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on to say : β however, if incoming information indicates faster progress toward the committee β s employment and inflation objectives than the committee now expects, then increases in the target range for the federal funds rate are likely to occur sooner than currently anticipated. conversely, if progress proves slower than expected, then increases in the target range are likely to occur later than currently anticipated. β in other words, what the fomc does going forward will depend on how the economy evolves, and how this affects the labor market and the inflation outlook. in considering the appropriate timing of lift - off, there are three important reasons to be patient. first, the committee is still undershooting both its employment and inflation objectives. unemployment is too high and inflation is too low. thus, monetary policy needs to be very accommodative in order to close these gaps relative to the committee β s objectives. second, when interest rates are at the zero lower bound, the risks of tightening a bit too early seem considerably greater than the risks of tightening a bit too late. a premature tightening might lead to financial conditions that are too tight, resulting in a weaker economy and an aborted lift - off. this would be problematic in that it would harm the fed β s credibility and, more importantly, would be difficult to rectify. the u. s. experience during the great depression and the japanese experience over the past two decades illustrate the risks of raising interest rates too soon, especially when inflation is running below the central bank β s objective. finally, given the still high level of long - term unemployment, there could be a significant benefit to allowing the economy to run β slightly hot β for a while in order to get these people employed again. if they are not employed relatively soon, their job skills will erode further, bis central bankers β speeches reducing their long - term prospects for employment and, therefore, the productive capacity of the u. s. economy. all that said, i hope the economic outlook evolves so that it will be appropriate to begin to raise interest rates sometime next year. while raising interest rates is often portrayed as a difficult task for central bankers, in fact, given the events since the onset of the financial crisis, it would be a development to be truly excited about. raising interest rates would signal that the u. s. economy is finally getting healthier, and that the fed is getting closer to achieving its dual mandate objectives of maximum employment and price stability. that would be very good | swedish economics association, 10 june 2020. king, m. ( 2023 ), β we need a new approach to bank regulation β, financial times 12 may 2023. leeper, e. and c. leith ( 2016 ), β understanding inflation as a joint monetary - fiscal phenomenon β, in john taylor and harald uhlig ( eds. ), handbook of macroeconomics vol. 2, elsevier press. leeper, e. ( 2018 ), β sweden β s fiscal framework and monetary policy β, sveriges riksbank economic review, 2018 : 2. 26 leeper, e. ( 2023 ), β fiscal dominance : how worried should we be? β policy brief, mercatus center, george mason university. jansson, p. ( 2021 ), β is it time to review the division of roles in macroeconomic policy? β, speech at sveriges riksbank, 8 december 2021. jonsson, m. and k. moran ( 2014 ), β the linkages between monetary and macroprudential policies β, sveriges riksbank economic review, 2014 : 1. linde, j. and a. vredin ( 2016 ), β rethinking the central bank β s mandate a summary of a conference of international experts β, sveriges riksbank economic review, 2016 : 3. lundvall, h. ( 2020 ) β what is driving the global trend towards lower real interest rates? β, sveriges riksbank economic review, 2020 : 1. nessen, m. ( 2016 ), β commentary : the case for unencumbering interest rate policy at the zero bound β, federal reserve bank of kansas city economic symposium, jackson hole 2016. rajan, r. ( 2005 ), β has financial development made the world riskier? β, in the greenspan era : lessons for the future, a symposium sponsored by the federal reserve bank of kansas city, jackson hole, wyoming. final report of the riksbank committee ( 2020 ), " a new sveriges riksbank act ", sou 2019 : 46. smets, f. ( 2013 ), β financial stability and monetary policy : how closely interlinked? β, sveriges riksbank economic review, 2013 : 3. stein, j. ( 2013 ), β overheating in credit markets : origins, measurement and policy responses, β speech | 0 |
those with β core β retail deposits greater than Β£25 billion β are required to implement ring - fencing by 2019. currently, seven banking groups cross this threshold. between them, these groups have around Β£5 trillion of assets, both in the uk and overseas. the ring - fencing regime is designed to be consistent with the other parts of the post - crisis regulatory framework. the most systemically - important ring - fenced banks will be held to higher capital requirements. the systemic risk buffer will be applied to ring - fenced banks to ensure they are adequately capitalised and resilient to shocks. we expect ring - fenced banks to have, on average, around 1. 5 percentage points more high - quality β tier 1 β capital than non - systematically important banks. 2 and a ring - fenced bank will not be able to be capitalised by debt raised externally by its group, which would give rise to so - called β double leverage β. overall, the bank estimates that ring - fenced banks β total loss absorbency will be, on average, around 27 % of their risk - weighted assets, higher than the 17 % recommended by the icb. 3 ring - fencing also helps improve the resolvability of the big uk banking groups. the resolution strategy for groups including ring - fenced banks will typically involve a bail - in at the level of the holding company. bail - in would recapitalise the relevant entity by passing losses up to the holding company to be borne by shareholders and debt - holders. this should stabilise the group. structural separation then provides authorities with additional options as part of any subsequent restructuring. ring - fencing, together with other elements of the post - crisis regulatory landscape, means that the key providers of important retail banking services are less likely to fail following a shock to the economy or the see bank of england ( 2018 ), financial stability report, june, page 44. see bank of england ( 2016 ), the fpc β s framework for the systemic risk buffer, may, box 2. all speeches are available online at www. bankofengland. co. uk / publications / pages / speeches / default. aspx financial system. but if banks do get into trouble, there will be greater certainty that important banking services will continue to be provided without disrupting customers and without the need for government bail - outs. this is the key difference ring - fencing delivers should we experience a repeat of the financial crisis. what changes | increases the intensity of supervision, for the groups in scope. as such, ring - fencing will remain a focus for the pra β as well as for the banks themselves β in the coming years. how will the next crisis be different? financial crises generate significant and persistent costs. the bank of england has estimated that the costs of crises amount to 75 % of gdp on average. 1 the previous crisis resulted in the government providing Β£65 billion of capital to rbs and lloyds to prevent them failing and disrupting the provision of vital banking services to their customers. since then, a comprehensive regulatory reform package was developed β which in large part has now been implemented β to reduce the likelihood that such a crisis could happen again. brazier, a., ( 2016 ), β a macroprudential approach to bank capital : serving the real economy in good times and bad β, speech available at https : / / www. bankofengland. co. uk / speech / 2016 / a - macroprudential - approach - to - bank - capital - serving - the - real - economy - in - good - timesand - bad. all speeches are available online at www. bankofengland. co. uk / publications / pages / speeches / default. aspx in 2010 the government established the independent commission on banking ( icb ) to make recommendations to improve financial stability and competition in the banking sector. the icb recommended that the core retail banking operations of uk banking groups should be ring - fenced from any international or investment banking activity in their groups. the icb argued that if retail banking operations had been ring - fenced prior to the crisis, this would have reduced the likelihood that the banks would have needed government support. the icb β s recommendations formed the basis of the banking reform legislation passed by parliament in 2013. this set out the core banking activities which must sit in a ring - fenced bank, as well as the β prohibited β activities that must be separated from the ring - fenced bank or stopped altogether. the legislation also specified the degree of separation required. ring - fenced banks must have the capability to make decisions independently of their groups and should not be operationally dependent on group entities which undertake prohibited activities. ring - fenced banks must also have sufficient financial independence and have their own capital and liquid resources. any exposures to the rest of the group must be limited and on commercial terms. all large uk banking groups β defined as | 1 |
stability to prices through our monetary policies and in keeping our banking sector sound, stable and liquid. all these give us cause to be optimistic about sustaining inclusive growth in 2016 and beyond,... particularly if adherence to good governance becomes the norm from the national agencies as well as to the local government units. members of the lmp, good governance is also the rationale that underpins the requirement by government to get prior opinion of the bsp β s monetary board ( mb ) on all government loans, including those from lgus to ensure that borrowings are consistent with overall state financial goals. this requirement is essentially based on the 1987 constitution ( article 12 ) that mandates the bsp to provide policy direction in the areas of money, banking and credit. furthermore, republic act no. 7653 or the bsp charter ( section 123 ) provides that the bsp functions as financial advisor on official credit operations of the government, its political subdivisions and instrumentalities. bis central bankers β speeches the objective is to enable the bsp to monitor public sector borrowings and to assess their impact on monetary aggregates, the price level and the balance of payments in fulfillment of its role and mandate to promote and maintain monetary and financial stability. as you may know, requests for mb opinion on planned borrowings may be submitted directly to the bsp by the lgus or through the lending banks. the bsp recognizes the importance of credit to lgus, particularly municipalities. thus, the bsp has issued circulars to streamline the documentary requirements and facilitate the review process on how lgus can secure mb opinions on lgu loans. we have since registered a significant increase in lgu β s engagement with the bsp. in 2015, the bsp received a total of 347 requests for mb opinion, an increase of 35 percent from the 257 requests in 2014. the cooperation of the lgus and lending banks enabled the bsp to render mb opinion on 334 or 96 percent of these requests. about 76 percent of the requests we received in 2015 came from municipalities, involving a total of p12. 2 billion. it is notable that the majority of the loans for which bsp rendered an opinion in 2015 were used for infrastructure projects such as farm - to - market roads, public markets and multi - purpose halls. these purposeful spending by local governments provide a boost not only to community development but also to broader national growth. indeed, in the context of governance, local government units play a significant role in ensuring | new generation of filipinos who are adept in managing their own resources and in strengthening the country β s financial system. let us cooperate therefore in implementing this breakthrough program. indeed, it should be another busy year for all of us. i therefore call on the officers and members of bmap to assist the bangko sentral in ensuring the successful implementation of these reforms and advocacies. we will again count on your support and commitment to these programs. together, let us forge an even stronger partnership as we continue to foster stability in the financial system and secure more sustainable and higher growth path for our economy. finally, i thank your outgoing officers β led by bobby banaag β for a job well done and congratulate the new set of bmap officers β headed by mike villareal β on the successive breakthroughs they will set during their term. mabuhay ang bmap! mabuhay ang pilipinas! maraming salamat sa inyong lahat! | 0.5 |
stronger this year than last, which has a dampening impact on inflation. given our inflation - targeting regime, we will be mindful of the effects of higher interest rates on the krone exchange rate when inflation is low. global growth will also influence oil prices and developments in prices for other commodities. oil prices are high and futures prices indicate that they will remain so. the price of brent blend has averaged close to usd 70 per barrel so far this year. in recent months, the price has been well above this level. gas prices have also increased in recent years, reflecting the rise in oil prices and gas shortages in europe. gas prices fell somewhat in the first half of 2007, partly as a result of the decline in uk gas prices and the fall in oil prices in the first half of 2007. both uk gas prices and oil prices have risen again this autumn. gas prices are expected to remain at a high level, and the price of norwegian gas may rise in the period ahead. a long period of high oil prices has boosted investment in oil and gas activities, leading to a strong increase in domestic activity in recent years. the level of petroleum investment is historically high and the outlook is favourable. the discovery rate on the norwegian continental shelf appears to be high this year. the number of applicants for new exploration activities is unusually high. coupled with high oil prices, these factors will contribute to increased activity on the norwegian continental shelf in coming years. at the same time, the composition of production is changing. oil production is on the decline and has not been lower since 1994. gas production continues to rise, and in 2007 production started on the large ormen lange and snΓΈhvit gas fields. the ministry of petroleum and energy projects that total petroleum production will gradually decline in the years ahead. prices for commodities excluding energy have increased considerably since 2002. the rise in prices was particularly pronounced in spring 2006, when metal prices climbed by a full 45 per cent from march to june. the rise in metal prices has been driven primarily by strong global economic growth, particularly in china and other emerging economies. prices for food and other agricultural products have also increased in recent years as a result of rising production costs owing to higher energy prices. increased demand for biofuel has also contributed as agricultural products and land are used in the production of biofuel. growth in demand for commodities is expected to remain high in the years ahead and supply will probably also increase. prices for metals are expected to fall somewhat | senad softic phd governor, central bank of bosnia and herzegovina conference : macroeconomic imbalances and eu convergence 07 november 2019 welcome speech and opening of the conference dear friends of the central bank of bosnia and herzegovina, distinguished panelists, dear guests, dear colleagues, a very good morning to all of you. it is my great pleasure to welcome you to sarajevo, to another international research conference of the central bank, jointly organized with the usaid finra project. a number of experts have agreed that large macro imbalances were the main cause of the euro area crisis. the eu has reacted with many institutional and organizational changes. this process will continue and our conference hopes to be a part of the efforts to discuss both the macroeconomic imbalances and the eu convergence process. i would mention some of the main macroeconomic imbalances : excessive government deficits and debts, excessive bank credit expansion, stock market and real estate bubbles, and large external account surplus or deficits. all of them can result in serious economic problems if unattended. in bosnia and herzegovina, as you all know, we have a currency board regime. we do not have independent monetary policy, nor can we use nominal exchange rate as a policy tool. if action is needed, we must rely on fiscal policy or use flexible labor markets to bring about the necessary adjustment. fiscal policy options can also be limited, especially if there is a trend of ageing population or decrease in working age population. in the case of structural imbalances, even fiscal policy measures can be of reduced efficiency. policy makers must keep in mind the macroeconomic context. let us take, for example, the annual growth rates of credit in bh in 2006, 2007 and the first half of 2008. just before the global financial crisis ( gfc ), loans to private sector were growing at the rate higher than 30 per cent annually. although it was viewed as a sign of overheating, the policy makers also considered factors such as low initial levels of lending. today, such accelerated credit growth would be considered a serious vulnerability. similarly, the path of the accession towards the eu is bringing structural changes to a candidate country β s economy. the convergence process itself will generate imbalances that, if not addressed properly, may be dangerous for macroeconomic stability. if the imbalances are neglected, the country may, at best, stay in the accession process for a long time. during the accession period, the legal framework and | 0 |
the quran3, " o believers! be steadfast, strive to excel in steadfastness, remain firm on your belief and be mindful of allah, so you may be successful. " on this count, i commend the malaysian islamic finance industry for taking the leap forward more than half a decade ago - to embrace value - based intermediation ( vbi ). this strategic alignment with the maqasid shariah has enabled the industry to have a leg up while the rest of the sector is still at the exploratory stage in the ethical and sustainable journey. with the recent launch of the 3rd cohort of the vbi financing and investment impact assessment framework ( vbiaf ) 4 sectoral guides and the maqasid shariah scorecard ( mss ) in october, the industry should collectively work to intensify the implementation of vbi and measure its impact more effectively. moving forward, stronger implementation of vbi requires concerted efforts and holistic alignment across all key stakeholders. in particular, shareholder stewardship is vital to 2 / 5 bis - central bankers'speeches ensure the transformative impacts of value - based finance are seen and felt by many. with louder tone from the top - shareholders have the power to drive positive changes across the entire ecosystem - aligning business practices with the best conduct - which can further strengthen governance and promote positive consumer outcomes. the islamic finance talent ecosystem must also evolve from treating shariah requirements as a compliance exercise to encapsulating the shariah values in its entirety aβ¬ β by demonstrating trustworthiness ; fairness ; transparency ; social responsibility ; and a commitment to justice and shared prosperity. ladies and gentlemen, the second key proposition is to advance innovation for value - based solutions. in adapting to the changing market needs, islamic finance must remain agile - by structuring sophisticated instruments, using the basic building blocks ; unbundling ; and repurposing different components of existing islamic financial instruments. the industry should actively explore the full range of shariah contracts and instruments to drive financial innovation to address real - world challenges. i believe that the future of value - based innovation is certainly bright. first, blended finance has great potential to expand access to finance for the underserved and unserved segments. this is particularly due to its ability, to mobilise social finance capital, such as zakat and waqf - combined with traditional financing. an example of blended | with a significant fall in its unemployment rate. today, french reforms are heading in the right direction, [ slide 5 ] in particular the tax credit for competitiveness and investment ( cice ) and the responsibility and solidarity pact ( rsp ) that enhance the competitive strength of the french economy. a policy of administrative simplification, the so - called β simplification shock β, and a new law to sustain economic growth and entrepreneurship ( β loi macron β ), are also being conducted in order to rebuild business confidence. however, we are not there yet and a number of reforms need to be complemented. in particular, in the labour market : hopefully renewed progress will be made with the draft law under discussion in parliament. finally, in the euro area, fiscal policy is now more balanced since significant adjustment has already been achieved. structural efforts and a growth recovery have led to a reduction in deficits and to a stabilisation in the ratio of debt to gdp. this more balanced policy mix is an opportunity to engage in new ways of thinking and to strengthen the recovery via stronger economic coordination in europe. the room for manoeuvre in economic policy is highly heterogeneous across european countries, and each country should use its capacity to improve the overall situation [ slide 6 ]. european countries have done quite a lot on their own, but now we can and must do more to coordinate demandside policies and structural reforms at the european level. to do so, i would like to make two proposals. 4 / strengthen investment first, we need to improve investment financing [ slide 7 ]. our efforts should be put towards financing growth and innovation and towards finding the right mix between debt and equity financing solutions, while still preserving financial stability and consumer protection. in the eu, the european commission has launched several initiatives to serve these objectives, particularly the investment plan and the capital markets union. bis central bankers β speeches second, we need to focus on removing obstacles to investment, providing visibility and technical assistance to investment projects and making smarter use of new and existing financial resources. the european fund for strategic investments ( efsi ) drives the investment plan for europe. it supports strategic investments in key areas such as infrastructure, education, research, innovation, as well as risk finance for small businesses. through the use of limited public guarantees, it aims to foster private investments totalling eur 315 billion in three years. for the first year, the plan managed to trigger around eur 76 billion of | 0 |
in effect standing by while bubbles and excesses threaten ο¬nancial markets. β i believe paul volcker hits the nail on the head here : what central banks need to bear in mind is that an enduring easy - money policy can contribute to the build - up of imbalances in the ο¬nancial system. these could, in the long run, pose a threat to price stability. 2. 3 measuring inflation however, we should also think about whether our target variable, the rate of inο¬ation, is currently being measured correctly. monetary policy is based on the harmonised index of consumer prices ( hicp ) for the euro area. in principle, it best meets the requirements of a measure for price stability within the euro area, in terms, for instance, of the breadth of the data collected and comparability within europe. the hicp also contains rents. however, a lot of people own their own ο¬ats or houses. yet owneroccupied housing is absent from the hicp basket of goods. it is undisputed that the hicp should really include this component. many national consumer price indices incorporate it, and give it some weight β in the united states, for instance, it makes up 24 % of the index and it contributes a sizeable 10 % to the german index. its inclusion may consequently impact the level of the measured inο¬ation rate. ecb experts have calculated that, in the past, the inclusion of such a component would have inο¬uenced the headline rate by up to 0. 2 percentage point in individual quarters. [ 17 ] in the long term, however, i expect that average hicp inο¬ation would not change much. the reasons why owner - occupied housing is not included in the hicp are of a technical and methodological nature. i personally would be willing to accept some methodological shortcomings if that meant that we were able to better reο¬ect people β s real - life situations. this would allow us to better fulο¬l our mandate of securing price stability within the euro area. 2. 4 instruments of monetary policy however, we cannot do so without the right tools. in recent years, we have seen the potential limits of traditional interest rate policy. we therefore need other tools in our toolkit to deal with such exceptional circumstances. monetary policy instruments should meet two criteria. https : / / www. bundesbank. de / en / press / speeches / change - and - continuity - 82 | 2 / 4 / 2020 change and continuity | deutsche bundesbank change and continuity speech delivered at deutsche borse β s new year β s reception 03. 02. 2020 | eschborn | jens weidmann 1 introduction 2 monetary policy strategy 2. 1 communication 2. 2 deο¬nition of the monetary policy aim 2. 3 measuring inο¬ation 2. 4 instruments of monetary policy 2. 5 additional aspects 3 conclusion 1 introduction dear joachim faber, dear theodor weimer, chere christine, ladies and gentlemen, there β s a saying that twice is repetition and three times is a tradition. so it is a pleasure, and a privilege, to speak to you here today in what it is my third speech at deutsche borse β s new year β s reception. for me, this event is one of the highlights at the beginning of the new year, not least because of the impressive setting. and it is no less gratifying to see all these familiar faces once again. https : / / www. bundesbank. de / en / press / speeches / change - and - continuity - 824754 1 / 11 2 / 4 / 2020 change and continuity | deutsche bundesbank but discovering unfamiliar faces can be fascinating as well. you will have a great opportunity to do just that if you happen to come here again over the next few days. you see, when deutsche borse is not holding its new year β s reception in this hall, it is exhibiting photographs from its own art collection here. some of these pictures can be found up here on the gallery, including photos from a series taken by christian borchert. he took portraits of families at home, usually in their living rooms. years later, he came back to photograph them again. his images show how people change, yet stay the same. things get particularly fascinating when you consider how much these families'circumstances changed. the ο¬rst pictures date back to the gdr era ; the last were taken in post - reuniο¬cation germany. the shifting sands of time put us to the test, over and over again. that goes for politicians and entrepreneurs, and for central bankers, too. we heard from joachim faber just now how change is impacting on deutsche borse β s strategy. i would like to add my own thoughts on the strategy for monetary policy. 2 monetary policy strategy people looking to realise their full economic potential need a stable currency. that is something merchants already knew back in the middle | 1 |
the financial crisis in one way or another ; it is difficult to avoid it in this context. in brief, i will talk about two themes : the importance of indebtedness not becoming too high and the importance of having crisis management mechanisms in place before the event. the most important lesson : don β t allow too much debt to build up! of course, the financial crisis was due to many factors acting together. but one of the most important lessons was that one should beware of allowing debts to grow too much. this applies equally to households, companies and governments. this is neither a particularly surprising nor especially new lesson ; over several hundred years, financial crises have often been preceded by periods when the attitude to credit granting and lending has been too carefree. but it seems as though this is a lesson that we must experience again and again β at least once a generation, and perhaps even more often. bis central bankers β speeches a rapid and substantial credit expansion can cause many different problems. if the expansion is characterised by an exaggerated optimism and an underestimation and underpricing of risk, large loan losses may arise in the banks when the sentiment changes. this can lead to banks failing and ultimately to a financial crisis. we experienced this in the 1990s, and spain and ireland are experiencing it now. once the economy has entered a recession after a period of rapidly - increasing indebtedness and rising asset prices, the recovery from this level may be very slow. the reason is that the economy then often enters what is known as a balance sheet recession. 1 put briefly, what this means is that the economic agents need time to adjust their balance sheets if, for example, property prices have fallen. their incomes will for some time to come be used for amortisation rather than consumption and investment. monetary policy stimulation has less effect than normal and developments in the economy as a whole are weak. studies show that this type of mechanism largely explains why the recovery in the united states has been, and still is, so slow. 2 a financial crisis may also have other consequences. for instance, one can claim that the sovereign debt crisis we are currently in the midst of is in many ways a consequence of the financial crisis, and thus of the credit expansion that preceded it. bank crises and sovereign debt crises are often connected. public finances in many countries have weakened substantially because demand has fallen and in some cases also because they have needed to support a precarious banking system. moreover, in | germany and other countries almost a week ago, many people have asked how this affects the riksbank β s actions. as stated already on several occasions, the answer is : not much as long as the conditions for inflation have not changed. the riksbank targets inflation and it is this target that guides policy. in view of what has happened in the past month, there is reason, finally, to highlight a couple of points in the report. the first is that monetary policy is being conducted against the background of an economic upswing. a gradual increase in capacity utilisation is therefore probable. sweden does not differ from germany in that particular respect. the other point is the diminished risk of a development that is appreciably weaker than in the main scenario ; this assessment is supported by the latest statistics. in the light of the rising activity, the main difficulty in assessing future inflation currently lies in an uncertainty about developments on the supply side, wage formation in particular. it is difficult to foresee how the swedish economy will react to a broad economic upswing. it is therefore important, not least on that account, to analyse incoming information. | 0.5 |
sabine mauderer : concluding remarks - ngfs workshop concluding remarks by dr sabine mauderer, member of the executive board of the deutsche bundesbank, at the ngfs workshop, singapore, 26 april 2023. * * * 1 introduction ladies and gentlemen, dear colleagues. let me start by thanking all of you for your input, be it on or off the stage, here in this room or virtually. today was an impressive journey through some of the topics that are currently at the centre of our work. perhaps, to some of you, this journey not only seemed impressive, but also a bit overwhelming. if so, that is great! that means the workshop was a success, because we cannot tackle climate change from within our comfort zone. we need to challenge ourselves and have open discussions to identify the crucial questions the financial system is facing β and then try to find some answers. that was the spirit today and that is the spirit of the ngfs. 2 blended finance one of these crucial questions is : what are the most effective ways to raise enough funds to finance the transition and climate adaptation in emerging markets and developing economies ( emdes )? this is particularly relevant as many countries in the global north are pouring lots of money into transforming their economies and lure private capital with generous subsidies. no doubt, such measures are important for these countries to realize their own climate ambitions. but what does that mean for private climate finance flows in emdes if investors may find less risky alternatives in the industrialized world? many central banks and supervisors have a limited role in answering such questions. but as our chair, ravi menon, highlighted this morning, the ngfs should and can use its convening power to help find the right answers. and that is exactly what we did today. we pooled expertise by convening experts from different fields and from all parts of the world to discuss the role blended finance can play. we heard about the challenges that remain in scaling up blended finance, but also about very concrete examples we can learn from going forward. allow me just one overarching comment : we also talked a lot about reducing the risks of transition projects through blended finance. on that, i do want to highlight that, of course, these risks, will not just disappear. they are re - distributed, but not reduced. that means they end up on someone else's book β typically a public sector player. 3 macroeconomic impacts of climate change when it comes to the macroeconomic impacts | e - kyc database for the sharing of customers'transactional and nontransactional data. the government of jamaica is also in the process of developing a national identification system ( nids ) which will provide a quicker method of identity assurance and verification thus making it easier for banks to onboard customers. 2 / 2 bis - central bankers'speeches | 0 |
. the structure of latvian gdp is in line with that of the developed countries : the shares of agriculture and manufacturing in total value added declined from 10 % in 1995 to 4 % in 2001 and from 22 % to 13 %, respectively, while the share of services increased from 56 % to 63 %. latvia's export structure by trade partner indicates expansion in the share of exports to the eu : 61. 2 % of total exports in 2001 went to the eu member states. although accession countries are not required to meet the maastricht convergence criteria, we have set fulfilling the maastricht convergence criteria as a medium - term target in the area of nominal convergence. already now latvia complies or is close to complying with most of them. β in october, consumer price inflation was 1. 6 %. β gross government debt was only 15. 0 % of gdp at the end of 2001. β there was no budget deficit in 1997 and 1998. in 2000 and 2001, the budget deficit was below the maastricht ceiling, i. e., 3 % of gdp. β yields on government bonds, while still higher ( 5. 54 % for 5 - year treasury bonds in july 2002 ) than the maastricht criteria, are on a downward trend and their maturity continues to increase. we expect to be able to meet the requirements in the medium term. β the lats has been pegged to the sdr basket of currencies at a constant exchange rate since 1994. latvia has thereby shown that it is ready and able to meet the currency stability criterion. during the pre - accession period, the exchange rate peg of the lats to the sdr will be maintained. this peg has served the bank well and has ensured narrower exchange rate fluctuations than a possible peg to any single currency. in addition, the composition of latvia's foreign trade by settlement currencies closely resembles the composition of the sdr basket, with the us dollar and the euro being the major component in both. the bank of latvia will be prepared to join the european system of central banks at the time of latvia's accession to the eu. the structure and objectives of the bank of latvia, the degree of its independence and its set of monetary policy instruments are fully in line with those defined for the european system of central banks. | and the euro ( fig. 3 * ). with that and the principles just mentioned in mind, the government and the bank of latvia have worked together to develop a three - stage strategy for the introduction of the euro ( fig. 4. * ) : at the beginning of 2005, the lats is pegged to the euro. latvia will strive to join the exchange rate mechanism ( erm ) ii soon thereafter. β’ in 2007 - spring, at the earliest - the eu institutions give their evaluation of latvia β s readiness to join the euro area β’ after receiving a positive evaluation, latvia would expect to receive an invitation to join the emu. then, at the beginning of 2008, the introduction of the euro will begin. let us explore each stage in more detail. first - about the first stage that is only a couple of months away. that is - about the change of the lats β peg and the chosen exchange rate level between the lats and the euro. we have considered all arguments and summed up all the pluses and minuses. as most of you may know, the bank of latvia has made a decision to peg the lats to the euro on january 1 of 2005 in accordance with the market rate. this market rate would be registered on the last business day, december 30, 2004. by pegging the lats to the euro, the bank of latvia will neither increase nor decrease the value of the lats : it will neither be devalued, nor re - valued. use of sdr formula in setting lats exchange rates to better understand the basis for our decision, it might be helpful to remind ourselves of the mechanism whereby the exchange rate between the lats and the euro is set at present. as you know, the lats is pegged to the sdr basket of currencies, the imf unit of settlement - the bank of latvia β s official exchange rate between the lats and the sdr is 0. 7997 : 1. it has remained unchanged since the beginning of the peg in february 1994. taking into account the exchange rates between the currencies in the sdr basket and the fixed exchange ratio between the lats and the sdr basket, the official lats β rate against the other currencies, including the euro, is also determined every business day. since the mutual exchange rates of the principal world currencies, which are all part of the sdr basket - the us dollar, | 0.5 |
this may also result in lower credit growth through the winter and spring. credit growth by borrower sector and house prices. 12 - month rise. per cent non - financial corporate sector households house prices sources : norwegian association of real estate agents, eff, finn. no, econ ef, econ and norges bank sg gausdal 31. 01. 03 the sharp rise in electricity prices may lead to lower growth in consumption this year. higher electricity expenses reduce household purchasing power. many enterprises will also be facing higher costs. on the other hand, high electricity prices generate revenues for central and local government. electricity prices 1 january 1998 = 100 spot prices incl. tax and grid rental electricity prices index in the cpi * * electricity ( including grid rental ) accounts for 3. 3 % of cpi jan 00 jul 00 jan 01 jul 01 jan 02 jul 02 jan 03 sources : statistics norway, nordpool, viken energi and norges bank sg gausdal 31. 01. 03 higher electricity prices will result in a sharp increase in the consumer price index this winter. the year - on - year rate of increase in the consumer price index may approach 4 per cent in january and february. underlying inflation will also be affected. for example, this can be the result of higher rents and higher costs in some business sectors. however, these effects can to a large extent be disregarded. assuming that weather conditions remain fairly normal over the next year, the rise in prices at the same time next year will be that much lower. electricity prices will then make a comparable negative contribution to overall inflation. conclusion in retrospect, developments over the past decade feature several elements of a normal business cycle. following a long period of expansion in the 1990s, the economy is stagnating as a result of overheating in the labour market, high wage growth and high borrowing in the private sector. the new guidelines for monetary policy were introduced in march 2001 when there were pressures in the economy, expectations of increased use of petroleum revenues and growing divergence between cyclical developments in norway and abroad. today, after close to two years of inflation targeting, experience shows that monetary policy has an impact on inflation. in this respect, the experience has been uplifting. future developments are uncertain. our internationally exposed sectors may be hard hit because this time the tightening has to a large extent been the result of a strong krone and a downturn in our export markets. it may take time to | of the fall of the iron curtain. we recall from those times the russian word glasnost, which means openness. mikhail gorbachev sought to modernise the soviet union and used glasnost as a means of reducing corruption and abuse of power. in western democracies, the term glasnost took on a broader meaning, and was associated with detente between east and west in the 1980s. 11 as mentioned, the shift towards a more decentralised economy both in norway and abroad reflected the failure of centralised planning. monetary policy is an important component of the economic policy framework. 12 in my lecture here last year, 13 i noted that it can be demanding for the political authorities to ensure price stability because low interest rates are often more popular than high interest rates. an appropriate interest rate may therefore be demanding to see nou ( official norwegian report ) 1973 : 36 om prisproblemene ( on price problems ). for an account of economic policy in norway in the twentieth century, see tore jΓΈrgen hanisch, espen sΓΈilen and gunhild j. ecklund ( 1999 ) : norsk ΓΈkonomisk politikk i det 20. arhundre. verdivalg i en apen ΓΈkonomi ( economic policy in norway in the 20th century. ethics in an open economy ), hΓΈyskoleforlaget. see i. e., chapter 5 in the norwegian act on securities trading. in norway, the concept is also associated with jahn teigen β s contribution β glasnost β in the national final of the eurovision song contest 1988. during the financial crisis last winter the government wrote : β monetary policy is the first line of defence in countering a setback in the economy β. see report no. 37 ( 2008 - 09 ) to the storting ( norwegian parliament ) β om endringer i statsbudsjettet 2009 med tiltak for arbeid ( on changes in the 2009 budget and labour measures ), ministry of finance, p. 6. the lecture entitled β on keeping promises β, remarks by endre stavang and henrik syse and francis sejersted β s summary of the debate have been published in nytt norsk tidsskrift 1 / 2009. set in government corridors. 14 most government authorities in democratic countries have solved this problem by delegating interest rate setting to an independent central bank. but | 0.5 |
amando m tetangco, jr : new year message 2006 with an overview of 2005 speech by mr amando m tetangco, jr, governor of the central bank of the philippines, at the annual reception for the banking community, bsp complex, manila, 17 january 2006. * * * introduction members of the banking community, special guests from the legislative branch and the judiciary, members of the cabinet, fellow workers in government, guests from the media, friends, ladies and gentlemen, good evening. it t has been a tradition for the monetary board to host an annual reception for the banking community. as chairman of the monetary board and governor of the bangko sentral ng pilipinas, i am only one of your seven hosts tonight. let me therefore introduce your six other hosts - - - my fellow members at the monetary board, by order of seniority of their appointment : 1. dr. vicente b. valdepenas, jr β¦. he is an economist, educator, former neda director general and holds the distinction of being a member of the monetary board for three terms now ; 2. mr. raul boncan β¦ a lawyer and former trade & industry undersecretary, banker, professional manager, and businessman ; 3. mrs. juanita amatong β¦ an economist, educator, and former finance secretary, the first woman to hold this important post ; 4. mrs. nellie favis - villafuerte β¦ a lawyer, prolific writer, and former undersecretary of trade and industry ; 5. budget secretary romulo neri β¦ educator and former director general of the national economic and development authority and of the house of representatives'congressional planning and budget office ; and last but not the least ; 6. mr. alfredo antonio β¦ a professional manager and banker, former ceo of the development bank of the philippines and the subic may metropolitan authority. ladies and gentlemen, we are the members of the monetary board β¦. and we welcome all of you to our traditional annual reception as you may have noticed, we also have non - banker guests this is our way of saying thank you to the other sectors of our society who work with the bangko sentral ng pilipinas in the pursuit of its mandate to ensure stable prices and a sound banking system. an overview of 2005 all of you present here tonight are our stakeholders and we are happy to report to you that β¦. even in the face of a challenging year marked by record high oil prices | nestor a espenilla, jr : third pillar of central banking speech by mr nestor a espenilla, jr, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the " providing a safer, more efficient, and more inclusive philippine payments and settlements system " conference, manila, 27 july 2018. * * * friends from the industry, media, fellow bspers, subject matter experts, esteemed guests, ladies and gentlemen, good morning. the bsp is pleased to host this conference on β providing a safer, more efficient, and more inclusive philippine payments and settlements system. β there are three pillars of central banking. every bsper knows this. the first pillar is price stability through the conduct of monetary policy. the second is financial stability through financial system supervision and regulation. the third is an efficient payments and settlements system through the issuance of currency, the operation of the real - time gross settlement system, and oversight over the payments system. the spotlight is often on the first two pillars and we hail the policies and initiatives pursued to achieve them. the importance of the third pillar is often glossed over. the payments system is often compared to the plumbing system. very important but not very exciting. lately though, this has been changing. and this change excites us for all the possibilities it brings! developments are unfolding at a rapid pace and more and more digital payments systems and services are being introduced. in the not - so - long - ago - early - 1990s, settlement of interbank transactions was a manual system. since 2002, the settlement of time - critical and large - value financial transactions has been handled by philpass, the country β s very modern real - time gross settlement system when it was installed. in its first 5 years, philpass processed an average of 1, 000 transactions daily, valued at php35 billion per day. in the last 5 years, the daily average is at 6, 000 transactions, valued at php 1. 4 trillion per day! today, we are in the process of upgrading philpass to replace the system implemented almost 16 years ago. this will further enhance the safety, efficiency, and resiliency of the country β s settlement system. at the same time, we are migrating the communication and messaging systems of the infrastructure to the global standard iso 20022. this shall prepare our payment and settlement system to be regionally and globally interoperable. indeed, a safe | 0.5 |
experience that consumers and businesses have with insurance. as major intermediaries between insurance providers and consumers of insurance products and services, how insurance agents think about their business and interact with their customers can make an important difference in helping millions of individuals, families and businesses across the country who remain ill - prepared for losses arising from unforeseen events. addressing this protection gap is ultimately the goal that we must all aspire to, to promote a resilient economy and the well - being of our society. bis central bankers β speeches | some ways, the joining of ai outputs with a human acting as a β filter β or β reality check β can capture efficiency gains and control for some ai risks. similarly, ai can act as a β filter β or β reality check β on analysis produced by humans, checking for potential errors or biases. ai tools may also be leveraged to fight fraud. one such use is in combatting check fraud, which has become more prevalent in the banking industry over the last several years. in a recent report, the financial crimes enforcement network noted that from february to august of 2023, there were over 15, 000 reports received related to check fraud, associated with more than $ 688 - 5million in transactions ( including both actual and attempted fraud ). 5 the growth in check fraud over the past several years has caused significant harm not only to banks and the perceived safety of the banking system but also to consumers who are the victims of fraudulent activity. the regulatory response to help address this growing problem has unfortunately been slow, lacking in coordination, and generally ineffective. could ai tools offer a more effective way for banks to fight against this growing fraud trend? we already have some evidence that ai tools are powerful in fighting fraud. the u. s. treasury department recently announced that fraud detection tools, including machine learning ai, had resulted in fraud prevention and recovery totaling over $ 4 billion in fiscal year 2024, including $ 1 billion in recovery related to identification of treasury check fraud. 6 while the nature of the fraud may be different in these cases, we should recognize that ai can be a strong anti - fraud tool and provide significant benefits for affected bank customers. if our regulatory environment is not receptive to the use of ai in these circumstances customers are the ones who suffer. ai will not completely β solve β the problem of fraud β particularly as fraudsters develop more sophisticated ways to exploit this technology. but it could be important if the regulatory framework provides reasonable parameters for its use. another often - discussed use case for ai in financial services is in expanding the availability of credit. ai is not the first technology with potential to expand access to credit for the β un - β or β underbanked. β we have long viewed alternative data as a potential opportunity for financial crimes enforcement network, financial trend analysis : mail theft - related check fraud : threat pattern & trend information, february to august 2023 ( vienna : financial crimes enforcement network, september 2024 ), https : / / www. fin | 0 |
, the access to financial products / services is fairly widespread and hence, consumers / market participants are required to be educated more about the characteristics of the financial products / services, including their risks and returns. however, for emerging market economies, ensuring adequate access to financial products and services is more important with the financial literacy initiatives focusing on creating demand for these products / services. in india, the access to products itself is lacking. therefore, ensuring widespread access to financial products / services and greater knowledge about the basic financial products / services, including their risk / return profiles, is essential for expanding the outreach and inclusiveness of the financial system. thus, our financial literacy efforts are closely interlinked with our financial inclusion strategy. why is financial literacy necessary? financial literacy is considered an important adjunct for promoting financial inclusion, consumer protection and ultimately, financial stability. financial inclusion and financial literacy need to go hand in hand to enable the common man to understand the needs and bis central bankers β speeches benefits of the products and services offered by the formal financial institutions. we have defined financial inclusion as ensuring access to appropriate financial products and services needed by all sections of the society in general and vulnerable groups, such as weaker sections and low income groups in particular, at an affordable cost, in a fair and transparent manner by regulated mainstream institutional players. so, from the financial literacy perspective, it essentially involves two elements, one of access and the other of literacy. who are the target groups and what messages to deliver? i shall argue here that everyone in the economy needs to be financially literate viz., users and providers of financial products / services. in the indian context, the users can be broadly categorized as the financially excluded resource - poor, the lower and middle income groups and high net worth individuals. for the resource - poor population, financial literacy would invariably involve addressing deep entrenched behavioural and psychological factors that are major barriers to participating in the financial system. for the purpose, our financial literacy efforts are primarily directed towards dissemination of simple messages of financial prudence ( vernacular language ) through large awareness campaigns across the country combined with vigorous roll out of financial inclusion plans by banks, insurance and pension funds, and others. however, it is important to note that being literate is not a necessary prerequisite for attaining financial literacy as the basic financial messages can be conveyed through various alternate means without relying on written inputs. some of the basic messages we seek to deliver are : β’ why save? β’ why save regularly and consistently | mugur isarescu : integrated supervision opening speech by mr mugur isarescu, governor of the national bank of romania, at the seminar β integrated supervision β, jointly organised by the romanian financial supervisory authority and the national bank of romania, sinaia, 22 january 2014. * * * distinguished guests, ladies and gentlemen, it is a pleasure for me to warmly welcome you to this seminar on integrated supervision. the newly established romanian financial supervisory authority and the national bank of romania decided to jointly organize the conference on this challenging topic that has recently come into the spotlight. i particularly want to thank our guests from the national supervisory authorities of austria, the czech republic, germany, poland, united kingdom and ireland. i also welcome the experts from the world bank, the international monetary fund and the european commission who will generously impart their knowledge to all of us. i do wish all of you a pleasant stay here in sinaia. this three days long seminar is an excellent occasion to learn, to exchange views and to generate professional ties. allow me to say a few words about where you are. this is a premise of the national bank of romania β s training center, situated in cumpatu district, in this lovely resort, sinaia. the name sinaia is an eponym of mount sinai. by the end of the 17th century, a group of wallachian monks, led by mihail cantacuzino, a landlord of those times, went on a pilgrimage to palestine and the sinai peninsula. they were hosted at saint catherine monastery. once returned, they established a convent quite here, in the heavily forested area, at the bottom of the carpathians. the new monastery was called sinaia, in the memory of their journey to the sinai peninsula. a century later, the first king of romania, carol i fell in love with the place and built peles castle, his summer residence. following the establishment of the peles castle a railroad connecting the capital to the king β s new summer residence was built. little by little, sinaia became popular among the members of the high society : they started building summer residences as well as hotels, villas. you can visit the peles castle and the sinaia monastery on friday. and now about this seminar. the topic of this seminar is integrated supervision to ensure financial stability. it relies on several conceptual layers. first of all, to understand that the frontiers among financial activities have been blurred by financial innovation and the formation | 0 |
reserves, and liquidity indicators such as current ratio ( percentage of liquid assets in total of liabilities ) are being observed. however, these reports are not yet part of a comprehensive risk measurement and control system. although they give an idea of the general level of market and liquidity risk levels, the actual risk exposure will be clearly seen only after the reserves portfolio is restructured and the benchmarks are included in these reports. the risk management process related to market risk that we plan includes daily marking to market of benchmark portfolios ; monitoring risk limits determined in terms of currency and duration limits ; daily measurement of actual portfolio β s var figures for currency and interest rate exposure ; monitoring liquidity ratios and reporting these figures to the top management weekly including stress testing report. there is no specified global risk tolerance limit but our institutional objectives and constraints are reflected in portfolio benchmarks. in terms of performance evaluation comparison of actual and benchmark portfolios returns are going to be monitored daily and reported to the top management periodically. for credit risk management side, a transaction limit is assigned to each counterparty, covering all types of credit risks and market risks. the limits are marked to market daily and reflect the amount of exposure that the bank is willing to take with each counterparty. the credit limits are set by employing an internal scoring model that incorporates the counterparty β s external credit ratings, financial information, and some other qualitative information such as the quality of relationship with our bank and the support status, ie the possibility of getting help from the government in case of financial difficulty. the credit rating of the country in which the bank operates is also considered. reports about limit monitoring are produced regularly. i would like to conclude my remarks by underlining once again how important it is to have an efficient risk management to protect our reserves from financial instabilities all over the world. we need to watch the rapid changes in reserve management in terms of technological developments and in terms of economic conditions very closely and adapt our institutions to these changes right away. | auctions, in the system, and hence, to further enhance the liquidity conditions of the turkish banks. in addition to the suspension of the foreign exchange buying auctions, the central bank started to inject foreign exchange liquidity into the market through foreign exchange selling auctions as of 24 october 2008 as unhealthy price formations were witnessed due to a decrease in the depth of the foreign exchange market. the daily amount of the foreign exchange to be sold via auctions was set as usd 50 million, which could be raised on the days of the auction when deemed necessary. it was also announced to the public that depending on developments in the foreign exchange market, the daily auction amounts might be changed and the auctions might also be suspended, when deemed necessary. as a matter of fact, after the auctions held on two working days, the central bank suspended the foreign exchange selling auctions on 30 october 2008 as a result of easing concerns pertaining to the depth of the foreign exchange market, which was also facilitated by favorable developments in the global markets. hence, in 2008, while the total amount of foreign exchange purchased via buying auctions reached usd 7. 584 million, usd 100 million was sold through two foreign exchange selling auctions. there has not been any direct intervention in the foreign exchange market. the total amounts of foreign exchange purchased and sold by the central bank from 2002 onwards are shown on a yearly basis in the table given below : table 2 : the central bank β s foreign exchange purchases and sales ( 2002 - 2008 ; usd million ) year fx buying auctions fx selling auctions fx buying interventions fx selling interventions total net fx buying - 5. 652 - 4. 229 - 9. 881 4. 104 - 1. 283 5. 378 7. 442 - 14. 565 - 22. 007 4. 296 1. 000 5. 441 2. 105 6. 632 9. 906 - - - 9. 906 2008 * 7. 584 - - 7. 484 total 39. 779 1. 100 25. 534 2. 126 62. 087 as of 15 december 2008 problems in the international credit markets have heightened since the second half of september due to increased concerns over the credibility of the financial system, thus leading to liquidity problems in many countries. during this period, the central bank adopted the following regulations in order to ensure the efficient functioning of the foreign exchange market and to strengthen foreign exchange liquidity in the | 0.5 |
riders. 12 it would, however, be rash to conclude that the market is now unambiguously healthy in all respects. there are still several factors which will continue to pose challenges to the investment, banking and valuing communities. for example, while lease lengths may have temporarily stabilised, break clauses exercisable by tenants are becoming more common. and despite the positive tone of the recent cbi / grimley survey, it is clear too that many occupiers will continue over the long - term to reduce their needs for space and to demand greater flexibility. privity of contract has disappeared on new leases. all of these factors are making it less straightforward to form a view of the quality of cashflow likely to stem from a particular building. 13 there is a sizeable overhang of unlet secondary property. the pool of such property increases every time that a major user of space moves into new offices and releases its former premises. while some of the better quality secondary property can be refurbished at an economic price and relet, much of this stock may never again be relet for its present use and may not lend itself readily to conversion for alternative uses. this will continue to exert a dampening influence on the market, and imaginative solutions will be needed. the future 14 so, the market may be improving but it is still not easy. how is the market likely to develop over the next eight years? what will i be saying if you invite me back in the year 2005? 15 as we all know, the property market has, historically, moved in cycles. some, notably rics, have done work to develop our understanding of these cycles. the economic cycle itself is clearly one of the driving factors, though it is clear too that property is subject to its own fluctuations and its own step changes. contributing factors include the strength of tenant demand, the activities of developers and the willingness of lenders to finance investment and development. 16 my story in the future could be similar - perhaps depressingly similar - to my review of the recent past. many of the β ingredients β that contributed to the last cycle are certainly present now. institutional investors are attracted to the sector in the short - term but they could easily resume their longer - term departure from property in a couple of years. this could happen if property β s performance runs out of steam as the economic cycle progresses and other asset classes begin to look more attractive. it is conceivable that the banks might | into opportunities. for example, when slovenia joined the eu, it was exposed to greater levels of competition from other member states in the economic bloc. but slovenia quickly capitalised on its skilled workforce to develop a new business model based on deep integration in the single market. today, every single car produced in europe has at least one component that is made in slovenia. 4 for europe, the changes in the global economy today represent a similar turning point. but if we approach it with the right spirit, i believe it can be an opportunity for renewal. a less favourable global economy can push us to complete our domestic market. fiercer foreign competition can encourage us to develop new technologies. more volatile geopolitics can drive us to become more energy secure and self - sufficient in our supply chains. for slovenia, the transformation of the automotive supply chain will be a particular challenge. but the economy is already adapting. for example, in july this year slovenia secured a major investment in domestic electric vehicle production. 5 for many slovenians, striding into an unpredictable future may seem like second nature. one of your most famous paintings, " the sower ", hangs on display here at the national gallery. depicting an agricultural labourer at the crack of dawn hard at work sowing seeds in a field, the painting represents slovenians'resolute determination in the face of uncertainty. the rest of us in europe will need to draw on this example in the uncertain times ahead. if we do so, we can also turn uncertainty into opportunity. the importance of sharing the benefits of change the second lesson from slovenia is that the benefits of change can β and should β be more widely shared. the path of renewal for europe is inescapably linked with new technology, especially digitalisation. but new technologies can sometimes lead to uneven labour market outcomes. slovenia has undergone remarkable technological change over the past 20 years. today, the country's level of digital development is 7 % above the ceec average and it can compete with some of the most digitally developed eu countries in certain areas. 6 2 / 4 bis - central bankers'speeches yet slovenia's gini coefficient β a measure of income inequality β is the second lowest in the oecd. 7 the country also benefits from high levels of gender equality. female labour force participation is higher than the eu average and nearly equal to that of men. many in europe are worried about the challenges ahead, such as the effects of artificial intelligence on social inclusion. | 0 |
factor which determines the success and sustainability of the company. no existing m - commerce player is organized for it. very few yet are thinking in these terms. one who desires to enter this field must evaluate its β delivery β capability. 2. 3 second important issue in m - commerce or e - commerce is the need for collaboration between technology service provider and provider of goods and services. if it is m - medicine, we require collaboration between mobile service provider and health / medicine service provider. similarly, in e - broking, we require collaboration between technology partner and broking service provider. similarly, in m - banking or m - payment, we require collaboration between mobile service provider and banking / payment service provider. we cannot and should not think of, at the initial stage, mobile payments without bank accounts. 2. 4 it will also be useful before debating on any alternative modes for banking / payment delivery or concluding that banks have failed in providing financial inclusion, to consider the following three aspects related to the payment delivery and banking technology in india : β i. banking technology is of recent origin in the country. scaling up may, therefore, require more time. ii. payment is only one aspect of banking. financial inclusion goes beyond remittances. other products and services are required which banks are better equipped to provide. iii. given the above aspects and that the enabling provisions like appointment of business correspondents have been permitted only recently, it would be early to conclude that banks have not been successful. i hasten to add that if the banks continue as laggards, the system will have to look for alternate non bank model. the important end of inclusive growth cannot suffer on account of our insistence on a particular means / model. 3. evolution of electronic financial services ( e - banking / e - commerce / m - banking / m - commerce ) 3. 1 payment methods in the settlement of transactions for goods and services have evolved over the years as a result of innovations and developments in technology and business practices. from the earliest known barter systems to the cash - based approach and later, to other paper - based payment instruments, the progress in the payment methods was a relatively gradual one. however, due to rapid strides in technology, more efficient payment methods have evolved, mainly in the last few decades. electronic mode funds transfer has afforded an efficient and secure means of transferring funds between bank accounts and is fast displacing paper - based payment methods. 3. 2. reserve bank of india | cards being issued and the number of outlets through which they are issued, as a regulator of the payment and settlement systems in the country, it is difficult to contain the risk of anonymity in a msp led model. let me add here that the m - pesa model has the comfort of a national - id scheme which is in existence in kenya. interestingly, as per the indications available on the uid project, the team is veering round to the bank led model to further financial inclusion in india. also, apart from kyc norms, msps would also have to enhance transparency in pricing and improve their infrastructure. 3. 10 the advocates of a msp - led mobile commerce list two advantages of the system, namely ( i ) leveraging the spread agent network ( ii ) transaction cost. the wide spread agent network is an attractive proposition for extending financial services. but does this require that the service is provided by the msp only? i have already highlighted the availability of a large network of banks in the country. cannot this agent network be utilized by banks in partnership with msps, for extending financial services? keeping in view the concerns about money laundering and financial terrorism, we would prefer a partnership where the msps gain from the over the air ( ota ) transaction volume and banks leveraging the channels for wider reach. there needs to be clear distinction of roles. reserve bank is exploring a better model across the world. 3. 11 in this context two successful models of partnership between banks and msps observed are wizzit in south africa and g - cash in philippines. wizzit bank is a virtual bank which is a subsidiary of bank of athens in south africa. it provides the unbanked population in sa with bank accounts on mobile phones which can be used to make person - to - person payments, transfers and pre - paid purchases. besides, account holders are also provided a maestro card for cash withdrawal. the msps supports this facility as carriers of such transaction instructions. 3. 12 philippines have been the pioneer in enabling financial services through use of mobile phones. the first product introduced in the country was smart money β a partnership between, smart telecom, banco de oro. subsequently, g - cash a telecom led model was subsequently introduced by globe telecom. the country has seen the development of partnership between the mobile payment platforms provided and rural banks there. 4. ownership of customers 4. 1 the issue of partnership between banks and msps brings to fore the muted | 1 |
limits, credit scoring, collateral, and similar tools. credit unions have an inherent advantage in this regard, because your institution is structured around the relationships of your members to each other, to the credit union, and, most often, to some other institution or location, be that a church, profession, workplace or town or village. your members are known to the union, and are subject to a powerful social sanction that serves as an incentive to service loans granted by the credit union. nobody wants to endure the humiliation of being known as a defaulter, and feeling that all and sundry are ostracising you and looking down on you as a deadbeat. as mohammed younis from bangladesh, the man who dreamed up microcredit realised, social sanction can be the most powerful incentive to pay what you owe. it follows that cooperative institutions such as credit unions will have a better track record than banks, so long as they are tolerably well run. credit unions typically are able to offer a better deal to their customers than banks can afford to do. they do not have all the overhead costs that a big bank has to pay, and any surpluses the union realises are added to members β bonuses and distributed. credit unions are not under pressure from shareholders to maximise their profits, as banks are. they are therefore able to accept deposits at higher rates than would be profitable for banks, and make loans at somewhat better rates than banks are able to do. therefore, as financial systems are modernised in many countries, credit unions come to play an increasing role in the provision of financial services to households. the growth of bis central bankers β speeches credit union membership is a phenomenon that may be observed not only in barbados but in the us, canada and many other countries. the establishment of our financial services commission in 2011 was an important milestone in the ongoing strengthening of credit unionism in barbados. the fsc is the new regulator of credit unions and all financial institutions other than banks, finance companies and trust companies. the fsc oversees credit unions to ensure that their operations are satisfactory, and that they are lending prudently. all credit unions report regularly to the fsc, which also carries out physical inspections from time to time. any credit union that is not operating at internationally acceptable standards is required by the fsc to remedy all deficiencies, as a condition of renewing its license. credit union members therefore have an assurance that licensed credit unions are well run, and that measures | the bank will be focusing in the coming months. on behalf of the organizing committee, i thank persons who so kindly participated in the survey. let me add, however, that while there is no one particular topic dealing with the cost - of - living, we hope that the overall programme will equip you to better manage this area. the bank hopes to partner with persons in the financial services and the education sectors to help with the delivery of the national financial education programme. we are therefore inviting commercial banks, the barbados stock exchange, credit unions and other financial entities to come on board to provide technical and other assistance. we have organized a comprehensive sponsorship package. if you are interested in partnering with us and you wish to obtain more details about the partnerships, please contact ms. sadie dixon at the bank. additionally, the committee with responsibility for developing these partnerships may be contacting you. i must add, that while we welcome the participation and involvement of partners we will not be promoting any company β s products and services. the national financial education programme is not about marketing products and services. educating the populace on matters related to finance and economics is a critical aspect of our mandate, it β s a mandate that we have fulfilled for years, and this programme is yet another initiative in our education campaign. however, as the nomenclature suggests, this programme will be on the national scale and we hope to make all barbadians financially literate. those of you who read the newspapers yesterday about the number of bounced cheques will agree that there is need for skills in budgeting. the result of such financial management and decisions can lead to a considerable improvement in financial decision - making. the length of the programme will depend on its success. the more successful it is, the shorter its duration can be. we trust that the general public will benefit from the programme. i thank you for listening. | 0.5 |
0 2. 5 2. 5 2. 0 2. 0 1. 5 1. 5 1. 0 1. 0 0. 5 0. 5 0. 0 0. 0 - 0. 5 - 0. 5 - 1. 0 cy 14 y / y % chg. - 1. 0 jan. apr. notes : 1. in the left panel, q1 = march - may, q2 = june - august, q3 = september - november, q4 = december - february. 2. figures from fiscal 2016 onward are based on continuing observations following the sample revisions. source : ministry of health, labour and welfare. july chart 14 household disposable income united states japan tril. yen tril. usd disposable income employee compensation interest income dividend income cy 90 cy 90 note : figures for japan before 1994 are calculated using year - on - year changes in each item based on the benchmark year of 2000. sources : cabinet office ; u. s. bureau of economic analysis ( bea ). chart 15 household financial assets japan 2, 200 international comparisons tril. yen financial assets ( total ) cash and deposits equity investment trusts 2, 000 1, 800 1, 600 1, 400 1, 200 1, 000 % 3. 5 ( 0. 5 ) 24. 8 ( - 1. 2 ) 2. 0 other 2. 7 27. 7 28. 7 insurance, pension, and standardized guarantees 21. 5 equity 13. 7 ( 2. 3 ) 5. 5 ( 1. 0 ) 40. 5 1. 3 ( 0. 0 ) investment trusts 10. 6 3. 1 debt securities 51. 2 ( - 2. 7 ) 12. 8 4. 6 34. 1 11. 7 japan fy 90 united states euro area note : in the right panel, figures are as of end - march 2024. figures for the united states and the euro area are based on " flow of funds : overview of japan, the united states, and the euro area, " released by the bank's research and statistics department on august 30, 2024. figures for japan in parentheses indicate changes from the previous fiscal year ( % points ). source : bank of japan. cash and deposits chart 16 dynamism of households growth of the firms where people work household expenditure expansion in consumption improving skills through reskilling, etc. changing jobs to growing firms higher wages labor income expansion in sources of income pensions, etc. | / banking / riskreduction _ 020113. gif bis central bankers β speeches meanwhile, in 2010, the securities exchange commission ( sec ) tightened the liquidity requirements and concentration limit rules for 2a - 7 money market mutual funds and increased the fund manager disclosure requirements. these changes, which were intended as a first step, make money funds somewhat less risky. but, they do little to reduce investors β incentives to run at the first sign of trouble. worthwhile as the steps taken thus far are, we have not come close to fixing all the institutional flaws in our wholesale funding markets. the tri - party repo system and the money fund industry that plays a crucial role financing collateral through it are both still exposed to runs. in fact, in each of these areas, one could argue that the risks have increased compared to prior to the crisis. that is because the dodd - frank act raised the hurdle for the federal reserve to exercise its section 13. 3 emergency lending authority and because congress has explicitly precluded the u. s. treasury from guaranteeing money market mutual fund assets in the future. with extraordinary interventions ruled out or made much more difficult, this may cause investors to be even more skittish in the future. this is why it is essential to make the system more stable. turning first to the issue of tri - party repo reform, there is still considerable work to do. in particular, the risk that investors will run at the first sign of trouble persists. that is because the costs of running are very low relative to the potential costs of staying put. the potential costs of staying are elevated in part because investors often don β t have the capacity to take possession of the collateral or liquidate the collateral in an orderly way should a large dealer fail. both aspects result in run risk, fire sale risk and potential financial instability. let me be clear. we must deal with the fire sale issue in tri - party repo and the heightened run risk it creates. i believe there are three potential ways forward, all of which are superior to the status quo. first, tri - party repo transactions could be restricted to open market operations ( omo ) eligible collateral. 11 such collateral would likely remain quite liquid during a time of crisis. 12 in addition, such collateral could, in a crisis, potentially be passed directly by a broker - dealer to the discount window under section 13. 13 authority, or, because of beneficial treatment under section 23a of the | 0 |
of our supervisory expectations on c & e risks by the end of 2024 at the latest. with respect to our monetary policy, the ecb is currently fully on track implementing the climate action plan that we committed to when we introduced our new monetary policy strategy in the summer of last year. to give you a concrete example, last week we announced the details of how we intend to gradually decarbonise our corporate bond holdings, starting on next monday, in line with the goals of the paris agreement. at the same time, it is important to remember that our climate action plan is not an aim in itself but rather a means for us to deliver on our mandate. that β s why the governing council announced in july that it would regularly review the measures proposed in its action plan to assess whether they are still fit for purpose, and continue to support the decarbonisation path towards reaching the goals under the paris agreement, as well as the eu climate neutrality objectives. and not only this. something that is clearly relevant for us and this conference is that we will adapt these measures if necessary to address other environmental risks within our mandate. expressing a readiness to look beyond climate - related risks and address environmental risks is an important initial step that i invite all relevant stakeholders to take. that applies to central banks, supervisors, regulators and international standard setting bodies. even if the current focus of the ongoing work is still on climate - related risks, our ever - evolving understanding of the materiality of environmental risks and their transmission channels implies that these risks ultimately need to be taken into consideration in everything we do. let me conclude. for the first time in 75 years the artis groote museum β where this conference is held β reopened its doors this spring. the theme of the museum is that everything is connected : plants, animals, microbes and human beings, all in a precious but delicate harmony. economics and finance are no different. taken together, households, firms, governments and financial institutions form a similarly precious β and at times delicate β equilibrium. our analysis, assessment and policy actions should reflect the fact that nature and the economy are equally interconnected and interdependent. in line with a central theme of the landmark dasgupta review on the economics of biodiversity that β humanity is embedded in nature β. back to β natura artis magistra β. nature isn β t just the teacher of the arts, it is also the teacher of finance. one may be inclined to paraph | am aware, no other central bank regularly communicates with the public in such a prompt and open manner immediately after its monetary policy meetings. we are convinced that this contributes to transparency and thus gives important and clear guidance. these press conferences are a tangible expression of the eurosystem β s commitment to being open, transparent and accountable in its conduct of monetary policy. obviously, journalists, financial markets and the public are still learning about the new monetary policy strategy in the euro area and, over time, the eurosystem will further improve its communication. in this respect, it has also been argued that we do not release sufficient information about our analysis. more specifically criticism has been expressed to the effect that the eurosystem is currently not publishing its inflation forecasts. may i remind you, therefore, that the inflation forecast is not a key element of our strategy? an inflation forecast is just one of the many pieces of information which we use. its importance should not be exaggerated. our quantitative definition of price stability is not an inflation target in the same way as those of other central banks, nor are we targeting an inflation forecast. in our view, a single forecast is not a sufficient statistic given the complexity of economic relationships and the existing uncertainties about the future. we are living in a complex environment in which policy decisions cannot be simply related to a few or even one information variable. there is also the risk that we are chasing our own tail. in fact, our monetary policy always aims to respect the definition of price stability. the advantage of publishing a forecast would be that it would make one more piece of information, which plays a role in the decision - making process, transparent. that being said, the governing council will have to reconsider the issue once our macroeconometric models are deemed to be sufficiently reliable. this may still take some time. let me now conclude by saying that i am happy to contribute to a project of such historical dimension and so are my colleagues in the ecb and those at the ncbs belonging to the eurosystem. monetary union has had a successful start and the monetary policy strategy of the eurosystem, on the basis of which the governing council has taken and will continue to take its monetary policy decisions, has contributed to this success. at the same time, we should recognise the fact that monetary policy alone cannot tackle all of the economic challenges facing the euro area. in particular, it cannot reduce the euro area β s unacceptably high | 0.5 |
. mobile phones are here to stay. β’ cards will develop technically. they will become safer with chips instead of magnetic strips and they will have several different functions β identity cards, driving licences, passports? technology appears to have no limits here. the opportunities with wireless communication further expand the areas of use. β’ use of e - money will grow. not cash cards, where there are good substitutes, but the server - based network money. as e - trading increases so too does the need for secure e - payments. β’ finally, i believe that paper - based payments will die a natural death, just as cheques once did. they are expensive for the banks and impractical for consumers. in a few years we will see them on display at the national museum of science and technology. thank you! β electronic money from a central bank perspective β, speech by stefan ingves, sveriges riksbank, 4 march 1998. | anita angelovska bezhoska : increased availability and use of official statistics in the republic of north macedonia introduction speech by ms anita angelovska bezhoska, governor of the national bank of the republic of north macedonia, at the marking of the european statistics day, skopje, 19 october 2021. * * * your excellency ms. forsgren bengtsson, dear mr. simovski and mr. stymne, dear state secretary ms gaber, distinguished speakers, representatives of the non - government sector, colleagues and participantsfor a second year in a row, we are marking the european statistics day in specific circumstances, shaped by the global pandemics. the health crisis has infiltrated itself into every single pore of our societies disrupting the world we know. statistics has not been an exception whatsoever. at the time the crisis hit, statistics area in global terms was already facing many challenges. producers of statistics were coping with lingering tasks that came as a side effect of the global financial crisis in 2008. although the lack of statistics was not a cause of this crisis, still it revealed significant data gaps and underlined a need of more frequent, comprehensive and granular data to strengthen policy - making infrastructure. the second challenge rested in unprecedented digitalisation and data proliferation, by both private and public entities. it challenged official statistical producers, which serve as the primary source of data, to innovate their data and data sources, but even more to work intensively on setting proper data governance frameworks. also, one of the lessons from the crisis was the need for higher financial literacy and awareness of financial risks, which among other things, required better tailored communication of statistics to different interest groups in society. thus, in fact pandemics occurred in the midstream of our strivings to address the flaws in statistics revealed during the gfc. at the very beginning of the crisis, the official statistical process was threatened by a basic risk of disruption, so preserving continuity of statistics production was vital. last year the world bank conveyed a survey among national statistical offices to assess the initial impact of the health crisis on their functionality1. the key findings can be pinned down to several conclusions : 1 ) around 65 % of the offices were fully or partially closed, and face to face data collection was stopped ; 2 ) the ability to collect essential statistics and to meet international data reporting requirements was impacted, particularly in low income countries ; 3 ) approximately two out of three | 0 |
christine lagarde : introductory statement at ecb press conference introductory statement by ms christine lagarde, president of the european central bank, at a press conference with ecb vice president luis de guindos, frankfurt am main, 3 february 2022. * * * good afternoon, the vice - president and i welcome you to our press conference. the euro area economy is continuing to recover and the labour market is improving further, helped by ample policy support. but growth is likely to remain subdued in the first quarter, as the current pandemic wave is still weighing on economic activity. shortages of materials, equipment and labour continue to hold back output in some industries. high energy costs are hurting incomes and are likely to dampen spending. however, the economy is affected less and less by each wave of the pandemic and the factors restraining production and consumption should gradually ease, allowing the economy to pick up again strongly in the course of the year. inflation has risen sharply in recent months and it has further surprised to the upside in january. this is primarily driven by higher energy costs that are pushing up prices across many sectors, as well as higher food prices. inflation is likely to remain elevated for longer than previously expected, but to decline in the course of this year. the governing council therefore confirmed the decisions taken at its monetary policy meeting last december, as detailed in the press release published at 13 : 45 today. accordingly, we will continue reducing the pace of our asset purchases step by step over the coming quarters, and will end net purchases under the pandemic emergency purchase programme ( pepp ) at the end of march. in view of the current uncertainty, we need more than ever to maintain flexibility and optionality in the conduct of monetary policy. the governing council stands ready to adjust all of its instruments, as appropriate, to ensure that inflation stabilises at its two per cent target over the medium term. i will now outline in more detail how we see the economy and inflation developing, and will then talk about our assessment of financial and monetary conditions. economic activity economic growth weakened to 0. 3 per cent in the final quarter of last year. nevertheless, output reached its pre - pandemic level at the end of 2021. economic activity and demand will likely remain muted in the early part of this year for several reasons. first, containment measures are affecting consumer services, especially travel, tourism, hospitality and entertainment. although infection rates are still very high, the impact of the | david dodge : recent review of the canadian economy opening statement by mr david dodge, governor of the bank of canada, to the senate committee on banking, trade and commerce, ottawa, 24 november 2004. * * * good afternoon, mr. chairman and members of the committee. we appreciate the opportunity to meet with this committee twice a year, following the release of our monetary policy reports. these meetings help us keep parliamentarians and, through you, all canadians informed about the bank β s views on the economy, and about the objective of monetary policy and the actions we take to achieve it. when paul and i appeared before this committee last april, we told you that we judged the economy to be operating significantly below its potential. that is no longer the case. the canadian economy grew faster in the first half of the year than we had projected, largely because of a surge in exports. the economy is now operating near its production capacity and continues to adjust to global developments. our latest monetary policy report, released on 21 october, presents the bank β s base - case projection for the period to the end of 2006. it calls for aggregate demand for canadian goods and services to expand, on average, at about the same rate as potential output. given the effects of higher oil prices and the past appreciation of the canadian dollar, economic growth in the report is projected to be slightly less than 3 per cent in 2005, and slightly more than 3 per cent in 2006. with the economy expected to remain near its production capacity throughout this period, core inflation is projected to move back up from the current level of 1. 4 per cent to the 2 per cent target by the end of 2005. this is essentially the same projection that we made last april. however, in october we expected that total cpi inflation would rise to near the top of the 1 to 3 per cent target range in the first half of 2005 before falling slightly below core inflation in early 2006. this projection incorporates the path suggested by futures prices for crude oil in mid - october, when we finalized the report. it is against that background, that the bank raised the target for the overnight rate to 2. 5 per cent on 19 october, our most recent fixed announcement date. the base - case projection in our october report assumes further reduction of monetary stimulus over time, to keep the economy near its production potential and to achieve the inflation target. we also emphasized that the pace of interest rate increases will depend on the bank β s continuing assessment of the prospects | 0 |
our exchanges are working closer together. the asia pacific exchange ( apex ), a commodities derivatives exchange in singapore, is collaborating with the shanghai international energy exchange ( ine ) to attract more international institutional investors to china β s commodity derivatives markets. the co - operation between the regulators has been growing stronger. the monetary authority of singapore ( mas ) and the shanghai municipal financial regulatory bureau have been organising since 2017 a joint training and exchange programme for financial agencies and institutions from both cities. mas and the shanghai municipal financial regulatory bureau have also organised since 2015 four editions of the singapore - shanghai financial forum ( ssff ). mas will set up a new shanghai representative office in august this year. the shanghai representative office will be mas β second office in china, in addition to its beijing representative office. this year will also see the launch of the singapore - shanghai comprehensive cooperation council financial working group, which will facilitate financial institutions in our two cities to participate in various areas such as cross - border rmb business and product innovation. let me suggest one important area where shanghai and singapore can work together for the greater good β and that is to harness the power of finance to promote a greener, more sustainable economy. using finance to green the economy the world needs to take urgent actions to reduce the risk of catastrophic climate change. finance can be a powerful tool to promote a more sustainable economy and society. both china and singapore are committed to meeting their sustainability goals under the paris agreement. both countries have embarked on ambitious green finance agendas. china issued a green industry guiding catalogue last year to harmonise differing standards for green activities, and is in the process of updating its taxonomy on green bonds to align with international practices. chinese companies led the world with us $ 33. 6 billion of green bond issuance last year. singapore launched a green finance action plan last year, built on three core pillars : building the financial industry β s resilience against environmental risks ; developing green financial products and solutions ; and leveraging technology to support the development of green finance. as we stimulate our economies to bounce back from the covid - 19 crisis, there is a good opportunity for shanghai and singapore to collaborate on promoting green finance in the region. there is strong demand in asia for green investment. according to a study by the united nations environment programme ( unep ) and dbs bank, us $ 200 billion in green investment is required 2 / 3 bis central bankers'speeches annually until 2030, to support the greening of | β speeches | 0.5 |
economy as it approaches its capacity to produce and reduce the amount of monetary stimulus in place in a timely and measured manner. we want to ensure that inflation stays close to the target so that, over the medium term, our economy can continue to grow at full capacity. what do we mean by " timely and measured "? " timely " relates to the fact that there is always a lag between our policy actions and their effect on the economy. we must be timely and forward - looking because our actions take a year to 18 months to have their full effect on output, and 18 months to 2 years to have their full effect on inflation. " measured " relates to the judgments that we will make as we approach full capacity. if the economic data going forward tell us that we are taking up excess capacity more quickly than expected, we would have to reduce monetary stimulus more quickly. but if the data suggest that the return to full capacity is going more slowly than we thought, we would then need to move more slowly. allow me to close by using the familiar car analogy. over the past year we put our foot on the gas to help us get up the hill of economic difficulties. the prudent thing now, as we return to more normal driving conditions, is to ease off on the gas β ease off, not slam on the brakes β to make sure that we continue our journey along the highway at a safe cruising speed. it is in line with this that we moved, on 16 april, to raise the target for the overnight interest rate by 25 basis points. | level of economic activity and the level of potential would be widening throughout this period. instead, growth has turned out to be much stronger than expected. this means that our economy is operating at a much higher level than we thought. so the output gap is smaller than we had predicted and is currently narrowing. indeed, we expect that it will close in the second half of 2003. the output path that we are now projecting is consistent with core cpi inflation being at 2 per cent by about the end of next year. total cpi inflation will probably continue to fluctuate in coming months as oil and natural gas prices move around. but, like core inflation, we expect it to be at the 2 per cent target midpoint by about the end of 2003. although we no longer face the same degree of uncertainty as we did last fall, there are still important risks and uncertainties in the outlook β some of which are working on the upside and others on the downside. given the amount of monetary and fiscal stimulus in the economy, output growth could be even stronger than projected. but it is also possible that some of the recent strength in spending on consumer durables was borrowed from the future, so that the growth of household expenditures will be weaker than expected. at the same time, there is still considerable uncertainty about the timing and strength of the pickup in business investment in north america, mainly because of the continued weakness in profits. moreover, recent tensions in the middle east could have implications for crude oil prices and the global economy. while we face many of the same risks as the united states, there are a couple of differences in our situations that are worth noting. first, as we pointed out in the monetary policy report, we expect that in canada final demand will make up a larger share of the growth in the first quarter, while inventory rebuilding will constitute a smaller share than in the united states. second, while weaker - than - expected confidence among large businesses remains a risk for both countries, the sectors that face the biggest challenges, such as computer equipment and telecommunications, make up a larger share of the u. s. economy than of the canadian economy. so what do recent economic developments in canada mean from a policy perspective? as i mentioned, our economy is now operating at a significantly higher level than we had expected. so the amount of spare capacity is smaller, and is expected to be absorbed sooner, than we assumed last november. in these circumstances, our job will be to gauge the strength of the | 1 |
the united states is completely dependent on imports for at least 14 critical minerals. [ 3 ] and europe depends on china for 98 % of its rare earth supply. [ 4 ] supply disruptions on these fronts could affect critical sectors in the economy, such as the automobile industry and its transition to electric vehicle production. in response, governments are legislating to increase supply security, notably through the inflation reduction act in the united states and the strategic autonomy agenda in europe. but that could, in turn, accelerate fragmentation as firms also adjust in anticipation. indeed, in the wake of the russian invasion of ukraine, the share of global firms planning to regionalise their supply chain almost doubled β to around 45 % β compared with a year earlier. this β new global map β β as i have called these changes elsewhere [ 6 ] β is likely to have first - order implications for central banks. one recent study based on data since 1900 finds that geopolitical risks led to high inflation, lower economic activity and a fall in international trade. [ 7 ] and ecb analysis suggests similar outcomes may be expected for the future. if global value chains fragment along geopolitical lines, the increase in the global level of consumer prices could range between around 5 % in the short run and roughly 1 % in the long run. these changes also suggest that a second shift in the central bank landscape is taking place : we may see the world becoming more multipolar. during the pax americana after 1945, the us dollar became firmly ensconced as the global reserve and transaction currency, and more recently, the euro has risen to second place. [ 9 ] this had a range of β mostly beneficial β implications for central banks. for example, the ability of central banks to act as the β conductor of the international orchestra β as noted by keynes, or even firms being able to invoice in their domestic currencies, which made import prices more stable. in parallel, western payments infrastructures assumed an increasingly global role. for instance, in the decade after the berlin wall fell, the number of countries using the payments messaging network swift more than doubled. [ 11 ] and by 2020, over 90 % of cross - border transmissions were being signalled through swift. but new trade patterns may have ramifications for payments and international currency reserves. in recent decades china has already increased over 130 - fold its bilateral trade in goods with emerging markets and developing economies, with the country also becoming the world β s | β we could then see a virtuous circle of lower volatility, lower inflation, higher investment, and higher growth. but if fiscal policy instead focuses mainly on supporting incomes to offset cost pressures ( in excess of temporary and targeted responses to sudden large shocks ), that will tend to raise inflation, increase borrowing costs and lower investment in new supply. in this sense, insofar as geopolitics leads to a fragmentation of the global economy into competing blocs, this calls for greater policy cohesion. not compromising independence, but recognising interdependence between policies, and how each can best achieve their objective if aligned behind a strategic goal. we could see the benefits of this in europe especially, where the multiplier effect of common action in areas such as industrial policy, defence and investing in green and digital technologies is much higher than member states acting alone. there is another benefit, too : achieving the right policy framework will not only determine how our economies fare at home, but also how they are viewed globally in a context of greater β system competition β. and while the international institutions established in the wake of bretton woods remain instrumental for fostering a rules - based multilateral order, the prospect of multipolarity raises the stakes for such internal policy cohesion. for a start, an economic policy mix that produces less volatile growth and inflation will be key in continuing to attract international investment. although 50 - 60 % of foreign - held us short - term assets are in the hands of governments with strong ties to the united states β meaning they are unlikely to be divested for geopolitical reasons [ 20 ] β the single most important factor influencing international currency usage remains strength of fundamentals. by the same token, for europe, long - delayed projects such as deepening and integrating our capital markets can no longer be viewed solely through the lens of domestic financial policy. to put it bluntly, we need to complete the european capital markets union. this will be pivotal in determining whether the euro remains among the leading global currencies or others take its place. central banks also have an important role to play here β even as protagonists. for example, the manner in which swap lines are used could influence the dynamics of major international currencies. [ 22 ] both the federal reserve and the ecb, within their respective mandates, have been proactive in providing offshore liquidity when recent crises have hit. but others are moving too, which is | 1 |
that i am certain about : the federal reserve will continue to act forcefully, proactively, and aggressively as we deploy our toolkit β including our balance sheet, forward guidance, and lending facilities β to provide critical support to the economy during this challenging time and to do all we can to make sure that the recovery from this downturn, once it commences, is as robust as possible. 1 these remarks represent my own views, which do not necessarily represent those of the federal reserve board or the federal open market committee. i am grateful to chiara scotti of the federal reserve board staff for her assistance in preparing this text. 2 for additional information on the federal reserve actions taken at the march 15 fomc meeting, see the meeting statement, which is available ( along with statements from other fomc meetings ) on the board β s website at www. federalreserve. gov / monetarypolicy / fomccalendars. htm. more details about the new credit facilities, the expansion of foreign exchange swap arrangements, and the fima repo facility, as well as other regulatory actions, can be found on the board β s website at www. federalreserve. gov / covid - 19. htm. 3 see federal reserve act, 12 u. s. c. Β§ 343 ( 1932 ), quoted text in paragraph 3. a. 3 / 3 bis central bankers'speeches | market conditions. 2. the capital adequacy of each bank after potential adjustments from the asset quality review remains above the minimum regulatory requirements. indeed, the individual results vary across banks. follow - up plans have been developed in line with individual results and include measures aimed at maintaining existing capital buffers for some banks or increasing capital buffers and decreasing risk - weighted assets for others. the concrete follow - up measures and timeline for their implementation will be announced on saturday, 1 pm, as part of the published results. implementation of the measures will begin on monday, 15 august 2016. they will be incorporated in the individual bank β s capital management plans, as well as in the supervisory process conducted by the bnb. 3. the results do not necessitate any public support to the banks with state budget funds. the follow - up measures aimed at maintaining or strengthening the capital position of all banks are based entirely on available market solutions and funds from private sources. bis central bankers β speeches in closing, i would like to stress out that the asset quality review and the stress test were not an isolated event but an important step in the 18 - month reform plan for the institutional development of the bulgarian national bank, which i announced upon my election as a governor in july 2015. other key aspects of this plan include significant improvement of the bnb β s supervisory process and the development of an institutional framework that is effective in resolving issues in the banking system. the strict execution of the plan to date has strengthened our disciplined approach and contributed to improving financial results in the banking sector. the markedly high half - year results of the banks are a solid platform for implementing the follow - up measures identified as a result of the asset quality review and the stress test. i would like to assure the public, that we will be consistent in our disciplined approach and we will continue to follow our plan for reforms in the banking sector focusing not on the issues of the past but on addressing effectively the challenges of the future in order to maintain financial stability and integrate successfully in the european financial infrastructure. bis central bankers β speeches | 0 |
law enforcement agencies to hold those who are involved in our supervised institutions accountable for criminal activities related to mortgage lending. again, i want to thank you for the opportunity to discuss what the federal reserve does to address and prevent mortgage - related fraud and abusive lending practices in the institutions we supervise. | with rising utilization rates, bode well for further increases in business capital expenditures. indeed, capital expenditures for most types of equipment increased significantly during the third quarter, and census data on orders and shipments suggest that investment continued to expand in the fourth quarter, with much of the gain in spending for information technology - - that is, computers, communications equipment, and software. productivity and technology let me now turn from the overall economic outlook to productivity and technology developments. productivity growth receives a considerable amount of attention from policymakers because its rate is an important determinant of a nation's standard of living. the development of farm machinery in the early 1800s, for example, boosted the productivity of farmers and consequently freed up labor to shift to the industrial sector. more recently, continued increases in industrial productivity have enabled a relative shift of employment into the production of services. although manufacturing employment has fallen sharply in recent years, both in absolute terms and as a share of total employment, the output of the nation's manufacturers has continued to increase because of impressive productivity gains. looking beyond manufacturing to the broader nonfarm business sector, we see that productivity growth has risen significantly over the past decade in the united states. labor productivity gains accelerated from an average annual increase of 1 1 / 2 percent over 1973 - 95 to an average annual increase of 2 1 / 2 percent over 1995 - 2001. from the first quarter of 2001 through the third quarter of 2005, labor productivity growth picked up even more - - to an annual rate of nearly 3 1 / 2 percent. thus, despite a recession, a tech - sector meltdown, a stock market correction, terrorism, and corporate governance scandals, our economy has proven remarkably resilient and productive. these productivity gains result from many forces, including business investment that has increased the amount and quality of capital available to the workforce, business process innovations, and the growth of innovative, research - intensive industries such as information technology and biotechnology. because firms may take a while to absorb a rapid run - up in investment, the productivity payoffs to investment may be drawn out for some time as firms learn more effective ways to use the capital they have acquired. anecdotal information suggests that some of the recent productivity gains appear to reflect firms making better use of existing capital and improving business processes. as i noted, the growing importance of the innovative technology sector has spurred productivity growth. i will focus on developments in the information technology ( it ) sector ; we at the federal reserve know more | 0.5 |
as rating agencies and market participants adjust their methodologies for assessing and rating risk. third, there is a need for improvement in risk management practices β not least liquidity management by financial firms ; standards of credit origination ; and monitoring of the debt servicing performance of borrowers. experience suggests that prior to the current turbulence investors underestimated the tail risks to which they were exposed, including the interdependencies between credit, market and liquidity risks. improvements in stress testing can play a key role here. needless to say, such stress tests should consider the crosscountry nature of the euro area financial system. finally, greater financial stability calls for closer communication and cooperation among players in the financial system, not just within the official sector, but also between the official and private sectors. this is especially true in the euro area given its multiplicity of jurisdictions and layers of responsibility, which puts a premium on cooperation. meetings like this suggest that the lesson is well understood by all the parties involved. this can only augur well for the future. | of the negotiations and in the gats itself. the agreement β s design - a framework of rules coupled with national schedules of commitments allows governments to decide which sectors they will open to competition by guaranteeing the rights of foreign suppliers and also the extent of those rights. the gats commitments of many wto members do not offer unrestricted access to their markets. but significant progress has been made, and the groundwork completed for moving ahead with liberalization in future negotiations. despite the tension and sensitivities surrounding the early discussions, today 106 wto members have commitments in the sector - more than in any other sector except tourism. not all of those commitments involve liberalization - often they are bindings of the existing level of access and regulation. let us not forget that in trade negotiations liberalization is always incremental ; in the case of services this is more so since the principle of progressive liberalization has been expressly recognized. we sometimes forget that the financial services negotiations that successfully concluded in december 1997 coincided with the financial crisis in asia. contrary to what some might have feared, the crisis had no impact on the negotiations : no country withdrew or wrote down the commitments it had negotiated. even the asian countries most seriously affected made commitments to improve access to their markets for foreign financial institutions. they did so in the belief that stronger competition and greater openness would make their national financial infrastructure stronger, not weaker. in fact, the crisis seems to have strengthened the conviction that competitive financial markets are essential to restore confidence and induce the long - term investment needed for growth and development. several factors made it easier for crisis - ridden countries to embrace the wto negotiations. first, the negotiations were not concerned with the liberalization of the capital account, but purely with the terms on which foreign suppliers would be allowed to do business, subject to whatever capital controls were in force. while it is true that a government is required to allow capital flows when the country has a commitment liberalizing the supply of a service requiring such capital movement, the capital account liberalization involved is limited in extent. second, the liberalization of financial services trade takes place inside a system of rules and procedures with the necessary flexibility and safeguard clauses to address prudential concerns. governments are free to take any measure necessary to preserve the stability of the financial system and also temporary, non - discriminatory restrictions on trade in services in the event of serious balance - of - payments and external financial difficulties. in fact, nothing in the services | 0.5 |
risks and future crises. at the same time, banks would not compete on a level playing field, and that would weigh on efficiency. ladies and gentlemen, the reforms that followed the financial crisis of 2008 were far - reaching, and they placed a burden on the financial sector β of that there is no doubt. do the reforms offer a full insurance contract to prevent each and every risk to financial stability? well, no ; such rules do not exist. but there is no doubt that they help to make the global financial sector a safer place. they make it less likely that we will experience a second financial crisis of the same magnitude. looking ahead, we should not forget that we live in a globalised world. and any attempt to turn back time, any attempt to isolate one country from the rest of the world is not only a pipe dream ; it is a perilous dream. 2 / 3 bis central bankers'speeches that is particularly true in the case of finance and banking. so, instead of building walls, we should come together to discuss how we can deal with a global banking sector, how we can reap the benefits and keep the risks in check. that is the only way forward. walking backwards will only lead us to where we came from : another global financial crisis. thank you for your attention. 3 / 3 bis central bankers'speeches | sabine lautenschlager : dealing with a globalised banking sector statement by ms sabine lautenschlager, member of the executive board of the european central bank and vice - chair of the supervisory board of the european central bank, at george washington university law school, washington dc, 16 october 2017. * * * ladies and gentlemen, today we can look back on nearly a decade of rule - making. following the financial crisis of 2008, almost no stone was left unturned β at least in the field of banking regulation. but this wave of re - regulation didn β t just focus on banks ; rules were put in place to increase consumer protection and regulate the derivatives business, central counterparties and rating agencies. in many countries these changes were accompanied by institutional changes β new authorities were set up to deal with financial risks, and they were given new powers and instruments to mitigate these risks. authorities gained a whole new set of tools for macroprudential oversight. the reforms were far - reaching in many countries, and in particular in the major financial centres. and i am convinced that this overhaul will contribute to future financial stability. there are two main reasons for this. first, deregulation and light - touch supervision were a significant cause of the financial crisis in 2008. in the early 2000s many believed in the self - regulation of the financial market β so restricting the entrepreneurial freedom of financial market participants was not at the top of governments β to - do lists. this all changed with the financial crisis, which was costly for banks, their investors and the taxpayers in many countries. in addition, the crisis was followed by an economic recession. banks, for example, now have to comply with a strict set of rules β they have to hold more and better capital than they did ten years ago. their capacity to absorb losses has increased significantly. banks are better prepared for a potential drying - up of liquidity sources, as the quantitative and qualitative requirements regarding liquidity management have risen significantly. this makes banks more resilient to potential economic downturns or major unexpected events. and supervision has changed quite dramatically, too. many supervisors have been given greater powers to act pre - emptively ; the set of supervisory tools and resources has expanded considerably. supervisors are therefore able to pick up on deficiencies in banks, risky trends and misbehaviour earlier and more decisively than before the crisis. does this mean that there is no room to improve the current rules | 1 |
education. through a number of activities, educational publications, lectures, films, and applications, irrespective of their age, visitors learn about financial products and system. the history of money originates long ago and its developments are closely related to the people that have produced it. its role is not limited to the economic functions ; it is also a historic evidence of the minting or issuing country. it speaks about periods of economic crisis or downturns, of peace and prosperity, of successes and injustices. in this context, we decided to dedicate the first conference of the museum of the bank of albania to two main topics, which we think are the gist of its exhibitions and educational activities. 1. findings, researches and discussions in the area of monetary production and circulation, the history of the economy and banking activity in albania and albanian historic territories, which contribute to accurate interpretation and updating of information transmitted to the visitors 1 / 2 bis central bankers'speeches through museum collections. 2. the educational role of central bank museums in getting to know the history of money, and banking activities and enhancing financial literacy through exhibitions, education and innovation. for this purpose, we aim, therefore, to bring together foreign central bank experts to share their perspective on the management of central bank museums, collections and educational activities. this conference certainly underlines the commitment of the bank of albania to earnestly engage in both research and educational activities. we are very interested in enhancing cooperation with researchers, academia, peer museums, and specialised institutions in economic, historic and cultural heritage research. such cooperation is an excellent opportunity to bank of albania employees, who may benefit from valuable skills and expertise for our museum. it would also contribute to new networking and collaboration in research activities. in light of promoting and furthering cooperation, we are committed to turning our conference of the museum of the bank of albania into an annual event. also, in 2017, the museum of the bank of albania will organise a cycle of lectures dubbed as β nights of the museum β, which will address a variety of topics, such as numismatics, banking history, economic and financial education, philately, art and architecture. these projects aim at developing another aspect of our work at the museum, which would focus on social developments vis - a - vis museum objects. dear participants, the first conference of the museum of the bank of albania coincides with the 25th anniversary of the establishment of the modern central bank of the republic of albania and a two - | ##ating sberbank. together with the insolvency trustee ms jiina luzova, we managed to set up the entire process properly. we also managed to get everyone on board, even those who were initially challenging the process. representatives of firms, regions, cities and 1 / 2 bis - central bankers'speeches municipalities withdrew their lawsuits. a large proportion of sberbank's assets sold very well. eska spoitelna bought sberbank's mortgage portfolios. part of its other assets was also sold. the assets which remain are those subject to sanctions. i have good news for the public and representatives of regions and cities : i expect the insolvency trustee to introduce a plan soon for the payout of the remaining part of the assets not previously covered by the guarantee fund. a recovery rate of 100 % is very likely. a large share of the money should be paid out this year, and the rest next year. if that is the case, it will be very positive news. in addition, we inherited the cnb's largest - ever accounting loss. this will be dealt with over a number of years, as it cannot be resolved immediately. this problem does not prevent us from fighting inflation. it does not prevent us from fulfilling our mandate. but it is a problem for the future and i do not want to hand the bank over to the next governor with another large accounting loss. the problem boils down to our balance sheet comprising assets with an expected annual return of 2 β 3 %. on the liabilities side, we have a large amount of koruna we now have to remunerate at 7 %. the excess koruna was generated above all in late 2016 and early 2017, when the central bank made perhaps the biggest economic policy mistake β a huge quantity of money was created to weaken the koruna and increase inflation. we must now withdraw this money and remunerate it to prevent it from fuelling further inflation. that is the main reason we have posted a loss. and until we tame inflation, we will probably continue to make a loss. however, we are dealing with the problem and will resolve it. thank you for listening to my opening remarks. deputy governor jan frait and i are now ready to answer any questions you might have. 2 / 2 bis - central bankers'speeches | 0 |
the whole year of 2013, profits after tax reached mop7. 5 billion, a rise of 31. 5 % over a year earlier. while the scale of assets continued to expand, all prudential supervisory indicators stayed at healthy levels : the non - performing loan ( npl ) ratio at 0. 09 % ; the capital adequacy ratio ( car ) at 14. 8 %, within which the tier - one capital ratio stood at 11. 2 % ; the one - month and three - month liquidity ratios were reported at 52. 3 % and 66. 0 % respectively. renminbi ( rmb ) businesses of local banks also registered notable growth. at end - 2013, rmb deposits amounted to rmb85. 8 billion, which represented an annual rise of about 110. 0 % while the cross - border rmb trade settlement business hit rmb149. 2 billion, a year - on - year increase of 53. 5 %. as regards insurance business, the total gross premium reached mop6. 8 billion in 2013, a year - on - year rise of 25. 5 %. within this total, the life insurance premium stood at mop5. 0 billion, an annual increase of 32. 8 %, while the non - life insurance premium reached mop1. 8 billion, a year - on - year increase of 9. 3 %. to uphold financial safety and stability in the msar, the amcm continued to supervise authorised institutions on an on - going basis through offsite surveillance, onsite examinations and thematic reviews. in order to promote sustainable development of the local financial sector and to cope with enhancing international financial supervisory requirements, regulatory regimes and financial infrastructure in the msar have continuously been refined. bis central bankers β speeches with regard to regulatory framework, on the banking front, the β guideline on disclosure of financial information β was made effective in 2013 in order to fulfil the requirement for market disciplines laid down by basel ii. for the revision of credit risk - weighted capital adequacy requirements, the amcm kicked off a consultation with practitioners and a quantitative impact study. to strengthen the security of automatic teller machines ( atms ) and bank cards, the amcm issued the β requirements for automatic teller machine and bank card security β. in particular, in the light of financial - market developments and enhancing international supervisory requirements, the amcm has been conducting a comprehensive review of the β financial system act β | ( fsa ) through concluding past regulatory experiences as well as making references to international regulatory standards and supervisory regimes in other jurisdictions. as regards insurance supervision in the year under review, progress was made in the revision of some articles contained in the legal framework for employees β compensation insurance, which has entered into the legislative stage. furthermore, after prior consultation with the industry, β guidelines on corporate governance of authorised insurers β was promulgated and became effective in january 2014. on financial infrastructure, the launch of mop real time gross settlement ( rtgs ) system in january 2013 was a milestone in the modernisation and digitalisation of the msar payment system. with the aim to achieve convenient, efficient and stable cross - border capital flows, we are working on expanding capacity to deal with other currencies at this stage so as to prepare for connection with neighbouring jurisdictions β payment systems. the exchange reserve and fiscal reserve are important components of the public financial resources of the msar. as these two reserves serve different statutory and policy functions, the amcm has all along followed relevant legal requirements and international standards, upholding the principles of safety, stability and prudence in managing these reserves. taking into account various internal and external factors, including the global political, economic and investment environments as well as financial market dynamics, the amcm has stricken a reasonable balance of risks while carrying out appropriate diversification of asset allocation. at end - 2013, the exchange reserve stood at mop129. 0 billion, while the fiscal reserve amounted to mop168. 9 billion. as regards regional financial cooperation, with the gradual implementation of the β framework agreement on cooperation between guangdong and macao β, financial cooperation between guangdong and macao has been deepened and broadened with steady concrete results and progresses. in 2013, in addition to existing cooperation mechanisms such as β the financial cooperation meeting between guangdong and macao β and β the working group on financial cooperation between guangdong and macao β, zhuhai and macao also established a steering group and a working group on financial cooperation between zhuhai and macao, and a working group on coordinating financial policies between zhuhai ( hengqin ) and macao to strengthen the financial cooperation, including financial innovation in hengqin. these initiatives serve to enhance communications and realise financial cooperation in a gradual fashion. meanwhile, in accordance with the β memorandum of understanding ( mou ) on financial cooperation between shanghai and macao β signed between the amcm and the financial | 1 |
, aware of the risks exposed during this period characterized by numerous unstable developments in global and regional economy. therefore, our supervision has placed great emphasis on identifying the various risks to banking activity, improving the banking sector β s ability to manage these risks and strengthening the legal and operational framework to address them in case of their materialization. in the wake of the global economic crisis, many countries are redesigning their economic development agendas and models. throughout many years, the bank of albania has initiated, encouraged and supported this discussion by engaging in an open communication with the public authorities, business community and academic circles. our opinion is that economic development policies should contribute to setting a better balance between the development priorities of the sectors of the economy, by supporting agriculture and production. one of our immediate objectives is enhancing the economic capacities that improve the competitiveness of our products and benefit more from foreign demand. to this purpose, the development and further perfection of financial infrastructure, as well as the qualitative improvement of technology, are, among others, a priority. we must ensure a well - educated labour force, able to adapt to the international labour market, in addition to the local one. therefore, the education - related policies on the younger generation must, above all, ensure the quality of education and incorporate programmes that assign greater importance to its practical orientation. the bank of albania is now very seriously committed to its public financial literacy programme. in this context, we have designed and implemented a series of projects and cooperation initiatives, covering different age groups and geographical areas across the country. it is clear that these objectives cannot be accomplished by the simple wave of a magic wand. they are even hard to be accomplished in due time and with the capacities of a single economy. albania is indeed a small economy but thanks to continuous reforms, it has turned into an attractive country to foreign investors. our vision has been and remains open to any regional initiatives. we are able to become part of joint regional projects, thus providing evidence for the great absorptive capacity for big investments and serious investors. bis central bankers β speeches therefore, the formulation of policies for attracting foreign investment, coupled with the constant improvement of the business climate and relevant legal framework, should be continuous part of the country β s economic development strategy. dear guests, despite being a small country, albania represents a vibrant economy with vital people who are able to undertake wide - ranging business intitiatives. moreover, our country shares a considerable part of its official borders with albanianin | ardian fullani : promoting investment in albania speech by mr ardian fullani, governor of the bank of albania, at the 3d international conference on β fdis in albania β, organised by the albanian investment and development agency ( aida ) and the islamic development bank ( idb ), tirana, 11 june 2012. * * * your excellency mr. sali berisha, dear mr. khalid al aboodi, dear minister of finance, dear ladies and gentlemen! it is a special pleasure for me to address this joint conference with the islamic development bank, dedicated to the promotion of investment in albania. allow me first to extend my thanks to dr. ahmed mohamed ali al madani, president of the islamic development bank, for his utmost contribution to lobbying and supporting albania β s interests in the arab and broader world. the bank of albania assesses that albania β s macroeconomic stability has been and remains a fundamental condition steering economic agents β investment, consumption or savingsrelated decision - making, not only for the present but also for the future. it is this very fundamental equilibrium in the economy that paves the way for albania β s long - term economic and financial development. let me recall to you that, in present days, macro - financial situation represents the β passport β the entire economic and financial credibility of a country is built on. in an integrated market that is ever - increasingly being affected by the globalization process, macroeconomic stability exerts the same impact on foreign investors as well. it is for this reason that our monetary policy, our role as the supervisory authority for the banking sector in albania, and our contribution to the communication between the public authorities at home, have been based on and have reflected this fundamental principle. the bank of albania has succeeded in guaranteeing a favourable macroeconomic environment in the recent years. i would like to remind you that the stability of the albanian economy has been achieved under the constant pressure of the global crisis, which has severely hit our main trading partners. thanks to the efforts of the bank of albania, successful monetary and fiscal policy mix, stimulating policies in the tax area and ongoing improvement of the business environment, the albanian economy has recorded satisfactory growth rates ranging 3 β 4 % in real annual terms. this growth has been achieved amidst an environment characterized by stable prices and a balanced exchange rate. albania β s financial stability has, in no single moment, been put into question, and the banking system, which enjoys buoyant liquid | 1 |
luis maximo dos santos : the euro 20 years on - the debut, the present and the aspirations for the future closing address by mr luis maximo dos santos, vice - governor of the bank of portugal, at the conference β the euro 20 years on - the debut, the present and the aspirations for the future β, lisbon, 15 november 2019. * * * 1. twenty years ago we launched an unprecedented, historic experiment. eleven free and sovereign nations, including portugal, democratically decided β after checking compliance with the criteria set out in the maastricht treaty β to share monetary sovereignty, and exercise it jointly. it is true that history has witnessed several monetary integration processes ( and also some disintegration processes, by the way ). but none have been quite like the creation of the euro, given its nature and complexity. indeed, never before has such a vast and heterogeneous group of nations, in terms of both economic and social development and their history and institutions, decided willingly and in peacetime to live together under a monetary union. the step taken 20 years ago, pursuant to the provisions set out in the maastricht treaty, stemmed from the political ability to seize on the historical opportunity which then arose and was fully consistent with the need to complete the internal market and affirm europe β s position in the face of globalisation. but this was not at all an impulse driven by circumstance. on the contrary, it fulfilled a longsought ( but not always explicit ) goal of the european integration process and was the result of a long journey, full of breakthroughs and setbacks, which continued a gradual monetary integration process. the clearest example of this is the european monetary system, created in 1979. regardless of how we assess its rationale and results, it is appropriate to state that the creation of the euro was one of the boldest acts of economic and political proactivity ever performed and, for that very reason, has led us, to some extent, into uncharted territory. this gives us a precise idea of how fundamental it is to take the necessary measures to ensure that the european monetary unification is successful in the long term. 2. despite structural shortcomings in the economic and monetary union ( emu ) project, which were far more serious in its initial version ( and which have been discussed here today in part ), it is important to emphasise 20 years on that : i. the number of euro area member countries | how rapid and strong their effect, if any, is. this applies regardless of whether such measures are aimed at productivity or incentives to work more. for some time, the number of people in employment relative to the number of 20 - 64 - year - olds has been close to a level not previously seen, even in an international context. one option could be to increase average working hours, which are not high by historical or international standards. however, working hours are determined by complex interaction between individual choice, collective agreements and cultural norms. even if it was possible markedly to change the incentives to work more β e. g. through a sizeable reduction of the marginal tax rate β this would take effect with a lag, and we have very little knowledge about how long this lag would be. moreover, uncertainty about the ultimate impact is considerable. if the marginal tax rate would be reduced to provide an incentive to work more, and this would be done by way of fiscal easing, i. e. not fully financed, it is very unlikely that the capacity - enhancing effects would balance the additional increase in demand. obviously, a lower marginal tax rate should not necessarily be unfinanced. it could be implemented as part of an actual tax reform and funded by increasing the tax base, i. e. by reducing existing tax deduction options and reducing selective tax benefits. as a main rule, reduction of tax deductibility in itself entails structural improvement, as tax deductibility often provides an incentive to engage in economic activity where the motivation is tax savings rather than other economic advantages. but there are considerably fewer tax deductibility options left to weed out than there used to be. another way to finance a lower marginal tax rate is to reduce ( growth in ) public sector spending. in that case, the net impact on capacity pressures in both the short and long term would depend on the actual tax and expenditure cuts introduced. if funding is achieved by reducing public sector spending, this can be expected to have a dampening effect, in net terms, on overall demand in the economy. this is mainly because the import share of public consumption is lower than the import share of private consumption triggered by lower taxes. as regards the issue of labour market pressure, the short - term question is whether the type of labour released via e. g. lower growth in public sector spending can fully or only partially make up for the extra labour required when lower income taxes push up private consumption. the lion | 0 |
be detected on the labour market. the causes of the german labour market problems are primarily structural. this can also be seen by the comparatively large number of long - term unemployed. wage formation is mainly geared to the interests of β insiders β who already have a job and not to those β outsiders β who would prefer moderate wage settlements. the accelerated adjustment of east german wages to the west german standards is one example of insufficient wage differentiation. it is precisely in the lower wage groups that it would be important to structure wage substitutes in a more incentive - friendly way. from a current perspective it remains an open question whether the establishment of european monetary union will ultimately also lead to a reduction in labour market rigidities. however, i should add that we are witnessing a gradual erosion of industry - wide pay bargaining at least in eastern germany. and we also observe working hours becoming more flexible. however, further steps will have to follow so that a wage policy which is in line with market requirements can help to stimulate employment friendly growth. furthermore, the non - accelerating rate of unemployment, or nairu, could also fall in germany. in the united states all the signs indicate that the nairu declined significantly during the long boom. according to the bundesbank β s calculations, which may like other calculations be regarded with some degree of uncertainty, nairu has risen in germany almost throughout the entire period since the end of the seventies. in western germany, it is likely to have been above 8 % towards the end of the 1990s. when i now come to the second area of my comments, β growth and productivity β, i do not have to tell you about the us economy β s success story in the 1990s. it is well - known to you. in short : output and productivity growth has been very buoyant especially since the mid - 1990s - that is in an advanced phase of the upturn. the scale and the timing of these productivity increases can scarcely be explained in terms of the normal cyclical pattern. i wonder whether schumpeter would have already interpreted the available evidence as a long wave. in germany, the gdp growth rate in the 1990s was almost 1Β½ percentage points below the corresponding us figure. currently, the difference in the trend growth is likely to be slightly more than one percentage point. 3 when considering the individual components of demand, the different momentum of capital spending is particularly striking. whereas real investment in machinery and equipment in the united states has been growing at an annual average of almost | the same entity, who is accountable to the customer? as the number of 3rd - party intermediaries involved in a financial service grows, there might also be increased operational risks. we will need to adapt our regulatory approaches. pay greater attention to market conduct, consumer protection, and technology risks. regulatory frameworks will need to become more modular and agile. entity - based regulation remains relevant for the provision of key services such as deposit - taking, insurance, and the offer of securities. but for the growing number of players who offer niche financial services, we need to rely increasingly on activity - based regulation. this is all still fairly familiar ground, as the fundamental structure of financial services remains largely intact. intermediaries continue to be at the centre, even as distribution becomes more decentralised with diverse players and new ways of connecting with customers. stepping a layer down, let us now examine the underlying infrastructure of financial services. technology is enabling a fundamentally different approach to financial infrastructure, compared to the centralised systems of today. take for example, open crypto networks based on self - executing smart contracts and noncustodial financial services, where users maintain control over their assets at all times. by replacing intermediaries and central parties, these networks aim to reduce both the cost and risk of finance. by decentralising key aspects of financial infrastructure, such as access, data, and code, open crypto networks can also potentially enhance inclusion and innovation. when firms of all sizes, and even individuals, can directly access financial infrastructure, it could mean more competition and inclusion. when transaction data is available to all participants, and not confined within the intermediary responsible for the transaction as is the case today, it could mean more contestability and transparency. w hen code can run directly and publicly on these networks, unlike proprietary code that runs on private servers, it could mean more interoperability and innovation. we are certainly not at the point where these self - governing networks can meet the high standards of governance, security, resilience that we demand of critical infrastructure. even so, central banks would do well to incorporate these innovations in designing the next generation of payment infrastructure. these ideas could be particularly relevant to the development of cbdcs. finally, we turn to the layer at the base of the system β the instruments, or forms of money that should confer the properties of a public good. 2 / 4 bis central bankers'speeches the decentralisation of instruments is most clearly | 0 |
the more important. as japan seeks to rebuild its economy, efforts to raise the potential growth rate have become even more important. these are certainly not easy challenges, but we have to take them on with great determination. v. the bank of japan β s response finally, let me briefly touch on the bank of japan β s response after the earthquake struck. as was the case in the financial markets immediately after the failure of lehman brothers, when people β s lives and safety are at risk, they sometimes tend to become excessively risk averse, which makes things worse. incidentally, while foreign nationals residing in tokyo increasingly left japan for fear of radiation risk, it has tended to be overlooked that the radiation levels in tokyo are roughly the same as in other major cities around the world, such as paris and berlin, or they were exposed to more radiation on the airplane than they would have been exposed to in tokyo. in the money markets, financial institutions β precautionary demand for liquidity surged. rumors have spread among the foreign financial community that the tokyo financial markets would close due to fears of radiation risk. the bank of japan has been asked whether there was any truth to the rumors that the bank of japan was planning to retreat to a backup site in the western part of japan. of course, these rumors were and are groundless. as i said, the financial infrastructures are fully functional and there is no reason for us to relocate from tokyo. bis central bankers β speeches in such times, the first priority is ensuring calm among market participants, and in this regard the bank of japan has provided ample liquidity on an unprecedented scale day after day. the very next business day after the earthquake, we decided to significantly increase the amount of its asset purchases, mainly of risk assets, with a view to preventing any deterioration in business sentiment or excessive increase in risk aversion from adversely affecting economic activity. as a result of these measures, financial markets, which became somewhat jittery in the period immediately after the earthquake occurred, have regained stability. needless to say, the bank of japan β s mission is to ensure price and financial system stability, thereby contributing to the sustainable growth of japan β s economy. we will continue to take appropriate measures as the central bank in order to achieve this mission. vi. concluding remarks as i mentioned earlier, nothing is more heartening in a crisis than the encouragement and support of friends overseas. i would like to conclude by thanking you once again for | bank of japan β s september report of recent economic and financial developments bank of japan communication, 11 / 9 / 98. the bank β s view japan β s economic conditions continue to deteriorate. with respect to final demand, public investment seems to have bottomed out. net exports ( exports minus imports ) are increasing mainly due to a decline in imports. however, business fixed investment has been decreasing significantly, and housing investment has declined further. private consumption has not yet shown a recovery despite the special income tax reduction. against this background of weak final demand, production has been reduced substantially. as a result, some industries have shown improvements in inventory adjustments, but the level of inventories is still high as a whole. with the decline in expenditure and production, corporate profits continue to decrease, and the decline of employee income is accelerating somewhat. in addition, the ratio of job offers to applications records a historically low level, and the unemployment rate remains at a high level. as a whole, the employment and income conditions have deteriorated further. as the above indicates, there are continued negative interactions of production, income, and expenditure. given the current considerably low level of economic activities, the economy is unlikely to transit immediately to a self - sustained recovery led by private demand, although a further deterioration in the economy is expected to cease gradually from the effects of the comprehensive economic stimulus package. additionally, attention should be paid to possible negative effects on the real economy from financial developments including the recent fall in stock prices. in these circumstances, the cabinet approved a guideline on budget requests by ministries for fiscal 1999. this guideline intends to stimulate the economy by allocating Β₯4 trillion to the special budgetary provision on the condition that the fiscal structural reform act is suspended. in addition, the bills to rebuild the stability of the financial system are being deliberated at the diet, and the reduction exceeding Β₯6 trillion in personal income taxes and corporate taxes is expected to be discussed in detail. the materialization of these policies along with their effects on corporate and household sentiment should be carefully monitored. with regard to prices, wholesale prices are on a downtrend, and consumer prices are lowering below the previous year β s level. with respect to the outlook, the downward pressure from domestic factors is unlikely to weaken considerably reflecting the already large output gap, despite the expected effects of the comprehensive economic stimulus package. hence, prices are likely to be weak for some time. in the financial markets, stock prices dropped considerably in late august | 0.5 |
positioned to build and export regtech solutions to the rest of the world. 46. the white paper suggests developing a regtech skills framework. this framework will cover suitable modules and competency standards. and we would seek to identify the skills required for different roles and which would help speed up regtech adoption, and then we would help train and develop both new entrants and existing practitioners. 47. finally, on β momentum matters β. all our hard work will not bear fruits if the momentum for changes cannot be sustained. it is therefore crucial to keep the industry engaged in the years ahead. one suggestion is that we introduce a benchmark for our progress in increasing regtech adoption. this benchmark will provide us with a holistic framework that will enable us to visualise the success of our regtech initiatives. 48. that is a quick snapshot of the key recommendations in the white paper. in fact, we are already putting some of those recommendations into action. 49. for example, a flagship event is already planned for the first half of 2021. like this fintech week, that event will also use available technology to bring together delegates from around the world. so stay tuned for further details of the event. 50. also in the first half of 2021, we will be announcing details of our first regtech challenge. 51. and then looking ahead to the second half of 2021, we expect to set up the β regtech knowledge hub β. 52. around the same time, we also plan to release a regtech adoption index that will visualise our progress in increasing regtech adoption over time. in the meantime, we are also working hard to flesh out our thinking behind the other recommendations. for example, we would explore the benefits of providing appropriate incentives and other assistance to stimulate regtech solution innovation in hong kong. conclusion 53. so to conclude, i hope that through this presentation, i have sent a clear message to the audience that the value of regtech in banking is coming to the fore in hong kong. industry stakeholders should realise that regtech and its underlying technologies are the way of the future. 54. the hkma strongly believes that hong kong has the right foundations to support a thriving regtech ecosystem, and ultimately become a regtech hub. our city already enjoys broad fintech capabilities, strong support for technology businesses, a significant and wellestablished financial services sector, and most important of all, very supportive financial regulators. 55. we hope the white paper that the hk | muhammad bin ibrahim : of perception, sentiment and reality opening remarks by mr muhammad bin ibrahim, governor of the central bank of malaysia ( bank negara malaysia ), at the persatuan pasaran kewangan ( ppkm ) annual dinner & quot ; of perception, sentiment and reality & quot ;, kuala lumpur, 17 november 2017. * * * thank you for the invitation to address the members of the financial market industry at this financial market association of malaysia β s ( fmam ) annual dinner. l always look forward to this event as it provides the central bank with the platform to share our thoughts and expectations for the industry. we are operating in a very dynamic environment. last year, i stood here and explained in detail why it was a challenging year. this year is no different. as the operating climate changes rapidly around us, we need to adapt. the theme of my speech will be a bit different this year. titled β of perception, sentiment and reality β, it will be a bit longer than usual. i shall cover four parts ; financial market review, factors that drive the level of the exchange rate, comments on ringgit exchange rate and interventions, and initiatives to build resiliency and liquidity for our market. part i β financial market review it has been an eventful year and our financial market industry has gone through significant changes and developments. the ringgit, for one, has seen significant developments. last november, it was one of the most volatile currencies. a year later, it has not only strengthened but has greatly stabilised. the implied volatility has declined from a peak of 9. 7 % to about 3. 7 % currently. the influence of offshore market activities and its damaging spill - overs to the ringgit exchange rate have subsided, consistent with the significant decline in transaction volume in the ndf market. on the other hand, foreign exchange ( fx ) transaction volume in the onshore market has been sustained with improving transaction costs, facilitating business transactions for all market participants. the domestic bond market has also been more stable and the risks of significant sell - offs from non - residents and other major outflows have reduced. non - residents now hold a more manageable level of 26. 4 % of total government bonds outstanding, down from the high of 34. 7 %. during the early part of 2017, a period of significant capital outflows, the spike in bond yields was short - lived while the ringgit exchange rate | 0 |
is based on two core pillars : the first is a β credit bureau β system that helps credit institutions to assess risks ; and the second is a β central credit registry β managed by central banks for their institutional functions. ladies and gentlemen, let me give you a brief overview of the steps that bank al - maghrib has undertaken over the last ten years to develop its financial information system and enhance its convergence towards international standards. in close cooperation with the ifc, the bank put into operation in 2009, under the first pillar, the 1st credit bureau. this was a decisive step towards the establishment of a modern and state - ofthe - art credit reporting infrastructure. indeed, the credit bureau has become an essential tool for lending decisions for individuals, businesses and micro - credit associations. opening up the market to competition and authorizing a second credit bureau in 2016 was a further step towards improving the quality of services provided to credit institutions and consumers. the range of products offered has expanded to include new decision - aiding tools, such as β behavior scoring β, β portfolio monitoring β and β alerting β. in close coordination with the ministry of economy and finance, bank al - maghrib is currently working to rapidly develop the legal and regulatory framework of β credit bureaus β in order to expand its scope to other nonfinancial data providers, including telecom operators and water / electricity suppliers. this will help the unbanked population to have access to financing, as demonstrated by the experience of pioneering countries in this area. as regards the implementation of the second pillar, the bank has undertaken since 2016, in collaboration with the ifc, an appraisal of the existing system and has identified the characteristics of the future credit registry. in this connection, today β s seminar is a real opportunity for us to learn about the experiences of forerunners in this field, with a view to finalizing our own roadmap. ladies and gentlemen, six regulators, well known for their optimal use of credit registries, will present to us today how they use credit reporting data to achieve their core missions, particularly micro and macro prudential regulation, systemic risk control and monetary policy, and strengthen off - site supervision. these topics are of particular importance in the current context in which our economies are undergoing significant changes in the credit market as well as in the behavior of consumers and borrowers. therefore, it is essential to upgrade financial infrastructures, which constitute a central element in the credit risk management system, in | young people under 25 to 33 percent for those aged 25 and over. based on these data, it became clear that priority should be given to targeting the most disadvantaged groups in order to reduce the gaps. besides, as fintech was experiencing significant growth and was becoming a promising lever, the first measure to undertake was to introduce mobile payment, considering the high mobile phone penetration rate, which reaches 130 percent and allows coverage of almost the whole population. to this end, we have developed, together with the national telecommunications regulatory agency, a national low - cost, secure, interoperable and real - time mobile payment solution. this offer is to be provided not only by banks and telecom operators, but also by payment institutions which formed an alternative network, and which we had begun to license based on strict specifications. however, the adherence of retail merchants, necessary for a large - scale deployment of this solution, is still low, as that many of them still operate in the informal sector. subsequently, we were prompted to collaborate with the ministry of finance in order to introduce tax incentives in the 2020 finance act. today, we are rather optimistic. these incentives, combined with communication and awareness - raising efforts, will hopefully give a new impetus to this solution and contribute to a greater integration into the formal economy and to a reduced use of cash. mobile payment has undoubtedly been one of the main levers of financial inclusion in morocco, but certainly not the only one. we have also strived towards turning microfinance and micro insurance into channels of inclusion. to this end, the applicable amending legal texts have been finalized and are in the process of being approved. at the same time, we continued strengthening and expanding financial education work, bringing together all national stakeholders around the foundation and drawing on international best practices. more particularly, we worked with the ilo and afi to develop educational packages, and organized several instructor - training sessions for various professional categories. in this same vein of association and cooperation, we are trying to bring together all stakeholders to reflect on the methods for implementing the bali fintech agenda. in this regard, bank al - maghrib co - organized, last march, a regional conference with the imf and plans to hold a second one in 2021. similarly, our institution held, last november, the africa blockchain summit, meant to share experiences between african countries, stimulate innovation and encourage startups. we hope to take advantage of the latter β s innovations for our own benefit and for the benefit | 0.5 |
are extremely valuable because they provide the opportunity to share experiences from real - life settings, including what has worked and what has not, as well as the pitfalls and the nuances. hopefully, some general guiding principles can emerge, that will prove useful for practitioners gathered here today. in conclusion, the guidelines for monetary policy communications are probably due for a refresh given the increased complexity facing the formulation and implementation of monetary policy. for 3 / 5 bis central bankers'speeches sure, central banks must continue to talk, engage, and be accessible and accountable. how we do it could evolve, and this high - level seminar serves to help us do just that and hone our communication skills. i wish you a most productive session. thank you. references bernanke, b s ( 2007 ), β federal reserve communications β, speech at the cato institute 25th annual monetary conference, washington, d. c., 14 november. blinder, a s, goodhart, c, hildebrand, p, lipton, d, and wyplosz, c ( 2001 ), how do central banks talk? geneva reports on the world economy 3, international center for monetary and banking studies and centre for economic policy research. blinder, a s ( 2007 ), β monetary policy by committee : why and how? β european journal of political economy, vol. 23 ( 1 ), pp. 106 β 23. blinder, a s, ehrmann, m, fratzscher, m, de haan, j d, jansen, d j ( 2008 ), β central bank communication and monetary policy : a survey of theory and evidence β, journal of economic literature, vol. 46 ( 4 ), pp. 910 β 945. chehal, p and trehan, b ( 2009 ), β talking about tomorrow β s monetary policy today β, frbsf economic letter, 35. cruijsen, carin a b v d, eijffinger, s c w & hoogduin, l h ( 2010 ), β optimal central bank transparency ", journal of international money and finance, vol. 29 ( 8 ), pp. 1482 β 1507. demiralp, s, and jorda, o ( 2002 ), β the announcement effect : evidence from open market desk data β, economic policy review, federal reserve bank of new york, vol. 8 ( 1 ), pp. 29 β | country from meeting its national needs of public investment. an expenditure rule could well be applied across the eu by including it in the next reform of the stability and growth pact. it could help redress one major problem : before the crisis, the rate of expenditure growth exceeded the growth rate of potential output in many countries, and there were no adequate buffers. particularly when economic growth is strong, there are all the good reasons to pay attention to fiscal responsibility. good times should be used for building fiscal buffers. ladies and gentlemen, our experiences during the past years have underlined the importance of fiscal policies that support the long - term economic well - being of euro area citizens. the monetary union needs fiscal rules. it needs rules that reinforce countercyclical policy and fiscal sustainability, as i write in my forthcoming economic policy thriller β walking the highwire β rebalancing the european economy in crisis β, to be published in february 2020. slide 4 β walking the highwire however, neither rules nor market discipline can work properly without timely and reliable fiscal data. perhaps the most devastating failure of fiscal policies took place in greece before the sovereign debt crisis. 4 / 5 bis central bankers'speeches without reliable fiscal data, rules and market discipline did not work, and greek fiscal policy was unsustainable for too long. the results were tragic. one may ask, how much of the ensuing suffering would have been avoided had only fiscal data been reliable. fortunately, it looks like we can now be confident that history will not repeat itself at least in this case. i wish you a pleasant and productive conference! 5 / 5 bis central bankers'speeches | 0 |
bonds could benefit from efficiency and credibility of using digital technologies. this increases the potential for green bonds to lead the ecological transformation. 3 concluding remarks ladies and gentlemen, i would like to close my speech with a saying of singapore β s notable founder lee kuan yew : β was it planned from the beginning? no! it was a process of learning, adjusting, refining and passing it on to the next generation so that they don β t have to relearn the process. β this is still true in essence, but with a small but significant distinction : climate change does not wait for the next generation. and thanks to digital technology the process of learning, adjusting and refining can be done much faster. fintechs and credit institutions should collaborate and explore synergies to boost the green finance market. there is a large potential for cooperation. we will see one possible area in the following panel discussion. 1 blockchain gateway for sustainability linked bonds : widening access to finance block by block β, a report from sustainable digital finance alliance ( sdfa ) and hsbc center of sustainable finance ; available under www. sustainabledigitalfinance. org / initiatives - publications. 2 / 2 bis central bankers'speeches | when eventually a group was victorious over the others, it bis central bankers β speeches was natural for it to impose centralized autocratic rule to ensure that chaos did not remerge. to rule over the large geographic area of the country, china needed a well - developed elite bureaucracy β hence the mandarins, chosen by exam based on their learning. so china had strong unconstrained effective government whenever it was united, and fukuyama argues, unlike western europe or india, did not have strong alternative sources of power founded in religion or culture to impose rule of law. in western europe, by contrast, the christian church imposed constraints on what the ruler could do. so military competition, coupled with constraints on the ruler imposed by canon law, led to the emergence of both strong government and rule of law. in india, he argues, the caste system led to division of labour, which ensured that entire populations could never be devoted totally to the war effort. so through much of history, war was never as harsh, or military competition between states as fierce, as in china. as a result, the historical pressure for indian states to develop strong governments that intruded into every facet of society was muted. at the same time, however, the codes of just behaviour for rulers emanating from ancient indian scriptures served to constrain any arbitrary exercise of power by indian rulers. india, therefore, had weaker government, constrained further by rule of law. and, according to fukuyama, these differing histories explain why government in china today is seen as effective but unrestrained, while government capacity in india is seen as weak, but indian governments are rarely autocratic. any of these grand generalizations can, and should, be debated. fukuyama does not claim history is destiny, but does suggest a very strong influence. of course, the long influence of history and culture is less perceptible when it comes to democracy where some countries like india have taken to it like a duck to water. a vibrant accountable democracy does not only imply that people cast their vote freely every five years. it requires the full mix of a raucous investigative press, public debate uninhibited by political correctness, many political parties representing varied constituencies, and a variety of non - governmental organizations organizing and representing interests. it will continue to be a source of academic debate why a country like india has taken to democracy, while some of its neighbours with similar historical and cultural pasts have | 0 |
its development in a way that suits our public policy objectives. we are now at a tipping point. if we do fail to act, there is a risk that inefficient, fragmented, monopolistic solutions could develop in a silo mode, harming financial stability. but if we act early, we can foster the development of an innovative ecosystem, which will improve the efficiency of post - trading processes and infrastructures. β’ authorities have already taken significant steps to design a regulatory framework that could stimulate innovation while preserving financial stability. the european mica regulation is a necessary first response to regulate the use of crypto - assets and it needs to be implemented as soon as possible. however, let me stress the mica regulation is not an end in itself but rather the start of a process. our regulatory framework will need to be adjusted on a regular basis to keep up with the development of defi. β’ in addition, these responses from public authorities need to be coordinated at the international level, to avoid arbitrage across jurisdictions. international bodies have a central role to play in coordinating responses, notably the bis and the fsb, but also the imf and the oecd. page 2 / 3 my third takeaway is that central banks could accompany usefully the tokenization of finance, by leveraging new technologies to provide central bank digital currencies, thereby improving the efficiency of securities settlement and payment systems. β’ the discussion showed that this possible positive impact is not confined to retail payments. o a wholesale cbdc directly integrated on dlt could be used to settle tokenised assets, bringing the security of central bank money. in addition, a wholesale cbdc has the potential to improve cross - border payments. o but we need to properly measure the economic impacts and the associated risks. that is why we are working on it step by step, including through experimentation with private actors. β’ indeed, these investigations must be undertaken hand in hand with private intermediaries. the tokenisation of finance creates a new ecosystem which is also a challenge for them, especially as their role could be transformed by decentralised technologies. β’ and we need to ensure that this ecosystem is fully interoperable with legacy securities and payment systems, which are likely to remain an important element of the landscape. β’ in that context, our goal at the banque de france is to facilitate responsible innovation from the market, while safeguarding the use of central bank money and thus financial stability. β’ my final | are presumed to be desirable and based on fundamentals. but short - term flows are by no means all undesirable and destabilizing. and there is no way of discriminating between useful flows and destabilizing speculative ones. for example, because foreign trade and investment inflows and outflows are not always fully offsetting, short - term capital flows are typically needed to balance out a country β s external accounts. these capital flows occur in response to actual and anticipated movements in the exchange rate, and thus serve to smooth out exchange rate fluctuations. because such flows are often driven by small differences in perceived rates of return at home and abroad, they could well be discouraged by a transactions tax. on the other hand, speculative flows that actually β bet β on a sharp movement in a currency, have rather large expected returns and are unlikely to be discouraged by the tax. in the end, a transactions tax would likely increase, rather than decrease, exchange rate volatility, as well as reduce market liquidity and raise the cost of capital. needless to say, where financial market fluctuations reflect changes in domestic macroeconomic policies that put investors at greater risk than before, the tax would be aimed at treating the symptoms rather than the cause of the problem. in all, i find the case for a tax on currency transactions completely unconvincing. promoting greater financial market stability if a tax is not a good idea, how else can we promote greater stability in international financial markets and reduce potential disruptions to domestic policymaking? i have already talked about the value of a flexible exchange rate system in facilitating adjustment to β real β shocks and allowing national authorities to pursue an independent monetary policy. flexible exchange rates can also be helpful in moderating the size of, and aiding in the adjustment to, capital flows. in addition, governments are increasingly coming to the realization that the issue of international financial stability is best addressed not by retreating into isolation or by falling back on distorting, costly restrictions, but rather through sound and transparent domestic economic policies. international co - operation can also help. it can help by encouraging countries to pursue national policies that lead to economic stability, thereby reducing the risk of sudden changes in market sentiment and sharp exchange rate fluctuations. and it can help by setting widely accepted standards for transparency and disclosure. such standards should support more informed market judgments about the riskiness of investments, especially in emerging market economies, and thus help avoid the crises that can be triggered | 0 |
the " brown revolution " last year as our mantra for the transformation of the wheat value chain in nigeria. wheat is the 3rd mostly consumed grain in nigeria after maize and rice. it is estimated that we only produce about 1 per cent ( 63, 000 mt ) of the 5 - 6 million mt of wheat consumed annually in nigeria. this enormous demand - supply gap is bridged with over $ 2 billion annual importation of wheat. as a result, wheat accounts for the second highest food import bill in nigeria, thereby putting pressure on the nation's foreign exchange reserves. we have concluded the 1st major wet season wheat farming in plateau state and planted over 100, 000 hectares of wheat across 15 states in the 2021 dry season. this strategic intervention will herald progressive reduction in our wheat import bills over the coming years. 9. we also established a strategic maize reserve with the stock of maize submitted as loan repayment by our farmers. this will provide a buffer for price modulation for the poultry and feed mills nationwide. a total of 241, 656. 76 mt was aggregated in the 2020 wet and dry seasons, out of which 217, 218. 53 mt has been disposed to 18 millers and poultry farmers through the poultry association of nigeria. the program was able to stabilize the poultry and livestock sectors during the pandemic and saved the industry and consumers over n10 billion in raw material costs. 10. our experience over the years has been transformed to operational efficiency of the programme. we have added several layers of controls to improve on transparency and accountability among all stakeholders and what you are witnessing today is a demonstration of our growth and a strong indication of the enormous potential in the country's agricultural space. it is important to note that this is still a far cry from the 2 / 3 bis - central bankers'speeches desired goal. however, the growth processes reaffirm our belief in the potential inherent in our agricultural space and we can hopefully harness them to lead the diversification agenda of the economy. 11. the mega pyramids being launched today represents aggregated paddy rice submitted as repayment of loans by rifan farmers under the 2020 dry season and 2021 wet seasons. beyond the event, it also symbolizes the efforts made by our farmers to commit to loan repayment through produce submission and ultimately ensure the sustainability of the programme. to further create value and transfer these gains along the value chain, we have mapped millers to off - take these paddies and we will track the release of their outputs | of 1, 743 trainees were linked to financial institutions from which they obtained loans amounting to n227. 84 million to start or expand their businesses. this first phase of the cbn - edc initiative came to an end april 2013 having operated for 5 years. ladies and gentlemen, for sustainability purposes, i am pleased to inform you that the management of the bank has extended the tenure of the first phase cbn - edcs by an additional three years to enable the host state governments in the aforementioned zones key in and participate actively in the enhanced edc model. the bank is therefore in the process of putting together phase 2 of the programme for the south - east, north - west and south - west zones. 6. 0 the modest achievements recorded and the experiences of the edc have encouraged the bank to roll out the project in the remaining three geopolitical zones of northeast ( maiduguri ), north - central ( markudi ) and south - south ( calabar ). to date the new centres have trained all together 1, 381 participants in the first half of 2013, in spite of teething challenges faced. i particularly appreciate the government of cross river state for allocating a temporary training venue for the implementing agency, sheild academy bis central bankers β speeches partners to commence its training activities before today β s official flag - off of this magnificent building that will permanently host the centre. 7. 0 permit me at this point to take a few minutes to provide a brief highlight on the edc to create an understanding of its concept, operational modality and what is required from stakeholders ( government, cbn, implementing agencies, and financial institutions etc ) to make the programme a success. 8. 0 the edc provides a platform for state governments, private sector and the central bank of nigeria to jointly support entrepreneurship development across the country. the centres provide facilities for training particularly secondary school leavers and university graduates to obtain skills on how to identify, choose, and practically engage in profitable production of goods and services. 9. 0 the state government is expected to provide the enabling environment through the provision of conducive structure and a site for the centres, while the central bank of nigeria engages private consultants to independently operate the centres. it is worth reiterating that the states where the edcs are located and the implementation agency were selected through a competitive bidding process to guarantee efficiency and effectiveness in its operations. 10. 0 the governments of the respective states are also expected to en | 0.5 |
john hurley : economic developments in ireland and other issues opening statement by mr john hurley, governor of the central bank and financial services authority of ireland, at the presentation of the annual report 2003, dublin, 12 july 2004. * * * i would like to welcome you all to the publication of the bank β s annual report for 2003. as you know, 2003 was a very significant year for us. we have been through a major restructuring process, which has seen the establishment of a new financial regulatory system. the irish financial services regulatory authority is now responsible for consumer protection and prudential supervision while the central bank deals with all matters relating to financial stability. i am happy to report that these new arrangements, which are in place for over a year now, are working very well. this restructuring has allowed us to take stock. as a result, we are also today publishing a three - year strategic plan for the central bank and financial services authority of ireland. a further important development will be the publication of a stand - alone financial stability report in mid - september. up to now, this was included in the bank β s annual report. i would also draw your attention to the reproduction in this report of the first lecture in the whitaker lecture series. this series has been established in honour of the former governor, dr. t. k. whitaker, and is intended to contribute to general economic debate in ireland. the inaugural lecture was given by the president of the european central bank, jean claude trichet. the report also includes an article on foreign direct investment in ireland, a vital component of our recent economic success. the study highlights the principal reasons for our success in this area : a stable macroeconomic background, a favourable business environment in its many aspects and a strong emphasis on education and skills. looking to the future, we need to ensure that we have the appropriate policies in place to continue to be an attractive location for foreign direct investment. economic developments turning now to the economic situation : in the context of a weak, if improving, international environment, the irish economy performed well, relative to other countries, in 2003. the latest official data put gnp growth at 2. 8 per cent ( gdp, 3. 7 per cent ). there was significant employment growth last year, which contributed to keeping unemployment at a low level - currently 4. 4 per cent. for 2004, ireland β s growth prospects appear generally good - particularly as the us and east asia economies improve. however, considerable uncertainties remain | low rate of unemployment. secondly, productivity increases over the past decade or so were boosted by structural changes in the economy which involved transferring labour from low to high productivity sectors, notably in the high - technology areas. the scale of this cannot be continued in the future. this would suggest that growth potential in the medium - term would be at the lower end of the 4 to 5 per cent range. it is important that expectations are adapted to this somewhat lower, but still very satisfactory, rate of potential growth over the medium - term. credit growth continues to be a worry. in may, ireland β s adjusted private sector credit growth rate of 23 per cent was four times the euro - area rate of 5. 8 per cent. if such divergent rates of increase were to persist, ireland would become one of the most indebted countries in the euro area within a few years. this increase in credit has mainly been accounted for by mortgage credit. the bank remains concerned at the continuing large increases in house prices - currently running at 12 to 13 per cent especially in the light of the substantial increase in housing supply. if the increase in prices were to continue, the risk of a significant correction would increase. monetary policy and the euro area economy current prospects for the euro area economy are reasonably positive. with external demand remaining strong, growth is expected to average 1. 7 per cent this year and 2. 1 per cent in 2005. largely due to higher oil prices, inflation will be above 2 per cent this year and into the early part of 2005. i feel however, that on balance, the current evidence points to inflation in the euro area being in line with price stability over the medium - term. supervision this annual report contains a review of financial supervision issues covering the period from the 1st of january to the 30th april 2003, with a short summary of activities from may to december 2003. in accordance with the new legislation, the financial services regulator will publish its own report covering the 20 - month period from the 1st of may 2003 to the 31st of december 2004 in mid - 2005. in the meantime, the financial services regulator published a progress report in june of this year outlining its first year of operation. in addition to supervising financial institutions from a safety and soundness viewpoint, a comprehensive regulatory structure for consumer issues was put in place during 2003 with the appointment of a consumer director as provided for in the legislation. financial results the surplus income paid by the bank to the exchequer in respect of 2003 is β¬32 | 1 |
. following the pickup and continued strengthening of domestic economic activities, many firms expressed optimism about the direction of future developments both in the near - term and the short - term, overall business outlook of the macroeconomy 57. 6 37. 7 29. 6 - 15 - 9. 2 august next month ( september 2021 ) next 2 months next 6 months iv. inflation rate : headline inflation rate is expected to moderate to 15. 35 per cent, and 14. 91 per cent by december 2021 and february 2022, respectively. core inflation is equally forecasted to fall from 13. 74 percent in october 2021 to 13. 39 percent in december 2021 and further to 12. 68 percent by february 2022, while food inflation falls from 19. 57 percent to 17. 26 percent and 16. 58 percent over the same period. domestic disinflation is projected on the backdrop of the favourable impact of the various cbn interventions on the real sector and the gradual upscale of economic activity, which is expected to keep prices moderate in the nearterm. v. fx reserves : based on in - house analysis and simulations, external reserves could surpass us $ 42 billion by mid - 2022 from the us $ 41. 5 billion in 2021q3, based on the dynamics of oil price and fx demand for import. generally, external reserves is expected to be at relatively comfortable levels with expectation of sustained trend of current crude oil price, the impact of eurobond issuance, and stable exchange rate condition. concluding remarks 50. distinguished ladies and gentlemen, in concluding my remarks, let me add that while we have been able to contain some of the effects of the covid - 19 pandemic on our economy, it is imperative that we work to build a more resilient economy that is better able to contain external shocks, whilst supporting growth and wealth creation in key sectors of our economy. we must take deliberate steps to diversify the base of the nigerian economy. as the true african giant, we must fold our sleeves and do everything possible to stop the incidence of importing anything and everything. proactive steps on the part of stakeholders in the private sector in collaboration with the government in supporting the growth of sectors such as manufacturing, ict, and infrastructure, will strengthen our ability to deal with the challenges of covid - 19, and stimulate further growth of our economy. i thank you for your attention. godwin emefiele, con governor, central bank of nigeria 26th november 2021 | of law enforcement agencies in recovery. let me reassure especially the customers of the affected banks and all the banks in general that there is no cause for alarm they should continue to transact their normal business in the banks where their accounts are domiciled as this exercise is meant to further strengthen the banking industry and recapitalize the affected banks. i should also state at this point that the scope of the special examination was widened to cover all 24 banks. so far, we have concluded the audit of 10 banks including these five, the others being diamond bank, first bank, united bank for africa, guaranty trust bank and sterling bank. we have also commenced the next batch of 11 banks and hope to conclude them by end of august, all in all, we expect to conclude the audit in mid - september. the central bank is requiring all banks to make appropriate provisioning for non - performing loans and disclose them. we hope that by the end of this quarter, all banks would have cleaned up their balance sheets. on the basis of the information available to us so far, we are confident that the banking system is safe and sound and we have dealt with the major sources of systemic risk. i will conclude by restating that, going forward, the cbn will not waiver in its desire to ensure that public confidence in the nigerian banking system is maintained through appropriate disclosures and the reinvigoration of its policy of zero tolerance on all professional and unethical conducts. we will not allow any bank to fail. however, we will also ensure that officers of banks and debtors who contribute to bank failures are brought to book to the full extent of the law and that all proceeds of infraction are confiscated where legally feasible. thank you. | 0.5 |
u. s. newspapers ( including the nation β s premier paper, the dallas morning news ) ; ( 2 ) a weighted count of tax - code provisions that are scheduled to expire ; and ( 3 ) the extent to which professional forecasters disagree with one another about future levels of inflation and government purchases. the baker - bloom - davis index begins in january 1985 and runs through the present. high values of the index signal an elevated level of economic policy uncertainty. from 1985 through 2007 β prior to the 2008 β 09 recession β the index has a mean of 94, and it exceeds 150 only 2 percent of the time ( one month in 50 ; just six times in over 23 years ). the index rose to above - average levels in the fall of 2007 and stayed at or above 94 β but below 150 β through the summer of 2008. then, between august and september 2008, the index nearly doubled, rising from 96 to 188. since september 2008, the index has at no time dropped below 100, and it has exceeded 150 on 31 occasions β more than half the time. it has soared above 200 twice : for two months in 2011, coincident with that year β s debt - ceiling debate, and in december 2012, when a compromise implementation of sequestration was being hammered out. it β ll be interesting to see what happens with the index in the wake of the past week β s developments ( or lack thereof ) in washington. the point is that starting with the collapse of lehman brothers in september 2008, economic policy uncertainty has been consistently high, and half the time it has been extraordinarily high. it β s difficult to prove β beyond a reasonable doubt β that this elevated uncertainty is causally related to the weak recovery we β ve experienced. but the hypothesis is surely sensible, the timing is certainly auspicious, and enough careful confirming analysis has been done to say that the preponderance of evidence favors the proposition that not just recent policy decisions, but also the manner in which those decisions were arrived at, have been a significant hindrance to economic expansion. the kinky stuff : monetary policy as to monetary policy, i would submit there are several links between monetary policy and economic uncertainty. first, though, some background. ordinarily, monetary policy works by influencing the current and expected near - term levels of short - term interest rates. once short - term interest rates hit zero, however, the fed turned to unconventional policies. by using massive purchases of | to report the bank's decision. meanwhile, the bank releases the guideline for money market operations simultaneously in english and japanese via its internet web site. thus, almost instantaneously, people around the globe can know the bank's decision. when there is a policy change, the governor, as the chairman of the policy board, holds a press conference about an hour after the mpm to explain the changes carefully to the public. even when there is no policy change, the governor holds a monthly press conference two business days after the first mpm of the month. the japanese and the english version of " the bank's view " of the monthly report of recent economic and financial developments and the japanese version of " the background " are released on the next business day after the approval of " the bank's view " at the first mpm of the month. the english version of " the background " is released on the next business day following the release of " the bank's view. " the minutes of the mpms are approved at the mpm held around one month after the meeting concerned and released after approval. transcripts of mpms are published ten years after the meetings concerned. i. publication of the outlook and risk assessment of the economy and prices ( the outlook report ) now i would like to talk about the outlook report, which is a report on the outlook for the economy and prices for the period twelve to 18 months ahead. the outlook report is released after it is discussed at the second mpm in april and october. in the report, the standard scenario for japan's economy and the risk factors that might cause a revision to the standard scenario are explained, and the policy board members'forecast of changes in price indexes and real gdp growth rate is included as a reference. at mpms thereafter, the standard scenario and risk factors in the report are discussed from the longer - term perspective. in short, the report provides a common basis for the members'discussions on the state of the economy. concluding remarks i have attended nearly 90 mpms during my term of office as deputy governor of the bank of japan, the post i was appointed to about the same time the new bank of japan law of 1997 came into effect. as a member of the policy board, i have taken part in important decision - making concerning monetary policy, such as changing the level of the target of the policy interest rate and implementing quantitative easing measures unprecedented in the history of central banks. when | 0 |
there is a huge theoretical literature on central banks β solvency. i read the conclusions as follows. nearly all analysts agree that a central bank cannot go technically bankrupt as it bis central bankers β speeches can issue as much currency and reserves as needed to face its payments and commitments. indeed, a few central banks with great reputation have operated in the past with negative net equity for long periods of time. most economists would point, however, that unlimited issuance of base money would certainly endanger price stability in ordinary circumstances. so, while the existence of a central bank cannot be put into danger by its technical insolvency, its ability to fulfill its mandate might certainly be compromised. and so would its independence as the central bank would depend on the government to rebuild its capital. it is very important to understand that the eurosystem is fully protected against such a contingency. it has been created with a solid capital base and has kept strengthening it through retained profits and occasional recapitalizations. the eurosytem is unique, in this regard, amongst advanced economies. both its independence and ability to fulfill its mandate are guaranteed even in very adverse economic circumstances. while it should not lead to complacency and negligence, the existence of such buffers should alleviate any concerns about the potential risks that the expansion of the balance sheet may entail. finally, huge central banks β balance sheets may be seen as influencing the allocation of resources, or effecting implicit fiscal transfers, an issue of special sensitivity inside the euro area. to discuss this question, it is useful to refer to the famous musgrave classification of public policies between three purposes : allocation, distribution and stabilization. there is no doubt that monetary policy is only and exclusively concerned with stabilization β and a very focused part of it : price stability. no monetary policy action should be taken for any other purpose. so to the extent that β unconventional β tools are implemented, there should be no ambiguity as to their close link with the central bank β s mandate of price stability. i believe that has been the case in all major countries and certainly so in the eurozone. 4. how to mitigate unintended consequences? the truth is, however, that the real world does not always fit perfectly with the beauty of musgrave β s classification. some public policies may aim at several objectives. others may inadvertently, have unintended side effects. all public policies with no exception, health, energy, infrastructures, unwillingly affect | in this context, central banks have the clear duty of preventing the market from seizing up, with incalculable consequences for other financial players and more generally for the real economy. however, it should be borne in mind that the central banks β criteria for accepting assets as collateral for their refinancing operations are particularly restrictive and penalising, and comply with the traditional principles that i have just mentioned. in particular, the value of these securities must be at least equal to the amount lent and the accrued interest, after applying a haircut to take account of a possible decline in their market value during the repo. 4 ) why have the central banks responded differently as regards their monetary policy stance? as regards the central banks β response to the crisis, although they converged in their shortterm liquidity management methods, they nonetheless responded differently in terms of monetary policy. the underlying reasons for this divergence are both due to the nature of the shocks that the economies are facing and the mechanisms of their propagation to the real economy and to nominal variables. over the recent period, the industrialised economies have undergone three common shocks : rocketing real - estate prices at least in a number of countries, soaring commodity prices and finally the financial crisis triggered last summer. they have also experienced specific shocks : the real - estate crisis in the united states in a context of household overindebtedness, for example. in the latter case, the economic slowdown already underway since mid - 2006 and the expected consequences of the credit crisis on economic activity over the medium term has led the us monetary authorities to change their monetary policy stance. the very different situation in the euro area, where activity remained favourable, has led the ecb to keep its monetary policy stance unchanged in spite of the uncertainties generated by the financial crisis in a context also characterised by persistent inflationary tensions. 5 ) what lessons can we learn for the future? at the current juncture, financial turmoil is still affecting the markets. however, after more than nine months, i think it is already possible to draw first conclusions in three main areas : - first, the close co - operation between central banks on the one hand and between the supervisory authorities and central banks on the other hand seems, in my opinion, to be a determining factor for efficient crisis management. this point was indeed underscored during the recent work carried out by the financial stability forum. i must say in this respect that the french model of banking supervision, in which | 0.5 |
coming months. the new tool is a fixed - rate, full - allotment overnight reverse repo facility that would be available to a broad range of counterparties β not just open to the primary dealers through which we have historically conducted our open market operations. 5 by being available to a much broader array of counterparties, this should allow the fed to tighten its control over money market rates. i β ll first explain in plain english what this facility is. then i β ll explain why we are testing it and what having such a facility in place might accomplish. a fixed - rate, full allotment overnight reverse repo facility is a facility in which the federal reserve posts a fixed interest rate and accepts cash from counterparties, which include banks, dealers, money market funds, and some government sponsored enterprises ( gses ), the desk has been conducting operational readiness exercises for the use of reverse repurchase agreements since late 2009. at the most recent fomc meeting last week, the fomc authorized the desk to begin another testing program which begins today. see the desk β s september 20 announcement of the next round of testing. bis central bankers β speeches on an overnight basis in return for a security. if implemented, the facility would be β full allotment β β that means the facility would have no cap on the amount of funds accepted from any of its counterparties at the posted overnight interest rate. 6 the repo facility is β reverse β because the direction in which the funds and securities move β participants are lending funds to the fed rather than vice versa. users of the facility are making the economic equivalent of an overnight collateralized loan of cash to the federal reserve. the amount of funds invested in the facility is likely to be sensitive to the posted interest rate. the higher the interest rate relative to comparable money market rates, the greater the participation is likely to be and vice versa. there are several reasons motivating our interest in developing such a facility. first, such a facility should enable the federal reserve to improve its control over the level of money market rates. by offering a new, essentially risk - free investment, one would expect that anyone with access to such a facility would generally be unwilling to lend instead to someone else at a rate below that posted for the facility. this should help to establish a floor on the level of overnight rates. right now, most short - term rates trade between 0 and 25 basis points, but occasionally t - bill and repo | time lows. these low rates aren β t just a fluke of how unemployment is measured in the official statistics β the broadest measure of underemployment, called u - 6, is at its lowest level since 2000. these are all very positive signs when it comes to assessing our maximum employment goal. the economy is in a good place, but not without risk and uncertainty ( there, i said it! ). persistently low inflation is a key area of my attention, with the core pce inflation rate β which strips out volatile food and energy prices β running at 1. 6 percent, nearly half a percentage point below our 2 percent longer - run target. 1 / 3 bis central bankers'speeches on its own, inflation somewhat below our longer - run goal would not be such a big deal, especially with our economy strong. but the broader context is important. ongoing disinflationary pressures from abroad, and the risk that inflation expectations in the u. s. may have drifted down after many years of inflation running below 2 percent, form an important part of this picture. if we look beyond the headline gdp figure, which remains good, there are more mixed signals coming from different sectors. robust consumer spending is balanced by signs of slowing business investment. we β ve also seen a decline in exports and weakening manufacturing data, reflecting slowing global growth and uncertainty related to trade and geopolitical risks. i am carefully monitoring this nuanced picture and remain vigilant to act as appropriate to support continuing growth, a strong labor market, and a sustained return to 2 percent inflation. monetary policy adjustments this brings me to our decision to lower the federal funds rate in july and how that fits into recent history. cast your minds back to a year ago, when the fed was continuing along the path of normalizing monetary policy. this context provides useful information for how and why our stance has evolved over time. during the summer of 2018, the economy was growing above trend as businesses rode the wave of fiscal stimulus. the unemployment rate had fallen below 4 percent, a figure not seen since the peak of the tech boom in 2000. the global outlook was still quite positive, and inflation was close to our 2 percent goal. against that backdrop, very gradually bringing interest rates back to more normal levels was appropriate in order to keep the economy on a sustainable path of growth. but the economic outlook and the uncertainty around that outlook have evolved considerably since then. while there β s not been | 0.5 |
willem f duisenberg : challenges to the ecb β s monetary policy speech by dr willem f duisenberg, president of the european central bank, upon receiving the european banker of the year award on behalf of the governing council of the ecb, frankfurt, 16 may 2002 * * * introductory remarks lady mayor, karl - otto, andrew, distinguished guests, ladies and gentlemen, on behalf of the governing council of the european central bank, may i say that it is a special honour to receive the european banker of the year award for 2002. the council, which in two weeks β time will have been directing monetary policy for three and a half years, is proud to be the recipient of this prestigious award. since it was set up in june 1998, the governing council has discussed and deliberated in an atmosphere of collegiality and consensus. the search for broadly shared resolutions within the council has ensured that a balanced judgement could be reached regarding the true state of the euro area, which covers a vast geographical area and comprises highly diverse national economies. the council β s consensual approach has fostered a long - term perspective and preserved continuity with our past. seeking and obtaining a broad consensus on policy decisions and then explaining them carefully to the public on the basis of euro - area aggregate evidence has a threefold effect. it shields governing council members from pressures originating in their home countries ; it imposes a discipline on monetary policy by having a continuous, multilateral check of time consistency and policy direction within the council ; and it counters any public suspicion that a national bias may inform policy decisions. internal governance has been an essential tool in the response to the many challenges confronting the ecb since its earliest days. at the start of economic and monetary union we were faced with the extraordinary task of having to conduct policy with limited area - wide data, with several conventional statistical indicators still under construction and, of course, with the euro area undergoing a major regime shift. moreover, we were hard pressed - following the asian and russian crises in 1997 and 1998 - to handle a difficult and unpredictable situation which some thought would spiral further downwards. and at the same time we had to attend to the unique task of laying the foundations for our future action, thereby completing the work that had been initiated by the european monetary institute. the ecb had to be guided towards full possession of the necessary economic details about a new and unique monetary area with an economic weight comparable to that of the united states. so it must | mr mcdonough focuses on the importance of risk management techniques and the enhancement of market discipline remarks by the president of the federal reserve bank of new york, mr william j mcdonough, before the bond market association in new york on 21 / 1 / 99. good morning. it is a pleasure to be here today and i thank the bond market association for giving me this opportunity to share some of my thoughts about supporting the resiliency and liquidity of our capital markets. as you recall, last august the russian government announced an effective devaluation of the ruble and declared a debt moratorium, shocking investor confidence all over the world. against the backdrop of weakened economies and financial markets in many developing countries, global equity and debt markets became increasingly volatile. in the u. s., a number of market observers had anticipated a correction in stock prices. however, the simultaneous and abrupt widening of credit spreads went far beyond the expectations of investors and financial intermediaries. we are all familiar with the immediate consequences of these dramatic events. what is most important, it seems to me, is to try to understand what public and private entities can potentially do to prevent, mitigate, and manage financial uncertainty in the future. in the face of the recent events in brazil, the launch of the euro, the countdown to y2k, and the extraordinary market volatility of the last 18 months, all of us are obliged to think carefully about our responsibility to support the functioning of liquid and efficient financial markets. one conclusion seems clear : prudent risk management by a critical mass of firms will not only help to ensure a safe and sound financial system, but also will reward individual institutions with longterm profitability. in my view, market discipline, enhanced by appropriate regulation and supervision, offers the only realistic path for us to achieve our goals of a strong and stable marketplace. today, i would like to focus my comments on the importance of risk management techniques and how market discipline can be enhanced to the benefit of public and private sector participants alike. a series of market events over the past year and a half, beginning with the devaluation of the thai baht in july 1997, had a major impact on many lenders and investors, revealing in the process several shortcomings in risk management techniques. one lesson financial institutions learned from these events was the need to continuously reassess both counterparty credit risk management techniques and assumptions about market liquidity. broadly, financial institutions learned that | 0 |
inevitably deviate from what could be inferred from models, theories, and past patterns of market prices. lessons of the crisis for central banks so, what are the lessons of the crisis with respect to our approach to markets? it may be strange to say this after a lengthy description of faults in processing market information, but developments in the financial markets will continue to be some of the most important sources of information from the perspective of central banks, as they conduct their monetary and financial stability policies. financial markets mirror what is happening in the broader economy. even if central banks were not completely free of the prevailing attitude toward the market that led to the crisis, there were forceful voices within the community that warned against the buildup of risks based on market observations. central banks should continue to make every effort to extract information from the markets. as alan blinder once remarked, broad, deep, fluid markets are indeed repositories of enormous power and wisdom. 2 having said this, the first lesson is that central banks should not look away from market reactions of which they may disapprove. for example, during the 1990s and early 2000s, after the bubble burst in japan, in spite of repeated assurances by the japanese government blinder, alan, central banking in theory and practice, the mit press, 1998. bis central bankers β speeches and the bank of japan, markets questioned the viability of the japanese banking system. there was dissatisfaction with this tyranny of the markets. because of the self - fulfilling nature of problems in the banking sector, the situation could easily have gotten out of hand. similar developments were observed in the recent crisis as well. nevertheless, looking back, there was some measure of reason in the reactions of markets. one should never stop talking to the mirror, even if it says that the prettiest of them all is somewhere else. the second lesson is that, central banks should never forget the ephemeral nature of information that could be extracted from market prices. as i explained earlier, these are prone to overshooting. central banks can calculate all sorts of implied information, but the informational content of such numbers is heavily influenced by the models adopted. sometimes, market prices may only be reflecting the positions and actions of the central banks themselves. accordingly, while market prices allow central banks to come up with the best estimates, central banks must not lose sight of what they are trying to estimate. the third lesson is the importance of the diversity of market participants | ##tech firms become more prevalent, the banks might face the greater risk that they will be a mere provider of deposit accounts and thus lose a close relationship with customers and merchants. if banks want to access customers'payment information and merchants'sales information, banks need to provide payment services to customers at the front end. this is the reason why banks have an incentive to participate in cashless payment platforms operated by the banking industry. in some sense, the payment services provided by banks and those provided by fintech firms could be viewed as substitutes, like coffee and tea. these two strategies are rational choices for each individual bank in terms of competition with other banks and with fintech firms respectively. however, if many banks follow the same strategies, the " fallacy of composition " could arise, and the combined effects of the two strategies may be lower than expected, namely, one plus one being less than two ( 1 + 1 < 2 ). while banks support fintech firms'payment services by providing them with real - time account transfer service, they act as acquirers themselves and seek out merchants who will join payment platforms operated by the banking industries. however, since fintech firm and bank payment platforms lack interoperability, none of these platforms is likely to grow significantly, making it difficult for banks to recoup their investments. collaboration among payment service providers when multiple payment platforms exist but lack interoperability, payment service providers, both fintech firms and banks, have a strong incentive to lock in customers in order to beat the competition. this may lead to fragmentation of payment services, undermining network effects and user convenience. as a result, banks and fintech firms would end up wearing themselves out in the process. especially in japan, where there exist very efficient cash services supported by geographically dense networks of cd / atms with a high - level of interoperability, payment service providers must devote a significant amount of resources to expanding the market for cashless payment services. however, the expansion is unlikely to be achieved if fintech firms and banks act separately in pursuing their own cashless payment services. in such a situation, a desirable option is that payment service providers collaborate with each other β that is, make their services interoperable β in order to maximize the network effects of digital yen. collaboration among payment service providers can take various forms : between banks, between fintech firms, and between banks and fintech firms. at first glance, interoperability may seem like giving away the benefit | 0.5 |
elson gaskin : data protection in the financial sector and why it matters speech by mr elson gaskin, governor of the central bank of barbados, at the data protection conference " compliance beyond borders β insights from financial regulators ", bridgetown, 20 march 2024. * * * like our sister regulator the financial services commission, the central bank of barbados is proud to be associated with this data protection conference, under the theme " compliance beyond borders β insights from financial regulators. " in fact, had we not been legitimately invited we would have engaged in our own version of a data breach and crashed the party anyway. i am pleased however that proper etiquette and decorum prevailed, and it did not come to that. so, thanks very much warrick and alicia! one of the major objectives of the central bank of barbados is to promote financial stability that is conducive of the orderly and sustained economic development of barbados. we all know that financial stability is inextricably linked to the confidence which the users of a financial system have in its operational resilience. every day, banks, credit unions, insurance providers, and investment firms deal with vast amounts of personal data ; some of it being sensitive in nature. this data may consist of names, email and physical addresses, telephone numbers, and government - issued identification documents. categories of sensitive information include financial status, race, religion, sexual orientation, political opinions, religion, criminal records, and involvement in legal proceedings. there is also now in some jurisdictions the question of health data. due to the possible harm that will otherwise result to an individual, customers'financial and personal information needs to be protected from theft, unauthorised access, and misuse. if then financial consumers come to believe that our system is porous relative to the way that their data is stored and maintained, such a belief could affect financial stability, as in the event of a breach, persons could move their funds away from a particular institution or institutions. it is for this reason that the central bank has a vested interest in ensuring that all institutions under its remit, properly comply with the requirements of the data protection act 2019 - 29 of barbados and the data protection pillars that underpin it. these pillars indicate that personal data must be processed lawfully, fairly, and in a transparent manner ; is collected for specified, explicit, and legitimate purposes ; is adequate, relevant, and limited to what is necessary ; is accurate and kept up to | with bank resolutions in various jurisdictions. thank you for diligently delivering this workshop and for your hands - on approach in guiding the participants through the simulation exercise. we look forward to continuing this productive engagement with you. 1 / 2 bis - central bankers'speeches thank you and a nice weekend to you all. 2 / 2 bis - central bankers'speeches | 0 |
slide β noting that mistakes β may arise even in the best regulated families β β and the account agreement was executed on may 3, 1917 and operationalized on june 20, 1917. 6, 7 andrew hauser will provide more insight into this fascinating period in his remarks in a few minutes. as expedient as the accounts were for wartime needs, the historical records show they were also motivated by ambitions of the fed β s first leaders to establish the dollar as a major international currency and, for benjamin strong, to establish new york as a great international financial center to rival london. they had their work cut out for them. by 1914, while the u. s. was already the world β s largest economy and trading nation, its banking system remained curiously parochial and the dollar was not a major international currency. 8 in fact, american firms continued to finance their trade almost entirely with credits from foreign banks, a source of resentment, with paul warburg, the first federal reserve vice chairman, referring to the annual acceptance fees paid to london banks as a form of β tribute. β 9 with the passage of the federal reserve act in 1913, some of the constraints on the emergence of a robust dollar trade financing market were removed and the newly established u. s. central bank could take a more active role in nurturing and backstopping a nascent dollar acceptance market, which it did. these efforts included buying dollar acceptances for foreign central bank accounts at competitive discount rates and providing guarantees, for a small fee, on payments at maturity of acceptances bought for these accounts. 10 these actions helped to spur the dollar β s emergence as an important international currency, with dollar acceptances viewed as an attractive reserve asset by the 1920s. the early accounts also represented tangible links of cooperation among major central banks, with much of this cooperation centered on efforts to maintain or restore the international gold standard in the aftermath of the first world war. 11 the reciprocal relationships enabled central banks to buy and sell foreign exchange to influence credit conditions in each other β s markets with the aim of regulating cross - border gold movements. in this, central banks of the time viewed acting through foreign central bank correspondent accounts as preferable to acting through private intermediaries. central banks β mutual need for safe, confidential, and reliable account services the need for reciprocal relationships continues to resonate with central banks today even following the demise of the international gold standard and major changes in the international monetary system over the past one hundred years. why do central | john c williams : getting to the core of culture remarks by mr john c williams, president and chief executive officer of the federal reserve bank of new york, at β working together ; an interdisciplinary approach to organisational culture β, london school of economics and political science, london, 14 january 2020. * * * as prepared for delivery thank you for the warm introduction. it β s an absolute pleasure to be back at the london school of economics, where i completed my master β s degree in the late 1980s. studying at the lse, with remarkable professors like richard layard, chris pissarides, george evans, and the late tony atkinson, inspired me to pursue a career in economics and public policy. i owe a great debt of gratitude to this institution and am in awe of how it has evolved and grown in the past 30 years. i will say that there are a few things i have not missed since my days in london : the food ( yes, that has changed! ), the high cost of living ( some things never change ), and the endless studying for and worrying about final exams. but i have missed the dear friends i made, the book shops, and the library. it β s ironic that i find myself back at the london school of economics andnot talking about economics. the views i bring to today β s discussion come from professional and personal, rather than academic experience. i β ve now led two major organizations, and culture is both the hardest and the most important thing to get right. culture is at the heart of behavior and norms, and the single most important factor driving the decision - making of employees. it β s not an exaggeration to say that culture is critical β both when things go right, and when they go wrong. before i get any deeper into ideas about culture, i should give the standard fed disclaimer that the views i express today are mine alone and do not necessarily reflect those of the federal open market committee or others in the federal reserve system. culture shapes our working lives when we talk about company culture in the context of financial services, the first thing that comes to mind is the risky, unethical, and sometimes criminal behavior in the banking industry, particularly during the financial crisis. and 10 years on from the crisis, this behavior persists. instances of fraud, money laundering, and scandals related to foreign exchange and libor continue to make the headlines. 1 this behavior puts a spotlight on the essential role of robust regulation | 0.5 |
it relates to the first company printing the albanian banknote. mr bundy will show the unspeakable on the designing, techniques and art of conceiving the albanian banknote, illustrated by photos and sketches. in the end, we invite you to explore our temporary exhibition on this topic and see the unspeakable through your own lens. 2 / 2 bis central bankers'speeches | philipp m hildebrand : inside europe, outside emu - lessons and outlook speech by dr philipp m hildebrand, member of the governing board of the swiss national bank, at the british swiss chamber of commerce, geneva, 23 april 2004. * * * my long - standing personal attachments to the united kingdom make it a special privilege to be here this morning to speak about europe and its significance to our two countries. geneva is one of europe β s truly international cities and provides a fitting platform for a discussion on some of the salient characteristics about the relations of the united kingdom and switzerland toward europe. the united kingdom and switzerland are both undeniably european nations. nonetheless, they both firmly remain outside of the european monetary union ( emu ). institutionally, the links of the two countries with europe differ, of course. the united kingdom is in eu europe while switzerland is only in europe, despite the fact that until the eu welcomes ten new member states next week, we swiss can be forgiven to think of ourselves as representing the β heart β of europe. culturally, our two countries are rooted in different european traditions : anglo - saxon on the one hand and continental european on the other hand, notwithstanding the fact the historical roots of the saxons are, of course, on the continent. during the remainder of my time with you today, i will sketch more fully a number of salient common features and differences between the united kingdom and switzerland. based on these commonalities and differences, i will then draw some tentative economic, financial and political conclusions about the respective experiences and relations of our two countries with europe and more specifically with emu. uk and switzerland : common features and differences : it seems to me that even a perfunctory comparison of our two countries β relations to europe and emu needs to touch upon law, politics and recent economic history. law and politics there is a fundamental judicial divide between the common law tradition of anglo - saxon countries and the civil law tradition of continental europe. over the centuries, this divide has undoubtedly spread into culture and minds. the custom and case - based common law was institutionalized in 1154 by henry ii through elevating local custom to a unified system of law β common β to the country. it may be unwritten, as it was at the outset, or captured in statutes and codes. this judicial history is reflected by the absence of a written constitution in the united kingdom. civil law in continental europe, on the | 0 |
t t mboweni : prospects for the global economy in 2002 speech by mr t t mboweni, governor of the south african reserve bank, at the nieman society of southern africa annual dinner, cape town, 9 february 2002. * 1. * * introduction ladies and gentlemen. i thank you for inviting me to speak at this, your annual dinner. i congratulate you as a group of individuals who have been recognized for your excellence. you have a responsibility to continue this pursuit of excellence. indeed, this should be a guiding characteristic for all of us. the year 2001 can appropriately be described as a depressing year. it started with the sudden cut in the us federal funds rate, which marked the first official acknowledgement of the unexpectedly sharp and sudden downturn in the us economy. the slowdown of the us growth juggernaut after almost a decade of exceptional growth had a profound effect on most countries and regions. initially there was a widespread belief that the euro area would be insulated from the fallout, given the high levels of intra - regional trade. it soon became clear that this optimism was misplaced, and that europe would not replace the us as the locomotive for world growth. not surprisingly, most emerging markets followed soon after. this was particularly the case in the technology - dependent asian countries which were badly affected by the bursting of the nasdaq bubble. the generalised slowdown was further exacerbated by the tragic events of september 11, which turned out to be the low point of a bad year. although 2002 started off with many economies either in recession or close to it, the mood is one of cautious optimism that the worst of the global downturn is behind us. growth forecasts are being continually revised by all the major fund managers and multilateral organisations. the latest forecast from the international monetary fund in december is for world growth of 2, 4 per cent, the same as for 2001. however this figure was marked down significantly from the 3, 5 per cent predicted in the october world economic outlook ( weo ). the latter forecasts had been prepared before the september 11 events. despite the significantly lower global growth forecast, these numbers do assume a recovery from the second half of the year. 2. increase synchronisation of cycles the current downturn has strongly reinforced the pivotal role of the us economy. strong us growth had been instrumental in overcoming the asian crisis of 1997 / 8. the story could have been very different had the us | one factor that could offset this is the continuing emergence of china which has to a large extent been shielded from the downturn. at the east asia regional summit of the world economic forum held in hong kong in october of 2001, developments in the chinese economy dominated the discussions. although the emergence of china was seen as positive for the region, it was also viewed with some trepidation in some of the countries, particularly hong kong. it is an irony that the most closed economies in asia i. e. china and japan, determine the future prospects of some of the most open economies in the world. growth projections for asia were also revised down by the imf, with recovery delayed into 2002. the newly industrialised economies of asian and asean were badly affected by the lower european, japanese and us growth and the collapse of the global electronics cycle, with hong kong and singapore being particularly vulnerable, and taiwan experiencing its first recession since world war ii. these countries are only expected to grow by around 1 per cent in 2002. the forecast for the asean countries for 2002 is 2, 9 per cent, although for developing asia the forecast is 5, 6 per cent, buoyed by a 6, 8 growth forecast for china. although the outlook for this region is relatively bright, particularly given the lower dependence on external capital flows, its heavy exposure to the electronics cycle make it vulnerable to developments in that industry. 8. latin america the outlook for latin america remains overshadowed by developments in argentina, but it appears that the worst of the contagion effects appear to be over. although the argentinean crisis was not caused by the general world downturn, the satisfactory resolution of the crisis in argentina does have an implication for the general β risk appetite β in the industrial countries, and therefore for capital flows to emerging markets in general. the adjustment in argentina is likely to be painful, and drawn - out, and is likely to remain a source of economic uncertainty and instability for some time and the recession is expected to persist through 2002. latin american growth in general is forecast to be 1, 7 per cent in 2002, with mexico having the lowest growth forecast at 1, 2 per cent ( apart form argentina ). mexico β s membership of nafta makes it more vulnerable to economic downturn in the us, whereas other latin american countries have greater trade exposure to europe. external financing requirements are relatively large in this region, and growth prospects will therefore be affected by a resumption of β normal β capital flows | 1 |
supply shocks to food, energy, labor, or semiconductors, we have both the capacity and the responsibility to maintain anchored inflation expectations and price stability. see ricardo reis ( 2022 ), β the burst of high inflation in 2021 β 22 : how and why did we get here? β working paper. - 8we are in this for as long as it takes to get inflation down. so far, we have expeditiously raised the policy rate to the peak of the previous cycle, and the policy rate will need to rise further. as of this month, the maximum monthly reduction in the balance sheet will be nearly double the level of the previous cycle. 10 together, the increase in the policy rate and the reduction in the balance sheet should help bring demand into alignment with supply. monetary policy will need to be restrictive for some time to provide confidence that inflation is moving down to target. the economic environment is highly uncertain, and the path of policy will be data dependent. while the precise course of action will depend on the evolution of the outlook, i am confident we will achieve a return to 2 percent inflation. our resolve is firm, our goals are clear, and our tools are up to the task. as of september 2022, the monthly caps on the runoff of treasury securities and mortgage - backed securities are $ 60 billion and $ 35 billion per month, as compared with $ 30 billion and $ 20 billion, respectively, from 2017 to 2019. | pressures and with longer - term inflation expectations stable, i anticipate that the subdued trend in inflation that we have seen for the past two years will continue. summary and policy outlook combining the various factors likely to influence the path of economic activity this year, including importantly the outlook for financial markets, i expect that the economic recovery will continue at a moderate pace. as the year goes on, i anticipate that we will see more signs that the improvements in financial markets, credit conditions, and business sales are reinforcing each other, leading to greater confidence and improving the prospects for 2011. even as economic activity strengthens, however, levels of resource utilization are likely to remain below historical norms for some time. as a result, cost pressures should be contained, inflation expectations should continue to be stable, and inflation is likely to remain subdued. in the current environment, the fomc continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. such policy accommodation is warranted to provide support for a return over time to more desirable levels of real activity and unemployment in the context of price stability. in addition, the federal reserve is committed to continue working with banks and bank holding companies to facilitate the flow of credit to consumers and businesses. of course, if economic conditions and the economic outlook were to change significantly, the outlook for policy would need to be adjusted as well. we have a wide range of tools for removing monetary policy accommodation when that becomes appropriate. the committee will evaluate the appropriate stance of policy in light of the evolving economic outlook and conditions in financial markets, with the aim of fostering maximum employment and price stability. | 0.5 |
to conduct an independent external academic audit of your activities and programmes. i was humbled to learn that dwu was the first university in the country to voluntarily go through the independent external academic audit in recognition of education as a public good, the many challenges faced in png and the need to demonstrate a system of accountability and learning culture for our education institutions. such initiatives aimed at improving academic performance and status are very worthwhile investment and truly reflect the genuineness of the dwu council, academic board and development partners. if the audit recommendations are implemented successfully, which i am sure they will through your 10 year action plan, this will mean quality programs / courses offered which will further increase stakeholders 1 / 3 bis - central bankers'speeches and general public confidence for the dwu in producing quality graduates to assist in the delivery of social, economic, cultural and political development of our country. dwu's drive towards tqa is highly commendable. one has only to read the daily newspapers, listen to the radio or watch the television to see the serious problems we have in our society today aβ¬ β some worth mentioning are corruption, crime, unemployment, poor socio - economic indicators and social disharmony. we have generated high economic growth for over a decade now but still struggle to ensure we all live together in peace and happiness. the efforts by dwu is consistent and complements the government's 2050 vision strategic plan which sets out human capital development as one of its priority pillars, in fact at the top of the list. an article in the post courier on 29 april 2013 ( this week monday ) reported the government's focus on higher education, with funding between k40m and k50m on higher education reforms over the next five years to meet global quality standards. there will be amendments to the office of higher education ( ohe ) act to make ohe the regulator to oversee the operations of the universities and higher learning institutions. i am pleased to note that the initiatives taken by the dwu will place it well ahead of its peers and the reforms about to take place in the higher education system of our country. we at the bank are also constantly looking at ways to up skill our human resources and improve our work processes and engaging professionals and independent persons / firms to review our work process as part of the ongoing quality assurance program. institutions and firms that have quality assurance program built into their work processes will no doubt benefit from the investment and stay ahead of the pack. regarding initiatives | that may be worth reassessing. one place to start is with regulations pertaining to smaller banks. people of all political stripes tend to agree that congress and regulators should reassess the effect that regulations have had on these firms and whether such regulations are commensurate with their level of risk. for these smaller banks, whose failure will not directly inflict large costs or stress on the broader financial system, the regulatory and compliance requirements should be reconsidered. indeed, banking agencies have announced many proposals for small banks, 11 including one that would simplify the capital rules for such banks consistent with their risk. 12 with respect to systemically important firms, i think it would be terribly myopic to forget the crisis. there have been a number of different types of changes proposed with respect to these firms. today, i β d like to focus on the proposals relating to resolution regimes. congress established ola when memories of lehman brothers β failure were fresh. it bears repeating that congress did so after facing the terrifying realization that the lack of a credible 4 / 6 bis central bankers'speeches resolution mechanism for dealing with failing systemic firms left only bad choices, such as lending into a run, bailout, or the collapse of the financial system. over the past several years, there have been efforts in congress to repeal ola and create a new, bespoke process for systemically important firms under the bankruptcy code. that process would largely mimic many of the features of the fdic β s single point of entry strategy intended for use in an ola proceeding. those efforts have picked up steam this year with the passing of two different bills in the house of representatives. 13 from my perspective, there are attractive aspects to both ola and the bankruptcy code. ola is largely an administrative process that has the benefit of agility. it is administered by the fdic, which will already have insight into the institution though the living will process. the fdic also communicates with foreign regulators regarding systemically important firms. ola has particular advantages in the context of a cross - border resolution, which means in this day and age the resolution of pretty much any systemically important institution. us regulators have established relationships with their foreign counterparts, and resolution processes similar to ola now exist in many globally important financial centers. this familiarity can facilitate crossborder cooperation and coordination in the event of a failure of a systemically important institution, and stem competing insolvency proceedings in multiple jurisdictions and | 0 |
roger w ferguson, jr : productivity - past, present, and future remarks by mr roger w ferguson, jr, vice - chairman of the board of governors of the us federal reserve system, at the new york association for business economics meeting, new york, 7 july 2004. * * * thank you for the invitation to speak here today. in assessing the economic outlook, economists cannot avoid confronting the question of how fast the economy can expand without creating upward pressure on inflation. a fundamental determinant of the economy β s potential growth is the sustainable rate of productivity expansion. critical though this issue is, it does not by itself capture the importance of productivity. besides influencing the near - term course of important economic variables, such as gross domestic product growth, inflation, and profits, productivity largely determines our society β s long - term economic welfare. productivity growth forms the foundation for improvements in living standards. and our ability to deal with budgetary challenges - such as funding the large future obligations of our social security and medicare systems and, more generally, managing the nation β s debt - depends critically on the future direction of productivity. thus, knowing where productivity growth is headed is, in many respects, equivalent to foreseeing our economic destinies. in thinking about productivity in the future, it is useful to first consider how it has behaved in the distant past and more recently. the past offers lessons about the kinds of economic and political environments that have proven most effective in fostering high rates of productivity growth. and a better understanding of the forces shaping recent developments in productivity - in particular, the causes of the pickup in labor productivity growth that began in the mid - 1990s and the sources of the additional post - 2000 surge - can help us put sensible bounds on possible future movements in productivity. in my discussion today, i will not attempt to predict these future movements, but with the knowledge gained from studying the past and the present, i will lay out some of the conditions - both favorable and unfavorable - that are likely to influence them. as usual, my remarks represent my own views, which are not necessarily shared by other members of the board of governors or of the federal open market committee. the past1 over the past century and a half, three episodes stand out as especially relevant for assessing the sustainability of the current productivity boom : the late 1800s from roughly the end of the civil war to around 1890 ; the decade or so between the end of world war i and the onset of the great | - art capital equipment and the technology embodied in the existing stock of equipment remains across a broad set of industries. that gap implies continued incentives for capital investment. 3 although the exhaustion of technological possibilities seems unlikely to slow trend productivity growth, adverse changes in the economic, legal, and financial environment could threaten the longevity of the current productivity boom. for example, economists have long noted that free trade - and the specialization and economies of scale that it affords - fosters productivity increases. that our most recent productivity boom occurred against a backdrop of freer trade and increased globalization is likely no coincidence. however, the momentum for the liberalization of global trade now appears to be facing strong resistance. a halt in the movement toward freer trade or outright backsliding, such as the erection of new barriers to the trade of goods or services, would endanger the sustainability of the current productivity boom. some observers believe that security - enhancing limitations on the international flow of capital, labor, and goods in response to an increased terrorist threat could have similar effects. in addition, a failure to continue to vigorously address the corporate governance issues of the past few years could also threaten the current boom. as i noted earlier, the efficient channeling of capital to innovators has been a critical component of past productivity booms. fraud or dishonesty in corporate accounts increases investors β risk, raising the cost of capital and reducing incentives for investment. large government borrowing to fund current consumption could also raise the cost of capital and crowd out the investment on which the current boom depends. the magnitude of future government obligations to fund social security payments for the retiring baby - boom generation and the growing costs of providing medical care to the elderly add to the urgency to put government debt on a sustainable long - term path. doing so sooner rather than later would make the necessary adjustments easier and diminish the likelihood of significant future economic disruptions. some observers have also stressed the importance of large economic shocks, such as the oil price shock of the early 1970s, in bringing periods of rapid productivity growth to an end. it seems possible that the recent run - ups in energy prices, and the fact that markets expect much of them to be permanent, could reduce productivity growth by rendering energy - intensive technologies and capital obsolete. without dismissing such concerns, one needs to keep in mind that the recent shock to date has been significantly smaller than the oil shocks of the 1970s and that the economy today is far less energy intensive than it was then. additionally, one | 1 |
gent sejko : signing the inter - institutional cooperation agreement on currency protection against counterfeiting speech by mr gent sejko, governor of the bank of albania, at the ceremony of signing the inter - institutional cooperation agreement on currency protection against counterfeiting, tirana, 17 january 2023. * * * honourable minister cuci, honourable prosecutor general cela, dear participants and media representatives, it is a great pleasure to welcome you on behalf of the bank of albania in the today ceremony of signing the inter - institutional cooperation agreement between the ministry of interior, the prosecutor general's office and the bank of albania. this agreement marks the completion of a voluminous work started five years ago, with the intensive contribution of the representatives from our three institutions. though citizens are increasingly using e - payments, cash remains indispensable and plays a crucial role in the life of everyone. banknotes and metal coins are the only form of cash that may be owned and used directly by everyone, without the need of infrastructure, intermediate institutions or systems. the bank of albania is the sole authority vested with the exclusive constitutional right to issue banknotes and coins of legal tender in the republic of albania. one of the main functions and institutional responsibilities stipulated by the law on the bank of albania, is to maintain the integrity and public confidence in the national currency as a payment instrument. the prevention and protection of currency against counterfeiting is a common challenge for all relevant national authorities. thus, this agreement, which aims at achieving the joint commitment and coordinated activity amid them, is considered the appropriate and more effective way to prevent, detect and respond in a timely manner to the counterfeiting phenomenon of currency in albania. the central bank, as the sole authority to issue the national currency, has undertaken concrete steps to prevent counterfeiting and maintain public confidence in our national currency, lek. in 2019 β 2022, the bank of albania issued and put in circulation the new series of albanian banknotes, produced with cutting - edge technologies for banknote printing, with new security features, making them safer against counterfeiting. recent data show a considerable drop in the quantity of counterfeit banknotes in circulation. in 2022, the total amount was only 343 counterfeit banknotes, from the average quantity of banknotes in circulation amounting 157. 7 million banknotes, or 2. 2 counterfeit banknotes per 1 million banknotes in circulation, from 5. 4 in 2021. with | - 1990s, when the inflation - targeting regime was relatively new, lars e. o. svensson, who was then scientific adviser to the riksbank and later a member of the executive board, argued that the debate often lacked structure. at the swedish economics associations β proceedings in february 1996 he called for each debater to answer the following questions explicitly or implicitly : ( i ) do you apply the same inflation target as the riksbank, or another inflation target, or any other target? ( ii ) do you make the same forecast as the riksbank or do you make a different assessment? ( iii ) do you know of a better way of attaining the target? 13 these questions appear as relevant today as they were twenty years ago. secondly, i have discussed how one should view a situation where it takes longer for inflation to attain the target, despite the riksbank doing everything it can to avoid this happening. this is not a situation we expect to find ourselves in, but there is nevertheless reason to seriously consider and examine it. if such a situation were to arise, it would very important to clearly communicate that the inflation target has not been abandoned, to prevent long - term inflation expectations from falling excessively. as the central bank determines inflation in the long run β inflation is a monetary phenomenon β there are also good reasons for expectations of long - term inflation to remain in line with the target. this is important to maintain a smoothly - functioning price - setting and wage formation, but also for monetary policy to be able to counteract future economic downturns. communicating this is a difficult but hopefully not impossible task. references alsterlind, jan, armelius, hanna, forsman, david, jonsson, bjorn and wretman, annalena ( 2015 ), β how far can the repo rate be cut? β, economic commentary, no. 11, sveriges riksbank. ball, laurence m. ( 2014 ), β the case for a long - run inflation target of four percent, β imf working paper, wp / 14 / 92, international monetary fund. 13 ekonomisk debatt ( 1996 ). 12 bernanke, ben s. ( 2016 ), β modifying the fed β s policy framework : does a higher inflation target beat negative interest rates? β, blog post, brookings, 13 september. blanchard, olivier, dell β ariccia, giovanni and mauro, paolo ( 2010 | 0 |
. the bank has enhanced a wide range of its monetary easing measures since march and implemented the following three measures in response to the instability in financial markets accompanying the spread of covid - 19 as well as concern over financial strains faced by firms stemming from the decrease in sales due to restrictions on economic activity ( chart 9 ). first, the bank introduced the special program to support financing in response to the novel coronavirus ( covid - 19 ) in order to support financing, mainly of firms. the total size of this program will be about 130 trillion yen. specifically, this program consists of ( 1 ) purchases of cp and corporate bonds with an upper limit of about 20 trillion yen and ( 2 ) the special fundssupplying operations to facilitate financing in response to the novel coronavirus ( covid19 ), which is a fund - provisioning measure with a size of up to about 110 trillion yen to encourage lending to firms by financial institutions. through the latter operation, the bank provides funds on favorable terms to private financial institutions that make loans in response to covid - 19, which links up with the government's economic measures to provide effectively interest - free and unsecured loans, mainly to small firms through private financial institutions. second, to maintain stability in financial markets, the bank has adopted a framework through which further ample yen and foreign currency funds can be provided in a flexible manner. as for the yen funds, with a view to maintaining stability in the bond market and stabilizing the entire yield curve at a low level, the bank decided to purchase the necessary amount of japanese government bonds ( jgbs ) without setting an upper limit. regarding foreign currency funds, the bank has provided u. s. dollar funds in cooperation with five other major central banks. third, the bank has been actively purchasing exchange - traded funds ( etfs ) and japan real estate investment trusts ( j - reits ) to lower risk premia in asset markets ; in other words, to prevent a deterioration in firms'and households'sentiment through volatility in asset markets with the aim of providing support to forward - looking economic activity. these powerful monetary easing measures have exerted positive effects. although financial and foreign exchange markets, which were highly volatile from march through april, remain nervous, tension has eased. moreover, even though corporate funding conditions are still severe, the environment for funding has eased owing to the various measures taken by the bank and the government, as well as active efforts made by financial | of participants and a complexity in market structures across the globe. regarding the approach, guy debelle raised an important point in his speech last november, and let me repeat it here : history has shown that β the more prescriptive it becomes the easier it is to get around [ because ] rules are easier to arbitrage than principles. β 4 i fully support his views. b. collaboration between the public sector and the private sector the second key concept of the global code is that continuous collaboration between the public sector and the private sector is indispensable. the foreign exchange market has evolved through close collaboration between the public and private sectors. for example, the foreign exchange committees in the major financial centers typically comprise both central bankers and private - sector participants. work on the global code has also achieved progress through a public sector - private sector partnership. the mpg, which consists of both sell - side and buy - side institutions, has been providing valuable insight based on its members β expertise in market practices and innovation. it would be desirable that innovations led by the private sector continue to evolve under the appropriate code of conduct, thereby improving market functioning. the public sector should endeavor to align the private sector β s incentives appropriately to support further market innovation and sound functioning of the foreign exchange market. bank for international settlements ( 1999 ), β market liquidity : research findings and selected policy implications, β cgfs publications no 11. see guy debelle, β the global code of conduct for the foreign exchange market, β speech at the fx week europe conference in london on november 25, 2015. available at http : / / www. rba. gov. au / speeches / 2015 / spag - 2015 β 11 β 25. html. bis central bankers β speeches c. user - friendliness the third key concept is that the global code should be succinct, clear, and easy to use. the code becomes valuable only when market participants make good use of and adhere to it in their day - to - day business at the practical level. in addition, bearing in mind the existence of diverse participants and diverse business models, i would like to emphasize the importance of clearly addressing what market participants can do under the code. this is to prevent over - cautious behavior of market participants which could be detrimental to fostering well - functioning markets. as an initiative to enhance market functioning through clearer dialogue among market participants, the tokyo foreign exchange market committee developed the β tokyo blue book β in april last | 0.5 |
fabrizio saccomanni : the global crisis and the future of the international monetary system speech by mr fabrizio saccomanni, director general of the bank of italy, at the chinese academy of social sciences, beijing, 15 april 2010. * * * the global crisis that hit the world economy since august 2007 has revived the long dormant debate about the adequacy of the institutional arrangements required to ensure stability in international economic and financial relationships on a global scale. the financial roots of the crisis have been widely analysed. here, i intend to focus more on the macroeconomic drivers. i will try to argue that they are ultimately connected to a number of long - standing features of the international monetary system such as it has evolved since the demise of the bretton woods regime. i will then review the main options available to reform the international monetary and financial system. 1. the global crisis and its macroeconomic roots there is now a broad consensus that, even though the global crisis was triggered by dysfunctions in the financial system, unbalanced global macroeconomic conditions contributed to the accumulation of large financial vulnerabilities ( visco, 2009 and 2010 ). the proximate cause of the crisis was the us housing boom, financed by an unprecedented expansion of mortgage lending. regulators β failure to correct the incentive distortions introduced by financial innovation can largely explain the deterioration of lending standards, the widespread use of opaque financial instruments and the excessive risk - taking on the part of many international banks. excessively easy monetary conditions contributed to encourage the rapid growth in mortgage borrowing and fed the rise in house prices. an easy monetary policy in the us and japan β and, to a lesser extent, in the euro area β translated into a loose global monetary stance. very low interest rates in main financial centers encouraged capital flows to economies with higher interest rates, which were induced to ease policy in turn, in order to avoid an excessive currency appreciation. countries that pegged their exchange rate to the dollar effectively adopted the us monetary policy stance, and absorbed capital inflows by accumulating large official reserves. the investment of official reserves in us treasury securities financed the growing us current account deficit and, at the same time, contributed to keep treasury bond yields low. investors turned increasingly toward riskier assets in their β search for yield β, leading to a compression of risk premia on a broad range of financial assets, from equities to corporate and sovereign bonds, thereby boosting asset | ) ; strengthening the robustness of the over - the - counter ( otc ) derivatives market ( strengthening capital requirements and incentives, moving to central counterparties or organized exchanges ) ; objective of convergence, the enormous complexity of the technical issues at stake, the strength of conflicting vested interests and the expanded number of participants in the negotiations explain why the process of financial reform is still underway more than two years after the outbreak of the crisis. nevertheless, a high degree of consensus has been reached on the main components of the reform and it seems unlikely at this stage that the process will be stalled. * * * the outline of a new international monetary system is being drafted within the g20 and in the broad fora of the academic community of the public opinion. the main pillars of a new system β a stability oriented anchor for macroeconomic policies ; an open multilateral trading system ; a more resilient and risk - averse regulatory regime ; a reserve regime based on a multilateral asset β are in different stages of construction. the world economy shows signs of recovery but it is essential that the pace of reform is not slowed down. it is imperative to reduce significantly the risk for the world economy of a devastating crisis such as the one we have just experienced. this requires to tackle the potential sources of instability that lie in our very imperfect international monetary arrangements. references alessandrini, p. and m. fratianni ( 2009 ), β dominant currencies, special drawing rights and supranational bank money β, world economics, vol. 10, no. 4, oct. / dec. bergsten, c. f. ( 2009 ), β the dollar and the deficits β, foreign affairs, vol. 88, no. 6, november / december. cooper, r. ( 2009 ), β the future of the dollar β, peterson institute for international economics, policy brief pb09 β 21, september, http : / / www. iie. com / publications / pb / pb09 β 21. pdf. eichengreen, b. ( 2009 ) β the dollar dilemma β, foreign affairs, vol. 88, no. 5, sept. / oct. greenwald, b. and j. stiglitz ( 2008 ), β a modest proposal for international monetary reform β, international economic association meeting, istanbul, june, http : / / www0. gsb. columbia. edu / ipd / pub | 1 |
and leisure and hospitality categories. when we look at the northern part of the state, we see a greater concentration of jobs in finance, particularly in hudson county. also prominent are goods distribution jobs related to the ports, rail lines, trucking and warehousing. other large sectors include pharmaceuticals manufacturing and research and development, as well as private education. looking at recent trends in northern new jersey, the recovery in the economy in general β and in employment in particular β is lagging the nation and is not going as well as we would like. the garden state β s economy lost a quarter of a million jobs during the recession, and employment didn β t begin to recover until 2011, and even then it was slow getting started. however, the latest annual employment revisions β released just a few weeks ago β show job gains in 2013 and 2014 were a bit stronger than previously reported. nevertheless, four years into the recovery, employment has recovered less than two - thirds of the job losses from the recession. this contrasts notably with both new york state and the u. s. as a whole, where employment has far surpassed its earlier peaks. moreover, here in essex county, there has yet to be any significant upturn in jobs, although neighboring hudson county has seen a fairly strong rebound. bis central bankers β speeches that β s not to say that there aren β t any strong industry sectors here in new jersey : job growth has been quite robust in health services, transportation and warehousing, construction and a number of business service industries. there has also been steady job creation in retail trade and leisure and hospitality, though these tend to be low - paying sectors. on the other hand, employment remains depressed in other industries such as finance, publishing, telecommunications and manufacturing. so why is new jersey not keeping pace with new york in terms of job growth? well, much of the strength in new york state has been driven by new york city ; other parts of the state have seen similar, if not weaker, job growth than new jersey. of course, this raises the question : why has new york city β s economy been so much stronger? in fact, there is a body of research suggesting that the long - term drift of economic activity and jobs from cities to suburbs has subsided, and that there is a growing trend toward re - urbanization β a preference for both people and businesses to locate in cities, like new york. yet there is also a strong tendency for persistent strength in an urban hub to | . as central bankers, it's critical that we remain focused on carrying out our responsibilities, while keeping pace with the world around us. and that's what brings us here today. this workshop is an important part of learning and understanding the challenges and opportunities that lie ahead so that we can be prepared for and successful in the future. thank you all for participating in what will surely be thought - provoking and constructive discussions. president's working group on financial markets, the federal deposit insurance corporation, and the office of the comptroller of the currency, report on stablecoins, november 2021. board of governors of the federal reserve system, overnight reverse repurchase agreement facility, january 3, 2018. | 0.5 |
, of course, first the responsibility of monetary policy, which has been assigned to the eurosystem since january 1. incidentally, monetary policy is european commission, economic forecasts spring 1999. also making the most valuable contribution to growth and employment by ensuring price stability. to enable the european system of central banks ( escb ) to fulfil its task, its independence was enshrined in the maastricht treaty ( article 107 ). neither the ecb, nor a national central bank, nor any member of their decision - making bodies is allowed to take instructions from any government. similarly, the governments of the member states shall not seek to exert any influence on monetary policy. in the last months, this second part of the article of independence was neglected by some parties. the signatories of the maastricht treaty have, however, and rightly so, acknowledged that a β depoliticised β money can only be brought about, if all policy areas duly respect the independence of the central bank. at the beginning of this month, the governing council of the ecb - fully independently and with total responsibility for price stability - lowered the interest rate for the main refinancing operations from 3. 0 % to 2. 5 %. this decision was in line with the two pillars of its strategy and was taken with a view to the future. it was generally welcomed. however, the ecb governing council made it clear that those responsible for other policy areas are now even more obliged to take the necessary steps. iii the international role that the euro will play in the future will be determined particularly by the policies pursued in the euro countries. it will hinge crucially on the euro β s stability and the success of emu and on the markets β confidence in the new currency. i should like to stress at this juncture that it was never intended to establish the euro as a β counterweight β to the dollar - although some commentators saw it like that. the relationship of the european currencies to the us dollar had previously depended, in particular, on the size and openness of the respective economic area, the breadth and depth of the financial market, and the preferences of international investors. in the case of the d - mark it was certainly the profound confidence of market participants in the stability of the german currency that established is as the second most important reserve and investment currency after the us dollar. as far as the size and openness of the | intergenerational savings fund aims to promote long - term prosperity and ensure intergenerational equity in the distribution of net economic benefits from the intertemporal utilization of the country's natural resources. ladies and gentlemen, 11. scaling up renewable energy is no easy task and calls for mobilising massive savings and investing them productively in a risky environment. renewables bring far - reaching benefits in terms of human health, energy access, environmental protection, and the response to climate change, along with the potential to create new jobs around the world. sustainable energy finance is essential in the energy transition and innovation. meeting a future global increase in energy demand in a sustainable way while reducing emissions from existing infrastructure will require billions of dollars of investment. however, there is currently a gap of many hundreds of billions of dollars between existing investments and what is required. this means that, as a country, we will need to ensure that the investment climate is conducive to attracting such investments, in addition to mobilizing local resources. 3 / 4 bis - central bankers'speeches 12. ladies and gentlemen, my remarks are not aimed at preempting the discussions and ideas that we will have during the course of this symposium. they are not to create an impression that we know and have all the solutions. the symposium, therefore, offers us the opportunity to collectively reflect and deliberate on this important topic, particularly around a few things which i believe are crucial to transforming the namibian economy and converting challenges into opportunities. in this regard, i would like you to ponder on these few questions for the consideration of the experts on this subject, those of us who are policymakers, practitioners in this sector, and all participants in this symposium. how to ensure that the discovered minerals / natural resources ( oil β onshore and offshore ) and green hydrogen development benefits and contributes to broadbased development that results in employment creation and reduction of poverty and inequality? how to prevent the dutch disease / resource curse? what should the regulatory landscape be so that namibia optimally benefits from these discoveries, including ownership? is the current regulatory landscape adequate to ensure the country gets a fair share of the discovered resources and also competitive to attract fdi? how can synergies between new investments and existing policies, such as local participation and local procurement and value addition, be enhanced? director of ceremonies, ladies and gentlemen, 13. allow me to end my remarks with a quote by john h schaar, " the | 0 |
christopher kent : the business cycle in australia address by mr christopher kent, assistant governor ( economic ) of the reserve bank of australia, to the australian business economists ( abe ), sydney, 13 november 2014. * * * i thank natasha cassidy, vanessa crowe, emma doherty, craig evans and thomas mathews for help in preparing these remarks. introduction i β d like to thank the australian business economists for the invitation to speak here today. it β s not surprising that after a period of sub - par growth in many parts of the world, we often hear the term β recovery β in discussion of current economic conditions and future prospects. for economists, the term recovery fits within the realm of business cycle analysis. at one extreme, it implies that the economy is near a low point in the cycle with the prospect of much better conditions ahead. a less extreme case would be one where growth has been below its trend ( or potential ) pace for a time, leading to a rise in unemployment and spare productive capacity more generally. in both cases, a period of above - trend growth would be required to reduce the unemployment rate and make use of that spare capacity. in my discussion today, i want to consider the extent to which either of these descriptions might be warranted, both here and offshore. this requires an assessment of where the economy has been, where it is now and where we think it is likely to be in the future. the first two parts of this are not always straight forward, and as for the third, the bank regularly highlights the fact that forecasting is difficult and imprecise. 1 also, conditions can vary somewhat across different parts of the economy. this is especially true of the australian economy right now given the differences between the mining and non - mining sectors and some resulting variation in conditions across the states. state of the global economy let β s start with a consideration of the state of the global economic business cycle. in terms of australia β s real economy β by which i mean the production, trade and consumption of goods and services β what matters on the global front is the strength of our major trading partners. this can be measured by combining the growth of each of our trading partners using australia β s export shares as weights ( graph 1 ). according to this measure, activity rebounded in 2010, following the worst of the global financial crisis. since then, overall growth of australia β s major trading partners has actually been relatively stable at close to its long - term average. in large part | which leads some to dismiss it as β bad growth β. are people presuming that it's all driven by the public sector and therefore somehow artificial? or is it that they think jobs in service industries are all low - skill, low - wage jobs and therefore bad jobs? ( university academics, teachers and medical professionals would presumably disagree with that idea. ) or is it just discomfort that growth is concentrated in industries where productivity is harder to measure? or do people genuinely think that it's not really production if you can't drop it on your foot? the literature in fact shows that growth in health and education can indeed be β good growth β β sustainable growth. both sectors contribute to stronger performance in other sectors. better health outcomes are good for their own sake ; they improve people's welfare. in addition, they improve productivity of individual workers and make it less likely that careers will be cut short ( and retirement income will fall short ) because of ill - health. similarly, better education is not only good for its own sake β it builds human capital, the better skills we all need to be more productive. to support growth and living standards in parts of the economy, it is important that the increased resourcing of and employment in the health and education sectors actually translate into better outcomes. this is an ongoing conversation in public policy, one i'm not qualified to add to. i will, however, note another connection to the kelly legacy. the commonwealth tariff board, on which stan served for many years, morphed first into the industries assistance commission, then the industry commission, and finally, the productivity commission. [ 4 ] over the past two decades of its existence in its current form, the commission has become the key public - sector institution involved in developing policies to boost productivity. i note the commission has recently published its fiveyear review, which contains many policy ideas for improving effectiveness and outcomes in the areas of health and education ( productivity commission 2017 ). where will the growth really come from? the preceding just shows that, over time, some industries grow faster than others. for a while, the mining industry was growing faster than the rest. other industries take the lead at other times. but it doesn't really get at the underlying drivers of growth. we need to ask : where will the growth really come from, over the longer term? in answering this question, it is hard to go past the β three ps β popularised by our colleagues at treasury | 0.5 |
unrealistic to expect impaired assets to stay as low as they are now. credit quality necessarily ebbs and flows with the fortunes of the economy and particular sectors. what is important is that any deterioration is manageable against banks β capital, and that they recognise early the need for additional provisions. on balance, we believe that some current lending practices do risk sowing the seeds of future credit quality problems for banks. chief executives and boards should be considering carefully whether the additional point of market share that might be won now by lending to marginal propositions is worth the pain of future losses, the resources needed for loan workouts, and so on. they should also be alert to the possibility that the household sector might feature more strongly in the next upswing of losses. household debt has increased a good deal more quickly than incomes in recent years. the rba recently organised a credit conference to review trends in credit risk management, with participants including a number of leading bankers and accountants. a volume of readings and a summary of discussion will be published soon. the main theme from the conference was how credit risk assessment and management are becoming more objective, more scientific. one speaker described this as moving from an β experience - centric β approach to β data - centric β models. with standard products such as mortgages, consumer loans, credit cards and ( to some extent ) small business loans, quite sophisticated statistical methods are beginning to be applied to estimating default risk. the aim is to see, from an analysis of history, which data are most helpful in predicting the probability of default. such analysis produces β scorecards β for use in processing loan requests. increasingly, consumer loans are being managed on a portfolio basis, with banks calculating expected losses for various broad product categories. some are tracking the migration of loans through various stages of delinquency to help determine the proportion which will ultimately incur a loss. by updating the amounts at each stage, and adjusting migration rates in the light of current information, banks aim to measure more accurately the current risks in their portfolios. at the β bigger β end of the loan market, a lot of attention is being given to the accuracy and timeliness of risk - grading systems. to grade loans, the more sophisticated banks are now using complex statistical models based on financial information about borrowers or on equity prices. these feed into decisions about pricing, provisioning and portfolio balance. securitisation, the development of secondary markets and the use of credit derivatives | β going live β, more thought is being given to its practical implications for banks and their customers. perhaps the most important of these is the daily management of liquidity. with payments able to flow across banks β settlement accounts at the rba only if the paying bank has sufficient funds, liquidity will clearly become more of an issue than it is now - when a bank needs only enough funds to extinguish any net obligation to others each morning. under rtgs, banks will need to manage their liquidity more carefully or run the risk of being unable to send an important payment at the required time. banks are starting to give attention to this task - studying the patterns in their payment flows and upgrading their systems so they can monitor and manage flows on an aggregate basis across their business. there will inevitably be implications for corporates in this. rtgs will cause banks to focus more sharply on the amount of credit extended to customers during the day. because they will have to manage their own liquidity more closely on a real - time basis, banks will ( understandably ) want to control their customer exposures, and the demands which these place on liquidity, more tightly than before. payment requests will have priorities attached. corporates may need to negotiate facilities to ensure that time - critical payments will flow when they are expected by suppliers and counterparties. as a result, some will no doubt choose to plan their payments and receipts more actively than in the past. our impression from recent discussions with corporate treasurers is that very few, if any, banks have yet done much talking to their customers about these issues. more careful management of liquidity by banks and their customers will reduce the likelihood of payments β gridlock β under rtgs. for its part, the rba has taken various decisions aimed at ensuring adequate liquidity will be available, at a reasonable cost, across the system as a whole. we will enter into securities repurchase agreements with banks to provide them with intra - day funds at virtually no cost. we will allow banks to dip into their par assets for such transactions. the range of assets eligible for repos with the rba has also just been expanded. finally, as banker to the commonwealth, we will use our control over government payments to inject funds early in the day. it remains to be seen whether other devices will be needed to lubricate the system. in some places, such as the united kingdom and hong kong, banks are required to send a minimum | 1 |
; ( ii ) developing a regional repository of monetary, financial and economic information ; ( iii ) disseminating its research findings through seminars, conferences and workshops including, of course, this annual monetary studies conference. it is widely recognized that the monetary studies programme and the ccms have served the region well. perhaps one of the most enduring contributions of the programme has been the provision of a training ground for many of the regions β noted economists. in fact, several of our prominent regional as well as national policy makers have β cut their teeth β, in the programme. over the years, the ccms, for its part, has developed an impressive range of publications covering both theoretical and policy issues. the caricom economic performance and convergence report one of its main outputs, provides important comparative information about regional economic performance, and has proved to be quite useful in the deliberations of the committee of central bank governors. the centre also has established a network of research associates, drawn from the regional and international community. the relationships cultivated by this network have allowed for the provision of joint research with relevance for the caribbean region. ccms broke new ground a few years ago with its annual senior level policy seminar which provide an important forum for the discussion of practical issues of importance to the business community. these seminars have been a tremendous success. globalisation and the rapid evolution of the regional financial environment have created new challenges for caribbean central banks in their quest to maintain monetary and financial stability. it is my view that the ccms has a critical role to play in helping us address these challenges. and i think that the ccms could provide this critical support in a number of ways. firstly, i think that ccms could contribute more to economic and financial intelligence at the regional level through the expansion of regional databases that provide up - to - date information on financial sector performance. secondly, i think that the ccms must get involved in joint research with the regional central banks on the urgent issues that confront us - issues such as the conduct of monetary and financial policy under different exchange rate regimes : as exchange rate management : issues of monetary and financial sector policy co - ordination in the context of the csme. of course, i am fully aware of the kinds of challenges that the ccms itself faces, not least of which is the financial resource constraint. the central bank of trinidad and tobago is a strong supporter of the ccms and i feel that all the regional central banks should be prepared to finance the center at a level | ewart s williams : challenges facing the caribbean centre for monetary studies opening remarks by mr ewart s williams, governor of the central bank of trinidad and tobago, at the thirty - sixth annual monetary studies conference, jointly hosted by the central bank of trinidad and tobago and the caribbean centre for monetary studies, st augustine, 1 - 4 november 2004. * * * on behalf of the management and staff of the central bank of trinidad and tobago, i wish to extend a warm welcome to all the participants ( especially our guests from the caribbean and further afield ), to the thirty - sixth annual monetary studies conference. the central bank is especially pleased to be collaborating with the caribbean centre for monetary studies to jointly host this conference, in this our 40th anniversary year. i should note that this conference has existed for almost as long as the central bank and has become an important fixture in the conference agenda in the caribbean. it, in fact started as, the regional programme of monetary studies, in 1968, under the leadership of sir alister mcintyre, ( who was then, director of the institute of social and economic research on the st. augustine campus of the university of the west indies ). as dr. jackson indicated, the first conference was really intended to focus on the implications of the new sterling agreements following the devaluation of the pound sterling to which most of our currencies were pegged. the agenda also included a few other topics : ( i ) financial accounting in the caribbean ; ( ii ) the operation of insurance companies ; ( iii ) the development of the eastern caribbean currency area ; and ( iv ) the design of an ideal accounting framework for the plantation economy. it β s interesting, but many of these continue to be burning issues today. for many years this conference continued to be staged, in a process of close collaboration between the regional central banks, university of the west indies and the university of guyana, but essentially administered by the university. and here we need to pay tribute to those β essentially unpaid co - ordinators β who did yeoman work in keeping the programme alive : professor compton bourne, maurice odle, adlith browne and ramesh ramsaran. in may 1995, uwi and the regional central banks signed a formal agreement to establish the caribbean centre for monetary studies ( the ccms ). the core mission of the centre is to provide caricom central banks with timely economic intelligence as well as monetary and financial policy advice by : ( i ) conducting relevant research | 1 |
mario draghi : hearing at the committee on economic and monetary affairs of the european parliament introductory statement by mr mario draghi, president of the european central bank, at a hearing before the committee on economic and monetary affairs of the european parliament, brussels, 19 december 2011. * * * dear madam chair, dear honourable members, e per me un estremo piacere partecipare per la prima volta come presidente della banca centrale europea a questa riunione. il dialogo monetario trimestrale con l β econ rappresenta un β opportunita fondamentale e la pietra angolare per un rapporto costruttivo tra le nostre due istituzioni. cet echange a lieu quelques semaines seulement apres que d β importantes decisions ont ete prises a la fois par le conseil des gouverneurs de la bce et par les chefs d β etats et de gouvernements. dans ce contexte, notre discussion promet d β etre particulierement riche et fructueuse. zur einfuhrung werde ich zunachst auf die aktuellen wirtschaftlichen entwicklungen im eurogebiet eingehen. anschlieΓend werde ich mich den von ihnen gewunschten themen zuwenden, namlich dem instrumentarium zur krisenbewaltigung einerseits, sowie den rating - agenturen andererseits. i. economic and monetary developments since the last regular hearing in october with former president trichet, the ecb has taken a number of steps to ensure that it will continue to deliver price stability in the medium term in an environment that remains challenging. these steps relate both to changes in our interest rates and to non - standard measures. as you know, regarding interest rates, the governing council early december decided to lower the key ecb interest rates by 25 basis points, following a 25 basis point decrease on 3 november 2011. as regards the short - term growth outlook for the euro area, the intensified financial market tensions are continuing to dampen economic activity in the euro area and the outlook remains subject to high uncertainty. euro area economic activity should recover, albeit very gradually, in the course of 2012, as also projected by | reliance on external credit ratings. let me say a few words on how the ecb itself uses ratings. in practice, for the large majority of marketable securities ( such as sovereign bonds ) the eurosystem credit assessment subject to approval by finnish parliament. bis central bankers β speeches framework mainly uses the ratings issued by eligible credit rating agencies. at the same time, the eurosystem does not mechanically rely on these assessments, as it is aware of the limitations of methodologies. it reserves the right to reject or limit the use of an asset on the basis of any information on its credit quality that it may consider relevant. the eurosystem has applied such discretion to temporarily suspend the application of the minimum rating requirement to debt instruments issued or guaranteed by some euro area governments following eu / imf adjustment programmes. thank you for your attention. bis central bankers β speeches | 1 |
stephen s poloz : opening statement before the standing senate committee on banking, trade and commerce opening statement by mr stephen s poloz, governor of the bank of canada, to the standing senate committee on banking, trade and commerce, ottawa, ontario, 20 april 2016. * * * good morning, mr. chairman and committee members. senior deputy governor wilkins and i are happy to be back to discuss the bank β s monetary policy report ( mpr ), which we published last week. it has been 18 months since carolyn and i were last here. and it was about that time, in the fall of 2014, when the canadian economy first started to feel the effects of a massive shock to our terms of trade, brought about by a sharp drop in the price of oil and other commodities. because canada is such an important producer of resources, particularly oil, this shock was a major setback. it set in motion a difficult adjustment process that has been very disruptive for many canadians. investment and output in resource industries have fallen precipitously, the decline in national income has curbed household spending and the resource sector has seen significant job losses. these negatives have clearly outweighed the benefits of lower energy costs for households and businesses. from a monetary policy perspective, the shock posed a two - sided threat to our economy last year. first, it was a clear downside risk to our ability to reach our inflation target. second, by cutting into national income, it worsened the vulnerability posed by household imbalances as seen in our elevated debt - to - income ratio. to address both threats and to help facilitate the necessary economic adjustments, we lowered our policy interest rate twice last year, bringing it to 0. 5 per cent. while we recognized the possibility that this reduction could, at the margin, exacerbate the vulnerability posed by household imbalances, the more important effect of lowering the policy rate last year was to cushion the drop in income and employment caused by lower resource prices. another natural consequence of the shock to our terms of trade has been a decline in the canadian - dollar exchange rate. it β s important to note that this is not unique to canada. indeed, many resource - reliant countries have seen similar depreciations in their currencies. both our policy moves and the lower currency have been helping to facilitate the economic adjustments, which have been playing out over two tracks. while weakness has been concentrated in the resource sector, the non | close monitoring. we have not yet seen concrete evidence of higher investment and strong firm creation. these are some of the ingredients needed for a return to natural, selfsustaining growth with inflation sustainably on target. with that mr. chairman, carolyn and i would be happy to answer questions. bis central bankers β speeches | 1 |
, which formulates the international regulatory and prudential standards for islamic finance. it has since issued the standards for capital adequacy, risk management and corporate governance. among the standards that are currently being formulated include market conduct and rules for financial disclosure, transparency, the shariah governance framework and the supervisory review process. this is to ensure best practices and the soundness and stability of the islamic financial system. the ifsb now has 137 members that include 35 regulatory and supervisory authorities, five international inter - government organisations including the bis, world bank and the imf, and 97 market players and professional firms from 22 jurisdictions. of significance to note is that the membership of the ifsb comprises several authorities and international institutions from the non - muslim countries. the ifsb complements the accounting and auditing organisation for islamic financial institutions ( aaoifi ) which was established earlier in 1991, to set the accounting standards to ensure that the true and fair value are reflected in the financial transactions and to ensure greater accountability and responsibility of the financial institutions. finally, these developments have been reinforced by greater liberalisation to increase the international dimension of islamic finance. with increased international participation in islamic financial markets, it has prompted increased cross - border islamic financial flows. in addition, islamic financial institutions that had previously operated only in their own domestic jurisdictions have begun to venture abroad to tap new growth opportunities in other regions. this new international dimension of islamic finance has enhanced further the international inter - linkages in this more globalised environment. islamic finance : operating in a challenging and evolving environment the evolution and expansion of islamic finance has occurred in a fast changing and dynamic international environment. in the context of a more challenging and competitive environment, the issue of financial stability, viability and competitiveness are paramount. this is particularly evident in the recent developments experienced in the international financial system. an important element of islamic finance is the strength and soundness it derives from its shariah principles. islamic finance has an inbuilt dimension that promotes soundness and stability, underpinned by the shariah injunctions. these shariah injunctions essentially interweave the financial transactions with genuine productive activities. the soundness and viability of islamic finance as a form of financial intermediation is premised on the fundamental requirement that islamic financial transactions need to be supported by an underlying productive activity. there is therefore always a close link between financial and productive flows. the financial transaction has to be accompanied by genuine trade or lease | quality and affordable financial services to a regional sme client base. it is paramount for smes to embrace these technological enhancements. this includes the adoption of end - to - end supply chain management solutions that integrate the production and financial flows of sme activities, allowing for greater expansion into regional production networks. together with digitalisation, the financial integration process will catalyse the convergence of institutional frameworks across asean countries to create a more effective regional financing ecosystem. such institutional infrastructures and instruments include credit guarantee schemes and credit and collateral registries. another example is the asean sme working group β s methodology for the asean benchmark for sme credit rating to facilitate the establishment of credit bureaus in asean member states. through these credit bureaus, as estimated by the asian development bank. bis central bankers β speeches financial institutions would have wider access to reliable credit records of smes, thereby increasing the access to financing for the smes. the promotion of deeper financial inclusion can be regarded as the final mile in enhancing and enriching the regional financial integration process. the asean finance ministers β and central bank governors β meeting in march this year elevated financial inclusion as a regional policy priority. indeed, asean will continue to coordinate and intensify efforts to advance financial inclusion, including addressing cross - border financing issues for sme trade financing and investments. this is critical to ensure the benefits of regional integration are experienced by all in the region. conclusion while the future for asean looks promising, asean businesses, including smes, need to consider and explore an asean strategy and to view asean as an increasingly integrated market. having such regional or international perspectives may prove to be a game changer for smes, paving a path towards sustained growth, increased job creation, and higher innovation capacity. a crucial element in the asean economic agenda is the development of the sme sector which will contribute to stronger and more equitable growth in the region. the next frontier for smes is to emerge as regional players that are not constrained by the domestic consumer base. smes possess the potential to participate in global production networks by riding on asean β s intrinsic strengths and prospects, multiple sme - focused policy initiatives as well as the continued wave of regional financial integration. this will allow for the transition for smes to benefit immensely from the ongoing regional economic and financial integration and thus contribute towards a balanced and sustainable growth of our region. bis central bankers β speeches | 0.5 |
most important lesson of all, the independence of statistical institutes is key to the quality and integrity of the underlying statistics. recent incidents involving government finance statistics have demonstrated this very clearly. the compilation and reporting of statistics must not be vulnerable to political and electoral cycles. countries should consider the quality and integrity of their statistics as a priority matter, to ensure that a proper system of checks and balances is in place when compiling these statistics, and should apply minimum standards, reinforcing the independence, integrity and accountability of national statistical institutes. despite the significant achievements and the good quality of euro area statistics in general, further improvements and enhancements are planned. ongoing economic transformation has to be accommodated in a forward - looking manner and statistical gaps identified by users inside and outside the ecb have to be filled in as far as possible. given the long lead times which characterise statistical projects, the directorate general statistics of the ecb has established medium - term priorities in this field. important items on this agenda are : a full system of euro area quarterly accounts for each institutional sector1, more comprehensive statistics for the monitoring and analysis of financial stability, the further development of external statistics, promoting the compilation of principal european economic indicators, including the application of the first - for - europe principle, and an increasing focus on the various quality dimensions of european statistics. let me elaborate a bit more on the first two items. progress in these areas is expected to have a major influence on policy analysis. the work currently undertaken by the ecb and eurostat on quarterly euro area accounts aims at a fully integrated system of sectoral financial and non - financial accounts. having such a system in place may lead over time to major progress in both the structural analysis of the euro area and the assessment of the current economic situation. fully integrated sectoral accounts provide the ideal framework for analysing the structure of the economy and its changes over time as well as the propagation of shocks through the system. this helps to gain further insights into the monetary policy transmission mechanism and the relative importance of the various transmission channels. at the same time, monitoring a wide range of key indicators in a single macroeconomic accounting framework provides a coherent picture of the current economic situation. this is particularly important in the context of the ecb β s monetary policy strategy, which takes into account a broad range of indicators. integrated financial and non - financial sector accounts provide a framework for analysing the link between the financial and the real economy - an issue notoriously difficult to anal | - round effects on wages from a sharp rise in oil prices are limited. this goes a long way towards explaining why, unlike what happened during the 1973 and 1979 oil crises, nominal wages have not been caught up in an inflationary spiral in recent years. no doubt driven on by the same desire for competitiveness, but also by the need to rein in public finances and inflation, i understand that the luxembourg government also decided in spring 2006, after negotiating with the social partners in the tripartite coordination committee, to adjust the automatic indexation mechanism until 2009, by delaying the point in time when wages are indexed. and it decided to neutralise certain taxes, excise duties, fees and other contributions in the reference index for index - linking. while the indexation system, after being thoroughly reformed, remains an acquired right for both employees and for recipients of social benefits, the total development in private - sector wages has also been controlled since 1996 by the wage norm - another distinctive feature of the belgian system. this indicative norm is set every two years by the social partners ( employers and trade unions ) in line with the expected evolution of hourly labour costs in the three main neighbouring countries ( germany, france and the netherlands ). it builds into the wage - formation process an explicit reference to the external situation and thus the competitiveness of the economy. it is a strong coordinating tool for negotiations at sectoral level. among these sectors, the so - called " all - in " agreements, introducing a corrective mechanism in the event of higher indexation than anticipated during the negotiations, have mushroomed. all in all, i would say that if we didn β t have wage indexation, we wouldn β t have to invent it. but, taking account of the built - in control features, now keeping it within limits, indexation in belgium is not - or to be more precise, is no longer - the bugbear still decried by so many international institutions. 3. on the other hand, i wholeheartedly share these same international institutions β opinion on the need to raise the rate of employment in belgium. at just 61 p. c. of the population aged between 15 and 64, belgium β s employment rate is still noticeably lower than the average in europe, not to mention other parts of the world. the boost it needs concerns, in particular, those groups that are under - represented on the labour market β young people, women, people of foreign origin and especially the relatively older groups | 0 |
must remember that one domestic producer β s advantage from protectionist profits is paid for by the consumer, or shows up as another domestic producer β s cost disadvantage. instead of targetting specific industries for governmental attention, which risks bringing back all the baggage of the licence permit raj that we have left behind, let us focus on improving the conditions for growth for all. our measure of success should be the jobs that are created, not by giving government subsidies or protections to labour - intensive industries or sectors but by developing a facilitating, though competitive, environment that will result in the emergence of the best solutions. this requires a disciplined focus on four issues : 1. we need to improve the quality of our infrastructure, especially the logistical support and power that industry and services need. grand plans are on the anvil, such as, the delhi - mumbai industrial corridor. we need to complete such projects on time, and within budget. the success of the new delhi metro suggests that timeliness and cost control are not foreign to the indian psyche. 2. our youth need education and training for the jobs that will be created. some of this will be higher degrees, not just computer science but also design or civil engineering. some of it will be appropriate vocational education that teaches them bis central bankers β speeches to be good plumbers and electricians rather than unemployable low - skilled engineers. teaching our citizens can be a stepping stone to teaching the world. india can be at the forefront of providing mass technology - enabled education laced with appropriate human inputs to the world. 3. we need better business regulation. this does not always mean less regulation but it means regulation that is appropriate to the objective and that is enforced. i am told that factories in one state are still required to have a snake trap on the factory floor by law, a law that has not been changed since the days factories were surrounded by jungles. the lack of change may be sheer inertia, but it may be more sinister rent - seeking. all too often, we have too much regulation on the books and too little regulation in practice, with the worst of the regulated finding unscrupulous ways around the regulation while the honest are stymied. we have strong labour laws in theory that are meant to protect employees, but in practice we have a very flexible system with no incentive for firms to invest in their workers or hold on to them, and no loyalty towards the firms from workers. this needs to change if we are to | ##s ) at a reasonable distance of about 3 β 4 kilometers. such branches should have minimum infrastructure, such as a core banking solution ( cbs ) terminal linked to a pass book printer and a safe for cash retention for operating large customer transactions and would have to be managed full time by bank β s own employees. it is expected that such an arrangement would lead to efficiency in cash management, documentation, resolving customer grievances and close supervision of bc operations. vi. the evolution of the bc model comprises of the following four stages : - stage 1 : mobile business correspondents bis central bankers β speeches vii. - stage 2 : fixed location business correspondent outlets - stage 3 : low cost intermediate brick & mortar structures ( ultra small branches ) - stage 4 : full fledged brick & mortar branches financial inclusion plan ( fip ) for banks β all domestic commercial banks β public and private sector have drawn a board approved three year fip starting april 2010. the banking system β s three year fips include parameters such as : i. no. of branches opened, of which the no. opened in unbanked villages and in villages with population greater than or less than 2000 ii. no. of bc outlets opened iii. no. of basic savings bank deposit accounts opened iv. no. of emergency credit ( od ) provided v. no. of entrepreneurial credit ( kcc / gcc ) provided vi. transactions done in the above accounts through brick & mortar branches as well as through bcs these initiatives are being closely monitored by the reserve bank of india through monthly reporting and annual comprehensive review. financial inclusion plan β achievements so far a snapshot of the progress in certain key parameters in the recent period ( march 2010 β june 2012 ) are given below ( details in annex 3 ) : i. banking connectivity to more than 1, 88, 028 villages upto june 2012 from 67, 694 villages in march 2010. ii. all unbanked villages with population of more than 2000 persons, numbering around 74, 000 are now connected with banks. iii. number of bcs increased to 120, 098 from 34, 532. iv. more than 70 million basic banking accounts have been opened to take the total number of such accounts to 147 million. v. about 36 million people / families have been credit - linked. in the context of this workshop it is important to note that there has long been a statistical system of capturing both macro and micro - level data on measurement of financial inclusion in | 0.5 |
allow for heterogeneity among banks and thereby interbank borrowing and lending. 16 future research is likely to feature a ( 1990 ), " making monetary policy : adjusting policy to achieve final objectives, " in w. e. norton and peter stebbing, eds., monetary policy and market operations ( sydney : reserve bank of australia ), pp. 11 - 26. see, for example, the models analyzed in michael woodford ( 2003 ), interest and prices : foundations of a theory of monetary policy ( princeton, n. j. : princeton university press ) ; and the model advanced in the influential work of lawrence j. christiano, martin eichenbaum, and charles l. evans ( 2005 ), " nominal rigidities and the dynamic effects of a shock to monetary policy, " journal of political economy, vol. 113 ( 1 ), pp. 1 - 45. see, for instance, nobuhiro kiyotaki and john moore ( 1997 ), " credit cycles, " journal of political economy, vol. 105 ( 2 ), pp. 211 - 48 ; and ben s. bernanke, mark gertler, and simon gilchrist ( 1999 ), " the financial accelerator in a quantitative business cycle framework, " in john b. taylor and michael woodford, eds., handbook of macroeconomics, vol. 1 ( amsterdam, the netherlands : north - holland / elsevier ), pp. 1341 - 93. for an example of the difficulties of quantifying such channels in a macroeconomic framework, see the discussion of the large - scale macroeconomic models used by the federal reserve for the past several decades in eileen mauskopf ( 1990 ), " the transmission channels of monetary policy : how have they changed? " federal reserve bulletin, vol. 76 ( 12 ), pp. 985 - 1008 ; and david reifschneider, robert tetlow, and john c. williams ( 1999 ), " aggregate disturbances, monetary policy and the macroeconomy : the frb / us perspective, " federal reserve bulletin, vol. 85 ( 1 ), pp. 1 - 19. see, for example, vasco curdia and michael woodford ( 2009 ), " credit frictions and optimal monetary policy, " manuscript, columbia university, may. see, for example, marvin goodfriend and bennett t. mccallum ( 2007 ), " banking and interest | are those that are competitive and offer a unique product. i view the world of payments in very much that spirit. to me, digital payments offer exciting prospects. but that does not necessarily imply the extinction of existing payment methods. it may very well actually increase the diversity of payment methods. cash offers these unique forms of independence from social and electronic networks, which suggests to me that it will continue to enjoy great popularity in the euro area. i now look forward to having fruitful discussions with all of you. thank you. footnotes : 1. deutsche bundesbank ( 2018 ), payment behaviour in germany in 2017 β fourth study of the utilisation of cash and cashless payment instruments. 2. j. l. korella and w. li ( 2018 ), retail payment behaviour and the adoption of innovative payments : a comparative study in china and germany, journal of payment systems and strategy, vol. 12, no 3, pp. 245 - 265. | 0 |
to note that there is as yet no broad consensus on how such a framework would be best implemented in order to provide timely and relevant information. third, who should take action in this direction? it should be acknowledged that the reduction of systemic risk is not an objective for central banks exclusively. here, i would like to praise the joint initiatives of market experts from a number of leading institutions around the world in response to calls from the central bank community : the reports by the counterparty risk management policy group 11 and the recent report released by the institute of international finance special committee on liquidity risk. both documents call for β greater transparency and an incremental collaborative mechanism between the public and private sector in contingency planning β. they also draw attention to the fact that standard methods for valuing contracts with defaulting counterparties under the close - out netting provisions of master agreements for derivatives transactions could be difficult to implement during periods of market stress. as noted by the basel committee on payment and settlement systems, market associations such as isda are well placed to develop common understandings regarding the use of these methodologies, taking into account existing market practices and laws. in addition, there is also scope for more private and public sector cooperation on stress - testing and gathering data that are relevant for regulatory purposes concerning the proper evaluation of systemic risk. for instance, the work on stress - testing by regulators, central banks and international organisations ( such as the imf β s financial sector assessment programme activities ), has revealed the difficulties for banks to introduce into their internal models a ) scenarios which affect systemic liquidity, or b ) assumptions on the behaviour / failure of large market participants under stress. fourth, how can we move forward? on the one hand, policy - makers are increasingly acknowledging the risk of a certain trade - off between liquidity and transparency in the credit derivatives market when the transparency framework is inappropriately designed. this can materialise under normal conditions but also under stressed conditions. to avoid the emergence of this trade - off requires a careful understanding of the market microstructure and its functioning, in order to build a transparency framework which can be adapted to the global, dynamic and complex nature of the credit risk transfer market. on the other hand, expectations with regard to market - driven initiatives are growing, which is a point that i will consider again later. in any case, it is crucial to bear in mind that the problem is not credit derivatives instruments per se, but how they are used, and | jean - claude trichet : some reflections on the development of credit derivatives keynote address by mr jean - claude trichet, president of the european central bank, at the 22nd annual general meeting of the international swaps and derivatives association ( isda ), boston, 18 april 2007. * * * ladies and gentlemen, it is a privilege and pleasure to be here at the 22nd isda annual general meeting in boston in front of such a distinguished global audience. looking back at what is already history, i would like to express my gratitude to isda for its substantial contribution towards the smooth introduction of the euro on 1 january 1999. the conversion of the original 11 national currencies into one single currency, the euro, represented an enormous operational and legal challenge that had significant implications for the global markets, particularly for the cross - currency and interest rate derivatives markets. isda played an important role in contributing to the development of the legal framework which ensured the continuity of contracts, both in the european union and in the united states. i would also like to mention the crucial role that isda currently plays in promoting the smooth functioning of all derivatives market segments, especially by mitigating legal risks and supporting industry - driven initiatives to promote market integrity and efficiency. i will come back to this point later. the main theme of my speech today is credit derivatives, in their different forms. the credit derivatives market segment has probably been one of the most innovative and fastest - growing in recent years. most notably, during the last mid - year review, isda recorded a 52 % rise in the notional outstanding amount of credit default swaps, which rose to $ 26 trillion. moreover, according to the securities industry and financial markets association, the issuance of collateralised debt obligations almost tripled between 2004 and 2006, amounting to $ 489 billion in 2006. the rapid development and the share of this market segment is a very important feature of today β s global finance, and i would like to share with you some reflections on the developments of credit derivatives. my objective is twofold : first, i would like to emphasise the importance of central banks β monitoring of developments in credit derivatives in terms of three interlinked perspectives : 1. the conduct of monetary policy, 2. financial stability and 3. market standards. second, i would like to take advantage of your agm to make a call in favour of market - driven initiatives that may lead to greater transparency. 1 ) credit derivatives and the conduct of | 1 |
tukiya kankasa - mabula : dissemination of results of baseline survey β framework for collection of sex - disaggregated data speech by dr tukiya kankasa - mabula, deputy governor ( administration ) of the bank of zambia, at the stakeholders β workshop, lusaka, 2 may 2019. * * * salutations : the chief executive officers of commercial banks and non - bank financial institutions the chief executive officer β rural finance expansion programme ( rufep ) the chief executive officer β financial sector deepening zambia the chief executive officer β united nations capital development fund ( uncdf ) the representative - the world bank country office the representative β united nations development programme ( undp ) the representative β african development bank ( afdb ) the representative β bankers association of zambia the representatives of various government ministries the representative β zambia institute of banking and financial services the representative β pensions and insurance authority ( pia ) the representative β securities and exchange commission ( sec captains of industry ; distinguished invited guests ; members of the press ; and ladies and gentlemen. let me begin by welcoming you all to this workshop on the dissemination of the results of the baseline survey on the supply β side sex disaggregated data conducted in the last quarter of 2018. at the same time, i wish to thank the alliance for financial inclusion, rural finance expansion programme and the financial sector deepening zambia for supporting the development and implementation of a framework for collection of supply - side sex - disaggregated data from regulated financial service providers. let me also thank ms linda zuze ( the international consultant on the project ) and mr shebo nalishebo ( the local consultant ) and ipsos zambia for successfully conducting the survey. 1 / 3 bis central bankers'speeches the bank of zambia and its collaborating institutions mentioned earlier are greatly indebted to the respondents who participated in the survey for completing the questionnaires. we thank you most sincerely for your cooperation. in particular, we are aware that the survey got into the way of your work as you completed the questionnaires. we are pleased to note that the response rate was 90 %. this points to the fact that you share in our resolve to bridge the financial inclusion gender gap and engender economic development. ladies and gentlemen, having launched the commencement of the project for the development and implementation of a framework for collection of supply - side sex - disaggregated data almost a year ago, i am pleased that today | hedging would facilitate the generation of new ground - breaking developments in islamic finance. greater involvement of the industry is essential not only to provide funding support, but also to give perspectives that contribute to the implementation of the research output. the launch of ibfim β s flagship programme today β the islamic finance qualifications framework and progression route β is part of this strategy for upgrading the skills and competencies of the existing talent in the industry. it is an innovative training framework that provides a progressive structured route to the acquisition of the relevant knowledge for the different levels throughout the career of the workforce in the industry. successful completion of the comprehensive series of programmes would lead to qualifications at three different levels. the modules of the programmes have been developed with extensive consultation with the industry. the framework also offers flexibility in learning, as participants can complete the modules at their own pace. important in the offering of these programs is that there needs to be clarity in the qualification that is earned so that it avoids confusion with other qualifications offered by other centres of learning to those practitioners aspiring to gain qualifications in islamic finance. our resources for investment in human capital development for the industry must be optimised. this would enhance malaysia β s potential to become a centre of excellence for education in islamic finance. bis central bankers β speeches | 0 |
. let me however make one observation that applies especially to tailored macroprudential policies, i. e., the ones that are aimed at preventing instability in specific markets. such measures, i would argue, are best seen as working, not as a restraint on, but as a complement to, monetary policy. the latter is, by nature, pervasive, and as such it can have unwanted side - effects in certain areas or markets. should such pockets of vulnerability emerge, authorities can activate tailored macroprudential policies to tackle them. in this context, macroprudential measures do not aim at β neutralizing β the effects of monetary policy. rather, a targeted use of macroprudential tools creates more room for manoeuvre for monetary policy to follow its price - stability mandate. recently, various euroarea countries have adopted macro measures to contain imbalances in the real estate sector, sometimes in response to the esrb β s warnings or recommendations. this is, in my view, a successful example of how monetary and macroprudential policies can complement each other. * * * 2 / 3 bis central bankers'speeches it is time for me to close this address. i look forward to the valuable exchange of experiences, insights and evidence that will take place during this conference. i am sure it will help us improve our understanding of the way macroprudential tools can be best used to satisfy our financial stability mandate, and to complement other macroeconomic tools. i thank you all for your participation and your attention. 3 / 3 bis central bankers'speeches | loss of the strength and credibility needed to counter inflation successfully in the future. however, as i have recently argued, we should not overemphasize these risks today. failure to continue acting in accordance with fiscal policy to support households and firms and raise aggregate demand to the levels needed to regain convergence towards our price stability objective could even threaten independence for the opposite reason. not only should we not end up being accused of failing to fulfil our duties, but we should explicitly recognise that cushioning the consequences of such a huge shock goes beyond the possibilities and instruments of fiscal or monetary policy alone. a coordinated effort is required and its effective implementation in the majority of countries is a major achievement. a further relevant topic that will be discussed in the third session of the workshop refers to the long - term consequences of the crisis on the structure of our economies. it is difficult to predict how the world will look after the pandemic wanes, which changes in consumption habits will persist, how production and labour will be re - organised. a substantial reallocation of capital and labour in the near future across sectors and firms, however, is likely. these adjustments may be painful and lead to temporarily higher unemployment, discouragement and low labour market participation, inefficient matches of workers with firms. several contributions to the workshop discuss instruments that might favour or hamper these adjustments. in particular, the second invited lecture provides an insightful review of the long process of labour market reforms experienced by our economies, with a focus on the role of temporary jobs. a last issue concerns the urgency to restore pre - crisis output levels and to achieve a satisfactory growth pace in europe. a few papers in the programme analyse the key role, in this perspective, of firms β innovation strategies and workers β efforts. the effectiveness of these key drivers of potential output needs to be enhanced significantly, in italy as well as in other european countries, by sustained public and private investment in modern infrastructures, in green technologies, in education and research. following the political agreement reached two weeks ago, the opportunity to achieve growth objectives through a prompt, targeted and effective use of the resources allocated for the β next generation eu β must not be squandered. * * * 2 / 3 bis central bankers'speeches let me conclude by thanking the organisers and the scientific committee for having put together a rich and interesting programme, and let me welcome all the presenters, moderators and other participants to the event. the fact | 0.5 |
of the budgets of federal or provincial governments. as a matter of fact there are three types of expenditures that are incurred. first is the public expenditure, second is the expenditures by private and nongovernmental sectors who provide schooling or health services and finally is the expenditures incurred by the households themselves in form of tuition fees, text books, purchase of medicines, vaccines etc. when all three types of expenditures are taken together we get a complete picture of the expenditures on inputs used for achieving mdgs. in addition to mdgs pakistan has developed the poverty reduction strategy ( prsp ) and more recently an ambitious medium term development framework ( mtdf ) to catch up in the other areas of human development such as secondary, vocational and technical training, higher education, science and technology teacher training, curative health services etc. too much preoccupation and the swing of pendulum towards an exclusive focus on primary education and basic health services create its own distortions and disequilibria. teachers at the primary level exhibit poor quality and performance despite many attempts at teacher β s training because their graduate and postgraduate education has been sub - optimal. universities are producing hundreds of thousands of graduates every year who are not all suited for ready absorption in labor market while economy is starving from a lack of technical skills. we have aspirations to become an active player in the globalized economy but capacity has to be developed in our science and technology institutions to generate the products, innovations and processes that will improve the productivity. the linkage between industry and universities is almost non - existent at present and has to be nurtured. the main argument of this paper is that while the donor emphasis and pakistan β s commitment to achieve mdgs are well placed and should be fully implemented a more holistic approach towards human resource development that caters both to the economic and social objectives of the country has to be adopted. the internalization of externalities, spillovers and linkages within the whole human development initiative would create efficiency and result in cost savings and thus reduced overall financing needs. second, β all hands on the deck β covering the federal, provincial and local governments, private sector, external donors, communities, not - forprofit institutions, civil society organizations, philanthropies and charities should be assigned roles in a more cohesive and integrated manner. the waste, duplication, overlapping can be avoided and optimal use of physical facilities and infrastructure by multiple players and pooling of resources across institutions rather than maintaining separate silos | encouraged under the current arrangements of program delivery. third, the excessive focus on public budgetary allocations on education and health has neglected the tremendous expenditures, being made by the households themselves in spending on schooling, health care, water and sanitation and also the efforts being made by other providers of these services in non - governmental sector. attention should be shifted from the level of public expenditures or its share in gdp to the productivity of these expenditures. these stereotype and meaningless indicators with which the countries are flogged for lack of their commitment are not very helpful. fourth, it is my contention that we should distinguish between financing and provisioning. while the government should be responsible for financing primary and to a large extent secondary education and basic health services particularly preventive it should have, however, no exclusivity or monopoly in providing these services. for the poor quintiles the access to quality services can be improved if the government provides scholarships, stipends, per capita grants and financial assistance to the non - governmental or quasi - governmental institutions in a transparent and targeted manner. the government is already providing several incentives to these providers in the context of its public - private partnership program which needs further strengthening in operational terms. to illustrate this point education and health in pakistan has been blessed recently with the entry or private sector, not - for - profit organizations, semi or quasi - governmental bodies ( annex i for a tentative list ). the national commission on human development, the national or provincial educational foundations, rural support programs, fauji foundation, private foundations, charitable hospitals and clinics are taking an increasing burden of provisioning every day. there is no reason that the government cannot use some of these quality institutions for financing the services targeted at the poor. so a competitive business model in which all service providers irrespective of their affiliation meeting the set criteria can provide the education, health or other services to the poor households needs to be implemented. if the above holistic framework encompassing the concept, measurement, financing, provisioning of human development is agreed upon and a consensus is reached then the issue of financing human resource development becomes less pressing. table - i financing human development 2005 - 2010 public private total basic and college education health, nutrition and populate water and sanitation skilled based literary, technology education higher education, s & t total annual the total financing requirements for human development as identified in the mtdf and estimated on the basis of household expenditures amount to rs. 2160 billion over 2005 - 2010 period or | 1 |
flexible inflation targeting the textbook account of a flexible inflation targeting regime explains that when interest rates are set to bringing inflation back to the target, consideration is also given to the effects on the real economy ; an appropriate balance between inflation and real variability is sought, which implies that an immediate reversal to the target is not an end in itself. textbook accounts of flexible inflation targeting typically give the following answer to the question of how asset prices should be factored into the monetary policy decision : monetary policy should respond to changes in asset prices to the extent that they affect the inflation and growth forecasts. thus, there is no independent role for e. g. rapidly rising house prices. their effect on the monetary policy decision should come only through their effect on the inflation and growth forecasts. this recommendation, and the assumptions on which it is based, is something i will comment more on, below. leaning against the wind another view often put forward is that a central bank can bring about better outcomes for inflation and output by reacting to rapidly rising asset prices, over and above their implications for inflation and growth. in short, there are two arguments for this : ( i ) engaging in such behaviour β let β s call it β leaning against the wind β β in situations when an asset price is changing due to non - fundamentals can dampen the effects of the unmotivated price change on the real economy and thereby prevent an inefficient allocation of resources ; ( ii ) if the market knows that the central bank engages in β leaning against the wind β activities the probability will fall of non - fundamental price changes arising in the first place. the key issue here is, of course, identifying price changes that are driven by nonfundamentals. this problem cannot be overly emphasized. but difficult or not, it is an issue that central banks cannot ignore. if prices of houses or other assets are partly driven by factors that are hard to explain and that are believed to give rise to inefficient allocations and risks of large fluctuations in real economic activity and inflation, such events will, in one way or another, find their way into our thinking about monetary policy. extending the forecasting horizon in practice, most inflation targeting central banks have chosen to adopt forecast horizons of two to three years, at least in external communication and official documents. in this environment, the idea that a central bank can need to extend the horizon over which it constructs inflation and output forecasts is one that has been heard | if you want to subsidize some activities, regions or parts of the population you should at least do it in a transparent manner, so the costs become explicit in the fiscal budget, implying an open debate and decision by the parliament or government. our regulation was also erroneous in trying to micro - manage the banks in their own business decisions on lending rates, fees, liquidity management and so on. experiences from many countries have clearly shown that the banks themselves, guided by market forces make better decisions than outside parties. finally, the restrictions on the capital flows were wrong because they hid the signals from swedish and overseas investors and other actors and also because they led to an unsound protection of the swedish financial system and markets. with hindsight it is easy to see these shortcomings but when they were in force, the regulations represented the flavour of the day. as i have shown, there are forms of regulation which are harmful and should be terminated. should there be any regulation at all? yes, i think so. let me explain why by using the example of banks, which in most countries dominate the financial sector. banks offer several unique and valuable services to society. as i noted in the beginning of my presentation, they receive deposits and transform them into lending. they assume, distribute and transform various risks. they facilitate payment transactions by the use of accounts in other banks and payment systems. however, performing these activities makes banks vulnerable, in particular receiving short - term deposits and transferring them into long - term loans. at worst, banks may fail and destabilize the whole financial sector and even the whole economy. to avoid such calamities from happening, society is willing, under certain specified circumstances, to rescue banks from failure by providing exceptional lending from the central bank or solidity enhancements from the government. depositors may be protected by a deposit insurance scheme. but the willingness of the authorities to assist the banks and their customers must be matched by regulation and monitoring to ensure that the bank owners and others do not use, or i might say β abuse β, the possibility of public support to further their own purposes. hence, there must be some regulation and supervision to make sure that banks behave in ways which are consistent with the overarching goals of society, such as financial stability and consumer protection. regulation must also provide the necessary incentives for banks to act prudently and in fair competition with other banks and other financial institutions. an adequate level of domestic regulation is | 0.5 |
threats has rapidly evolved, with increasingly sophisticated methods being used by those attempting to cause disruptions. the rba is working closely with the fmis it supervises to better understand their approach to cyber resilience. as part of this work, the rba and asic asked the asx to conduct a selfassessment of its cyber - security practices for the fmis that it operates. this assessment concluded that the asx β s practices were generally aligned with the upper tiers of maturity levels under internationally used cyber security standards. 2 but this is an area that needs to be continually watched, and there is considerable work going at the international level, with the rba closely involved in this work. as a financial institution itself, the rba also sees the increasing prevalence and sophistication of cyber attacks and has made its own very significant investments to address the risks. in the area of payment infrastructure, we are undertaking work to strengthen further the resilience of the reserve bank information and transfer system, commonly known as rits. this system is owned and operated by the rba and lies at the heart of australia β s wholesale payment system. with those introductory remarks i look forward to participating in the panel discussion. thank you. asx β s high - level self - assessment was carried out against the united states national institute of standards and technology cybersecurity framework. bis central bankers β speeches | new year address by the governor of the banque de france β paris, 9 january speech by francois villeroy de galhau, governor of the banque de france, chairman of the acpr press contact : delphine cuny ( delphine. cuny @ banque - france. fr ) page 1 of 5 i would like to start by extending, on behalf of the banque de france and the acpr, our warmest wishes to you with whom we work, day - in, day - out : financial centre players, elected representatives and public officials, and journalists. in the turbulent environment of 2024, we will need more than ever to counterbalance the pessimism of intelligence with the optimism of the will, and to remind ourselves that a full life combines both professional commitment and personal ties. so, first and foremost, i wish you much joy with those you love as well as in all your new projects in 2024. this year promises to be an eventful one : monetary union was 25 years old on 1 january, we will be celebrating 10 years of the european banking union, and france will of course be hosting the olympic games. there will also be two elections of key importance for our country beyond our borders : the european elections in june and the us elections in november. because the year ends " in four ", i would like to follow a process of simple addition and share 2 + 2 wishes with you. * * the first two wishes follow on from those i made before you a year ago. i would like to return to the economic progress achieved in 2023, and invite us to " finish the job ". 1. 1 less inflation and more stabilisation inflation remains the main concern of our fellow citizens, and our main mission as a central bank. at the beginning of 2023, i stated here before you that french inflation would pass its peak in the first half of the year β it has since declined from 7. 3 % in february to 4. 1 % in december i β and that we should reach the terminal interest rate " by the summer " β this occurred in early september. i also made a β commitment β that barring any new shocks we would bring inflation down towards 2 % by 2025 at the latest. a year ago, many people were expressing polite β or not so polite β scepticism. today, our forecast is much more widely accepted and believed : average inflation of 2. 5 % in 2024 and | 0 |
be around zero percent for the time being. however, consumer prices are basically projected to continue falling slightly, since the imbalance between supply and demand in the economy remains considerable despite a gradual improvement. financial markets have been stable on the whole, even during the approach of the fiscal year - end at the end of march 2004 as the bank has been providing ample liquidity. the environment for corporate finance is becoming somewhat more accommodative on the whole, although it remains severe for firms with high credit risks. the lending attitude of private banks has been slightly more accommodative, and the issuing environment in the corporate bond and cp markets continues to be favorable. ii. conduct of monetary policy the main features of current monetary easing policy are as follows. first, the bank has been providing ample liquidity to the money market, with the outstanding balance of current accounts at the bank as the operating target for money market operations. second, the bank is committed to maintaining the quantitative easing policy until the consumer price index ( excluding fresh food, on a nationwide basis, hereafter the core cpi ) registers stably zero percent or an increase year on year. and third, the bank is working to strengthen the transmission mechanism to ensure that the effects of monetary easing permeate through the economy. the bank has been implementing additional measures since the autumn of 2003, as in the past, in line with these three main features. with regard to the bank β s provision of funds to the money market, it raised the upper limit of the target balance of current accounts at the bank by 2 trillion yen in october 2003, to provide scope for conducting money market operations in a more flexible manner. in addition, in january 2004, the bank raised the target range for the outstanding balance of current accounts at the bank by 3 trillion yen to around 30 to 35 trillion yen in order to reaffirm its policy stance of overcoming deflation and to ensure a continued recovery. regarding its commitment to maintain the quantitative easing policy, the bank released a more detailed description in october 2003. that is, the commitment to maintain the quantitative easing policy until the core cpi registers stably zero percent or an increase year on year is underpinned by the following two conditions. first, it requires not only that the most recently published core cpi should register zero percent or above, but also that such tendency should be confirmed over a few months. second, the bank needs to be convinced that the prospective core cpi will not be expected to | income for them. enabling them to lift themselves and their children out of poverty. i am convinced that over the next decade, we can together take substantial steps towards making these sustainable development goals a reality. financial authorities contribute to financial inclusion every single organization, whether in the public sector, or the private sector, should look at how it can contribute to these sdgs with their own activities. this is also what central banks do. it is the mission of de nederlandsche bank to safeguard a stable financial system, solid financial institutions and smoothly functioning payments. as a result of our mission, we contribute to sdgs such as decent work, economic growth and good infrastructure. earlier this year we reviewed our strategy and priorities. we have now set out the way forward for the next five years. i'm sure you do the same at your organisation too. our new strategy is called dnb2025. in it, we set out how we will fully integrate corporate social responsibility, or csr, in all areas of our work. and today β s subject, financial inclusion, is of course a big part of csr. our new strategy means we will systematically consider the csr impact of all our activities from now on. a holistic approach is needed to effectively stimulate financial inclusion we all know how financial inclusion can empower people so they can play a fuller role in society. when we talk about financial inclusion, we apply a broad and internationally - accepted definition. financial inclusion is not just about having good access to the financial system, it is also about having knowledge of financial products, and improving financial resilience of people and businesses. we need all three of these dimensions to make the most of financial products and services. only then can we β can you β make a fairer and more inclusive world. which also strengthens financial stability on the macroeconomic level. this holistic approach is not one - size - fits - all. it varies depending on the country, culture, regions and target groups. but again, it can only be effective when all three dimensions are covered. to stress this, i β d like to quote the wise words of two pioneers of financial inclusion : to begin with, sri mulyani indrawati, indonesia β s minister of finance and former head of the world bank group : β financial inclusion matters not only because it promotes growth. but also because it helps ensure prosperity is widely - shared. access to financial services plays a critical role in lifting people out | 0 |
our economy is never again devastated by a financial collapse. the federal reserve has been granted, both in law and in political tradition, considerable independence and autonomy. that independence serves important public objectives. critically, it allows the federal open market committee to make monetary policy in the longer - term economic interests of the american people, rather than in the service of shortterm political imperatives. it also allows the federal reserve to make supervisory decisions based on the facts of each case and the need to preserve financial stability, not on the basis of political considerations. in the interest of maintaining public confidence and promoting economic and financial stability, we must continue to protect our independence. at the same time, in a democratic society like our own, institutional independence brings with it fundamental obligations of transparency, responsiveness, and accountability. the federal reserve is already one of the most transparent and accountable central banks in the world, providing voluminous information and explanation concerning all of its activities. however, i believe that we should be prepared to do even more, to become even more transparent. it is essential that the public have the information it needs to understand and be assured of the integrity of all our operations, including all aspects of our balance sheet and our financial controls. we will continue to work with the congress to ensure maximum transparency of america β s central bank, without compromising our ability to conduct policy in the public interest. these are just some of the challenges that we will all face in the coming months and years. i thank you for the many expressions of support i received during the confirmation process, for your hard work and dedication, and for your service to your country. i look forward to continuing to work with all of you to strengthen our economy and to make the federal reserve as effective as it can possibly be in advancing the economic wellbeing of all americans. thank you. | june. bis central bankers β speeches i believe this intention reflects the preference of most community bankers, who worry that more centralization of supervisory practice would lead to delays in getting answers to questions and decisions on applications. at the same time, members of the board do, from time to time, hear complaints from community bankers that supervisory practice may not always be consistent across reserve banks. to some degree, of course, this is an inevitable byproduct of an approach that leans toward bottom - up supervision. nonetheless, our staff at the board will continue to assess practices across all the reserve bank districts to promote overall consistency without micromanaging the supervision of individual banks. and i want to emphasize that, if community bankers believe that significant variation in certain practices or policies is having an unfair or deleterious effect on one or more of their banks, they should feel more than comfortable raising these concerns with board staff. we do not regard such observations as criticism of our examiners, but instead as opportunities to test, and possibly adjust, our policies to promote overall consistency. a third way in which our community bank supervision differs from that of other banks is the particular effort made to limit the length of examinations and the amount of time bank personnel must spend on them. community banks have much smaller balance sheets over which to amortize the resources they spend on regulatory and supervisory requirements. of late, we have increased off - site supervisory activities, which can reduce the burden on community bank personnel. for example, we can conduct some aspects of the loan review process off site for banks that maintain electronic loan records. while off - site loan review has burden - reducing benefits for both bankers and examiners, some bankers have expressed concern that increasing off - site supervisory activities could potentially reduce the ability of banks to have face - to - face discussions with examiners regarding asset quality or riskmanagement issues. accordingly, we remain flexible and will continue to work with community banks that may prefer their loan reviews to be conducted on site. more generally, the federal reserve has invested substantial resources in developing technological tools for examiners to improve the efficiency of both off - site and on - site supervisory activities. these measures should lead to greater consistency and more efficient, effective, and risk - focused examinations by better enabling staff to tailor the scope of examinations to the activities and risks of individual banks. the automation of various parts of the community bank examination process can also save examiners and bankers time, as a bank can submit requested pre - examination | 0.5 |
the challenge. thank you for listening. i look forward to your questions. endnotes [ * ] i would like to thank lynne cockerell, judy hitchen, callum hudson and david norman for assistance with this speech. bullock m ( 2023 ), β monetary policy in australia : complementarities and trade - offs β, speech at the commonwealth bank global markets conference, sydney, 24 october. the rate of underutilisation captures both the share of the labour force that is unemployed and the share that is employed but working fewer hours than they desire. r e s e r v e b a n k o f au s t r a l i a | time to make some comments about this important project. a key point in the innovation review process was the industry roundtable held in 2012, focusing on the familiar themes of payments system gaps, governance and architecture. my recollection of the discussion was that there was fairly widespread acceptance that the industry would need to find a way to make some bold decisions about cooperative investments in payments system infrastructure not too far down the track. this has been echoed in subsequent views expressed by some of the key players. the reserve bank agreed. the payments system board has seen its own role as acting as a catalyst for that cooperative investment. in the conclusions to the innovation review, the board announced its intention periodically to set some strategic objectives or general goals in terms of the services that the payments system should be able to provide to end users. the five strategic objectives that the board set in 2012, after lengthy consultation and with, i think it can be said, a wide consensus within the industry, were as follows : β’ all direct entry payments to be settled on a β same day β basis β’ the ability to make retail payments in real - time β’ the ability to make and receive payments outside of normal banking hours β’ the ability for payments to carry more complete remittance information β’ the ability for payments to be addressed in a simpler way than using a bsb and account number. the first of these, the same - day settlement of direct entry payments, was achieved in 2013. it is therefore now possible for recipient financial institutions to make funds available to their customers sooner, without incurring credit risk. the bank worked closely with the industry to facilitate same - day settlement, including the introduction of new liquidity arrangements for exchange settlement accounts at the reserve bank. these new liquidity arrangements will also be important as the industry moves to meet the other four objectives from the innovation review. on those other objectives, the payments system board set out a proposed timeframe. it also offered one piece of guidance, namely the suggestion that it would be desirable to have all payments system participants connecting to a central hub or hub - like arrangement in any new payments infrastructure, as opposed to continuing with the numerous bilateral linkages that have proved to be not particularly conducive to either innovation or competition. beyond that, the board did not seek to dictate particular technical details of the solution, accepting that the industry itself should provide the roadmap to the agreed destination. one initial concern was that industry participants might respond with a number of separate | 0.5 |
ottawa, ontario, 24 march 2010, available at : < http : / / www. bankofcanada. ca / 2010 / 03 / speeches / virtue - productivity - wicked - world / >. bis central bankers β speeches | policies, large current account imbalances can be expected to persist. continued reliance on domestic demand in advanced economies promises disappointment. as we have seen in recent weeks, the hand - off from the public to the private sector in the united states and europe is in danger of being fumbled. fiscal consolidation has begun, without autonomous private demand picking up the slack because of unresolved fragilities and a barrage of negative shocks. rebalancing demand across economies will require the implementation of comprehensive financial reforms ; open trade and capital markets ; and significant changes to fiscal, structural and exchange rate policies across a broad range of countries, including major emerging markets. when the g - 20 meets later this week in washington and next month in paris, these issues must be at the centre of the agenda. in the face of this difficult external environment, the bank will continue to support canada β s economic expansion by keeping inflation low, stable and predictable. since the crisis erupted four years ago, the bank has demonstrated its nimbleness in the conduct of monetary policy. we reacted quickly and forcefully during the downturn. as the bis central bankers β speeches canadian recovery has progressed, we have emphasised that we would be prudent with respect to the possible withdrawal of any degree of monetary stimulus. the bank always takes a flexible approach. our decisions are guided by considered analysis and informed judgment rather than mechanical rules. for example, as we have emphasised, given current material headwinds, the policy rate can return to its long - run level after inflation is projected to reach the 2 per cent target and output is projected to reach its potential. the bank also exercises considerable flexibility with respect to the time horizon over which inflation should be expected to return to target. in general, both the size and nature of the shocks that hit our economy can have a bearing on the appropriate targeting horizon. over the last 20 years, the persistence of the effects of the shocks on the economy has been such that it was typically desirable to return inflation to target over a period of six to eight quarters. however, there has been considerable variation in this horizon from as short as 2 quarters to as long as 11 quarters. 1 on at least eight occasions, the bank has extended the targeting horizon beyond eight quarters. it did so most recently in april 2009, when returning inflation to target over a longer period was warranted, given the unusually large shock confronting the canadian economy at the time. just as we do not have mechanical rules for the path | 1 |
corporate sector, including the financial sector. last but not least, structural reforms have gathered pace. the countries under an adjustment programme have taken many initiatives to make their economies more flexible and marketoriented, thus sowing the seeds for better performance and increased competitiveness in the future. all of these developments give reasons to be cautiously optimistic about the prospect for crisis - ridden countries β return to a path of sustainable growth, productive investments and creation of new jobs. however, historical experience suggests that the combination of an economic downturn and a financial crisis is usually associated with a prolonged recession and losses of jobs and welfare. most structural reforms take time to generate positive effects, and some of the countries in distress are still saddled with rigidities in the markets for goods, services and labour. in order to prevent β and indeed reverse β job losses, the downward adjustment of both prices and wages need to be stronger in those areas where unemployment is still high, and where this adjustment has not taken place to a full extent due to structural or institutional factors. if this goes hand in hand with a continued consolidation of public sector budgets, then the cautious optimists will see their views confirmed through a chain of reduced uncertainty, renewed investor and consumer confidence, better access to funding and a return to robust and sustainable growth. 4. 2 reforms at the european level let me now turn to the last and arguably most important topic of my intervention today, namely the reforms which have been introduced in order to make the euro area and the eu stronger in the long haul. to an external observer, especially from asia, the reform process may seem slow and haphazard, but one has to keep in mind that institutional evolution is almost never a formal optimization exercise starting from a β clean slate β, but rather something that builds on the existing institutional setting and adds additional layers and structures, and the institutional evolution of emu is no exception, as pointed out in recent ecb research. 6 the need to agree on reforms at both the domestic and the european level also introduces an additional element of complexity, which is perhaps difficult to understand from the outside. but it is important to point out that if one looks back it is impressive how much has been achieved in a matter of a couple of years. let me just briefly describe what has changed in the institutional setting of emu β and indeed also in the eu more generally β in just a few years. i will start with innovations in the crisis prevention toolkit, and will then move to | the back, let us not get complacent. rather, let us be inspired to further push the boundaries and produce more tangible results in our countries and across the region. financial inclusion is about thinking outside the box, because what is required is beyond the norm. what is required is innovative thinking. i therefore invite us to put on our collective thinking caps in this regard. allow me to suggest a few issues for possible deliberation over the next two days. financial inclusion usage the financial inclusion monitoring framework, according to international standards, looks at access, usage and quality indicators. financial access points are just the building blocks. what is important is getting our people to understand and use these financial products and services. for example, even though remitting funds through mobile phones is perhaps the cheapest of the channels, we still see other alternative expensive mediums being used. we ask the question, why is this so? as a working group, we need to see the translation to active usage of all these positive developments. it is promising to note that we are beginning to gain ground on the financial access points being now visible in our countries, but this must simultaneously be accompanied by active usage. this will provide economies of scale for the provider and, therefore, the sustainability of a particular product or service. bis central bankers β speeches diagnostic exercises β surveys during the next two days, i think it would be timely if we can deliberate on why there is low uptake for certain financial products and services, for instance mobile financial services. i know answers to some of these questions can only be determined by asking the very people on the ground, the intended customers. to this end we need to work towards a national demand survey in our respective countries. piwg may also explore the idea of a progress out of poverty index ( ppi ). the index measures, assesses and tracks the poverty level over time and is a tool that is statistically sound, yet simple in its implementation. remittances and msmes remittances are another important area for us. what can be done to improve remittance flows, as they can play a pivotal role in advancing financial inclusion in our countries? similarly the encouragement of micro, small and medium enterprises is another crucial area in the financial inclusion sphere. what do we need to do to further develop and grow these sectors in our economy? developments in fiji ladies and gentlemen, please allow me to give you a quick update on developments in fiji after our last | 0 |
##que de france is going to add, alongside some of you, three more experiments to the nine already carried out ; it is also with this in mind that the bank organised a pioneering international conference on 27 september on the tokenisation of finance. on a regulatory level, france was one of the first to propose a new dasp status under its 2019 pacte law, which has since been attributed to 54 players. europe has provided a pioneering regulatory framework for crypto - assets thanks to the mica regulation ; following the agreement obtained under the french presidency, it is crucial that it be adopted, and as quickly as possible. in the meantime, we will remain extremely vigilant regarding the risk of regulatory arbitrage in europe. on a global level, it is imperative that the other large jurisdictions β including the largest one β now implement the shared recommendations of the g20 and fsb on consumer protection, financial stability and the prevention of money laundering. we all confirmed our agreement last week in washington : this is good news for β trusted innovation β, but we need to turn our words into action on everything, and quickly, following the examples of france and europe. * * * to conclude, i would like to come back to our work as a β catalyst β for innovation. as aristotle said β what we need to learn before doing, we learn by doing β : internally, we encourage a culture that is geared towards innovation, with the page 5 of 5 launch of an intrapreneurship programme to foster innovative ideas. we also want to co - construct and test out with you innovative solutions to digital challenges, for example a collaborative method for preventing money laundering, or a security solution that can withstand the huge processing capabilities of future quantum computers. we shall continue on this path. thank you for your attention. i new payment stakeholders overview ( banque - france. fr ) digital players in the financial sector : a step towards profitability? | banque de france ( banque - france. fr ) iii digital transformation in the french banking sector | banque de france ( banque - france. fr ) iv charter for the appraisal of fintech authorisation requests | banque de france ( banque - france. fr ) ii | crucial path towards profitability β which page 2 of 5 is necessary for everybody, even though situations vary widely, depending on the business model. the digital revolution is leading to a major restructuring of the financial landscape, at the point where these new players and the existing ecosystem meet. according to an acpr survey published in january, iii all banks and insurers questioned said they had set up partnerships with innovative players. legacy banks and insurers are thus being forced to operate with a more open structure, exploring new distribution channels and offering new products. i welcome this wholeheartedly : no maginot lines and no trench warfare. if existing players and fintechs did not both know how to innovate, and often innovate together, it β s the bigtechs that would ultimately reap the rewards. 2. promote the integration of fintechs into the regulatory framework in response to these transformations, our role as public authorities is twofold : to continue to safeguard financial stability and therefore trust, but also to act as a catalyst for innovation β two roles that are far more complementary than they are contradictory. financial stability without innovation would be a form of dying conservatism ; innovation without trust would be a fleeting fad. we therefore want, clearly, concretely and firmly, to facilitate the entry of new players into the regulated arena. to this end, at the end of last year, we adopted the fintech charter, iv and today we want to update you on how we have lived up to our commitments. - between january and august, the acpr β s fintech - innovation unit received 107 contact requests from new project initiators. in 90 % of cases, a first response was given within two weeks, with an average response time of six days. - after this first contact, and once the fintechs had started the actual authorisation or registration process, the average time taken to ensure their applications were complete and decide on their legal classification was in line with the charter β two to three weeks depending on the legal status β although page 3 of 5 for a third of cases it took longer ; this was notably due to the sharp rise in applications ( up 20 % on last year ). - once an application had been submitted, the deadline for examining it was met in 84 % of cases, with the average time standing at 12 days β less than the average of 17 days it took for applicants to respond! we are therefore well on the way | 1 |
see the economies would take off like a rocket and so you say inflation is going to accelerate really sharply. i β m sure models exist that would have that feature, but given the persistence of inflation, which many models don β t fully capture, we are saying we also need to see actual inflation, the outcomes, especially across the indicators ; especially we need to strip out the volatile elements sufficiently in the neighbourhood of where you want to get to. everyone β s going to agree : yes, it β s credible to say compared to where we are now, these forecasts you have, this 3 / 8 bis central bankers'speeches outlook assessment you have is credible. in order for rates to go up, you have to be forecasting inflation targets however you β re interpreting it at that point, and that has to be a credible forecast given that β¦ lane : so, some people will say β you think β that the jump is too big. so, if inflation today is low and you forecast a high number two years from now, it β s fair to say, well, we β ve not seen it. we β re seeing inflation move maybe sometimes in an incremental way. so the connection between the outcome and the forecast is basically saying there β s a modelling error and maybe it β s safer to wait until the actual realised inflation is not too far away. it β s fantastic to have this conversation with you, just a few days after this major event, so thanks again for coming here. i know people in the audience are going to want to ask questions. i have a couple more things. when i listen to mario draghi and particularly the tone of the conversation around fiscal in the last couple of months, which has been slightly different from even his previous comments, and i look at your very explicit charts about the effect on the output gap in the eurozone, it seems to me that the ecb is saying : when it comes to next responding to the ups and downs of the cycle, potentially downs over the next few years, fiscal is the new monetary. is that right? lane : i don β t think that β s the way to think about it. i β ve skipped over it, as i was conscious it was running a bit long β but in the concluding section of the speech, which i β m sure is online by now on the ecb website, i do emphasise that our mandate is unconditional. we will do what it takes. whatever | , we will certainly consider making adjustments. substantial work remains to be accomplished before basel ii can " go live. " as you are aware, several areas in particular will require special efforts. data collection and validation are examples. while supervisors are working diligently to provide guidance on what is expected for data warehouses and validation methods, financial institutions are responsible for collecting the data they will need for the advanced approaches. similarly, validation starts with institutions β own independent checks on the adequacy of risk management and internal control processes. accordingly, those institutions considering adoption of the advanced approaches at the earliest possible date should now be defining the details of their own implementation plans, including a self - assessment, gap analysis and a remediation plan. the recently issued interagency statement on qualification describes some steps that banking organizations should follow if they wish to be positioned to adopt the final rules at the earliest possible implementation date. the focus on enhanced risk management in basel ii means that banking organizations should not view basel ii preparations with a checklist mentality. rather, they should be moving ahead on many fronts, looking at how to make the fundamental changes needed for better risk identification, measurement, management, and control. by doing so, banking organizations can position themselves to succeed in implementing the accord on a timely basis. we do, however, recognize that a certain time constraint exists for institutions wishing to implement the new framework : on the one hand, those institutions are encouraged to start preparations as soon as possible ; on the other hand, we leave open the possibility that elements of the framework are subject to change. i will not try to pretend that this is a trivial matter. as a former banker, i sympathize with the challenges you face in deciding on investments and upgrades to your systems and personnel. when it comes to basel ii, we recognize that certain details relating to systems and processes will depend on what the final u. s. rule and guidance contain. accordingly, we are available to discuss your implementation efforts at any time and we desire to hear specifics about which elements of the proposal, from your perspective, will demand the greatest investments or appear to generate the greatest uncertainty. using that information, the agencies can then understand where to target resources to assist institutions during the transition to basel ii. we certainly hope that many upgrades made for basel ii are those that would have been made anyway. i would like to say a few words directly to the potential " opt - in " institutions. an institution that does not | 0 |
##rse has the potential to become such a bridge. clearly, the leave vote poses new challenges for the corporate governance of the merger : the parties concerned need to find a governance structure which balances all reasonable interests β even at the expense of synergies. furthermore, i am convinced that, in the medium term, euro clearing cannot take place to the existing extent in london β frankfurt would be the more appropriate alternative. the referendum commission set up by deutsche borse and lse is now being put to the test in terms of its ability to work calmly, and needs to keep in mind the economic rationale of the proposed merger which has gained greater credence through the brexit vote. but uncertainty following the brexit decision is much less due to economics and much more due to politics. indeed, almost all the economic consequences are associated with political uncertainty. as we all know, economic uncertainty is a product of political uncertainty. the fact that the mechanics of leaving the eu are laid down in article 50 of the treaty of the european union is well - known to most people by now, but it only governs the negotiation process without changing the complexity of its nature in any way. clearly, the practical implications of a brexit depend to a large extent on what will be agreed upon in brexit negotiations. and this is also true with respect to banks on both sides of the channel. many institutions have shaped their business models in accordance with the cooperative financial framework in the eu. european banks based on the continent operate in the uk market and have branches in london. the city of london is also home to a great number of non - european institutions which use the passporting regime of the eu to conduct business in any other eu country, making london a hub for the entire european banking market. so what could happen with respect to the passporting regime once the negotiation period has ended? one thing is clear : it will very much depend on politics. in the event that the united kingdom decides to remain a member of the european economic area ( eea ), not a great deal would change for banks and enterprises on both sides of the channel. eu rules for banking super - vision equally apply to members of the european economic area. current supervisory powers would likewise remain unaffected. naturally, eu membership does not only cover free trade. it also means applying the full body of eu legislation, a key component of which is freedom of movement. on the one hand, financial institutions in london have bene | rupee coins net of the increase in the central government β s cash balances. in other words, the reserve bank β s holdings of 91 - day treasury bills that forms a part of budget deficit is also a subset of the monetised deficit. however, it may be noted that while the constituents of the budget deficit are measured at face value, those of the net reserve bank credit to the central government are measured at book value. this valuation difference is, however, negligible particularly for 91 - day treasury bills. the correlation between the budget deficit and the monetised deficit grows weaker at times of easy liquidity such as during the current financial year as absorption by the market of government securities including 91 - day treasury bills has gone up substantially. the purchase of government securities by non - rbi entities reduces the monetised deficit in two ways : ( i ) directly by reducing the devolvement on the reserve bank of 91 - day treasury bills and dated securities auctions as well as through the sale of dated securities including repos and ii ) indirectly, as the market off - take of tap treasury bills and fresh government securities improves the central government β s cash balances and reduces the central government β s recourse to ad hoc treasury bills. 16. the rbi β s support to primary issues of central government securities reflects only its support in the primary offers, and net rbi credit to the government could be very different due to other factors. let me illustrate this with some figures. in 1993 - 94, the rbi β s support to government was rs. 7, 014 crore, but net rbi credit was only rs. 260 crores. in 1996 - 97, till february 14th, rbi β s support was rs. 12, 099 crore, but, net rbi credit was only rs. 7, 837 crore. the monetised deficit is one source of the money supply and is not the only factor affecting the money supply. 17. it is sometimes argued that the real instrument for fiscal prudence should be a statutory ceiling on debt. true, our constitution enables parliamentary legislation relating to a ceiling on debt. the ministry of finance is due to bring out a discussion paper on this. let me not pre - empt its content. but, clearly the new system has merits of its own and will co - exist more effectively with a ceiling on debt. it has merits in itself since it seeks to limit the extent of the rbi β s support. technically, | 0 |
. innovation is already altering the power source of motor vehicles, and much research is directed at reducing gasoline requirements. at present, gasoline consumption in the united states alone accounts for 11 percent of world oil production. moreover, new technologies to preserve existing conventional oil reserves and to stabilize oil prices will emerge in the years ahead. we will begin the transition to the next major sources of energy perhaps before midcentury as production from conventional oil reservoirs, according to central tendency scenarios of the energy information administration, is projected to peak. in fact, the development and application of new sources of energy, especially nonconventional oil, is already in train. nonetheless, it will take time. we, and the rest of the world, doubtless will have to live with the uncertainties of the oil markets for some time to come. | improved their profitability and capitalization, thanks to their growing net interest income. more generally, financial systems throughout the world have remained remarkably resilient in the last few years β despite being hit by the pandemic, the spike in inflation, rapid interest rate increases and the deposit runs in regional american banks. the strengthened resilience is a testament to the profound regulatory and supervisory reforms after the global financial crisis, as well as to the better readiness of policymakers to take bold, timely and exceptional policy actions in times of crisis. we expect that the systemic risks and vulnerabilities in finlandΒ΄s real estate market will start to ease this year, assuming that interest rates fall and the economy starts to recover as projected. 2 / 5 bis - central bankers'speeches as we β the bank of finland β stated in our annual financial stability assessment, published in may, we are fully aware that the deterioration in the international security environment exposes finnish and other western financial systems to shocks and widespread disruptions. for instance, there is a heightened risk that the financial market infrastructure and financial institutions could face more frequent and severe cyberattacks and hybrid interference. in response to this, finnish financial institutions have improved their continuity planning and contingency preparations. the national emergency account system established in finland two years ago, in turn, ensures that critical banking and daily payment services would be available to the public even in times of severe disruption. the short - term economic outlook for the euro area and finland is now somewhat brighter than projected just a while ago. however, our long term growth prospects look rather weak, unless we can manage to find new sources of growth. that goes for all of europe, too. as documented by ian goldin and others, the growth rate of labour productivity in the oecd economies between the 1970s and the 1990s was around 2 %. in the current century, it has fallen to 1 %. the gap between europe and the us has been widening, especially since the pandemic. the discrepancy between post - pandemic developments in productivity is, however, exaggerated if we only look at productivity per person. this is because the pandemic caused a very large adjustment in the number of people employed in the united states, while in europe, thanks to different job retention schemes, jobs were preserved β but hours worked fell abruptly. in other words, average hours worked decreased dramatically in europe, but much less in the us. consequently, productivity per person looks | 0 |
asset price increases - as so often in the past. although there is little evidence to date of a general lowering of credit standards, credit growth has been very rapid and loans to finance equity purchases have risen sharply in some countries. ensuring that investors are not sheltered from the consequences of their sometimes misguided investments is important for maintaining prudent lending standards. it is important that the message from central banks is clear : investors should not count on monetary policy underwriting any particular valuation of equity markets. a second and related risk is that high asset prices might lead to complacency about debt levels. household and corporate balance sheets may look healthy when asset prices are stable or increasing, but what if prices fall? similarly, debt servicing ratios for some emerging market countries may look sustainable when market access is improving, but what will happen if interest rates rise? rising levels of household and corporate indebtedness in some industrial countries, as well as rising levels of external indebtedness in a number of emerging market countries, are based on expectations of continued strong growth in income and production. earlier i remarked that the momentum of the world economy and the policy actions taken to date give reason for optimism. however, volatility is intrinsic to financial markets. our experience during the 1990 β s clearly demonstrates the danger of basing decisions solely on a single central scenario, rather than on a range of possible - including worst case - scenarios. monetary policy and structural changes let me now briefly touch upon the question of how monetary policy should react to structural changes in the economy? quite a lot of thinking has already been done on this issue, both among academics and policymakers. nevertheless, i believe that more must be done in this field, especially since at least some parts of the world economy have seen something of a productivity shock in recent years. i am deliberately avoiding the buzzword β new economy β here, since history has been full of expressions like that ever since the turn of the 19th century. the discussion about monetary policy and a productivity shock is taking place mostly in the united states, in the light of the impressive economic performance there and the acceleration in the rate of productivity growth. so one could certainly ask : what about the rest of the world? the possibility of a productivity breakthrough also in other parts of the world cannot of course be ruled out. higher - or accelerating - productivity growth does indeed pose new challenges for monetary policy. it could set in motion a complex of effects on aggregate supply and demand, on | maximum stability in output could, on the other hand, result in sharp fluctuations in the rate of inflation and erode the credibility of the monetary regime. a point somewhere midway between the two extremes must therefore be found. let me also stress the importance of central bank independence. in order to be successful with the implementation of an inflation target approach, the central bank must be able to act independently of day - to - day party politics and to set interest rates continuously according to the specified inflation target. otherwise a credibility problem arises because it will be hard for policymakers to convince the general public of monetary policy β s long - term nature. lack of credibility, in turn, means that the central bank has to set its interest rates higher than otherwise would have been the case. looking ahead, i believe there are at least two major questions that central banks have to address more thoroughly. first, how should monetary policy react to asset prices, such as equity and / or real estate prices? we know from history that the development of asset prices can have a significant impact on both inflation and real economic activity. we need to establish whether or not there are actions that central banks can and should take to minimise the likelihood of macroeconomic instability arising from extreme fluctuations in asset prices. second, how should monetary policy react to structural changes in the economy? monetary policy and asset prices let me start with the question of monetary policy β s response to movements in asset prices. this depends in turn on how the central bank chooses to use the information contained in asset prices. in a regime that explicitly targets inflation, asset prices are taken into account via the effects on aggregate demand. rising share prices increase household wealth and that would raise consumption for a given level of income if these increments to wealth are considered to be of a permanent nature. at the same time, consumer confidence boosted by higher share prices could potentially make individuals more prone to spend their increased wealth. an increase in share prices also makes investment more attractive to firms since it increases collateral values and lowers the cost of new capital relative to existing capital. if share prices predict higher expected output growth, this could also lead to more investment. if the asset prices on which households and firms base their consumption and investment decisions prove to be too optimistic, this would create inflationary pressure in the short term. an important question in this context is how sensitive households β and firms β consumption and investment responses are to changes in asset prices. via the effects on inflation, asset prices are thus taken | 1 |
that credit institutions are facing. firstly, not having adequate controls to prevent, for example, money laundering or terrorist financing will be unacceptable for regulators, who - as illustrated by the fines levied against abn amro in the united states - will not hesitate to take formal measures against your institutions. secondly, and perhaps even more importantly, involvement in serious compliance related incidents can lead to reputational damage, the impact of which may be even larger than that of regulatory interference. as confidence remains one of the financial sector β s cornerstones, a substantial impairment of an institution β s reputation could very well lead to its collapse. nevertheless, whereas the basel accord, of course, requires institutions to set aside capital to cover credit -, market and operational risk, β compliance risk β is not covered. is this a missed opportunity? should the drafting panels of the new capital accord have spent time on a concept like β compliance capital β? in my opinion, requiring institutions to set aside capital to cover losses from compliance incidents is not the issue. i believe that it is justified that the basel committee has not included compliance risk in its capital accord. whereas ( potential ) credit losses can be financially compensated by holding additional capital, compliance incidents will not be mitigated by financial means. after all, compliance incidents will impact the reputation of a credit institution, which cannot be measured in financial terms. compliance is not a financial matter, but a matter of principle. nevertheless, the question about the position of compliance continues to intrigue me. you will undoubtedly be aware that pillar ii ( the so - called supervisory review process ) of the new capital accord deals ( amongst others ) with the treatment of risks that are not fully covered by the requirements under pillar 1 14. under pillar ii, the accord requires banks to address all material risks faced in the capital assessment process, even those risks that cannot be measured or quantified precisely 15. banks are expected to further develop techniques for managing unquantifiable risks like reputational risk 16. although the language in the capital accord gives the impression that β something β needs to be done, it also implies that holding additional capital for unquantifiable risks is not the solution. so, what then is the solution? i would argue that, whereas it remains necessary to mitigate compliance risks, a more structured and coherent approach is necessary. as previously discussed, banks are faced with challenges like the increasing globalization, issues with the corporate governance of complex institutions, the continuously changing understanding | to talk about the conduct of monetary policy. in april this year, the bank committed to achieving the 2 percent price stability target at the earliest possible time, with a time horizon of about two years, and introduced the qqe to underpin the commitment. specifically, it would increase the monetary base at an annual pace of about 60 β 70 trillion yen and double the monetary base in two years. in order to do so, it would purchase japanese government bonds ( jgbs ) so that the amount outstanding of jgb holdings would increase at an annual pace of about 50 trillion yen ( chart 12 ). while the chart shows the outstanding amounts of the monetary base and jgb holdings as of end - 2013 and end - 2014, these are projected amounts under the current policy and do not suggest in any way a time limit of the policy conduct. as i will mention later, the bank will continue with the qqe, aiming to achieve the price stability target of 2 percent, as long as it is necessary for maintaining the target in a stable manner. the effects of the qqe are expected to carry through the economy via several different routes, and the most important of these is to lower real interest rates. to be specific, first of all, by committing to achievement of the 2 percent price stability target at the earliest possible time and announcing the continuation of a new phase of monetary easing into the future to underpin that commitment, the bank aims to drastically change people β s expectations and raise inflation expectations. second, it will put strong downward pressure on nominal long - term interest rates through massive purchases of jgbs. consequently, real interest rates could be lowered if the extent of a pick - up in nominal rates can be contained within the extent of a rise in inflation expectations. and the decline in real interest rates is expected to have the effect of stimulating business fixed investment and household spending. for the last eight months, our endeavor on this front has been successful. according to surveys on households and economists, inflation expectations seem to have been rising on the whole ( chart 13 ). by contrast, long - term rates have remained stable at a low level of around 0. 6 percent in japan despite the rise in long - term interest rates in other advanced economies ( chart 14 ). therefore, real interest rates have been declining. under such stimulative effects, japan β s economy has been recovering moderately and the year - on - year rate of change in the cpi has turned positive. | 0 |
and tested mechanisms, which can be used for us to ensure that we get a good deal. our trade negotiators are well aware of these principles and mechanisms and i am sure they will negotiate effectively. now in addition to all the deals which that have been negotiated with india, china and singapore, we have the bilateral fta in goods with pakistan which is being invigorated, and on top of that, of course we have eu gsp plus. if you take all this together, if we are able to conclude these trade negotiations successfully, sri lanka could have access, preferential access, to a market of 3 billion people, which is a massive usp. now i think singapore has preferential access to both china and india. but they don β t have preferential access to eu. so there is no other country in the world that i know of, which has preferential access to china, india and page 14 of 17 europe. i know that gsp plus is only for four years. but four years is enough time for us to take advantage of it. so that is a massive opportunity. now, of course this market of three billion people is going to provide opportunities for our own exporters. but on top of that the trick is to use this preferential access to this billion person market to leverage the trade / investment nexus. we can tell people you can come and locate here and sell on a preferential basis to china, india and europe. that is a massively attractive narrative one can offer for potential investors from all over the world. now, if i may talk about some of the policy support offered by the government. the edb has initiated a national export strategy which, as you know, is a collaborative effort between the government and the private sector and it provides a five - year action - oriented frame work for the development of trade and competitiveness. simultaneously, a national trade policy has now been drafted. it is a very neat 20 - page document, very tightly and coherently drafted, and this is the first time we have formulated, in this concise way, the country β s trade policy, which for me, is actually very well presented. an anti - dumping bill is also in parliament. it is very important, if we are going to open up some sectors as part of the trade page 15 of 17 agreements. the government is also working on a trade adjustment package with the world bank and the international trade center, in geneva. | want to try to get to. so that β s the micro side. in addition, the government is also very much in the forefront in terms of improving the investment climate, investment promotion, trade facilitation and trade policy. so, hopefully we are moving in the right direction in terms of macroeconomic stabilization and the framework is being put in place to improve the investment climate, as well as the trading environment. let me now turn to the matters in hand today and focus on the export sector. i must thank my colleagues in the economic research department of the central bank who helped me to put these remarks together. sustained export growth is crucial for the development of sri lanka, particularly given the relatively small size of its domestic economy. relying on the domestic economy is not sufficient to enhance growth. sri lanka was ahead of its regional peers in liberalizing its page 4 of 17 economy in 1977. the adoption of liberal economic policies, such as private sector development, export networks and encouragement of fdi led to immediate improvements in the foreign trade openness of the country. trade openness which was 36. 4 % in 1977, nearly doubled to 72. 2 % by 1979 while exports which were 18. 7 % of gdp in 1977, increased significantly to 29. 2 % by 1979, just two years after opening of the economy. despite the turn - around in the immediate aftermath of the adoption of liberal policies, sri lanka β s international trade performance has been lackluster since then, regressing to levels that were seen during the pre - liberalization era. in 2015, sri lanka β s trade openness was 36. 5 % - it was 36. 4 % in 1977. while exports, relative to gdp, declined to 12. 7 % in 2015, having increased to 29. 2 % in 1979, and it rose as high as 32 % in 2000. so we β ve gone backwards. and we have gone back to almost where we were in 1977, in terms of trade performance. although the common notion is that there is a by - directional relationship between export and economic growth, this relationship has not been seen in relation to sri lanka. this was especially so between 2000 and 2016, wherein gdp increased by a compounded annual growth rate of 10. 4 %, while exports grew only 4 %. page 5 of 17 sri lanka β s economic growth during the past decade or so has mainly been generated by the expansion of domestic demand, rather than increased exports. the tradable | 1 |
effect of impounding market liquidity on a temporary basis. thus, new factors have been impinging the assessment of liquidity in recent weeks, which has been reflected in the behaviour of overnight market rates and in the reserve bank β s liquidity management operations ( table 3 ). in the financial markets, the shifts in liquidity flows between the first quarter of 2007 - 08 and the preceding quarter have imparted considerable volatility. overnight rates have been close to zero for a prolonged period of time ( chart 1 ). these have been caused by the cumulative impact of the unwinding of government cash balances, excess capital flows, and high deposit growth. in the government securities market, there is reasonable stability but the yield curve seems to be indicating that excess liquidity conditions in the short term segment was beginning to effect longer term yields. the forex market is experiencing continuous upward pressures on the spot exchange rate and forward premia have declined across maturities. the most important change between april and now is in inflation conditions. it may be recalled that in january 2007, the resolve of monetary policy was stated as returning inflation to within the policy tolerance threshold on a priority basis. against the backdrop of the spike in wpi inflation in january and the persistence in the hardening of consumer prices, this stance was reinforced in april. the combination of monetary, fiscal and supply management measures appears to have had a salutary effect on inflation expectations and from end - may there has been a distinct easing of inflation in terms of the headline. yet, inflation pressures appear to be ruling firmly. excluding the decline in energy prices since february, wpi inflation continues to be above 6 per cent. excluding food and energy prices, inflation would still be above the headline. inflation in terms of consumer prices is still in the range of 5. 7 - 7. 8 per cent. besides, global prices of key food grains such as wheat and rice, and of oilseeds and livestock products are at historically elevated levels, igniting international concern on the effect of these prices on overall inflation. with food having a higher weight in price indices in developing countries, this development is of particular concern to countries such as ours. international crude prices are high and volatile with expectations that they would remain at these levels through 2007. these factors would have a definite bearing on the manner in which the inflation outlook in india evolves over the months to come. inflation concerns remain with us and thus our vigil on inflation must continue | with increasing linkages and potential vulnerability to contagion effects. in response to these developments, several monetary authorities have continued to display a readiness to tighten monetary policy further in reinforcement of their stance in april. central banks in emes have supported the withdrawal of monetary accommodation with successive increases in cash reserve requirements and in the application of non - monetary measures. in india and china, in particular, the use of cash reserve requirements has been more frequent than in other emes ( table 5 ). thus, central banks across the world remain hawkish with respect to inflation and prepared to act against any signs of instability developing. where they have paused, as in the us, they have done so on the back of sustained prior action. the outlook on inflation continues to drive the response of central banks ( table 6 ). one key issue that many of the key emerging market economies ( emes ) are facing is the issue of excess forex flows, both because of a current account surplus in most cases, and additional capital flows. in this regard, the key difference between india and most of these economies is the existence of a current account deficit, though modest, along with a significant merchandise trade deficit which is now in excess of 7 per cent of gdp. most of these countries, along with us, have experienced significant real exchange rate appreciation over the last year or two. so the practice of monetary management has encountered significant complexity in a number of emes. we are not alone. we may note that we have so far been managing this complexity relatively successfully within the context of high economic growth, high credit growth, a reasonable degree of price stability and most importantly maintenance of financial stability. the quality of bank balance sheets has been improving on a continuous basis, and we are hopeful that they will reach international best practice soon. it is interesting to observe that, just like us, many of these countries have been using the whole range of monetary instruments, including direct sterilisation through issuance of government or central bank bonds, increases in reserve requirements, and different means of capital account management to manage the monetary impact of excess forex flows. the overall problem of the capital flows, both from the point of view of the monetary management of emes and reverse capital flows to industrialised countries, is now receiving worldwide attention. the committee of global financial system ( cgfs ) under the aegis of bis has also appointed a working group to look into these complex issues. ii. macroeconomics of policy assessment domestic macro | 1 |
##unnermeier, and diego saravia, eds., monetary policy and financial stability : transmission mechanisms and policy implications ( santiago, chile : central bank of chile ), pp. 283 β 310. return to text 6 / 6 bis central bankers'speeches | 6 bis central bankers'speeches i don β t want to overstate my concern β i am not worried about a return to the 1970s. we designed our new monetary policy framework for the very different world we live in now, which involves an equilibrium for the economy with slow workforce growth, lower potential growth, lower underlying inflation, and, therefore, lower interest rates. one of those differences is that the kinds of β wageprice spirals β that characterized inflation dynamics in the 1970s have not been present for a long time. it β s quite possible that this situation now prevails because inflation is never high enough for long enough to enter decisionmaking in a material way. so, what are the implications for monetary policy? i am fully committed to the fomc β s new monetary policy framework and the two pieces of related guidance that we have put in place for asset purchases and the federal funds rate to implement that framework. the conditions required to change the pace of asset purchases and those required to increase the federal funds rate are sequential : the latter requires improvement in the economy that clears a much higher bar. let me address each of those in turn. the guidance on asset purchases, introduced in december, commits us to increasing our holdings of securities at least at the current pace until substantial further progress has been made toward the committee β s maximum - employment and price - stability goals. my personal view is that the rise in inflation β even after discounting temporary factors β and inflation expectations since december will prove sufficient to satisfy the standard for inflation in the guidance around asset purchases later this year, but improvement in the labor market has been slower than i would have liked. for instance, the unemployment rate has decreased only 0. 6 percentage points to 6. 1 percent, and the labor force participation rate is still nearly the same as it was at the time of the december meeting. therefore, we need to remain patient in the face of what seem to be transitory shocks to prices and wages so long as inflation expectations continue to fluctuate around levels that are consistent with our longer - run inflation goal. for me, it is a question of risk management. the best analysis we currently have is that the rise in inflation to well above our target will be temporary. but those of us on the fomc are economists and lawyers, not prophets, seers and revelators. we could be wrong ; and what happens then? part of the calculus in balancing the risks of either overshooting or under | 1 |
gill marcus : the outlook for the south african economy in a challenging global environment address by ms gill marcus, governor of the south african reserve bank, to the distinguished speakers seminar, european economics and financial centre, london, 8 april 2014. * * * thank you for the opportunity to address you this afternoon. today β s discussion takes place at a time when the uk is one of the advanced economies that is showing signs of sustained recovery from the global financial crisis. this is good news not just for the uk, but also for south africa, which still has strong trade and investment links with your country. however, after nearly seven grueling years, we need to recognise that the global financial crisis is not yet over. rather, we have entered a new phase, one which is moving in the right direction, but one that is no less uncertain and risky than previous phases, and which poses new challenges for emerging economies in particular. the unwinding of the extraordinary monetary policy actions of the past by the us fed is taking us all into unknown territory, and there is no history or precedent to guide us. emerging economies had to deal with the spillover effects of monetary accommodation in the advanced economies, and the challenges to be faced by their reversal will be no less daunting. however, while the adjustment will be difficult, i believe that emerging economies in general, including south africa, are more resilient and better equipped to respond to such challenges than was the case in the past. one of the consequences of the unconventional monetary policies adopted in a number of the advanced economies in response to the global financial crisis was a significant change in the pattern of global capital flows. as the search for yield became more intense, emerging economies had to contend with large capital inflows. although these flows presented opportunities, they also brought challenges in the form of appreciating exchange rates and lower interest rates, which had the potential to cause a buildup of macroeconomic imbalances, including, in some instances, excessive credit extension, asset price bubbles and widening fiscal and current account deficits. the appreciating currencies also made the products of these economies less competitive, with significant consequences for domestic manufacturing, for instance. the announcement by the us fed in may last year that a reduction of asset purchases was likely to commence at some stage later in the year had a marked impact on these global capital flows, amid initial uncertainty about the timing and quantum of the tapering. the widely expected | towards foreign financial markets and eventually towards foreign relocation, then that could be activity lost to new zealand. new zealanders β unwillingness to provide equity capital has been an incentive for increased direct foreign ownership. in many cases this has been desirable, even inevitable, for expanding companies. one can see a natural progression whereby some new zealand companies gradually outgrow the technical and market limitations of this country, and as they expand into bigger markets, take on more of the ownership attributes of international firms. but if that happens β prematurely β, there is an opportunity benefit foregone for new zealand. new zealand β s liberal attitude to foreign ownership has brought us many important advantages. we have enjoyed access to the world β s capital, to best practice international technologies, to specialised business skills, and to marketing networks. these have brought higher productivity, employment opportunities, and have contributed to our higher growth rates. this also has to do with the much discussed cultural tendency of some new zealand entrepreneurs to grow their business to sales levels of some tens of millions, then exit for the β bach, boat and bmw β semi - retirement subculture, leaving overseas investors to expand the business further and develop its full value internationally. gdp is a measure of what is produced in new zealand, while national income ( which used to be called gnp ) measures the fruits of production that actually accrue to new zealand residents. in 2005, national income was around $ 10 billion lower than gdp, as a significant part of gdp accrued to the overseas owners of new zealand - based companies. ultimately, it is national income that matters for the overall economic wellbeing of new zealanders. the wedge between gdp and national income has some quite complex welfare implications for government, which has to balance how much its policies aim to promote activity in new zealand, or activity owned by new zealanders, whoever or wherever they may be. one particular consequence is seen in our current account deficit, a measure of the external financing required by the country β s investment - savings imbalance. in recent years about half the deficit has been represented by the trade imbalance. the other half has mainly been the imbalance of income earned by foreigners in new zealand compared with that earned by new zealanders abroad. measurement problems apart, this appears to have been growing as a result of recent investment trends. a further decline in the ownership share of new zealand business will worsen this deficit and put the balance of payments under continued pressure. interestingly, our net | 0 |
nestor a espenilla, jr : ready in the age of great convergence speech by mr nestor a espenilla, jr, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the security bank economic forum, 21 november 2017. * * * sbc chairman alberto villarosa ; president and ceo alfonso salcedo, jr. ; department of finance undersecretary gil beltran ; fellow speakers / panelists, esteemed guests ; ladies and gentlemen, good afternoon. it is a pleasure to be here at security bank β s annual economic forum, to discuss developments and prospects in the global and domestic economy and to take stock of challenges ahead. at present, four key financial sector issues seem top of mind. first, is uncertainty over the pace, timing, and magnitude of tightening of global financial conditions. the potentially divergent monetary policies of advanced economies ( aes ) would likely trigger bouts of volatility in the financial markets. second, is peso volatility with specific concern over its possible sharp depreciation. third, is the perceived risk of overheating in the economy. and fourth is the challenge of disruption brought about by fintech. the use of digital technologies challenges the status quo, 1 even making an impact on monetary policy. anchors of stability we can rely on several anchors of stability to manage these pressing issues. the philippines sustained its robust macroeconomic fundamentals. it is one of the fastest growing economies in the world, with 75 consecutive quarters of uninterrupted and increasingly broad - based growth. annual growth has been running above 6 percent in the last five years. for the third quarter of this year, gdp picked up to 6. 9 percent. prospects remain bright as growth is predicted to be between 6. 5 and 7. 5 percent this year and 7. 0 and 8. 0 percent over the medium - term. growth will be increasingly investment - led as government and private sector investments ramp up. the stable inflation environment provides support to domestic demand. inflation has averaged 3. 2 percent in the past ten months, in line with the 2017 target. latest baseline forecasts show it will likely settle around the middle of government β s target range of 2 β 4 percent in 2017 to 2019. we are ready to deploy the full array of our monetary policy toolkit to deal with possible market volatility as policy settings evolve and normalize in the us and other advanced economies. | durmus yilmaz : dollarization β consequences and policy options speech by mr durmus yilmaz, governor of the central bank of the republic of turkey, at a conference on β dollarization β, istanbul, 14 december 2006. * * * distinguished governors, academicians and guests, i would like to welcome you all to the conference entitled β dollarization : consequences and policy options β. i would also like to thank you for sharing your precious knowledge and experiences with us. as this conference is one of the activities organized in the context of the 75th anniversary of the central bank of turkey, it gives me an honor to give the start for it. before continuing with my speech, i would like to comment on the motives that lie behind the topic of this conference. although we have never had hyperinflation, we, in turkey, experienced high and chronic inflation for the past almost 30 years before 2001. living long years with chronic inflation led to huge losses in the credibility of our national currency, which is important for us as an institution responsible for issuing banknotes and maintaining stability of the money. in this sense, it will be appropriate indeed to discuss dollarization in depth, i believe. given the wide range of issues related to dollarization and the limited time available, i will make some brief remarks on the concept of dollarization in general and touch upon the turkish experience in particular. dear guests, dollarization has evolved as one of the noteworthy features of globalization during the last two decades. the integration of the international financial system, the removal of restrictions on capital mobility and the increasing trade volumes have contributed to the evolution of dollarization. although it was a phenomenon in different economies for a long time, the word β dollarization β has become a well - known term in the 90 β s. in this period, the number of countries that gave foreign currencies the legal tender status increased and the official dollarization has been a widely discussed issue. alternatively, unofficial dollarization has expanded even more and become a pervasive phenomenon in a wide range of countries. the number of countries where the ratio of foreign exchange deposits to total deposits higher than 30 percent increased from 7 in 1990 to 46 in the year 2000 1. similarly unofficial dollarization in turkey has also evolved during this decade. in this sense, i will focus on unofficial dollarization in the rest of my speech. distinguished guests, in general, dollarization occurs in circumstances where residents lose confidence in their own currency. | 0 |
recently accessed on 8 february 2016 ] at : http : / / usa. marsh. com / portals / 9 / documents / benchmarkingtrendscyber8094. pdf. bis central bankers β speeches customers, yet at the same time the additional layer of security imposes a higher hurdle for cyber criminals to clear authentication. third, defending from cyber risks is by no means trivial, but requires a considerable degree of foresight and ingenuity. threats are constantly evolving. in order to control and mitigate cyber risk, banks are even starting to use big data to discover unusual patterns that point to a cyber attack. from a governance point of view, setting the right priorities can make a huge difference. we have seen cases in which banks expend a lot of resources on deterring sophisticated assaults while omitting the most basic of measures. i am especially referring to a factor which is still highly underappreciated : the human factor. for humans are often the weakest link in it processes. targeting β digital carelessness β among customers and staff is usually a good way to achieve fast results in mitigating risk. 4. how to cope with cyber risks these insights have been incorporated into regulatory and supervisory practice. unsurprisingly, regulation cannot give a detailed prescription for cyber security, because the cyber environment is so agile that technical details can quickly become obsolete. in addition, there is no one - size - fits - all solution that can cover the diversity of the types and sizes of institutions. there are, of course, concrete elements for cyber defence that would not be out of place on a checklist for any institution : network plans with appropriate security layers, contingency and recovery plans and a well - conceived update management, to name some important items. but indeed, there is more to cyber resilience than a functional first line of defence. it requires responses to new as well as unknown circumstances that at the same time maintain the functional viability of an institution. this gives senior management a lot of room for manoeuvre. the tone from the top is instrumental in raising staff awareness of security issues. also, companies and organisations are evolving constantly. managing responsibilities is thus key. this includes breaking down the β accountability firewall β, where nobody assumes responsibility for the many intersecting aspects of cyber risk. we therefore demand that banks clarify what is at stake and how the risks are supposed to be governed. this is called a cyber strategy, and every | philipp hildebrand : current state of the financial system in switzerland introductory remarks by mr philipp hildebrand, vice - chairman of the governing board of the swiss national bank, at the half - yearly media news conference, berne, 14 june 2007. * * * i would like to use today β s publication of our financial stability report as an opportunity to share some thoughts with you on the current situation of the financial system. i will start with the most important message β the swiss banking sector and the financial system in general are in very good shape at the moment. based on our analysis, the outlook for the future is also essentially positive. as stated in our report, the favourable situation in the swiss banking sector comes as no real surprise. developments in the economy and the financial markets in recent years have been very positive, both in switzerland and abroad. although economic growth has been strong, it has had practically no impact on inflation to date. the credit standing of borrowers remained high. in addition, despite repeated, significant short - term price corrections β as was the case last week β the stock markets rose sharply overall in an environment of low volatility. how can these positive developments be explained? and are there any risks involved β in particular for the stability of the swiss financial sector? the good performance is not solely attributable to the favourable economic situation. structural aspects have also played a role. with that i mean first and foremost the increased level of efficiency that has been achieved in the financial system in the past few years. this rise in efficiency can be ascribed to the innovativeness of financial markets. new financial instruments, such as credit derivatives, enable banks to separate their credit risk and transfer it either completely or partially. this facilitates a better distribution of credit risk in the financial system and means that the risk is borne by those who want to and are able to bear it. the improved efficiency has resulted in a reduction in the financing costs of companies and households. lower financing costs help the economy and stock markets to achieve greater growth. the increased efficiency also appears to have improved the ability of global financial markets to absorb shocks. the downgrading of general motors β credit rating in 2005, for instance, or the major losses suffered by the hedge fund amaranth last year had no lasting impact on stock and credit markets. all in all, global financial markets are currently better able to absorb shocks, at least small to mediumsized ones. accordingly, serious turbulence in the financial system | 0 |
bank of japan β s september report of recent economic and financial developments1 bank of japan, 16 september 2003. * the bank β s view * * economic activity still continues to be virtually flat as a whole, although signs of improvement have been observed in such areas as the environment for exports. with regard to final demand, business fixed investment is recovering gradually. meanwhile, private consumption continues to be weak, housing investment remains sluggish, and public investment is declining. net exports are virtually flat. industrial production continues to be basically level in response to these developments in final demand, and corporate profits are on a moderate uptrend. as for the employment situation, although the number of regular employees continues to decline, the total number of employees including both regular and non - regular employees has stopped falling. the pace of decline in wages has also slowed, and thus the decline in household income is gradually coming to a halt. however, the unemployment rate continues to be high, and hence the employment and income situation of households overall still remains severe. turning to the economic outlook, with respect to overseas economies, the likelihood is gradually increasing that the growth rate of the u. s. economy will accelerate and that the east asian economies as a whole will resume a growth trend. hence, exports and industrial production are likely to turn up gradually. with respect to domestic demand, public investment is projected to follow a declining trend, and private consumption is likely to remain weak for some time since the employment and income situation is unlikely to improve markedly. meanwhile, the recovery trend in business fixed investment is expected to become clearer in the period ahead, mainly in large manufacturing firms, whose investment has been thus far significantly restrained despite the recovery in their profits. however, as long as the pace of increase in exports and production continues to be gradual, the recovery in business fixed investment is likely to remain moderate. overall, with the recovery in overseas economies, the uptrend in exports and production will resume gradually, which in turn will initiate the momentum for an economic recovery in japan. however, a selfsustaining recovery in domestic demand is unlikely to gain momentum for some time due to persisting downward pressures from structural adjustments, such as firms β reduction of excess debt and labor costs. in addition, as for the outlook for the environment for exports, there still remains uncertainty overall, as the employment situation in the united states continues to be sluggish and the pace of recovery in some east asian economies such as south korea is slow. | susan schmidt bies : economic outlook and developments in mortgage markets remarks by ms susan schmidt bies, member of the board of governors of the us federal reserve system, at the eller college of management distinguished speaker series, tucson, arizona, 18 january 2007. * * * to begin, i would like to thank dean portney and everyone at the eller college of management here at the university of arizona for the invitation to speak this evening. i know that this audience includes both experienced business leaders as well as students preparing to apply the knowledge they have learned in the classroom to the real world. accordingly, my remarks will first touch on the economic outlook. then, i will offer some thoughts on the challenges facing consumers as they navigate today β s changing mortgage loan market. economic outlook economic activity slowed in the middle part of last year. after rising at an annual rate of 3 - 1 / 4 percent over the previous two years, real gross domestic product ( gdp ) increased at an annual rate of 2. 6 percent in the second quarter of last year. real gdp growth in the second half of last year slowed after accounting for some measurement difficulties in the automotive sector. despite the recent slowing in output, however, resource utilization remains relatively high by historical standards and thus continues to be a potential source of upward pressure on inflation. in the aftermath of the 2001 recession, the federal open market committee ( fomc ) eased monetary policy substantially. however, the degree of easing in place in 2003 and 2004 was clearly unsustainable. since mid - 2004, the fomc has gradually moved monetary policy from an accommodative stance to a more neutral position. as a consequence, the elements now appear to be in place for some easing of resource utilization rates over the next year or so and a reduction in inflationary pressures. however, substantial uncertainty surrounds the near - term outlook. in determining the future path of interest rates, the fomc will be guided by the incoming data on both output and prices, so let β s begin by reviewing recent developments. economic activity the slowdown in the growth of real gdp since last spring largely reflects a cooling of the housing market : sales of both new and existing homes dropped sharply after their peak in the summer of 2005, the inventory of unsold homes has soared, and the number of single - family and multifamily housing starts has fallen nearly 30 percent since the beginning of last year. at the same time, homes are appre | 0 |
channels of data communication with existing and potential customers and business partners through the internet. in this world, particularly in retail commerce, payments by paper have been the exception, not the rule. despite ongoing discussions about privacy and security in electronic commerce, credit cards have rapidly become the payment instrument of choice for consumers. interestingly, there have been experiments with new payment systems analogous to private currency. to date, these products have not been widely successful, despite the fact that some have offered significant degrees of privacy and security. instead, familiarity with and confidence in the credit card built up over more than half a century of use seem for now to have shaped behavior. some suppliers have sought to deepen confidence by voluntarily expanding consumer protections. in a twist of history, even gold coins can now be purchased on line with a credit card. experiments are also taking place to facilitate the use of debit cards in on - line transactions. the use of such instruments would clearly expand electronic payment capabilities over the internet to those with bank accounts who do not hold credit cards. experiments with technologies such as electronic money that do not even require bank accounts may yet find a role to play. new arrangements are also being tried that would mimic the flexibility of the check in making payments in diverse on - line transactions ranging from ad hoc person - to - person payments to routine business - to - business purchases. regarding the older electronic payment systems such as the automated clearinghouse ( ach ), both suppliers of payment services and the end users are continuing to look for new ways to build on the interbank processing efficiencies that these systems offer. one of the great ironies is that studies in the 1960s and 1970s led to recommendations that it would be more economical for society to build whole new electronic payment systems such as the ach than to adopt check - truncation technologies. although the ach has been extremely effective for automating some types of transactions, it has not been as widely used as originally anticipated. one of the problems has apparently been the relative lack of flexible and low - cost interfaces with consumers and with business systems similar to those that have been built up around the check. now, however, a range of experiments and businesses are building on the ach, and potentially on other electronic payment networks. in a revival of the idea of check truncation, projects have gone forward to truncate checks at the point of sale, as well as at lockbox locations, and to substitute ach payments. these | money - our store of value and medium of exchange - takes than we payments system specialists have readily understood. it took many generations for people to feel comfortable accepting paper in lieu of gold or silver. it is taking almost as long to convince them that holding money and making payments in ephemeral electronic form is as secure as using paper. there is, of course, more to the tenacity of paper than a deep psychological connection between money and tangible wealth. paper instruments also are perceived to have a greater degree of privacy than electronic payments, although there have been experiments with electronic money and other instruments that would provide relatively high levels of privacy. but confidence in such arrangements may take quite awhile to emerge. currency, and to a large degree checks, are currently perceived to offer significant advantages in privacy over electronic payment systems that entail centrally maintained databases with elaborate records of individual transactions. perhaps an even more important dimension influencing our behavior regarding money and payments is convenience. currency and checks do not require the users to travel to special locations, dial the number of a special machine, or maintain special equipment to originate payments. this is not to deny that automation has played an important role in reducing risks and increasing efficiency in handling currency and checks. rather, the issue is that traditional paper instruments allow the users themselves, within a structured format, to have significant control over when, where, and how to make payments. turning to the suppliers of payment instruments and services, we see that many are straddling two different worlds. the world of paper is well known and a major part of the business of traditional financial institutions. the world of electronic commerce is a new and growing part of business that is changing daily and operating on a different time scale. the phrase β internet time β has now been added to our vocabulary. behind this phrase is a serious observation that advances in information technology allow new ideas to be transformed into products and services much more rapidly than a few years ago, thus greatly speeding up product cycles. at the same time, new information technologies have broken down barriers between firms and stimulated very creative and competitive processes across the economy. some traditional financial institutions have tended to view this process with concern. as many firms have driven to find new ways to supply financial and other kinds of information, along with transactions and accounting services, some have expressed concern that their traditional payment franchise is being eroded. this concern is another manifestation of the insecurity brought on by innovation and change. many firms, including financial firms, have now opened | 1 |
annual population survey ; bank calculations. source : ons labour market statistics ; bank calculations. all speeches are available online at www. bankofengland. co. uk / publications / pages / speeches / default. aspx chart 9 : youth ( 16 - 24 ) unemployment rates chart 10 : working age mortality rates, males source : ons labour market statistics ; bank calculations. source : ons mortality figures for england and wales, scotland and northern ireland ; bank calculations. chart 11a : real gdp per head growth ( 2008 to 2014 ) chart 11b : scenario - real gdp per head growth ( 2008 to 2014 ), without monetary stimulus source : ons ; bank calculations. source : ons ; bank calculations. notes : see footnote 16. all speeches are available online at www. bankofengland. co. uk / publications / pages / speeches / default. aspx chart 12a : change in unemployment rates ( 2008 to 2016 ) chart 12b : scenario β change in unemployment ( 2008 to 2016 ), without monetary stimulus source : ons labour market statistics ; bank calculations. source : ons labour market statistics ; bank calculations. notes : see footnote 16. chart 13a : growth in median net wealth ( 2006 / 8 to 2012 / 4 ) chart 13b : scenario - growth in median net wealth ( 2006 / 8 to 2012 / 4 ), without monetary stimulus source : ons wealth and asset survey ; bank calculations. source : ons wealth and asset survey ; bank calculations. notes : see footnote 16. all speeches are available online at www. bankofengland. co. uk / publications / pages / speeches / default. aspx chart 15 : growth in average weekly pay ( 2008 to 2016 ) chart 16 : uk, us and euro area 5 - year, 5 - year forward inflation swaps per cent 4. 5 4. 0 3. 5 3. 0 2. 5 2. 0 1. 5 uk ( rpi ) us ( cpi ) euro area ( hicp ) 1. 0 0. 5 0. 0 source : ons annual survey of hours and earnings ( ashe ) ; bank calculations. pay is measured as median gross weekly earnings of full - time employees. source : datastream ; bank calculations. chart 17 : firm level productivity percentiles 10th percentile 50th percentile 75th percentile 90th percentile gva per head, Β£000s 99th percentile source : ons ; | lending to the economy even if truly adverse scenarios materialise, as shown by the ecb β s vulnerability analysis published in july 2020. this shows that in the field of banking regulation, we did not waste the previous crisis and learnt our lessons well. my second point relates to regulatory response. the relief package that the ecb banking supervision announced in march was designed to ensure that banks can keep lending to the contracting economy. for instance, banks were allowed to temporarily operate below the level of capital defined by the bank - specific pillar 2 capital requirements, namely pillar ii guidance. 1 / 2 bis central bankers'speeches in lithuania, macroprudential policy was a key domain of the regulatory response package. prior to 2020, critics would say that our macroprudential set - up was perhaps too wide - ranging. but this crisis showed, i believe, that our policy stance was the right one. first, it helped prevent a deterioration in lending standards and a build - up of systemic risk in the run up to the covid - 19 shock. and second, when the time came, we implemented countercyclical policy decisions in line with the intended functioning of the framework. for instance, in mid - march, the bank of lithuania fully released the counter - cyclical capital buffer from 1 % to 0 %. overall, the relaxation of various requirements has increased the lending potential of banks in lithuania by β¬2 billion, or by a third, compared to 2019. of course, we are talking about potential here, not the real world. but the real - world data has been encouraging, at least in terms of lending to households, which has broadly returned to the pre - pandemic levels. going forward, policymakers should not β waste a good crisis β this time as well, and take a fresh look at the existing macroprudential framework. we could even consider novel ways of applying macroprudential tools β such as the application of borrower - based measures during the cycle, e. g. relaxing the loan - to - value or debt - service - to - income requirements in times of crisis. finally, i would like to make a point on the long - term issues of the european banking sector. the first issue here is inadequate bank profitability. in this regard, there is a need for consolidation via mergers and acquisitions to make the european banking sector leaner. completing the banking union by creating a european deposit insurance scheme ( edis ) would open doors for true | 0 |
. there was also a development towards a more decentralised and individualised wage formation, which has had a subduing effect on wages. many agreements gave the local social partners the freedom to determine and distribute the wage scope themselves. however, the local negotiating scope was often limited to some extent by block rules regarding the size of this scope and guarantees for a minimum wage increase for each individual. the 1998 bargaining rounds marked a break in trend with regard to the rate of wage increase. the annual nominal rate fell from approximately 8 per cent during the period 1970 - 1997 to around 3. 5 per cent during the period 1998 - 2000. the outcome may be regarded as moderate taking into account the rapid recovery in the economy and the large increase in employment that took place during the period covered by the agreement. the fact that there were unused resources also helped to keep down the rate of wage increase. low inflation meant that real wages increased considerably. during a 20 - year period up to the mid - 1990s, real wages rose by an average of only 0. 5 per cent a year, but over the past five years the average increase in real wages has been approximately 3 per cent a year. the development towards a more decentralised wage formation process continued in the 2001 bargaining rounds. all those in the central government sector have local wage formation, compared with around one - fifth in the private sector. some of the agreements signed were completely without figures so that everything was determined at local level, without any individual guarantees or centrallyestablished levels. this applies to one - third of the employees in the public sector and 7 per cent of those in the private sector. prior to the 2001 bargaining rounds, the unions in lo decided to improve the wage situation for women in the public sector in relation to industrial workers. however, the wage bargaining between the employers and the swedish municipal workers'union broke down and after mediation the social partners reached a central agreement that entailed wage increases of around 3. 7 per cent a year during the period 2001 - 2003, with the possibility of local agreements on higher wage increases. the municipal workers'union agreement was thus one of the most advantageous among the lo unions. this time, nurses and teachers were the first onto the field with regard to wage bargaining and they signed 5 - year agreements, which roused some concern that high wage agreements stemming from the favourable demand situation would spread to the rest of the labour market. the average level of the wage agreements in the economy | pursued tracker mortgage issues with a number of individual lenders and ensured 7, 100 cases were resolved in favour of affected customers. we also took enforcement action against springboard mortgages limited, resulting in a reprimand and monetary penalty of β¬4. 5 million, the highest penalty ever collected by the central bank further to an enforcement investigation. a full history of these interventions can be found in part ii of our march 2017 update on the tracker mortgage examination, which is available together with all previous updates on the examination here : www. centralbank. ie / consumer - hub / tracker - mortgage - examination 1 an outline of the central bank β s policy and supervisory interventions and enforcement activity in relation to tracker mortgage - related issues in the pre - examination period is contained in the annex to this statement. 2 26, 600 affected customers identified through the examination and 7, 100 cases remedied following central bank intervention outside of the examination 5 / 5 bis central bankers'speeches | 0 |
safety net before turning to the global safety net, let me first say a few words about how the financial regulatory reform agenda in the uk has enabled the strengthening of the domestic safety net β the provision of liquidity insurance to the financial system by the central bank. since the onset of the financial crisis, to keep the financial system open for business, central banks have used their balance sheets as never before. at the bank of england, for example, new published liquidity facilities have been introduced that extend liquidity for longer durations against expanded sets of collateral to new counterparties. 5 as with any kind of insurance, however, liquidity insurance creates incentives to take more of the insured risk. the extent of this moral hazard and how best to tackle it was a key concern for the bank of england when making these changes β it is not the role of the central bank to lend to insolvent institutions. 6 to that extent, the expansion of the provision of liquidity insurance was enabled by reform to the regulatory framework for banks, including : ( i ) micro prudential supervision that raised the levels and quality of capital and liquidity banks are required to hold ; ( ii ) regular, transparent stress testing to ensure an ongoing assessment of solvency under different scenarios ; ( iii ) a credible resolution regime for insolvent banks that reduces contagion to the wider system and the need for taxpayer support. it would be foolish to declare categorically that the bank of england has eliminated stigma or moral hazard. but we can say that these regulatory reforms have made it easier for the bank of england to provide liquidity insurance to solvent institutions. in turn, this has allowed us to increase the availability and flexibility of our liquidity facilities and to give more clarity around the circumstances under which that insurance would be provided. these changes should help to reduce the stigma attached to the use of central bank liquidity facilities, and encourage earlier take - up to limit contagion and protect financial stability during future crises. see hume ( 1758 ). see carney ( 2013 ) and shafik ( 2015 ). see hauser ( 2014 ) and tucker ( 2014 ). bis central bankers β speeches 3. are sovereigns like banks? attention more recently has turned to sovereign rather than banking vulnerabilities and two issues in particular have brought this into sharper focus. first, do fundamentally sound emerging market economies have access to the right form of liquidity insurance to deal with the challenges posed by lower growth | minouche shafik : fixing the global financial safety net β lessons from central banking speech by ms minouche shafik, deputy governor for markets and banking of the bank of england, at the david hume institute, edinburgh, 22 september 2015. * * * the views in this speech are my own, and not those of the bank of england. i would like to thank james benford, simon whitaker, ed denbee and glenn hoggarth for their policy analysis and insights ; and chris salmon, andrew hauser, ankita mehta and grellan mcgrath for their comments. 1. introduction it gives me great pleasure to deliver my first internationally themed speech as a central banker in edinburgh on the 30th anniversary of the david hume institute. of course, scots have played a vital role in the bank of england β s history β including one william paterson, whose idea it was to set up the bank of england to help put order on the government β s finances in the late 17th century. but paterson is perhaps best known for the catastrophic darien scheme β an unsuccessful attempt to establish a scottish trading colony in panama. it has been argued that the failure of the scheme crippled the country β s economy β an early example of how troubles abroad can rebound at home 1. scotland also has a tradition of producing internationally renowned economists including, of course, david hume. hume was a great advocate of free trade between nations. his β of the balance of trade β, published 34 years before smith β s β the wealth of nations β, was arguably the first example of modern economic reasoning. in it he railed against the β numberless bars, obstructions, and imposts, which all nations of europe, and none more than england, have put upon trade β which β deprive neighbouring nations of that free communication and exchange which the author of the world has intended, by giving them soils, climates, and geniuses, so different from each other 2. β what an elegant way to talk about the gains from international trade! the benefits of free trade are now well established. similarly, economic theory provides compelling arguments for the potential advantages of integrated global capital markets based on the efficient allocation of resources. but, in practice, cross - border capital flows can be fickle and flighty, with destructive effects on the real economy. it is fair to say that the case for the free movement of capital took something of a knock following the string of crises since the early 1990s in | 1 |
in measuring risk. diversified shareholders with comparatively short investment horizons can demand overly ambitious returns. competitive pressures encourage risk taking. the typical features of contracts and remuneration schedules for traders and money managers can have a similar effect. the same is true of β herd instinct β, namely the tendency to conform behaviour to the norm, or to the presumed better informed, for fear of being left behind and in the hope of limiting blame in the event of failure. and perceptions of official β safety nets β can play a similar role. in different ways and to varying degrees, all of these forms of behaviour share a common characteristic : they may seem reasonable, even compelling, when considered in isolation, but they can result in undesirable outcomes once the system - wide impact of collective action is taken into account. iii. implications for regulatory and supervisory policy a strengthening of the macro - prudential orientation in the regulatory and supervisory framework would have implications for the relative weight assigned to different objectives, for the treatment of different institutions at a point in time, and for the assessment and mitigation of risk over time. consider each of these in turn. in terms of objectives, a strengthening of the macro - prudential orientation would call for a further broadening of focus away from narrow depositor protection and towards systemic concerns. its main benefit would be to permit a better balance between official intervention and market discipline. in turn, this could be conducive to sounder individual institutions too. at least in the public β s eye, the failure of individual institutions tends to be identified with the failure of supervisors to perform their duties. this considerably complicates their task, encouraging forbearance rather than orderly exit. implementing the shift requires that specific means be in place to protect depositors in the event of failure, relieving public pressure to forbear and adding to the credibility of the exit threat. targeted deposit insurance schemes can play a useful role in this context. in terms of the treatment of different institutions at a point in time, the shift in focus would imply the calibration of regulatory and supervisory arrangements to the institutions β systemic significance. higher costs of failure for the system call for a higher degree of comfort in the soundness of the institutions that generate them. the greater difficulties in ensuring ex post their orderly exit further supports this view. one way of implementing a calibrated approach would be through the supervisory review process. in fact, in several supervisory jurisdictions the authorities are already | of reserves, this would be unwise. dear shareholders dear guests the swiss national bank must retain the confidence of the population and the markets if it is to conduct its policies effectively. the cosa initiative is playing with fire. it constitutes a permanent invitation to press never - ending financial demands. it places the snb at the centre of a permanent political debate which threatens both its credibility and the effectiveness of its policies. that is why good sense dictates that it be rejected. the snb needs the support of everyone in this tricky phase and, in particular, the support of its shareholders. i would like to thank you for your attendance today, and for your continual interest in our activities. | 0 |
government debt is good or bad, as i have already mentioned, is a sham question to a certain extent. another sham question is a choice between the financial stability and economic growth. both the central bank and the ministry of finance are being quite often criticised for focusing monetary and fiscal policies respectively on the problem of financial stability to the detriment of economic growth. in actual fact, economic growth is impossible without financial stability. while a stable budget is the basis of financial stability. it is possible to stake money, including government one, at the microlevel, at the level of small specific projects. to take risks at the macrolevel means to endanger economic growth and social stability. bis central bankers β speeches an important question is how to finance the deficit : through reserves or through debt? strictly speaking, both options lead to growth in net debt ( net of reserves ) and consequently to debt burden accumulation. that is why this choice is also a sham one to a large extent. nevertheless, since the commodity market risks are high, we believe that today the priority should be given to debt financing and keeping reserves for more complicated scenarios, when the access to debt financing is even more difficult. moreover, no doubt that the available reserves serve as an insurance from the market point of view and make the access to debt financing somewhat easier. in conclusion i would like to say a few words about how to reach the path of strong economic growth amid tough monetary and fiscal policies and prudent build - up of government debt. the matter is the structure of budget expenditure, rather than its volume, and the use of structural reform potential. the external conditions push the economy towards structural changes and balanced structural reforms may accelerate this process and make it less painful. the emphasis should be put on those industries, which turned out to be competitive in the current situation without government support. only they could become an efficient engine of development amid new reality. as it often happens, the best way to help businesses in the current conditions is not to interfere. the deficit resources of government support should be concentrated on assistance to the most vulnerable population groups, as well as on the development of infrastructure and human capital. bis central bankers β speeches | is important that we see balanced growth in retail lending. i said at the beginning of my speech that it is important not to reach dangerous levels of household debt burden. we are now being forced to pay attention to unsecured lending again. here 2 / 5 bis central bankers'speeches are some figures : in march of this year, debt on unsecured lending increased by 1. 9 % in just one month. according to preliminary data, it grew by another 1. 6 % in april. if such rates persist, then the annual growth will be about 20 %, which is much higher than the growth of household incomes. we are already seeing an increase in debt burden. now households are directing almost 12 % of disposable income ( 11. 9 % ) to servicing loans. this is 1 percentage point more than it was pre - pandemic, when we were already rather concerned about unsecured lending. we do not want this trend to grow, so we have returned to the macroprudential policy we pursued before the pandemic. this involves the following requirement : more capital on loans granted to borrowers that already have loans. but we understand that such macroprudential measures β eat away β at banks β capital, which could be used to expand lending in other segments and cover losses on restructured loans. what β s more, these measures affect different banks in different ways, that is to say, they almost don β t have a discouraging effect on banks with a large capital reserve, while they seriously impact those banks that have a small capital reserve. therefore, we are once again addressing the duma. we know that the government has approved a draft law that allows the central bank to set quantitative limits on unsecured consumer loans for borrowers with a high debt burden. and it will not be an additional burden on capital. in our opinion, this will be positive and will affect different banks with different capital reserves equally. the introduction of quantitative restrictions themselves, if we are granted that right, is a crucial step, we understand, and we will discuss it in detail with the banking community. another risk that we are paying attention to, and we think that you are also paying attention to, is not only the increase in debt burden, but also the interest rate risk that individuals can unwittingly take upon themselves. thus, we came up with an initiative and published a report. we are also discussing with you the proposal of not allowing | 0.5 |
with inventory levels high, the correction in the housing market is expected to continue for a while. banks are becoming increasingly cautious in extending loans in view of disruptions in financial markets due to subprime mortgage problems. nevertheless, to date, other parts of the economy seem not to have been harmed significantly, and private consumption and business fixed investment are continuing their moderate upward trend, although the pace of increase is decelerating. employment has also continued increasing. given these developments, it seems likely that the u. s. economy will register relatively low growth rates in the short run but will eventually realize a soft landing and move toward sustainable growth. however, if the correction in the housing market intensifies or the negative effects of disruptions in financial markets become unexpectedly widespread, private consumption and business fixed investment may fall below expectations through negative wealth effects, credit tightening, and deterioration in business and consumer sentiment, thereby leading to further deceleration in u. s. economic growth. meanwhile, the european economy has continued to expand, but the possible adverse effects on financial conditions of global financial market disruptions may pose a downside risk. if downside risks related to the u. s. and european economies were to materialize and have significant adverse effects, growth in other parts of the world may be hampered and this could cause global economic growth to be weaker than expected. at the same time, attention should also be paid to the risk of inflation, since the world economy, taken as a whole, has been expanding at a rapid pace. in the united states, underlying inflationary pressures do not seem to have subsided, reflecting continued high levels of resource utilization as well as developments in crude oil prices. in china, with signs of overheating, especially in fixed asset investment, economic growth and inflation may exceed expectations. meanwhile, given the currently elevated prices of crude oil and grains such as wheat and soybeans, possible shifts in international commodity prices may also influence the outlook for the global economy and the price situation. in global financial markets, disruptions due to subprime mortgage problems have continued to be observed. in the united states and europe, the functioning of markets for securitized products has deteriorated significantly, while money markets are still in the process of recuperating. stock prices and foreign exchange rates have been unstable across the world. the recent volatility in global financial markets seems to reflect a reversal of the previous laxity in risk evaluation that had developed during the long period of | have provided consumers with an incentive to visit retail stores and encouraged them to purchase products to which the stimulus measures do not apply, such as dvd recorders that are compatible with flat - panel tvs and the latest home cleaning robots. this increase in spending on durable consumer goods has had a positive effect on the economy by increasing production. in sum, japan β s economy has been supported by two major engines of growth, namely, the improvement in overseas economic conditions and the government β s economic stimulus measures favoring environment - friendly products. however, because the recovery remains weak in areas that have not directly benefited from these developments, many people have yet to feel that the economy overall is recovering. moreover, although japan β s economy enjoyed relatively high growth of around 5 percent at an annualized rate from the end of 2009 through the beginning of 2010, the level of economic activity remains lower than before the lehman shock. it is, thus, too early to say that a self - sustaining upturn in domestic private demand is fuelling a robust recovery. b. the economic outlook next, i will talk about the outlook for japan β s economy. the effects of the two factors that have so far been the engines of economic growth are likely to weaken. specifically, overseas economies, including those that currently are growing at a rapid pace, seem likely to slow to more steady and sustainable rates of growth as the effects of inventory restocking and stimulus measures abate. the uptrend in japan β s exports is expected to continue, but the pace of increase is likely to moderate gradually. durable goods consumption is expected to fall temporarily in reaction to the termination of the government β s economic stimulus measures favoring energy - efficient products : subsidies for purchases of environment - friendly cars expire at the end of september, while the eco - point system for electrical appliances expires at the end of december. new factors should be taken into account, however. for example, the government β s child allowances, which started in june, are expected to help support private consumption. moreover, business fixed investment and household income are likely to pick up, reflecting an improvement in the capacity utilization rate and in corporate profits. supported by these factors, japan β s economy should assume a moderate recovery trend. the outlook i just presented, however, is subject to various upside and downside risks. one upside risk is that growth in emerging and commodity - exporting economies might accelerate. recently, a growing number of emerging and commodity - export | 0.5 |
francois villeroy de galhau : central bank digital currency and innovative payments speech by mr francois villeroy de galhau, governor of the bank of france and chairman of the autorite de controle prudentiel et de resolution ( acpr ), at the acpr, paris, 4 december 2019. * * * ladies and gentlemen, one of the great things about the conferences organised by the acpr is their sense of timing : they always come in the middle of heated debates. today is no exception with the issue of the challenges faced by life insurance in a low interest rate environment. by way of introduction, let me agree with and sum up bernard delas β s message of this morning : french insurers are resilient and thus have the capacity to make the necessary dual adaptation. first, the rates paid on life insurance policies need to be lowered this year from last year β s average of 1. 8 %. next, insurers must actively restructure and diversify their offering for savers, while at the same time paying very close attention to the quality of advice they offer. if, as a complement β and only as a complement β regulatory adjustments are needed to facilitate this change in life insurance, then we are ready to support them. i would like to turn now to the topic for this afternoon which is dedicated to innovation. allow me to both restrict and extend the scope of the subject : restrict it to the field of payments which has seen a proliferation of innovations over recent years. and extend it beyond the scope of the acpr and the supervisory authority : i shall also speak as a central banker, and of a central bank digital currency ( cbdc ). driven by new market entrants, the digital revolution has brought with it a wealth of advancements that we profit from every day : but it also raises major questions about bank intermediation, and even about our monetary sovereignty. i would like to propose today that we take a stark look at these questions ( i ), and that we answer them by reiterating the two main pillars of our strategy : safeguarding confidence and supporting innovation ( ii ). i / the advances and challenges associated with the proliferation of private initiatives in the payment industry let us first recall the main trends that currently characterise the european payments market. the increasing digitalisation of cashless payments β which is leading to a sharp fall in cash usage in certain countries, from sweden to china β has been driven by | market transparency experience shows that uncertainty and incomplete information are determining factors in mimetic behaviour. these shortfalls in market transparency make mimetic behaviour seem rational to agents, who prefer to follow bigger participants, who are thought to be better informed, rather than develop their own analysis. strengthening transparency therefore continues to be a priority. one of the objectives of transparency is to enable better differentiation of borrower creditworthiness. a key feature of mimetic behaviour is that all borrowers are " tarred with the same brush ". so when one emerging economy encounters difficulties, all neighbouring countries, or countries that share common characteristics, are treated in the same way β regardless of their actual economic and financial situation. the same applies to businesses operating in the same economic sector. transparency has substantially increased since the asian crisis, thanks to a solid global consensus. let us continue and reinforce these efforts. take into account the medium and long - term perspective of some market participants some investors, such as pension funds and insurance companies, have to invest funds in order to enable their customers to build up wealth over the medium and long term, notably in preparation for retirement. consequently, these types of investors are supposed to behave differently from traders and short - term investors, who are working on a very different time horizon. but at times it seems that they are all pushed to behave in much the same way, on the basis of a very short - term horizon. to preserve, and even restore, their specific investment approach, these investors might be more shielded from excessive short - term pressures. this objective raises considerable difficulties, because it touches on the way in which the performances of medium and long - term funds ( including pension funds ) and life insurance companies are assessed. in other words, this objective concerns the accounting standards and practices they use. it implies that some rules and standards would be adapted to the medium and long - term horizon used by these entities. i have no answer at this stage. i am only asking the question. diversify the risk management tools of financial institutions as i mentioned earlier, even the best techniques can have adverse effects when used by too many participants. to some degree, this is perhaps what has happened to value - at - risk based techniques, which have been massively adopted by the financial industry. because they use more or less similar parameters and suffer from the same weaknesses β for example, they took inadequate account of market liquidity at the time of the 1998 crisis β, such tools tend to give con | 0.5 |
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