooled collateral. the bank has already begun purchasing jgbs and corporate bonds, and the first auction for the purchase of cp is scheduled for tomorrow, december 10, 2010. the bank also decided to start purchasing etfs and j - reits in the near future. as the bank has been explaining, this is a temporary and extraordinary measure for a central bank. moreover, the bank did not adopt this measure lightly, since it entails the critical issue of making sure that the risks involved in holding various risk assets are properly managed in order to ensure the financial health of the central bank of japan. b. the bank β s measure to support strengthening the foundations for economic growth lastly, i will move on to talk about the fund - provisioning measure to support strengthening the foundations for economic growth, which the bank decided to introduce at the monetary policy meeting held on june 14 and 15, 2010. the measure supplies long - term funds at a low interest rate against eligible collateral to financial institutions in accordance with their efforts in terms of lending and investment toward strengthening the foundations for economic growth. japan β s economy faces the critical challenge of overcoming deflation and returning to a sustainable growth path with price stability. to achieve this, the key, in my view, is to tap potential demand, and both economic entities in the private sector and the authorities need to continue to make steady efforts to this end. the main cause of the current deflation is the negative output gap, which largely reflects a long - term downtrend in the economic growth rate since the 1990s. however, looking again at major trends such as demographic developments and globalization, can we really say that japan has nothing to gain from these trends? i do not think so. it all depends on one β s perspective. for example, demographic trends can be seen as a shrinking of the total and the working - age population, or they can be seen as an increase in the importance of the elderly. similarly, global warming is an issue that requires an immediate response, but even more important is a medium - to long - term strategy covering the next 10 or 20 years. regarding the fund - provisioning measure to | s. economy is likely to continue recovering on the back of increasing exports and accommodative monetary policy. it must be added, however, that in the labor market employment conditions have not improved greatly, with unemployment, for example, remaining at a high level. consequently, balance - sheet adjustments in the household sector β that is, the restoration of financial health, including the repayment of household debt β are unlikely to gather pace, so that the pace of recovery is likely to remain moderate. economic activity in the euro area as a whole has been recovering moderately, with some differences in growth by country : germany has performed strongly while other countries have lagged behind. although the pace has been slowing, exports and production have continued to increase, while domestic demand components, such as private consumption, have been rising from the previous quarter. for the present, the euro area is likely to continue recovering moderately. however, attention needs to be paid to the effects of fiscal bis central bankers β speeches consolidation, which from next year will start in earnest also in the major economies, and to volatility in financial markets due to concerns over the public and private debt problems in some of the peripheral countries. b. emerging and commodity - exporting economies although emerging and commodity - exporting economies are often grouped together, they are a diverse group. here, i will focus on the major east asian economies, since they are most relevant to japan. first, the chinese economy has continued to show high growth of around 10 percent. although the pace of increase in exports has been slowing due to a deceleration in overseas economies such as the united states, domestic demand, as indicated by retail sales and investment in fixed assets, has continued to show high growth. like china, south korea, taiwan, thailand, and other nies and asean countries also experienced continued economic growth driven by domestic demand, although inventory adjustments in it - related goods are casting a shadow on the outlook for exports. overall, it is very likely that emerging and commodity - exporting economies will continue to show relatively high growth due to robust domestic demand and capital inflows from overseas. the pace of growth of the chinese economy is likely to decelerate somewhat due, among other things, to government measures to restrain the increase in real estate transactions. however, given the continuing increase in private consumption, growth is nevertheless likely to remain relatively high. economic conditions in the nies and asean countries are expected to follow a recovery trend due to the in | 1 |
proponents of this view considered 6 percent a reasonable estimate of the nairu. since 1995, however, the unemployment rate has been below this level, and substantially below of late, while inflation has continued to progress toward our price - stability objective. in response, over the past few years, many observers have revised their estimates of the nairu down by half a percentage point or more. yet considerable uncertainty remains about the confidence with which the new estimates can be relied upon for evaluating inflationary pressures. the nairu never was measured with precision ; statistical inference has always provided a distribution of likely values around a point estimate. and several factors, for instance the demographic composition of the labor force, have long been known to introduce systematic variation in its value over time. nonetheless, the uncertainties about how structural forces may be changing the nairu seem unusually large at present and cannot be ignored. and for some the present uncertainties have called into further question the basic usefulness of the concept, or at least of a point estimate held with any confidence. a related uncertainty concerns the underlying trend growth of labor productivity. until fairly recently, this trend had seemed to have been about constant since the mid 1970s. but there are many that believe that a pickup may have occurred in the last few years, and a faster productivity trend would help to explain the unexpectedly favorable economic growth - unemployment - inflation nexus in recent years. unfortunately, much as with the nairu, our understanding of the forces that drive the productivity trend is less than perfect. certainly, the investment boom of the current expansion has raised the amount of capital for each worker and contributed to an increase in labor productivity, and it may be that advancing technology is making the capital stock and workforce more productive. however, some of the recent pickup in productivity is the normal response to the faster output growth of late, so the degree to which there is a new higher trend remains an open question. another difficulty in assessing the current amount of slack in the economy, and a third uncertainty, concerns the divergent patterns in alternative measures of excess demand. capacity utilization in manufacturing and the rate of unemployment have historically moved together over the cycle. unexpectedly, they have diverged in the current expansion, in part as the surge in investment has kept capacity utilization in the manufacturing sector near its historic average while labor markets have become tighter and tighter. recent developments in south - east asia also have contributed to uncertainty about the current monetary policy environment. one place where the effect of the crisis is being felt is | 9 % in france. the consensus view of economists on the current crisis is that each month of lockdown will mean a loss of 2 % to 3 % of annual growth in 2020. that would imply a fall in gdp of 3. 5 % to 4 % in a scenario where the lockdown lasts a few weeks, and of 9 % to 10 % in the event of a longer lockdown lasting several months. but i would caution that these are just estimates! are eu countries responding adequately? they have quickly taken far - reaching measures, increasing fiscal spending and providing support for employees and businesses. the eu has granted countries maximum flexibility in terms of both deficits and debt ratios. we are in a period where we need to use all of our tools without hesitation. having fully recognised this, germany, although very attached to its balanced budget principle, has temporarily relinquished its zero deficit policy. but if debt soars, could certain european countries default? is there a risk of a domino effect? 1 / 3 bis central bankers'speeches no. the euro area β s architecture has been strengthened precisely to address that fragmentation risk. in addition, the european central bank ( ecb ) is there ; it has its entire toolbox at its disposal and it will provide the necessary shield to protect the euro area. before march, people said to me, β the toolbox is empty, you have nothing left, you can β t use the monetary weapon β β and then we did! the β bazooka β used by the ecb consists of a fund of β¬750 billion. how does it work? our new asset - buying programme enables us to respond to an enormous shock which would otherwise risk undermining price stability. it consists of a large envelope for the purchase of public and private sector securities, including corporate bonds and commercial paper. we are a bit like a control tower : we intervene where there is a risk of fragmentation. altogether, we have more than β¬1, 000 billion of firepower at our disposal to support financing conditions, and thus companies and jobs. at the same time, we can mobilise β¬3, 000 billion of liquidity. today, if a bank extends a loan, whether it is to someone who is self - employed, a small business, a small or medium - sized enterprise or a large company, it can bring those loans to us as collateral and say, β here you go, i need funding β. and the funding is there, at very | 0 |
value, it is made clear that money is one variable which we look at very carefully in order to examine whether inflationary or deflationary pressures are tending to emerge. we do not, however, react mechanistically to changes in money growth. the formulation of the second pillar is also prompted by the potential changes in economic behaviour on account of the introduction of the euro. it is a broadly based assessment of the outlook for price developments on the basis of an analysis of monetary, financial and economic developments. in this context interest rates, the yield curve, wage developments, public finance, the output gap, surveys of economic sentiment and many other indicators are analysed. use is also made of forecasts produced by other bodies and internally for inflation and other economic variables. this brings me to the role of the exchange rate of the euro in our strategy. since our primary objective is price stability and since the euro area as a whole is a relatively closed economy with an export share of 14 % of gross domestic product, we do not have a target for the exchange rate of the euro, for example, against the us dollar. this does not mean, and it is good to underline this once more, that the ecb is indifferent to the external value of the euro or even neglects it. the external value of the euro is one of the indicators we look at in the broadly based assessment of the outlook for price developments. within that framework, we constantly monitor exchange rate developments, analyse them and shall act on them, if and when this becomes necessary. however, such action will never be mechanistic, nor will it be isolated. the external value of the euro and its development are analysed and considered in the context of other indicators of future price developments. the ecb also tries to assess international confidence in the still very young euro. of course, the level of international confidence in the euro is not the only factor determining its external value, nor is the exchange rate the only indicator of confidence in the euro. it is, for instance, encouraging to see how the euro has been received on the international money and capital markets. i am sure that an internally stable euro will also strongly underpin international confidence in this currency, as it has for other currencies in the past. as the currency of a very large area, the issue of the international role of the euro naturally arises. the ecb takes a neutral stance regarding this role. it will neither be stimulated, | debit funds from one account and credit it to another. the speed of response depended on whether someone was waiting by the telex machine! β’ now, transferring funds only requires banks to send a swift message containing payment instructions to another bank for funds to be moved, at any time in the day. some banks are selectively opening up their systems to customers, employees, and others. bis central bankers β speeches β’ silicon valley bank plans to offer an api for payments by the end of the year. this will allow their tech - savvy customers β systems to process payments without human intervention. β’ bny mellon has built an internal online api catalogue for services such as pricing, calendars, market and reference data, etc. this has helped its developers to significantly reduce steps to build new innovative apps. more efficient data submission another potential benefit from apis will be a reduction in the cost of regulatory data submission. currently, data submission to mas is still partly manual. we will improve this process. our vision is for data to flow seamlessly in both directions between systems in the financial institutions and mas. this will reduce the ongoing cost of regulatory submissions. this is not a trivial exercise, given the volume and diversity of financial data. well - crafted apis are essential for this vision to work. mas will closely engage the industry to ensure that these apis are clear, simple to implement, and extensible. conclusion i spoke earlier about the telegraph. despite the breakthrough in world travel and communication enabled by the telegraph and other technologies, the globalisation of the late 19th century soon faltered and reversed. there is a lesson here. technology alone does not make connections or create better understanding : it merely gives us the means to make those connections. β’ what is more important is the spirit of openness and collaboration. β’ common standards and seamless data sharing are in this spirit. β’ they will enable us to maximise the benefits of digital and mobile technologies β reap enormous cost efficiencies and extend our reach and understanding. and it is this spirit of openness and collaboration in innovation that will help create a smart financial centre. we have only just begun. thank you. bis central bankers β speeches | 0 |
mark carney : addressing financial market turbulence remarks by mr mark carney, governor of the bank of canada, to the toronto board of trade, toronto, 13 march 2008. * * * since last summer, many of us here today have been preoccupied with the ongoing dislocations in financial markets. what began in securities linked to u. s. subprime mortgages has spread to a broad range of structured assets, conventional credit markets, and, to a lesser extent, equities. as a consequence, some of the world's largest financial institutions have recorded substantial losses, the cost of borrowing has increased, and the availability of credit has decreased. more than seven months on, the end is not yet in sight, although it is safe to say that we have reached the end of the beginning of this turmoil. this is not because the dislocations in markets have eased ; in fact, strains in financial markets have intensified recently, but rather because we are entering a new phase where policy - makers and market participants have a better understanding of both the shortcomings in the current financial system and what needs to be done β by both groups β to address them. this response is important for all economies. even though most of the practices that contributed to the crisis took place beyond our borders, and our financial institutions are in comparatively robust health, canada is not isolated from global events. some of our institutions have suffered losses, and our economy is beginning to feel the effects of the deterioration in global financial conditions. moreover, going forward, national markets will be judged by new standards of liquidity, transparency, and the greater integrity that comes from properly aligned incentives. our institutions will have to compete in that environment. in my remarks today, i would like to discuss briefly three of the factors behind the market turbulence and then outline corresponding priorities for the official sector and market participants. this list is far from exhaustive, but i chose these three because they are among the most important, and because efforts are now under way β in both the public and private sectors β to address them. causes of the turbulence recent events represent an overdue repricing of risk ; the direction of which was predicted by many and desired by some. 1 however, the speed and virulence of the repricing has illustrated the adage " be careful what you wish for. " while the repricing was triggered by significantly higher - than - expected defaults in u. s. subprime | - makers and business leaders cannot ignore. conclusion we know that the challenges facing our economy will not be easy to meet. we know that tough choices will have to be made to secure an economic framework that enhances ontario β s efficiency and its flexibility. we know that the burden of adjustment will fall disproportionately on some individuals and groups and that we have a collective responsibility to help with that adjustment. but we also know that canadians and ontarians have made tough choices in the past that have proved right. these choices have yielded an economy that is resilient, and capable of competing with the best in the world. that tradition must continue. the choices ontarians make in the years ahead will determine our ability to meet the challenges thrown at us by this changing world economy, and to seize the opportunities that growth in world markets will bring. this province has tremendous human and natural advantages. i am confident that it also has the will to make the choices that will help ontario thrive in this new world economy. | 0.5 |
narayana kocherlakota : making monetary policy β public contingency planning using a mandate dashboard speech by mr narayana kocherlakota, president of the federal reserve bank of minneapolis, at the stanford institute for economic policy research ( siepr ), stanford, california, 29 november 2011. * * * i thank doug clement, ron feldman, david fettig, terry fitzgerald and kei - mu yi for their many insightful comments and ideas. john, thanks for the introduction and for the invitation to be here today. it β s great to be back on the farm. i have to say that there have been lots of changes. i β ve been away only six years, but i hardly recognize the place. this building is, in particular, a fantastic addition to the economics scene here on campus. in my remarks today, i β d like to touch on several topics. i β ll begin with a quick description of the structure of the federal reserve system and the deliberative process of the federal open market committee β the committee that makes monetary policy for the nation. then i β ll describe the fomc β s objectives. next, i β ll discuss how the fomc can enhance the pursuit of its objectives by formulating a public contingency plan, based on what i term a β mandate dashboard β. finally, i β ll close with a discussion of considerations for near - term monetary policy actions. after that, i β ll be pleased to answer any questions you may have. and before i begin, i should remind you that my comments here today reflect my views alone and not necessarily those of others in the federal reserve system, including my fomc colleagues. some fomc basics let me begin with some basics about the federal reserve system. the federal reserve bank of minneapolis is one of 12 regional reserve banks that, along with the board of governors in washington, d. c., make up the federal reserve system. our bank represents the ninth of the 12 federal reserve districts, and by area, we β re the second largest. our district includes montana, the dakotas, minnesota, northwestern wisconsin and the upper peninsula of michigan. eight times per year, the fomc meets to set the path of monetary policy over the next six to seven weeks. all 12 presidents of the various regional federal reserve banks β including me β and the seven governors of the federal reserve board, including chairman bernanke, contribute to these deliberations | β brookings papers on economic activity. bis central bankers β speeches reach this conclusion. we can readily see this underperformance in numerous key metrics of labor market performance. i β ll begin by showing you data on the evolution of the unemployment rate. in march 2007, the unemployment rate was 4. 4 percent. it rose slowly throughout 2007 to reach 5 percent by the end of the year. the national bureau of economic research dates the great recession as having begun in that month. in the wake of the recession, the unemployment rate reached a peak of 10 percent in october 2009. since that date β over four years ago! β the unemployment rate has fallen slowly to 6. 3 percent. this is still unusually high relative to the past quarter century or so. the current unemployment rate is also high relative to most forecasts of its expected long - run level. personally, i expect that, over the long run, the unemployment rate will converge to just over 5 percent. basically, an unemployment rate of 6. 3 percent means that the u. s. labor market is not healthy. but i would say that this measure β troubling as it is β could well overstate the degree of improvement in the u. s. labor market. to estimate the unemployment rate, the census bureau asks people two questions : are you working? and, if not, have you looked for work in the past four weeks? the unemployment rate measures the ratio of the second number β the recent job searchers β to the sum of the two numbers ( the recent job searchers and the workers ). this means that the unemployment rate can decline for two reasons : because more people are finding work or because fewer people are looking for work. most of the declines in the unemployment rate since october 2009 have occurred because the fraction of people who are looking for work has fallen. this characterization is borne out if we look at the evolution of the fraction of people over the age of 16 who have a job β what β s called the employment - to - population ratio. in march 2007, the employment - to - population ratio was over 63 percent. the employment - topopulation ratio fell sharply during the great recession and bottomed out at just over 58 percent in mid - 2011. the percentage has risen little from this low point and remains lower than at any time between 1986 and 2007. it is true that, even without the great recession, demographic forces would have led to some decline in the employment - to - | 0.5 |
denis beau : from open banking to open finance speech by mr denis beau, first deputy governor of the bank of france, at the france payments forum β the europe of banking and financial services β β paris europlace β france innovation, paris, 24 march 2022. * * * technological innovations, changes in demand, the arrival of new players : the changes underway in the financial sector are providing a strong impetus to relax the conditions of access to the market, in order to foster competition and thus encourage the development of new, more efficient and less costly services. in europe, in the field of payments, this relaxation has already occurred. the emd, the psd1 and finally the psd2 directives have all resulted in the emergence of more agile players, particularly in terms of data exploitation. the pressure to open up data now extends to insurance and savings : after open banking, we now speak of open finance. this pressure calls for further adapting the regulatory framework. but what should our guiding principles be? in the payments sector, the main objective of the directives i mentioned was to reconcile openness and security. while this challenge remains relevant for the transition from open banking to open finance, with digitalisation and the development of the platform economy, we have seen two other challenges emerge : reconciling innovation and integration on the one hand and competition and sovereignty on the other. how do we at the banque de france and the acpr, given our role and experience as a supervisor, plan to address these new challenges? this is what i would like to briefly discuss with you today, after a quick recap of the regulatory framework for open banking and the lessons that can be drawn from it to guide the development of open finance. part i : openness and security a - as regards the assessment of and lessons learned from the regulatory framework for open banking, i would like to start by recalling : 1 - the key principles that governed the sharing of payment data : on the one hand, the creation of appropriate statuses and, on the other, the strengthening of security requirements for access. the creation of the payment service or electronic money service provider status has fostered the emergence of an open banking ecosystem. the introduction of an agent status has also contributed to this process, by creating a gradual β proportionate β regulatory framework : it thus allows emerging players to test the suitability of their services with the market under the aegis of a licensed institution, before applying for a license themselves, | focus. the very large negative externalities associated with such failures could be realized through a classic domino effect or through contagion effects. as the financial crisis showed, losses in a tail event are likely to be correlated for large firms deeply engaged in trading, structured products, and other capital market instruments, and relying on similar sources of short - term funding. thus, the regulatory framework should aim to reduce the chances of distress or failure at such firms to a greater extent than traditional, microprudential regulation would. moreover, it should explicitly take into account the correlations and inter - dependencies in asset holdings and funding. finally, the regulatory system should aim to offset the perception of too - big - to - fail status, which carries with it the possibility of funding advantages in normal times, and protection of creditors and perhaps even shareholders in highly stressed times. the systemic perspective and consequent aim of protecting financial stability argue for the stronger and broader regulatory measures that have been undertaken in recent years. at the other end of the spectrum are community banks, conventionally defined as those with less than $ 10 billion in assets. the roughly 5, 700 banks in this group constitute 98 percent of insured commercial banks in the united states, but hold just under 20 percent of the aggregate assets of all commercial banks. indeed, 90 percent of community banks are what supervisors classify as β small β community banks β those with less than $ 1 billion in assets. while these banks will suffer the fallout from systemic problems, they are unlikely to cause such problems. the regulatory aim, therefore, is about as close as can be to the traditional microprudential bank regulatory aims of protecting the federal dif and limiting the use of insured deposits by restricting the scope of bank activities. it is true that the relative lack of geographic and portfolio diversification in many community banks can make them vulnerable to localized economic problems. but that is just the kind of problem that traditional microprudential regulation has been concerned with addressing. what, then, of the 80 or so u. s. banks that have assets of $ 10 billion or more, but are not among the eight large, complex institutions that have been designated of global systemic importance? obviously they vary enormously in size, from just over $ 10 billion in assets all the way up to very large regional banks with hundreds of billions in assets. they bridge the $ 50 billion threshold for enhanced prudential standards established by dodd - frank. yet, whatever their size | 0 |
tensions or potential crises and to prevent italy β s future generations from inheriting higher debt and lower income. designed and printed by the printing and publishing division of the bank of italy | encouraged to prudently leverage on technology to reinforce their controls against fraud or financial crimes. criminals and money launderers never β sleep. β they are unfazed by the virus. the bangko sentral ng pilipinas therefore continues to be pro - active, alert, and determined to keep watch against financial crimes and money laundering activities. as bsp governor and chairman of the anti - money laundering council, i assure you that we will 1 / 2 bis central bankers'speeches continue to work for an internationally compliant and effective anti - money laundering regime, which will provide the filipino people with a sound, dynamic, and strong financial system in an environment that is conducive to the promotion of social justice, political stability, and sustainable economic growth. in closing, let me thank our speakers from the international monetary fund, bank de france, and the anti - money laundering council secretariat who have graciously shared their time and expertise to be with us in this webinar. they have been carefully chosen to help webinar participants learn how international institutions have developed a protective and responsive infrastructure against money laundering activities. thank you very much and stay safe always! 2 / 2 bis central bankers'speeches | 0 |
sector accounts for 60 per cent of gdp and has been growing at 9 per cent per annum since the mid - 1990s, with potential for creating jobs and generating additional income. β’ there has been a significant decline in the poverty ratio during the 1990s as reflected in the latest survey of 2004 - 05 by the national sample survey organisation. the growth performance and potential augurs well for addressing concerns relating to disguised unemployment, seasonal unemployment and underemployment in the years ahead. β’ the fiscal position of the government, both central and states, is undergoing consolidation in terms of targeted reduction in fiscal deficit indicators. β’ the current account deficit ( cad ) to gdp ratio has been moderate in india. the current account remained in surplus during 2001 - 02 to 2003 - 04, before turning into a modest deficit since then. it is expected to continue to be in the range of 2 to 3 per cent under the projected outlook of 8 to 9 per cent growth rate during the eleventh five year plan. india's foreign exchange reserves now stand roughly at us $ 165 billion and are well in excess of total external debt of the country. β’ the financial markets, especially the money, government securities and forex markets have been nurtured and developed in view of their critical role in the transmission mechanism of monetary policy. β’ the financial sector has acquired greater strength, efficiency and stability by the combined effect of competition, regulatory measures, policy environment and motivation among the market players including banks. β’ the workers enjoy considerable freedom of movement, expression and rights, especially through unionisation which, while making some changes difficult, ensures a vibrancy and timely improvisation to deal with competition. major challenges for sustenance of indian growth process β’ first, the poor state of the physical infrastructure, both in terms of quantity and quality. the most important issue here is regulatory framework which is being addressed by the government. technological developments and rapid enhancement of domestic construction capabilities should aid the process of speedy and efficient implementation. given the healthy fundamentals of the domestic financial sector and the enhanced interest of foreign investors, funding should not pose any serious problem. one other concern has been the cost recovery, which is expected to improve with more public - private partnership. there are grounds for optimism for a medium term resolution of these issues. β’ second, fiscal consolidation. the recent budget of the central government brings the consolidation on track, targeting a gross fiscal deficit of three per cent of gdp by 2009 while eliminating revenue ( current ) deficit. our studies on state finances | to contain the contagion and restore confidence in the system in the first phase. the second phase would typically involve coping with the secondary effects of the crisis, for example, recession, if any, flight of capital, etc. the third phase of this process would involve affecting changes in the financial system to reduce risk and prevent future crises. simultaneously, the other key features of a crisis situation, viz., the unpredictability associated with the event, the speed with which it typically unfolds and the uncertain but dangerous outcomes that it can spawn, suggest that it is necessary to lay down a comprehensive contingency plan which envisages, in a given context, all possible crisis situations of varying gravity and possible decisions and actions as well as the framework under which decisions can be taken and implemented. a crisis management framework evolving events since august 2007 have put to test arrangements for crisis management and financial stability across the globe. swift and proactive action was indeed taken once the contours of the crisis started becoming clearer. once the crisis broke, central banks, governments and other regulators across the globe, including in india, managed to coordinate effectively to improvise solutions to the problems they faced. the experience, however, also revealed several shortcomings in the arrangements in place to manage the crisis, ahead of the crisis. the global financial crisis : analysis and policy implications, dick k. nanto, coordinator, october 2, 2009. bis central bankers β speeches drawing from the lessons learnt during this crisis, let me lay down some broad attributes, which i believe, are key to the design of an effective crisis management framework. let me confess at the very outset, however, that this list is far from exhaustive. crisis management remains an inexact science and i, along with all of you in central banks and other policy making institutions, continue to learn. first, there should be a clear assignment of responsibility for financial stability. where this responsibility is shared amongst different agencies, roles and responsibilities need to be clearly delineated and the protocol for coordination during crisis clearly spelt out. crisis management plans need to be flexible. the characteristics of a crisis can always differ from earlier crises, so authorities need to be prepared to apply flexibility rather than working from a set framework. effective crisis management hinges on the authorities identifying and addressing problems at an early stage implying that the processes that enable early identification of emerging systemic risks need to be strengthened. the framework for crisis management needs to strike an appropriate | 0 |
dodge their own responsibilities, but the scope of these is different. interestingly though, pointing fingers and shifting responsibility are daily fare in a similar fashion. this is particularly true with respect to the relationship between europe and its national constituents. the british referendum may be regarded as a current example. but there are other instances. in banking supervision, a common regulatory framework in the euro area that has been operational for almost two years now, is directed at dampening national interests. keeping institutions credible and effective is an ongoing task. and finding and deploying governance mechanisms that are congruent with our view of european cooperation will continue to be at the forefront of our public duties in the future. 4. role of bundesbank representatives ladies and gentlemen, in a world of broadband internet and market movements synchronising within seconds across the globe, one might question why there is a need to work together like we do here in sao paulo. but, as i have outlined for europe and the european sector, filtering and interpreting our complicated world, remains a challenge. this remains especially true with respect to the globalised financial sector. high - quality information and close cooperation have not lost their value β in fact, i deem them more important than ever. the bundesbank β s network of international representatives is in place to comprehensively observe economic developments and the expected evolution of financial markets from within key countries and regions. our representation here in sao paolo is no exception. economic ties are on the rise β just take the increase in direct investment from the euro area to brazil from 1. 6 % in 2008 to almost 4 % in the first quarter of this year. exchanging expertise and nurturing fruitful personal networks with central banks, financial authorities, supervisory authorities, banks and others is more important than ever. dr marc rennert has represented the bundesbank in south america since december 2012. during this time, he has played a vital role in substantially stepping up the exchange of information between the bundesbank and the region β s central banks foremost in brazil, colombia, peru, chile, argentina, uruguay and paraguay. during his time here in sao paulo, dr rennert has been committed in particular to deepening ties with the banco central do brasil. one of his milestone achievements was undoubtedly the preparation of a memorandum of understanding formalising close cooperation between the banco central do brasil and the bundesbank with respect to knowledge transfer and education and training opportunities for staff members. more than 12 projects have already been | deutsche bundesbank, are critical of many of the demands currently being voiced. in this context, it is a great honour for us to be able to present to you mr peter sands and professor friedrich schneider as the keynote speakers at this year β s conference. whereas mr sands β main areas of research are banks and financial markets, professor schneider has made a name for himself as an expert on the shadow economy. mr sands will kick off the conference by discussing β the dark side of cash ". professor schneider will follow by taking a critical look at the question of whether abolishing cash is an efficient instrument in the war against the shadow economy, crime and terrorism. following these two speeches, our two keynote speakers will take part in a panel debate on the future of cash. i am already eagerly looking forward to the clash of views and opinions we will be likely to hear. even after this morning β s proceedings, which will already be very exciting and informative, the rest of our programme for this year β s conference will once again rest on a broad basis. this year, we received so many high - quality papers that we have decided to conduct the conference in two parallel sessions. this enables us to look not only at the components and motives of cash demand but also payment behaviour. in addition, cash experts will speak on restrictions on cash 1 / 2 bis central bankers'speeches payments and on the theme of our conference, the β war on cash ". i would additionally like to welcome the delegates from austria, our guest of honour at this year β s conference. at this juncture, i would like to thank you for your willingness to contribute talks on trends in cash usage and on technical innovations in cash processing to our third cash conference. it is precisely in questions concerning cash usage patterns or also the motives behind the demand for cash where, in my opinion, cultural differences are especially important. this is why i am pleased once again to be able to present you with a large number of speakers from a wide array of countries. these talks on cash - related themes will be delivered by leading experts from japan, india and europe, but also the united states and canada. this international variety is a hallmark of our research conference. i don β t want to keep you on tenterhooks so i will now hand over to the head of the bundesbank β s directorate general cash management and the chair of the first session, stefan hardt. i hope we all have a fruitful conference | 0.5 |
mobile penetration rate is 99 per cent for a population of nearly 1. 3 million ( and around 375, 000 fixed telephone lines ), this means of payment seems very convenient for low - value transactions. if the service runs in the low - value segment, it would not have systemic impact. but the matter needs to be discussed further with all parties concerned β cim finance, the telephone service provider, the carrier or gateway, and other regulators, namely the financial services commission and the information and communication technologies authority ( icta ). there should be some coordination between financial and telecoms regulators. in fact i have already had meetings with the icta in this respect. regardless of what the law says, i don β t believe that it was the intent of the legislator that a payment product would go unregulated. please do not get me wrong β we are not against this new product! but we need to be prudent and alive to any possible danger and ensure that there are not any pitfalls ahead. to come back to cim visa card β the bank of mauritius fully backs such developments and pledges the necessary support to all financial institutions which roll - out new products for the benefit of their clients. but as the regulator, we are fully aware that along with such initiatives comes a wide range of inherent risks. these risks should be carefully evaluated and credible mitigation measures must be put in place to ensure the safety of depositors β funds and preserve the soundness of the financial system. bis central bankers β speeches my first advice to you is that you should conduct a proper screening of your clients to ensure that your credit card advances do not turn into bad loans. you should ensure that you have in place procedures to chase the bad clients and a good fraud investigation framework. your recent participation in the mauritius credit information bureau will certainly contribute to a better assessment of the creditworthiness of your prospective borrowers and reduce your non - performing loan ratio. therefore, prudence in credit risk management should be your priority. growth in the use of credit cards has been, to say the least, spectacular. between 2000 and 2010, credit card advances increased by more than 175 per cent. the credit card has grown to become a ubiquitous financial product used by households. there are presently more than one million credit cards in circulation for total advances amounting to 1. 6 billion rupees β the biggest chunk, 1. 5 billion rupees, represent personal and professional sectors β which means that | there has been a notable change in consumer behavior. consumers use credit cards for two purposes : ( i ) as a substitute for cash and cheques, and ( ii ) as a source of revolving credit. therefore my concern is whether the consumer fully understands the costs and implications of using credit cards and whether credit cards are encouraging over - indebtedness, particularly for those least able to pay? in the us, for example, many households have thus been caught in the so - called β plastic trap β β consumers do not seem to be able to repay their balance, especially those who opt to pay only the minimum repayment amount by the due date of each month. in mauritius, credit card advances currently represent around 3 per cent of total household credit. concurrently, credit to the household sector by banks has been growing at a faster pace than nominal gdp ( although the credit was mainly for property acquisition, generally viewed as a low risk investment. ) as a regulator we need to remain vigilant and keep an eye on the delinquency rate of credit cards. and so should you for the health of your loan portfolio. my second concern which of course is more in the nature of an inducement, not a concern, for you is that card business is very good business. financial institutions that are in the card business know that they make very good money from card - related fees. since credit cards are unsecured in nature, interest rates on credit cards are very high β around 2 per cent monthly. there are also fees for late payments, fees for cash withdrawal, and other penalties, on top of the hidden β swipe fees β that banks and credit card companies collect each time a customer pays with his credit card. unfortunately, most of the time, such costs are passed on to the customer. and i can tell you, time and again we receive complaints from the public that credit card fees are prohibitive. in the us there is what i call the battle of the swipe fees raging on. the senate passed an amendment directing the federal reserve to reduce β swipe fees β ( on debit cards ) and to limit them to the β reasonable and proportional β cost of each transaction. you can imagine the intense lobbying from banks to push for changes, or outright repeal of such a legal requirement, arguing that they are being deprived of a significant source of revenue and that they would be forced to trim down on some of their services to recoup the loss. on the other | 1 |
david dodge : monetary policy developments in canada opening statement by mr david dodge, governor of the bank of canada, to the senate banking, trade and commerce committee, otttawa, 30 april 2003. * * * good afternoon, mr. chairman, members of the committee. i would like to start by saying how much we appreciate the opportunity to meet with you following the release of the bank β s semi - annual monetary policy report. it β s important for us to be able to explain our views on the economy and on inflation. i β d like to spend a few minutes summarizing the key points of our most recent report, which we released last week. but first, i β d like to introduce my colleagues β deputy governors chuck freedman and pierre duguay. chuck will retire in september, after almost 30 years at the bank. his leadership in the areas of monetary policy, financial institutions, and canada β s clearing and settlement systems has been invaluable. we will all miss his expertise, his enthusiasm, and his keen wit and intellect. the last time i testified before this committee was in the spring of 2002, because we were unable to arrange our regular meeting last fall. you will recall that following the 11 september 2001 terrorist attacks in the united states, we quickly and aggressively cut our policy interest rate to shore up confidence and support domestic demand. by last spring, evidence had already started to build that demand was growing faster than the economy β s production capacity. monetary policy actions must always be forward looking. so, even though demand pressures were not yet showing up in prices, we raised our key policy rate three times between april and july 2002. by the autumn, inflation was on the rise. but we refrained from raising interest rates because of geopolitical and financial uncertainties, high yield spreads and restricted access to funding for riskier corporate borrowers, as well as the expectation of weaker foreign demand for canadian goods. since then, inflation has been above the 2 per cent target midpoint. the total cpi inflation rate peaked at 4. 6 per cent in february, falling back somewhat to 4. 3 per cent in march. the jump in inflation reflected the sharp rise in oil and natural gas prices, increases in insurance premiums, and strong domestic demand that had led to price pressures in certain sectors, such as shelter and some services. in this environment, certain indicators of short - term inflation expectations have edged up β although longer - term expectations remain around 2 | benjamin e diokno : sustainable finance towards a climate - resilient philippine economy speech by mr benjamin e diokno, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the 2nd annual national business climate action summit, pasay city, 21 november 2019. * * * secretary emmanuel de guzman of the climate change commission, ms. ma. alegria limjoco, president, philippine chamber of commerce and industry, mr. titon mitra, resident representative of the united nations development programme ( undp ) philippines, colleagues from the other government agencies, fellow speakers, friends from the banking industry, development partners, sustainability advocates, esteemed guests, a pleasant morning to all of you! first, let me congratulate the climate change commission, the pcci, the philippine business for the environment, and the undp for organizing this 2nd annual national business climate action summit. i am honored to join you in this important gathering as we exchange views on sustainable finance and firm up our commitment in pursuing a low - carbon, climate - resilient, and sustainable development pathway for the philippines. according to a study made by climate central and published on the nature communications journal, the impacts of sea - level rise and coastal flooding is seen to become more extensive that could erase coastal cities by 2050. the philippines is one of the countries identified to be in danger and the national capital region could likely be submerged due to climate change. then, last 8 november 2019, we commemorated the 6th year anniversary of typhoon yolanda which is considered to be the strongest typhoon that struck the country in 2013. lastly, three major earthquakes hit north cotabato and surrounding provinces in october 2019 alone. thousands of families were affected and scores of houses and infrastructures were damaged. after what happened, we cannot help but ask ourselves if we are ready to withstand any other form of calamity that may befall on us? if we are uncertain with our answers, all these headlines should serve as a strong wakeup call. we should prepare for threats or risks that may happen any time especially those that have prolonged significant impact such as those resulting from environmental degradation or climate change risk. several climate vulnerability reports have consistently positioned the philippines at the top as one of the countries exposed and vulnerable to natural disasters or climate change hazards. these facts provide a strong impetus and sense of urgency for all stakeholders to work together to address environmental issues including climate change. | 0 |
. any solution must fall into one of those two categories. what does this mean in practice? consider the first approach. to reduce the likelihood of failure, regulators can impose capital requirements on a wide range of financial institutions related to the risks they are taking. this is the current approach underpinned by the basel regime. in essence, it makes banks build a buffer against adverse events. it has attractions but also problems. first, capital requirements reduce, but not eliminate, the need for taxpayers to provide catastrophe insurance. second, the β riskiness β of a bank β s activities and the liquidity of its funding can change suddenly and radically as market expectations shift. this means that what appeared to be an adequate capital or liquidity cushion one day appears wholly inadequate the next. indeed, the achilles heel of the basel regime is the assumption that there is a constant capital ratio which delivers the desired degree of stability of the banking system. after the experience of the past two years, and a decade or more in which capital ratios fell and leverage ratios rose to historically unprecedented levels, banks need more capital to persuade investors to fund them. a larger buffer gives new creditors greater comfort that their claims will be met in future, without resort to the public purse. and rather than pay out dividends or generous remuneration, banks should use earnings to build larger capital buffers. but how much larger? we simply don β t know. a higher ratio is safer than a lower one, but any fixed ratio is bound to be arbitrary. one way of dealing with this problem is to require banks to take out insurance in the form of β contingent capital β, that is capital in a form that automatically converts to common equity upon the trigger of a threshold that kicks in before a bank becomes insolvent. if a bank β s regulatory core tier 1 capital β common equity β remained above the threshold, nothing would happen. but if the regulatory core tier 1 capital fell below the threshold then the contingent capital would automatically be converted to common equity. when bank failures impose costs on the rest of the economy, it is reasonable to insist that banks themselves purchase a sufficient degree of insurance in the form of a large capital cushion available automatically before insolvency. such contingent capital instruments are very different from instruments, such as subordinated debt, which banks have been permitted to count as capital under the basel regime, but which do not provide a reliable capital buffer until too late β after the bank has failed. so at present the | information on the risks posed by a firm β s group is critical to the pra β s approach to supervising international banks. our expectations are set out in two parts. firstly, a clear baseline of information we want on all international banks. this concerns : the nature of the firm and group β s business model ; the resilience of the firm and its parent from both an operational and financial perspective ; material risks to the firm β s strategy ; and resolution planning. then, on top of that, a proportionate and tailored set of data that reflects a firm β s business model, its scale and potential impact on uk financial stability. proportionality is key here. we need more detail on a firm β s group where it is larger, more systemic and where its business model is highly integrated globally e. g. trading and custody. this is because the more highly integrated uk operations are within the group, so the more readily losses or disruption can be transmitted to the uk operations. all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice for highly - integrated businesses such as the trading activity of gsibs, we expect access to regular profitand - loss and risk data for key trading business lines. these are often fast moving so we need to monitor them on a daily or weekly basis so we can ascertain how businesses are performing and to identify product or risk management vulnerabilities. good practice examples of the data we typically receive where a strong and cooperative relationship exists with home state supervisors and firms, are set out in the statement. they include : a. daily or weekly profit and loss figures covering global and local business lines ; b. weekly or monthly group market risk reports ; c. the outputs from reviews e. g. the supervisory review and evaluation processes ; d. information on stress tests and how these affect the uk entity ; e. group liquidity information regularly in normal time and more frequently once there is a period of market stress ; f. any material change in the operational resilience of the firm or group, for example, cyberattacks that may affect the group systems and are used by the uk business or which threaten the survival of the firm or group ; and g. material findings from internal risk or audit functions, or external audit reviews ( particularly where there are common group wide systems and controls ). i would stress that, where we ask for group information, we are | 0.5 |
in government spending β starts out at about 1 but then quickly falls to zero as long - term interest rates rise so that private spending and exports decline. however, if financial market participants anticipate that the federal funds rate will remain at zero for an appreciable period of time following the hike in government spending, the simulated short - run fiscal multiplier rises to 1. 3 for some time. model simulations also indicate that the fiscal spending multiplier may rise even further β to around 2 β if the fiscal stimulus is expected to be temporary and to last no longer than the period when monetary policy holds short - term interest rates at the zero lower bound. 4 to be sure, greater - than - usual uncertainty surrounds estimates of the size of the fiscal multiplier under current circumstances, and its magnitude could be somewhat smaller than suggested by these model simulations. with lenders unusually cautious, household and business spending may react less than would normally be expected to low real interest rates because tight nonprice credit terms are restricting access to borrowed funds. also, the above - normal levels of uncertainty faced by households and firms could damp the responsiveness of consumption and investment spending to the boost in household income and business earnings generated by the fiscal stimulus. finally, any increase in uncertainty about the longer - term trajectory of government borrowing could raise term premiums. of course, sustained changes in fiscal policy may have supply - side implications that affect the long - run level of potential output, and hence actual gross domestic product. except to the extent that these long - run changes alter the equilibrium real rate of interest, however, they have only minor implications for monetary policy. in the frb / us model, about 40 percent of households are estimated to be rule - of - thumb consumers, implying that they generally spend most of their current income. the remaining households are life - cycle consumers, implying that their spending decisions are influenced by their expected permanent income rather than their current income. however, these consumers are nonetheless relatively sensitive to expected changes in income over the next several years because they are assumed to discount future income at a high rate, reflecting its uncertain nature. these basic results are also borne out by simulations using the federal reserve staff's estimated dynamic stochastic general equilibrium ( dsge ) model of the u. s. economy, edo, and its calibrated multicountry dsge model, sigma. nontraditional monetary policies current economic and financial conditions have not only changed the potential effectiveness | a broad array of independent academic research aimed at adding to the general knowledge and understanding of the economy. each year, fed staff members publish hundreds of papers and others forms of research, sometimes in collaboration with scholars from universities and other institutions, all of it available for use by the research community and on view to the public. conferences play an integral role in promoting the federal reserve β s research mission as well. this biennial community development research conference, organized by community development officials from across the federal reserve system, serves to encourage high - quality research see pew research center ( 2014 ), β emerging and developing economies much more optimistic than rich countries about the future ( pdf ) β ( washington : prc, october ). see ben s. bernanke ( 2007 ), β the level and distribution of economic well - being, β speech delivered at the greater omaha chamber of commerce, omaha, neb., february 6. see janet l. yellen ( 2014 ), β perspectives on inequality and opportunity from the survey of consumer finances, β speech delivered at the conference on economic opportunity and inequality, sponsored by the federal reserve bank of boston, boston, mass., october 17. bis central bankers β speeches and also helps bridge the gap between community development research, policy, and practice. in my brief remarks, i would like to mention a few aspects of economic mobility that i think are particularly important and worthy of further research, with the hope of stimulating the conversation that will take place here over the next couple of days. this conference will explore economic mobility as it is influenced by or affects families, communities, and the economy, so let me touch on each of those three facets. we know that families are the locus of both opportunities and barriers to economic mobility. there are important research questions to be tackled here. what individual or family characteristics may predict who will achieve upward mobility? how much does someone β s initial circumstances in life influence how far that person can get or how hard he or she needs to work to get there? researchers and policymakers need a better understanding of how much mobility individuals may experience over the course of their lives and at what age people β s outcomes may become more difficult to change. families are the source of many of the resources and experiences that influence economic mobility, and more research can help us understand to what extent and in which ways differences in the economic circumstances of families affect the upward mobility and economic security of offspring. research may be able to provide evidence on which public policies are | 0.5 |
the monetary policy meeting in april 2003 the riksbank judged that inflation towards the end of the forecast period would be somewhat below target if the repo rate were left unchanged. a strict application of our simple rule would have resulted in a repo rate cut, but since temporary fluctuations in energy prices were the chief reason for the inflation forecast being below 2 per cent, the riksbank decided to leave the repo rate unchanged. in order to clarify that the riksbank did not wish to bring inflation back to the target over the normal two - year horizon, the riksbank decided on this occasion to place particular emphasis on an inflation measure that was not as strongly affected by the fluctuations in energy prices. how has the strategy worked? so how has this strategy worked, i. e. highlighting on different occasions other indices than the cpi as a way of illustrating that there sometimes may be reason to depart from the rule that cpi inflation should be 2 per cent one to two years ahead? with hindsight we can conclude that despite out attempts to be explicit in our communication, it appears that we haven't got our message across in all respects. the strategy does indeed seem to have been successful insofar as we have seldom been asked, especially in the last few years, why the repo rate has not been changed in spite of an inflation forecast that is above or below target. sometimes, however, and particularly during a couple of months in autumn 2003, the interpretation has been that the riksbank has " changed target variable ". but this has not actually been the case ; the inflation target is and has always been defined in terms of the rate of increase in the cpi, even if we've often made it clear that policy in the time horizon in question has been based on a different index, mainly und1x. permit me to return to last year's discussion about energy prices in order to illustrate what i believe could be one of the problems. as i mentioned, the repo rate was not lowered in april 2003 despite the fact that our forecasts pointed to below - target cpi inflation two years ahead. the reason was that the forecast of cpi inflation was depressed by energy price effects that were judged to be transitory and that were expected to subside just beyond the forecast horizon. however, the measure that was considered a better reflection of longer - term cyclical inflation, und1x excluding energy, was forecast to be in line with the inflation target at the end of | which was rooted in the us housing market and caused a synchronised global recession, should continue to serve as a sober reminder of this. let me briefly now turn to the second thing on everyone's mind when they think about the economy - the ringgit. when it comes to the ringgit, bnm's role is to make sure that its value does not swing too fast or too much either way, and to allow an orderly price discovery. under a flexible exchange rate, it is reasonable for the ringgit to fluctuate from time to time. these adjustments allow the domestic economy to adjust to global economic and financial shocks. we saw this during the federal reserve's rapid and large interest rate adjustments last year, which caused huge shocks to the global economy. at one point, the ringgit declined as much as 11. 5 % between end - march to early november, before appreciating by 7. 8 % towards the year end. yet the real economy grew by 8. 7 % during the year, thanks in no small part to the ringgit's role as a shock absorber. 2 / 3 bis - central bankers'speeches in recent weeks, the ringgit has come under renewed pressure β underscoring the need for more than short - term solutions. we need structural reforms that will strengthen our growth prospects and encourage more investment opportunities. this will increase demand for the ringgit and secure a more enduring appreciation in its value over time. ultimately, to secure our future, the country must stay the course in implementing vital reforms. the issues we need to address are not new. but history and the passage of time should inform how we move forward. we must fortify our defences against crises. we must critically examine our priorities to increase our growth potential and meet sustainable goals. we must rebuild the buffers we have drawn down on to strengthen our resilience to future shocks. and we must enhance our capacity to adapt and change in order to manage risks and exploit opportunities that we may not yet see today. ladies and gentlemen, for many of the challenges malaysia faces, the solutions require a whole - of - nation approach. hence the theme of this symposium β " structural reforms for a stronger malaysia ". today will see in - depth discussions on various issues that my team has been working on in recent years. there will be seven sessions delving into topics such as digitalisation in the payments sector, financial sector policies, and broader economic and monetary concerns | 0 |
##p β s cornerstones in stakeholder engagement for financial inclusion. the citi microentrepreneurship awards ( cma ), as the fruit of such remarkable partnership, serves as an important platform to convey the message that collaboration with a strong shared vision, coupled with responsive policies and platforms, can bring the best out of the filipino people. it is thus with great interest that i participate in this year β s cma. i look forward to the opportunity to discover promising micro - entrepreneurs whose experiences, achievements, and community contributions would serve as an inspiration to everyone. to my fellow nsc members, we indeed have some exciting work ahead of us. may the cma continue to nurture and empower filipino micro - entrepreneurs in the years to come. again, good afternoon and thank you all for coming. 2 / 2 bis central bankers'speeches | harmful spillovers, fragmentation or β ring - fencing by other means β do not emerge ; 23 and take action if they do. one last comment : wherever the legislative process ends up, along the scale from purely statistical to full legal harmonisation, the rules on bbms should be as cross - cutting and β activity - based β as possible, i. e. applicable to all lending contracts, whatever category the lending institution belongs to. this is necessary to avoid regulatory arbitrage between the banking and non - banking sectors. 24 * * * as the esrb highlighted β for example, six countries ( denmark, france, ireland, malta, netherlands, norway and sweden ) use gross income to define income - related measures, while other member states use income in net terms. three countries ( austria, finland and slovenia ) use a broad definition of collateral value for the purpose of the ltv limits, while in other countries this is restricted to real estate. β ( esrb, review of the eu macroprudential framework for the banking sector - march 2022, response to the call for advice, p. 13 ). banca d β italia used gross income to define income - related measures when it issued its rules on bbms last february. under article 513 of the crr, β harmonised definitions β of bbms β and the reporting of respective data at union level are a prerequisite for the introduction of such instruments β ( paragraph ( 1 ) ( d ) ). hartmann, 2015. in that respect, the legal acts already available are the mortgage credit directive ( directive 2014 / 17 / eu of the european parliament and of the council of 4 february 2014 on credit agreements for consumers relating to residential immovable property and amending directives 2008 / 48 / ec and 2013 / 36 / eu and regulation ( eu ) no 1093 / 2010 ) and the consumer credit directive ( directive 2014 / 17 / eu of the european parliament and of the council of 4 february 2014 on credit agreements for consumers relating to residential immovable property and amending directives 2008 / 48 / ec and 2013 / 36 / eu and regulation ( eu ) no 1093 / 2010 ). these, as i said at the outset, are very provisional reflections ( and, as such, they should not be taken as an official statement of the position of banca d β italia ). i am sure that the discussions in this seminar will help clarify some of the economic and legal issues i have briefly | 0 |
, that exposures to emerging economies could present substantial risk. given these events, the u. s. banking system has remained strong, possibly in large part because the recession in this country seems to have been relatively mild and short - lived. more directly, the strength seems also to reflect improvements in risk management at many banks and a greater awareness throughout the industry that institutions should promptly address problems as they emerge. this time both the banking industry and the regulatory agencies appear to have done just that - - acted promptly - and without going too far and unnecessarily constraining credit. much of the weakness among banks recently has been concentrated in large regional and money center banks, rather than in smaller institutions. bank earnings reached a record level in the first quarter of 2002, with one of the highest quarterly return - on - assets ratio ever reported of 1. 33 percent. net interest income was the driver of stronger revenue, despite lower commercial loan volume. loan loss provisions were significantly above the first quarter of 2001, although below levels of the fourth quarter. higher charge - offs were concentrated in commercial loans at large banks and in credit card specialty lenders. what areas may present heightened risks to community banks today? first, for most of the past decade, community banks - - particularly those in the asset range of $ 100 million to $ 1 billion - - have actively expanded their commercial real estate lending. since the early 1990s, larger community banks have expanded their commercial real estate portfolios from 13 percent of aggregate assets to 22 percent. to date, these credits have generally performed well, and my comments are not intended to suggest a material concern. these credits, however, account for most of the group β s increase in nonperforming assets over the past year. given the checkered history of commercial real estate lending and its increased relevance to many community banks, this portfolio must be monitored and managed carefully. we have often seen the cyclical nature of commercial real estate and its links to the general level of economic activity. the loss of anchor firms such as k - mart, for example, may reduce the market value of certain shopping centers and the consumer traffic and the financial strength of nearby businesses as well. the second area of potential risk relates to interest rates. for the industry overall, the federal reserve β s rate cuts last year may have proved to be a mixed blessing. lower interest rates undoubtedly eased payment pressures on many borrowers and prevented further deterioration in the quality of bank loan portfolios. liability | than the large banks have paid, their net interest margins were still much higher, and by a growing differential in recent years. measured by return on assets, small banks have done as well as or better than large banks in all but a handful of years over the past decade and a half. managing risks the health of financial institutions today also reflects the improvement in risk management process that has been ongoing at banks for years. increasingly, the entire risk management process has become more quantitative, reflecting not only the enhanced ability and lower costs of collecting and processing data but also improved techniques for measuring and managing risk. larger banking organizations quantify a borrower β s probability of default, the bank β s loss given default and its likely exposure at the time of default - - practices upon which we are trying to construct new international capital standards. the greater use of credit scoring has, it seems, improved risk management as well. such tools should perform even better after the effects of the most recent economic slowdown are incorporated. consumer credit models were developed after the 1990 - 91 recession, and so their reliability in predicting credit quality in the current slowdown is yet to be determined. further, we are already observing increases in delinquencies in subprime lending. since many of these borrowers did not have significant access to credit in previous recessions, their ultimate default rate will also help to validate the strength of the new statistical models. community banks have greatly improved their management of interest rate risk in recent years. information developed from models that are used to identify sensitivity to market changes in the mix of loans and deposits are now part of asset / liability committee meetings at community banks. as a result, managers can better anticipate changes in net interest income and respond appropriately to their unique competitive conditions. community bankers are also developing new revenue streams that will help to manage risk by diversifying sources of earnings. in addition, the fee income streams help to increase the cross - sell ratio with key customers. this in turn should improve customer loyalty, another factor that should help manage risk by stabilizing revenue. providing the personal touch has served community banks well, but conducting sound market research and pricing to reflect competition, customer value, and risk are becoming more important for success. the arthur andersen matters and other corporate events currently being addressed provide good risk management lessons for bankers as they try to increase earnings by cross selling more products. when line officers are compensated on sales and cross selling, a strong, independent quality assurance or risk | 1 |
is a positive development. by spreading and diversifying risk, financial markets have become more efficient and stable. deeper and more mature markets tend to be better equipped to deal with uncertainty and distress. we have also witnessed the forging of new and ever more complex financial instruments. increasing the set of available financial instruments creates more complete markets. it enhances the opportunities for households and enterprises to decouple consumption and investment from current income. investors can take on or load off risks in a more tailored fashion than before and actively manage their exposures and relocate risks to those best equipped to bear them. yet, the flip side of increased financial integration and diversification is the potential for more widespread contagion if something goes wrong. furthermore, rapid innovation and increased complexity can make it difficult to assess the real underlying risks of the new instruments. it takes time for borrowers and lenders to learn the true characteristics of new instruments. this increases the possibility that some investors β and issuers, for that matter β misunderstand the riskiness of an instrument. as a consequence, expected return may not appropriately reflect the true risk. when the true risk of an instrument starts to reveal itself, sharp corrections in the market may follow. the recent subprime crisis is one example of how new and complex instruments can give rise to global financial turmoil. problems stemming from over - optimistic price expectations for the us housing market have spread to investors and financial institutions all over the world. the wide dispersion of the financial turmoil took many of us by surprise. not to mention where problems turned up ; in german landesbanken, in large investment banks and in norwegian hydro - electricity - rich municipalities, to name but a few. ben s. bernanke ( 2006 ) : β opening remarks β at β the new economic geography : effects and policy implications β, a symposium sponsored by the federal reserve bank of kansas city, jackson hole, wyoming. alan greenspan ( 2007 ) : β the age of turbulence β, the penguin press, new york. one lesson from the current financial turmoil is that the expected advantages of securitisation have been somewhat exaggerated. securitisation was believed to make markets deeper and more liquid and β most importantly β to provide continuous pricing. recent events have shown that this is not necessarily true for all markets at all times. in times of distress and uncertainty, some financial market segments can cease to function. when no trading takes place, no updated prices are quoted. this represents | and around 1990, when levels of domestic spending, private and public, far exceeded our economic limits. it was not until 30 years after oil had been discovered off our shores that norway was in a position to put some money aside. we are nonetheless frequently reminded that petroleum production has reached a plateau and will begin to decline in a few years β time. our welfare system, including old - age pensions, is basically financed by current income. it is not fundbased, as pensions are in a number of other countries. even though it is likely that the pension fund will grow considerably in the years ahead, estimates show that the capital in the fund will only cover some 60 per cent of public pension expenditure in the future. it cannot therefore be argued that the government β s savings are large relative to its obligations. the fund and its investments in international capital markets greatly enhance our welfare and they do it in two ways : first, they give us the freedom to consume and invest oil revenues independently of the actual time profile of oil production. second, they give us the freedom to diversify by converting oil in the ground into ownership stakes in businesses around the world, increasing expected returns and reducing risk. i hope those of us gathered here tonight β guests from far away and close by, and many who work with this fund every day β will see a growing consensus around standards and norms for ethical investment. as a representative of norges bank, i am happy that you wish to be part of the process. as i β m confident our owner the ministry of finance, and our colleagues at the council on ethics would agree, we welcome input, ideas, and challenges. i wish you every success with your discussions. thank you for your attention. | 0.5 |
jessica chew cheng lian : ifrs 17 insurance contracts welcome address by ms jessica chew cheng lian, deputy governor of the central bank of malaysia ( bank negara malaysia ), at the joint ifrs foundation & amp ; masb regional workshop β ifrs 17 insurance contracts β, kuala lumpur, 17 may 2018. * * * good morning ladies and gentlemen and welcome to today β s regional workshop on ifrs 17 standards for insurance contracts, jointly organised by the ifrs foundation and the malaysian accounting standards board ( masb ). allow me first of all to congratulate the ifrs foundation and masb for putting this workshop together, with an impressive line - up of experts and practitioners to share their knowledge and insights on ifrs 17. we are especially privileged to have with us today two senior members of the iasb board mr. darrel scott and mr. amaro gomez, both of whom have been with the iasb for more than 10 years. the strong interest in ifrs 17 and its importance both to financial systems and businesses are clear from the turnout today, with more than 250 participants from over 15 countries, representing industry players, accounting firms, national standard setting bodies and financial regulators. it is an honour for me to offer some brief remarks this morning to kick off today β s workshop. on my way here, i recalled a joke in which a lady was once told by her doctor that she would only have six months to live. understandably very distraught, she asks the doctor for advice on what she should do. the doctor suggested that she should marry a cpa. β will that make me live longer? β the lady asks hopefully. β no, β the doctor replies. β but it will seem longer β. well, i promise to keep my remarks short, although since this is an accounting workshop, you will forgive me if they might seem long. as you know, ifrs 17 was finalised and issued in 2017. today, the 17th of may, also marks 17 years since the international accounting standards board took on the job to develop a globally accepted accounting standard for insurance contracts. what a remarkable coincidence indeed! the final ifrs 17 standards represent a historic milestone β for the first time, insurers in over 120 countries, with assets worth at least usd13 trillion, will be reporting financial statements based on a common set of standards when ifrs 17 comes into effect in january 2021. almost two decades ago, standard setters embarked on a hercule | muhammad bin ibrahim : charting new frontiers β financial advisers the future keynote address by mr muhammad bin ibrahim, deputy governor of the central bank of malaysia, at the inaugural conference of the association of financial advisers β charting new frontiers β financial advisers the future β, kuala lumpur, 31 october 2012. * * * i would like to congratulate the association and its members for your commitment, which has resulted in the successful formation of the afa to champion and promote the interests of all licensed financial advisers in malaysia. the formation of afa is most timely, and marks a significant milestone in the progressive maturing of the financial advisory industry. since the introduction of fas in 2005, we have seen commendable growth within the industry, with the number of licensed fas rising from 2 to 17, and the number of licensed fa representatives increasing from 17 to 229 today. the formation of the afa is timely as it provides a platform to encourage greater collaboration among fas to instill greater professionalism among its members and i expect the afa to play an important role in coming up with clear strategies to propel the financial advisory sector towards greater progress and growth. developments in the insurance and takaful sectors there are some broad developments within the economy and the financial sector that will expand the opportunity for growth in the provision of independent financial advisory services. first, the insurance and takaful sectors have seen positive and continuous growth over the last five years, with total insurance premiums transacted and takaful contributions recording an average annual growth of 4. 9 %, with annual growth peaking at 13 % in 2010. in terms of insurance penetration, in 2011, 67 out of 100 malaysians had some form of life insurance or family takaful coverage as compared to only 59 out of 100 malaysians in 2006. this means there remains a large untapped segment of the population with no life insurance or family takaful protection that the profession can further develop. second, in terms of distribution channels, the agency force is still the dominant intermediation point for the insurance industry. at present, the market share of financial advisers as a delivery channel is still low and therefore, the prospect of growth is tremendous. the prominence of the agency force as a delivery channel of choice for the distribution of life insurance business is evidenced from the more than 10 % growth in the number of life insurance agents enrolled between 2006 and 2011. consistent with the increase in the agency force, the expenditure dedicated to maintain this | 0.5 |
let us not be entrapped by outdated ideologies or theories but gather our wits for us to overcome new challenges with courage and wisdom. of course, we need to hold ourselves to stricter standards in order to exercise such leadership. no change enforced by others can ever be effective, but the initiative for the change needs to come from within. nowadays β national dignity β is at the center of public concerns. in order to elevate our nation β s dignity, a shift in the values of all members of our society is required. the leadership of our society, in particular, is expected to be bound by lofty moral obligations, such as β noblesse oblige β, and businesses are required to carry out faithfully their corporate social responsibilities. if we succeed in elevating the authority of the bank both nationally and internationally, that will be a way to contribute greatly to elevating the dignity of the entire nation. let us join hands to do our best and move forward with pride in being members of the central bank of the g20 chair country. may we together resolve to open a glorious new chapter in our history as the central bank of korea in this year that sees the 60th anniversary of its foundation. it may still be recognized in years yet to come as a central bank that paved the way for the long - term development of the nation. thank you. | factors such as government services, institutions, human capital, and natural environment, among others. the quality of less mobile factors of a region will determine the extent to which it can attract mobile factors for production such as physical capital and finance. in this respect, the recipe for success is very much the same between regional economic development within the national border and globalization beyond the national border. in a globalized world, economic success of an individual country would be determined largely by how much productive investment and finance it can attract. and the abundance or lack of its own mobile factors would be neither a constraint nor an advantage that a country would face in its economic development. likewise, regions within a country are competing with each other for investment resources available domestically or internationally, and their success depends on how attractive they bis central bankers β speeches are as the destination of investment. as such, the essence of such competition should focus on how to upgrade the quality of less mobile factors of each region. in this light, i should emphasize the leading role of local governments and also the central government in promoting regional economic development. to be specific, local governments should provide a clear vision and framework for sustainable development with detailed strategies to support business and human capital development. deregulations, supportive tax system, and administrative services would then be designed within the framework. the central government could incentivize regional development by delegating more authorities to local governments for their autonomy and, more importantly, by prioritizing the allocation of fiscal resources among local governments according at least in part to their supportive performance in regional economic development. it would be ideal if regional development strategies are closely nested with national development strategies in the first place. ladies and gentlemen, promoting economic development is always a highly complex task. it requires a myriad of inputs including knowledge, information, network, dedicated efforts of the people, and good luck as well. and we all know that economic development is an evolutionary process of learning and adaptation. today β s seminar is particularly meaningful in that we will learn from the rich experiences of our advanced peers, especially germany and japan. i believe that learning from others β experiences is as important and productive as learning by doing. and i am sure that this seminar will offer very useful guidance to our long journey to rebuild this region β s economy. i look forward to your active exchange of ideas and in - depth discussions. thank you once again for joining us today. bis central bankers β speeches | 0.5 |
central bankers β speeches | gent sejko : prospects and challenges facing albania statement by mr gent sejko, governor of the bank of albania, at the conclusion of discussions on the eighth review of the arrangement with the international monetary fund, tirana, 28 june 2016. * * * in the last two weeks we have been engaged in intensive discussions with imf mission representatives, in the framework of the review of the imf arrangement. the discussions focused on : the analysis of the current situation of the albanian economy and financial system ; identification of development prospects and challenges facing albania ; and the policies to be implemented with a view to supporting the country's development. the conclusions of our discussions may be summarised in three main points : ( i ) economic activity appears upward and the development outlook remains positive. ( ii ) yet, the external environment is unfavourable and the albanian economy continues to face structural weaknesses, which decelerate the pace of growth. ( iii ) therefore, the monetary and fiscal policies should continue to generate a prudent economic stimulus, whereas structural reforms should accelerate their pace. in this context, the bank of albania deems that the arrangement with the imf and the measures envisaged as part of the eighth review provide a consistent framework for drafting and implementing a programme for the country β s development. let me now present in greater detail the opinion of the bank of albania. the growth pace of the albanian economy continues to show progressive improvement. the improvement reflects the expansion of domestic demand - that is increase in consumption and private investments - whereas foreign demand appears weak and fiscal policy continues the consolidating trend. the new information obtained in the first half of the year is in line with this judgement. the intensity of supply shocks, which led to the rapid decline in inflation over the first half of the year, seems to decrease. inflation recorded a slight increase in may, reaching at 0. 7 %. this performance confirms our judgement about the transitory nature of the abovementioned shocks. however, our analyses confirm that the balance of inflationary pressures is still weak. economic activity remains below potential, suggesting that the return of inflation to target will be a gradual and medium - term phenomenon. our monetary policy has assumed a stronger stimulating stance over 2016. after two consecutive cuts in april and may, the key interest rate currently stands at 1. 25 %. the strengthening of the monetary stimulus has led to lowering the interest rates across all segments of the financial market, thus stimulating the | 1 |
francois villeroy de galhau : recovery and resolution of ccps opening speech by mr francois villeroy de galhau, governor of the bank of france, at the policy conference β recovery and resolution of ccps β, paris, 24 june 2016. * * * i will not comment now on the results of the british referendum. be only assured that we are mobilised and determined. france has already quite a long history with ccps. la caisse de liquidation, based in le havre, was the first to provide, in 1882, an insurance against counterparty risk on commodities markets. this history explains why we have a longstanding role as ccp overseer ; it gives us also a special interest and commitment to contribute to this policy issue, on which i would like to share a few thoughts. considering the growing importance for financial markets and financial stability of ccps, it is our collective responsibility shared among the financial industry and regulators - to maintain a robust network of ccps. as we strongly believe in the key role of ccps we must ensure that they never become the next β too big to fail β institutions. the growing importance of ccps is linked to regulatory changes, but not only. it is also linked to financial disintermediation and changes in the behaviour of market participants, which in both cases are most welcome evolutions. regulatory changes and the pittsburgh agenda have been obviously major factors contributing to the systemic importance of ccps. however, the clearing obligation for otc derivatives is not the end of the story. another potent factor is indeed the movement towards disintermediation, which should further amplify the role of ccps. this disintermediation trend is fostered by public initiatives, such as the capital markets union promoted by the european commission in the eu. this movement is also related to market initiatives, notably in our financial centre here in paris, to promote market financing as a complement for bank credit : for instance, the esni ( euro secured note issuer ) allows for the securitisation of high quality credit claims to improve sme financing. we also see a growing appetite of market participants for central clearing to further secure their transactions. repos are increasingly cleared in ccps in the eu, and this has stood as a key factor in the resilience of the european repo market over the latest years. however, with greater systemic importance come greater responsibilities. greater responsibilities lie first with the industry. the clearing industry | and anti - money laundering surveillance. 19. despite this promise of support, we recognise that banks, especially smaller ones, may still have doubts about going β all in β with fintech given the heavy talent and resource investments required. however, we are confident that by offering support that is targeted, specific to local market circumstances, and where it is needed, banks of all sizes will soon grow to appreciate the case for β going β fintech. the hkma looks forward to being a long - term partner with you on this journey, and i hope you can offer us your unwavering support too. 2 / 5 bis central bankers'speeches future - proofing hong kong for central bank digital currencies ( cbdcs ) 20. as we look beyond banks to the wider financial system, we turn our attention to initiatives that will have an impact on the financial system as a whole, one of which is cbdcs, the focus of our second strategy. 21. as the world becomes more interconnected than ever, cross - border and cross - boundary transactions have never been more frequent. many of us have witnessed how payment instruments have evolved over time, from banknotes to credit cards to cross - border payment networks. while cbdcs may not see mainstream adoption any time soon, this is something that has the potential to profoundly alter the global payment landscape. we must work with the industry and international community to ensure that we address both the technical and non - technical issues involved. 22. for this reason, we have been researching wholesale cbdcs as they have great potential in addressing the long - standing pain points in cross - border payments. lately, the hkma β s joint research with the bank of thailand has been ranked by the market as one of the most mature of its kind in the world ; a testimony that we stand at the forefront in the realm of wholesale cbdcs. we recently expanded the scale of the project to include more participating jurisdictions. 23. some of you may already be aware that the hkma has begun researching retail cbdcs ( rcbdcs ). we have been working with the bank for international settlements ( bis ) innovation hub hong kong centre on project aurum, which will focus on the technical aspect of issuing r - cbdcs and the possible architectural designs. 24. similar to the majority of central banks, we see that a lot of issues need to be thought through before issuing r - cbdc. for instance, how should we | 0 |
task is an arduous one but not impossible if we believe that, though it is very difficult, we are capable of changing and reforming. this is why i shall begin my speech with an optimistic message, offering you some examples showing how spain has already progressed with some adjustments and has undertaken major reforms during the difficult times we have faced during these years of crisis. i β m aware of the risk being run in showing optimism amid the crisis, in the same way that during the bubble whoever dared denounce the imbalances being built up was called a killjoy. but i hope my optimism is qualified by my reminder that complacency, that is to say believing that we have already done everything that has to be done and that nobody can teach us any lessons, is the arch - enemy in the battle to exit the crisis. to earn the confidence provided by the knowledge that spain has been capable of adjusting and reforming during these years of crisis, i have chosen two examples. first, the rapid improvement in our current - account balance ; and second, the headway during these years in restructuring our banking system. bis central bankers β speeches as is well known, under normal conditions the current - account balance is very easy to finance in a monetary union, but its size is a good indicator of two of the deepest imbalances that came about in spain during the expansionary phase : the explosion in debt and the loss of competitiveness. indeed, from 1996 credit began to outpace gross domestic product, doing so systematically until 2006, when its annual growth peaked : at a rate of over 25 % for total credit, and more than 40 % for credit extended to real estate development activities. over the same period, spanish cpi growth was systematically higher than that of the euro area. although the growth rate of credit began to fall as from 2006, growing debt and the loss of competitiveness over the 12 years to 2008 led the external imbalance to an unsustainable position, with a current - account deficit of 10 % of gdp and a strong increase in spain β s external debt. but what counts is that spain has since adjusted its current - account deficit at a spectacular pace. from almost 10 % in 2008, the deficit fell at the end of last year to 3. 7 % β an adjustment of more than 6 pp of gdp in three years β and at the end of 2012 we might already be in balance. the climate of pessimism accompanying the crises leads some to under | a year or with an interest rate fixation period of up to one year declined from 70 % to 59 %. 18 a second factor could be related to a slower pass - through of market rates to retail deposit rates than in previous episodes, which could weaken the standard intertemporal channel through which rising interest rates discourage savers from spending. 19 this slower pass - through could come from the fact that, during the period with negative rates, the these results, however, mask a significant degree of heterogeneity across countries : the share of household debt with interest rates that reset within a year stands at 63 % in spain and 59 % in italy, but just 6 % in france and germany. in the case of firms, the share of bank debt either maturing or with interest rates that reset within a year stands at 93 % in italy, 70 % in spain, 48 % in france and 41 % in germany. it should be noted, however, that a slower pass - through to deposit rates may also have dampening effects on household spending, by slowing down the increase in savers β financial income. remuneration of retail deposits was above market interest rates, as banks were unwilling to reduce it below zero. additionally, the current ample liquidity available to commercial banks reduces the pressure on them to increase the remuneration of retail deposits. other factors point to a potentially faster monetary policy transmission compared to past episodes. first, the current hiking cycle comes after the strong negative shock prompted by the pandemic, which adversely impacted firms β financial situation by increasing their debt levels. this leaves them more vulnerable to interest rate hikes, and their expenditure decisions may be more sensitive to monetary policy changes. conversely, however, households still have around β¬900 billion in excess savings built up during the pandemic and they are benefiting from sizeable fiscal policy support. second, there has been a shift from bank to bond funding over the last decade, with bond debt increasing from 16 % to 24 % of non - financial corporations β total debt. 20 this, together with the faster monetary policy pass - through to bond rates than to bank rates, implies faster transmission than in the past. third, the residential real estate market is a key area to monitor, in particular given that some euro area countries have experienced a significant increase in house prices over the last decade, with signs of overvaluation. 21 housing represents a major part of household wealth and bank assets. thus, | 0.5 |
, i would be pleased to take your questions and begin our discussion. 2 / 2 bis - central bankers'speeches | target will be slow, and risks remain. overall, our outlook for both growth and inflation is largely unchanged from when we were here in october. economic growth is expected to be modest in 2024 - weak in the first half before picking up around the middle of the year and rising to about 2Β½ % in 2025. with downward and upward forces largely offsetting in the near term, cpi inflation is expected to remain close to 3 % over the first half of this year. it is then expected to ease to about 2Β½ % by year end and return to target in 2025. let me give you a sense of governing council's monetary policy deliberations. at our decision last week, there was a clear consensus to maintain our policy rate at 5 %. we also discussed where we see the economy and inflation going and what that could mean for monetary policy going forward. what came through in the deliberations is that governing council's discussion about future policy is shifting from whether monetary policy is restrictive enough to how long to maintain the current restrictive stance. that doesn't mean we have ruled out further policy rate increases. if new developments push inflation higher, we may still need to raise rates. but what it does mean is that if the economy evolves broadly in line with the projection we published last week, i expect future discussions will be about how long we maintain the policy rate at 5 %. governing council is concerned about the persistence of underlying inflation. we want to see inflationary pressures continue to ease and clear downward momentum in underlying inflation. we also discussed the risks to the economy and inflation. we are trying to balance the risks of over - and under - tightening. we don't want to cool the economy more than necessary. but we don't want canadians to have to continue to live with elevated inflation either. we remain focused on a number of indicators of underlying inflationary pressures. we need to see further and sustained easing of core inflation. with the economy now looking to be in modest excess supply, demand pressures have abated. corporate pricing behaviour has continued to normalize. at the same time, measures of near - term inflation expectations and wage growth suggest that underlying inflationary pressures remain. let me conclude. we've come a long way from the inflation peak in 2022. monetary policy is working, and we need to continue to let it work. we remain resolute in our commitment to return inflation to the 2 % target. with that summary | 1 |
norman chan : welcome remarks - 2018 green and social bond principles annual conference welcome remarks by mr norman t l chan, chief executive of the hong kong monetary authority, at the 2018 green and social bond principles annual conference, hong kong, 14 june 2018. * * * financial secretary, martin, distinguished guests, ladies and gentlemen, 1. welcome to the 2018 green and social bond principles annual conference, co - organised by the hong kong monetary authority ( hkma ) and the international capital market association, supported by the hong kong financial services development council. 2. today β s conference is the flagship event in the world of green finance, and rightly so. since the publication of the green bond principles ( gbp ) in 2014, it has become the de facto global standard for green bond issuance. these days, a majority of the green bonds issued globally follow the gbp framework, and many major markets base their local green bond standards on the gbp. in this conference, we will have the opportunity to hear more about the latest enhancements to the gbp, and how green standards have been developing in different parts of the world. 3. today β s conference is notable also because of its location. as martin said, it is the first time that the conference is held in asia. looking at the turnout, it is a good choice. i am not just referring to over 900 registered attendees β this is clearly impressive. i am also referring to the geographical mix, with a large showing from asia, in addition to delegates from europe. this is a testament to the rapid growth of the green bond market in region. 4. indeed, over the past few years, the green bond market has grown exponentially, including the green bond market in hong kong, and we are very pleased about this development. for many years, the hkma has been working to promote the development of the hong kong bond market. today, hong kong is the third largest bond issuer in asia ex - japan, behind only the mainland of china and south korea. 5. the hkma plays more than just the promoter role in green finance. as many of you may know, the hkma is the investment manager of the exchange fund. with assets under management over usd500 billion at the end of last year, we are one of the world β s largest asset owners. the hkma has been very supportive of responsible investment, and has incorporated environmental, social and governance, or esg, principles into our investment | this is a difficult environment in which the japanese banks are embarking on their mergers. from my discussions with the banks concerned it is clear that they know what needs to be done in order to achieve the desired synergies and economies of scale. but it all depends on the quality of the implementation. unlike the case with some past japanese mergers, the banks will need to achieve full integration in their operations, technology, management and culture as quickly as possible, and jobs will have to be lost. there must be a much greater focus than in the past on return on capital and on the generation of shareholder value rather than on pursuit of size and market share for its own sake. this is something in which we all have an interest. it is important for the stability of the world financial system and for the economic development of the asian region that the banks of the world β s second largest economy are fully restored to health and can resume their major role in financial intermediation at home and abroad. i wish you therefore all the best in your efforts. as i mentioned earlier, the japanese banks have been and will remain an important part of the financial system in hong kong. they also of course have a similar role to play in relation to mainland china. i am aware that the japanese banks felt particularly disappointed and aggrieved at the collapse of gitic and the subsequent debt problems that afflicted other mainland window companies. i do not intend to go over the past history of this episode that is hopefully now coming to an end. but it is possible to see some good coming out of it if it helps, as i hope it will, to restore financial discipline within china. it has also served as a useful reminder to both domestic and foreign banks in hong kong not to engage in name lending and not to rely on implicit guarantees. while financial transparency among mainland companies is by no means perfect, lenders are now at least better equipped to identify those companies that have sound underlying businesses and good management. the long saga of gde is now drawing to a close. the banks have, i believe, managed to negotiate the best deal possible, and the last remaining step is for the banks to review and sign the detailed documentation to put the restructuring into effect. i understand that when the documentation is sent to the banks, they will have plenty to read. but i hope that they will try to do this as quickly as possible and that we can avoid any last minute problems and delays. there is unlikely to be | 0.5 |
, a media campaign in all parts of the world against terrorism is also very important. that is something that the world has clearly recognized today, and internationally, we see a greater coordination in the media in dealing with terrorism. the other important front in this war against terror is the stopping of financing for terrorism. without finance, terrorism cannot progress. so, steps taken by countries to ensure that the funding lines to terrorism and money laundering are cut off, that terror financing transactions are interrupted or stopped, and that there is worldwide co - operation to track down persons who are suspected of being involved in terror financing in whatever way, is of vital importance. just take a small example. if at the end of the month, you do not receive your salary, you will find it difficult to comfortably progress with your next month β s activities. in the same way, if we can stop the funds going to terrorist activities, that will put a dampener on their activities. it is very simple to understand. therefore, not only should we deal with terrorists on a military basis, but we should disrupt their progress by cutting off and interrupting their funding lines. by doing so, we complicate their agenda. in order to do so, and to continue to do so, we have to equip ourselves. the judiciary, the law enforcement agencies, the regulators, the media, the bankers, the prosecutors, all of these groups, have to equip themselves with whatever it takes, to meet with this challenge. we have to learn from each other. we have already learnt many lessons during our own activities in this field. but, it is important that we share such knowledge and experience with others as well. if we do so, perhaps others too, could replicate some of those efforts which have been proved to be successful. hence, there is an urgent need for us to create the awareness. we also have to enact the necessary laws. sri lanka has already passed the necessary laws for this purpose : so have many other countries. that is very important. because, without the legal framework and the legal backing, our efforts will not succeed. then, we have to build our own capacities. we have to have people who are trained and competent to deal with these challenges. because, unless you have the competence, and the ability to recognize certain disguised transactions, the ability to see through the clever facades, and the ability to anticipate the next move of the terror financiers or money launder | during the previous financial crisis, the proper functioning of mortgage markets is necessary for monetary policy to support the economy. unfortunately, the problems in mortgage finance in this crisis were broader than just the mbs markets. this crisis period has also revealed a number of new β or, in some cases, renewed β vulnerabilities related to lending and loan servicing by nonbank mortgage companies, which i will refer to from here on as mortgage companies. these vulnerabilities were not entirely a surprise to me. when i served as a banker and, subsequently, as the state bank commissioner in kansas, i saw firsthand the increasing share of mortgage companies in mortgage origination and servicing as well as some of the weaknesses in the mortgage company business model. and in my role as a board member with a focus on community banks, i frequently hear about the issues that have caused some regional and community bankers to pull back from originating and servicing mortgages. i view this as a significant problem, because i believe firmly that a healthy financial system must have a place for institutions of many different types and sizes that are able to serve the varying needs of different customers. i will begin today by describing the evolving role of mortgage companies in mortgage markets and the risks to financial stability that activity entails. i will then focus on developments in mortgage markets during the covid - 19 pandemic and discuss how actions by the federal reserve and the other parts of the government helped stabilize financial markets and prevent more severe damage to the economy. finally, i will explain how vulnerabilities associated with mortgage companies could pose risks in the - 3future, and i will review ongoing work across the regulatory agencies to monitor and address these vulnerabilities. i will end by enlisting your help. figuring out how to achieve a balanced mortgage system β one that delivers the best outcomes for consumers while being sufficiently resilient β is a highly complex task that could benefit from the insights of those of you here today. the role of nonbank financial institutions in mortgage markets in the 1980s and 1990s, the share of mortgages originated by mortgage companies increased considerably, as expanded securitization of mortgages allowed mortgage companies, which lack the balance sheet capacity of banks, to compete with banks in the mortgage market. the role of mortgage companies increased further in the 2000s with the growth of the private - label mortgage market, where mbs sponsors are private firms without government support. but the last financial crisis and the prolonged housing slump that followed | 0 |
extreme economic centralization and adherence with the principle of self - support. transition brought about a structural change in the principles of economic philosophy. the market forces took over the distribution of economic resources and the reduction of existing economic imbalances. this process resulted in increased unemployment, reduced output and consumption, while prices of consumption goods increased over 100 percent. foreign reserves disappeared almost instantly under the pressure of reduced output and drastic devaluation of domestic currency. meanwhile a relatively large and growing stock of foreign did not stop the declining trends. public confidence dived and many albanians emigrated mostly in neighboring countries. financial situation deteriorated at a fast pace as well. monetary policy as we know it was inexistent for albania did not have a modern central bank. early structural reforms focused on cutting the subsidies for insolvent state owned enterprises ; massive price liberalization ; privatization process ; land reform ; and provided the necessary incentives for the rapid macroeconomic consolidation of 1993 - 1995. during β 90s albania β s path has been quite disordered scoring one of the most unique transitory experiences. it was an experiment a trail and error by everybody. it was a quest to understand and the role and position in this new market economy ; to rediscover the incentives of the private initiative and the risk that embodied in economic decision making. along this process albanian society established the foundations of the macroeconomic consolidations that started with the new millennium and accession to eu has scored significant progress. for a long period of time the economy has grown around 6 % percent annually, contributing to an upward trend of gdp per capita reaching around 2. 500 euro. inflation has been quite stable within our target band 2 - 4 % supported by responsible monetary and fiscal policies. further structural reforms improved the functioning of the market economy. privatization of big and medium enterprises, the privatization of former public banks, the modernization of legal framework and many other important reforms contributed to such impressive performance of albanian economy. in the last years i believe the country has made a substantial progress in its way towards european union. after wasting our chances during β 90s i believe we are in the right track and personally i β m confident that the distance to our final destination, brussels is getting shorter day after day. the coming years are of a vital importance in adhering to eu as far as albania is preparing itself to move with its own feet. the current agreement with imf will finish at the end of 2008. i hope that acquis communautaire will become | 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, 27 march 2014. * * * today, on 27 march 2013, the supervisory council of the bank of albania reviewed and approved the monthly monetary policy report. given albania β s latest monetary and economic developments and discussions on their outlook, the supervisory council of the bank of albania decided to keep the key interest rate unchanged, at 2. 75 %. the council deems that inflationary pressures on the economy remain subdued. under these circumstances, the monetary policy will continue to be stimulating in the period ahead to provide the necessary conditions for compliance with our inflation target in the medium run. let me now proceed with an overview of economic developments and key issues discussed at today β s meeting. * * * annual inflation stood at 1. 9 % in february, slightly up from a month earlier. the increase resulted from higher prices of agricultural products, tariffs of potable water in some regions of the country, and vehicle insurance premiums. prices of other items of the consumer basket are stable and their inflation is low. new information obtained during the last month is limited. it does not alter our assessment that the overall economic and financial setting is characterised by low inflationary pressures. our projections have remained overall unchanged, but near - term downside risks are assessed as high. reflecting the weakness in aggregate demand, the output gap remains negative and the albanian economy is still characterised by incomplete utilisation of production capacities. the lower economic growth and poor performance of the employment index have led to weaker pressures on increasing wages and production costs. also, the sluggish aggregate demand keeps profit margins low. weak pressures from production costs and downward inflation expectations were the main drivers lowering core and headline inflation rates. in parallel, imported inflation was contained due to low inflation rates internationally and the exchange rate stability. this situation is expected to continue in the quarters ahead. the macroeconomic analysis, updated with information for the first two months of the year, suggests low economic growth during this period. private investments and consumption remained weak because of the low confidence of economic agents, slowdown of disposable income, tight lending terms, and presence of spare production capacities. trade deficit expanded 3. 6 % in january, primarily as a result of declining exports, in contrast to a month earlier, when it | 0.5 |
johannes beermann : heads and tails - cash in the age of digitalisation dinner speech by dr johannes beermann, member of the executive board of the deutsche bundesbank, at the international cash conference, munich, 10 september 2019. * * * introduction ladies and gentlemen, welcome to the seehaus right at the heart of the english garden. this park is a true landmark of the city of munich, with a design inspired by british landscape architecture. it probably comes as no surprise that football β another at least originally english pastime β is popular around here as well. of course, β kicking a ball β with friends in a park such as the english garden is a more informal affair than the matches you might see in the professional football leagues, where the stakes are arguably much higher. but the basic principles of football apply everywhere. the direction of play is the first decision to be made before any match can begin. depending on the position of the sun or the direction of the wind, the choice of which goal to defend first could make a difference to the game β s outcome. a neutral mechanism needs to be put in place to decide who obtains this β first mover advantage β. a coin toss is one such mechanism. the coin is considered β fair β if both events β the coin landing on heads or the coin landing on tails β have an equal probability of occurring. in the history of minting, heads on the obverse and tails on the reverse have emerged as the two sides shown on coins which serve as legal tender. although the details on each side differ at first sight, they are closely related. to β coin β a well - known expression, heads and tails are literally two sides of the same coin. together, they complete the coin, which also means both sides have to be taken into consideration. in the world of payments, that is precisely what central banks do. on the one hand, we provide payment systems that function purely electronically while, on the other hand, we take part in the production and distribution of physical cash. in the prevailing set - up, one aspect of payments cannot work without the other. digital payments are in a state of flux. new competitors enter the market, at times trying to disrupt existing structures. the direction of play remains unclear at this stage. it may be that the rise of one form of digital payment will lead to the fall of another. it is also possible that physical cash is used to a lesser and lesser extent until it effectively fades | till now, been a blank spot on the map of the bundesbank β s representative network. and as for the question of whereabouts in africa to base our bundesbank representative, there β s simply no getting round south africa β the most developed economy in africa, a country that boasts abundant natural resources, and the only african member country of the g20. your country is fertile ground for the private sector. it has a diversified industry and a wellregulated financial sector with a recognised and independent central bank. because of your ability to promote political and economic stability in southern africa, german companies use your country as a springboard into the african market, notably into the countries of the southern african development community. today sees the deutsche bundesbank introduce its first representative to south africa. my visit to celebrate this event is not just an acknowledgement, on the part of the bundesbank, of the economic importance and potential of south africa. it also marks the advent of a frequent exchange of information on financial and monetary policy issues with the aim of better understanding the economic and financial interests of each country and of facilitating dialogue in international forums. within this broader objective, the deutsche bundesbank and the south african reserve bank intend to cooperate closely for the purpose of promoting capacity building by each party and of supporting the formulation of policy in both countries. to this end, on 28 february 2016 the south african reserve bank, represented by deputy governor mminele, and the bundesbank, represented by me, signed at the g20 meeting in shanghai a memorandum of understanding defining the scope of a cross - border cooperation between our two central banks. we will start by jointly undertaking two research projects : one that aims at exchanging best practices in bank stress testing, and another where we will explore how to cooperate more closely on g20 issues. and that is yet another reason why it is beneficial for our representative not to be located too far away from the sarb. on that note, i am delighted that the bundesbank is today presenting ms jenny kilp as its first representative to south africa. ms kilp graduated from liebig university in gieΓen with a diploma in economics, and after gathering several years of experience in the academic world, joined the deutsche bundesbank in 2004. since then, ms kilp has been an expert in the bundesbank β s directorate general financial stability, where she was in charge of policy issues regarding the international monetary fund ( imf ). | 0.5 |
in china. with the financial sector opening up wider and wider, the shanghaihong kong stock connect, the shanghai gold exchange international board, the bond connect and crude oil futures have been introduced successively ; the interbank bond market, foreign exchange market and money market have been opening up with quickened pace ; and pilot programs, such as overseas rmb investment and lending funds and cross - border exchangetraded funds ( etfs ), have been launched successfully. shanghai has become one of the cities in the world where financial products and business categories are most diversified and concentrated. 4. financial reform and innovation have been pushed forward in an all - round way, with financial business innovation increasingly gaining momentum. shanghai has pioneered many fundamental measures in the reform and opening - up of the financial sector. among others, a series of pilot financial reform measures taken in the shanghai pilot free trade zone have been replicated and applied nationwide. second, the people β s bank of china ( pbc ) will implement resolutely the decisions and 1 / 4 bis central bankers'speeches arrangements of the communist party of china ( cpc ) central committee and the state council to strongly support shanghai accelerating the international financial center development. in january 2019, to fully implement the important instructions that general secretary xi jinping had given during his inspection of shanghai last november, with the approval of the state council, the pbc issued in collaboration with eight ministries the action plan for shanghai international financial center development ( 2018 β 2020 ), which sets forth key tasks and the roadmap for the undertaking. going forward, the pbc will wholly support shanghai β s endeavor to complete the three major tasks entrusted by the cpc central committee in the new era. the priorities are as follows. 1. we will support the establishment of an integrated rmb and foreign currency account system in the new area of the shanghai pilot free trade zone, and put into place a more convenient system for the administration of cross - border funds. 2. we will continue to improve the interbank foreign exchange market and bond market, broaden the spectrum of foreign exchange options products, expand market participants, and support the development of β silk road β themed bonds. 3. we will support the cooperation between the shanghai gold exchange ( sge ) and the chicago mercantile exchange ( cme ), and the launch of derivatives based on the shanghai gold benchmark price on the cme. 4. we will support the establishment of representative offices by international financial organizations, and the establishment of subsidiaries | yi gang : welcome address β 11th lujiazui forum welcome address by mr yi gang, governor of the people's bank of china, at the 11th lujiazui forum, shanghai, 14 june 2019. * * * honorable vice premier liu he, secretary li qiang, mr. zhou xiaochuan, ladies and gentlemen, vice premier liu he has just elaborated in his speech on the triangular framework in the economy made up of supply, demand and the financial system. he has underscored the importance of following market - oriented and law - based reform approaches and drawing on international practice to promote the healthy development of the stock market, particularly the star market. also he has put forward requirements on accelerating the development of shanghai as an international financial center, which are highly instructive as to what we should do in the financial field to provide support. next, in line with the theme for this forum β accelerating the international financial center development and promoting high quality economic growth β, i want to give my opinions from the following three aspects. first, impressive progress has been achieved in the development of shanghai as an international financial center. 1. the financial market system has been undergoing improvement, featuring more of the essential factors. so far, there have been all types of major financial markets in shanghai, such as the stock market, the bond market, the money market, the foreign exchange market, the commercial paper market, the futures market, the gold market and the insurance market, with trading volumes in quite a number of varieties ranking high globally. 2. the system of financial institutions has further grown so that the influence of shanghai as a financial center has risen significantly. in recent years, as a host of important financial institutions or organizations have come to be based in shanghai, such as the brics new development bank, the global association of central counterparties ( ccp12 ), the cross - border interbank payment system ( cips ), the china insurance investment fund, and the national internet finance association of china, the radiant effect and influence of shanghai β s financial industry have been enhanced remarkably. as shown by the latest two editions of the global financial centres index ( gfci ) released by z / yen, a british think - tank, shanghai ranks fifth among the world β s financial hubs. 3. the progressive opening - up of the financial sector has contributed significantly to the city β s international competitiveness. shanghai has become home to a large number of foreign - funded financial institutions | 1 |
##u in connection with the eu enlargement there has been an intense discussion in recent years, both in the old and new eu countries, about what requirements should be imposed on the new member states β economic policy. the discussion has not dealt with entry to the eu, for which the key issues have already been settled, but the next step : the euro. nine of the ten new member states have announced their intention to introduce the euro as quickly as possible. for some of them the changeover would be entirely undramatic and opportune. for example, estonia and lithuania have long had currency boards anchored to the euro, whereby the currency is only issued against a certain statutorily established quantity of euro - in practice a kind of β shadow euro β. the currency boards anchored to the euro are considered to have contributed to falling inflation and a stable investment climate. their economies have been highly flexible in terms of wages and prices and their government finances have been in order, and they have thereby been able to manage situations where developments in the baltic countries have deviated from those in the euro area. the fact that they now also have the opportunity to introduce the euro is expected to provide further advantages for trade and price comparisons. but for some of the other new member states a hurried transition to the euro could give rise to problems. to qualify for participation in the eurozone the countries must meet the convergence criteria which lay down various requirements for inflation, interest rates, the exchange rate and government finances. the baltic states are very close to meeting these criteria today, or have already fulfilled them. but the largest new member states have bigger difficulties. one of the criteria for introducing the euro is that a country keeps its exchange rate stable within the bands set by the exchange rate mechanism erm2, which allows a maximum movement in the exchange rate of 15 per cent up or down. the largest of the new member states - poland, the czech republic and hungary - today have a floating exchange rate. in this regard there is a more theoretical and more immediate danger for the countries. the theoretical problem has to do with the pressures that high growth exerts on a country's economy and that, according to the balassa - samuelsson theorem, either leads to a rise in the exchange rate ( nominal appreciation ) or to a higher inflation rate than in other countries ( real appreciation ). if the new member states peg their exchange rates to the euro and at the same time have higher growth than the euro area countries | market, this will have positive spillovers in lifting the quality of jobs in the industry more generally and reversing the brain drain of insurance talent. secondly, insurers need to stay ahead of the curve in leveraging new technologies to be more accessible, more efficient and more agile. many forces will be driving insurers to be more innovative. the removal of tariffs and changes introduced under the life framework will drive the growth of new products and delivery channels. as social media and other forms of communication change the way insurance is accessed, traditional business models will be at risk of being β uberised β. even where face - to - face contact remains important, for example in the purchase of long term life insurance, the effectiveness and cost efficiency of agents will be transformed by enhancements in productivity arising from better data analytics. the bank will continue to pursue the innovation agenda. technology advancement is here to stay. revolution in business brought about by technological advancements will change the way we live and do business. as a catalyst for such innovations, i am pleased to announce that following a public consultation process, the bank has today issued details of the financial technology regulatory sandbox. effective immediately, financial institutions and fintech companies will now be able to pilot innovations in a controlled, live - test environment with appropriate flexibilities accorded. this will include flexibilities under existing regulatory requirements that apply to outsourcing arrangements and access to customer information, subject to compensating safeguards. the experience from the sandbox will provide input into formulating more proportionate regulations that will spur the orderly growth of new innovations in the financial industry, including insurance. we see significant potential for positive disruptions to transform the business of insurance and takaful in malaysia β from the way insurance is consumed, to opportunities for addressing leakages to drive insurance costs lower. indeed, the greatest gains from technological innovations may well be reaped in the more mundane aspects of running a business efficiently. today, money is still being left on the table from inefficiencies and leakages in the insurance system. from inefficient manual bis central bankers β speeches processes to the slow take - up of electronic payments, there are large gaps in the supply chain that unduly increase the cost of insurance and limit efforts to combat insurance fraud. the insurance industry needs to accelerate its pace in terms of its technological adoption or else events will dictate the shape of the industry β s future. | 0 |
management, not ordinary people with deposits in banks. and finally it means making sure that if you take out an insurance contract, it will pay out if whatever you are insuring against happens. the work that the bank does in all of these areas can ultimately be summed up very simply : we maintain confidence in money. this confidence is not, though an end in itself ; it is a means to an end. confidence in money provides the foundations for prosperity. without it, companies would struggle to provide the goods and services we all use every day ; you would face difficulties in knowing how to invest for your futures, be it financing studies or buying a house. maintaining this confidence is the best contribution the bank of england can make to the good of the people of the united kingdom. all speeches are available online at www. bankofengland. co. uk / speeches building public understanding of what the bank does β by engaging with people directly β is essential to our work. that β s because our policies work better if our objectives are clear and the british people have confidence that we will do the right thing whatever happens. improving understanding of the bank β s role is also part of being accountable to the people we serve. the bank is at the heart of the uk economy. the responsibilities parliament has given us are wide - ranging and the decisions we take affect everyone in the country. people deserve the information and tools to judge how well we are doing our job and to know that we are listening to your views. today β s event is also part of a wider effort by the bank to move beyond traditional modes of communication to speak more directly to the people we serve. while three hundred thousand people read the financial times, there are 30 million facebook users in the uk. and while everyone knows it is good to talk, the bank is learning how it can also be good to tweet β our twitter account has 227, 000 followers, though that still leaves us a little behind wayne rooney β s 16. 7 million. we are revamping our publications to make them more accessible, using icons and graphics to convey our messages on webpages designed for mobiles and tablets, rather than relying only on pages of words on paper. you can take a look at our first example of this β the november inflation report β online, at www. inflationreport. co. uk. this afternoon β s event will showcase a selection of the materials we are planning to run alongside these changes in our communications | new vibrancy to the anfield area. i personally heard last night about some of the great work that everton in the community are doing to tackle problems like homelessness and boost educational attainment. and the club of course has ambitious plans for a new stadium at bramley moore dock. liverpool β s science park provides office space alongside commercial labs, right at the heart of the city β s knowledge quarter. all speeches are available online at www. bankofengland. co. uk / speeches we β re here today to discuss with you what causes changes in the economy, how they affect people and businesses in merseyside and across the country and the bank of england β s role in supporting jobs and growth. the economy matters for everyone and people want to understand it better. three quarters think there should be better education about the economy and half want a better understanding themselves but virtually no - one β just 1 in 10 β think public figures talk about economics in an accessible way. today, we are trying to bridge that gap. we are helping to make discussions of the economy more accessible and are launching practical tools that can be used to help educate students, and indeed everyone, about the economy. this is all part of a wider effort to improve our communications. we are doing this to make the bank more open and accountable. quite simply, people need to understand our actions and their effects in order to hold us to account. doing so will also make our policies more effective. let me give you an example. our mission was originally set out in 1694 in the bank β s founding charter. that was to β promote the publick good β β although that sentiment was contained within a 700 word sentence, hardly clear and transparent communication. and in practice at the time what it meant was raising money to carry on a war against france. today, our mission is still to promote the good of the people of the united kingdom, but now we do that by maintaining monetary and financial stability. let me explain what that means. maintaining monetary stability means two things. first, providing banknotes that you can use and trust. we have over 3 billion notes currently in use, and they are used in 44 % of all transactions. second, it means maintaining low and stable inflation. maintaining financial stability means three things. first, making sure that when you put your money in a bank it is safe. second, it means that if a bank fails, the costs fall on the bank β s investors and senior | 1 |
games on the event app for your entertainment in between sessions. there will also be electronic raffle draws for registered participants. in closing, we thank all of our participants and institutional partners who remain committed to the bsp's advocacy of strengthening financial health for every filipino. what does a post - pandemic financial recovery look like? we no longer have to imagine because we are already creating it. together, let us create a financial future that is more accessible, rewarding, and sustainable for all filipinos. maraming salamat at mabuhay po tayong lahat. 4 / 4 bis - central bankers'speeches | disasters but also by financial exclusion and financial illiteracy. with limited income and credit, affected households depleted their savings, defaulted on their debts, and sought government aid. some households even resorted to taking their children out of school. some took out " buy now, pay later " loans from unregulated lending companies, often with prohibitive interest rates. the most financially vulnerable sectors also belong to the most financially underserved. filipino farmers and agricultural workers were the least banked among all types of workers during the pandemic, with 73. 0 percent having no financial accounts. besides the dearth of account ownership, notable gaps in financial knowledge are also reflected in filipinos'poor performance in financial literacy surveys. when surveyed on basic financial literacy questions, only 2 in 10 filipinos scored a hundred percent, while 7 in 10 correctly answered at least half of the questions. only 42. 0 percent of adults correctly identified inflation's effect on purchasing power in 2021, lower than 55. 0 percent in 2019. the question on simple and compound interest had the lowest correct answers at just 30. 0 percent. these results are consistent with the philippines'showing in similar international financial literacy surveys. the world bank found that only 25. 0 percent of adult filipinos are knowledgeable on basic financial concepts. in a global study by standard & poor's [ s & p global ratings ], the philippines scored in the bottom 30 of 144 countries surveyed on financial literacy. financial health through financial education these knowledge gaps show that for many filipinos, financial health is still a work in progress. the bsp is committed to upholding the financial health of every filipino as best embodied in this year's expo theme : " owning the future : rebuilding and strengthening financial health through financial literacy. " the bsp is actively working with partners in government, namely the overseas workers welfare administration and the departments of agriculture, trade and industry, and social welfare and development to develop customized capacity - building financial literacy training programs. 2 / 4 bis - central bankers'speeches we partnered with the civil service commission, the armed forces of the philippines, the bureau of fire protection, and the philippine national police for fin - ed programs for civil servants and uniformed personnel. we are working with the department of education and the commission on higher education to make financial literacy lessons mandatory for k - 12 [ kindergarten to grade 12 ] and secondary education classes and in training programs for teachers. through our upcoming partnership with the technical education and | 1 |
norman chan : the new membership regime of aci - the financial markets association of hong kong remarks by mr norman chan, deputy chief executive of the hong kong monetary authority and chairman of treasury markets forum of hong kong, at the cocktail reception to mark the new membership regime of aci - the financial markets association of hong kong, hong kong, 14 october 2004. * * * good afternoon ladies and gentlemen, i am pleased to welcome you all to this reception to mark the successful launch of the new membership regime of aci - the financial markets association of hong kong, and the introduction of accredited educational programmes for market practitioners. this is a major milestone in raising the professionalism of treasury market practitioners in hong kong. the treasury markets forum of hong kong was established in march this year with a view to promoting co - operation and synergy to raise the professionalism of practitioners and the overall competitiveness of the treasury markets in hong kong. the forum brings together the providers, users and intermediaries in treasury markets, including representatives of hong kong association of banks, aci - the financial markets association of hong kong, hong kong capital markets association, hong kong association of corporate treasurers, dtc association and hong kong foreign exchange and deposit brokers β association, to consider how we can co - operate in raising the professionalism of market practitioners. i am pleased to report that we are made major progress in raising the professionalism of treasury market practitioners. treasury markets comprise a wide range of products including foreign exchange, fixed income, derivatives and so on. the boundaries between various markets have become blurred alongside more innovative and sophisticated structuring of new products. whether dealing, sales or back - office staff in treasury markets all require strong technical, up - to - date knowledge in order to cope with the rapid changes in treasury markets. in the discussions between the treasury markets forum and aci - the financial markets association of hong kong on the design of the new membership scheme, we consider that there is a need to bring together qualifying practitioners from various treasury markets. this can facilitate the exchange of views among practitioners within the industry on the one hand and promote the professional standing of practitioners on the other hand. in addition, accredited educational programmes should be introduced to raise the professionalism of practitioners and provide training to those who are interested to join the industry. following the active co - ordination among industry bodies, i am glad that the aci - the financial markets association of hong kong has successfully launched the new membership regime and made | 1 % 0 % 0 % 2 % 1 % 1 % 1 % 0 % sector manufacturing electricity water construction wholesale trade transportation and storage information and communication real estate activities professional, scientific and technical activities administrative and support service activities education health arts and entertainment other services 12 % - 10 % 25 % 14 % 4 % 41 % 32 % 5 % 9 % 25 % 20 % 17 % 9 % 10 % 7 % - 14 % 8 % 8 % 4 % 28 % 18 % 3 % 6 % 14 % 13 % 7 % 4 % 0 % - 1 % - 13 % 1 % - 2 % 0 % - 1 % 3 % - 1 % 4 % 4 % 0 % 2 % - 5 % - 5 % sources : ons research database and bank calculations. note : data refer to non - financial business sector. calculations over the ten - year period in question are only possible for firms that exist for entire decade period and sampled throughout ; these are likely to be larger firms. all speeches are available online at www. bankofengland. co. uk / speeches chart 8 : trade openness and productivity gdp per hour worked rΒ² = 0. 4434 average of goods and services mgi connectedness ranking sources : mckinsey global institute, oecd and bank calculations. notes : data for 2014. gdp per hour worked in us $ at constant prices, in 2010 ppps. uk marked in red. chart 9 : finance openness and productivity gdp per hour worked rΒ² = 0. 3431 financial mgi connectedness ranking sources : mckinsey global institute, oecd and bank calculations. notes : data for 2014. gdp per hour worked in us $ at constant prices, in 2010 ppps. uk marked in red. all speeches are available online at www. bankofengland. co. uk / speeches chart 10 : people openness and productivity gdp per hour worked rΒ² = 0. 199 people mgi connectedness ranking sources : mckinsey global institute, oecd and bank calculations. notes : data for 2014. gdp per hour worked in us $ at constant prices, in 2010 ppps. uk marked in red. chart 11 : overall openness and productivity gdp per hour worked rΒ² = 0. 4635 total mgi connectedness ranking sources : mckinsey global institute, oecd and bank calculations. notes : data for 2014. gdp per hour worked in us $ at constant prices, in 2010 ppps. uk marked | 0 |
a depreciation of about 15 per cent. an ex post analysis of the composition of the capital in - and outflows of last year provides interesting information for a better understanding of the changes that took place. initially, it was mainly a sudden reversal in the inflow of short - term capital in the form of inter - bank and trade related financing arrangements that triggered the shortages in the market for foreign exchange. as the exchange rate depreciated and south african residents became more concerned about possible losses on foreign currency exposures, long - term foreign loans were repaid without replacement or extensions. south africans with existing short - and long - term foreign currency commitments covered their positions forward, and the reserve bank β s forward exchange book showed a sharp increase of the net oversold position. in the fourth quarter of last year, when short - term capital began to flow back again, there was a net outflow from the private sector of r6 billion in the form of longer - term capital, mostly for the repayment of maturing loans. another interesting feature of the international capital flows last year was that foreigners remained important net portfolio investors in south african securities. non - residents increased their holdings of south african equities listed on the johannesburg stock exchange by r5. 3 billion, and added a net amount of r3. 4 billion to their holdings of south african bonds acquired through the south african bond market. this ostensibly β volatile β element of the capital flows was therefore not responsible for the problems that developed in the south african balance of payments last year. 2. monetary policy faced with new challenges in a situation of a deteriorating balance of payments the abrupt decline in the capital inflows from abroad in the first quarter of 1996 confronted the monetary policy authorities with an unexpected new challenge. since 1994, the reserve bank β s policy on international financial relations was to rebuild the country β s depleted official foreign reserves gradually, to relax the exchange controls on a step - by - step basis, and to restructure the market in foreign exchange gradually with the objective of enabling a more efficient market to determine not only the spot foreign exchange rate of the rand, but also the forward rate. good progress was made on this road during 1994 and 1995, but the country was surely not yet in a position to withstand the adverse developments of early 1996, or to protect the exchange rate of the rand against a series of determined attacks in a rather vulnerable situation. the reserve bank realised that it was not in a position | support strong sustainable balanced growth around the world. bis central bankers β speeches | 0 |
than before the crisis. as for the european system of central banks, i can assure you that we stand ready to act as forcefully as necessary to ensure price stability and preserve the integrity of the euro, which is, today, our most precious common good. bis central bankers β speeches | quarter more than the labour costs. as the third row in figure 10 suggests, if volunteering activities are similar in nature, there is a case for scaling - up our estimates of output by a similar amount. β’ the final issue, outlined on the fourth row of figure 10, is about comparing volunteers with paid workers. in carrying out the same activity as a paid employee, volunteers may be more enthusiastic, but also less capable. i am more enthusiastic about painting a shed than my local decorator, but also less competent. so it is not altogether clear whether the wages of paid workers are good proxies for volunteering value or not, with uncertainties on both sides. the final row in figure 10 offers estimates of the overall contribution of volunteering to the uk economy. it suggests this could exceed Β£50 billion per year, or around 3. 5 % of annual uk gdp. this would place the volunteering sector on a level pegging with the uk energy sector ( both extraction and utilities ). very few sectors add more value. clearly, the inner layer of the volunteering onion β economic value β is a very significant one. these new estimates can be found at http : / / www. ons. gov. uk / ons / about - ons / business - transparency / freedomof - information / what - can - i - request / published - ad - hoc - data / econ / august - 2014 / hhsa - consistent - estimates - of - thevalue - of - informal - voluntary - activity - in - 2012 - 13. xls. this calculation uses the following industries : professional and support services ; distribution, transport, hotels and restaurants ; government, health and education ; and other services. the calculation also includes an adjustment for β mixed income β β that is, the income of the self - employed that is classified separately in the national accounts but which arguably reflects a return to labour rather than capital. bis central bankers β speeches private value of volunteering the second layer of the onion is the private benefit from volunteering. this might sound fluffier than a gdp - equivalent measure. yet even the hardest - nosed economist would recognise the existence of those private benefits. why else would anyone volunteer in the first place! volunteering is a prime example of revealed preference theory in practice. surveys of individuals overwhelmingly support this conjecture. the 2006 / 07 helping out survey of volunteers found a range of benefits including enjoyment, satisfaction and achievement, meeting people and | 0 |
increasingly being held on the balance sheet of the originator bank and pledged as collateral with the central bank. second, non - marketable assets and above all, credit claims ( i. e. normal bank loans ) have become the largest single asset class in our collateral portfolio. third, uncovered bank bonds constituted the largest marketable asset type in 2009, mostly in non - guaranteed forms. however, the absolute amounts and the share started to decline sharply thereafter, due to subdued issuance volumes, increased risk aversion and concerns about the counterparty risk. in addition to the decrease in issuance, downgrades of banks have rendered a large part of this collateral non - eligible for eurosystem operations. as a result, guaranteed unsecured bank bonds now dominate non - guaranteed bank bonds. finally, due to the implementation of the two 36 - month refinancing operations conducted in december 2011 and february 2012, posted collateral in general increased, and in particular the use of covered bank bonds, which has lately become the largest marketable asset type in our collateral framework. it is equally important to analyse whether the observed scarcity of collateral in some regions follows a cyclical or a structural pattern. if it is cyclical it is mainly the result of the prevailing uncertainties in the markets and the perceived heightened counterparty risk that leads market participants to move from unsecured to secured funding, thus increasing their needs for collateral. such moves could in principle be reversible, once confidence in banks β resilience improves again. it has been argued however that a continued decline in, or even disappearance of, unsecured funding could have permanent effects on the balance sheet structure of banks. so, although central banks may have taken a number of measures to address the current stress on banks β balance sheets ( enlarging the collateral framework, purchasing assets, extending longer term this figure includes the haircuts applied by the eurosystem. bis central bankers β speeches liquidity, implementing non - recourse repos or swapping them with more liquid assets ), these measures can be rolled back or discontinued as soon as the crisis subsides. a structural change in the demand for collateral, on the other hand, would be more the result of a series of regulatory changes ( such as the liquidity coverage ratio under basel iii, regulatory changes on derivatives trading, the proposed capital charges in solvency ii for insurers, making it more attractive to hold covered bonds, and | resilience remains crucial. existing releasable macroprudential capital buffer requirements and adequate borrower - based measures should be maintained to ensure that banks can absorb any future shocks. at the same time, the policy framework for non - banks should be improved from a macroprudential perspective to strengthen the sector's resilience. finally, to mitigate the current risks to sovereign debt sustainability, it is important to implement the eu's revised economic governance framework fully, transparently and without delay. given the structural challenges related to low potential growth, the consolidation of public finances will need to be designed in a growth - friendly way. 3 conclusion let me conclude. in december we decided to further moderate the degree of monetary policy restriction, lowering the key ecb interest rates by 25 basis points. this decision was based on our updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission. we are also continuing the process of balance sheet normalisation. in december the last repayment of the targeted longer - term refinancing operations was completed and reinvestments were discontinued. we are determined to ensure that inflation stabilises sustainably at our 2 % mediumterm target. given the high level of uncertainty, we will continue to follow a datadependent and meeting - by - meeting approach to determining the appropriate monetary policy stance. the high level of uncertainty calls for prudence. in particular, severe global trade frictions could increase the fragmentation of the world economy, uncertainty about fiscal policy and its present challenges could weigh on borrowing 3 / 4 bis - central bankers'speeches costs, and renewed geopolitical tensions could affect energy prices. we are therefore not pre - committing to a particular rate path. if the incoming data confirm our baseline, the policy trajectory is clear, and we expect to continue to further reduce the restrictiveness of monetary policy. 1 i am grateful to adriana grasso, max lampe and thomas mcgregor for their contributions to this speech. 2 baumann, a., l. caprari, g. kocharkov and o. kouvavas, ( 2025 ), " are real incomes increasing or not? pessimism and its impact on consumption ", forthcoming in economic bulletin, issue 1, ecb. 3 see draghi, m. ( 2024 ), the future of european competitiveness, september, and letta, e. ( 2024 ), " | 0.5 |
daviΓ° oddsson : review of the icelandic economy address by mr daviΓ° oddsson, chairman of the board of governors of the central bank of iceland, at the bank β s annual meeting, reykjavik, 31 march 2006. * * * chairman of the supervisory board, prime minister, cabinet ministers, ladies and gentlemen : on behalf of the board of governors of the central bank of iceland i welcome you all to the 45th annual meeting since the central bank was established on april 7, 1961. the bank β s financial statements for the year 2005 have been ratified today by the prime minister. the bank β s annual report has also been published. it includes a report on the bank β s performance and a summary of how it has implemented its mandatory role. the chairman of the supervisory board devoted part of his address to birgir isleifur gunnarsson, the former chairman of the board of governors. the present governors endorse his words wholeheartedly. in this context i would like to draw attention to two points that the former chairman of the board of governors mentioned at the last annual meeting. one concerned the bank β s forecast for inflation and the current account deficit. at that time the bank forecast that the current account deficit would be equivalent to 12 % of gdp in 2005 and inflation would be 2Β½ % by today. now it is clear that developments have been less favourable than was forecast and hoped. the current account deficit ended up at 16. 6 % of gdp and inflation is currently 4. 5 %. institutions are admittedly not accustomed to drawing attention to their forecasts if they do not come completely true. but what are the explanations? it has transpired now that gdp grew last year by more than was forecast, and new national accounts data also show that the figure for 2004 was hugely underestimated. gdp growth then was 8. 2 %, the highest figure in iceland since 1987, which was effectively a tax - free year [ when iceland moved onto a paye tax system ]. last year was eventful on the economic front. private consumption grew at its fastest rate since 1987 and gross fixed capital formation faster than any year since 1971. import growth has not been as brisk in any year since 1953 and the current account deficit broke previous records β although it should be added that as a result of income from soaring foreign asset holdings, iceland β s net external position only deteriorated slightly. real wages were at a peak, unemployment at a minimum and direct foreign inward investment ran | at a massive level. this inflated picture must be seen in the light of the very robust economic growth in the previous year, 2004, and strong growth in 2003 as well. besides these large movements, a structural change in the domestic credit market made much more capital available to mortgage borrowers. higher disposable income and net wealth also contributed to making this a unique period in icelandic economic history. bearing all this in mind, it is probably surprising how modest a deviation was actually shown from the forecasts for inflation and the current account deficit. so far, house prices have been the main driver of inflation above the target. if house prices alone are excluded, iceland β s rate of inflation is low β and also in comparison with other european countries, for example. house price inflation was widely expected to stop sooner than it actually did. monetary bulletin, which was published yesterday, describes how the financial position of households has tightened due to a rise in short - term interest rates and in the lowest rates for new mortgages, compounded by the depreciation of the krona and higher inflation. for a number of familiar reasons, however, these monetary effects are not felt strongly yet, which is dampening efforts to slow down the economy. the increase in mortgage interest rates following yesterday β s rise in the central bank β s policy rate, however, represents an important contribution now. private consumption grew by almost 12 % last year. growth at such a pace is rare and can only be short - lived. disposable income has been driven up by wage rises, a higher employment rate and tax cuts. household wealth has also grown as real estate and equity prices rose substantially. most indications are that asset prices are the main driver of private consumption growth. housing prices in the greater reykjavik area went up by 45 % over the past year and a half, and equity prices by almost 96 % over the same period. in the central bank β s view, the real estate market will cool down significantly in the near future and private consumption growth will normalise next year. it might seem natural to ask whether the bank β s concerns about inflation will not vanish overnight then, because housing prices have been the only factor keeping inflation figures high. unfortunately the matter is not so simple. there is no doubt that the central bank β s policy rate measures have played a crucial part in helping the other index components to counteract house price inflation in the recent term. the movements in the exchange rate of the krona in | 1 |
further signs of moderation. whereas in previous months this moderation reflected a decline in the growth rate of household borrowing in an environment of rising mortgage lending rates throughout the euro area and a slowing increase in house prices in some regions, in february it was due to a moderation in the growth of loans to non - financial corporations. when assessing such developments, it should be borne in mind that monthly figures can be influenced by temporary factors and should thus not be overstated. indeed, the strong growth in private sector credit reflects the continuation of the strong trend in the growth of borrowing by non - financial corporations seen since mid - 2004. when put in perspective, the latest data continue to point to vigorous dynamics in the underlying rate of broad money expansion in the euro area. the continued robust expansion of money and credit reflects the low levels of interest rates over a prolonged period of time and the strengthening of economic activity in the euro area. rising short - term interest rates, in combination with low long - term interest rates, have had an impact on developments in the individual components of monetary and credit aggregates, but have thus far had only a limited influence on the overall strength of monetary developments. following several years of robust monetary growth, the liquidity situation in the euro area is ample by all plausible measures. in this environment of ample liquidity, the continued vigorous expansion of money and credit points to upside risks to price stability over the medium to longer term. monetary developments therefore continue to require very careful monitoring, particularly against the background of a solid expansion in economic activity and continued strong property market developments in many parts of the euro area. to sum up, in assessing price trends it is important to look through any short - term volatility in inflation rates. the relevant horizon for monetary policy is the medium term. risks to the medium - term outlook for price stability remain on the upside, relating in particular to stronger than currently expected wage developments in a context of ongoing robust growth in employment and economic activity. given the vigorous monetary and credit growth in an environment of already ample liquidity, a cross - check of the outcome of the economic analysis with that of the monetary analysis supports the assessment that upside risks to price stability prevail over the medium to longer term. accordingly, the governing council will continue to monitor very closely all developments. indeed, it is essential to ensure that risks to price stability over the medium term do not materialise. this will support the solid anchoring of medium to longer - term inflation expectations | is truly european, while other important parts of economic policy are still handled at the national level. first, the euro area is exposed to shocks arising from global shocks or common vulnerabilities. the 2007 β 08 financial crisis and its aftermath were a case in point, causing growth to go into negative territory in all euro area countries in 2009. what made the euro area different from other economies was the absence of a readily available area - wide fiscal capacity to complement monetary policy. moreover, the lack of a robust regulatory, supervisory and crisis management framework when the crisis hit gave rise to increased doubts in the solidity of the european banking system. this in turn affected the financing of the real economy and the transmission of monetary policy. second, as we have seen in the past crisis, the euro area can be exposed to the risks originating from unsustainable domestic policies resulting in excessively high levels of debt, financial sector vulnerabilities and / or a lack of competitiveness. through financial, confidence and trade channels, these risks can spill over to other countries which have similar fragilities or strong interlinkages with the country where the risk originated. such policies can also fragment economic and financial conditions, thereby hampering the homogeneous transmission of our single monetary policy across the euro area. and unsustainable policies eventually force socially painful and financially costly economic adjustments which can undermine cohesion in emu. in other words, an incomplete emu impacts the economic and financial environment in which we conduct monetary policy. 2 / 4 bis central bankers'speeches europe has learned this lesson the hard way. and we have made significant progress in fixing the gaps in emu β s architecture. for instance, we now have a much stronger and more integrated framework for financial regulation, supervision and crisis resolution. you played an essential role in bringing this about. and the framework has also helped contain any financial stability risks that may emerge during a long period of low rates. but more progress can and should be made. i would like to mention three areas where work is still needed. first, an effective system for policy coordination is vital for promoting sound national policies, thus reducing the domestic sources of such shocks and increasing countries β shock - absorption capacity when they materialise. this pertains to promoting sound economic and fiscal policies. for that, we need to rekindle faith in our common rules and ensure that they are respected. additional support from the eu level, as recently proposed by the european commission, could | 0.5 |
many times in the past but in vain. do you believe that the stability of the greek government, given the fact that its parliamentary majority is smaller, could be in danger if new measures are needed? β it is undisputed that we have a fiscal gap for the years 2015 β 2016. we have to see how big it will be. then we have to discuss, as part of the medium term fiscal strategy ( mtfs ), how to close it. we need a credible mtfs in order to re - enter capital markets. this is unavoidable. i understand the difficult political situation and the majority situation in the parliament but as i said one should not unravel what has been achieved β with political pain β up to now. and the question is : what is the credible alternative to this? so i would really focus the efforts on growth enhancing measures because they create jobs. we need to balance between the two pillars of the program β. bis central bankers β speeches are you aware of any eu - oriented measures to help enhance growth in greece because this seems like the only way funds can be poured into the greek economy? the greek banks are still not able to lend and from the greek government we listen mostly wishes. how can we push for growth? β first, the program has a number of product market reforms to increase the growth potential, but it takes time to feed into the economy. on the eu side, one can make much more use of structural funds. currently, they are used only partly, because there is a lack of sustainable projects. any bilateral help is also welcome. we must undertake a joint effort to reach a critical mass of structural reforms so that investors from inside and outside the country are convinced that we are creating a positive momentum β. even though all banks, especially in southern europe, are provided with liquidity they seem unwilling or unable to transmit it to the real economy. in greece we are facing a suffocating credit crunch. what was your message to the central bank governor and what do you think about the situation of the greek banking sector? β the banking part of the program has been a real success. all four core banks have been recapitalized and thus financial stability has been restored. i do not know what the outcome of the blackrock exercise will be and the results will be known by the end of the year. there is a buffer in the bank stabilization fund and if a need arises, this is an assurance to financial stability and | , the june 2020 projections also include two alternative scenarios, a mild one and a severe one, based on different assumptions regarding the further progression of the virus and the necessary containment measures. both monetary and fiscal policies play a crucial role in supporting the recovery in the euro area. fiscal policies at national and eu level have been crucial in mitigating unemployment risks, bolstering household income and supporting investment by firms. in order to achieve a broadbased recovery, national measures must be backed up by forceful action at the european level. we welcome the new β¬750 billion eu recovery instrument which consists of β¬500 billion in grants and β¬250 billion in loans to member states. the sharp contraction in economic activity is also reflected in the inflation slowdown. headline inflation decreased further to 0. 1 percent in may, from 0. 3 percent in april, mainly on account of the continued fall in energy prices. over the coming months, inflation is expected to be close to zero percent, averaging 0. 3 percent in 2020, before slowly recovering to 0. 8 percent next year and reaching 1. 3 percent in 2022. the inflation projection is also subject to unprecedented uncertainty, with a faster recovery in the mild scenario. financial markets 1 / 4 bis central bankers'speeches euro area financial markets were set in turmoil as the virus spread throughout europe : euro area sovereign bond spreads widened, corporate bond spreads surged and stock prices plummeted. financial markets eventually stabilised, notably on the back of a forceful monetary policy response by the eurosystem. but the monetary accommodation generated by the decline in riskfree rates has only slightly eased the tightening in financial conditions caused by the decline in stock prices and the increase in euro area sovereign and corporate bond yields. the widening of sovereign bond spreads β on account of the macroeconomic outlook and the sizeable fiscal policy responses endorsed by national governments β is particularly troubling from a monetary policy perspective. an effective pass - through of risk - free rates to sovereign bond yields in all countries is crucial because sovereign bond yields are widely used as benchmark rates for pricing financial market instruments and bank credit. evidently, the costs banks face to raise funding in the money, capital and equity markets have notably increased. monetary policy measures tightening financial conditions, combined with an outlook for price stability that had significantly worsened due to the economic fallout of the covid - 19 crisis, prompted the ecb β s governing council to take further policy action at its june policy meeting. we decided that the | 0.5 |
data limitations as estimates are based on inflation - linked bonds or swaps which have only recently become more widespread. but it is likely that the inflation risk premia declined significantly in the 1980s and 1990s alongside the decline in inflation expectations, with investors accepting lower compensation for bearing inflation risk. the decline in inflation risk premia from mid - 2014, by contrast, pointed to the increased prominence that market participants assigned to 6 / 7 bis central bankers'speeches lower than expected inflation outcomes around that time. 5 more than a century ago knut wicksell ( 1898 ) described the natural rate as : β there is a certain rate of interest on loans which is neutral in respect to commodity prices, and tends neither to raise or to lower them. this is necessarily the same as the rate of interest which would be determined by supply and demand if no use were made of money and all lending were effected in the form of capital goods β. 6 the β u6 measure β captures unemployment, underemployment ( i. e. workers who would like to work more hours ) and marginal attachment, which refers to those members of the workforce who are not seeking employment very actively, because, for example, they are not available to start a new job at short notice or have been discouraged by a fruitless search for work. 7 / 7 bis central bankers'speeches | ##modative monetary policy stance, ongoing improvements in financing conditions working their way through to the real economy, and the progress made in fiscal consolidation and structural reforms. in addition, real incomes are supported by moderate price developments, in particular lower energy prices. economic activity is also expected to benefit from a gradual strengthening of demand for euro area exports. at the same time, although labour markets have shown the first signs of improvement, unemployment in the euro area remains high and, overall, unutilised capacity is sizeable. moreover, the necessary balance sheet adjustments in the public and private sectors will continue to weigh on the pace of the economic recovery. the risks surrounding the economic outlook for the euro area continue to be on the downside. developments in global financial markets and in emerging market economies, as well as geopolitical risks, may have the potential to affect economic conditions negatively. other downside risks include weaker than expected domestic demand and insufficient implementation of structural reforms in euro area countries, as well as weaker export growth. according to eurostat β s flash estimate, euro area annual hicp inflation was 0. 5 % in march 2014, down from 0. 7 % in february. the decrease reflects falls in the annual rates of change bis central bankers β speeches of the food, goods and services components, partly offset by a more moderate decline in energy prices. on the basis of current exchange rates and prevailing futures prices for energy, annual hicp inflation is expected to pick up somewhat in april, partly related to the volatility of service prices in the months around easter. over the following months, annual hicp inflation is expected to remain low, before gradually increasing during 2015 to reach levels closer to 2 % towards the end of 2016. at the same time, medium to long - term inflation expectations remain firmly anchored in line with price stability. the governing council sees both upside and downside risks to the outlook for price developments as limited and broadly balanced over the medium term. in this context, the possible repercussions of both geopolitical risks and exchange rate developments will be monitored closely. turning to the monetary analysis, data for february 2014 point to subdued underlying growth in broad money ( m3 ). annual growth in m3 was broadly stable in february at 1. 3 %, compared with 1. 2 % in january. the growth of the narrow monetary aggregate m1 remained robust at 6. 2 % in february, after 6. 1 % in january. the main factor supporting annual m3 growth continued | 0 |
kiyohiko g nishimura : what should we learn from the eurozone crisis? a regulatory - reform perspective speech by mr kiyohiko g nishimura, deputy governor of the bank of japan, at the institute of international bankers 2012 annual washington conference, washington dc, 7 march 2012. * 1. * * introduction : two β once - in - a - century β crises just three years apart let me begin by thanking the institute of international bankers for inviting me to join the leading international bankers today. i am delighted and honored to have the opportunity to deliver this speech at the 2012 annual washington conference. it is a great pleasure for me to return to washington d. c. from tokyo after 30 years of absence, especially as it is just two weeks before the cherry blossom festival officially begins. i vividly remember the festival on the mall in 1982 when i lived here. in fact, this year is special not only for me but also for all washingtonians and tokyoites. this year marks the centennial anniversary of the gift of these 3, 000 cherry trees from tokyo to washington d. c. in 1912. the washington cherry trees have rooted strongly, survived the elements, and withstood the test of time. their blossoms come into full bloom every spring so as to make us feel eternal peace and serenity, regardless of economic cycles, market swings, and in particular, financial crises. alan greenspan once described the β lehman crisis of 2008 β as a β once - in - a - century type event β. 1 and now we are facing the β eurozone crisis of 2011 β. some say the potential magnitude of the fallout from this latter crisis may approach that of the former unless appropriate measures are devised and implemented promptly. thus, we have experienced two once - in - a - century events within three years. indeed, this is quite extraordinary. however, if we look closer at these two crises, we find they are not necessarily isolated events ( or in statistical terms, they are not independent. ) rather a certain factor was active behind both events : important regulatory changes in the united states around 2004. these regulatory changes are seen as having led to excessive leveraging in the united states, culminating in the collapse of lehman brothers. but what is relatively less well known is that these regulatory changes provided fertile ground for the excessive risk taking of european financial institutions as well, making these institutions vulnerable to potential shocks after the lehman crisis, when the sovereign risks of a small periphery country surfaced. | by refinancing bank loans of existing projects, the idfs are expected to take over a significant volume of the existing bank debt and this will release an equivalent volume of fresh lending for infrastructure projects. three idfs β one nbfc by icici bank ltd. and two mutual funds by il & fs and iifcl have been launched in 2013, of which the first one has already started refinancing operations. 20. but a common refrain that i get to hear across various fora is that take out financing model is not working successfully. with all due respect to the proponents of this measure, i have a fundamental issue with the take out financing model. as we discussed earlier, being long - gestation projects, the financiers of infrastructure projects need to pay a lot of attention to the project at the nascent stage. having assumed the risk till the project comes on stream and starts generating stable revenues, i don β t understand why a bank would be willing to trade a good credit risk for the risk of funding another greenfield project! 21. i would rather wish that the entities such as infrastructure debt funds / iifcl etc., which are set up to provide take out financing, in view of their expertise in assessing, appraising and financing infrastructure projects, should assume the initial credit risk in such projects and then sell the same to the banks. external commercial borrowing ( ecb ) norms for infrastructure funding 22. under the extant ecb guidelines, there are several concessions given to the infrastructure sector related to credit enhancements, import of capital goods, availment of trade credit, etc. rbi has recently taken several measures to boost infrastructure financing, especially for the projects in roads and power sector, such as relaxing the ecb norms and treating debt due to lenders in ppp projects as secured finance. the definition of bis central bankers β speeches infrastructure under the extant ecb guidelines is currently being further expanded to bring it in line with the government of india β s harmonized list. this would expand the list to include some of the urban infrastructure items : ( a ) urban public transport and ( b ) water and sanitation, which will include ( i ) water supply pipelines, ( ii ) solid waste management, ( iii ) water treatment plants, ( iv ) sewage projects ( sewage collection, treatment and disposal system ), and ( v ) storm water drainage system. 23. while i do appreciate the recent measures by goi and rbi, i | 0 |
financial system than it would otherwise be. in that case, prudential rules restricting domestic financial institutions β cross - border operations will be needed. the feasibility of this option is also dependent on support for the necessary reforms. but even though that condition is fulfilled, it is not likely that excess exchange rate volatility will disappear, as it is also rooted in the inherent volatility of asset prices and the small size of the domestic foreign exchange market. but the fluctuations need not be larger than many other and larger countries appear able to tolerate. finally, it is appropriate to emphasise that independent monetary policy under a flexible exchange rate regime can take many forms, including different types of price stability target and taking into consideration the role of money and credit in policy formation. it can therefore change from one period to another without necessitating major decisions concerning the currency as such. 1. 7 capital controls and exchange rate regime options lifting the capital controls is one of the most important yet most complex challenges facing iceland at present. the controls have proven an important means of achieving stability in the wake of the financial crisis. because of this, they were approved by signatories of the eea agreement even though they are contrary to the spirit of the agreement. in the long run, however, it is critical that they be abolished. there are at least two main reasons for this. first, the costs associated with the capital controls grow over time and will ultimately exceed the benefits. second, they are in contravention of iceland β s international obligations. for the long term, it will be impossible to retain universal restrictions on capital outflows and remain in the eea. iceland must therefore make a genuine attempt to lift the controls. it may prove complicated and time - consuming, but there is no other option. this gives rise to the question of how capital account liberalisation is related to the choice of currency and exchange rate policy. do some policy options make it easier to lift the controls than others? which comes first, lifting the controls or deciding the currency issue? at what exchange rate should so - called offshore kronur be converted if iceland establishes a currency board or adopts another currency unilaterally? is it possible that capital account liberalisation will wait until β or even beyond β accession to the eu? these questions are not easy to answer, and exhaustive answers are beyond the scope of this report, but a few points can be made nonetheless. the most desirable option must be to lift | ed sibley : central bank of ireland's financial regulation functions restructure, relevant issues this year and forthcoming priorities address by mr ed sibley, deputy governor of the central bank of ireland, at the association of compliance officers of ireland β s ( acoi ) annual conference, dublin, 10 november 2017. * * * introduction good morning ladies and gentlemen. i am delighted to be here at the association of compliance officers of ireland β s ( acoi ) annual conference. thank you for the invitation to speak here today1. it is the second time this year that i have spoken at an acoi event, which i hope is evidence of how important i consider the role of compliance to be to our mandate of safeguarding the stability of the financial system and protecting consumers. when i spoke at your event in march2, i covered, among other topics, my expectations of compliance officers. this warrants repeating. my comments today will also cover the recent restructure of the central bank β s financial regulation functions, a summary of relevant issues arising from our work in 2017, and some of our priorities for 2018. central bank restructuring of financial regulation on the 1 september 2017, the central bank β s financial regulation function was split into two distinct pillars : prudential regulation and financial conduct. the restructuring reflects the critical and equal importance of both our financial stability and financial conduct mandates, the ongoing evolution and increasing complexity of ireland as a financial services centre, and a strengthening of our approach to conduct supervision, over and above our longstanding work on, and commitment to, consumer protection. the two pillars, led by me as deputy governor, prudential regulation, and by derville rowland as director general, financial conduct, are working as equal partners to drive delivery of our mandate of safeguarding stability and protecting consumers ; and that vision of a financial services sector that serves the needs of the economy and its customers over the long term. the new structural arrangements are designed to enhance how we operate as one bank, recognising the interlinkages, dependencies and need to challenge each other across financial stability, prudential regulation and financial conduct disciplines. as the governor of the central bank has stated3 β measures applied to protect consumers range from working to ensure financial stability, through prudential and macro prudential regulation, supervision and enforcement to [ provision of ] personal financial information. β approach to prudential regulation delivery of this vision of financial services in ireland requires that regulated firms | 0 |
should be taken to mitigate moral hazard, avoid adverse selection, and ensure that the financial interests of the taxpayer are adequately safeguarded. | ##igation arrangement between the lender or servicer and the distressed borrower. the federal reserve, in conjunction with the other federal banking agencies ( which include the office of the comptroller of the currency, the federal deposit insurance corporation, and the office of thrift supervision ), the conference of state bank supervisors and the national credit union administration, has issued guidance urging lenders and servicers to pursue such arrangements, when feasible and prudent, as an alternative to foreclosure. for the lender, servicer, and investor, working out a distressed loan with a struggling borrower makes economic sense if the net present value ( npv ) of the payments under a loss - mitigation strategy exceeds the npv of proceeds that would be received in foreclosure. loss mitigation can be advantageous to both the borrower and the lender because the costs associated with foreclosure can be very substantial. historically, the foreclosure process has usually taken from a few months up to a year and a half, depending on state law and whether the borrower files for bankruptcy. anecdotal evidence suggests that the time to complete a foreclosure has been increasing recently, as the number of foreclosures has risen and the average time that properties remain on the market has lengthened. the losses to lenders and investors from foreclosures include not only the missed mortgage payments during that period, but also the costs of taxes, legal and administrative fees, real estate owned sales commissions, and maintenance expenses. additional losses arise from the often significant reduction in value when a property is repossessed even in stable housing markets, particularly if the property is unoccupied for some period. in fact, a recent estimate based on subprime mortgages foreclosed in the fourth quarter of 2007 indicated that total losses exceeded 50 percent of the principal balance. whether the losses are that large in all cases is difficult to know, but what is known is that the foreclosure process itself destroys considerable value. the existence of such costs raises the real prospect that, by restructuring distressed loans in those cases in which the borrower wants to stay in the home, borrowers, lenders, servicers, and investors may all be able to achieve a better outcome than is attainable if the foreclosure process is allowed to run its course. lenders, servicers, and investors have historically relied on repayment | 1 |
of central bank digital currency on physical cash? what would be the impact on central bank seigniorage? how would market participants change their investment bis central bankers β speeches strategies and business models? would there be any implication on the integration of the european capital market, financial inclusion, and economic growth? i will certainly not attempt to answer today this list of questions, which could be further continued. i just want to show that the narrow issue of a move of the eurosystem β s market infrastructure for the settlement of payments and securities would involve far more issues than an assessment of the technical capabilities of dlt. we have a lot of more thinking to do. within the ecb, i will steer an organisational structure for analytical work on technological innovation in the financial sector. it will range from practical aspects, such as the possible usage of dlt for our eurosystem market infrastructure, to more research driven activities like the implications of the issuance of central bank digital money. in this context, we publish today two papers on the impact of dlt on securities post trading. i dare say that there is a big demand for research into the dlt related questions and their policy implications. contributions in this field are highly welcome. part 3 : observations on dlt from the catalyst and oversight perspective let me finish with some reflections from the eurosystem β s catalyst and oversight perspective. we strongly believe that the creation of an integrated european market for payments and securities brings improvements in efficiency and contributes to economic growth. in its catalyst role, the eurosystem aims to ensure that technological innovation does not lead to a disruption or re - fragmentation in the market. as a facilitator, the eurosystem stands ready to help the industry co - ordinate its efforts to work on standardisation and interoperability both in the payments and in the post - trade domain. standardisation and interoperability are also key issues for dlt. it would seem almost ironic to look at a consensus technology from a proprietary perspective and to create silos. on the other hand, is a permission - less world without a trusted third party or a supervised gatekeeper a utopian approach that flies in the face of human history? it is a positive signal that there are collaborative initiatives between fintech companies and banks and between banks, market infrastructures and technology companies. in the post - trade domain, we recently had a workshop which came to the understanding that the involvement of the eurosystem in the | institutions. here, we need to arrive at a common understanding on how the adoption of dlt could potentially affect the overseen and supervised entities and their business models, and on how reporting and accounting could be affected. part 1 : the development and operation of the eurosystem β s financial market infrastructure let me start with our reflections on how to go forward with the eurosystem β s financial market infrastructure for payments and securities. the eurosystem is the owner and operator of target2, the real - time gross settlement system for the euro, and of target2 - securities ( t2s ), the integrated platform which processes the real - time settlement of securities transactions against central bank money across europe. to address the need for these financial market infrastructures to continuously evolve and keep pace with market developments and technological progress, the eurosystem has defined four key action points it will work on in the run up to 2020 and beyond. the first is to explore synergies between target2 and t2s, with the goal of offering a single gateway to the two platforms and enabling target2, a system of the 90s, to benefit from some state - of - the - art features currently available for t2s, a system of the last ten years. what will be the design and the needs of a system for the next decade? bis central bankers β speeches the second is the provision of new target2 services. we have recently conducted a market consultation on functional and business opportunities of our future real time gross settlement ( rtgs ) system. in this consultation, openness to new technologies was one of key components in the investigation of technological opportunities. the replies to the consultation are currently being analysed. the third is to prepare for the enhancement of target2 services with instant retail payments, at least in the settlement layer taking into account the clearing layer solution. in 2014, the euro retail payments board ( erpb ) identified the need for at least one paneuropean instant payment solution for euro that is open to any payment service provider in the european union. by november 2017, end - user solutions for instant payments in euro should be made available at the pan - european level by the payment service providers. the present efforts focus on p to p schemes. but they would lay the foundation for more ambitious b to b instant payment solutions. the fourth action point sets out to review the harmonisation of eurosystem arrangements and procedures for collateralisation. further progress is needed in this area | 1 |
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