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fully reactivating the financing of households and firms. for some time we have been proposing initiatives along these lines, with scope for public - sector participation. we are working together with the government to design them, in compliance with the european rules on state aid. a discussion that we hope will be rapid and constructive is now under way with the european authorities. in 2014 the large increase in italian banks β capital ratios, with the average core capital ratio rising to 11. 8 per cent from 10. 5 per cent the year before, was achieved mainly with the capital increases carried out, at our prompting, in the first half of the year ; the contribution of self - financing was negative for the system as a whole. in order to recoup profitability, banks can curb costs further and expand their sources of income. more than a few banks, especially medium - sized ones, are evaluating mergers and acquisitions, including in response to recent regulatory innovations. there are sizeable potential bis central bankers β speeches benefits of these operations but they cannot be taken for granted ; they require vigorous action at the organizational level, in rationalizing distribution systems, risk management and technology uptake. the revision of international prudential standards aims to protect the integrity of the banking system as a fundamental infrastructure for the functioning of a modern market economy. the new rules on capital, leverage and liquidity and the establishment of crisis resolution mechanisms will make the system more stable and lessen the possible effects of bank crises on the economy and the public finances. at the same time, they will result in a reduction of banks β capacity to take risks and a structural reduction in the return on capital invested in them. the granting of loans will become more selective ; the development, within a welldefined regulatory framework, of alternative forms of financing necessary to avert a shortage of resources for the real economy will have to be stimulated. looking ahead, the shift of a part of the intermediation process from banks to markets will benefit both firms and households, allowing the former to expand their sources of financing and the latter to diversify their savings to a greater extent. banks will continue to play a central role in the financial system if they prove able to accompany this evolution by expanding their activity in the field of services and assisting firms in direct capital raising. a trend of this kind is under way in many countries, but here in italy the transition will not be easy. the underdevelopment of the italian capital market reflects the characteristics of the | to the increased complexity of the corporate structures of mnes, as i just mentioned. chart 7 evolution of external assets ( percentages of world gdp ) sources : external wealth of nations database ( lane and milesi - ferretti ) and ecb staff calculations. notes : aggregates for advanced economies, financial centres and emerging and developing countries are defined as in lane, p. r. and milesi - ferretti, g. m. ( 2018 ), β the external wealth of nations revisited : international financial integration in the aftermath of the global financial crisis β, imf economic review, vol. 66, no 1, international monetary fund, pp. 189 - 222. due to these trends, interpreting headline fdi data has become increasingly difficult, including for the aggregate euro area. notably, there is a high presence of spes in a number of euro area countries. in these economies, spes account for sizeable shares of cross - border financial transactions and positions, not only in terms of fdi but also in terms of portfolio investment and other investment. spes located in euro area financial centres typically hold equities, manage debt issuance, and allocate funding across parent and subsidiaries. statistics on spes are, however, not yet sufficiently developed : these are only available for a limited set of countries, largely focus on fdi and do not follow a harmonised international definition. large changes to the international balance sheet and financial flows of an economy may also arise from redomiciliations of headquarters. common patterns associated with moving the headquarters of an mne to a financial centre economy are increases in net fdi assets of the financial centre, while portfolio equity liabilities increase if the shareholders remain unchanged. in relation to fdi of the euro area, it is notable that, in recent years, gross fdi transactions of euro area financial centres have been so large that these have driven aggregate euro area developments ( chart 8 ). another defining feature of fdi is the strong positive correlation between gross assets and liabilities, especially in financial centres, which hints at the importance of the pass - through of financial flows for the evolution of fdi data. chart 8 euro area foreign direct investment assets and liabilities transactions ( percentages of euro area gdp ) sources : ecb and eurostat. notes : financial centres refer to belgium, cyprus, ireland, luxembourg, malta, netherlands. inverted values for liabilities. four - quarter moving sums. the latest observation is for the | 0 |
marzunisham omar : capital flows management for monetary and financial stability remarks by mr marzunisham omar, assistant governor of the central bank of malaysia ( bank negara malaysia ), at the seminar and meeting of the seacen expert group on capital flows, kuala lumpur, 11 june 2019. * * * i am delighted to be here today. let me take this opportunity to express bank negara malaysia β s appreciation for the collaborative efforts of the seacen centre and the bank of japan that have gathered us here for this biennial seg event. it has been six years since i last attended the seg seminar in manila, back in 2013 as the newly appointed co - chair. i am truly honoured to have had the opportunity to work alongside deputy governor diwa. under his capable stewardship and intellectual guidance, the seg has developed into a beneficial platform for its members since it was established 19 years ago. as we approach two decades of the seg, it is timely that we re - establish our bearings to ensure we remain relevant and true to the original mission of contributing to the international dialogue on capital flows to ensure that the concerns and interest of the seacen group are adequately protected. 1 as most of our economies continue to face wave after wave of large and often volatile capital flows, i am reminded of the remark by professor jon kabat - zinn, a professor emeritus of medicine at the university of massachusetts who famously said : β you can β t stop the waves, but you can learn to surf β. 2 just like the surfers who do not have control over the speed and patterns of the waves, policymakers from small open economies do not have much control over the size, speed, and the direction of capital flows that each country faces. like it or not, capital flow volatility and the risks it entails are a by - product we have to deal with as long as we intend to benefit from free capital mobility. to paraphrase professor kabat - zinn, we can β t stop the flows, but we can learn to manage these flows in the best way possible. unlike the surfers, however, we policymakers do not have the luxury of repeating a surf when we make a mistake. there is no room for policy missteps as investors can be very unforgiving. this is the reason why it has always been my firm belief that timely sharing of experiences and lessons between policymakers is in itself a big part of policymaking. | management practices. an enterprise - wide approach is appropriate for setting objectives across the organization, instilling a culture attuned to risk, and ensuring that key activities and risks are being monitored regularly. clearly, there is always an opportunity to improve upon enterprise risk - management strategies and strengthening the discipline to implement those strategies effectively. but vigilance is critical, too, since problems can sometimes quickly arise in a business line or unit that has presented no past difficulties. accordingly, it is always helpful to evaluate the " what if " scenarios even for the most pristine of business units. but the manner in which risk - management challenges are addressed can - and should - vary across institutions, based on their size, complexity, and individual risk profile. in many cases, it simply does not make sense for small organizations to adopt the most sophisticated risk - management practices ; however, that does not absolve such smaller institutions of their responsibility to improve risk management. additionally, as supervisors, we want to ensure that institutions are not only identifying, measuring, and managing their risks but are also developing and maintaining appropriate corporate governance structures appropriate for their business activities and risk taking. our hope is that the guidance we offer on these various topics is becoming more consistent with financial institutions'own risk - management practices. today i have used the example of mortgage lending to stress the importance of erm, but there are obviously many other areas to which erm applies. we believe that the recently issued guidance on nontraditional mortgage products contains helpful reminders and recommendations for institutions using those products, ensuring that they recognize the full set of risks involved. as a final point, i would like to stress that supervisors at all five federal banking agencies, including the ncua and the federal reserve, aim to implement the guidance as consistently as possible across institutions, since we do understand institutions'concerns about this issue. of course, it is always a challenge to ensure that guidance is applied consistently throughout the industry, especially when institution - specific factors - such as portfolio concentrations and individual risk - management practices - might affect the manner in which the guidance needs to be applied to individual organizations. but we have already begun to undertake efforts across our agencies, including extensive communication and coordination, so that institutions are not subjected to needlessly differing treatment. | 0 |
##lfil our monetary policy tasks. i also want to stress that, as a rule, the implementation of the regime for non - eu countries should continue to rely as much as possible on cooperation with, and deferral to, local authorities. let me also stress the crucial importance of finalising the adoption of key pieces of eu legislation β such as emir ii β well in advance of brexit, in order to be prepared for all possible contingencies, including a no - deal scenario. failing to do so could leave central banks and supervisors without the appropriate tools to handle the risks linked to systemic euro ccps operating outside the umbrella of eu regulation. naturally, we are available to provide any assistance in the context of these discussions. finally, we should not overlook the systemic cross - border implications of central clearing within the eu. we should therefore also strive to achieve enhanced supervisory convergence within the union. this would contribute to ensuring the integrity of the single market 3 / 4 bis central bankers'speeches and a level playing field, consistent with the objectives of the capital markets union. the european parliament can play a key role in furthering these objectives. conclusion let me conclude. our monetary policy measures have had tangible benefits for the euro area economy. further policy initiatives are however needed to reduce vulnerabilities, strengthen resilience in crisis situations and increase growth potential. only ambitious policies will deliver concrete benefits for the people of europe. this is also what our common history tells us. this year marks the 25th anniversary of the single market and of the maastricht treaty β s entry into force. those were bold decisions and we continue to benefit from them today : goods, people, services and capital can move freely and eu legislation ensures that commensurate rights and obligations apply throughout our union. with the creation of economic and monetary union ( emu ) we went further by adopting the single currency. it is in this spirit that i look forward to the coming months and the pivotal discussions we will have on reforming emu governance. thank you for your attention. i am at your disposal for questions. 1 www. ecb. europa. eu / press / key / date / 2018 / html / ecb. sp180205. en. html 2 see β low inflation in the euro area : causes and consequences β, ecb occasional paper series, no 181, january 2017. 3 see β domestic and global drivers of inflation in the euro area β, ecb economic bulletin | in the more volatile components, namely energy prices and, to a lesser extent, food prices. measures of underlying inflation β which we monitor for their information content concerning inflation dynamics β have remained subdued. inflation excluding energy and food was 1 % in january, and has ranged between 0. 9 % and 1. 2 % since april 2017. let me now focus on the factors behind these moderate inflation developments from a longerterm perspective. the recent period of low inflation may appear surprising from a cyclical perspective given that we have seen positive economic growth over the past four years, supporting a steady and gradual absorption of economic slack. this has raised the question of 1 / 4 bis central bankers'speeches which factors, cyclical or structural, may have played a role in the growth - inflation relationship. a comprehensive analysis by the eurosystem has concluded that adverse cyclical factors have played a crucial role in explaining low underlying inflation. these notably consisted of dampened economic activity and high unemployment in the aftermath of the sovereign debt crisis, and subsequently subdued foreign demand and low oil prices. 2 yet, these factors are of a temporary nature and should not affect inflation over a medium - term horizon, even though they might impact on the speed of adjustment in inflation. moreover, given the uncertainty surrounding the measurement of economic slack, the true amount may be larger than estimated, which could slow down the emergence of price pressures. this is particularly visible in the labour market, where wage growth has remained subdued despite strong employment gains. nonetheless, these factors should wane as the economic expansion continues and unemployment further declines. in fact, wage growth in the euro area has already picked up recently and the labour market is expected to improve further. on the structural side, globalisation may have reduced the responsiveness of inflation to domestic cyclical conditions but empirical evidence for the euro area is not clear - cut. 3 other potential factors include demographic trends or changes in behaviour triggered by technological developments, which may contain price pressures, for instance through increased price transparency. however, even if these factors are somewhat more persistent, they should still not exert a permanent impact on inflation. overall, the analysis indicates that the relationship between growth and inflation remains largely intact, even if it has temporarily weakened in recent years to the extent that the speed of adjustment in inflation towards our aim has been affected. looking ahead, we anticipate that headline inflation will resume its gradual upward adjustment, supported by our monetary policy measures. at the same time, uncertainties continue | 1 |
and harm to the reputation of the international monetary fund and its ability to raise funds outside europe. i am therefore very glad that this session is devoted to the facility, whose importance to europe and especially to the euro area is much greater. bis central bankers β speeches i could list other problems, such as the delayed consolidation of the european banking system and the related recapitalisation of banks, and in particular the fact that the existence of the euro area has widened the long growing imbalance in the exchange of goods, capital and savings between euro area countries. the short - term rescue of the euro will not directly solve the long - term problem of imbalances, and in particular the gradually emerging path towards a fiscal pact with no significant redistribution of resources at european level will require the elimination of, or at least a considerable reduction in, the imbalances in the euro area. in the context of the three change drivers i mentioned earlier, i would like to say that the time that the ecb β s pre - christmas actions gave the euro area, the european financial sector and many european states to solve their problems is useful but not infinite. i believe that the potential of the fiscal pact to become a true change driver is smaller than generally assumed, and i expect that the future formulation of the pact in the constitution of each country will contain ( abusable ) escape clauses. i base this view in particular on the fact that throughout its existence the euro area has had a tendency to soften or bend the criteria for its operation. be it the not - always - proper manner of fulfilment of the maastricht criteria by accession countries or the revision of the stability and growth pact or the purchase of government bonds by the european central bank, we have repeatedly seen how things that are initially unthinkable become reality over time. i am doubtful that investors, who are well aware of europe β s relationship to the rules, will change their attitude as a result of the fiscal pact. my overall view on the current design of the facility is none too optimistic. to enhance its ability to face the debt crisis, we need to find a clear consensus on its mission. we need to precisely identify whom it is supposed to help, under what circumstances and to what extent, and to derive from that the amount of funding it needs. this will predetermine the solutions to all the issues surrounding its operation. we have time to solve all these problems, but not much time. thank you | to aa +. in its comments on this change, s & p stated explicitly that the efsf β s rating has a developing outlook, which means that the agency foresees the possibility both of returning the rating to aaa ( if offsetting credit enhancements are adopted ) and of downgrading it further to below aa + ( if key guarantor countries are downgraded ). a lower efsf rating would probably be associated with higher interest costs of refinancing. there might even be a fall in liquidity in the efsf bond market owing to the exit of some institutional investors, who primarily target the aaa segment of issuers. 6. on a more general level, the lack of coordination of resources for supporting european countries is disturbing. it is resulting in fragmentation of resources and a lack of transparency in the setting of parameters such as β who β, β how much β, β to whom β and β how β. specifically, the european union, or the euro area, is planning simultaneously to lend to the international monetary fund, to guarantee the efsf and to guarantee the esm, while central banks guarantee the capital of the ecb. if a non - european country wanted to help europe, there is the question of whether it should send the money to the imf or use it to purchase efsf bonds, a senior tranche of the spv, or the peripheral countries β debt, i. e. with no intermediation. the many uncertainties associated with the specific operation of the efsf are giving rise to general doubts about the appropriateness of the current approaches to overcoming the ongoing debt crisis in the euro area. i cannot help feeling that many solutions to the problems have been wrongly chosen in part because the main causes of the financial and debt crisis have not been correctly identified. greece gets too much attention from decision - and policy - makers. it represents a mere 1 / 50 of the european economy. i believe that without the political will to provide greece with massive support from european funds to restore its competitiveness β and i see little such will at the moment β its exit from the euro area will be inevitable, since depreciation of the greek currency will become part of the measures to restore competitiveness. the provision of loans to greece has so far primarily bought time. this has enabled wealthier greeks to transfer their savings out of the country. the costs of such action have been a reduction in europe β s credibility | 1 |
francois villeroy de galhau : new year wishes 2023 new year wishes to the paris financial centre by mr francois villeroy de galhau, governor of the bank of france and chairman of the autorite de controle prudentiel et de resolution ( acpr ), paris, 5 january 2023. * * * allow me to extend my warmest wishes for 2023 on behalf of the banque de france and the acpr. i don't know if i dare wish you, or wish us, a year free of shocks after those of 2020, 2021 and 2022. this past year has been marked by a climate of uncertainty, exacerbated by russia's war in ukraine and the energy crisis. it has also seen increased financial market volatility, compounded by the turmoil in the cryptoasset universe. in this unstable environment, i would like to make two double wishes for 2023 : 1 ) less inflation and more stabilisation. activity has, until now, proved more resilient than expected, which is good news ; however, inflation must not become entrenched. it is the number one concern for french people, and defeating it is our number one mission. it fell in december to 6. 7 %, which is encouraging but still not enough. it should peak in the first half, before declining towards 4 % by the end of this year. but our forecast, and our commitment, is that inflation should be brought down towards 2 % by end - 2024 to end - 2025. to achieve this, after raising interest rates to close to the " neutral interest rate " of 2 % in december, we are now embarking on the second phase towards monetary stabilisation : ideally, it would be good to reach the right " terminal rate " by next summer, but it is still too early to say what that level will be. we need to remain pragmatic and to be guided by observed data, including on core inflation, without getting fixated on overly mechanical rate hikes. we will then be prepared to remain at this terminal rate for as long as necessary : the sprint to raise interest rates in 2022 is now becoming more of a long - distance race, and the duration will count at least as much as the level. in parallel, we shall continue to focus on maintaining financial stability, helped by the strong resilience of french banks and insurers. in europe, 2023 | develop a robust and resilient european ecosystem, capable of ensuring the continued sovereignty of our monetary and financial system. to achieve this, we will not hesitate to deploy our full range of actions and expertise, a range that we have enriched by recognising the importance of experimenting with the ecosystem. 4 / 4 bis central bankers'speeches | 0.5 |
will involve making this kind of intermediate, more qualitative assessment. the implied forward rates on which the forecast in the inflation report published on 23 february was based reflected a 15 - day average as per 9 february. on 16 february, an unexpectedly low cpi outcome was published for january. this led to a downward movement of the implied forward rate, which we stated that we considered reasonable in the press release in connection with the interest rate decision. at present, the implied forward rate is slightly higher than it appeared immediately after publication of the unexpectedly weak cpi outcome for january. however, in the short term the differences are marginal. the current implied forward rate path entails the repo rate remaining unchanged until summer and then subsequently being increased gradually. we executive board members will thus take a stance with regard to which monetary policy conclusions can be drawn from the information received since the end of february at our meeting on 27 april. let me say a few words here on my own view of the situation. the february inflation report contained the forecast that international economic activity would remain relatively stable over the coming years. since the report was published, the oil price has risen by almost 10 dollars per barrel which is clearly higher than the forecast in the report. the forward prices for oil have risen, which indicates that there may also be reason to expect a higher oil price for some time to come. experiences from recent years are that the international upturn in economic activity has been surprisingly resilient to increases in the oil price. revised national accounts for the united states have been received, which show that growth was marginally stronger at the end of 2005 than was indicated by preliminary figures. the most recent labour market statistics for the united states indicate a continued favourable development, although the monthly statistics for household consumption indicated some slackening of demand. the purchasing managers index for the manufacturing industry in march indicated a small decline for the united states, while the index continued to improve for the euro area. other indicators for the euro area such as the european commission β s surveys show a positive development recently. growth in asia has been stronger than we had assumed. all in all, my opinion is that international economic activity appears slightly stronger now than we assessed in the february inflation report. for sweden, the assessment in the inflation report was that gdp growth would be relatively high in the coming years. statistics sweden has since then published national accounts for the fourth quarter of 2005. these figures show that gdp growth was somewhat lower than expected, although the outcome for earlier periods | government finances are in good condition. for several years now the public sector β unlike earlier periods of large american current account deficits β has shown a surplus in savings. all in all, there are thus many factors indicating that confidence in the american economy can quickly be recovered. if this is true, the economic decline will not last very long. the most likely situation is therefore that although the high level of indebtedness, the large deficit in savings in both the household and corporate sectors, combined with over - investment in certain sectors, will subdue growth for a time, there will be no dramatic or prolonged economic recession. however, in order to increase saving in the economy and thus correct the constant deficit on the current account, it is necessary that growth is not primarily driven by increases in consumption. net export and investment should instead be the motors behind growth to a larger extent than before. bringing about this state of affairs requires a weaker dollar exchange rate. one can therefore look with scepticism on the idea that tax cuts will bring the american economy out of its decline. how will sweden be affected? the american economy affects developments in the rest of the world through many different channels, with exports to the usa as the most direct channel and the one where the effects are easiest measured. however, exports to the usa are only responsible for a couple of per cent of gdp in sweden and have a similar significance for the euro area. spread effects via the expectations that largely govern consumption, investments and the stock market are probably much greater, although more difficult to measure. nevertheless, there are numerous indications that the swedish economy is more sensitive to developments in the usa than the economies in the euro area. for instance, shareholding is more widespread among swedish households and many of the major " swedish " multinationals β in which swedes have invested a substantial part of their shareholdings β are very dependent, directly or indirectly, on developments in the usa. developments in the swedish economy in recent years have shown many similarities to developments in the usa. rapidly rising share prices, a strong gdp growth driven by both investment and consumption and an increase in indebtedness is a description that fits both the swedish and american economies in recent years. however, the increase in economic activity began later in sweden and has not really had the same speed as that in the usa. moreover, the rise in sweden was preceded by a period where adjustments following the crisis at the beginning of the 1990s had forced down investment and consumption considerably | 0.5 |
masaaki shirakawa : international policy response to financial crises remarks by mr masaaki shirakawa, governor of the bank of japan, at the federal reserve bank of kansas city's annual economic symposium, jackson hole, wyoming, 21 august 2009. * * * introduction i will explore the future of international coordination between central banks in the wake of the current financial crisis. here, i mean by coordination between central banks that they attempt to respond to and stave off a global crisis effectively in an organized way without any outside pressure. the current crisis has posed enormous challenges on many fronts to policymakers. as the starting point for discussing those challenges, i think it is important to highlight three facts. first, the global economy has encountered a crisis more frequently in the past 20 years than before. second, the current crisis has grown literally into a global crisis. the global economy has contracted sharply since the fall of 2008, as often described as falling off a cliff. by contrast, the prior crises such as japan β s post - bubble period and the east asian crisis still remained local, even though they exerted significant adverse effects on the domestic or regional economy. 1 third, the soundness of financial institutions before the crisis differed significantly between those countries in question. asian financial institutions, including japanese institutions, as well as canadian and australian ones, had smaller exposure to complicated structured products, compared with u. s. and european institutions. those three points provide a sound basis for considering how to forestall a crisis. causes for global financial crisis here, i will try to summarize some stylized facts about the unfolding of crises, including the current one. during a pre - crisis period, benign economic conditions, just like the β great moderation β prior to the current crisis, usually prevail for some time, and the risk - taking attitude of economic agents becomes aggressive. in economic analysis, economic agents β preferences are assumed to remain unchanged over time. but, in reality, risk perception becomes optimistic and risk tolerance is elevated under benign economic conditions. unfortunately, our knowledge of a mechanism of such endogenous changes in the risktaking attitude, or risk - taking channel, is quite limited. institutional arrangements, such as regulation, valuation, and compensation, shape incentives at a micro level. given institutional arrangements, an actual implication of such incentives is importantly influenced by the financial and economic environment at a macro level. in that respect, low inflation and high growth coupled with low volatility | ##20 and financial stability board ( fsb ) fisher ( 2009 ) emphasizes the importance of incentives as the principle lesson from the current crisis. see goodhart ( 2009 ) for an assessment of the anglo - saxon model of banking and financial regulation and supervision in light of the current crisis. have correctly proposed to review the capital adequacy standards, with a reservation of implementing most of the new rules once recovery is assured. 10 such a policy direction seems relevant in light of the amount of risk actually taken by internationally active financial institutions in recent years. in implementing the policy, however, we also need to pay attention to the endogenous changes in financial institutions β risk - taking stemming from strengthened capital regulation. finally, coordination between central banks is required in the area of money market operations, and, more generally, banking policy. a crisis is likely to be amplified by concern over funding liquidity. that underscores the importance of the efforts to transfer liquidity smoothly on a global basis. u. s. dollar funds - supplying operations, carried out under coordination between major central banks, have been highly effective under such conditions. in that case, other central banks than the fed have an incentive to implement operations to secure the stability of domestic financial markets and domestic financial institutions. the fed also has a natural incentive to secure the stability in u. s. dollar denominated financial markets. as a result, u. s. dollar funds - supplying operations are mutually beneficial for both the fed and other central banks. that point is markedly different from β international policy coordination β in monetary policy, easily placing strain on bilateral relations in key variables, such as foreign exchange rates and the balance of payments. through the current crisis, we have reconfirmed that it is important to make currency swap, repo, and other collateralized markets more robust, and that central banks need to promote private initiatives in that direction. from that perspective, central banks need to make further coordination in providing liquidity, accepting cross - border collateral, and extending operating hours for the payment and settlement systems provided by central banks. concluding remarks in closing, i emphasize the importance of promoting human interaction in further developing coordination between central banks. since the summer of 2007, central banks have communicated with each other intensively at various levels, from top central bankers to mid - class staffers using various tools, such as emails, conference calls, and face - to - face conversations. such efforts have contributed to preventing the crisis from worsening further. | 1 |
##point of the government β s target range. this is consistent with our expectation that inflation will settle within the target range of 2 β 4 percent in 2017 and 2018. this environment gives us a sound basis to be optimistic about the philippine economic outlook. we believe that the economy can attain its gdp growth target of 6. 5 - 7. 5 percent for the year, and remain a source of strength for the asean region. moving forward, our fundamentals will serve as the spring of resilience in the economy amidst the external headwinds. in addition, our young and dynamic work force is teeming with potential as a source of labor productivity and quality. both our fiscal and monetary sectors also have ample policy space to respond to the materialization of exogenous shocks. we have room to accelerate government spending to build needed infrastructure, generate jobs and support economic growth. at the same time, the monetary authorities have the flexibility to adjust policy, if needed, to sustain price and financial stability without sacrificing economic activity. in other words, investors can expect not only sources of value but also anchors of stability in investing in the philippines. thus, our country will continue to provide a conducive business environment and outstanding value to investors. conclusion ladies and gentlemen, in this time of uncertainty, better and stronger global cooperation is the best way forward. it is up to us to calibrate, adjust and evolve the means by which we connect our shores and advance our exchanges. i hope therefore that through this summit, the partnership between the eu and asean will work toward achieving collective resilience and renewed growth, amidst diversity and asymmetry in economic conditions. i wish you all a successful and productive summit. thank you and mabuhay! 2 / 2 bis central bankers'speeches | 2024 [ that ] it is poised to have the slowest growth in global trade of any fiveyear period since the 1990s. the trade disruptions have caused the kind of supply shocks across the world that have led to the highest global inflation rates in decades. 2 / 3 bis - central bankers'speeches in the case of the philippines, our inflation rate rose to 8. 7 percent in january 2023. to tame this inflation, central banks around the world, including the bsp, have had to raise interest rates. we hope that diplomatic channels can help prevent further economic fragmentation and maybe even repair the existing one. let me close by restating the obvious. the consular corps of the philippines is an important partner in building economic bridges that connect the philippines to the nations that you represent. we need to continue to build bridges for both trade and finance. together, let us continue to nurture our bond of friendship. let us keep the bayanihan spirit alive as we move towards a more resilient and inclusive philippine and international financial system. thank you very much. maraming salamat po. 3 / 3 bis - central bankers'speeches | 0.5 |
in. finally, i would like to highlight a few payments matters. australia β s new fast payments system is continuing to grow, with most of the major banks now close to offering the agreed initial functionality. the rba β as banker to the australian government β has been using this new system recently to get money immediately into the bank accounts of people affected by the bush fires. more generally, most people in australia are now able to move money between bank accounts in a matter of seconds. the payments system board is hoping to see banks, fintechs and others use this new infrastructure to develop innovative payment solutions that help individuals and small businesses. another priority for the payments system board over the year ahead is to complete its periodic review of payments regulation in australia. we are currently reviewing the initial submissions to this review and it is clear that the world of payments is moving quickly, partly driven by new technologies. one of the issues that the council of financial regulators has already raised with government is the regulatory arrangements for so - called stored value facilities, which could include digital payment β coins β. the council is seeking some changes to current regulatory arrangements that would provide stronger protections for consumers as well as creating a simpler regulatory system that encourages innovation. another issue on which the council of financial regulators will provide advice to government this year is the resolution arrangements that apply to australia β s systematically important financial infrastructures, including central counterparties and securities settlement facilities. we need to make sure that our arrangements for dealing with problems in these critical parts of australia β s financial infrastructure are strong and that they meet international standards. this will likely require some changes in current legislation. thank you. my colleagues and i are here to answer your questions. 1 see β lenders β interest rates β, available at : www. rba. gov. au / statistics / interest - rates /. 4 / 4 bis central bankers'speeches | have exports in some other categories ( graph 3 ). many of these are areas where australia does have a comparative advantage and where value added is high. it is by focusing on these comparative advantages that we can best build a strong and successful manufacturing sector, while at the same time living with a high exchange rate. bis central bankers β speeches graph 3 i would now like to turn to the second broad factor that has helped maintain domestic balance during the once - in - a - century investment boom. and that is the increase in household saving. since the mid 2000s, the household sector net saving ratio has risen from around zero to around 10 per cent ( graph 4 ). in today β s money this represents about an additional $ 90 billion that is saved, not spent, by households each year. graph 4 now i know that this increase in household savings has not been universally welcomed by the retail sector. it has caused difficulties for some businesses, including those that based their business models on a continuation of the earlier trends. but consider how the economy might have looked over the past few years had households spent an extra $ 90 billion each bis central bankers β speeches year. it is likely that there would have been significant overheating. the exchange rate would have been higher. there would have been more borrowing from the rest of the world. and both inflation and interest rates would have been higher. i suggest that these are not developments that would have been warmly welcomed by most in the community. so, somewhat ironically, two of the factors that have created difficult challenges for many businesses over recent years β the high exchange rate and increased household savings β are the very same factors that have been critical to australia β s good macroeconomic performance. importantly, these factors have helped australia to digest a huge investment boom without generating substantial imbalances in the economy. at the same time, these factors have prompted significant structural change which, while difficult, is critical to achieving higher overall productivity and higher living standards. there is clearly a lot of change going on in the australian economy at the moment. how you view this change depends critically upon where you stand. however, no matter what one β s perspective, we should not lose sight of the fact that maintaining overall macro balance through this period of change has been a significant achievement. and it is an achievement that has benefited the entire community. the contribution of monetary policy so far i have discussed structural factors, but monetary policy has also played some role in helping maintain this overall internal balance. in | 0.5 |
the national central banks implementing monetary policy. today the word β eurosystem β is well known and is included in the lisbon treaty. when the opportunity came to change the treaty to make it closer to the citizens, it was proposed to make the ecb one of the eu institutions, recognising its role in the further bis central bankers β speeches integration of europe. traditional central bankers were sceptical, fearing that a closer link to the other, more β political β union institutions would undermine the independence of the european central bank. tommaso was at the centre of this debate ; he managed to strike a balance between, on the one hand, maintaining and even reinforcing the european central bank β s independence and keeping its special features and, on the other hand, reinforcing the role that the ecb, as a newly recognised institution, more visible to the people, could play jointly with the other institutions to foster european unification. notably, the lisbon treaty explicitly mentions the financial independence of the ecb and that it has a legal personality separate from that of the eu. a key concern in the early years of the european central bank was to implement the concept of central bank independence in a concrete and practical manner, also in interactions with the political authorities of the union, whether the council of ministers or the european parliament. there were, after all, very different national traditions concerning central bank independence β in some countries, the notion of an independent central bank was a more recent phenomenon, not fully anchored in the day - to - day political reflexes and actions of national authorities. while being a staunch defender of the european central bank β s independence whenever necessary, tommaso never viewed the emergence of an effective economic decision - making structure at european level with trepidation, as a potential threat to the ecb β s independence. on the contrary : he thought it indeed desirable from the central bank β s perspective, and that of the people of europe β that β independence should not mean institutional loneliness β. tommaso β s legacy jean giono, the frenchman who turned pacifist after experiencing the horrors of the first world war, wrote once that in order to appreciate the exceptional qualities of human beings we must observe how they behave over a long period of time. we certainly did that with tommaso for many years before his untimely departure. but, i would add, we should also consider the influence he will continue to exert. this is something that today | as well as the green and digital transformations require substantial additional public spending. the huge investment required to meet all of these challenges suggests that the era of very low interest rates is likely to be over, also in the medium to long term. this calls for policies that, on the one hand, take advantage of times of favourable cyclical developments to consolidate public finances but, on the other, prioritise necessary investment and structural reforms. the new european fiscal framework provides for precisely such a balance. current projections give cause for concern, however. structural primary balances in 2024 and 2025 are expected to remain well below pre - pandemic levels, thereby putting upward pressure on government debt ( slide 13, right - hand side ). one reason for this is that some government support measures taken during the crisis years were not fully phased out. the lack of fiscal consolidation, despite high debt levels, may impede monetary policy and heighten the risk of fiscal dominance. measures to strengthen long - term growth are equally important. europe plays a central role here. it still offers considerable unexploited growth potential. deeper integration of the internal market for services could boost productivity, as could the urgently needed progress on the banking union and the capital markets union. ngeu can accompany this process. however, it β s not yet certain whether this programme can meet the high expectations. a successful evaluation of the programme is likely to determine whether a follow - up programme is eventually conceivable at european level. at the same time, structural reforms to improve labour mobility, increase labour market participation, promote lifelong education and exploit the potential of new technologies such as artificial intelligence are essential. it is precisely in the area of information and communication technology that many firms domiciled in the euro area are lagging behind global developments. reforms that increase potential output would not only ease debt reduction but would also reduce inflation pressures in the long run. this is all the more important at a time of looming de - globalisation and climate change, when the european economy is likely to be more exposed to supply - side shocks. conclusion this brings me to the conclusion that monetary policy was not dominated by fiscal policy in recent years and that monetary policy β s ability to act was ensured. the determined monetary policy response to the sharp increase in inflation and the anchoring of inflation expectations despite inflation rates in double digits show that monetary policy has unwaveringly pursued its objective of price stability and that confidence in monetary policy has successfully been preserved | 0.5 |
1999, it weakened by 14 % against the dollar, while, in overall terms, the effective exchange rate was down by about 13 %. currency developments largely reflected an unexpected divergence in economic performance between the us and the euro area. growth in the us economy accelerated beyond expectations in 1999, while the expected recovery in the euro area economy was slow. stock markets in the us lent further support to the dollar while outward investment from the euro area weighed on the euro. it was also weighed down by the impression that structural impediments were retarding economic activity in europe. besides, it did not help matters that, in the early days, there was a variety of spokespersons with different prescriptions for the new currency. most commentators accept that the currency is now significantly undervalued and that the tide will turn. the question is sometimes asked whether the absence of political integration is a drawback to the currency. perhaps there is some disadvantage ; all other major international currencies are underwritten by political union. i would not wish to exaggerate the significance of this. the integration of financial markets within the euro area is going ahead at different speeds in different markets. while the money market has been unified quickly, the bond market is still not fully integrated. market structures differ and most of the smaller countries do not have sufficient issue sizes to achieve benchmark status. investors have a preference for the larger markets, where there is greater liquidity. this is not to our advantage. equity markets are least advanced in terms of integration. for many stocks, national considerations are still important. in time, however, trading may become concentrated in a small number of larger centres and the existence of small equity markets may be put in doubt. in this context, the ability of national markets to be competitive, especially in terms of transaction costs, will be a very important factor. emu has brought these issues of competition to the fore and increased the urgency of resolving them successfully. these developments are a source of concern to us because of the tendency towards centralisation. the european central bank is realising its primary objective, which is to maintain price stability within the euro area. although the harmonised index of consumer prices ( hicp ) rose by 1. 7 % in the year to december 1999, this was boosted by a rise of over 10 % in energy prices. while the bank does not target an exchange rate for the us dollar or any other currency, it would be entirely wrong to imply that it pursue | mr o β connell gives a review on the euro and the european central bank and makes a few brief remarks on the world economy statement by mr maurice o β connell, governor of the central bank of ireland, to the irish parliament β s joint committee on european affairs, dublin, on 23 february 2000. * * * before i speak about the euro and the european central bank, may i make a few brief remarks on the world economy. the outlook is quite positive. the us economy has surprised even the most optimistic of observers. growth was of the order of 4 % last year and inflation remains low. europe appears to have turned the corner and to be on a path of stable, if unspectacular, growth. the european economy should expand by 3 % this year and this should be sustained in 2001. the far east generally is recovering, though the recovery in japan appears to be very tentative. as always, there are risks. in the us, factors such as the persistent balance of payments deficit or a declining stock market could undermine success. europe must address vigorously the structural deficiencies that are a dead hand on the economy. japan has yet to demonstrate convincingly that reforms, including consolidation of the financial sector, are beginning to work. at the international level generally, the succession of economic crises in recent years has prompted the authorities to review comprehensively the whole international financial architecture. central to this response have been efforts to improve the quality and availability of economic and financial data and strengthen financial regulation. this is underpinned by institutional developments, such as the creation of two new bodies - the financial stability forum and the g20. this is not today β s subject. i mention it, however, because there will be changes ahead which will enforce new standards of regulation and transparency worldwide. the euro it is against this background that we should assess the progress of the euro. the new currency is now in its second year. it is an accepted element of the international financial system, being the second largest currency - second only to the us dollar and ahead of the yen. the euro area has an internal market of about 290 million people, some 20 million more than the us. exports from the area account for almost 20 % of world exports. in 1999 the euro became the most popular currency for new bonds in international markets, accounting for some 45 %, compared with 42 % in us dollars. while the launch of the euro has been a remarkable success, the first year has not been without difficulty. during | 1 |
amando m tetangco, jr : financial stability through collaboration and understanding speech by mr amando m tetangco, jr, governor of the central bank of the philippines ( bangko sentral ng pilipinas ), at the insurance congress of developing countries ( icdc ) 2009, makati city, 25 march 2009. * * * atty. eduardo malinis, insurance commissioner and chairman of the organizing committee of the insurance congress of developing countries 2009, other distinguished speakers, distinguished delegates to this insurance congress, ladies and gentlemen, good morning. to our visiting delegates, welcome to manila! welcome to the philippines! i hope you β ve had or you will have the chance to partake of the many options to help further β stimulate β our domestic economy. i am sure all of us in this room have heard about the different financial stability and fiscal stimulus packages, being pursued by economies across the globe, to help stem the impact of the current global financial and economic crisis. i am certain the organizers of icdc manila 2009 have also put together their β own β version of a post - meeting stimulus package to complement the many interesting conference breakout sessions. for my part, i β d like to encourage all of you to participate as actively in that endeavor as you would in the different sessions in the next three days. let me begin my remarks this morning by thanking commissioner ed malinis and the congress organizers for inviting me to speak before you today. at first blush, the keynote message for a gathering of insurers to be delivered by the governor of a central bank that supervises only the banking sector, may be a bit peculiar. but if one seriously looks at the situation, it is indeed quite reflective of the theme of the congress, which is financial stability through collaboration and understanding. ladies and gentlemen, at no other time than now has the need for promoting financial stability been more imperative. as we are all keenly aware, the current financial turmoil has gone beyond the borders of the epicenter of the financial crisis β the us and the major economies β and has reached the shores of emerging markets. more importantly, the global financial turmoil has transcended the bounds of the financial realm and has crossed over to the real sector of most economies, including several represented here today. you will be pleased to know that my remarks this morning will be brief. i only have two messages that i wish to bring across, in light of our desire for financial stability. first is that, information | total assets. against this background, both big banks have already made major strides towards expanding their loss - absorbing capital base. to this end, credit suisse issued contingent convertible bonds ( cocos ), while ubs retained its earnings. these important first steps have already significantly strengthened the big banks β loss - absorbing capital base. they also show that the big banks should be in a good position to build up the necessary, additional capital buffer. situation of domestically focused banks allow me now to discuss the situation of banks with a domestic focus. the capitalisation of domestically focused banks was almost unchanged in comparison to 2009. the short but sharp recession in switzerland in 2009 did not have any noticeable impact last year either. write - downs and provisions were at a historical low. in a long - term comparison, profits remained at a high level overall. likewise, the capitalisation of domestically focused banks hardly changed in 2010 and remains good in relation to both risk - weighted assets and total assets. however, the fact that capitalisation is high overall does not take into account that the regulatory capital requirements do not fully capture certain risks. for example, the interest rate risk and credit risk associated with potentially adverse developments in the real estate and mortgage markets are not taken into account, or only partially accounted for. yet these risks are especially pronounced in the current environment. on the one hand, interest rate risk for all domestically focused banks continues to remain at a historically high level. since there is a maturity mismatch between assets and liabilities, a rise in interest rates would result in losses for the banks. the overall high level of interest rate risk is driven by raiffeisen and cantonal banks. on the other hand, credit risk at domestically focused banks continued to increase. this is because the mortgage lending volume, which is closely linked to developments in the real estate market, continued to grow. the situation in the swiss real estate market has deteriorated slightly since last year β s financial stability report was published. even though they varied widely, most real estate price indices suggest that prices also rose substantially in 2010. there is still no indication of a general overvaluation based on the current price level, yet several indicators suggest that overheating is already becoming apparent in the owner - occupied apartment and apartment bis central bankers β speeches building segments. there are also considerable regional differences, although there are signs that, already now, real estate prices in some regions are no longer justified by fundamentals. should real estate prices continue to rise at | 0 |
but if too many canadian households start to become dangerously over - leveraged, policy - makers have several macroprudential tools they can use. our experience with the mortgage - interest stress test shows how effective these tools can be. the bottom line is that the private and public sectors together need to be acutely aware of financial system risks and vulnerabilities as the economy recovers. gri has an important role to play in analyzing and highlighting these risks and keeping us focused on what may be coming down the road. risks from climate change finally, let me say a few words about a longer - term risk that is accelerating β the impact of climate change and the transition to a low - carbon economy. the financial system has a critical role to play to support the real economy through the transition and to help businesses and households manage new climate risks. to do this, the financial system has to both manage its own climate risks and help direct savings to productive and sustainable investment. physical and financial risks from more frequent and severe weather events, including damage to assets such as real estate and infrastructure, will almost certainly grow. many types of business also face significant transition risks related to the revaluation of assets and the reassessment of projected earnings and expenses. if not appropriately priced and managed, both types of risk have the potential to bring about significant losses for financial institutions and could even threaten the stability of our financial system. sound risk management starts with sound measurement. companies need reliable, consistent and comparable ways to measure and state their exposure to climate risks. financial institutions, too, must understand and be transparent about their exposures. investors are increasingly demanding this transparency. if we are going to do a better job assessing, pricing and managing climate risks, we need better and more decision - useful information that combines climate - data analysis with economic and financial information. this will make the financial system and the real economy more resilient. and it will strengthen the ability of the financial system to fulfill its most critical role, which is to allocate savings to its most productive uses. this will help canadians take advantage of sustainable investment opportunities. 4 / 5 bis central bankers'speeches as part of its responsibility to promote financial system stability, the bank is accelerating its work to understand the implications of climate change for the canadian economy and financial system. last year, we developed a multi - year research plan focused on climate - related risks. and we joined the network of central banks and supervisors for greening the financial | , but this is about to change with the upcoming mica regulation. mica will ensure that licensing and the obligation to follow aml standards become defining features of the sector. in lithuania, this sector is large. the number of crypto exchanges in the country leaves lithuania second in the eu, which exposes our financial system to sizable risk. this is not due to the number of exchanges per se, but because of the deficiencies often found in the areas of adequate staffing and competencies, not least when it comes to the application of aml practices. this is not a circumstance for which we have the privilege of waiting for mica. and we are not waiting. lietuvos bankas has been working in close partnership with the ministry of interior, the ministry of finance, and other ministries on measures to further improve the regulation of crypto - asset service providers. one month ago, changes were made to law on the prevention of money laundering and terrorist financing. we, as a country, have taken a step forward by increasing capital requirements for crypto firms and strengthening measures if aml practices are breached. third, on regional dialogue. as illicit activities transcend borders, collaboration becomes not just beneficial, but imperative. as the financial systems of the nordic - baltic countries are closely interlinked, active cooperation in identifying and managing risks at the regional level becomes paramount. thus, in 2023, lithuania, our international partners from the nordic - baltic region, and the international monetary fund concluded a technical assistance project on anti - money laundering. the outcomes of this project included recommendations on the ongoing monitoring of cross - border flows, with regional information exchange on macro - trends, and better identification of countries with potential money laundering risks to the nordic - baltic region. besides this project, i am proud to report that the imf has highlighted lithuania's progress in the area of money laundering prevention over the last few years. this assessment is not alone : a similar view is held by other bodies, including moneyval. the international developments of the last year should also not be neglected. in 2024, after 3 years of work, the council and the european parliament concluded political negotiations on the anti - money laundering and anti - terrorist financing package. a political agreement on amla has also been reached. dear colleagues, as benjamin franklin once said, if you fail to plan, you are planning to fail. this is not our path. geopolitical fragmentation and digitalisation constitute two important changes, neither | 0 |
the first step of understanding the nature of organizational culture. these three concepts β β connect, β β convene, β and β catalyze β β will continue to be our guiding principles on the issue of culture as we build on our current work and explore new initiatives. like addressing cyber risks and climate change, the journey toward reforming culture in the banking and financial services industry is a long one. and there β s no single action that a regulator or a bank can take to make it happen. getting it right is going to require the will and expertise of regulators, financial services firms, academics, and practitioners. and while changing organizational culture is a long - term, complex, and challenging task, i β m optimistic that we can and we will make progress. and the federal reserve bank of new york is committed to being a partner on that journey. thank you. 3 / 3 bis central bankers'speeches | its power and means ) to contribute to financial stability, without interfering with the performance of its monetary policy tasks. third, the new body responsible for macro - prudential supervision in the eu should be independent in carrying out its tasks and pursuing its objective of assessing and regulating systemic risk. the fact that the esrb will be responsible for the assessment of systemic risks and the formulation of pertinent policy recommendations, and that it will not be involved in the implementation of these recommendations strengthens the argument for its policy independence. fourth, the effective performance of macro - prudential supervision in the eu will require addressing a number of legal, institutional and governance issues. there are two key requirements for the successful functioning of the esrb : the first is the establishment of a comprehensive and relevant information base as well as effective information - sharing and cooperation between the esrb and the european supervisory authorities. the second is that suitable and sufficient mechanisms are in place in order to ensure the implementation of the macro - prudential recommendations. finally, i should emphasise that the ecb is actively preparing, in collaboration with the national central banks, in order to provide the appropriate analytical statistical and administrative support to the esrb. | 0 |
x p guma : monetary policy transparency and openness speech delivered by dr x p guma, deputy governor of the south african reserve bank, on behalf of mr t t mboweni, governor of the south african reserve bank, at the launch of the labour markets and social frontiers publication series, 15 october 2002. * * * honoured guests, colleagues of the south african reserve bank and members of the media. as you are already aware, formal inflation targeting was introduced in south africa in february 2000. one of the hallmarks of inflation - targeting is the greater degree of transparency it requires regarding monetary policy. a major determinant in the success of the inflation - targeting framework hinges on whether the bank's actions are fully understood by and have credibility with labour, business, government and other social players in our economy. i have mentioned this in the past, but i am compelled to stress it again, that monetary policy transparency and openness are essential in order to enhance the understanding and credibility of our policies. this commitment to transparent monetary policy has resulted in numerous initiatives to improve the communication of our policies to the public. in march 2001, the bank published and distributed its inaugural monetary policy review, which is now published twice a year. we make statements, which are broadcast live on sabc, at press conferences shortly after each monetary policy committee ( mpc ) meeting. and we simultaneously release a detailed written statement in which reasons for the bank's stance is explained. monetary policy forums ( mpfs ) are held twice a year at various venues around the country to create a platform for discussion on monetary policy and general economic developments, both domestically and internationally. the bank also reports regularly to parliament on monetary policy. over and above all of this, i am frequently invited by various organisations to address various groups and forums, ranging from businessmen and women to universities, hiv / aids donors and caregivers, and i use every opportunity to bring the bank and its work closer to the people. today, i am proud to officially launch another initiative that is ground - breaking for the south african reserve bank and which i believe ranks it as a leader among central banks. the bank realises that the effects of monetary policy impact on labour markets and social development issues. while we acknowledge that sometimes these linkages are not blatant, we cannot rule out the possibility that some of the trickle - down effects are real and warrant more in - depth interrogation. it is for this reason in particular that we thought it necessary | radovan jelasic : developments in the serbian financial sector speech by mr radovan jelasic, governor of the national bank of serbia, on the occasion of the opening of the eighth forum and exhibition of banking technology β tehnobank 2008 β, belgrade, 9 april 2008. * * * ladies and gentlemen, allow me to greet you on behalf of the national bank of serbia on the occasion of the opening of the eighth β tehnobank β meeting which was first organized at the outset of transition of our economy. i wish to thank the organizers for a very interesting programme which, just as the transition itself, forces us to face up to new challenging ideas. the serbian financial sector is developing rapidly and i wish to single out three topics from this year β s agenda which the nbs is particularly keen to develop : β’ business continuity and disaster recovery β’ mobile payment services β’ new sepa regulations why these three? first, because quality and efficiency in performing financial services are of vital interest to any central bank. implementation of the technology which enables business continuity and disaster recovery is a sign of maturity of both the banking industry and the banking market environment itself. the nbs expects that application of such technologies will increase in the near future and, with that purpose in mind, in cooperation with the bank of england, plans to organize an international seminar on this topic to take place in belgrade on 13 through 15 may 2008. the nbs will host this meeting to discuss the targets, significance and the experiences of central banks in managing business continuity as well as the strategy for disaster recovery and averting threats to the normal conduct of business operations. one thing is for certain β in the 21st century, liquidity and solvency are important but are not sufficient to ensure stability of the financial sector if business continuity and disaster recovery do not function immaculately. let us take the uk example of the northern rock where a mistake in that respect actually led in great part to the first instance of bank nationalization after more than a century. mobile payments, however, are a chance for serbia to jumpstart technological development and to implement from the start the most innovative technologies. while many countries are still at the stage of devising extended pilot programs for mobile payments, in many serbian cities mobile telephony is already used for payment of parking space fees, while payment of top up fees for prepaid mobile telephony through sms messaging service is already a matter of everyday use. it gives me pleasure | 0 |
accommodation? here it is useful to first consider the market environment we were facing during the first half of this year and up until the 13 june governing council meeting. you can see this on my second slide. what you can see here is that, compared to a year earlier, uncertainty around the future path of 3 / 11 bis central bankers'speeches short - term interest rates had increased measurably. in the first months of this year, markets believed that an unusually wide range of policy outcomes would be possible in 2019. a dispersion of views is not in itself a bad thing, of course. it is usually an encouraging sign that markets remain attentive to changes in the outlook. the information - processing role of markets can in fact be expected to recover during periods of policy normalisation. herding, by contrast, is often a sign of perilous complacency. a dispersion of views does become a source of concern, however, if it reflects uncertainty around the central bank β s reaction function. such uncertainty is not unusual in periods of transition. once policy has succeeded in shifting upwards the distribution of risks around the growth and inflation outlook, uncertainty about the future path of interest rates naturally begins to increase. i would argue, however, that our environment is characterised by two factors that vindicate the need for stronger forward guidance and that have contributed to amplifying uncertainty around our near - term policy intentions. the first has to do with the peculiar anatomy of the inflation process we are currently facing. although uncertainty around the inflation outlook is receding and a sustained convergence of inflation to levels closer to our aim is in sight, underlying inflationary pressures have long proven stubbornly weak β to an extent that, in the past, threatened to destabilise public confidence in the return of inflation to levels closer to 2 %. 10 in addition, there is still considerable uncertainty as to whether the key parameters underlying our workhorse phillips curve models have undergone structural change β whether inflation has become less responsive to economic slack, be it through globalisation, technological progress or structural product and labour market reforms. 11 at a time when policy rates remain deeply in negative territory, such parameter and model uncertainties imply that the costs of committing a type ii error β of failing to anticipate a much slower than usual return of inflation to pre - crisis levels β may be uncomfortably high. communicating our expectation that the ecb key interest rates would remain at their present levels at least through the | envisaged subsequent path of future short - term interest rates and, ultimately, on the expected level of the terminal rate, and if so, how? there are two broad ways in which central banks can increase transparency around the future path. the first is to publish policymakers β projection of the future path of short - term interest rates conditional on the macroeconomic outlook. 14 the second approach is to broadly maintain within the confines of current practice, which is geared towards explaining in more detail the central bank β s reaction function and to communicate policymakers β conditional expectation of the likely future pace of policy adjustment. the key difference between the two approaches is, hence, the level of precision with which policymakers are willing to communicate their future policy inclinations. the first approach is by no means uncharted territory in the central banking community. a number of pioneering central banks, led by the reserve bank of new zealand in 1997, regularly publish numerical interest rate forecasts to reinforce their inflation targeting commitment, very much in line with modern monetary theory. 15 the experience of these central banks shows that there have been many instances where guidance on the future path has been successful in coordinating disperse market views. 16 but 6 / 11 bis central bankers'speeches there have also been instances of stark and persistent discrepancies between the path expected by market participants and that published by policymakers. 17 some academics have resolved this impasse by arguing that the optimal degree of transparency depends on the central bank β s ability to forecast the economy. 18 put simply, transparency around future policy intentions is likely to be welfare enhancing if the central bank has established a convincing track record of systematically beating private sector inflation forecasts. but neither the private sector nor central banks have been particularly good recently at predicting inflation. more, even a well - established projection track record may not be enough to tilt the balance in favour of publishing a path for future policy β mainly for four, largely interrelated, reasons. first, it is often more important how central banks communicate than what they communicate. back in 2004, alan blinder already pointed out that a monetary policy committee that releases dispersed views could cause a β cacophony β in communication and ultimately create more confusion than clarity. 19 indeed, i believe that one reason why the ecb β s enhanced forward guidance has been so effective is precisely the fact that it represents the governing council β s unanimous view. for a large committee to agree on an entire path of future policy rates is, however | 1 |
to aa +. in its comments on this change, s & p stated explicitly that the efsf β s rating has a developing outlook, which means that the agency foresees the possibility both of returning the rating to aaa ( if offsetting credit enhancements are adopted ) and of downgrading it further to below aa + ( if key guarantor countries are downgraded ). a lower efsf rating would probably be associated with higher interest costs of refinancing. there might even be a fall in liquidity in the efsf bond market owing to the exit of some institutional investors, who primarily target the aaa segment of issuers. 6. on a more general level, the lack of coordination of resources for supporting european countries is disturbing. it is resulting in fragmentation of resources and a lack of transparency in the setting of parameters such as β who β, β how much β, β to whom β and β how β. specifically, the european union, or the euro area, is planning simultaneously to lend to the international monetary fund, to guarantee the efsf and to guarantee the esm, while central banks guarantee the capital of the ecb. if a non - european country wanted to help europe, there is the question of whether it should send the money to the imf or use it to purchase efsf bonds, a senior tranche of the spv, or the peripheral countries β debt, i. e. with no intermediation. the many uncertainties associated with the specific operation of the efsf are giving rise to general doubts about the appropriateness of the current approaches to overcoming the ongoing debt crisis in the euro area. i cannot help feeling that many solutions to the problems have been wrongly chosen in part because the main causes of the financial and debt crisis have not been correctly identified. greece gets too much attention from decision - and policy - makers. it represents a mere 1 / 50 of the european economy. i believe that without the political will to provide greece with massive support from european funds to restore its competitiveness β and i see little such will at the moment β its exit from the euro area will be inevitable, since depreciation of the greek currency will become part of the measures to restore competitiveness. the provision of loans to greece has so far primarily bought time. this has enabled wealthier greeks to transfer their savings out of the country. the costs of such action have been a reduction in europe β s credibility | financial system is in the end completely incomparable to the pre - world - war - ii system. nowadays, we live in a global world and, although we are more capable of minimising the impact of inflationary disturbances, there are other types of shocks arising. to sum up, the main message we can learn from the history is that price stability as the ultimate goal of monetary policy is not in contradiction with the effort to achieve the financial stability. indeed, on one hand, price stability is a necessary condition to achieve financial stability, as the inflationary disturbances have the potential to cause serious damages to the financial system ; on the other hand, a sound financial system enables the monetary policy to smooth its actions in order to achieve price stability. ladies and gentlemen, thank you for your attention. | 0.5 |
environment had a lot more to do with this narrowing, along with sluggish loan demand. historically low interest rates have significantly reduced the yields banks earn on their assets, especially mortgages. banks built up their holdings of mortgages as market conditions generated such remarkable volumes of these loans, and as weak demand for commercial loans left a void in bank balance sheets and income. historically low rates on new mortgage loans, together with rapid prepayment of higher - rate mortgages, have sharply reduced yields on bank mortgage portfolios. the preliminary data for 2003 indicate that the effective yield on mortgage - backed securities, including adjustable - rate products, fell to 4. 22 percent ; by late in the year, yields had fallen to only about 3. 90 percent. along with this pressure on yields, banks have faced an interesting new pressure on funding costs. for much of the last two years, households have been inclined to keep their assets very liquid and flexible. interest rates have been low by historical terms, and didn't seem to provide much incentive for households to tie up their assets in time deposits. the stock market - at least through the spring of last year - was on a downward track and certainly not providing attractive returns. flexible bank deposits offered a comfortable compromise, providing positive returns, deposit insurance, and flexibility to redeploy funds if alternative investments became more attractive. in this setting, bankers have valued core deposits even more highly, and have paid up for them. in particular, they have favored nonmaturity deposits such as money market or savings accounts. smaller - denomination certificates of deposit, in contrast, have declined steadily over a period of some years. influenced by the low interest rate environment, banks reduced the rates on their nonmaturity deposits by far less than money market rates had fallen. the result has been tighter margins, but with an important potential side benefit. the success that bankers had in raising these nonmaturity deposits created opportunities to reclaim some of the market share that bank deposits had lost over the previous decade or two. money market and savings accounts, in particular, now fund 30 percent of bank assets. remarkably, despite these pressures, it now appears that bank margins recovered to some degree late in 2003. the improvement was only about six basis points, but appears to be significantly influenced by slower prepayments and the resulting increases in mortgage asset yields. there were a host of other forces at work, suggesting that the improvement in margins may or may not be sustainable. still, banks | also plays a role, and we have seen a recent wave of merger announcements among the largest bank holding companies. based on what i hear from community bankers, mergers and acquisitions among big institutions have historically created opportunities for community banks. i wouldn't be a bank regulator if i neglected to mention that bank capital ratios remain very strong. nearly 99 percent of banks in the united states are well - capitalized, which is a higher proportion than we have ever seen. some analysts have expressed concern that bankers would reduce their capital buffers in order to increase dividend payments, especially as the tax treatment of dividend income became more favorable to stockholders. but in spite of these changes in the tax code, the aggregate dividend payout ratio at commercial banks increased only modestly, from 76. 4 percent of income to 77. 4 percent of income. conclusion in conclusion, the u. s. banking industry is healthy, strong, profitable and well - positioned to play its proper role in supporting growth and prosperity in our economy. many of the factors that made 2003 such a remarkable year for the industry look like they will carry over into 2004 as well. new challenges will arise as we move ahead, of course, and perhaps some new opportunities as well. adapting to change is an important aspect of the banking business, and the industry's ability to respond well to changing circumstances was a key to last year's record - setting results. i believe we can look forward with confidence to continued strong performance from the banking industry. | 1 |
halal profits. towards sustainability : the role of islamic finance islamic finance value propositions not only are consistent with universal and ethical values, but the economic aspirations are to elevate our overall well - being. much of today β s discussion focus on as sustainable development goals ( sdgs ) and sustainable responsible investments ( sris ) that centre on impact - driven and value - added outcomes, in addition to being commercial2 / 3 bis central bankers'speeches oriented. on this note, malaysia is at the forefront of innovation and thought leadership with the value - based intermediation ( vbi ) initiative that aims to create positive and sustainable impact to the economy, community and environment, without compromising the financial returns to shareholders. our vbi journey has hit several key milestones. to date, 12 islamic banking institutions have pledged to integrate environmental and social considerations in their offerings, practices and cultures. in facilitating this new journey, bank negara malaysia will continue to collaborate with the industry to create an enabling environment for smooth and orderly transition. these include the issuance of several guidance documents such as the vbi implementation guide, vbi scorecard and value - based impact assessment framework ( vbiaf ). more recently, the bank and the vbi community of practitioners ( cop ) have embarked on efforts to develop sectorspecific guides on value - based impact assessment alongside sectoral experts. to start with, the focus of these efforts will be on renewable energy, efficient energy, and primary commodities. this year also witnessed the launch of an islamic index - based investment scheme, which has embedded environmental, social and governance ( esg ) principles, and the launch of working capital financing for women entrepreneurs. in the same vein, the takaful sector is also moving towards integrating vbi elements, with the establishment of the vbi takaful task force by the malaysian takaful association ( mta ) to look into establishing a strategic roadmap on vbi implementation by the takaful industry. success of these initiatives require conviction and commitment by the industry leaders to actively pursue these as an important agenda for islamic finance. therefore it is imperative that the industry leadership to also support this with talent development strategies to equip the islamic financial institutions with the right talent pool. these include re - evaluating and refining the learning and development requirements, anchored at incorporating new learnings and more understanding of businesses that translate into value - added services to clients and addressing gaps in skills and competencies required to | adnan zaylani mohamad zahid : ethics & professionalism - leaders as role models for the next generation of islamic finance professionals speech by mr adnan zaylani mohamad zahid, assistant governor of the central bank of malaysia ( bank negara malaysia ), at the chartered institute of islamic finance professionals ( ciif ) 4th anniversary dinner and conferment ceremony, kuala lumpur, 6 november 2019. * * * i wish to extend my sincerest thanks to the chartered institute of islamic finance professionals ( ciif ) for inviting me here this evening to join the celebrations for the 4th anniversary of the institute as well as the conferment ceremony of the chartered professional in islamic finance ( cpif ) professional designation. i understand that this evening will also see the conferment of the first ever fellows from amongst the existing chartered members of the institute, all of whom have served the islamic finance industry with distinction over the years. the institute β s efforts to support the professionalisation of the islamic financial services industry is part of a long journey that we embarked on some time ago, forming a key step towards achieving a vision of an industry that is rich with talent. developing talent development together as an industry recognising that talent development is a long - term endeavour, bank negara malaysia had set out the initial plan in the financial sector blueprint 2011 β 2020 in which several affiliate institutions had been identified as having crucial roles to play in the development of talent for financial services industry as a whole. on islamic finance, institutions such as islamic banking & finance institute malaysia ( ibfim ), association of shariah advisors in islamic finance ( asas ), international centre for education in islamic finance ( inceif ) and international shari β ah research academy for islamic finance ( isra ) were amongst the key affiliates that were given specific mandates for education and training. similarly, the chartered institute of islamic finance professionals ( ciif ), then known as the association of chartered islamic finance professionals ( acifp ), was identified as the key institution to develop professional standards and set the professional qualifications for the industry. the institute, now entering its 5th year of establishment, is recognised as the industry β s own professional body through the islamic finance profession charter, and as such is strategically positioned as the platform for the development of ethically driven talent imbued with professional integrity. with the industry leadership on board as ciif β s members, the professional body is expected to continue its | 1 |
the strengthening of banks β self - regulation in january 2020 has led to a reduction in the share of new mortgages with a high loan - to - value ratio in the residential investment property segment. however, affordability risks as measured by the loan - to - income ratio have increased for new mortgages. the snb β s stress scenario analysis suggests that most domestically focused banks β capital buffers remain sufficient to cover the loss potential stemming from relevant stress scenarios. these include the scenario involving a severe recession and the scenario involving an interest rate rise with a simultaneous correction in real estate prices. however, these simulations also suggest that the capital ratios of certain banks could decline significantly and approach, or even fall below, the regulatory minimum requirements. given the risk exposures of these banks, adequate capitalisation is particularly important. the recent reactivation of the countercyclical capital buffer will help to maintain the banking sector β s resilience. the snb will continue to monitor developments on the mortgage and real estate markets closely, and to assess whether further measures are necessary to mitigate the risks to financial stability. page 3 / 3 | bank financial institutions β legislation is needed here. judging from the actions of the past year, there are indeed institutions that are β too big to fail β, at least in certain circumstances. let β s set up a resolution framework that is robust and transparent so everyone understands the rules of the road and likely outcomes beforehand. an ad hoc approach increases uncertainty and reduces policymaker credibility. β’ if large systemically important institutions are indeed too big to fail, then there needs to be an explicit quid pro quo for this. otherwise, this implicit support will create moral hazard and discriminate against smaller institutions. in particular, important institutions cannot be allowed to stay outside in the sun during good times, but allowed to come inside the regulatory net when it is raining. β’ we need a more robust capital regime for banks. measures of regulatory capital lag far behind the real - time market - based measures of capital and risk. moreover, the capital regime is procyclical. banks are constrained in the amount of reserves they can build in good times as a buffer against cyclical downturns. finally, banks balk at cutting dividends to conserve capital or replenishing the capital they sorely need in the middle of crisis. these incentives reinforce the downward pressure on the financial system during times of stress. β’ we need a more effective regulatory system. we need a systemic risk authority that has both the responsibility and the powers to look across the entire financial system β both depository institutions and the capital markets. our regulatory regime is incredibly balkanized, which makes coordination difficult and means that important information can fall between the cracks. it also leads to less accountability for supervisory shortcomings and failures, which is another area where we have to do better. this list is just a hint of the agenda that lies ahead. we need to put our financial system into the repair shop for intensive reconstruction. we need to do this in order to rebuild confidence and to ensure that we do not repeat the type of financial boom and bust that has characterized this cycle. thank you very much for your kind attention, i would be happy to take questions. | 0 |
2002, before ending the year at about 63. 4 cents us. during this time, the cost of labour relative to capital goods declined in canada because most capital goods are imported and priced in u. s. dollars, while labour is paid in canadian dollars. businesses reacted appropriately to these price signals by increasing their production of services and of those manufactured goods that require relatively more labour and less machinery and equipment. what we have seen over the past couple of years is, in many ways, a mirror image of the 1997 - 2002 period. commodity prices have risen, and our terms of trade improved by more than 16 per cent from the fourth quarter of 2001 to the fourth quarter of 2004. the cost of labour has increased relative to the cost of capital goods. again, canadian firms are responding to the price signals. we are currently seeing large increases in investment spending in oil and gas extraction, other mining activity, and wood - product manufacturing. firms have been motivated both by high prices for their products and by the expectation that these high prices will persist. we are also seeing rising investment spending in sectors with low exposure to international trade, such as electric power generation, finance and insurance, and information and cultural industries. in these cases, firms are reacting to recent substantial gains in canadian domestic demand. for both of these groups, a crucial point to note is that a large part of the planned investment is motivated by the desire to increase production capacity. but the story is somewhat different for those sectors that are highly exposed to international trade, but where the prices of their products are not rising. here, i am referring to sectors such as auto parts, textiles, and clothing manufacturing. firms in these sectors are feeling the pressure of the higher canadian dollar, and are also facing increased competition from places such as china and india. the good news is that there is evidence that many of these firms are making adjustments in the face of adversity. investment spending for these firms is being channelled toward increasing productivity and reducing costs, not increasing capacity. because much of the productivity - enhancing machinery and equipment is produced abroad and priced in u. s. dollars, the appreciation of the canadian dollar has lowered the cost of this machinery and equipment relative to that of labour. other firms are using different strategies to adjust to the stronger canadian dollar and to increased competition from abroad. a growing number of firms are looking to cut costs by importing more inputs. others are phasing out production of goods and services with low profit margins and | the bank was able to anticipate all future movements in inflation, and adjust interest rates in advance to offset them and keep inflation exactly at 2 per cent. in such a case, it might appear to the casual observer that interest rates were being adjusted up or down for no reason. taking together the approaching closing of the output gap and our understanding of recent soft inflation readings, today β s increase in interest rates is clearly warranted. that being said, we will of course monitor the details of inflation carefully to determine the extent to which it remains appropriate to look through fluctuations in inflation. interest rates were lowered in 2015 in order to help the economy adjust to lower oil prices, and much of that adjustment is now behind us. while lower rates contributed to greater household financial vulnerabilities, enhanced macroprudential policies helped to mitigate these and will continue to do so. as the economy approaches full capacity, a higher policy rate in pursuit of our inflation target also serves to reinforce efforts to mitigate financial system vulnerabilities. governing council acknowledges that the economy may be more sensitive to higher interest rates than in the past, given the accumulation of household debt. we will need to gauge carefully the effects of higher interest rates on the economy. future adjustments to the target for the overnight rate will be guided by incoming data as they inform the bank β s inflation outlook, keeping in mind continued uncertainty and financial system vulnerabilities. with that, senior deputy governor wilkins and i will be happy to take your questions. 2 / 2 bis central bankers'speeches | 0.5 |
the medium to longer term. by so doing, we will continue to ensure a firm anchoring of medium - term inflation expectations. such anchoring is indispensable to supporting sustainable growth and employment and contributing to financial stability. the financial system and individual institutions within it must act now to ensure that a future removal of central bank support can be managed without painful β withdrawal symptoms β. preventive care : lessons from the crisis the overriding objective of someone recovering from a severe illness is not to suffer a relapse. unfortunately, there is no way of guaranteeing the avoidance of illness. but β preventive medicine β is crucial in reducing the risk of recurrence. we have to develop a new preventive framework to minimise the risk of recurrence. this framework will have both monetary policy and regulatory dimensions. β leaning against the wind β in monetary policy recent experience has reopened the debate about whether central banks should use interest rates to β lean against the wind β of asset price surges. prior to the crisis, conventional wisdom was sceptical about such an approach for three main reasons : asset price misalignments or β bubbles β were seen as difficult to identify in real time ; it was doubted that interest rate increases of a plausible magnitude could contain surging asset prices once these have achieved a momentum of their own ; and third, it has been argued that any damage to the economy stemming from an asset price correction can be contained by prompt and aggressive monetary policy easing. with these considerations in mind, a β wait - and - see β approach was seen as preferable when addressing asset price surges. having spoken on these issues in the past, i do not wish to enter into a detailed discussion of these arguments today. i only want to emphasise that recent experience has demonstrated the limitations of a wait - and - see approach. unprecedented policy action in response to the financial crisis could not prevent a sharp fall in economic activity, with all the consequences for the labour market, public finances and the society as a whole. moreover, a wait - and - see approach risks creating moral hazard. what is required is a more symmetric approach : one that leans against the emergence of asset price booms as well as dealing with the consequences of asset price busts. by encouraging more responsible behaviour on the part of investors, such an approach should make such cycles of boom - bust less likely. but substantial practical questions remain. clearly, central banks should not target, nor react mechanically to, | administered. contagion must be avoided. similarly, a global financial crisis of first magnitude requires prompt and decisive policy action, possibly of an unprecedented nature. when this crisis began, the european central bank was in the vanguard of the policy response, taking early and bold action to address financial turmoil. during the crisis, our exceptional measures β the ecb β s β enhanced credit support β β served to prevent a systemic liquidity crisis, enabled banks to continue functioning and helped to restore confidence. second, medical experience tells us that, over time, the continued administration of strong painkillers can be harmful. they can create dependence β r even addiction β or the recipients. such medicine cannot be a permanent solution. it would eventually create new problems. by analogy, the exceptional support provided by central banks to the private sector must not degenerate into long - term dependence of the private sector on such support. for that reason, the current non - standard monetary policy measures will have to be progressively phased out. enhanced credit support is not for eternity. financial institutions must prepare themselves for an eventual withdrawal, which, as i have said on behalf of the governing council, will be timely and gradual. third, looking forward, we know that β prevention is better than cure β. β preventive medicine β reduces the risk of future recurrence of the illness. recent experience has offered important insights into how public policies and private incentives can be improved so as to reduce the chances of recurrence. through preventive medicine, we must develop a fitter and healthier financial system. so let me describe in more detail : how we have administered the β central bank medicine β to the financial system ; how we envisage continuing the treatment going forward ; and what lessons we are drawing for the future design of a preventive framework. emergency medicine : crisis management and β enhanced credit support β it is natural to start with the β emergency treatment β that we have provided to the financial system throughout the financial crisis. the alertness of the ecb was reflected in its actions from the very moment that financial tension first emerged. in august 2007 the ecb was the first central bank to respond, acting within hours. in the ensuing months, we changed the timing and maturity of our liquidity provision, so as to support the functioning of the money market. in addition, we offered foreign currency liquidity to our counterparties. the intensification of the crisis in mid - september 2008 brought soaring credit spreads, dramatic | 1 |
##ize. the financial landscape will change, and we cannot know how. while i have outlined some things to expect and some not to expect, uncertainty will persist for quite some time. the task for financial institutions is to deal with the uncertainty 4 / 5 bis central bankers'speeches surrounding brexit as efficiently as possible. as regards the course of the negotiations, we should bear in mind that economic rationale might not be the main guiding principle β and will certainly not be the only one. this means that companies have to factor in the possibility that the final deal will not prioritise the economy β or that, in a negative scenario, both sides might not agree on any deal at all. but whatever happens in terms of our future relations, it is vital to remember that lax financial rules have often paved the route to failure. the outcome became painfully apparent in the financial crisis that erupted just under a decade ago, and its costs are still being felt. none of us wants to see such events again any time soon. and preserving the progress we have made in increasing the resilience of financial institutions is the only way to ensure this. thank you for your attention. 5 / 5 bis central bankers'speeches | of the social security system be safeguarded on a permanent basis. summary generally speaking, major reforms were initiated last year to counteract the weak economic growth in germany. however, i think they are not sufficient. in my opinion, what is now important is to avoid being lulled into a feeling of security through the emerging cyclical revival. there is still considerable need for action and reform to improve long - term growth perspectives. | 0.5 |
indian business : past, present and future address delivered by shri shaktikanta das, governor, reserve bank of india on the occasion of iconic week of azadi ka amrit mahotsav celebrations organised by the central board of indirect taxes and customs in mumbai on june 9, 2022 it is a great pleasure to address such an august gathering in this event organised by the central board of indirect taxes and customs ( cbic ), department of revenue, government of india as part of the iconic week of azadi ka amrit mahotsav celebrations. the topic i have chosen for my address today, namely, β indian businesses : past, present and future β will resonate with the audience here. businesses form the bedrock of an economy and on an occasion like this, it would be worthwhile to look at how indian businesses have evolved over the years. the current context of transformative changes that are altering the business landscape in india and across the world is yet another reason for choosing this theme. 2. i have structured my talk in the following order. i shall start by recounting the historical evolution of indian businesses to draw lessons for the future. i will then turn to the current scenario where i propose to highlight the tremendous opportunities that are available today for indian businesses and the challenges that they would have to contend with. i also propose to highlight aspects of corporate governance and related issues that are indispensable for a sustained performance by any entity or business. 3. historically, businesses have been the creators of wealth by bringing innovation in production and trading activities which facilitated higher productivity and better standard of living of the people. apart from creating growth and employment opportunities, thriving businesses generate vital resources through tax payments for the government to undertake welfare measures. thus, both from growth and welfare standpoints, businesses play a crucial role in overall economic development. in the words of nobel laureate in literature t. s. eliot, β only those who will risk going too far can possibly find out how far one can go. β 1 the underlying theme of business is to explore opportunities and capitalise on them. 4. in india, business and entrepreneurship have always had a special place in our society. the history of indian business is a fascinating story and one that is closely intertwined with the political and economic history of our country. traditionally, indian businesses were rooted in local knowledge and resources that were greatly admired all over the world. during the colonial period, however, many of our businesses were faced with | , and the risk that wages and prices will rise beyond the price stability target warrants attention. the second is downside risks to overseas economies. inflation rates in the united states and europe, which were at high levels, have been steadily declining recently. however, there are uncertainties as to how the past policy interest rate hikes by overseas central banks will affect the real economy and financial activity over time. moreover, at the beginning of august 2024, data suggesting a possible slowdown in the u. s. economy triggered market developments over concerns of a sharp economic downturn, or a hard landing. attention is warranted over the risk of continued excessive movements and adjustments in financial markets - - stemming from these concerns over a slowdown in overseas economies - - exerting further downward pressure on overseas economies and eventually spreading to japan's economy. the third risk is that delayed improvement in consumer sentiment will disrupt the virtuous cycle from income to spending. households have so far been defensive about spending, mainly because the rate of increase in the price of everyday goods such as food and daily necessities has been relatively high and growth in real income has been negative. it is true that private consumption has shown resilience thanks to improvement in the income situation, with the year - on - year rate of change in real wages turning positive recently, together with firms'initiatives and the effects of various government measures. however, i believe it is still necessary to monitor this situation carefully, as the previous prolonged negative growth in real income may hamper future improvement in consumer sentiment. iii. the bank's conduct of monetary policy 5 / 7 bis - central bankers'speeches next, i would like to talk about the bank's decisions made at the july 2024 mpm and share my views in this regard. the first point concerns the change in the bank's guideline for money market operations ( chart 12 ). specifically, the bank decided to raise the target for its policy interest rate, the uncollateralized overnight call rate, from the previous level of " around 0 to 0. 1 percent " to " around 0. 25 percent. " at the july mpm, the bank assessed that, while japan's economic activity and prices had been developing generally in line with its outlook presented in the outlook report, upside risks to prices required attention given that, for example, the year - on - year rate of change in import prices had recently turned positive again. in view of | 0 |
##tech to address fintech developments and their attendant risks. the rise of digitization also forces us to focus on the third pillar of central banking ( which admittedly, has not received as much attention in the past! ). with digitalization and technological disruption, the payment system is now seen as an essential tool for the effective implementation of monetary policy and as a critical infrastructure of a stable and inclusive financial system. these are all exciting prospects. allow me to talk about the bsp β s three mandates in this 1 / 5 bis central bankers'speeches context. evolution in the pursuit of price stability the bsp β s constant commitment to its primary mandate of price stability has led to managed and stable inflation in an environment of high economic growth. the philippines has achieved uninterrupted growth for the past 77 consecutive quarters despite domestic and global economic challenges. for six consecutive years ( in 2009 to 2014 ), as well as in 2017, inflation settled within the national government β s inflation target range. amid this resilience, the philippine economy is being tested by external headwinds emanating from the normalization of monetary policy by advanced economies, and the brewing trade tensions among key economies. these exert depreciation pressure on the peso even as the flexible exchange rate policy continues to be a stabilizing mechanism against unsustainable imbalances. the overall external position of the domestic economy remains resilient. the sustained resilience of foreign direct investments, overseas filipino ( of ) remittances, and business process outsourcing ( bpo ) receipts have provided additional buffers to the domestic economy. our external debt metrics have also improved as exhibited in the continued decline in the external debt to gdp ratio. these external transactions yielded positive results in terms of comfortable gross international reserves of us $ 76. 9 billion as of july 2018, covering 7. 4 months of imports of goods and payments of services and income. in the meantime, the peso continues to reflect day - to - day market conditions. over the last ten years, the peso has generally maintained its external price competitiveness against baskets of currencies of all trading partners and trading partners in advanced and developing economies. on the domestic front, the country β s inflation environment is confronted by a confluence of supply - side factors. this posed a challenge as monetary policy instruments more effectively address demand - side driven shocks. this was the case early this year when economic data suggested that an adjustment in | to the bsp. we have systems in place for the electronic transmission of reports to us not only by the big commercial banks but the thrift and rural banks as well. in order to better appreciate the reports and data gathered from the banks and utilize these to supervise them in a more proactive way, the bsp embarked on a data warehousing project. to fully automate the project, the bsp is procuring an integrated financial reporting portal system that will allow bsp - supervised banks to send / upload reports to bsp and retrieve / download processed reports from bsp using mutually acceptable secured channels of communication. reaching out to the rural areas an area that your association may be of help to us in this regard is encouraging through your education campaigns and drives the smaller thrift and rural banks to be more e - savvy. there are over 700 rural banks scattered all over the country but only about half have email facilities and about the same number have in - house developed systems. you may want to consider e - enabling the regional areas as there is already a heavy concentration of applications in the mega - metro manila area and other major cities. for the bsp β s part we developed the β integrated regional information system β ( iris ) which allows the branches of banks in the countryside to conduct electronic transactions with bsp such as cash deposit, withdrawal, fx purchase, peso exchange, and rediscounting of loans and payments. iris has been implemented in three bsp regional offices and 5 regional units, and is expected to be fully deployed in the remaining bsp branches by the 3rd quarter of 2006. it risk management with the increasing applications of technology to banking services comes increased exposure of banks to technology - related risks, including operational, reputational, and strategic risks. to help mitigate these, the bsp recently put out guidelines for technology risk management. the bsp established these guidelines to ensure that the knowledge and skills necessary to understand and effectively measure, monitor and control these risks are in place. anti - money laundering efforts in addition to risk management, you may also partner with financial institutions in the anti - money laundering efforts of the government. under the anti money laundering act, as amended ( amla ), covered institutions, i. e., financial institutions that are supervised by the bsp, the sec and the insurance commission, are required to electronically report to the amlc all β covered and suspicious transactions β. while the amlc has established its | 0.5 |
. but it does underline the importance of adding to supply, not just to demand, over the medium term, and of maximising the productivity of the factors of production that we have, if we are to have the sort of growth that genuinely brings prosperity. second, and following on the theme of potential supply, others have noted that the rate of population growth at present is the highest since the 1960s. on one hand, this may help alleviate capacity constraints, insofar as certain types of labour are concerned. on the other hand, immigrants need to house themselves and need access to various goods and services as well. that is, they add to demand as well as to supply. it follows that the demand for additional dwellings, among other things, is likely to remain strong. corresponding effects will flow on to urban infrastructure requirements and so on. so the question of whether enough is being done to make the supply side of the housing sector more responsive to these demands will remain on the agenda. adequate financial resources will of course also be needed. in that regard, the current issue is not the cost of borrowing for end buyers, which remains low, but the availability and terms of credit for developers. perceptions by lenders of the riskiness of development in some cases are probably overdone just at the moment, given the strength of the underlying fundamentals on the demand side for accommodation. that will probably not be a permanent problem though ; the more persistent difficulties look like they may be in the areas of land supply, zoning and approval. third, the likely build - up in resources sector investment over the years ahead carries significant implications for the medium - term performance and structure of the economy. even if a number of the proposed projects do not go ahead, the ratio of mining investment to gdp for australia, which is already very high, will probably go higher still over the next several years. a sizeable share of the physical input will be sourced from abroad ( through imported equipment ) but the domestic spend will still be significant. so, other things equal, the investments will be expansionary for the economy. the financial capital to fund this build - up will mostly come from abroad. that is to say, absent some offsetting changes elsewhere, australia β s current account deficit could be considerably larger for some years than the 4 to 5 per cent of gdp we have seen on average for the past generation, which itself was a good deal bigger than seen in the generation before that. now of course the current account | government does not own, and has not had to give direct support to, any financial institution. australia, therefore, will be relatively free of the difficult governance and exit strategy challenges that such support is raising in some countries. public finances remain in good shape, with a medium - term path for the budget back towards balance, and without the large debt burdens that will inevitably narrow the options available to governments in other countries. sensible policy frameworks β both macroeconomic and microeconomic β remain in place, and they have worked. the financial regulatory system is strong and tested. we remain open for trade and investment, with an exposure to asia, which still has the most dynamic growth potential in the world over the next several decades. these advantages are already paying dividends. properly exploited, they will pay many more. but there is no such thing as effortless, or riskless, prosperity. there is still a business cycle, and we do well to remember that even if we have been spared the worst of the recent downturn. we will need to continue investing in all the things that helped us get through the recent episode. and we will need to accept and manage various changes that will probably confront us over the years ahead. the road to prosperity will have some bumps, twists and turns. but it is the road to the right destination. | 1 |
per cent over the coming year will contribute to bringing inflation back towards the target of 2 per cent a couple of years ahead and contribute to a balanced development in production and employment. however, there is still considerable uncertainty regarding the economic outlook and inflation prospects. conditions for the riksbank β s monetary policy steering system how is an interest rate decision put into practice? what actually happens when the executive board decides that the repo rate should be raised, cut or held unchanged? this can best be answered with a description of how our system works. like many other central banks, the riksbank aims its monetary policy at steering the shortest market rate, the overnight rate. this can be done in many different ways. we have a system where we decide the conditions for the banks β deposits and loans with the riksbank. the riksbank supplies a payment system, rix, which manages payments in swedish krona. a payment system is an infrastructure that makes it possible to forward payments from one bank to another, and thus payments from households β and companies β accounts in one bank to the recipient β s account in another bank. rix consists of an account system where each of the participating banks has its own account in which payments between the banks are booked. by determining the conditions for the banks β deposits in and borrowing from the rix system, the riksbank can affect the overnight rate, that is the interest on overnight loans between the banks. deposit and lending rates set the limits for the overnight rate when the payment system closes for the day and trade between the banks in the overnight market has been concluded, the banks β accounts in rix must be in balance. this means that the banks must finance their deficits or invest their surpluses. the banks have two alternatives for achieving this. they can either balance their respective deficits and surpluses against one another on the overnight market, or they can use the riksbank β s deposit and lending facility. the latter means that they can deposit in or borrow from the riksbank overnight at interest rates published in advance. these are known as the deposit and lending rates, which are 0. 75 percentage points below and above the repo rate respectively. this difference creates an incentive for the banks to firstly borrow from and deposit funds with each other at a rate of interest in this so - called interest rate corridor. one could thus say that the deposit and lending rates set the limits for the overnight rate. how does the riksbank ensure | several simplifying changes to the regulatory framework. for instance, the definition of capital now focuses on tangible common equity, the truest form of loss - absorbing capital. moreover, all components of the capital base and associated deductions such as goodwill or deferred tax assets must be disclosed in a fully comparable manner. by standardising and simplifying the measure of capital, basel iii makes the regulatory framework easier to understand, and will enable market discipline to work better. another important step has been the introduction of a non - risk based leverage ratio as a supplement to the risk - based requirement. this is a β belt and suspenders β approach to capital regulation. the leverage ratio will help contain the buildup of excessive leverage in the system, serving as a backstop to the risk - based regime and safeguarding against banks β attempts to β game β the risk - based requirements. equally critically, the risk - based framework helps ensure that banks do not game the leverage ratio. let β s not forget that simple measures like a leverage ratio have been in place in the past and did not alone prevent banking failures. bis central bankers β speeches risk - weighting is difficult but vitally important. therefore the basel committee is in the process of reviewing the risk - weighting regime of the capital framework to ensure that it is as simple and comparable as can be while still capturing the risk profile of banks β varied asset portfolios. complexity is a byproduct of the desire, among regulators and banks, for risk sensitivity. risk measurement will never be perfect. simplicity, however, can sometimes come at a cost. ignoring risk does not make it disappear. without measuring risk properly, we may allow it to build up undetected. operating only with a non - risk - based leverage ratio creates incentives to shed safe assets and to increase the riskiness of asset portfolios ; to forgo risk - reducing hedging strategies because they could result in higher capital requirements ; and to engage in off - balance sheet activities and other sophisticated structures that expose a bank to contingent risks. this is likely to increase the aggregate risk in the economy and thereby create global financial stability concerns. the lesson, therefore, is not to rely on either risk - based or non - risk - based measures alone, but to have each reinforcing the other. a combined approach, as basel iii introduces, is better than any single approach. i believe basel iii strikes a reasonable balance by strengthening overall bank - capital requirements | 0.5 |
of national strategies that promote financial inclusion are critical to enhancing access to a diverse range of financial products to the unbanked in kenya, the mandate of the government to enhance the deepening of financial markets by fostering access, efficiency and stability is captured under kenya β s vision 2030. the central bank β s approach to achieving its role under vision 2030, is centered on the promotion of an enabling legal and regulatory framework that fosters the development of a diverse range of financial service providers, while guaranteeing its dual mandate of financial stability and financial integrity. central to this objective has been the licensing and regulation of microfinance banks. the first microfinance bank in kenya was licensed in may, 2009. this paved the way for 11 other microfinance banks which have been licenced to date. the 12 licenced microfinance banks have made a significant contribution to financial inclusion in kenya. this is evidenced by the number of active deposit and loan accounts as at december 2015 which was 931, 585 and 342, 481 respectively. in value terms, this represented bis central bankers β speeches ksh. 40. 5 billion in deposits and ksh. 46. 9 billion in advances. further, microfinance banks had a footprint of 109 branches and 1, 154 agents as at december 2015. while commendable achievements have been made in the past 6 years, the microfinance sector in kenya still has considerable opportunities and challenges that institutions need to tackle in order to realize their full potential. key amongst these challenges include the high cost of credit, inadequate products and services, and weak consumer protection frameworks. microfinance institutions must be willing to make a difference if the full benefits of microfinance and financial inclusion are to be realized. microfinance institutions must be prepared to employ innovative delivery channels to reduce their operational costs, and thereby enhance their reach and efficiency. an essential element in this process is recognizing the characteristics of the customers of these institutions and tailoring lending mechanisms to meet their situations. policymakers, on their part, should support the development of appropriate support infrastructure to facilitate the last mile delivery of suitable financial services. therefore, the development of proportionate, risk - based, regulations by policymakers is critical to guaranteeing the development of a dynamic, robust and sustainable microfinance framework for a country. the starting point towards this collaborative structure is a consultative process to developing a forward - looking framework for regulation and supervision of microfinance institutions. developing | collateral. for financial institutions saddled with moribund ict legacy systems, the cloud presents an opportunity to upscale to the anytime anywhere cutting - edge financial services platforms demanded by today β s discerning customers. even as we reap from innovation, we must remain alive to the risks. recent devastating cyber attacks including solarwinds, colonial pipeline and kaseya in the u. s. come into mind. in the region, we have also seen an upsurge in online scams, identity theft and social engineering attacks. we must therefore reinforce our cyber defenses internally to neutralize the insider threat. externally, as a financial sector we must build a circle of trust, nationally, regionally and globally to share information and co - ordinate our cyber responses. third, strong governance should underpin the culture in banks. this goes beyond the classical tenets of an effective board, management and staff with clearly defined responsibilities and accountability. governance in the age of the fourth industrial revolution would also be about the public good, for instance, supporting appropriate behavior in the financial markets. banks play a critical role in foreign exchange markets and are key players in the government securities markets. misbehaviour in these markets adversely affects society through distortions in foreign exchange rates and raising the cost of debt for government. appropriate market conduct is therefore imperative to avoid short term profitability gains jeopardizing the long term societal good. anti - money laundering and combating the financing of terrorism ( aml / cft ) is another key facet of supporting the public good. lapses in aml / cft can be devastating given the consequences particularly of terrorism. kenya, for instance has borne the brunt of terrorism including the dusit 2 complex attack in 2019 that took advantage of vulnerabilities in aml / cft frameworks of part of the financial sector. technology now offers banks, cutting - edge 3 / 4 bis central bankers'speeches technologies to monitor and analyse transactions and reinforce their aml / cft defenses. * * * * * as i draw to a close, i want to emphasize that we must all act with courage to do the right thing, and not just survive but thrive. we must have the courage to bend it like beckham, to go around the walls to attain the goals of people - centricity, balanced innovation, and stronger governance. i am sure you will reach deep and find the courage to bend it like beckham one day after | 0.5 |
caleb m fundanga : the new k10, 000 banknote in zambia opening remarks by dr caleb m fundanga, governor of the bank of zambia, at the official launch of the new k10, 000 banknote, bank of zambia, lusaka, 16 june 2008. * * * β’ members of the press β’ official from commercial banks present β’ ladies and gentlemen i wish to welcome you all to the bank of zambia. the objective of this press briefing is to announce the introduction of the new k10, 000 banknote in our economy. the new k10, 000 banknote will be put into circulation as early as this week. by showing you the new k10, 000 banknote first, we expect that you will, in turn, help us to inform the public about this new banknote. in order for us to help you understand the new k10, 000 banknote, we have produced posters and will make a short power point presentation. the posters are showing the main public recognition and security features of the new k10, 000 banknote. let me from the outset inform you that although we are calling it a new k10, 000 banknote, most of the features on the banknote are still the same as those on the current k10, 000 banknotes. the differences can best be detected by comparing this new k10, 000 banknote with the current k10, 000 banknotes in circulation. ladies and gentlemen the new features on the k10, 000 banknote are as follows : on the front of the banknote β there is a new bright silver demetallised holographic lead representing a fish eagle. this has replaced the old hologram of the head of a fish eagle. on the back of the banknote β the area around the value numeral, k10, 000 in the right top corner, is printed with a special ink which shifts colour from copper to green when angle of view is changed. these are the two changes that have been made to the k10, 000 banknote. all other features are basically the same. the reason for the introduction of these two features is mainly to enhance the security of the banknote. the bank of zambia would further like to inform the public that the new k10, 000 banknote and the current circulating k10, 000 banknotes shall circulate side by side. the new and current banknotes will therefore all be legal tender. the current k10, 000 banknotes will | being discussed seriously in advanced countries. i think that the success of the operation of such a department depends upon how well it can fit in with and network with all of the various other departments of the organization. it seems pointless for it to take charge of communication independently, because success in its operation relies on enthusiasm and an ability to grasp and understand the overall business of the organization. noise inevitably appears in a situation where uncertainty exists in the market and there is less than a full understanding of economic policy, and so monetary policy should be implemented in such way as to boost the ratio of the signal relative to the noise, with communication policy serving a complementary function in this process. meanwhile, the ageing of our organization, one of the bank β s very distinctive characteristics, is a responsibility that we should resolve ourselves. it is a reality for us that, among our close to 2, 200 bok staff, more than 600 have been working for the bank for 30 years or more while the number of those who have worked here for between 20 and 29 years reaches almost 500, so that around one half of our entire staff have been working here for 20 years or longer. among about 1, 150 staff at the grades of lead manager to economist, more than 300 have been here for 30 years or more. it would be hard to find this type of manpower structure anywhere else. the most difficult challenge for our bank β s human resource and organizational management policy over the past three years has been the revitalization of our organizational operations. we needed to keep in balance with other organizations within our society. through our experience, we understand well the situation that aged countries and organizations face. and we can overcome this problem only by continuing to improve our productivity by applying very high levels of work discipline to ourselves. we must all remain alert until the moment we retire, and contribute to the development of our organization and the nation through the use of our experience and creation of high added value. as the central bank, which should serve as a model for the nation, i do not think there is any time for us to hesitate in imposing strict working practices on ourselves under this principle. we should bear in mind that the bank can avoid losing touch with our society as a whole only by continuing our efforts for self - reform. it is we ourselves who must create the bank of korea β s standing. we can win respect from others only when we engage in constant self - examination and have the courage and modesty to apply stricter standards | 0 |
recent years. finally, the recent decline in energy prices, if it is sustained, should reduce cost pressures along the production chain. one upside risk to the inflation outlook comes from the labor market. the unemployment rate declined steadily between the second half of 2003 and the beginning of 2006 and has stood at a relatively low 4. 7 percent for the past six months. with labor markets comparatively tight by historical standards, unit labor costs have begun to accelerate, especially since the end of last year, and firms may pass on some of these higher costs to consumers. however, the large markup of prices over costs - the margin is currently well above its historical average - could act as a shock absorber if cost strains were to intensify. thus, in my judgment, inflation appears poised to decelerate in coming months as energy prices stabilize and resource pressures ease. but the risks to that outlook seem tilted toward the upside. aggregate supply in considering the appropriate setting for monetary policy, the level of the economy β s underlying productive capacity - its potential output - is the benchmark against which we assess actual output. accordingly, whether the recent slowdown in economic activity eases resource constraints enough to reduce inflationary pressure depends importantly on how fast potential output is growing. if the key determinants of potential output - the workforce, economic efficiency, and the capital stock - grow quickly, as they did in the second half of the 1990s, then gdp can also rise quickly without increasing the pressure on the economy β s resources. conversely, a reduced rate of growth of potential output would require slower growth of actual gdp to keep resource pressures from increasing. i β d like to spend a little time examining in greater depth the outlook for some of the factors that determine potential output, starting with the labor force. the size of the labor force depends on a combination of two factors : the size of the working - age population and the likelihood that members of this population join the labor force - a likelihood that economists refer to as the labor force participation rate. the labor force participation rate tends to vary over the business cycle as potential workers become more or less encouraged about job prospects. however, the influence of labor force participation on potential output does not depend on short - run conditions in the labor market but rather on long - run changes due to demographic and social factors. for instance, in the 1950s and 1960s the labor force participation rate stood at just under 60 percent. in subsequent years, women entered the labor force in large numbers and | thus dramatically pushed up the participation rate. indeed, by some estimates, the increase in the labor force participation of women aged sixteen years and older added a little more than 1 / 2 percentage point per year to the growth rate of potential output between the late 1960s and the early 1990s. now, the united states is facing another change in the trend of labor force participation. the baby boomers, the large population born between 1946 and 1964, are getting older, and the oldest are turning sixty this year. older individuals tend to have relatively low participation rates, with many people starting to retire in their fifties and more still when they reach sixty and then sixty - five. thus, with the aging of the boomers, a large share of the population is entering the low - participation years, which will tend to pull down the aggregate labor force participation rate. recent work by economists at the federal reserve board has explored how changes in the age distribution of the population affect the participation rate. for instance, between 1995 and 2005 the participation rate declined on net from 66. 4 percent to 66. 0 percent. the study suggests that changes in the age distribution of the population - the movement of a large portion of the population from their high - participation - rate years to their later, low - participation - rate years - can explain the bulk of the decline. 1 the changing age distribution - primarily the aging of the baby boomers - is expected to lower the participation rate by about 0. 2 percentage point next year and continue to lower it over the next several years. however, this decomposition assumes that the participation rate for each age group is constant at its average between 1995 and 2005. but the propensity of individuals of a given age to participate in the labor force changes over time. already, individuals aged fifty - five and older are working more than they did ten years ago, perhaps because of better health ; higher levels of education ; and a reduction, over time, in the share of workers employed in physically strenuous occupations. unfortunately, there is still much we do not understand about the increase in the participation rates of older workers, so it is difficult to predict how much their participation will rise in the future. however, given the magnitude of the predicted age - related decline, it is unlikely that changes in behavior could completely offset it. as i noted earlier, the reduction in the growth of the labor force and, thus, of potential output has important implications for how we interpret incoming economic data. for example, | 1 |
peter praet : we need to complete the banking union speech by mr peter praet, member of the executive board of the european central bank, at the eurofi conference, malta, 6 april 2017. * * * the eu moved in less than five years from decentralized banking supervision and resolution to the single supervisory mechanism and the single resolution mechanism, based on the single rulebook. this is part of an overarching effort to create a sound institutional framework for financial integration in europe. but there still are a number of legal, institutional and political problems to overcome before a european bank can operate in the banking union as it operates in its domestic market. several dimensions need to be taken into account : first, private risk - sharing. the financial system is a private risk sharing device, but we have learned the lessons from the financial crisis in terms of budgetary costs, when excessive risk - taking by the private sector was eventually borne by the public sector. we do not want to revert to the old world of implicit government guarantees for risky behaviour of financial institutions. this entails making banks equally liable across countries for the amount of risk they want to take into their respective balance sheet. the general principle of the new european rules such as the bank recovery and resolution directive is to absorb bank losses by bailing - in shareholders and uninsured creditors. the new rules contain sufficient flexibility to deal with exceptional situations where public money may be required to ensure financial stability. second, public risk sharing. a certain level of public risk sharing is necessary to create confidence in the overall financial system. even well - capitalised banks can fall victim to runs and contagion. this is why central banks act as lender of last resort and fiscal backstops should be in place to ensure trust in the stability of the financial sector. in the banking union, both supervisory responsibility and the fiscal backstop need to be at european level, to underpin durably confidence in the area - wide financial system. just as necessary is the establishment of a european deposit insurance system ( edis ). the current situation, where supervision is common, but the consequences of potential bank failures are still predominantly national, should not last. in such an incomplete framework, national considerations inevitably continue to affect supervisory decisions. this is not without consequences for the incentives for banks to become more european. concrete examples include a lack of fungibility of liquidity or capital. the fact that the euro area is not considered as a single jurisdiction | may result in applying higher capital buffers to euro area g - sibs. while the institutional underpinnings of the banking union do not yet meet the requirements of a genuine single financial market, the creation of the ssm has been a leap forward in the establishment of a coherent regulatory framework. one of the first priorities of the supervisory board has been to promote integration through harmonized implementation of options and national discretions ( onds ), thereby evening the level playing field in the euro area. regarding liquidity requirements, the single supervisory board can grant waivers at national as well as cross - border level on a case - by - case basis. in the current institutional context, where the free flow of liquidity within the same banking group but across border could be impeded, a prudent supervisory approach has led the ecb β s supervisory board to still maintain a floor on the liquidity requirements of significant subsidiaries. overall, the banking landscape still resembles too much a collection of banking systems highly exposed to their domestic economies, with limited cross - border private risk - sharing. at the same time, one should recognise that the banking union is both an objective and a process of fundamental structural changes in the euro area β s financial architecture. the next steps are clearly set out in the ecofin roadmap to complete the banking union. it is now urgent to agree on an ambitious timetable for its implementation. 1 / 1 bis central bankers'speeches | 1 |
banking sector to benefit again from an economic upturn. this hadn β t been possible if the new requirements had come into force with immediate effect. second, although the bar will be raised for all banking activities, the new regulation is primarily targeted at the riskiest activities. systemically important banks, trading assets, complex securitizations, those are the type of banks and activities that will be experiencing the highest impact. those are the activities that will become least appealing to banks. not the traditional, plain vanilla banking business, which includes msme lending. and third, i believe that all new regulation explicitly allows for a proportionate implementation. this means that emerging market economies are permitted to use a risk - based approach with respect to the tasks of the supervisor and the standards that they impose on banks. even in the latest eu legislation, proposals have been made to ensure that capital requirements for msme financing do not grow as rapidly as those for other banking activities. i find it encouraging to learn that the basel committee on banking supervision, starting even this year, will develop guidance on how to apply such a proportionality principle. for emerging markets this guidance is most welcome. so altogether i think that intensified regulation, provided it is implemented proportionately, can continue to go hand in hand with sufficient msme financing. in the end, sounder and healthier banks will enhance financial stability. this, in turn, will benefit the entire financial sector, and hence also the msme business. if you ask me if i think that intensifying regulation will solve all of the problems? no, it definitely won β t, i β m afraid! if only, because intensifying regulation does not necessarily motivate the banking sector to move back towards its core task of servicing the real economy and its customers. take, for example, proprietary trading. this is when a bank trades financial instruments with its own money instead of its customers β money, sometimes even following an investment strategy it doesn β t advise to its customers. as a result, the bank makes a profit for itself instead of for the customers. such a disconnect between the interest of the bank and that of the customer still occurs too often. β survey on the access to finance of small and medium - sized enterprises ( smes ) in the euro area β, 2 november 2012. bis central bankers β speeches ultimately, going back towards their core task of servicing the real economy and its participants is where the future of banking lies. no | bank will survive that does not set its clients β interests center stage, instead of sales targets or profits. i find it encouraging to learn that in many emerging markets clients are still put first. this most likely explains in part why the banking sectors in many emerging market economies have weathered the financial storm much better than in developed economies. other factors that have contributed to their stability is that many banks in emerging market economies still engage predominantly in plain vanilla banking activities β¦. β¦ and that they are strongly funded by wholesale funding. furthermore, i find it encouraging that banks in emerging market economies have remained stable despite the fact that they have used quite innovative ways of banking. many emerging markets use ict solutions that are very advanced. such as mobile banking, which allows individuals and msmes to access and transfer money without needing to travel to a branch. your own country, governor velarde, may serve as a fine example here. in your country branchless banking may have been borne out of necessity. but in recent years, this has proved to facilitate access to finance for great many msmes. you have also shown that regulation, even if intensified, can be designed to accommodate these innovative ways of banking while still protecting customers and safeguarding financial stability. customer protection in your country is even set as a top priority. it calls for banks to formally assess the financial situation of the client in order to avoid over - indebtedness. such initiatives have vastly helped to establish a solid msme business and sustainable growth in your country. i am therefore quite confident that also in developed countries, we shall manage to combine intensified regulation with sound msme financing. and that we shall also manage to ultimately motivate our banks to move back towards their core task of servicing the real economy and their customers. ladies and gentlemen, let me conclude. today β s conference coincides with the opening of the dutch national money week, later today. during this week, we teach our youngsters how to deal with money in a responsible way. for today β s youngsters create the demand for financial products and services of tomorrow. and many of them will become entrepreneurs, setting up msmes themselves. by educating young people in money matters, i hope we can empower them to shape the banking sector to their liking and to their demands, instead of merely enabling them to use what banks have to offer. i thank you all for your attention, and i wish to you all a very interesting and fruitful conference. bis central bankers β speeches | 1 |
bond markets instead of relying solely on their relationship banks. credit or risk guarantees provided by multilateral development banks or export credit agencies may also need to be adapted for use in the capital markets. banks need to be innovative and develop a broader suite of financing instruments beyond bank lending in order to meet the financing needs of their clients. mdbs / ecas are important risk mitigants and could explore new ways to make efficient use of their funds this brings me to the next point β the role of multilateral development banks, or mdbs, and export credit agencies in catalysing broader private sector participation. given the scale of financing required for infrastructure, discussions at international fora have started to focus on how the multilaterals can further support the sector. for example, part of the g20 agenda for 2013 involves getting multilaterals to increase their lending capacity. post global financial crisis, these entities have in fact stepped up and filled project financing gaps when bank liquidity is constrained. between 2009 and 2012, they doubled their lending to infrastructure projects globally from us $ 22b to us $ 44b. however, is more lending the solution? despite a doubling of their lending in the last three years, they only contributed 16 % of project debt financing volumes globally in 2012. conceptually, a more efficient way to utilise their financial resources may be in the form of risk mitigants such as credit or risk guarantees. the g30 working group on long - term financing has in fact recommended that governments and mdbs should provide risk mitigation instruments to help lower the higher risks involved, especially during the early phases of long - term projects. bis central bankers β speeches this is definitely worth considering. given their status, mdbs and export credit agencies are seen as very credible counterparties that can provide risk mitigants. it is probably harder for the private sector to play such a role, especially given the long tenor of project finance. i would add that mdbs and export credit agencies already have guarantee products that mitigate credit and political risks for project loans. the issue at hand is how to extend these products to say capital market instruments to β crowd in β participation by a broader group of institutional investors. for instance, the credit guarantee & investment facility or cgif, established by the asian development bank and asean + 3 nations, recently completed its first guarantee transaction on a 3 - year thai baht bond issuance by noble group. there must also be a concerted effort by | project developers to make project delivery more cost - efficient, productive and financially viable to mitigate risks for investors while considerable attention has been focused on increasing the supply of infrastructure financing, we also need to think about how we can β get more for less β by optimising the project delivery value chain. improving project implementation processes mckinsey has estimated that productivity of the infrastructure value chain could be increased to achieve 40 % savings, if project sponsors globally adopt proven best practices. this would translate to an average of us $ 1tn per annum in infrastructure cost savings over the next 18 years. such best practices may include having processes in place to select projects that best address infrastructure needs, finding innovative ways to structure and execute these projects, as well as maximising the use of existing capacity. this is not just a regulatory or public sector issue. on the part of project developers, greater attention has to be paid to productivity improvement across the entire value chain. put simply, project developers must find ways to deliver projects on time and on budget, boost asset utilisation and undertake proper maintenance. if investors have confidence that there is β less leakage β from cost overruns, this will help to reduce financial buffers and in turn the required hurdle rate. there are various ways in which sponsors can enhance their delivery of projects. they could invest in project design at an early stage to avoid costly subsequent changes. they could invest in technology and leaner construction methods to lower costs. for example, prefabrication and modularisation techniques enabled 14 bridges in the us state of massachusetts to be replaced over just 10 weekends. these improvements across the entire value chain will ultimately make infrastructure projects more β bankable β and less costly to finance. this will create a virtuous cycle of enhanced efficiency leading to lower costs for governments, the project sponsors and the financiers. capability building can help improve ppp standards and the β bankability β of projects, as well as assist companies in developing their talent pool across the infrastructure value chain capability building for governments finally, i would like to talk about knowledge sharing and capability building. formalising public - private partnership ( ppp ) frameworks is an important pre - requisite in enhancing project delivery. given the long - term nature of infrastructure investments, private investors also have to be assured that projects have been properly evaluated on economic viability, that there is strong political commitment to ppp, and that the broader legislative frameworks beyond ppp are conducive | 1 |
a concentration of risks in particular regions or with respect to particular firms. this new awareness, through a rethinking of business strategies, could generate new investment in, for example, computer centers and distribution depots. the accident at the fukushima daiichi nuclear plant has triggered active global discussion on nuclear power policy, which will highlight the importance of energy conservation and environmental technologies. and as japanese firms have an edge in those areas, such as high - end batteries, there will be great room for them to make contributions. iv. tasks ahead for japan β s economic rebuilding various challenges lie ahead on the road to overcoming the adverse effects of the earthquake and rebuilding japan β s economy. the first challenge is ensuring the necessary financing for rebuilding. in this regard, japan has continued to have a current account surplus. in other words, japan has had an excess of savings over investment for a protracted period, which means that, from a macroeconomic perspective, this financing will not be difficult ( chart 8 ). japan β s capacity for foreign currency funding is extremely strong, given that the country is the biggest creditor nation in the world, with net external assets of 2. 9 trillion u. s. dollars, or 57 percent of nominal gdp. private financial institutions are fully able to meet an increase in financing demand for rebuilding. rumors have circulated that japanese insurance companies would sell foreign currency assets due to an increase in payments of insurance claims relating to the earthquake and subsequent events. these companies have ample short - term liquid assets, so they do not need to sell their foreign currency assets in order to make the payments. meanwhile, japanese government bonds have been issued quite smoothly and long - term interest rates have remained stable at low levels compared with other countries. as long as japan continues to work tirelessly toward rebuilding, it is unlikely financing problems will arise. the second challenge is raising japan β s potential growth rate. since 2000, japan has had one of the highest gdp growth rates per worker among g - 7 countries, although slightly lower than the united states ( chart 9 ). however, the decline in the working - age population in japan is proceeding at a pace that has no precedent in modern economic history ( chart 10 ). as a result, japan β s economic growth has been on a downtrend. raising the potential growth rate was the biggest challenge for japan β s economy even before the earthquake, but the efforts to do so by raising both the labor participation rate and productivity have now become all | your friendship. with the resilience of japanese society and the determination to rebuild, i am absolutely convinced that japan β s economy will overcome this trying time, successfully rebuild and become even better placed with greater growth potential. with that, i would like to conclude my remarks. thank you for your attention. bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches | 1 |
but in the treaty it is nevertheless clear that the ecb can conduct monetary policy by means of asset purchases. and yet the germans are still concerned. they are rightly concerned about the possible side effects of qe : the creation of asset bubbles and reduced incentives for countries to initiate reforms and reduce their debt. however, the response cannot be to ask the central bank to internalise these unwanted consequences. we have a narrow mandate. instead, we need strong prudential policies and, in terms of fiscal policy, the strict application of the stability and growth pact. but was it necessary to humiliate the bundesbank? no such thing occurred. there was unanimity in the governing council that asset purchases are a legitimate monetary policy instrument. and then we discussed when to use it and whether the situation was bad enough to decide to use it. we will really try hard to explain that what we are doing is in the interest of the euro area, germany included. bis central bankers β speeches in your book, you talk about the isolation of the central banks. do you feel that strongly at the moment? central banks are independent, but they are not isolated. in europe, however, we need a coherent approach across monetary policy, fiscal policy and structural reform policy, as emphasised by president draghi at the jackson hole conference ( at the end of august [ ed. ] ). the understandable instinct of the governments is to respond to their voters. this is never easy and it becomes even more difficult in an environment of low growth and high unemployment. but our plea to the governments is to always remember europe β s common interest, because the actions of one affect all the others. that is why they must be coordinated. do you feel more mature, at the ecb, after last thursday? this is not about being mature, but about providing the right answers to a new situation, as the ecb has always done throughout the crisis. now, with asset purchases, we are like the other central banks, but with an instrument that is adapted to our specific environment, i. e. an environment which does not foresee a common fiscal policy. we are conducting qe in our own way. bis central bankers β speeches | represented the lowest annual average rate of inflation in south africa for the past 24 years. ominous signs developed over the past two years, however, with the rate of increase in bank credit extension escalating again to 18. 7 per cent in june 1996. the rate of increase in the m3 money supply also rose to 16 per cent in october 1996, while inflation gradually crept up from a low of 5. 5 per cent over the twelve months up to april 1996, to 9. 4 per cent over the twelve months up to december 1996. the current stimulus for inflation emanated mainly from the depreciation of the rand last year, but there is a danger that, if not checked at this stage, it could easily be converted into a new cycle of a continuous rise in the rate of inflation. the reserve bank was therefore forced once again during the past year to pursue a more restrictive monetary policy that led to an increase of approximately 3 percentage points in the level of interest rates. towards the end of 1996, the more restrictive policies began to produce results when both the rates of increase in bank credit extension and in the money supply slowed down. over the twelve months up to december 1996, bank credit extension to the private sector rose by 15. 7 per cent, and the m3 money supply by 13. 7 per cent, both marginally down from the peaks established earlier in the year. inflation is, however, still creeping upwards and it will take some time before the full effect of the depreciation of the rand will work itself out. in the meantime, it is of great importance that all other inflationary impulses in the economy, such as excessive rises in government expenditure or real wage rises in excess of productivity increases, and of course, a continuation of the excessive rates of increase in the monetary aggregates, must be avoided. the depreciation of the rand can bring many benefits for economic growth and development, provided the advantages for international competitiveness will not be dissipated very quickly by rising costs of production and a rising rate of inflation in the domestic economy. the year 1997 is indeed a testing period for the reserve bank and for the monetary policy applied by the bank. should the bank fail in its efforts to protect the value of the currency at this stage, the goals set by government for economic reconstruction and development, and the implementation of the government β s strategy for growth, employment and redistribution will not be attainable. | 0 |
##esian idea : we can β t know what the economy β s parameters are, and we should not view them as set in concrete anyway - they are subject to variation. one starts with some priors about what these parameters are, i. e. how the economy works. these priors are then confronted by a data sample, and the result is the posterior distribution of parameter values - that is, better - informed guesses about the way things work. as time goes by and new data become available, this working hypothesis of the economy β s properties and likely future behaviour is updated. while i could not say that we implement this idea rigorously quarter by quarter in practice, i find it quite appealing as a way of conceptualising both the forecasting of the economy and the conduct of policy. let us then look at two examples of forecast errors, and see what they teach us. the first chart is for year - ahead forecasts of us gdp growth, from the survey of professional forecasters. the shaded area is the range of forecasts, with the inter - quartile range - the middle 50 per cent of forecasts - in a darker colour. the average forecast is the line in the middle of this range. the forecasts are plotted forward by one year, so that they can be compared with actual year - ended growth, the blue line in the graph. for several years in the second half of the 1990s, virtually all forecasters persistently underestimated the pace of us growth. time does not permit a detailed decomposition of the errors into their various causal components. suffice to say that, as is now well - known, productivity growth in the us picked up, and so therefore did the us economy β s potential growth rate, at least for a period of several years. if we looked as well at forecasts of us inflation, we would find that unexpectedly high growth was not generally accompanied by unexpectedly high inflation. so strong demand growth was met with rapid supply growth. in other words, a high - level treatment of the forecasting errors points us to the productivity story. ( of course, having understood that did not make forecasters much better at predicting the 2001 recession. the β new economy β was as prone to cyclical setbacks as the old. ) graph 2 the second chart shows some forecasts closer to home : those enunciated by the rba in the statements on monetary policy in the late 1990s. the chart shows underlying inflation as measured | per cent and cpif inflation was + 0. 4 per cent. we have been able to observe that it is a broad - based decline in inflation, to the extent that all major components are affected. 6 low inflation has come to be a widespread phenomenon and many countries and regions have recently reported inflation rates clearly below their targets. inflation has fallen particularly sharply in the euro area. the fact that this happens in a situation where there is plenty of spare capacity β which is the case in large parts of the euro area β is not particularly surprising. however, the downturn in swedish inflation is larger and has been going on for longer than in other countries. and the question is why... one possible reason, which was also discussed in an article in the latest monetary policy report in february, is that swedish companies have not been passing on their cost increases to consumers as much as is normal. 7 they have thus not increased their prices to the extent that one might expect, given the historical relationships with unit labour costs and import prices faced by producers. there may be several reasons for this, but one is that margins may decline when economic activity is weak, which is also noted in the article. current research using us data implies that price mark - ups vary positively with the business cycle. 8 another reason may be that the weak development in the euro area has hit swedish exports hard and that this has contributed to resource utilisation being lower than normal over a long period of time. with low resource utilisation one can expect that inflation will be pushed down as the pressure on wage and price increases will be low. the weak international demand is of course one factor that is beyond the riksbank β s control and in this sense monetary policy housing market. in the case of australia, there are no clear signs that they have faced this kind of trade - off during the period following the financial crisis. this is clearer for the period 2002 β 2004, but then inflation stayed within the target interval of 2 β 3 per cent and was only close to the lower interval limit for one quarter. see sveriges riksbank ( 2014a ). see sveriges riksbank ( 2014a ). see nekarda and ramey ( 2013 ). bis central bankers β speeches cannot be blamed for the low inflationary pressure. at the same time, it is the role of monetary policy to counteract this type of downward pressure to stabilise inflation around the target. monetary policy may have | 0 |
leading to a further expansion of production and income β would make more progress as we move forward. concluding remarks in conclusion, let me touch on the economy of miyagi prefecture. the regional economy is recovering moderately, with the decline in demand affected by the consumption tax hike waning gradually. somewhat weak developments in production will continue. reflecting the demand resulting from rebuilding and reconstructing, public investment has been increasing and housing investment has remained at a high level, particularly for building public housing for people affected by the disaster. business fixed investment has also continued to be on an increasing trend and private consumption has remained resilient on the back of an improvement in the employment and income situation. looking at reconstruction in the disaster - stricken areas, i have recognized that while reconstruction has been steadily progressing, rebuilding day - to - day life and rehabilitation of livelihood are still half - way through. the pace of reconstruction differs between the regions and the difference between the regions seems to have been widening. at the root, there seems to be also a challenge that is common nationwide, namely, the declining population and aging. in addition, a labor shortage and prices of materials rising or remaining at high levels have been affecting not a little the progress in reconstruction in the disaster - stricken areas. how that will develop going forward also warrants due attention, in my view. i have heard that big events are scheduled for this year in miyagi prefecture. sendai city will host next month the united nations world conference on disaster risk reduction, the cumulative number of participants of which is expected to be more than 40, 000, and has announced itself as a candidate for the 2016 summit meeting. the city has disclosed its plans to develop in the future as an international convention city as well as has aggressively been trying to tap inbound demand. an improvement and reinforcement of transportation infrastructure will be promoted. the jr ishinomaki and sengoku lines that have been cut off by the disaster are scheduled to be reopened throughout, the tozai subway line is expected to open in sendai city, and the privatization of the sendai airport is being pursued. i expect that, triggered by those events and creating and tapping new demand, a stream of bis central bankers β speeches reconstruction will further accelerate and vitalization of the local economy will gain momentum. the bank conducts an operation that provides long - term funds at a low interest rate to financial institutions that have business offices in the disaster - stricken areas in order to support their efforts to meet | policy regime change β as an ignition point β will expand aggregate demand through multiple channels. c. reasons of the bank β s expansion of the qqe given the aforementioned view, you could naturally understand why the bank expanded the qqe at the end of october last year ( chart 9 ). the consumption tax hike in april last year brought about substantial fluctuations in the economy, that is, a front - loaded increase in demand immediately before the hike and a subsequent decline after the hike. as somewhat weak demand, mainly for durable consumer goods like automobiles, was protracted, a substantial decline in crude oil prices also exerted downward pressure on prices ( chart 10 ). weakness in demand associated with the consumption tax hike already waned, and the decline in crude oil prices will likely, over time, have a favorable impact on japan β s economy and work to put upward pressure on prices. however, as developments in actual prices and inflation expectations will mutually feed back, if there is downward pressure on actual prices, even for a short term, we should take a risk into account that it will delay the conversion of the deflationary mindset. to preempt manifestation of such risk and to maintain the improving momentum of expectation formation, it was necessary to expand the qqe. that was the judgment the bank made at the end of last october. d. how to evaluate employment and wage developments as aggregate demand expands, ignited by a rise in inflation expectations, a virtuous cycle from production to income and spending operates, and thereafter, stable employment and an improvement in labor conditions would ensue. in that regard, as mentioned earlier, an improvement in the labor market conditions since last year, such as a sizable increase in the number of employees and a substantial improvement in the unemployment rate and the active job openings - to - applicants ratio, has not been interrupted even amid the seemingly lackluster real gdp growth due to the effects of the consumption tax hike ( chart 11 ). as for the increase in the number of employees, there is criticism noting that only non - regular employment was increasing in number while regular employment was not. however, that criticism seems to mix up a forward - looking development of β gradually increasing employment starting from non - regular employment, β which has been occurring as the pie of employment as a whole has been expanding, with a backward - looking development of β replacing regular employment with non - regular employment, β which had been seen in the past. it is natural that | 1 |
caleb m fundanga : exploring and creating financial opportunities in zambia remarks by mr caleb m fundanga, governor of the bank of zambia, at the official opening of venture capital workshop, lusaka, 26 january 2010. * * * the managing director, slyvettan investment limited, mr robert masiye distinguished resource persons, dr peter njang and mr kenny rice distinguished participants members of the press ladies and gentlemen i am greatly honoured to officiate at this important workshop which is aimed at exploring and creating financial opportunities in zambia. i wish to extend a warm welcome to all participants and resource persons, particularly those who have travelled from outside the country. mr chairman, i would like to commend slyvettan investment limited for organising this important workshop. this workshop which is aimed at increasing access to capital by local entrepreneurs through venture capital is indeed more than timely as the country strives towards financial deepening, wealth creation and reducing the levels of unemployment. in order to achieve this, affordable financial services should be available to the majority of businesses. it is also gratifying to note that, potential investors will present their projects for possible funding at this workshop. let me begin by giving a brief perspective of the enormous investment potential this country possesses. zambia is a country with abundant natural resources and human capital. it is a centrally located country with eight neighboring countries and close proximity to the large market of south africa. it also boasts of a suitable climate and peace. the country possesses all the necessary attributes for sustainable economic growth and development. competitive production costs, incentives, and reforms have also enhanced the attractive investment climate for both local and foreign investors. numerous investment opportunities exist in the agriculture, manufacturing, tourism and mining sectors across various regions of the country. almost all provinces in zambia remain potential areas of investment whose resources remain largely untapped. its active participation in the sadc trade protocol and the comesa / fta offers preferential tariff access to a market of nearly 380 million people. a key challenge in developing this economic potential and enhancing the wealth creation capability of zambians to drive growth and development is the ability to access long term investment capital especially for economically viable projects at start - up level. financial institutions are critical in this process of mobilising and channeling these investment resources. to do so successfully, the industry must identify the constraints to the provision of finance and credit and provide innovative solutions to address them. such innovations may include venture capital funds, structured finance products, equity and other innovations that | . it is also important to realise that not all projects can access venture capital funds. only innovative, high quality and highly profitable projects may qualify for these funds. therefore applicants of these funds should think outside the box and provide well researched project plans that meet international standards. in this regard it is key for project promoters to collaborate and pool resources as a team instead of the usual norm of going it alone. in addition, as we are all aware, small and medium sized enterprises form the engine of economic and social development as they generate employment, and are an ingredient to growth and international competitiveness. it is therefore imperative that this key sector rises to the challenge and creates wealth through innovative entrepreneurship. a disciplined, innovative and successful sme sector will no doubt make zambia an attractive destination for more venture capital. to this effect, this workshop on venture capital should explore ways to support efficient resource mobilization for smes. distinguished ladies and gentlemen, with these few remarks, i now declare this workshop officially opened. i thank you for your attention and god bless your deliberations. | 1 |
, this treatment has no longer seemed justified, as it has become apparent that government bonds do carry some solvency risk. it would therefore be appropriate to change the rules in the medium term. we believe that government bonds, just like other loans, should be backed with sufficient capital to reflect the risks that they carry. at the same time, a ceiling could be imposed on lending to any one government, just as lending to other borrowers is subject to a limit of this kind. these two measures combined would shield banks from the impact of public finance problems. by adjusting the rules, governments can help to make banks, and hence the financial system, more stable. however, rules are only effective in the areas where they apply. and there is one area of the financial system which is not yet truly regulated : the shadow banking system. i have to confess that i don β t really like the term β shadow banking β, as it strikes me as slightly unfair. it makes the industry sound rather shady, or even criminal. and that certainly isn β t the case. the shadow banking system contains entities which, like banks, perform credit intermediation. the difference is that these entities β such as us - style money market funds β don β t belong to the regulated banking sector. shadow banks are not bound by the normal β rules of play β. in terms of financial stability, the crux of the matter is that these entities can cause similar risks to banks but are not subject to bank regulation. and the shadow banking system can certainly generate systemic risks which pose a threat to the entire financial system. much the same applies to insurance companies. although they aren β t a direct component of the shadow banking system, they can also be a source of systemic risk. all of this makes it appropriate to extend the reach of regulation. 4. conclusion in conclusion, i would like to reiterate the three main points of my speech. β’ first, we need to redraw the boundaries between the state and the market by tackling and solving the problem of systemically important banks. β’ second, the state needs to amend bank regulation β not least by requiring banks to hold capital against government bonds. bis central bankers β speeches β’ and third, the state must extend the reach of regulation. the shadow banking system and insurance companies also warrant our attention β albeit for very different reasons. these three aspects are crucial to ensuring financial stability, but they will not be sufficient on their own. we need to be clear | axel a weber : what imbalances after the crisis? speech by professor axel a weber, president of the deutsche bundesbank, at the international symposium of the banque de france : regulation in the face of global imbalances, paris, 4 march 2011. * 1. * * introduction ladies and gentlemen, over the past several decades, the economies of the world have become increasingly integrated. with the removal of barriers to the worldwide flow of ideas, services, goods and capital, a global economy emerged. this has brought about a large increase in welfare and still harbours huge potential for further economic growth and prosperity. during the past years, growth in the world economy has become increasingly unbalanced, however. a visible expression of these imbalances are divergences in current account positions. although these imbalances were not the ultimate cause of the financial crisis, they did play a role in the build - up of unsustainable structures. this sparked public debate regarding the options to rebalance the world economy and secure sustainable long - term growth. let us first take a look at recent developments with regard to global imbalances and then discuss some policy options to address these imbalances. 2. global rebalancing : recent trends and perspectives over the past two and a half years we have witnessed a partial correction of current account imbalances which was mainly driven by external adjustments in deficit countries and by lower surpluses in commodity exporting countries. however, the imf forecasts a renewed divergence of current account positions. while the current account of the euro area as a whole will remain broadly in balance, future trends in global imbalances will be determined mainly by the united states on the deficit side and by emerging asia and oil - exporting countries on the surplus side. according to these forecasts, the current account deficit of the united states will increase slightly until 2015, while the chinese current account surplus is expected to increase more sharply. the medium - term outlook, however, is uncertain as the chinese government has outlined a new plan to raise domestic demand. current account surpluses in oil - exporting countries have not returned to pre - crisis levels, but given the recent hike in oil prices the surpluses might increase faster than initially expected. to sum up, current developments suggest that global imbalances will grow again and remain uncomfortably large over the coming years, albeit at below pre - crisis levels. thus, there is good reason to further discuss policy options | 0.5 |
communicate. the committee has two instruments through which it can withdraw the stimulus, raising bank rate and selling assets. unlike some other central banks which need to create new instruments to drain excess reserves or alter the terms of existing facilities, the structure of the bank β s operating framework means these two instruments can be used at any time, in any order. and the strategy guiding our policy decisions will be unchanged β monetary policy will continue to be determined by the outlook for inflation relative to target. the most difficult decision will be to decide the timing of the withdrawal, but that is always the case. the aftermath of the financial crisis posed many questions for the theory and practice of monetary policy. one year on from reaching the effective lower bound of interest rates and starting a policy of quantitative easing, there is still much for academics and policy makers to learn. i hope today β s conference will mark another step in that collaboration. references andres, j, lopez - salido, d j and nelson, e ( 2004 ), β tobin β s imperfect substitution in optimising general equilibrium β, journal of money, credit and banking, vol. 36, no. 5, pages 665 β 90. bernanke, b s, reinhart, v r and sack, b p ( 2004 ), β monetary policy alternatives at the zero bound : an empirical assessment β, brookings papers on economic activity, issue 2, pages 1 β 78. brunnermeier, m k and pedersen, l h ( 2009 ), β market liquidity and funding liquidity β, review of financial studies, vol. 22 ( 6 ), pages 2201 β 38. duffie, d, garleanu, n and pedersen, l h ( 2007 ), β valuation in over - the - counter markets β, the review of financial studies, vol. 20. del negro, m, eggertsson, g, ferrero, a and kiyotaki, n ( 2009 ), β the great escape? a quantitative evaluation of the fed β s non - standard policies β, manuscript, federal reserve bank of new york and princeton university. eggertsson, g and woodford, m ( 2003 ), β the zero bound on interest rates and optimal monetary policy β, brookings papers on economic activity 1, 212 β 219. fisher, p ( 2010 ), β the corporate sector and the bank of england β s asset purchases β, association of corporate treasurers winter paper. gert | would end in inflationary tears. many academics questioned whether it would have any impact at all. from the outside, you may imagine that this was a difficult decision for a committee of nine, conservative central bankers to reach. in fact, from my perspective the decision was relatively straightforward. the inflation target provides a clear, numerical objective for policy. the outlook for inflation suggested further monetary stimulus was necessary to achieve that target. with bank rate close to its lower bound, this stimulus had to be implemented via alternative means. and there are clear and convincing economic arguments why β in the real world β injecting money directly into the economy is likely to provide a means of achieving that stimulus. one year on, there is a range of evidence β some relatively hard, some more circumstantial β that quantitative easing is having its desired effect. asset prices have increased substantially, companies have made record recourse to debt and equity markets, confidence has recovered and inflation expectations remain firmly anchored. but there is still a long way to go. the bulk of our asset purchases have been made only over the last 9 months or so. much of their effect on nominal spending and inflation is still to come through. we are likely to learn a lot about the transmission of those purchases and about their ultimate impact over the course of the next year. as you know, at its meetings in february and march, the committee decided to maintain bank rate at 0. 5 % and to maintain the stock of asset purchases at Β£200 billion. it is worth emphasising two important considerations underlying these most recent decisions. first, the portfolio balance channel implies that the primary stimulus from qe stems from the stock of past purchases, not the flow of additional ones. as such, maintaining the stock of asset purchases, together with the low level of bank rate, should continue to impart a substantial stimulus to the economy for some time to come. second, the committee stands ready to make further asset purchases should the outlook warrant them. just as with movements in bank rate in more normal times, a pause in monetary loosening does not necessarily mean that loosening has come to an end. it will all depend on how the outlook for inflation evolves. looking further ahead, the committee at some point will need to reduce the current exceptional degree of monetary stimulus. some commentators have suggested that the mpc has been less forthcoming than other central banks in explaining its exit strategy. but to a large extent this reflects the fact that we have less to | 1 |
build awareness and education of fintech in seychelles. i look forward to the diversity of thought and richness of the debate on the topic and wish you all fruitful deliberations. to the international guests, it is a pleasure to have you with us, and i hope that you also have the opportunity to explore our beautiful country. thank you. 3 / 3 bis central bankers'speeches | solutions. similarly, our current financial landscape is also having to change to accommodate the opportunities brought about by the advances in technology and rise of the digital era. the use of 1 / 3 bis central bankers'speeches innovative technology in the design and delivery of financial services and products is transforming the way we transact and most importantly, the way money is presented. in seychelles however, there is still some level of reticence among much of our population to move towards newer technologies. a tour of town at 7. 30 in the morning on any given day will show long queues outside the banks, of clients waiting for bank opening hours to either withdraw or deposit cash, although there are atm facilities and an increasing number of merchants avail their customers the use of pos machines for instant payment. although the level of fintech in seychelles still has some way to go to get to the highest possible level, there is no mistaking the growing interest in harnessing the possibilities. in 2014, the central bank of seychelles issued a telecom provider, airtel seychelles, with a license to offer mobile money transfers β the first license issued by the institution to a payment service provider offering a service based on a fintech solution. since then, the central bank has initiated a number of projects as part of efforts to encourage innovation in the payments sphere. these would include : the drafting of the e - money regulations which will set the licensing framework to introduce emoney issuers. an amendment to the foreign exchange act which will enable entities licensed under the national payment systems act and the e - money regulations ( once in effect ), to conduct cross border transactions and engage in the selling and buying of foreign exchange. the reformation of the national payments council so as to act as a conduit to promote innovation in the payments sphere. as the sole institution with the mandate of ensuring financial stability, the central bank of seychelles has, for some time, realised that it needs to further understand the dynamics of the phenomenon, which has given rise to technological innovation such as biometric authentication, mobile money and wallets, cloud computing, cross border remittances, blockchain technology, big data, to name but a few. most importantly, it is imperative that the bank understands the impacts that fintech has on the financial institutions falling under its regulatory purview and subsequently, on the stability of the financial system. fintech is challenging what had become a slow paced and conventional industry, transforming it into a dynamic and vibrant ecosystem. | 1 |
zeti akhtar aziz : benchmark market indices - milestones in financial market progress speech by dr zeti akhtar aziz, governor of the central bank of malaysia, at the launch of citigroup malaysian government bond index & dow jones - rhb islamic malaysia index, β benchmark market indices - milestones in financial market progress β, kuala lumpur, 23 june 2005. * * * yang berbahagia dato'sri sulaiman abdul rahman taib, executive chairman, rhb capital, dr. zaha rina zahari, chief executive officer, rhb securities, mr. piyush gupta, country officer and chief executive of citibank berhad, distinguished guests, members of the media and ladies and gentlemen, " the use of benchmark market indices emerged on the financial scene as early as in the 1880's. in 1884, charles dow, journalist and founder of dow jones & company produced the first dow jones index, published in the company's'customer afternoon letter'which was later to become the wall street journal. of what we know, charles dow had always been a keen market observer. the haphazard idiosyncratic price movements of shares of individual or group of companies indeed did not lend itself to a coherent assessment of the performance of the market nor enable any meaningful analysis of market direction and investors'inclinations. this gave rise to the need for an index that reflects the broad market performance and investors'interest. this first market index was simple. prices of 11 stocks, the most actively traded on the new york stock exchange, were averaged. charles dow himself chose these stocks, nine of them being railroad companies, the key growth industry at the time. over time, he would revise the index as he saw appropriate to be reflective of ongoing market and industry developments. ladies and gentlemen, the construction and use of benchmark market indices today has undergone much advancement since then. indeed, financial markets have undergone dramatic transformation. economic, industry, and corporate expansion ; the sophistication, proliferation and diversity of instruments ; the expanding investment communities are all factors that have led to an increase in the number of benchmark indices and their greater use. benchmark committees deliberate over the construction of the index and determine the rules of the benchmark. investors need the benchmark indices to be used as performance indicators of the broad market and for an indication of the market direction and investors'sentiment on the corporate sector | of fatf, malaysia holds itself to the highest levels of integrity in adhering to international aml / cft / cpf standards. as we all know, crimes today transcend borders, and in response to this, malaysia has also forged and maintained strong relationships with our foreign counterparts, particularly where intelligence - sharing and investigations are concerned. additionally, our aml / cft / cpf regime is anchored by a robust surveillance system, which in turn helps ensure the effectiveness and timeliness of enforcement actions by the relevant law enforcement agencies. 1 / 4 bis - central bankers'speeches on this note, in 2023, bank negara malaysia ( bnm ) had undertaken a total of 291 supervisory and enforcement actions on financial institutions, and forfeited assets from illegal activities amounting to approximately rm 11 million. the financial intelligence unit of bnm had also shared financial intelligence with domestic law enforcement agencies and more than 50 foreign fius, with 71 % of these disclosures related to highrisk crimes. we do not, and cannot, combat financial crimes alone. indeed, our regulatory and enforcement counterparts have played an equally critical role in this respect. the malaysian anti - corruption commission, or macc, for example, has made important and significant progress in graft - busting, including the opening of a total of 776 investigation papers, resulting in 869 arrests and a total of 326 charges brought to court between january and august 2023. our counterpart, the commercial crime investigation department of the royal malaysia police has also charged a total of 4, 880 cases in court between january and april 2024. these efforts are reflective of malaysia's keen determination to combat financial crimes and preserve the integrity of our financial system. while we have made commendable progress, we should not be complacent. ml / tf / pf risks continue to evolve, and if we let our guard down, it will pose serious threats to our financial system, our economy, our society, and our country. on that note, i would like to elaborate on five strategic priorities in our effort to further strengthen our national aml / cft / cpf regime : first of these is the new national coordination committee to counter money laundering roadmap that is currently being developed as we refresh our national risk assessment. this new roadmap, like the existing one, will outline key initiatives in the areas of investigation, enforcement, coordination, and capacity building. improvements and refinements will | 0.5 |
prices for pce rose more than expected in september and october and so did " core " pce inflation, which excludes more volatile food and energy prices and is a better guide to future inflation. three - month annualized core pce inflation has risen over the past two months, while six - month annualized inflation has made only a small improvement. these rates now stand at 2. 8 percent and 2. 3 percent, respectively. these recent readings have contributed to 12 - month core pce inflation of 2. 8 percent in october. if we compare components of core inflation this october with last october, we see 12month housing services inflation has softened and goods inflation has moved to slight deflation, but there has been an increase in nonmarket core services excluding housing. overall, i feel like an mma fighter who keeps getting inflation in a choke hold, waiting for it to tap out yet it keeps slipping out of my grasp at the last minute. but let me assure you that submission is inevitable - inflation isn't getting out of the octagon. while the recent increase and the level of inflation raise concerns that it may be getting stuck above the fomc's 2 percent goal, let me emphasize that this is a risk but not a certainty. i take the recent inflation data seriously, but we saw a similar uptick in inflation a year ago that was followed by a continued decline, so i also don't want to overreact. and i expect housing services inflation to continue to moderate and i do not take much signal from the elevated inflation for other non - market services. now let me turn to the implications for monetary policy based on my assessment of the underlying economic outlook. while some near - term aspects of the outlook may be a little unclear, something that is clear is the direction for monetary policy and our policy rate over the medium term, which is down. this downward trajectory reflects the fact that the level of aggregate demand in the economy, relative to supply, has moderated significantly over the past year - it is plainly visible in the data on spending and the labor market. inflation over that time is also significantly lower, so it makes sense to be moving policy rates toward a more neutral setting. and there is a ways to go. in september, the median of the projections of fomc participants was that the federal funds rate would be 3. 4 percent at the end of next year, which is about 100 basis points lower than it is today. | or skip. as of today, i am leaning toward continuing the work we have started in returning monetary policy to a more neutral setting. policy is still restrictive enough that an additional cut at our next meeting will not dramatically change the stance of monetary policy and allow ample scope to later slow the pace of rate cuts, if needed, to maintain progress toward our inflation target. that said, if the data we receive between today and the next meeting surprise in a way that suggests our forecasts of slowing inflation and a moderating but still - solid economy are wrong, then i will be supportive of holding the policy rate constant. i will be watching the incoming data closely over the next couple weeks to help me make my decision as to what path to take. 1 the views expressed here are my own and are not necessarily those of my colleagues on the federal open market committee. 2 a similar story holds true if one looks at growth in labor productivity and hourly compensation from the productivity and cost release. here the wedge between the two series has narrowed over this time period. 4 / 4 bis - central bankers'speeches | 1 |
and wealth distribution in the labor market, and more substantial redistributive measures. v otherwise, we risk losing public support for policies which contribute to our prosperity. we should not forget that international cooperation and exchange remain the key to prosperity in an interconnected world economy. finally, i would like to come back to the role of technology. let me touch on a few implications for the banking sector. whatever impact digitalization will have on the future shape of the financial sector, it is reasonable to expect a reduction of the current labor force in the banking sector. to some degree, such downsizing is already an ongoing process in the post - crisis landscape. in austria, we see employment in the banking sector decline. and we must be prepared to see a continuation of this trend in the years to come. the other important change that is likely to occur is the rising importance of market - based forms of finance, also in countries like austria, i. e. countries which are traditionally characterized by a dominance of bank - based finance. the capital markets union pursued by the european union will foster activity and cross - border integration in this domain, promoting the development of new forms to finance economic activity. but the extent of economic activity to be undertaken and its financing needs will be shaped less by technology than by the macroeconomic parameters and policies i have already referred to above. having said that, framing technological evolution in a way that best adapts to macroeconomic circumstances and contributes to their favorable development is certainly an important endeavor in an era of rapid change. i hope our conference will help foster our understanding of emerging trends and their possible impact β with all due modesty, given our experience in attempting to forecast the future. i wish all of us two days of lively and productive discussion, and i hope we will succeed in strengthening confidence in the future ahead of us. i david a. graham ( 2014 ) : rumsfeld's knowns and unknowns : the intellectual history of a quip, https : / / www. theatlantic. com / politics / archive / 2014 / 03 / rumsfelds - knowns - and - unknowns - the - intellectual - historyof - a - quip / 359719 / ii scherbov et al. ( 2008 ) : probabilistic population projections for the 27 eu member states based on eurostat assumptions, http : / / www. oeaw. ac. at / fileadmin / subsit | ##es / institute / vid / pdf / publications / edrp / edrp _ 2008 _ 02. pdf iii statistics austria ( 2017 ) : population forecasts, https : / / www. statistik. at / web _ en / statistics / peoplesociety / population / demographic _ forecasts / population _ forecasts / index. html iv sources : european commission ( 2017 ) : white paper on the future of europe. reflections and scenarios for the eu27 by 2025, https : / / ec. europa. eu / commission / sites / betapolitical / files / white _ paper _ on _ the _ future _ of _ europe _ en. pdf ; world bank database v imf ( 2017 ) : world economic outlook, april, chapter 3 : understanding the downward trend in labor income shares, p. 140, http : / / www. imf. org / en / publications / weo / issues / 2017 / 04 / 04 / world - economic - outlook - april - 2017 | 1 |
trading of options is not found incompatible with shariah principles. however, further work is still necessary to assess the implication for islamic finance in terms of social welfare, speculation and risk - sharing, and more specifically risk management. errico luca & farrahbaksh mitra, β islamic banking : issues in prudential regulation and supervision, β imf working paper 98 / 30, march 1998 ; http : / / www. imf. org / external / pubs / ft / wp / wp9830. pdf ; also see, el hawary dahlia, grais wafik, iqbal zamir, β regulating islamic financial institutions : the nature of the regulated, β world bank working paper 3227. hong kong monetary authority, quarterly bulletin, december 2008. e. g. muhammad al - bashir muhammad al - amine of the international islamic university of malaysia and manager of the shariah compliance department at unicorn investment bank ( 2008 ), andreas jobst ( imf, 2008 ), obiyathullah ismath bacha ( international journal of islamic financial services, 2001 ). islamic finance in luxembourg : opportunities and challenges 34 - explanation of the business environment - challenges for further development explanation of the business environment the development of luxembourg β s international banking activities started in the late 60 β s with the expansion of the euro bond market. the financial centre extended further in the 80 β s with private banking services. the other core activity of the luxembourg financial centre is the investment fund industry. our practitioners developed acute expertise in the domiciliation, administration and distribution of investment funds with the result that the luxembourg financial sector is positioned among the world β s leading investment centres together with the us and france. islamic finance started to operate in luxembourg as early as in 1983 with the establishment of the first shariah compliant insurance company in europe ( takafol s. a. ). year by year, other islamic financial products developed and there are currently 31 shariah compliant investment funds ( september 2008 ) domiciled and managed in luxembourg. our stock exchange, started listing islamic funds in 2002 and is thus the first stock exchange in europe to host sukuk. its current listing of 14 sukuk with a combined value of $ 5. 5 billion put it in a competitive position with london. several of these sukuk have issuers originating from the gulf countries, malaysia or pakistan. furthermore, local financial institutions lobby the | treasury to issue luxembourg sukuk, but the volume would be symbolic in international comparison. on the operational side, clearstream banking, the luxembourg international central securities depository ( icsd ) holds under custody and offers the clearing and settlement of a range of islamic securities. it has slightly adapted its technical processes to sukuk β s requirements as regards the distribution of payments. earlier this year, deutsche bank announced the launch of a new platform " al mi'yar " whose aim is to facilitate the issuance of shariah compliant securities. this platform is domiciled in luxembourg. it is also worth mentioning that several local market practitioners and support entities ( mainly law firms and investment funds service providers ) are expanding to the gulf region. competition for the global lead in the investment fund industry has attracted expertise in domiciliation, administration and distribution of investment funds to luxembourg, including shariah compliant investment funds. working groups encompassing authorities and market players were set up to find out how to remove barriers to the development of islamic finance products. our national agency for the development of the financial centre β luxembourg for finance β has issued a leaflet which is used during promotional trips to explain the islamic finance opportunities in luxembourg. a 2 - day conference is planned for early may to disseminate awareness and knowledge within the banking and funds industry 35. the bcl participates together with other public authorities in a working group, chaired by the ministry of finance, on the promotion of islamic finance in luxembourg. the luxembourg school of finance and the university of luxembourg offer modules of islamic finance in their master programmes. see, bataineh sufian & carole, la finance islamique : opportunites et challenges pour le grand - duche de luxembourg, to be published in a forthcoming bulletin of the association luxembourgeoise des juristes de droit bancaire. see, islamic finance awareness days, agenda 2009, http : / / www. alfi. lu /. in reality, practitioners in luxembourg consider that our current legal framework is compatible with islamic insurance products and islamic finance products. it already allows the issuance of such products β differences between conventional investment funds and islamic funds are considered minimal. however, full islamic banking would request adjustments 36. the most appropriate structural category for islamic funds is the β specialized investment fund β ( fonds d β investissement specialise β sif ) which is targeted at well - informed investors. in addition, this structure is legally easier to establish and it | 1 |
almost 20 % below the level of 2008. the operating environment for businesses in finland improved significantly in 2010 due to a considerable strengthening of demand in finland β s export markets. strengthening demand for the products of export companies and increasing output volumes will gradually raise the level of corporate fixed investment. now, let me take up some major factors affecting our economy β s outlook. the financial crisis hit finland, even though it took place outside our country, and we lost a lot of our total production ( figure 21 ). gdp fell by about 8 % in 2009. according to the march 2011 bank of finland forecast, the pre - recession level of output will be regained during the course of 2012. the recession has caused a contraction in the gdp share of industry, and conversely an increase in the share of services sectors, which are characterised by slower productivity growth. over the longer term, this shift will weaken the growth potential of the economy. as regards the structure of growth in finland, in 2010, the strengthening of export demand boosted the growth impact of net exports ( figure 22 ). it will remain strong, but in 2012 β 2013, the significance of net exports will decline as import growth picks up. private consumption supported growth in 2010 and will continue to do so throughout the forecast period 2011 β 2013. despite strong growth in housing investment in 2011, the growth impact of private investment was zero. private investment is expected to pick up and support growth throughout the forecast period. the annual gdp growth will slow down to 2, 7 % in 2012 and to 2, 5 % in 2013 ( figure 23 ). the unemployment rate will continue to be fairly high, averaging 7 % in 2013 ( figure 24 ). employment did not decline very much during the recession considering the depth of the collapse of output. the explanation is the use of temporary layoffs and employers β willingness to retain skilled work force. similarly, the post - recession growth in output has generated relatively few new jobs. inflation measured by hicp ( harmonised index of consumer prices ) has risen to above 3 % in the first 4 months of 2011 ( figure 25 ). the acceleration in inflation is mainly due to rise in the world market prices of energy and food. in finland there is an additional impact from the hike in energy taxes as of the beginning of 2011. according to market expectations, oil price will decline. average wage growth in finland is expected to remain at around 3 %. last, but not the least important topic ; public finances. we have had fairly | forecast next week, but before that comes out, let us see the general outlook without foretelling any of the content of the forecast. the bank of finland β s forecast will be available on 15 june 2011. economic outlook of finland the finnish economy will grow relatively briskly in the immediate years ahead. in 2011 the pace of growth will rise to almost 4 %, but in 2012β2013 it will be much slower. the pre - recession level of output will be regained during the course of 2012, somewhat earlier than estimated half a year ago. export growth will be bolstered by stronger global demand for capital goods towards the end of the forecast period. industrial and construction confidence indicators ( figure 17 ) suggest that companies have positive expectations of the future. especially the construction sector has recovered strongly from the recession. consumer confidence levels recorded in finland in 2010 reached a record high, even though the euro area debt crisis did at times cause uncertainty among finnish consumers. consumer purchasing power was bolstered in by an increase in household incomes, cuts in income tax, the improved employment situation and low interest rates. the stronger confidence and continuation of low interest rates continued to encourage the taking out of new housing loans. the finnish economy is recovering quite strongly. in 2010 the growth boosted by both domestic demand and exports ( figure 18 ). the robust economic growth of gdp seems to continue in 2011. in the first quarter of 2011 gdp growth was about 5. 5 %. private consumption has grown steadily since the second quarter of 2009, but slowed down in the first quarter of 2011. housing construction growth was exceptionally brisk in 2010, and growth is expected to moderate in 2011. construction of other buildings picked up towards the end of the year 2010 but remains still weak at the beginning of 2011 ( figure 19 ). during the course of 2010, finnish exports of goods began to benefit from growth in export markets ( figure 20 ). in 2011, the structure of growth is expected to still be unfavorable for finland β s capital - goods - weighted export structure. in 2012 β 2013, global demand for capital goods will begin to accelerate, and boost finnish exports. the recovery of industrial output has progressed at a very different pace in different industries. the chemical industry started bis central bankers β speeches to recover early from the recession, and metal industry output began to grow during the course of 2010. forest industry output is not expected to return to pre - recession levels due to cuts in production capacity. electronics industry output is still | 1 |
radovan jelasic : payment card business in serbia speech by mr radovan jelasic, governor of the national bank of serbia, at the round table discussion on payment card business, belgrade, 17 september 2008. * * * distinguished members of the press, colleague bankers and hosts to this event, i would like first of all to warmly thank the organizers of this round table on payment card business for the invitation to give introductory speech and to take part in the discussions during this event. payment card business, together with the overall system of payment operations, represents the backbone of a stable and efficient financial industry of any market. supervision of these operations in serbia, however, is under the remit of the national bank. recently, we have been witnessing major, both technological and regulatory changes in the domain of payment card business equally in europe and worldwide. its significance in some economies has met and even exceeded that of payments in cash and has consequently grabbed the attention of financial market regulatory authorities and central banks. perhaps the most significant decision in this domain is the one taken by the master card ( under supervision, not to say pressure, of the european antimonopoly commission ) to cut down cross - border interchange fees down to the zero level, and hence open up a new era in the relations between payment card systems, financial market regulatory authorities, banks and traders in europe and worldwide. besides, the initiative of the european commission and the european central bank to develop a new european payment card system within the implementation of the sepa agreement ( if you β ll permit me to boast a bit, following in the footsteps of our β dina card β ) and to do so now when visa and master card have already established strong positions for themselves, shows how important payment cards have become for the stability of payments systems, not only from the financial, but also from the social point of view. today, we shall also attempt to discuss current issues prevailing in our economy. one of the topics of discussion ( and often a bone of contention ) between the nbs and commercial banks in the course of several recent years has been the treatment of payment cards and debit card overdrafts. i sincerely hope we shall see further discussions on this matter as they strongly contribute to the improvement of the quality of the system. on our part, i wish to reaffirm the position of the nbs to continue its best efforts begun six years ago to promote further intense development of the card business in serbia. | for banks in the medium and long run. | 1 |
with the signing of the treaty of rome in 1957 recently reached a decisive point. on january 1, 1999, european monetary union was launched by introducing the euro as the single currency in 11 of the 15 member states of the european union. at the same time, the european system of central banks, consisting of the european central bank and the central banks of the participating member states, assumed responsibility for conducting monetary policy. monetary union sets up a new economic architecture in europe with far - reaching consequences for the strategic behaviour of all parties. the delegation of national powers to an independent monetary authority certainly requires a new common understanding of policy making within the countries of the euro area. owing to the abolition of national currencies, it is no longer possible for member states to resort to individual monetary and exchange rate policies. interest rate differentials and currency fluctuations, hitherto devices for readjusting economic competitiveness in the event of asymmetric shocks, will have to be replaced by more market flexibility. at the same time, we are seeing signs of an ever - increasing degree of economic concentration in terms of large - scale transnational mergers and acquisitions in virtually all sectors of the european economy. there is also an open contest between regions for corporate investors. even at national level, governments worry about the effect of fiscal policy on their country β s competitiveness. these developments are closely linked to the beneficial characteristics of the single currency. exchange rate risks and the cost of foreign exchange transactions have ceased to burden european economies. in combination with fundamental structural reforms this will prove a stimulus to investment and economic growth as well as help to ease the ailing labour market situation in europe. in addition, the exclusive use of the euro on most financial markets in europe will make capital allocation more efficient, thereby reducing volatility and enhancing the stability of a more integrated european financial market. b ) the road to the euro in a historical perspective on the road towards the single currency legal and economic hurdles had to be cleared. besides the necessary ratification of the amended treaty by national parliaments, a process of economic convergence indispensable for exchange rate stability had to be initiated. the so - called convergence criteria embedded in the treaty provided a clear incentive for national governments to exercise fiscal restraint. specifically, four economic criteria had to be met before joining the single currency : the achievement of a high degree of price stability, 1 a sustainable government financial position, that is to say, the absence of an excessive deficit, 2 membership of the european monetary | system for at least two years without devaluation while keeping the exchange rate within the fluctuation margins and, finally, a moderate long - term interest rate level. 3 no doubt, for some member states economic convergence has represented a long and painful process that required a stronger dedication to improving and maintaining government budget discipline. in the end, however, those continuous efforts are bearing fruit. we are now seeing unprecedentedly low levels of inflation and interest rates throughout the euro area. preserving this state has become the responsibility of the ecb, the european central bank. c ) strategic approach of the ecb the ecb governing council, consisting of the president, the vice - president and the four other members of the executive board as well as the governors of the national central banks of the euro area, has adopted a monetary policy strategy in accordance with its primary objective of maintaining price stability as mandated by the eu treaty. besides a quantitative definition of price stability β consumer prices in the euro area should over the medium term on a year - on - year basis increase by less than 2 % β two main pillars were established : one, a reference value for the growth rate of broad money is announced in advance β at present a rate of 4Β½ %. average inflation rate no more than 1. 5 % above the inflation rates of the three member states that achieved the highest degree of price stability. reference values are 3 % of gdp for the general government deficit and 60 % of gdp for general government gross debt. average long - term interest rate no more than 2 % above the respective rate in those three member states that achieved the highest degree of price stability. two, a broadly based assessment of the outlook for price developments and risks to price stability in the euro area as a whole is conducted on an ongoing basis. this approach to monetary policy reflects a medium - term orientation and by no means a willingness to fine - tune the economy. the ecb acknowledges that during the first few years of monetary union it will not be sufficient to rely exclusively on the development of broad money. initially, the transmission mechanism may vary because of differences in the process of financial intermediation. in other words : it is not yet clear whether there is a stable relationship between the broad money aggregate and price developments in the euro area. the ecb therefore considers a number of general economic indicators. d ) apparent tension between centralised monetary policy and decentralised fiscal policies there is an apparent tension between centralised monetary policy and decentralised national | 1 |
has fallen to a low level of 4 percent. 1 / 4 bis - central bankers'speeches inflation is another story. the fomc defines price stability as 2 percent inflation, as measured by the personal consumption expenditures ( pce ) price index. 1 our commitment to 2 percent inflation is an important bedrock principle, providing a " north star " for policy decisions and helping to improve the public's understanding of our goals and actions. inflation reached a 40 - year high of 7 percent this past june. while it has since moderated to 5 percent, it is still well above our longer - run goal. without price stability, we cannot achieve maximum employment on a sustained basis. that is why it's so important for the fomc to use its monetary policy tools to bring inflation down. the inflation gears our most important policy tool is the setting of the target range for the federal funds rate, which influences demand for goods and services by affecting borrowing costs. to show how this is helping to reduce inflation, i've been using an analogy of a mechanism, such as a watch, that is powered by gears. the watch represents the economy, and its gears are different sectors. to keep time accurately, the gears need to turn at the right speed. but the ones that drive inflation have been spinning at different rates. the first inflation gear relates to globally traded commodities, such as lumber, steel, and grains. thanks in part to tighter monetary policy here and abroad, demand has eased, and commodity prices have moderated. the second gear, which represents goods such as cars, appliances, and furniture, is turning nearer where it needs to be, as higher interest rates have helped curb demand. supply - chain bottlenecks that plagued the economy earlier in the pandemic have receded, which is also helping bring goods price inflation down. 2 the gear that's having the most trouble turning represents non - energy services excluding housing. it's influenced by the balance of overall supply and demand for these services and labor, and it will likely take the longest to bring inflation in this sector down fully. well - anchored expectations one aspect of inflation that's important for achieving and sustaining price stability is the anchoring of inflation expectations. various measures of longer - run inflation expectations have remained well anchored at levels consistent with our 2 percent goal. 3 inflation expectations for the next few years, which increased as inflation was rising, have come down in recent months. the new york fed's | bis central bankers'speeches | 0.5 |
last year, there were several bond deals of about s $ 1 billion from domestic corporate issuers successfully placed in singapore. structured debt products now account for about 35 % of the total s $ debt issuance, reflecting a move towards more sophisticated debt instruments. with deeper and more mature capital markets, and greater confidence and experience in managing larger s $ flows, we are now ready to make a further move. since october last year, mas has been seeking the views of key market participants on how we can facilitate the continued growth of the s $ capital markets. following these dialogues, we have reviewed the non - internationalisation policy, taking into account their ideas and suggestions. we have decided to further liberalise the policy, to lift many of the specific restrictions on the use of the s $. henceforth, we will retain only two basic guidelines : a. first, financial institutions may not extend s $ credit facilities exceeding s $ 5 million to nonresident financial entities, where they have reason to believe that the proceeds may be used for speculation against the s $ exchange rate. this continues to be necessary, as we have no reason to allow offshore speculators to access the liquidity in our onshore fx swaps and money markets. b. second, when a non - resident entity wishes to obtain a s $ loan, or tap our equity or bond markets to fund overseas activities, it must swap or convert the s $ proceeds into foreign currency as and when it uses the proceeds offshore. this guideline is unlikely to stand in the way of market development, as the s $ is not a currency commonly used for transactions abroad, and non - resident entities would in any case wish to swap or convert the s $ proceeds into a currency of their choice for overseas use. with this liberalisation, the following will now be possible. a. first, mas will exempt all individuals and non - financial entities, which includes corporate treasury centres, from the s $ lending restrictions of the non - internationalisation policy. this recognises that such entities are not usually the prime drivers of destabilizing currency speculation. b. second, for non - resident financial entities that continue to be governed by the s $ policy, we will lift restrictions in the following financial activities : i. asset swaps, cross - currency swaps and cross - currency repos can now be transacted freely. mas had hitherto treated such transactions as forms of s $ lending. it will no longer do so | is also relatively larger and more established, compared to other countries in the region. by 1997, we had decided that we were sufficiently well established to shift from our previous highly conservative and risk - averse regulatory approach towards the financial industry and instead supervise with a lighter touch and accept calculated risks in order to promote its development. as part of this overall liberalisation, we progressively relaxed restrictions on the singapore dollar, and fostered the growth of our capital markets, throughout the asian crisis. our monetary policy has been centred on the exchange rate since 1981. but as a large financial centre with open capital markets, we are exposed to large and sometimes, volatile capital flows. thus we have long maintained an explicit policy of discouraging the internationalisation of the singapore dollar, in order to support our monetary policy framework. we limited the use of the singapore dollar by non - residents for purposes unrelated to the singapore economy, for example currency speculation. this non - internationalisation policy, supported by our strong macroeconomic fundamentals and substantial foreign reserves, has helped us to maintain a stable singapore dollar, and to avoid large swings in our exchange rate which would have severely damaged our economy. the trade - off was less vibrant capital markets. indeed in some cases, the tight domestic restrictions fostered the growth of offshore markets in these restricted activities, undermining our purpose. recognizing this, we have over the past four years progressively relaxed the s $ restrictions. our approach has been a cautious one : weighing the trade - off between development and the risk to exchange rate management, and feeling our way forward step by step. our efforts have yielded encouraging results. the outstanding volume of singapore government securities ( sgs ) has doubled since 1998 and average daily turnover volume increased about threetimes. sgs outstanding volume in 2001 was s $ 54 billion and average daily turnover was s $ 1. 9 billion. new corporate debt issuance has continued to grow strongly, with s $ and non - s $ corporate bond issuance totalling a record s $ 72 billion in 2001. this was an almost 8 - fold growth over issuance volumes in 1998, spurred by exceptional merger and acquisition activities, but significant nevertheless. outstanding corporate bonds have also more than doubled to s $ 80 billion. besides higher volumes of issuance, we are also seeing a greater diversity of corporate bonds in the market. the tenors issued range evenly across a spectrum of maturity up to 15 years. the average size of s $ - bond issues has also increased. | 1 |
of consumers. studies have shown that if borrower income is held constant, loan features do matter to the successful repayment of a loan. so i hope we have learned that misaligned incentives that result in harm to consumers have implications for the economy overall. if we recognize this, then we must also recognize that consumer protections cannot be viewed as an ancillary component of a scheme to regulate for safety and soundness. rather, they are fundamental to the quality of the credit upon which the economy is built. having said that, policymakers must also consider the desirability of a dynamic economy, one in which useful innovations are encouraged and credit is made available to as many consumers as have the ability to benefit from it. the tension between protecting consumers and making credit broadly available is one that is as important in making an individual loan as it is to ensuring the stability of the economy. the key to successful policy formulation is to resist the temptation to regulate the problem of the moment. for example, if, in reaction to the abuses in consumer and mortgage lending over the past few years, we were to focus solely on consumer protection policies, the result could be overly restrictive access to credit, which could threaten future economic growth. on the other hand, if the policy focus is strictly on stabilizing the banking sector without giving due consideration to consumer protection, both consumer and investor confidence will remain weak and we will risk repeating the mistakes of the past. trust in the financial system can be regained only if sufficient consumer protections are in place to give borrowers reason to believe they will be treated fairly. the role of the federal reserve the federal reserve addresses its consumer protection responsibilities in a variety of ways, using its regulatory and supervisory authority as well as its consumer education, research, and outreach capabilities. we take a multifaceted approach to consumer protection, for a couple of reasons. first, our organization is in the unique position of being a central bank as well as a regulator and supervisor for the banking industry. moreover, our experience in this arena has taught us that there is no one solution sufficient to address the information needs and substantive protection of consumers in credit transactions. by offering a broad spectrum of products, services, and activities, we aim to provide consumers with the information necessary to make good financial decisions. for example, based on our belief that clear and well - organized disclosures can help consumers make good choices among financial products, the federal reserve has used its regulatory authority to develop extensive new disclosures for | sarah bloom raskin : downturns and recoveries β what the economies in los angeles and the united states tell us speech by ms sarah bloom raskin, member of the board of governors of the federal reserve system, at the federal reserve bank of sand francisco business and community leaders luncheon, los angeles, california, 12 april 2012. * * * good afternoon. i appreciate this opportunity to speak with you today. i β m not sure when you last found yourself in a planetarium. at the start of my most recent visit, i was handed a brochure that said β sit anywhere. all seats provide equal viewing of the universe. β i took the brochure but instead of contemplating the stars, i contemplated my job as a governor on the federal reserve board. and it occurred to me that the brochure was wrong. completely wrong. all seats do not provide equal viewing of the universe. some seats are better than others. it β s not just that the big dipper is clearer than ursa minor from certain seats. if you want, for example, to see the economy, you don β t necessarily want to always be sitting in washington. that is not a seat that tells you everything you need to know about the economy. you have to break out, set free, and hightail it out of the beltway to los angeles. it β s critical to appropriate policymaking that we get a multidimensional view of the so - called economic universe. from that perspective, it is an understatement to say that these are profoundly challenging times for millions of americans. many families have suffered significant declines in their net worth over the past several years, especially as the value of their homes and other assets has plummeted. many households have faced job losses or large reductions in the number of hours worked, events that have reduced family income and well - being. while i β m not happy to bear witness to households trying to navigate these difficulties, we would be poor policymakers if we consistently avoided the seats that give us this view. in short, i β m very pleased to be here, but i β m here on a mission. it β s a quest to understand what the seat from los angeles tells us about the economy, and more generally, how the path of the economy in a recovery may depend on the path of the economy in a recession. to rewind and review : the u. s. economy recently endured a financial crisis rival | 0.5 |
to ourselves than to others. only when we have created an environment in which we can compete against all comers from both within and outside the bis central bankers β speeches organization, based on open - mindedness and open practices, can we keep ourselves on a tight rein and hone our skills. we should constantly bear in mind the question, β what does the bank of korea mean to me, and who am i to the bank of korea? β if you get into the habit of asking yourself, β what if this organization were to work well without me? β as you go about your business, you will develop yourselves as time passes. the easy way means doing a familiar job, which will only result in following the same old path as in the past. long - term employees will of course have contributed more greatly to the development of the current organization than short - term employees. however, the future of the organization lies in its young employees, and therefore when institutional consideration is given to younger workers who will work for longer periods to encourage their further development, we can say that they are being treated with respect. we must all understand that this is also a precondition for securing higher quality minds, and that such efforts are a shortcut to establishing a virtuous circle ensuring that the organization develops another stage further as a result. when we come together like this, to choose the difficult path of reaching out to β the future and to the world β, glorious days will unfold before us. the future belongs to those who are prepared for it. the year 2014 is called the year of the blue horse. legend has it that it brings people fortune. and what greater fortune for us is there than national economic development and a flourishing bank of korea? i hope that 2014 will be a year in which the practice of sowing seeds continuously takes root, rather than that of trying to reap the harvest of those sown in the past many years. in this new year ahead of us, i wish the very best of good fortune and happiness to all members of the bok and their families. january 2, 2014 choongsoo kim governor the bank of korea bis central bankers β speeches | factors such as government services, institutions, human capital, and natural environment, among others. the quality of less mobile factors of a region will determine the extent to which it can attract mobile factors for production such as physical capital and finance. in this respect, the recipe for success is very much the same between regional economic development within the national border and globalization beyond the national border. in a globalized world, economic success of an individual country would be determined largely by how much productive investment and finance it can attract. and the abundance or lack of its own mobile factors would be neither a constraint nor an advantage that a country would face in its economic development. likewise, regions within a country are competing with each other for investment resources available domestically or internationally, and their success depends on how attractive they bis central bankers β speeches are as the destination of investment. as such, the essence of such competition should focus on how to upgrade the quality of less mobile factors of each region. in this light, i should emphasize the leading role of local governments and also the central government in promoting regional economic development. to be specific, local governments should provide a clear vision and framework for sustainable development with detailed strategies to support business and human capital development. deregulations, supportive tax system, and administrative services would then be designed within the framework. the central government could incentivize regional development by delegating more authorities to local governments for their autonomy and, more importantly, by prioritizing the allocation of fiscal resources among local governments according at least in part to their supportive performance in regional economic development. it would be ideal if regional development strategies are closely nested with national development strategies in the first place. ladies and gentlemen, promoting economic development is always a highly complex task. it requires a myriad of inputs including knowledge, information, network, dedicated efforts of the people, and good luck as well. and we all know that economic development is an evolutionary process of learning and adaptation. today β s seminar is particularly meaningful in that we will learn from the rich experiences of our advanced peers, especially germany and japan. i believe that learning from others β experiences is as important and productive as learning by doing. and i am sure that this seminar will offer very useful guidance to our long journey to rebuild this region β s economy. i look forward to your active exchange of ideas and in - depth discussions. thank you once again for joining us today. bis central bankers β speeches | 0.5 |
ernst welteke : the bundesbank β s view on the world economy speech by mr ernst welteke, president of the deutsche bundesbank, at the annual members β dinner of the financial services industry association in dublin, on 4 september 2001. * * * i ladies and gentlemen! for a true european dublin today is a great place to be. ireland has shown the most spectacular catching - up process in the eu. it is all the more impressive as ireland lies geographically on the edge of the eu. the favourable starting conditions created by the advent of the common currency framework were helpful in this respect. economic and political convergence make for an ever - stronger economic entity in europe. great challenges are ahead for us. we are on the eve of the physical introduction of the single european currency. and we are in the process of negotiating the access of new eu members, most of them much less wealthy than the current member states. the euro area is the second - largest economy in the world. right now, we find ourselves in an environment of slowing global growth. increasingly, the global markets have brought the strains in the world economy to our doorstep, faster and with more thrust than at first expected. we do not blame the markets, though. on the contrary, we are glad to see the financial markets in europe evolving rapidly. in this regard, the euro is important. the single currency both facilitates and accelerates integration. and with the financial markets becoming ever - more complicated, financial supervisors are faced with a challenge. in ireland, as well as in germany, a debate on how best to design prudential supervision is taking place. ii ladies and gentlemen! the development of the irish economy is indeed impressive. most of the catching - up took place in the second half of the 1990s. since 1994, ireland has been the fastest - growing country in the european union with an average real growth rate of eight percent a year. more than half of the growth occurred due to an increase in capital and labour inputs. employment growth was the highest in the eu. the unemployment rate has fallen by nearly ten percentage points during this period. with employment conditions being that favourable, ireland now sees net immigration. ireland is the only eu country that has consistently seen double - digit growth in private investment since 1994. productivity has thus risen faster than in most eu countries. ireland is now among the most productive countries in the eu. last year, gdp per worker was 15 percent above the eu average. foreign direct investment | it would have an overwhelming incentive to take the sort of supply - side measures which have proved so difficult to implement hitherto. and the people in those countries would similarly have the incentive to accept structural change. i am not wholly persuaded that you can necessarily rely upon that making life very much easier. but what i think this discussion leads to the broader conclusion, given that the euro is to go ahead, that structural reform - in labour markets and welfare systems and in broadening and deepening the single market for goods and services, but also capital markets - in order to improve supply - side flexibility - becomes more crucially important than ever. the need for greater supply - side flexibility was the subject of much of the discussion at the informal meeting of european finance ministers and central bank governors in york last weekend, and i was greatly encouraged by the degree of consensus around the table on this point. the united kingdom of course will not participate in the first wave of monetary union. that decision, taken last october, was - as i noted earlier - a disappointment to some of our eu partners ; but it was a considerable relief to others because uk participation from the outset would certainly have complicated the project - not least because of the substantial cyclical divergence between ourselves and the major countries on the continent. but in making its announcement the british government made it clear that it is not opposed to euro membership as a matter of principle. when the time comes - and that will almost certainly not be during the lifetime of the present parliament - it will make its decision - and submit it to parliament, and the people in a referendum - on pragmatic, economic, grounds. in the meantime the united kingdom will prepare both for the introduction of the euro on the continent from next january and for our own eventual participation. [UNK] the fact is that monetary union will have a major effect on this country whether or not we are a part of it, and it is clearly in our national interest as well as the interest of the participating countries, that it should be successful. we benefit in macro - economic terms from a stable and prosperous europe just as continental europe benefits from a stable and prosperous united kingdom - and the same mutual interest, of course, applies between europe and its mediterranean neighbours. we can contribute to that success in at least three ways. most immediately the government has undertaken to use its current term as president of the european union council of ministers to promote an orderly decision - making process during the crucial next few months. not being | 0 |
higher risk - taking or less liquid banks appears more responsive to a tightening of monetary policy. β’ this would seem to suggest that more stringent regulations tend to weaken the transmission of monetary impulses. β’ and the transmission of policy rate changes to other interest rates and asset prices may be altered if debt markets become less liquid as a result of regulatory changes. conclusion let me conclude by drawing together the main points. β’ microprudential policies are critically important for financial stability and we must get them right. β’ but the ability of microprudential policies to achieve financial stability may be dampened by credit cycles that have their roots in broader macro forces. β’ monetary policy matters for financial stability because it affects the credit cycle. to what extent monetary policy should therefore take account of financial stability remains an unresolved matter. β’ macroprudential policy potentially offers a way out by targeting the macro sources of financial instability, leaving monetary policy to focus on price stability. β’ but macroprudential policy is neither a panacea nor without cost or distortion. β’ and we need to better understand the interactions of monetary, microprudential and macroprudential policies, and how they influence price and financial stability. henry kissinger once asked zhou enlai β the late premier of china β what he thought of the implications of the french revolution. zhou replied, β it is too early to tell. β we are living in interesting times. β’ it has been a period of bold experimentation in both monetary and regulatory policies. β’ it is too early to tell what the implications of these experiments are. β’ we need much more research, experience, and the passage of time before we can draw firm conclusions on some of the issues that i have raised. β’ in the meantime, let us pray for the wisdom to do the best we can. and be humble. bis central bankers β speeches thank you. bis central bankers β speeches | ravi menon : powering the next stage of singapore fintech keynote address by mr ravi menon, managing director of the monetary authority of singapore, at the singapore - china ( chongqing ) financial summit, via video conference from singapore, 23 november 2020. * * * mayor tang, minister teo, assistant minister li, distinguished guests, ladies and gentlemen, good afternoon. welcome to the 3rd singapore - china ( chongqing ) connectivity initiative ( cci ) financial summit. let me first thank chongqing for hosting this summit. we are honoured to have with us representatives from all ten asean central banks. the global economy is recovering from one of the deepest recessions in history. with covid19 still raging globally, the recovery has been uneven and remains uncertain. yet, east asia β especially china and asean β has held up relatively well. china reacted decisively to contain the pandemic. its economy has rebounded and gdp has recovered to above pre - covid levels. asean is not far behind, with asean - 5 expected to grow by 7 % q - o - q in q3. trade between china and asean is booming again. as the rest of the world takes longer to recover, we must step up economic and financial integration between china and asean to sustain the economic recovery in the region. financial connectivity can play a particularly vital role in supporting this. taking stock through the cci over the past 5 years, chongqing and singapore have strengthened financial connectivity between the western region and asean. corporates from chongqing as well as the broader western region have found singapore an attractive destination to raise financing. as of april 2020, we have seen 117 cross - border financing deals amounting to usd 11 billion. chongqing enterprises raised usd 7 billion in singapore, while enterprises in sichuan, shaanxi, qinghai, xinjiang, guangxi and yunnan obtained nearly usd 4 billion of financing. cross - border loans from singapore grew 67 % y - o - y to reach rmb 5 billion this year. our financial institutions continue to establish in each other β s markets. a chongqing - based fintech, whalet, obtained a licence in singapore to conduct crossborder remittance this year. i am also pleased that vickers venture partners, a venture capital fund focusing on deeptech, will be establishing a qualified foreign limited partnership fund in chongqing. let us continue to build on the progress we have made. i suggest three areas where chongqing and singapore can work closer together | 0.5 |
these rates are of prime importance not only for the refinancing costs of the banking sector, but for the pricing of loans to households and firms and, hence, crucially determine the wider financing conditions in the economy. this doesn β t mean that our standard toolkit played no role in our crisis response : confronted with downside risks to price stability after the lehman collapse, we swiftly cut our main policy rates to record lows. but further action was necessary to confront impairments to monetary policy transmission. here, three measures have taken a prominent role. bis central bankers β speeches first, we provided term - funding support to euro area banks through long - term refinancing operations. this measure avoided a major credit crunch when interbank lending dried up. second, we removed unwarranted and self - reinforcing fears of euro breakup by announcing outright monetary transactions. this measure mitigated major impairments in monetary policy transmission when sovereign bond spreads spiralled to fundamentally unjustified levels. third, we provided more explicit communication on the likely future orientation of our key monetary policy rates, including on the deposit facility, through forward guidance. this measure aligned market expectations more closely with our policy intentions when disturbances from within and outside the euro area interfered with our monetary policy stance. especially in extraordinary situations when, for example, policy rates are at, or close to, their effective lower bound, or when the normal channels of monetary policy transmission are impaired, or when there is exceptional uncertainty on the state of the economy, there is extra value in making central bank communication more explicit. so do these rather non - standard monetary policy measures mean the ecb has become more unorthodox during the crisis? again, the answer is : no. we have employed non - standard β not un - orthodox β monetary policy instruments precisely for the reason to achieve our orthodox monetary policy objective of price stability. in fact, the described challenges to the conduct of monetary policy during the crisis have required a more expanded set of tools to fulfil our price stability mandate. hence, they were an expression rather than a renunciation of our predictable monetary policy strategy with a medium - term orientation. vice versa, the anchor established through our price stability objective has allowed us to tailor our toolkit to the challenges at hand β without unanchoring inflation expectations. going forward, we must ensure that our policies continue to complement the adjustment in the euro area economy. at the same time, it must be clear that | be made available to authorities to mitigate the build - up of systemic risk during times of financial exuberance. they should also support the sector β s ability to meet potential funding needs under stress, including from margin calls. strengthened supervisory powers at eu level could further contribute to a timely and consistent use of liquidity management tools. moreover, the regulatory framework for money market funds should be re - assessed in the light of specific vulnerabilities in the sector. beyond a strong macroprudential mandate and an adequate toolkit for the non - bank financial sector, accelerating progress towards completing the capital markets union remains a key priority. this is particularly important in the current situation, as integrated and resilient european financial markets could help support the economic recovery. first, deep and integrated capital markets can complement bank lending, thus ensuring access to funding for a wide range of businesses. this would contribute to a swift recovery of economic activity. and second, the risks that materialised during the pandemic have highlighted the need to increase the resilience of the financial sector to large exogenous shocks. this underscores the importance of the europe - wide supervision of capital markets, which would enhance cross - border risk monitoring and coordinated action across europe. conclusion let me conclude. in the wake of the coronavirus pandemic, the euro area financial system has faced an economic shock of global breadth and of enormous scale and speed. policy measures 3 / 4 bis central bankers'speeches have so far helped prevent a health crisis turning into a systemic financial crisis, but mediumterm risks to financial stability have increased markedly. despite pre - existing vulnerabilities, the euro area financial system has weathered the immediate stress relatively well, thanks to the regulatory reforms of the past decade and bold policy responses by monetary, fiscal and prudential authorities. the forceful fiscal policy response to the pandemic by euro area governments acted as a first line of defence : introducing discretionary support measures and letting automatic stabilisers act as intended was absolutely necessary. however, this response raises fragmentation issues and will significantly increase public debt. the size of national responses and the design of guarantees differ across countries. large differences in loan guarantee packages can distort the level playing field for corporates and banks in the euro area and contribute to financial fragmentation. very large guarantee envelopes may, for example, allow companies operating in the country in which these envelopes are granted to access credit on a much larger scale, which could | 0.5 |
outlook current rating ( october 03 ) bbb / a - positive ( october 03 ) a3 / a3 stable ( october 03 ) bbb / a - stable december 02 bbb / a - positive november 02 a3 / a3 stable march 03 bbb / a - stable october 01 positive october 02 positive november 02 bbb - / bbb + positive bbb / a - baa3 / a3 stable november 99 bb + / bbb + stable positive september 00 bb + / bbb + november 00 ba1 / baa2 february 01 bb + / bbb + november 00 bb + / bbb + positive november 01 baa3 / a3 december 98 bb + / bbb + positive stable september 98 bb + / bbb + negative october 99 ba1 / baa2 stable june 97 bbb - / a stable march 98 ba1 / baa2 negative october 98 bbb - / a - negative april 95 bb + / stable november 97 baa3 negative august 96 bbb - / a - - february 94 bb - / stable may 95 stable * * 8. baa3 * - conclusion slovakia has taken many steps in order to become more attractive place to make an investment, mainly in the recent years. moreover, it is obvious that economy is on the path to stabilization, both external and internal. all major reforms are timed in the way to be introduced before 2005 and more importantly before joining erm2. legislation favoring foreign investments has been applied to a large extent. labor and production costs are one of the lowest in the region. vast majority of investors are satisfied and confident about future. besides, slovakia experiences one of the highest dynamics in the region. all these features make slovakia a more perspective country to invest day by day. | elena kohutikova : slovakia - perspective place for investments speech by ms elena kohutikova, deputy governor of the national bank of slovakia, at the conference β middle and east europe β region of the future β, salzburg, 15 october 2003. * * * slovakia has been disregarded as a reasonable country to place an investment in, for a long time. this trend has been showing on the results of total foreign direct investments made in slovakia until 1999 compared to the other countries acceding to the european union in may 2004. after the changes of general economic policy ( economic reforms, legislative changes, making institutions more transparent β¦ ) with the new government seizing power in 1998, this fdi per capita gap shrinked to minimum. at present, overall environment is very much competitive for new investments within the area ; it still ranks fourth behind czech rep., hungary and poland, however capacity to invest, experience of the foreign companies that invested already and overall conditions created by government motivation to attract new investments makes slovakia a very interesting market. this contribution aims to view some of the attributes of slovak environment and features of the country that have a vast importance in the course of decision - making process on placement of an investment. 1. location and infrastructure slovakia is a small open economy ( with exports plus imports ratio to gdp amounting to 155 % ). therefore, development of external relations is of high importance for the country. thanks to location, slovakia, near european markets as well as near eastern european emerging markets may represent a bridge between east and west. european market of 350 million people is accessible within one - day truck drive ( more than u. s. and canada combined ). despite relatively hilly surface, major roads infrastructure is fairly well developed. moreover, government highway construction program aims to conclude main corridors connecting north and south, and east and west in the medium resp. long run perspective. 2. external stability slovakia became a member of oecd in 2000. this membership invitation declared stable environment, transparency and clear path in economic development based on the premises of the world trade organization. oecd membership itself helped to certain extent to ensure exponential growth of investments in 2000 - 2002. slovakia will enter european union in may 2004 and soon will become a member of nato as well ( ratification process in member countries is running in the moment ). economy has been stabilized and maastricht criteria should be reached and fulfilled until 2006. according to the strategy, slovakia plans to adopt euro as soon as possible | 1 |
caleb m fundanga : the history and experiences of the financial sector and regulatory framework in zambia address by dr caleb m fundanga, governor of the bank of zambia, at the co - operative bank capitalisation consultative forum β the history and experiences of the financial sector and regulatory framework in zambia β, lusaka, 3 march 2011. * * * the honourable minister of agriculture and co - operatives, hon eustarkio kazonga, m. p ; the board chairman of the co - operative bank zambia limited, mr mulilo kabesha ; members of the diplomatic corps ; distinguished invited guests ; ladies and gentlemen it is with great pleasure and privilege to speak to you at this very important consultative forum. i have been requested to speak briefly on the history and some of the experiences of the financial sector in zambia. ladies and gentlemen, as you are aware, considerable developments have been recorded in the zambia economy in general and the financial sector in particular, following the liberalization of the economy in the early 1990 β s. these developments include the proliferation of banks and non - bank financial institutions, which have necessitated the review of supervisory policies as well as the legal and regulatory frameworks in order re - align them to the liberalised environment. a significant development relating to the zambian financial sector was the decision to relocate the function of the registrar of banks and financial institutions to the bank of zambia from the ministry of finance and national planning where it was previously located. this decision was taken in an effort to enhance regulatory oversight of banks and financial institutions starting from the licensing stage. currently, all applicants have to be evaluated in line with relevant provisions of the banking and financial services act ( bfsa ) and international best practice such as the basel core principles on effective banking supervision. the intention is to ensure that only applicants who meet these stringent criteria enter the financial system in zambia. this is crucial for fostering confidence and stability in the financial system. mr chairman, you may be aware that in the early stages of the reforms, a number of commercial banks faced serious problems and were subsequently liquidated. the closures were in part a consequence of the reforms. the reforms also highlighted some weaknesses in corporate governance arrangements at most failed banks. however, following improvements in the regulatory and supervisory frameworks, no bank closure has been recorded since 2002 and the banking sector has recorded significant growth. the growth in the sector can also be attributed to prudent fiscal and monetary policies aimed at achieving sustainable macroeconomic stability. | bankers β speeches | 1 |
##ully and successfully in so many β battlefields β. wim was not only a great central banker. he was not only a great president of the european central bank, making history in launching the single currency. he was a great friend, a great european friend. the dutch writer cees nooteboom says in β the question of brussels β : β how to become a european? in starting by being one, a quality that we can acquire, for instance, in being born in the netherlands. the same result could be obtained, according to some, in sicily, in east prussia, in lapponia or in wales, but being myself a european of the dutch kind, i prefer to stick to this particular kind of european ( β¦ ). in fact if i am a european, it probably means that the european wealth of different cultures influences my dutch specificity β. wim was a great european, fully open to our common cultural wealth. fluent in english, german and french, as well as dutch of course, he was a man of culture, a man of great intellectual and moral elegance. among his many friends, his extreme kindness, his wit, his humour, his smile were legendary. his openness to others and his simplicity were always appreciated by all, particularly by the staff of the ecb. he gave a lot to colleagues and friends only out of the goodness of his heart. gretta, i am particularly fond of one memory of wim, an event which i must relate because it says so much about him. the two of you were in aachen when wim was to receive the charlemagne prize. there was he, that tall fellow with his magnificent mop of hair and there were you, a picture of supreme elegance. but you had a problem walking on the cobblestone streets of aachen β so wim gave you his shoes, carried yours and walked in his socks through the streets with his prize around his neck. simplicity, imagination, humour and great kindness are the best words to define our dear friend wim, who will be with us, with all of us, forever, as chateaubriand said, β not defeated, only invisible β. i would like to give the last word to wim himself. at his farewell celebration on 22 october 2003 he said : β all in all, i had the privilege of being part of history. being responsible for the introduction of a new currency is the dream of any central banker, i believe. a | rules of trade. all of us need to support these efforts and to be vocal in resisting calls for protectionism. in addition, it is critical that we get on with the job of building an international monetary order for the 21st century. a more effective international monetary fund ( imf ) has a crucial role to play in this regard. this issue is extraordinarily important, and i spoke at length on this topic in a speech i gave last month in montreal. current economic developments in canada against that backdrop, what specific policies are needed to help the canadian economy adjust to global developments? while imbalances pose risks ahead, recent economic growth in the global economy has been quite strong, led by the united states and china. this growth has increased the world prices of oil and of many other commodities that we produce in canada. as a result, there has been a marked improvement in our terms of trade β that is, the ratio of the prices that we receive for our exports to the prices we pay for our imports. this improvement has helped to raise real incomes and stimulate domestic demand in canada. we have also been importantly affected by the sharp appreciation of the canadian dollar against the u. s. dollar over the past couple of years β an appreciation that has had a major impact in many sectors. the canadian economy has been adjusting to these economic forces. we have seen increased business investment spending in sectors that are benefiting from higher world prices. we are also seeing rising investment in sectors that are not very exposed to international trade, as such firms react to strong growth in domestic demand. and we've had very strong investment in housing. but in other sectors that are highly exposed to international trade, mainly goods - producing sectors, prices are either falling or rising very slowly. firms in these industries are feeling the pressure of the higher canadian dollar, and they are also facing increased competition from other regions of the world. the good news is that many canadian firms are making the necessary adjustments. investment spending is being directed towards increased specialization, higher productivity, and lower costs. since much of the productivity - enhancing machinery and equipment is priced in u. s. dollars, the stronger canadian dollar has made it easier for firms to make investments. a growing number of firms are looking to cut costs by importing more inputs, particularly from asia. other firms are phasing out production lines with low profit margins. through its monetary policy, the bank of canada is helping these adjustments by keeping inflation low, stable, | 0 |
to avoid preventable foreclosures, which can be costly to all involved β the borrower, the lender, and the communities in which they are located. steps that should be taken in this area include ensuring adequate funding and staffing of mortgage servicing operations and adopting systematic, proactive, and streamlined mortgage loan modification protocols aimed at providing long - term sustainability for borrowers. finally, the agencies expect banking organizations to conduct regular reviews of their management compensation policies to ensure that they encourage prudent lending and discourage excessive risk - taking. thank you. i would be pleased to take your questions. | liquidity to the financial system. these actions, together with similar measures in many other countries, appeared to stabilize the situation and to improve investor confidence in financial firms. notably, spreads on credit default swaps for large u. s. banking organizations, which had widened substantially over the previous few weeks, declined sharply on the day of the joint announcement. going forward, the ability of the treasury to use the tarp to inject capital into financial institutions and to take other steps to stabilize the financial system β including any actions that might be needed to prevent the disorderly failure of a systemically important financial institution β will be critical for restoring confidence and promoting the return of credit markets to more normal functioning. as i noted earlier, the federal reserve has taken a range of policy actions to provide liquidity to the financial system and thus promote the extension of credit to households and u. s. department of the treasury, emergency economic stabilization act website. businesses. our recent actions have focused on the market for commercial paper, which is an important source of short - term financing for many financial and nonfinancial firms. normally, money market mutual funds are major lenders in the commercial paper markets. however, in mid - september, a large fund suffered losses and heavy redemptions, causing it to suspend further redemptions and then close. in the next few weeks, investors withdrew almost $ 500 billion from prime money market funds. the funds, concerned about their ability to meet further redemptions, began to reduce their purchases of commercial paper and limit the maturity of such paper to only overnight or other very short maturities. as a result, interest rate spreads paid by issuers on longer - maturity commercial paper widened significantly, and issuers were exposed to the costs and risks of having to roll over increasingly large amounts of paper each day. the federal reserve has developed three programs to address these problems. the first allows money market mutual funds to sell asset - backed commercial paper to banking organizations, which are then permitted to borrow against the paper on a non - recourse basis from the federal reserve bank of boston. usage of that facility peaked at around $ 150 billion. the facility contributed importantly to the ability of money funds to meet redemption pressures when they were most intense and remains available as a backstop should such pressures reemerge. the second program involves the funding of a special - purpose vehicle that purchases highly rated commercial paper issued by financial and nonfinancial businesses at a term of three months. this facility | 1 |
credit is functioning well in every aspect. the international credit markets are still largely closed to swedish companies and they cannot borrow from foreign banks to the same extent as before. the riksbank has also granted special liquidity assistance during the autumn to kaupthing bank sverige ab and carnegie investment bank ab. the liquidity assistance was offered in the form of loans against collateral and at a higher interest rate than on normal loans. the market turbulence and the great uncertainty that prevailed were reasons for granting liquidity assistance to safeguard financial stability, even though these institutions were relatively minor participants in the swedish financial market. confidence in the swedish financial system could have been seriously damaged if a failure like the one at lehman brothers had been allowed to occur. the riksbank β s assessment was that the two banks were experiencing temporary liquidity problems, but that their solvency was not threatened. finansinspektionen later revoked carnegie β s licence to conduct banking activities owing to serious deficiencies in the company β s risk management and violation of the law concerning asset management. the decision to revoke the licence thus had nothing to do with carnegie β s liquidity problems or with the riksbank β s loan. carnegie is now owned by the swedish national debt office and the riksbank β s liquidity assistance has been repaid. the riksdag ( the swedish parliament ) has also introduced a new act concerning support to credit institutions, which will give the government the opportunity to take the necessary measures to strengthen stability in the financial system. for instance, a government guarantee programme has been presented to support the banks β and mortgage institutions β medium - term funding, and a stability fund has been established to manage potential future solvency problems in swedish institutions. the current situation despite the crisis in the global financial markets and the increasingly gloomy economic prospects, the assessment is that the swedish banks still have good resilience to facing the situation that has arisen and future developments. 1 the losses arising from the international crisis have so far been limited, not least in an international perspective, and the swedish banks have good financial strength. in addition, most of the banks β borrowers have a good ability to pay their loans. to summarise, the riksbank β s assessment is therefore that the stability in the swedish financial system is satisfactory. but it is important to emphasise that the measures taken by the riksbank and other authorities are currently a necessary condition for this to be the case. | mr. stals elucidates the opportunities and concerns relating to the south african economy address by the governor of the south african reserve bank, dr. c. stals, at β forex 97 β : 39th international congress of the association cambiste internationale held in toronto on 30 / 5 / 97. 1. the new south africa after three years it is now just more than three years since the fully democratic election of a new government for south africa took place in april 1994. mr nelson mandela β s government has now firmly established itself, and has succeeded in allaying many of the fears that existed at that time, both in south africa and internationally. not all the developments in south africa over the past three years were positive and some major challenges still remain for the future. on balance, however, all reasonable south africans will agree that the reforms in the country succeeded in averting a major disaster and in opening up many new opportunities. one of the most encouraging developments is a growing demonstration of tolerance and comprehension by most south africans of the changing environment, and an unflagging determination to make the new south africa succeed. there is a deepening spirit of co - operation amongst the various groups, representing a complex multi - racial community. more and more joint public and private sector projects emerge, providing further support to the integration of all south africans in a single community. the new government has established itself as a stable government with the prospect of being in control of the country for a long period of time. important outstanding constitutional issues were resolved, such as the conversion of the interim constitution of 1994 into a final and more permanent version, and the operational relationships between central, regional and local government authorities. the economic growth rate improved, and over the past three years averaged 3. 1 per cent, compared with only 0. 6 per cent over the nine years from 1985 to 1993. the government β s initial macroeconomic policy was mainly based on a social and upliftment programme referred to as the reconstruction and development programme ( rdp ). with its emphasis on providing in the desperate social needs of many disadvantaged south africans without recognition of the factual constraint of limited overall resources, the rdp met with justifiable scepticism from many economists. its asymmetrical approach was rectified when the government in june 1996 supplemented the rdp with a macroeconomic strategy for growth, employment and redistribution ( gear ). in terms of the gear programme, structural economic adjustment must be implemented to | 0 |
##bn of sterling corporate bonds in the secondary market as part of a package of measures designed to ease monetary conditions following the referendum on leaving the european union. this so - called β corporate bond purchase scheme β ( cbps ) was increased to Β£20bn in 2020, in response to the economic impact of covid. it β s therefore fair to ask : as an investor in corporate assets in our own right, should we be taking steps to support the achievement of net zero? the bank as investor : reconciling monetary policy goals and market mispricing the first point to underscore is that the cbps began as, and will remain, a monetary policy tool. that means that the overall target stock will continue to be set by the mpc to achieve its inflation objective. so, in due course, when the economic outlook allows, the fund will unwind. we do not expect to be a permanent investor. to achieve the policy goals of the scheme, eligible bonds must be issued by non - financial companies making a material contribution to uk economic activity. and to protect public money, the bank imposes controls on credit quality, portfolio concentration and other financial risks. 12 these elements of the scheme will not change. a more interesting question relates to the composition of the cbps. up to now, we have aimed to replicate the structure of the sterling corporate bond market itself. we do that by dividing up our purchases across sectors according to the amount of debt outstanding ; and within sectors using competitive reverse auctions. the rationale for allocating purchases in this way has been to minimise the impact of the cbps on relative borrowing costs across sectors and firms. this approach, sometimes called β market neutrality β, has obvious attractions for central banks charged with setting monetary policy for the economy as a whole. but it has quite a striking implication for the carbon footprint of the cbps portfolio. chart 5 compares the proportion of the cbps held in each sector with the contribution of that sectoral holding to the total carbon footprint of the portfolio. and you can immediately see that some sectors β notably the utilities : electricity, water and gas β contribute more to the cbps β carbon footprint than their portfolio share might suggest. others by contrast contribute substantially less β eg the consumer, communications, property and finance sectors. a full set of eligibility criteria can be found here : https : / / www. bankofengland. co. uk / markets / market - notices / 2016 / asset - | a period of extraordinary volatility in the economy and at the same time we managed to absorb a 25 % fall in sterling β s effective exchange rate, something that historically would have created far more serious inflationary problems. the key question is whether the current inflation rate signals that inflation will persist above target. the mpc is conscious that the continuing high level of inflation poses the risk that inflation expectations may move up. and it may be some while before inflation returns to target. but at present, there is also a risk β at least as large β that once the temporary upward influences on inflation dissipate, the influence of spare capacity in the economy will push inflation below the target. consistent with that possibility, a range of other indicators β growth in broad money, pay, and the pressure of demand on supply, that together are likely to be a more reliable guide to inflationary pressure looking ahead β all remain extremely subdued. so not only can monetary policy play a role in smoothing the rebalancing process, it needs to do so if the outlook for inflation is to remain in line with the 2 % target in the medium term. because there are risks on both sides of the outlook, reasonable people can disagree about the monetary policy judgement. in recent speeches, different mpc members have emphasised upside and downside risks to inflation. after the event, no doubt whichever risk has crystallised will be described by the critics as inevitable. unfortunately, we do not have a crystal ball. so in setting policy today the only coherent approach is to balance those two risks. the next decade will not be nice. history suggests that after a financial crisis the hangover lasts for a while. so the next decade is likely to be a sober decade β a decade of savings, orderly budgets, and equitable rebalancing. our prospects remain closely linked to developments in the rest of the world. but we can influence the outcome, with monetary policy still a potent weapon to ensure that the amount of money in the economy is growing neither too slowly, as in the recent past, nor too quickly so as to reignite inflation. with that, and the inspiration provided by the black country β s example of how to adapt to economic change, i am sure of one thing. a sober decade may not be fun but it is necessary for our economic health. | 0.5 |
consistent with the evidence of greater competition in grocery and general merchandise stores in canada. looking forward, ongoing structural change in this sector suggests that competitive pressures are likely to remain intense for some time. however, the recent depreciation of the canadian dollar can be expected to offset at least some of the downward pressure on retail food prices. other notable retail entrants include marshalls, j. crew and nordstrom. the 2012 federal budget raised duty exemptions on goods purchased abroad. the exemption for a stay of 24 to 48 hours was increased from $ 50 to $ 200, while the exemption for a trip longer than 48 hours was increased from $ 400 to $ 800, both effective 1 june 2012. in total, in 2012, canadians placed nearly 164 million orders, valued at approximately $ 18. 9 billion. this dollar amount of spending represents only about 1. 9 per cent of nominal consumption in canada ( canadian internet use survey, statistics canada ). bis central bankers β speeches for non - durable goods, which include items such as personal care products, price growth has eased significantly in recent quarters, with prices outright falling in the fourth quarter of 2013 ( chart 20 ). in fact, the last time the rate of inflation for non - durable goods was lower than the current level was when walmart entered the canadian market in the mid - 1990s. overall, our expectation is that while increased competition will have a permanent effect on the level of prices, its impact on the rate of inflation will be transitory. our best judgment is that more intense competition will subtract around 0. 3 percentage points from core inflation in 2014. it is difficult to predict how long increased competition will weigh on inflation, but in our base - case projection we assume that it will continue to drive prices lower for about another year. implications for monetary policy as we just saw, subdued inflation appears to reflect a significant and persistent amount of excess supply in the economy and heightened competition in the retail sector. our best estimates of the impact of these two factors still leave some of the disinflation unexplained, but together they are not far off. with at least a partial diagnosis, it is time to consider the treatment. this is most easily demonstrated by comparing the effects of a fall in aggregate demand and an increase in competition in a very simple, stylized model of the economy. the model consists of the phillips curve previously outlined, equations linking aggregate demand to interest rates and a monetary policy rule in which the policy interest | years. inflation targeting was designed against a backdrop of high inflation, but its key features of symmetry and flexibility also give us room to manoeuvre in an environment of disinflation. we are doing our best to identify the main drivers of disinflation and are continuously assessing their impact on the economy and their persistence. there is, of course, some uncertainty about our judgments, particularly as to how long increased competition will depress inflation. i can assure you that the bank of canada will continue to monitor developments closely, whether i am there or not. thank you. s. poloz, β monetary policy as risk management β ( speech to the canadian club of montreal, montreal, qc, 12 december 2013 ). bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches | 1 |
mervyn king : the new inflation target speech by mr mervyn king, governor of the bank of england, at the annual birmingham forward / cbi business luncheon, birmingham, 20 january 2004. * * * i have always wanted to perform at villa park. now is my chance. economists at villa park are not as unusual a sight as you might think. it is not well known that john maynard keynes also came to villa park. in september 1913 keynes was visiting birmingham and decided to see the match of the day between the two top teams in the country - aston villa and blackburn rovers. on the following day, keynes wrote to duncan grant1 : β there has been some amusement here, but mixed up with a good deal of boredom. birmingham has a very definite character. i went yesterday with 40, 000 other people to one of the peak football matches. the scene was very much as i imagine the coliseum. the ground is built on the same model - an immense oval rising all round tier above tier in about 50 rows so far as i could count. the crowd maintained a dull roar nearly all the time, rising into a frenzy of excitement and rage when the slightest thing happened. the match was between the two principal β league β teams of england. the local people were beaten by a team from lancashire, who had, so i was told, β the best right wing in england, and the most expensive β β. sadly, as keynes recorded, aston villa lost 3 - 1 and finished that season as runners - up to blackburn. it is unclear whether keynes ever again visited a football ground, and there must be a real possibility that, for him, villa park was the sum total of his football experience. in later years some of keynes β s disciples forgot not only his connection with villa park but also his view that price stability was a necessary condition for a successful economy. tomorrow is the 80th anniversary of the death of lenin, and it was to lenin that keynes attributed the remark : β the best way to destroy the capitalist system was to debauch the currency. by a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens β. after doing their best to test this proposition, successive british governments have committed themselves to stable and low inflation. and for the past decade, inflation has ceased to be a dominant consideration in the economic decisions of families and businesses. that has been achieved by aiming at a | symmetrical inflation target. crucial to the success of such a policy is the ability to anchor inflation expectations on the target. for this to be the case, the target must be clear and well understood. from may 1997 the target was 2Β½ % for rpix inflation. but in december the chancellor gave the monetary policy committee a new target for inflation. it is 2 % as measured by the consumer prices index or cpi, formerly known as the harmonised index of consumer prices. what is this new inflation measure, and how will it affect monetary policy? on the rpix measure, inflation was at or above target for the whole of last year. in contrast, the cpi measure of inflation was below 2 % throughout the same period. indeed, cpi inflation has been below 2 % for all bar three months since may 1997, and it is almost six years since it was last above 2 %. how can it be possible for inflation to move from above to below target - just like that? to answer that question, we need to examine how inflation is calculated. inflation is measured as the increase in the price of a particular basket of goods and services over the previous twelve months. so there are as many measures of inflation as there are baskets. since no two people in this room spend their income on exactly the same items, in principle each of you could construct your own measure of inflation. the office for national statistics calculates an average inflation measure by weighting together the inflation rates of over 650 different goods and services, using as weights the estimated expenditure on each item for a representative household. but where unpublished writings of j. m. keynes, copyright of the provost and scholars of king β s college, cambridge to whom i am grateful for permission to publish this extract. a reference to the letter appeared in skidelsky, r. john maynard keynes volume 1 : hopes betrayed, 1883 - 1920, macmillan, london, 1983, page 280. the official attendance on 13 september was 38, 575 ; the villa scorer was the incomparable clem stephenson, who may have lacked pace but whose passes were, according to contemporary observers, β as sweet as stolen kisses β ; and the β most expensive β right winger for blackburn rovers was john β jocky β simpson who cost blackburn a record fee of Β£1, 850 when he was transferred from falkirk in 1911. do those prices come from? each month - on β index day β ( either the second or third tuesday of the month ) - around | 1 |
thirachai phuvanatnaranubala : prospects for the thai economy speech by mr thirachai phuvanatnaranubala, deputy governor of the bank of thailand, at the german - thai chamber of commerce annual meeting, bangkok, 18 february 2003. * * * ambassador andreas von stechow, distinguished guests, ladies and gentlemen, it is a pleasure for me to be here. my task today is to assure you, as one of our most important groups of foreign investors, that the thai economy is doing well. and for this year my task is quite easy. 2002 was a good year for the thai economy. despite much uncertainty in the global conditions, the thai economy made a robust recovery with stability, both on the internal and external fronts. you may recall that 2 years after the crisis, we started to have positive growth in 1999. gdp growth rates for 1999 and 2000 were strong at 4. 4 and 4. 6 %. but the year after that, in 2001, the global downturn adversely affected our export and made growth for 2001 dip to 1. 9 %. however, we recovered in 2002 when growth for the first three quarters climbed back up to 4. 9 %. for the final quarter, our initial estimate is just over 5 %, which would result in growth for 2002 the whole year at 5 % as well. this is a good performance in the midst of slow growth in many parts of the world. so what has caused this? first, there was an export recovery. export contracted as much as - 7 % in 2001. but it began to recover in april 2002. the latest figure for the whole year showed the annualised growth at almost 6 %. this was a dramatic turn around. it should be noted that the export recovery did not come entirely from our traditional markets, the us and europe. what we did see was that export to asia increased by over 7 %, somewhat higher than the average figure, with china absorbing a good 23 % more of thai goods this year compared to last. second, farm prices improved substantially. prices increased by 11 % boosting farm income by the same percentage for the whole year. both these factors helped improve our domestic consumption especially the sale of automobiles, motorcycles and construction. third, there was a strong recovery of other domestic demand. part of this was helped by the fiscal stimulation. in 2002 the budget deficit was at 3. 6 % of gdp. the other factor was the low interest rate environment | ##it, and i have no doubt that the financial ties between london and the eu27 will remain strong β all of you will work to ensure that. close cooperation and a continued dialogue between the supervisory authorities will therefore be necessary, especially in times of crisis. i believe that the ssm and the pra should ensure information sharing and reciprocal 1 / 2 bis central bankers'speeches consultation while respecting independent supervisory decision making in each jurisdiction. now i β m sure you are wondering what a split of responsibilities would mean for uk branches of german ( and other ssm ) banks. the truth is : we can β t really tell just yet. we β ll have to wait for the final outcome of the negotiations between supervisory authorities. as i have said, these negotiations are already under way, and i am optimistic that they will be concluded soon. overall, our goal must be to achieve an adequate level of information sharing and joint supervisory work that does not lead to an increased workload for all parties involved. certainly, it will not be possible to develop a one - size - fits - all solution. the agreement on a split of responsibilities will need to leave room for accommodating specific cases. on the basis of the agreement, the pra plans to process applications for third country branches. 4 conclusion ladies and gentlemen, in the short run, the temporary permissions regime will mitigate the outcome of a possible hard brexit. nevertheless, thorough preparations by financial institutions are necessary. what happens in the long run depends on how brexit re - shapes the european financial system. where does all this leave us? in a way, you could simply say : uncertainty continues. but we should not forget that we have made quite some progress since the referendum in june 2016. at that time, brexit and its potential repercussions were essentially a black box. since then, both financial institutions and supervisors have put tremendous effort into better understanding and preparing for every possible outcome. and while some tasks are yet to be completed, most banks are well advanced in their preparations. 2 / 2 bis central bankers'speeches | 0 |
another, and with each institution it ate, it grew bigger and stronger. we had just watched it eat lehman. we could not stop it there because we are only authorized to lend against collateral, and lehman did not have enough collateral. now it was focused on aig. unlike the situation with lehman brothers, we were presented with an action we could take, a loan we could make to avoid the collapse of aig. our knowledge of the company was limited because we had never supervised aig, but the loan could be secured with collateral. based on our assessments of the collateral, we believed the risk of the loans to be limited. and while the risk of making the loan was limited, the risk of not making the loan β of letting aig, which was significantly larger than lehman, fail β was certain to be huge. and no other entity β not a private company, not a consortium of private companies acting together, not any other branch or agency of the government β was in a position to do anything. the clock was ticking, and default was imminent. there was no time to gather more information or find another solution. so i ask you, what would you have done? it was in this context that the federal reserve, with the full support of the treasury, made a loan to aig to prevent its failure. the loan imposed tough terms, senior management was replaced, and shareholders lost almost all of their investments. if i had to cast that vote again, even knowing all that followed, including the criticism that we have received, i wouldn β t change it. i still believe that the consequences would have been far worse for all businesses and consumers if we had let aig fail. despite the claims by some that healthier wall street firms or even the small businesses and consumers on main street did not benefit from assistance to aig, i would argue that no business or individual was immune to the effects of a sequential collapse of key financial intermediaries. as it was, we still had frozen credit markets that necessitated the facilities i discussed earlier. in the wake of the lehman failure and the near failure of aig, it was as if someone turned off a switch on business activity. almost overnight, businesses went into full protection mode, halting all capital expenditures, shedding inventory, and slashing expenses. in the face of massive unemployment caused by layoffs and business failures, consumers stopped spending. this first became clear to me during the october 2008 board of directors meeting at the | mr. greenspan presents the views of the federal reserve in its semi - annual report on monetary policy testimony of the chairman of the board of governors of the federal reserve system, mr. alan greenspan, before the senate banking committee on 26 / 2 / 97. i appreciate the opportunity to appear before this committee to present the federal reserve β s semiannual report on monetary policy. the performance of the u. s. economy over the past year has been quite favorable. real gdp growth has picked up to more than three percent over the four quarters of 1996, as the economy progressed through its sixth year of expansion. employers added more than two - and - a - half million workers to their payrolls in 1996, and the unemployment rate fell further. nominal wages and salaries have increased faster than prices, meaning workers have gained ground in real terms, reflecting the benefits of rising productivity. outside the food and energy sectors, increases in consumer prices actually have continued to edge lower, with core cpi inflation only 2Β½ percent over the past twelve months. low inflation last year was both a symptom and a cause of the good economy. it was symptomatic of the balance and solidity of the expansion and the evident absence of major strains on resources. at the same time, continued low levels of inflation and inflation expectations have been a key support for healthy economic performance. they have helped to create a financial and economic environment conducive to strong capital spending and longer - range planning generally, and so to sustained economic expansion. consequently, the federal open market committee ( fomc ) believes it is crucial to keep inflation contained in the near term and ultimately to move toward price stability. looking ahead, the members of the fomc expect inflation to remain low and the economy to grow appreciably further. however, as i shall be discussing, the unusually good inflation performance of recent years seems to owe in large part to some temporary factors, of uncertain longevity. thus, the fomc continues to see the distribution of inflation risks skewed to the upside and must remain especially alert to the possible emergence of imbalances in financial and product markets that ultimately could endanger the maintenance of the low - inflation environment. sustainable economic expansion for 1997 and beyond depends on it. for some, the benign inflation outcome of 1996 might be considered surprising, as resource utilization rates - - particularly of labor - - were in the neighborhood of those that historically have been associated with building inflation pressures. | 0 |
klibor which has no direct correlation with the changes in the rental rate. actively promote the role of the market players the islamic financial services industry is expected to benefit from the recent increase in the number of players following the launching of islamic subsidiaries, the issuance of foreign islamic banking licences and the measures to issue additional takaful licences. the entrance of these players will contribute to an active participation in both the primary and secondary markets for islamic financial instruments. ladies and gentlemen, i hope this seminar will crystallize positive ideas to pave the way and contribute towards the development of a more vibrant and dynamic islamic financial system. i wish to take this opportunity to thank the speakers for accepting our invitation to share their invaluable knowledge and experiences in this seminar. the participation by researchers and practitioners in the islamic financial system is also important. on this note, i wish you all a successful seminar. | intermediaries alike, the bank developed dedicated webpages for investors interested in the developments of the malaysian financial market. there are continuous updates on what is new in our markets, and important updates on foreign exchange administration rules that market participants may use as a point of reference in their ringgit dealings. many of these initiatives focus on increasing efficiency, access and transparency. however, the reality is that markets will always be imperfect. in the 1970s through to the 1990s, we were told that financial markets can be relied upon to be efficient, that prices will reflect all available public information and hence appropriately reflect the fundamentals of an instrument or asset. regulators were asked to leave markets alone. liberalisation and deregulation were the two key themes and policy push on emerging markets that would enable the development of liquid financial markets. then in the 1990s, the asian financial crisis happened. together with liberalisation and deregulation came excessive speculation and destabilising capital flows. the costs of adopting developed market policy approaches to developing and emerging markets proved high. in dealing with the crisis, we rolled back selected liberalisation initiatives and deinternationalised the ringgit. the latter enabled ringgit trading to be brought back onshore and protected it from the laissez faire offshore markets that were prone to such volatility and risks. this non - internationalisation policy remained intact through the years. yet markets found a way to circumvent it through the non - deliverable forward market. the 2016 enforcement reaffirmed the ringgit non - internationalisation and remains a strong prudential safeguard against excessive volatility and external risks. based on our experience and understanding of the market and its imperfections, there will always thus be a need for rules, regulations and the regulator to see to that market imperfections are not exploited or lead to instability, and that markets continue to be β fit for purpose β or serve their functions. in emerging markets, the industry also needs to come together to work for continued development. only then will we be able to continue progressively growing in a stable and healthy environment. charting the upcoming financial sector blueprint while we see continued growth, a greater understanding of what is to come is key to maintain such momentum. the operating landscape we are entering is expected to be equally challenging and heightened with unknown risks. global growth outlook is forecasted to remain subdued, with slow growth expected from advanced economies and this may inhibit advancement in emerging economies. financial market conditions are expected | 0.5 |
sector will be fully addressed during the plenary sessions. these include sustaining macroeconomic stability through election cycles ; infrastructural development to support the productive sector and trade ; digitisation of the economy to enhance efficiency ; scaling up human capital development which is critical for sustainable growth and development, and last but not least, sustaining financial stability after the clean - up exercise. i believe that we will have fruitful deliberations from the distinguished panellists assembled for the various sessions. thank you. page | 4 | ##ary policy has to last longer to fulfill the mandate. so, β weak dominance β is essentially about whether policies complement or compensate for each other. and what determines this is the framework β whether it is strong enough to ensure the right policies dominate, and whether comprehensive enough to achieve that along all the relevant dimensions of policy interaction. while such a framework is important in any country, it is even more important in a multicountry union. in a single country coordination and policy adjustments involve a single treasury and economics ministry. but in a monetary union there are multiple different policymakers and policies to align. a strong framework that constrains discretion is therefore indispensable. fiscal dominance though there is much that can be said about how fiscal dominance in this context, i have discussed this elsewhere. 3 the risk of β weak β fiscal dominance was actually recognised by lamfalussy. he noted that the lack of an appropriate aggregate fiscal stance for the euro area could lead to monetary policy having to bear too much of the adjustment burden : β the combination of a small community budget with large β¦. national budgets leads to the conclusion that, in the absence of fiscal coordination, the global fiscal policy of the emu would be the accidental outcome of decisions taken by member states.... as a result, the only global macroeconomic tool available within the emu would be the common monetary policy implemented by the european central banking system. β 4 there is much to learn from this comment. but in the remainder of my remarks i would like to focus on two other areas where we learned important lessons from the crisis for our future framework : financial policies and structural policies. financial dominance for financial policies β that is, the governance of the banking sector β we saw clearly during the crisis how a weak framework can allow weak forms of dominance to take hold. both monetary and fiscal policies can have their choices constrained by so - called β financial dominance β. 5 for monetary policy, the problem stems mostly from inadequate supervision. at the micro level, if supervisors show too much forbearance to undercapitalised banks, they can end up effectively shifting the burden onto monetary policy β as when those banks lose access to market funding, or have to pay higher risk premia, they turn to central bank funding see speech by cΕure, b. on β outright monetary transactions, one year on β, berlin, 2 september 2013. lamfalussy, a. ( 1989 ), macro - coordination of fiscal | 0 |
system, which is the backbone of the financial system. 30 banca d β italia performs all these tasks, working with law enforcement and judicial authorities, as well as with other national and foreign supervisory and regulatory bodies. * * * banca d β italia reviewed 100, 000 complaints from bank customers over the decade 2014 - 23. the banking and financial ombudsman handled 210, 000 complaints, with the assistance of banca d β italia β s staff. as a result of the latter and of our supervisory activities, more than β¬1 billion were returned to customers. the insurance ombudsman service will be rolled out over the next few months. banca d β italia is responsible for anti - money laundering supervision of financial intermediaries, issues relevant regulations and is involved in setting national and international rules and standards. it carried out about 350 inspections and 1, 300 interventions over 2019 - 23. the financial intelligence unit for italy ( uif ), which works with staff and funding from banca d β italia, examines reports of alleged money laundering and terrorist financing ( more than 150, 000 suspicious transactions were reported in 2023 ) and carries out its financial analysis. at national level, banca d β italia fosters cooperation with various institutional players through its computer emergency response team ( cert - bi ). together with the italian banking association ( abi ), it chairs the computer emergency response team for the italian financial sector ( certfin ). at european level, banca d β italia is a member of the euro cyber resilience board for pan - european financial infrastructures ( ecrb ) and the cyber information and intelligence sharing initiative ( ciisi - eu ) for sharing information and cyber intelligence across systemic financial structures. at national and european level, banca d β italia monitors cyber risks in order to strengthen the security and business continuity safeguards of intermediaries. it identifies minimum requirements and measures for information system management. banca d β italia manages a large number of italian and european payment infrastructures. for example, at european level, the bank has been involved in the development and is responsible for the operational management of the eurosystem β s market infrastructures, consisting of : the t2 system for the real - time gross settlement of large - value transactions in central bank money between financial institutions and with the central bank ; the target2 - securites ( t2s ) platform, which enables securities transactions in central bank money to be settled simultaneously based | few years on monetary policy and banking supervision are critical steps ahead towards a stronger union. financial fragmentation along national lines, which came to represent a hallmark of the euro area crisis, has been reversed by the european response to the crisis ; financial integration is now back to a level comparable to pre - sovereign debt crisis levels, although some fragmentation still remains. however, the recent opposition to a common european deposit insurance scheme is unwelcome news if not outright regress. some claim that for european integration to proceed more collective responsibility needs to be necessarily accompanied by a parallel transfer of sovereignty. one may reply that this transfer of sovereignty has already taken place for monetary policy and banking supervision, without the corresponding introduction of common macroeconomic stabilization mechanisms or common deposit insurance. what is certain, most of the actions needed to strengthen emu calls for trust. a confrontational approach would be detrimental. much can be done at the level of the european institutions β parliament, council, commission β to make them better instruments of a genuine union, rather than a collection of states. each country must continue to build on the progress made so far, before or during the crisis, in macroeconomic and structural adjustment. all must show some understanding for their peers and play their part in renewing a shared sense of purpose and trust. we have to realize that europe β s strength lies in the fact that we are united. bis central bankers β speeches | 0.5 |
strong house price inflation as we can see from the chart, inflation - adjusted house prices have fluctuated over the past 150 years. house prices reached a preliminary peak in 1899, the year before the housing market crash in kristiania ( the name of oslo at the time ), falling thereafter, especially during and after the two world wars. if you had bought a home just before the kristiania crash, it would have taken more than 80 years for you to recoup your investment. and after the fall in house prices at the end of the 1980s, 12 years passed before prices returned to 1987 levels. following the banking crisis at the beginning of the 1990s, house prices took off and in real terms are now more than twice as high as before the housing bubble burst at the end of the 1980s. a home purchase has been for many years an exceptionally good investment. thanks to rapid house price inflation, many of us have accumulated considerable wealth β at least on paper. chart 6 : how much housing can an average wage buy? in the most of the past century, norwegians experienced a substantial rise in prosperity. larger and cheaper housing was a significant contributor. this meant an ordinary wage could by more housing space, even though the real price of housing also rose sharply. but since the beginning of the 1990s, the average house has become more expensive also relative to income. or to put it another way, an average wage can buy less than half as many square metres today than it could in 1991. chart 7 : higher debt β lower interest burden since our living conditions are generally not more cramped than before, you might think that we have to spend more of our income on financing our homes. but this is not the case. although we hold record - high levels of debt, our interest burden is not heavier now than it was 30 years ago. interest rates have fallen. since income has risen markedly at the same time, principal payments on large loans have also been manageable. norwegian households have responded by taking out increasingly larger mortgages to finance increasingly more expensive housing. this would not have been possible without access to cheap credit. low interest rates have made it possible to maintain housing quality, even though house prices have crept steadily upwards. moreover, lower interest rates, longer repayment periods and the introduction of interest - only periods have made it possible to borrow more without squeezing liquidity. this has also enabled prospective homebuyers to submit a bid higher than they normally would have done, with increasingly | deepak mohanty : india β s post - crisis macroeconomic challenges speech by mr deepak mohanty, executive director of the reserve bank of india, at the ruia college, mumbai, 28 august 2012. * * * the assistance provided by rajeev jain and binod b bhoi in preparation of the speech is acknowledged. i thank professor aditi abhyankar for the opportunity for being a part of such a distinguished panel and share my thoughts with the young audience. as the future of the country, you have a great stake in the performance of our economy in a globalised world : the opportunity it provides, the promise it holds and the challenges we face. therefore, the focus of my talk today is on the recent macroeconomic performance of the indian economy. as you know the indian economy experienced an acceleration in growth in the early 2000s which was dented by the global financial crisis, particularly after the collapse of lehman brothers in september 2008. though the world economy has recovered from the recession in 2009, it continues to be buffeted by problems. apart from the uncertainties in the global economy, indian economy faces challenges from several other domestic factors. against this background, i sequence my presentation as follows. first, i will situate india in the global economy under the rubric of emerging and developing economies ( edes ). second, i compare and contrast the macroeconomic performance in the post crisis 4 - year period of 2008 β 12 with the preceding high growth 5 - year period of 2003 β 08. third, i highlight a few key challenges that the indian economy needs to overcome to regain its growth momentum. finally, i conclude with the conjecture : when can india become a high middle - income country, for your inquisitive minds to ponder over? india in the world the global economic landscape has changed substantially over the past decade with the share of edes in the global gdp rising from about 20 per cent in 2000 to 36 per cent by 2011 in terms of us dollar at market exchange rate. in terms of purchasing power parity ( ppp ), the share rose from 37 per cent to almost 49 per cent. thus, at the current juncture, the global economic weight is equally split between the edes and advanced economies ( aes ). but, what is interesting is that the edes will continue to grow faster than the aes, even under adverse economic conditions. this will increasingly tilt the global economic balance in favour of edes. hence | 0 |
central bank of sri lanka recast its objectives in december 2002 into two core objectives, namely, economic and price stability and financial system stability with a view to encouraging and promoting the development of the productive resources of sri lanka. the change has enabled the central bank to free itself from multiple objectives for pursuing its core objectives. the theme of this seminar is central bank governance and how such governance is related to strategic planning in central banks. these issues are not a novelty in a private sector organisation. this is because private organisations operating under competitive market conditions should review the existing strategies and adopt new ones for survival and success. central banks being organisations created and powered by statutes did not consider it necessary to adopt such strategies in their medium to long term planning. however, changes in the world and especially, the changes in the complexities in financial systems, have forced central banks to be mindful of the need for moving into strategic planning as a major management device. in this sense, the theme of the seminar is topical, opportune and timely. as we all central bankers know, the conduct of monetary policy and attaining financial system stability are the primary tasks of a central bank. hence, the strategic plan of a central bank should be formulated in such a way that it strategically links its goals, objectives and action plans to these primary tasks. like any other corporate entity, the central bank also has a mission of achieving a long term objective, that is, macro economic development through maintaining price stability and ensuring the financial system stability. in this context, strategic planning plays a very important role in assisting the central banks to effectively and efficiently utilise the limited resources at their disposal to achieve such objectives and accomplish the given tasks. however, the successful implementation of strategic plan will mainly depend on the legal framework governing a central bank, which provides for its 1 / 2 independence, accountability and transparency. indeed, in recent times, especially in the aftermath of asian crisis in late 1990s, we have seen several countries amending the laws governing their central banks. such amendments have given them greater independence in the conduct of monetary policy. the current world trends have required the central banks to be transparent and accountable. this would be attained by ensuring a greater disclosure policy on their decisions. i have no doubt that today β s seminar will lead to a healthy discussion and exchange of views on comparative policies among seacen member central banks and monetary authorities in selected areas of corporate governance. the first session will cover strategic planning process for central banks, for which a | background paper has been prepared in consultation with the seacen centre. i hope the paper will be a useful document to initiate fruitful discussion on the issue of strategic planning for central banks. in addition, mr gavin bingham, head of international liaison, bank for international settlement, will present an overview of current issues and practices relating to this topic. i am confident that the participants would contribute with their country specific experiences on central bank governance and specifically on their experiences with the formulation and implementation of strategic plans in the respective central banks. the second session will cover selected central bank governance issues and will serve as a follow - up to the seacen - bis seminar on central bank governance conducted in langkawi, malaysia in february 2004. the discussion will specifically focus on aspects of central bank boards as well as lessons and conclusions drawn from the february seminar. ladies and gentlemen, i have no doubt that deliberations of this seminar will be of great benefit to all of us. i also hope your journey to sri lanka will give you a chance to see a little of our country and meet our people. we have arranged for you to see some places of interest in sri lanka. let me conclude by wishing you a productive seminar and pleasant stay in sri lanka. thank you. 2 / 2 | 1 |
ms. phillips discusses the federal reserve board's views on proposed accounting standards for derivatives and risk management activities testimony of ms. susan m. phillips, a member of the board of governors of the us federal reserve system, before the subcommittee on capital markets, securities and government sponsored enterprises of the committee on banking and financial services, u. s. house of representatives, on 1 / 10 / 97. i welcome this opportunity to discuss the federal reserve board β s views on proposed accounting standards for derivatives and risk management activities issued by the financial accounting standards board ( fasb ). in approaching this complex matter, it should be acknowledged up front that most responsible observers and market participants share an interest in improved accounting standards and disclosure of information that is useful and relevant to the broad range of users of financial statements. thus, the desirability of meaningful disclosure is not the issue. all would agree, i think, that enhanced financial disclosure and market transparency can lead to more efficient financial markets, more accurate pricing of risks, and more effective market discipline. with respect to financial disclosures, the interests of most firm managers, investors, and other market participants are essentially the same. market participants can benefit from enhanced disclosure by being in a better position to understand the financial condition of their counterparties and competitors. investors have an obvious interest in being able to make meaningful assessments of a firm β s performance, underlying trends, and income - producing potential. sound, well - managed firms can benefit if better disclosure enables them to obtain funds at risk premiums that accurately reflect their lower risk profiles. inadequate financial disclosures, on the other hand, could penalize well - managed firms if market participants are unable to assess their fundamental financial strength. while most market participants favor sound accounting standards and meaningful disclosure, a key question is how to ensure that accounting practices and techniques reflect, and are consistent with, how a business is run, that is, its overall business strategy. indeed, accounting methodology should measure the results of a business purpose or strategy, and not be an end in itself. for example, in the case of a company that actively trades financial instruments or other products to profit from short - term price movements, such as a securities firm, reporting trading positions at fair values appropriately measures the success or failure of that business strategy, and market participants expect this reporting treatment. however, for many other types of businesses, such as a manufacturer or a lender that funds loans with liabilities of equal maturity, market value accounting in the | primary financial statements may not accurately reflect business strategies or appropriately measure the firm β s underlying performance and condition. in these cases, although information about fair value can be useful in supplemental disclosures, it is questionable whether there is widespread demand for market value accounting to become the basis for the preparation of the primary financial statements. although the needs of financial statement users may vary, a critical function of financial statements is to reflect in a meaningful way underlying trends in the financial performance and condition of the firm. the application of market value accounting to business strategies where it is not appropriate, and particularly when applied on a piecemeal basis, may lead to increased volatility or fluctuation in reported results and actually obscure underlying trends or developments affecting a firm β s condition and performance. requiring companies to adopt market value accounting where it is not consistent with their business strategies can cause them to incur significant costs to provide information that may not reflect in a meaningful way their underlying circumstances or trends in their performance. moreover, from the standpoint of financial statement analysts and other users, having to make adjustments to remove the effects of this accounting volatility from income statements and balance sheets - - volatility that is not consistent with firm β s risk positions - - can also impose significant costs without offsetting benefits. these problems can be minimized by placing market values in meaningful supplemental disclosures rather than by forcing their use in the primary financial statements. such an approach would give analysts the information they need, without imposing the broader costs of having to reverse or back out the effects of artificial volatility from the primary financial statements. of course, financial statements and supplemental disclosures must be accurate and not misrepresent a firm β s financial circumstances - - a problem that can be minimized when financial reports are subject to thorough review by management and external auditors. federal reserve β s experience the federal reserve board has a long - standing interest in the quality of financial reporting. this arises from our role as the nation β s central bank, and as the supervisor of bank holding companies, state member banks, and the u. s. operations of foreign banking organizations ( fbos ). the federal reserve and other bank supervisors are responsible for assessing the safety and soundness of the institutions they regulate. in this regard, the federal reserve relies on off - site monitoring, on - site supervision, capital and other regulatory requirements, and policies that encourage sound risk management practices. we believe that market discipline - - supported by appropriate | 1 |
article / pii / s0304393223000417? via % 3dihub 7 / 7 bis - central bankers'speeches | ( 3 - year - long ) refinancing operations were conducted to remove liquidity uncertainty and facilitate the function of the euro area money market. again, the final objective was to improve the transmission of the proper monetary policy. another crucial segment in the monetary policy transmission is the government bond market. partly due its size β it is the largest capital market in the euro area β it lays the foundation for price formation in other capital markets, like bank and corporate bonds. government bonds are also important repo instruments. a year ago, in spring and summer 2012, fears of a break - up of the single currency area and the associated implicit exchange rate risk led to several tensions in the euro area capital markets. as a result, the steering of monetary policy was not functioning fully, or was, in part, not functioning at all. at the same time, economic indicators pointed to a significant credit crunch and a severe decline in economic activity. as a result, there was a risk of an incipient deflationary spiral ; the primary goal of the governing council β price stability β was not ensured. against this background, the governing council set up the omt programme. there are three crucial elements in the programme. first, a necessary conditionality is to ensure that the member state remains under considerable pressure to implement reforms and maintain fiscal discipline. second, this necessary conditionality is not yet sufficient. in addition an omt transaction must be warranted from a monetary policy perspective. this decision will be made independently by the governing council of the ecb. third, the transactions will be discontinued during the quarterly efsf / esm programme evaluation period. the continuation of omt transactions requires that the programme remains on track. the omt is designed to stay strictly within the mandate of the ecb. central banks have been able to play a stabilising role first against the forces of the financial collapse and then supporting a recovery of the real economy. but the central banks cannot repair the balance sheets. they cannot consolidate the public finances. central banks cannot implement the structural reforms. everyone has to take his or her own responsibility. bis central bankers β speeches we need more growth. how can we achieve it? the pace of recovery in advanced economies has been disappointing. still between 2001 and 2007, they grew 2. 3 %. between 2010 and 2012 annual average was 1. 3 %. the bis report from 23 june 2013 reads : β the only major exception is germany, which bounced back from a | 0.5 |
prize - winning architectural offices which participated in the revision phase of the competition. over the past 11 months, they have gone into substantial depth to elaborate the details of their design proposals. the high quality and professionalism of the work done in the revision phase was very much appreciated by the governing council. the governing council β s decision on the design of the ecb β s premises was reached after extensive discussion and careful evaluation of the prize - winning designs. as a public institution, we are committed to performing our tasks effectively and to using our financial resources prudently. therefore, it was essential to have a thorough and comprehensive assessment - even if that prolonged the process somewhat - so as to make the right decision on a matter of such symbolic and financial importance. let me now explain briefly the main reasons why the governing council chose coop himmelb ( l ) au β s design. i am delighted that the architect, prof. wolf prix, and his colleagues, mr dreibholz and mr halm, have joined us for this press briefing today. the design chosen the governing council judged the revised design concept of coop himmelb ( l ) au not only to be superior from an overall aesthetic and urban planning perspective, but also to be the one that best met the functional and technical requirements specified by the ecb. it was felt that this expressive, dynamic and appealing design would serve as a unique landmark, and result in the ecb β s new premises having a strong identity. in the governing council β s view, this design concept had features that reflected the ecb β s values - in particular, unity and transparency - and translated them into architectural language. furthermore, the way in which the three elements of the design - the high - rise building of a twisted shape, the β groundscraper β and the grossmarkthalle - formed a harmonious and well - proportioned ensemble was assessed very positively. we also considered that the integration of the grossmarkthalle into this ensemble was addressed in an excellent way, while at the same time respecting the fundamental appearance of this historic building. the design concept also met, in principle, the ecb β s functional and spatial requirements. the governing council appreciated especially the good connection of the different functional areas and the excellent workplace quality, guaranteeing natural light for all members of staff. using the atrium as a large communicative zone within the two tower buildings was also welcomed. the governing council noted that all requirements for the energy | european central bank : press conference on the chosen design for the new ecb premises introductory statements by mr jean - claude trichet, president of the european central bank, and mr lucas papademos, vice president of the european central bank, to the press conference on the chosen design of the international urban planning and architectural design competition for the new ecb premises, frankfurt, 20 january 2005. * * * ladies and gentlemen, we have invited you today for the presentation of the chosen design proposal in the international urban planning and architectural design competition for the new ecb premises. in our introductory remarks we would like to do the following : first, to briefly recall the main steps that have led to the outcome of the competition. second, to present the chosen design proposal in some detail. and third, to explain what happens next. afterwards, we will be happy to answer further questions, as will the chosen architect when it comes to technical questions on the design proposal. the decision of the governing council / the conclusion of the competition last thursday, on 13 january 2005, β the governing council chose the design for the ecb β s new premises out of the 3 revised design proposals of the 3 prize winners of the international urban planning and architectural design competition. after extensive discussion and a careful evaluation, the governing council concluded that the revised design concept of coop himmelb ( l ) au best meets the functional and technical requirements specified by the ecb, and has features that reflect the ecb β s values and transforms them into architectural language. β [ quotation of the press release ] on 13 february 2004 an international jury consisting of architects, eurosystem representatives and a representative of the city of frankfurt chose three winning designs in accordance with the following criteria, as laid down in the competition rules out of the 12 design concepts submitted in the second phase of the competition : 1. overall town - planning, architecture and landscape ; 2. compliance with the main features of the functional and spatial programme, including modularity ; 3. feasible approach to an energy / environmental concept and compliance with the main features of the ecb β s technical requirements ; 4. compliance with the relevant rules, in particular in the field of building law and environmental law. the first prize was awarded to coop himmelb ( l ) au, vienna ; the second prize to asp schweger assoziierte, berlin ; and the third prize to 54f architekten + ingenieure, darmstadt, in | 1 |
, thereby providing a boost to economic globalization. in other words, regional trade arrangements are not aimed at creating an exclusionary economic bloc. to the contrary, such trade networks can make the asian economies more open and prosperous. on the financial front, cooperation among asian countries is gathering pace. its prime motivation is to avert a financial crisis like the one we went through in 1997 - 98. efforts in this field are producing tangible results around two pillars : 1 ) the establishment of bilateral swap arrangements, and 2 ) the development of regional bond markets. as some of you might know, there is a collegial group of central banks in this region. this group, called emeap, an acronym for the executive meeting of east asia pacific central banks, has eleven members. from its inception in 1991, emeap comprises nine east - asian central banks plus two central banks from australia and new zealand. emeap is very active in three key areas, namely, financial markets, banking supervision, and settlement / payment systems. to give you a picture of what emeap is doing for bond market development, allow me to digress a little bit. emeap has engaged itself in the project known as abf, or asian bond fund. in this fund, eleven emeap central banks jointly set up their foreign reserves to place investment funds composed of asian sovereign bonds. the purpose of abf is to stimulate turnovers in the bond market in this region. in june 2003, the central banks launched abf1, the first stage of the abf project, to invest in dollardenominated sovereign bonds issued by asian countries. in may 2005, emeap went a step further by announcing the start of abf2. abf2 invests in sovereign bonds issued in asian local currencies. although led by the emeap central banks, abf is not an " asia - only " project. actually, western financial services companies take part in this project as a fund manager and custodian. from what i have said, you can sense the pragmatic spirit of asian regional cooperation. in fact, pragmatism is the hallmark of joint initiatives in this region. another point is that these cooperative endeavors are largely market - driven. put differently, asian cooperation is an " autonomous " process. it is in sharp contrast to the eu integration where member nations have agreed to transfer some of their sovereignty to brussels, frankfurt, and other european cities to operate | a currency called the β yen. β in order for this mechanism to function properly, ( 1 ) the value of money - - in other words, domestic prices - - must be stable ; ( 2 ) the mechanism for settling transactions by means of money must be efficient and convenient ; and ( 3 ) private financial institutions, as the members of the financial system, as well as the central bank must be sound and reliable. the maintenance of these three conditions - - that is, price stability, stable operations of the payment and settlement systems, and the resulting soundness of the financial system - - is the important responsibility of the central bank, an institution which has a primary role in the issuance and circulation of the β yen. β the central bank system is thus an important component of the financial system infrastructure of japan. therefore, in order to win domestic and overseas confidence in the japanese financial markets and to maintain and improve the international competitiveness of these markets, it is essential that the central bank system is able to win domestic and overseas confidence, and that the market environment is improved through such efforts as the β big bang β reform package. third, many of the issues raised regarding the revision of the bank of japan law can also be applied to economic structural reform and to administrative reform in japan. - 11 - the bank of japan has urged that ( 1 ) its organizational objectives and roles be clarified ; and ( 2 ) the management of policy and operations be founded on a mechanism which allows the market participants and other third parties to monitor ex post facto whether the bank is discharging its responsibility appropriately, rather than be part of a mechanism that attaches importance to advance coordination with the government. this argument applies not only to the central bank. in fact, it may be applied generally to the question of what the economic and financial systems should be or what the role of government administration should take to meet the challenges of a new era. the japanese economy today is required to function within a mechanism under which any institution is responsible for its own course of action and then the market and the public examine and evaluate the actions taken, instead of within a system governed by advance examination based on administrative supervision and regulations. such reforms will fundamentally change the economic and social structures of japan, making them more consistent with global standards. the old methodology of carrying out reforms within the conventional framework and ways of thinking must be changed. it is necessary to consider how the distinctive systems and ways of thinking in japan could be changed from a perspective of | 0.5 |
issuance with increased demand from municipal investors, including very strong inflows to municipal bond funds, and improved secondary market conditions. ultimately, the increased availability of credit to municipal borrowers helped them maintain employment and capacity by avoiding forced cutbacks in payrolls and other critical operations. the term asset - backed securities loan facility the term asset - backed securities loan facility ( talf ) supported the issuance of securities backed by newly and recently originated student loans, auto loans, credit card loans, commercial mortgages, loans backed by the small business administration, and certain other assets. the announcement and presence of the talf substantially helped improve liquidity in the asset - backed securities markets, including those for commercial mortgage - backed securities and collateralized loan obligations, and contributed to rapid improvement in credit markets for consumers and businesses. ultimately, the talf helped promote the longer - term, market - based financing that is critical to the real economy. summary of section 13 ( 3 ) facilities using cares act funding ( billions of dollars ) peak amount of assets2 14. 1 16. 6 6. 4 4. 1 current amount of assets2 12. 8 13. 6 5. 4 1. 6 treasury equity remaining3 13. 9 16. 6 6. 3 3. 5 maximum facility announced closed capacity1 corporate credit facilities mar. 23, 2020 dec. 31, 2020 main street lending program apr. 9, 2020 jan. 8, 2021 municipal liquidity facility apr. 9, 2020 dec. 31, 2020 talf mar. 23, 2020 dec. 31, 2020 note : the data are current as of june 17, 2021. 1. the maximum authorized amount of facility asset purchases. 2. current and peak outstanding amounts of facility asset purchases. β’ for the corporate credit facilities ( consisting of the primary market corporate credit facility and the secondary market corporate credit facility ), includes exchange - traded funds at fair value and corporate bonds at book value. asset balances from trading activity are reported with a one - day lag after the transaction date. β’ for the main street lending program, includes loan participations, net of an allowance for loan losses updated as of december 31, 2020, at face value. β’ for the municipal liquidity facility, includes municipal notes at book value. β’ for the talf ( term asset - backed securities loan facility ), includes loans to holders of eligible asset - backed securities at book value. 3. the amount of the treasury contribution to the credit facilities. source : for | the amount of assets and treasury equity remaining, see federal reserve board ( 2021 ), statistical release h. 4. 1, β factors affecting reserve balances of depository institutions and condition statement of federal reserve banks, β june 17, https : / / www. federalreserve. gov / releases / h41 ; the peak amounts of assets for each facility are based on the h. 4. 1 from the start of the corresponding facility until june 17. | 1 |
##ted dividends amounting to β±20 billion to support the national government β s programs, even if the bsp is no longer required under our new charter to remit cash dividends to it. moreover, we expanded the set of eligible instruments as compliance with the bsp β s reserve requirement to include new loans to micro, small, and medium and critically impacted large enterprises that do not belong to conglomerates. we also issued time - bound and targeted regulatory and operational relief measures to encourage bsp - supervised financial institutions to continue their support to the economy, 1 / 5 bis central bankers'speeches particularly the micro, small, and medium enterpresis. these measures include extension of financial relief to borrowers, incentivized lending, promotion of continued access to financial services, support for continued financial services delivery, and support for sufficient level of domestic liquidity and economic activity. in sum, we have injected approximately p1. 9 trillion pesos ( approximately $ us 39. 2 billion ) in liquidity into the financial system, equivalent to 9. 6 percent of gdp. indeed, the pandemic has given us an opportunity to further accelerate the digital transformation of the financial services sector. in fact, we have encouraged the use of electronic payments to enhance the speed, convenience, and affordability of financial transactions. particularly, pesonet β as a viable alternative to checks and recurring bulk payments ; and instapay β as a substitute for cash. the existence of the pesonet and instapay was crucial in facilitating two key milestone initiatives of the national retail payment system : the government e - payments ( β egov pay β ) facility via pesonet ; and the national quick response code standard ( β qr ph β ) via instapay. as a result of the pandemic and the consequent lockdowns, more consumers shifted from cash payments to digital payments. the evidence is crystal clear : the use of pesonet and instapay zoomed exponentially. for the first eight months of 2020, the value of instapay rose almost 400 percent, while that of pesonet jumped 100 percent year - on - year. by volume of transactions, instapay and pesonet soared by 624 percent and 130 percent, respectively. this is truly excellent news. as governor of the bsp, one of my personal goals is to have not less than 50 percent of transactions, by volume and value | the eba consultation paper. i am arguing that the bsa needs to take this and other sources of heterogeneity into account. similar considerations apply to leverage. italian banks have lower leverage than their international competitors, partly because of their relatively small volume of business in derivatives. arguably, their operational risks are also comparatively low : italian banks have not been involved in any of the serious episodes of malpractice or the market - rigging schemes that have damaged the reputation and of some foreign intermediaries and cost them expensive legal settlements. these and other sources of heterogeneity, which tend to bias international comparisons against italian banks, have been documented by the bank of italy in its financial stability report as well as by market analysis. they will have to be duly taken into account in the comprehensive assessment. these arguments are intended simply to support a fair approach to the forthcoming bsa ; they are not meant to downplay the risks that the italian banking system faces. while italian banks have demonstrated good resilience overall, thanks to their sound fundamentals at the outset of the financial crisis, the sovereign crisis and two long and deep recessions have put their balance sheets under severe stress. npls have been rising steadily since 2008, depressing profitability and raising concerns over provisioning among analysts and market operators. and even though i have set out the reasons why we need to quickly enhance comparability among european banks, we take these concerns seriously. indeed, we have taken decisive action to address these risks, and we are confident that this will improve the outlook for the italian credit market. apart from episodes of malfeasance, which are relevant but circumscribed, serious difficulties mainly concern a handful of medium - sized and small banking groups. this class of banks has been particularly hard - hit by the recession, owing among other things to lesser diversification of risks and revenues. additional challenges have sometimes been raised by weak ownership and corporate governance structures, which may complicate capital strengthening and adaptation of business models. intense supervisory actions have been bis central bankers β speeches β and continue to be β taken on these banks. in some instances special administration has been necessary to allow a clear recovery and return rapidly to ordinary management. the bank of italy regularly reviews banks β asset quality as part of its standard supervisory activity, assessing the risk exposure of each institution. the quality of banks β assets is assessed continuously off - site, on the basis of detailed monthly supervisory reports. | 0 |
somewhat slow to act as a shock absorber or adjustment mechanism to provide support to the trade account and the balance of payments. south africa β s current account deficit widened from 2. 8 per cent of gdp in 2010 to 6. 3 per cent in 2012. the trade deficit grew on account of increased imports related to the infrastructure investment programme, and lacklustre exports, as well as declining terms of trade. the depreciation of the rand exchange rate resulted in a deterioration in the bank β s inflation outlook, and the targeted measure of inflation increased from just below 5. 0 per cent in august 2012 to 6. 4 per cent in august 2013. still, however, there was little evidence of any demand pressures, with much of this increase driven by cost push factors. it is the improvement in growth prospects for advanced economies, in particular the us, that saw the rand again recouple with global developments on talk of asset purchase tapering. expectations of tapering had a profound impact on financial markets of both advanced economies and emerging markets, but more particularly for the latter as it is deemed that such a withdrawal of stimulus will negatively impact on portfolio flows to emerging markets. indeed, capital inflows retreated somewhat, and in south africa we witnessed a pull - back especially in bond inflows. during may and june this year, we witnessed a net outflow of over r17 billion from our bond market although this was partially offset by equity inflows. from the beginning of may the rand exchange rate depreciated from r8. 90 against the usd to levels of r10. 40 in august. a number of central banks in emerging markets reacted quite differently to these movements, with some tightening monetary policy despite an evident slowdown in growth, others intervening in the foreign exchange market and others draining liquidity in local markets. the central bank of brazil has since april this year, increased its policy rate by a total of 225 basis points to 9. 5 per cent due to inflation pressures and to shore - up the currency and limit capital outflows, while also lifting previous taxes on capital inflows. the central bank in indonesia increased the policy rate by 150 basis points thus far in 2013 to bis central bankers β speeches 7. 25 per cent, but in emerging europe we have seen various interest rate reductions. 1 the people β s bank of china ( pboc ) reacted by initially tightening liquidity conditions, only to be relaxed soon thereafter to reverse a substantial increase in | of south africa β s export commodities weakened during the second half of the year and the federal reserve raised its main policy rate in december 2015. perceptions of south african risk were also important, with the rand depreciating abruptly on news that finance minister nhlanhla nene had been removed from his post. bond prices and credit default swaps on south african government debt also spiked, signalling investor concern about the reliability of the south african government as a borrower. research suggests that markets were pricing government bonds as if south africa had already lost its investment grade credit rating. conditions deteriorated further early in the new year, when china β s economy experienced a period of stress. the shanghai stock market index fell sharply and the renminbi was allowed to depreciate abruptly against the us dollar, triggering a bout of capital flight from china. in an atmosphere of market fear and risk aversion, the rand depreciated further, in line with many of its peer currencies. this sell - off in emerging market currencies went too far β an excellent example of the wellknown phenomenon of overshooting in exchange rate markets. as a result, emerging market currencies were primed for a rebound episode. world economic conditions began to move back in their favour in the second quarter of the year. china β s growth stabilised with help from stimulus policies, and commodity prices stopped falling and even registered gains. meanwhile, risks emanating from the brexit convinced the world β s largest central banks to either ease policy or delay further tightening. the net result was an appreciating trend in emerging market currencies. in line with the overshooting diagnosis, the countries which experienced the largest depreciations during the sell - off phase enjoyed the biggest rebounds. south africa joined this rally : the rand strengthened through june and july, reaching a recent high of r13, 23 in early august. the south african currency benefitted from commodity movements, including from a higher gold price following the brexit. we also saw the effects of a renewed search for yield by investors looking for something better than negative interest rates on advanced economy government bonds. in addition, domestic factors were supportive of the rand. the major ratings agencies reaffirmed south africa β s sovereign investment grade credit rating in june. the local elections in august demonstrated the vitality and competence of our democratic institutions. but the rand β s appreciation phase would be short - lived. | 0.5 |
this direction over recent times. these steps include : efforts to simplify prospectus requirements for retail vanilla bonds and ease the personal liability of company directors ; improving market transparency through the rba β s publication of new measures of corporate bond yields ; the lengthening of the government bond curve ; and the listing of certain fixed - income securities on the australian securities exchange. these are all welcome developments. conclusion in conclusion, let me try to briefly summarise. bank - based finance remains the dominant form of finance for australian companies. superannuation funds have been prepared to finance banks and have effectively outsourced the credit assessment function for much of the corporate sector. partly as a result, the development of a deep and liquid corporate bond market is still a work in progress. but an equally important observation is that we do have the infrastructure that could support a strong and very active bond market in times of stress or inadequate competition. in this way, this infrastructure provides a form of insurance. we need to make sure that we nurture this infrastructure so that we can continue to be confident that the corporate bond market will be there when it is most needed. given this perspective, i think it is probably better to think of markets and institutions as being complements, rather than as being engaged in some type of struggle for supremacy. thank you very much for listening. bis central bankers β speeches | rapidly, with most business borrowers still connecting with savers over the balance sheets of financial institutions. some of these commentators have also lamented the fact that superannuation funds β who they see as a natural buyer of corporate bonds β seem to have had only a limited appetite for these bonds. see financial system inquiry ( 1997 ), financial system inquiry final report ( s wallis, chairperson ), australian government publishing service, canberra, p 159. bis central bankers β speeches given this background, i thought it would be useful to briefly discuss recent developments in the australian non - financial corporate bond market as well as the role that superannuation funds have come to play in intermediating between borrowers and savers. i would then like to discuss the role that market - based corporate financing can play in providing a form of insurance against stresses in the banking system and the possibility of a lack of competition in the banking system. the australian corporate bond market by international standards, the australian corporate sector makes relatively little use of the bond market, especially the domestic bond market. since the mid 2000s, the available internationally comparable data suggest that average annual bond issuance by australian corporations has been the equivalent of just under 1 per cent of gdp, with around two - thirds of total issuance taking place offshore, rather than in the domestic market ( graph 1 ). in most other countries with which we normally like to compare our financial markets, the corporate sector makes greater use of bond funding. graph 1 the relatively high reliance of australian issuers on the offshore market is evident in the data on the composition of corporate bonds outstanding ( graph 2 ). currently, bonds that were issued offshore account for around 80 per cent of the outstanding value of bonds issued by australian - based corporations. a decade ago, this figure was considerably lower at around 50 per cent. the offshore market is favoured by companies that want to raise foreign currency funding as a natural hedge against their foreign currency revenue. it has also proven easier to issue large amounts and at longer tenors in the offshore market than it has in the domestic market. bis central bankers β speeches graph 2 another perspective on recent trends can be gained from looking at the data on the number and credit ratings of the individual bonds that have been issued domestically and offshore ( graph 3 ). graph 3 bis central bankers β speeches a number of observations stand out : 1. the number of australian companies issuing bonds is quite small. on average, over recent times, only around 30 bonds have been issued in | 1 |
was due to default of mortgage and other consumer debt. it is hard to tell what is a sustainable level of household debt, but most estimates suggest that us households are just about a third to halfway through the deleveraging process. this means probably another 3 β 5 years of sub - par household consumption growth in the us. 12. third, deleveraging by eurozone banks. there are two factors at work here. one, the quality of eurozone bank assets has come under pressure. two, eurozone banks are required to improve their capital adequacy positions so as to buffer against shocks. in particular, european banks are required to achieve a minimum core tier 1 capital ratio of 9 % by june this year. to the extent that banks cannot achieve the target capital ratios through retained earnings and capital raising, they will have to reduce their balance sheets. they can do this by selling assets or reducing lending. both will have a dampening effect on economic activity. given the global footprint of many eurozone banks, the effects will be felt not just in europe but elsewhere in the world. bis central bankers β speeches impact of deleveraging on asia 13. emerging asia will not be immune to this synchronised deleveraging in the advanced western economies. fiscal consolidation and household deleveraging in the us and eu will have significant spillover effects on asia, principally through the trade channel. asia ex - japan exports about a quarter of its goods to the us and europe. already, asian export growth has decelerated from 25 % at the beginning of 2011 to 10 % in the last quarter of the year. 14. while asian economies have started to restructure their economies towards increasing domestic demand, and intra - regional trade within asia has been growing, these trends will, at best, cushion only part of the fall in demand from the west. rebalancing of demand is a long - drawn process. it is unrealistic to expect asia to become the main engine of growth for the global economy over the next few years. 15. the deleveraging of eurozone banks will impact asia mainly through the financial channel, in the form of tighter credit. euro area banks as a whole provide 36 % of global trade finance loans, and french and spanish banks together account for more than two - fifths of trade finance loans in asia. 16. to - date, the impact on asia of deleveraging by eurozone banks has been quite limited. through most | up our internal capabilities and human resources, and actively consult the industry participants in our efforts to meet the challenges in the coming year. | 0.5 |
market liquidity and market functioning. these actions include reducing the cost and increasing the allowable term of discount window credit to commercial banks ; increasing the size of our term auction facility, through which credit is auctioned to depository institutions ; initiating a term securities lending facility, which allows primary dealers to swap less - liquid mortgage backed securities for more - liquid treasury securities ; and creating the primary dealer credit facility, which is similar to the discount window but accessible to primary dealers. although these facilities operate through depository institutions and primary dealers, they are designed to support the broader financial markets and the economy by facilitating the provision of liquidity by those institutions to their customers and counterparties. with respect to monetary policy, at its march meeting the fomc reduced its target for the federal funds rate by 75 basis points to 2 - 1 / 4 percent. it was in this context of intensifying financial strains that, on march 13, bear stearns advised the federal reserve and other government agencies that its liquidity position had significantly deteriorated and that it would have to file for bankruptcy the next day unless alternative sources of funds became available. this news raised difficult questions of public policy. normally, the market sorts out which companies survive and which fail, and that is as it should be. however, the issues raised here extended well beyond the fate of one company. our financial system is extremely complex and interconnected, and bear stearns participated extensively in a range of critical markets. the sudden failure of bear stearns likely would have led to a chaotic unwinding of positions in those markets and could have severely shaken confidence. the company's failure could also have cast doubt on the financial positions of some of bear stearns'thousands of counterparties and perhaps of companies with similar businesses. given the exceptional pressures on the global economy and financial system, the damage caused by a default by bear stearns could have been severe and extremely difficult to contain. moreover, the adverse impact of a default would not have been confined to the financial system but would have been felt broadly in the real economy through its effects on asset values and credit availability. to prevent a disorderly failure of bear stearns and the unpredictable but likely severe consequences for market functioning and the broader economy, the federal reserve, in close consultation with the treasury department, agreed to provide funding to bear stearns through jpmorgan chase. over the following weekend, jpmorgan chase agreed to purchase bear stearns and assumed bear's financial obligations. the purpose | declined, their borrowing capacity has been reduced. finally, small business lending often is based on relationships that are solidified over time. sometimes those relationships are broken as a result of the bank β s inability to lend, such as when the bank fails or when it reduces lending because of strains on or concentrations in its own portfolio. small businesses may then find it quite difficult to establish similar arrangements with a new bank. given the challenges facing small businesses, the federal reserve has sought to ease the flow of credit and better understand the nuances of the credit tightening. ultimately, the most effective way for policymakers to improve credit availability to small businesses, as well as other businesses and households, is to undertake efforts that support a sustainable economic recovery. with this in mind, the federal reserve over the past two years has taken strong action in response to the financial crisis to help improve financial market conditions and promote the flow of credit to households and businesses. we have acted on multiple fronts by instituting accommodative monetary policy, expanding existing liquidity programs for depository institutions, and establishing new liquidity facilities to support market functioning. throughout this period, we have particularly emphasized ensuring that our supervision and examination policies do not inadvertently impede sound lending to businesses, both large and small, and we will continue to do so. in addition, the federal reserve system is hosting meetings with private - and public - sector partners to highlight concerns facing small businesses. some of these meetings focus on general small business topics. others concentrate on subsegments of the market such as minority business owners or businesses located in low - and moderate - income areas. we are in the midst of hosting more than 40 such gatherings across the country to collect data and glean perspectives that will help find ways to meet the immediate and intermediate financial needs of small businesses. these meetings seek to identify existing credit gaps, share promising practices, and highlight regional differences as well as national themes in credit access and technical support for small businesses. the key findings of these small business gatherings will be presented to policymakers later this summer. despite the difficulties in the small business lending market, i find reason to be optimistic about small business lending in the near future. improvements in conditions that depressed lending in 2009 lead me to believe that we will begin to see an increase in bank loans to small businesses later this year. notably, overall economic conditions, the most important determinant of the demand for and availability of small business lending, have improved considerably since the early and | 0.5 |
context for me to address some criticism against the reserve bank β s use and analysis of inflation data. abstracting from all the details and nuances, the criticism can be summarized as follows : ( i ) the use of wpi as the headline inflation index is flawed as it does not capture the final goods prices that consumers actually experience in the market. rbi should be guided more by the cpi which more accurately reflects demand pressures because it is demand pressures that monetary policy action can influence. ( ii ) rbi β s interpretation of non - food manufacturing inflation as a proxy for demand pressures is flawed as it reflects more supply side price adjustments and cost push factors than demand side pressures. at the outset, i must admit that this criticism has some merit. conceptually, the cpi is a better indicator of demand side pressures than the wpi. an increase in wholesale prices, if sustained, either results in an eventual increase in prices by retailers or a squeeze in their margins. if demand is strong, retailers may exercise pricing power and pass on the increase in wholesale prices to consumers. in case demand is weak, retailers will be forced to partly absorb the increase in wholesale prices in their margins. thus, there is no denying that consumer prices better reflect demand side pressures than wholesale prices. even so, in india, we have opted for wpi over cpi as a second best choice for a number of reasons. first and most importantly, we do not have a single cpi that is representative of the whole country. until recently we had four, and of those, currently we have three cpis representing different segments of the population. while wpi is computed on an all - india basis, cpis are constructed for specific centres and then aggregated to an all - india index. second, wpi is available with a slightly shorter lag than the cpis. third, wpi has a broader coverage than the cpis in terms of the number of commodities, number of quotations, inclusion of non - agricultural products and tradeable items. finally, the revision of the basket for cpi series lags that of the wpi series. last year, the wpi series was revised to the base of 2004 β 05 whereas the existing cpis continue with the old base β for cpi - rl ( 1986 β 87 ), cpi - al ( 1986 β 87 ) and cpi - iw ( 2001 ) which makes cpis ill - equipped to capture the price behaviour caused by the rapid structural changes in the economy. the | ##cyclical buffers during the upswing of a business cycle and their use during the downturn of the business cycle. this means we need to be able to make a judgement on the inflexion point in the business cycle in real time. quite evidently, both pre - mature action or delayed action can be costly in macroeconomic terms. in order to deploy countercyclical buffers, we need to hone our skills in business cycle analysis which again is based on time series analysis β one of the two focus areas of this conference. data gaps let me under this heading address some of the areas where we have to made improvements in statistical measurement. potential output first, we need a more reliable measure of the potential output of the economy. potential output, as we all know, is the maximum output that the economy can produce without putting pressure on the trend / average inflation rate. when the economy is operating at the potential level, aggregate demand and supply in the economy are balanced so that inflation tends to its long run expected value. a measure of potential output is therefore important not only to capture output data but to assess the inflation dynamics in the economy. the measurement of potential output depends on reliable data on employment and wages. i commented on both these statistics earlier while speaking about the quality of data. i am happy to note that the national statistical commission and the official statistical agencies are engaged in improving the quality of both employment and wage data. as that happens, we can look forward to a statistically more robust potential output measurement of the economy, and that in turn should improve our inflation watch. in the aftermath of the global financial crisis, growth rates in major advanced economies remain sluggish despite large output gaps. past experience with financial crises episodes suggests that growth and investment rates typically remain below the pre - crisis levels and potential growth rates take a hit. similar dynamics are at play in the aftermath of the recent financial crisis. there is a perception that potential growth rates of advanced economies are likely to be lower than their pre - crisis trends. if so, given the growing trade and financial bis central bankers β speeches globalization, potential growth rates of the fast - growing emerging market economies can be expected to be lower than the pre - crisis trends. against this backdrop, it would be useful to re - assess india β s potential growth rate consistent with our objective of low and stable inflation. services sector production and price index a defining feature of the indian economy is the large share of the services sector, | 1 |
signature of president rodrigo duterte. when signed into law, the fcpa will provide protection to consumers of financial products and services β including those delivered via digital channels. specifically, the fcpa requires financial service providers to adopt and implement information security standards to ensure the safety and protection of the financial transactions and data privacy of their clients. the bsp has also created an internal technical working group to proactively address cybersecurity concerns on financial transactions and data privacy of their clients. the bsp has also created an internal technical working group to proactively address cybersecurity concerns on financial transactions and consumer complaints. among the tw g functions is to coordinate with law enforcement agencies, relevant government authorities, and other stakeholders on cybersecurity management, prosecution of scammers ; and prevention of cyber - related threats and scams. lastly, t he bsp continues to implement a digital literacy program ( dlp ) to increase public trust and confidence in the digital financial ecosystem and encourage the massive usage of digital 2 / 3 bis central bankers'speeches financial services. as the bsp continues to champion financial digitalization initiatives, everyone is called to join this journey of transformation. let us work together in building an economy that is characterized by a robust, secure, and resilient digital financial infrastructure, with tech - savvy consumers and an innovation - embracing public sector. these collaborations among various stakeholders are what we envision in platforms such as alibaba cloud β s sandbox program. together, let us continue the financial digitalization journey toward a resilient and inclusive future. thank you very much. 3 / 3 bis central bankers'speeches | better than cash alliance study released in december 2019, the estimated total monthly volume of digital transactions grew by more than 20 times from 2013 to the end of 2018, with the increase driven by payments made by individuals. the bsp is encouraged by these numbers and expects the percentage of payments transactions done digitally to reach 50 percent by 2023. you may also already know that the bsp has fully supported the passage of ra no. 11055, which established the foundation for the development of the philippine identification system or philsys. the adoption of verifiable and unique digital identities could pave the way for a broader participation in the financial system, as it will be easier to open accounts and apply for financial services. the bsp is mindful that the openness in the financial services industry and the ease of access to products will not by itself lead to inclusiveness. the risks to the customers and investors and service providers alike are higher if products and modes of delivery are not well understood. forging trust in the financial services industry is necessary and these can be achieved by promoting financial literacy and consumer protection. this is why the bangko sentral advocates these complementary initiatives. educating investors 4 / 6 bis central bankers'speeches for two years now, the bsp has been organizing financial education expos. in the november 2019 expo themes included responsible financial planning, becoming good financial role models, stock market investing, and mainstreaming financial education in school curriculums. the bsp has consciously targeted the younger population in order to inculcate early on, the value of saving and knowledge on money and finance. we have partnered with the department of education more than once and has supported private sector programs geared at developing tools for the delivery of important messages. as our economy continues to grow and such growth translates into higher incomes for consumers, the challenge is to make sure the consumers imbibe the discipline of saving and that they are armed with the proper information so that they can eventually migrate into retail investors. consumer protection now i turn to our other advocacy, which is consumer protection. while the underpinning principle is very simple β β not to take undue advantage of users of financial services β β it has taken on many dimensions because of developments in products and service delivery. for instance, the use of technology has added another layer of risk to transactions with customers. a client could have issues on data privacy, security, or those relating to simple downtimes in systems. the bsp has issued sets of | 0.5 |
benoit cΕure : monetary policy and climate change speech by mr benoit cΕure, member of the executive board of the european central bank, at a conference on " scaling up green finance : the role of central banks ", organised by the network for greening the financial system, the deutsche bundesbank and the council on economic policies, berlin, 8 november 2018. * * * 2018 has seen one of the hottest summers in europe since weather records began. 1 i would like to thank torsti silvonen, fabio tamburrini and sam langfield for their contributions to this speech. i remain solely responsible for the opinions contained herein. increasing weather extremes, rising sea levels and arctic melting are now clearly visible consequences of human - induced warming. 2 climate change is not a theory. it is a fact. while only one dimension of the human cost, the consequences in macroeconomic terms look set to be large. without further mitigation, cumulative emissions pose significant risks of economic disruption. 3 while there is a wide recognition that environmental externalities should be primarily corrected by first - best policies, such as taxes4, all authorities, including the ecb, need to reflect on, and consider, the appropriate response to climate change. in recent years, central bankers, led by bank of england governor mark carney, have started discussing the financial stability implications of climate change. 5 the first tangible results are trickling in. the financial stability board β s task force on climate - related financial disclosures published its first status report just a few weeks ago. only last week, ecb banking supervision communicated to banks that climate - related risks have been identified as being among the key risk drivers affecting the euro area banking system. and, of course, the central banks and supervisors network for greening the financial system published its first progress report just a few weeks ago, reasserting that climate - related risks fall squarely within the supervisory and financial stability mandates of central banks and supervisors. an area that has received less attention though, both in policy and in academia, is the impact of climate change on the conduct of monetary policy. today i would like to contribute to this debate and offer a way of thinking about how climate change fits into our current monetary policy framework β the way we react to shocks and the way we think policy propagates through the economy β and how it may affect our monetary policy implementation. i will argue that climate change can be expected to affect monetary policy one | . in the uk, we adopted a target for inflation as long ago as 1992 and the whole framework for taking decisions about interest rates was overhauled after the 1997 election. i am sometimes asked how different british economic history would have been if we had adopted the present approach to monetary policy at various landmark dates β such as 1976 or 1979. this is a hard one. tolstoy famously said that all happy families are alike, but unhappy families are each unhappy in their own way. it is rather the same with monetary policy. there are very many ways of getting it wrong β the uk has some experience here - but the hallmark of all good monetary policy is what hans dietrich tietmeyer ( president of the bundesbank in the 1990s ) used to call β the three cs β : credibility, consistency, and continuity. my own view, for what it is worth, is that there has been a virtuous circle over the past 10 - 15 years when central banks have taken advantage of relatively benign global conditions to embed the three cs, by successfully implementing better policy - making frameworks and establishing strong reputations for competence on the back of excellent track records. the bank of england would have faced a tougher challenge in doing this in the economic circumstances of the 1980s, and certainly the 1970s β even if the political consensus had existed to support such an experiment ( which it didn β t ). even the bundesbank built up its formidable reputation during the german post war economic miracle. that said, i do not think there is any doubt that the new approach to monetary policy did represent a major advance on what went before. in what way? inflation targeting, the uk β s current approach, broke with past attempts to run an independent monetary policy by offering commitment and clarity. for the first time, the government and the bank of england committed to clear objectives, clear communications and clear lines of accountability. we now have a decision - taking framework which allows monetary policymakers plenty of room for discretion, while forcing them to provide a full explanation of their thinking. by hook or by crook, the fact is that central banks do now enjoy considerable credibility. they treasure that legacy, much like any blue chip company, and for many of the same reasons. credibility, and the trust that flows from it, is worth a great deal in policy - making, as in business. if people believe that the bank will act to keep inflation low and stable they will factor that in to their decisions. ( they may | 0 |
operational risk supervision. second, various specific assessments have been made, such as the 2015 thematic review of cyber security risks or targeted onsite inspections. last but not least, the ecb has initiated a reporting framework for significant cyber incidents that was implemented as a pilot scheme in 2016 and will be rolled out to all significant institutions in 2017. 4 / 4 bis central bankers'speeches | mario draghi : hearing of the committee on economic and monetary affairs of the european parliament introductory statement by mr mario draghi, president of the european central bank, at the econ committee of the european parliament, brussels, 29 may 2017. * * * mr chairman, honourable members of the economic and monetary affairs committee, ladies and gentlemen, it is a pleasure to be back speaking to your committee for the second regular hearing of this year. i am also pleased that you have chosen as the topic for today β s hearing the role of financial innovation. this is only one element in the broader process of innovation which is taking place in the economy. but it is a decisive one, given the essential role played by financial markets in resource allocation. before addressing this topic, let me first review the economic outlook and discuss the monetary policy stance. the economic outlook the economic upswing is becoming increasingly solid and continues to broaden across sectors and countries. real gdp in the euro area has expanded for 16 consecutive quarters, growing by 1. 7 % year - on - year during the first quarter of 2017. unemployment has fallen to its lowest level since 2009. consumer and business sentiment has risen to a six - year high, supporting expectations of a further strengthening of growth in the coming months. downside risks to the growth outlook are further diminishing, and some of the tail risks we were facing at the end of last year have receded measurably. the fact that domestic consumption and investment are the main engines driving the recovery makes it more robust and resilient to downside risks, which relate predominantly to global factors. despite a firmer recovery, and looking through the volatile readings in hicp inflation over recent months, underlying inflation pressures have remained subdued. domestic cost pressures, notably from wages, are still insufficient to support a durable and self - sustaining convergence of inflation toward our medium - term objective. for domestic price pressures to strengthen, we still need very accommodative financing conditions, which are themselves dependent on a fairly substantial amount of monetary accommodation. at its june monetary policy meeting the governing council will receive an update of the staff projections and a more complete information set on which it will be able to formulate its judgement on the distribution of risks around the most likely outlook for growth and inflation overall, we remain firmly convinced that an extraordinary amount of monetary policy support, including through our forward guidance, is still necessary for the present level of underutilised resources to be re - absorbed | 1 |
will in turn reduce their ability to borrow and fund investment and spending. it will affect the value of property. and it will affect the quality of the loan portfolios of banks. what does all this mean for ireland? take insurance first. our insurance sector is very international. for example, 80 per cent firms operating here conducted underwriting business in the european economic area ( eea ) ( excluding ireland ) in 2018. a substantial number of firms also operate further afield, outside the eea. the value of premiums underwritten outside of ireland was significant, accounting for 73 per cent of the total value of underwriting in 2018. the irish insurance sector is exposed to shocks from across the globe. and what of banks? irish banks are heavily exposed to property. as are households and businesses. property - related lending, for example, accounted for 68 per cent of the loan portfolios of irish resident banks in the third quarter of 201816, while the asset holdings of irish households are also heavily focused on property β accounting for almost 70 per cent of household net worth17. so adverse weather events that affect property can affect several aspects of the economy and financial system. transition risks in addition to getting active, what of the third request? imagining the world we want to get to is easy. a greener world with less plastic and ultimately β a low carbon economy without the devastating impact of climate change. however, the journey to this world is not risk free. the risks i am referring to here are termed β transition risks β. transition risks refer to : the impact of the adjustment towards a low - carbon economy ; and the uncertainties related to the timing and speed of the adjustment. 3 / 8 bis central bankers'speeches with regard to timing, the sooner we start on this journey the better. the longer we wait, the greater the adjustment that will be required to meet our goals. the speed of this adjustment must also be managed. as an economist, implementing a carbon tax seems like a sensible way to price in the externalities associated with high - carbon technologies and products. however, the implementation of such a tax must consider the capacity of the economy to switch to low - carbon products to be as effective as possible. adjusting to a lower - carbon economy will involve changes in policy to encourage shifts in consumption and investment. this will have implications for both economic activity and asset prices. the expectations of economic agents regarding the timing of transition will also play a role, affecting, for example, the | agnes benassy - quere : towards an extended policy mix speech by ms agnes benassy - quere, second deputy governor of the bank of france, at the european university institute, robert schumann centre, economic and monetary union lab seminar, florence, 22 march 2024. * * * it is a great pleasure for me to be here in florence, and i would like to thank marco buti and giancarlo corsetti for giving me the opportunity to share some thoughts about the policy mix β a topic they know very well. since we are here to celebrate the emu lab, i will focus on the european policy mix. i will first review how it has actually worked since the inception of the economic and monetary union ( i ) ; then, i will discuss the complexification but also enrichment of the policy mix over time ( ii ). i would like to convince you that the policy mix is more than what you think. i. the policy mix since maastricht as you all know, the euro area's policy mix was born in maastricht, netherlands, in 1992. hence it was maybe not a coincidence that the maastricht treaty de facto endorsed the instructions of a dutch economist, jan tinbergen. " one objective, one instrument " : the single monetary policy was put in place to ensure price stability at the level of the euro area, while fiscal policies were assigned to output stabilisation at the level of each member state. this framework implicitly assumed the absence of supply shocks. with only demand shocks, there would be no trade - off between price stability and output stability, whether at the euro area or at the member state level. the set - up was clear, simple and straightforward. it was assumed that during economic booms, governments would accumulate buffers that they would subsequently spend to cushion inevitable crises. in this way, they would stabilise their economies while avoiding running excessive deficits. as argued by my co - authors elga bartsch, giancarlo corsetti, xavier debrun and myself in a geneva report in 2020, i the credibility of fiscal policy reinforces that of monetary policy, and vice versa. indeed, fiscal discipline enhances the effectiveness of monetary policy by reinforcing the independence of the european central bank. and reciprocally, a credible central bank delivers price stability at low levels of real interest rates, reducing the risks of snowball effects for sovereign debts on several | 0 |
account liberalisation on the back burner. further, the recent crisis of 2008 has also led to a rethinking on the issue of capital flows. it seems that international opinion is moving towards acceptance of capital controls both at the source and the destination, if the situation so warrants. 5. in india, as some of you may be aware, we have β light β capital controls. the policy towards capital flows is one of carefully calibrated approach. we began liberalising the capital account in 1991. we view the capital account liberalisation as a β process β and not an β event β. the path of capital account liberalisation is well calibrated but is subject to change, depending upon the evolving domestic and international economic conditions. why is this gradualist approach? we believe that the benefit of capital flows hinges on pace of liberalisation of the overall economy and market efficiency and in the absence of those, unfettered capital flows could endanger financial stability. therefore, we are guided by the principle that process of capital account liberalisation should progress in tandem with reforms in the financial sector and real sector. 6. nevertheless, capital flows to india remained volatile especially in the last few years. portfolio flows dominated by foreign institutional investors ( fiis ) showed large swings having implications for liquidity, besides complicating monetary and exchange rate bis central bankers β speeches management. more frequent changes in the direction and variation in capital flows have been a matter of concern in the context of a widening current account deficit. our policy response to handle capital flows quite often had to switch mode quickly from addressing excessive inflows to sudden outflows. 7. i hope this conference would provide further insight into how to handle capital flows. i am sure that we will benefit immensely from the deliberations. i see that there are a number of good papers, country presentations and panel discussions which will throw more light on the subject. the collaboration with the adb has brought more ede and asian perspective which will provide useful policy inputs to sharpen our skills to better manage capital flows. 8. i once again extend my hearty welcome to you all and wish you a nice stay in mumbai. thank you. bis central bankers β speeches | continues to be highly dependent on the future evolution of the pandemic and the success of containment policies. one major reason why we can expect a rebound in activity in the second half of the year is because, when faced with the largest economic shock since the second world war, europe and its leaders showed the unique strength of the european project : by acting together, we can achieve more. the ecb has played its part in this collective effort in the face of an unprecedented crisis. the nature of the pandemic shock called for an extraordinary monetary policy response. we launched the pandemic emergency purchase programme ( pepp ) to help stabilise financial markets and ease our monetary policy stance considerably. the pepp is temporary, targeted and proportionate. it addresses the specific shock at hand, and aims to repair the economic damage and the resulting downward pressures on inflation wrought by the pandemic. in addition, it was also vital that we limited the risk of a credit crunch. so we substantially eased the conditions under which banks can obtain liquidity under our targeted longer - term refinancing operations. banks can now borrow from the ecb at interest rates which can reach - 1 %, under the condition that they are lending to the real economy. six months after we introduced our measures, our policy package has stabilised markets, protected the supply of credit and supported the recovery. this, in turn, should support the return of inflation towards our medium - term objective and safeguard price stability. at the same time, the uncertainty of the current environment requires a very careful assessment of the incoming information, including developments in the exchange rate, with regard to its implications for the medium - term inflation outlook. the governing council continues to stand ready to adjust all of its instruments, as appropriate, to ensure that inflation moves towards its aim in a sustained manner, in line with its commitment to symmetry. when you look at the past six months, the ecb has not been the only game in town. our measures have been complemented by forceful fiscal responses at both national and european levels. this has been a critically important factor in alleviating the impact of the pandemic on the labour market and on banks β lending. we judge that the economy still needs that support if the recovery is to continue and strengthen further. ambitious fiscal measures by national governments were complemented by a β¬540 billion european safety net. and with the next generation eu fund, europe took a decisive step forwards as the crisis | 0 |
/ 5 bis - central bankers'speeches | 2025. 1 / 2 bis - central bankers'speeches what does all of that mean for inflation? we've come a long way from the 8. 1 % inflation we saw last summer. as i mentioned, annual cpi inflation was down to 4. 3 % in march, led by falling goods price inflation, and we see further declines ahead. that's good news. but many canadians are still struggling to manage the rising cost of living, and prices of many things that people need to buy are still rising too quickly. food price inflation is just under 10 %. we expect food price inflation to come down in the months ahead, but services price inflation will take longer. continued strong demand and the tight labour market are putting upward pressure on many services prices, and those are expected to decline only gradually. we expect it will take until the end of 2024 to get inflation all the way back to the 2 % target. when we met last week, the bank's governing council discussed whether we've raised rates enough, and we considered the likelihood that the policy rate may need to remain restrictive for longer to return inflation to the 2 % target. governing council also discussed the risks around our projection. the biggest upside risk is one i just mentioned - that services price inflation could be stickier than projected. the key downside risk is a global recession. if global banking stress re - emerges, we could be facing a more severe global slowdown and much lower commodity prices. overall, we view the risks around our inflation forecast to be roughly balanced, but with inflation still well above our target, we continue to be more concerned about the upside risks. let me conclude. our job at the bank of canada is to get inflation all the way back to the 2 % target. we are encouraged with the progress so far. and seeing inflation get down to 3 % this summer will be welcome relief for canadians. but let me assure canadians that we know our job is not done until we restore price stability. price stability is important because it restores the competitive forces in the economy and allows canadians to plan and invest with the confidence that their money will hold its value. that's the destination - we are on our way and we will stay the course. with that summary, the senior deputy governor and i would be pleased to take your questions. 2 / 2 bis - central bankers'speeches | 0 |
through which market discipline works are, of course, changes in access to funds and / or changes in risk premia as banks take on or shed risk or engage in certain types of transactions. the changing cost and availability of bank funding affect ex ante risk appetites of bank management and serve as market signals of a bank β s condition to market participants and to examiners. but the prerequisite to the enhancement of market discipline in conjunction with supervision and regulation is improvement in the amount and kind of public disclosure that uninsured claimants need about bank activities and on - and off - balance - sheet assets in order to make informed judgments and to act on those judgments. information on loans by risk category and information on residual risk retained in securitization are examples. the best way to encourage more disclosures is not yet clear. our intent is to consult with the industry regarding the establishment of new disclosure standards and ways to evaluate their application. supervision improved public disclosure will, we believe, not only enhance market discipline but also create further incentives for improvements in banks β risk - management practices and technologies. such improvements will enhance the supervisory pillar of prudential oversight. if supervisors are comfortable with a bank β s internal risk - management processes, the most cost - effective approach to prudential oversight would have supervisors tap into that bank β s internal risk assessments and other management information. to be sure, some β transaction testing β of risk - management systems by supervisors will necessarily remain. but as internal systems improve, the basic thrust of the examination process should shift from largely duplicating many activities already conducted within the bank to providing constructive feedback that the bank can use to enhance further the quality of its risk - management systems. it is these internal bank systems β coupled with public disclosure β that provide the first line of defense against undue risk - taking. indeed, it should be emphasized that the focus of supervision and regulation β especially for the larger institutions β should be even less on detail and more on the overall structure and operation of risk - management systems. that is the most efficient way to address our interest in both the safety and soundness of the banking system and the overall stability of financial markets. relying more extensively on banks β internal risk - management systems can also be used to enhance prudential assessments of a bank β s capital adequacy. as the basel consultative document suggests, over time our examination process for assessing bank capital adequacy would try to use the same techniques | recent swing in financial conditions, " federal reserve bank of new york, liberty street economics ( blog ), may 25. erceg, christopher j., and andrew t. levin ( 2014 ). β labor force participation and monetary policy in the wake of the great recession, " journal of money, credit and banking, vol. 46 ( s2, october ), pp. 3 - 49. goodfriend, marvin ( 2016 ). β the case for unencumbering interest rate policy at the zero bound 6 / 8 bis central banker's speeches ( pdf ), " speech delivered at β designing resilient monetary policy frameworks for the future, β a symposium sponsored by the federal reserve bank of kansas city, jackson hole, wyo., aug. 26 β 27. haldane, andrew ( 2015 ). β how low can you go? " speech delivered at the portadown chamber of commerce, northern ireland, september 18. johannsen, benjamin k., and elmar mertens ( 2016 ). β the expected real interest rate in the long run : time series evidence with the effective lower bound, β feds notes. washington : board of governors of the federal reserve system, february 9. kiley, michael t. ( 2015a ). β what can the data tell us about the equilibrium real interest rate? β finance and economics discussion series 2015 β 077. washington : board of governors of the federal reserve system, august. β β β β - ( 2015b ). β low inflation in the united states : a summary of recent research, β feds notes. washington : board of governors of the federal reserve system, november 23. laubach, thomas, and john c. williams ( 2015 ). β measuring the natural rate of interest redux ( pdf ), " working paper series 2015 β 16. san francisco : federal reserve bank of san francisco, october. lubik, thomas a., and christian matthes ( 2015 ). β calculating the natural rate of interest : a comparison of two alternative approaches ( pdf ), " economic brief 15 β 10. richmond, va. : federal reserve bank of richmond, october. reifschneider, david ( 2016 ). β gauging the ability of the fomc to respond to future recessions ( pdf ), β finance and economics discussion series 2016 β 068. washington : board of governors of the federal reserve system. romer | 0.5 |
##gment about the future direction of policy rates. examining the likely path of growth and inflation for the next one to two years while assessing the changing risk balance from a longer perspective, the bank of japan will make an appropriate judgment in a flexible manner in order to ensure sustainable economic growth with price stability. lastly, let me finish up with a few remarks about japan β s financial markets. on the whole, japan β s financial markets function well. for example, because of the market turmoil over the past ten months, japan β s ted spread, defined as the inter - bank offered rate minus the t - bill rate, has widened by 25 bps, while those spreads in the u. s. and european markets expanded by 100 bps and 70 bps respectively. the prime reason for this relative stability of japan β s markets is that japan β s financial firms have smaller exposures to structured credit markets than their foreign competitors. in addition, i believe the flexible framework of our money market operations has contributed to preserving the stability of short - term funding market. the bank of japan has acquired this operational flexibility over time, including through its experience of the financial crisis in the last decade. let me discuss this from three angles. first, the bank of japan sets the maturity of market operations quite flexibly, from o / n to one year, depending upon prevailing market conditions. flexibility in liquidity - draining operations such as bill - selling operations also makes it possible to provide large quantities of funds without worrying too much about excess reserves being left in the system. second, the bank of japan executes market operations with a broad range of counterparties, banks, securities houses, and money market broker - dealers. third, our collateral regime is efficient and user - friendly. under the so - called pooled collateral scheme which covers not only regular market operations but also the standing lending facility and day - light overdraft, counterparties are able to pledge a variety of collateral in advance, ranging from government securities to private - label debts including asset - backed securities. when faced with increased stress in the money market over the past ten months, the bank of japan responded by providing ample liquidity or supplying longer - term funds earlier than usual. these operations, conducted within the normal operational modalities, enabled us to control short - term interest rates without serious difficulties. in short, i am reminded that financial market stability is essential for effective monetary policy. | growth in other regions β major emerging market economies and resource - rich countries in particular. thus, japan β s whole exports are growing briskly toward a wider range of areas and / or countries. in a nutshell, strong external demand is counter - balancing the negative terms - of - trade effects which i mentioned earlier. second, japan β s economy has improved resilience in recent years. in the late 1990s, for example, japan β s economy accumulated excesses in a variety of forms which made it doubly vulnerable to various shocks. but now, the corporate sector is not under the burden of those excesses, and the aggregate business profits are close to record levels. owing to improved resiliency of corporate borrowers, japan β s financial sector is on a sounder footing as well. third, japan β s easy monetary conditions will continue to support demand. the real shortterm interest rate is in the neighborhood of zero. in addition, unlike in the united states and europe, credit spreads are relatively compressed. on the inflation side, japan β s core cpi inflation, which excludes fresh food, has edged up in recent months to hover around 1 percent, and the 1. 2 percent increase for this march was the highest in almost 15 years except in 1998, when japan β s consumption tax rate was raised. according to our april projections, our cpi inflation rate is expected to be around 1 percent in both 2008 and 2009. but more recently, signs are emerging that upside risks on the inflation front increase gradually amid rising energy and food prices. therefore, we are closely watching whether corporate pricing behavior will change and how general inflationary expectations will evolve going forward. this vigilance is important because higher input costs are gradually feeding through into the down - stream, and there are some indications that inflation sentiment among consumers might be slowly growing. having said all this, i think the risk balance for growth is still slanted to the downside, while pressures on prices are on the upside. at the same time, though, it is true that japan β s monetary conditions have been extremely accommodative for quite some time. in this light, we bear it in mind that if this monetary accommodation is maintained for long while downside risks subside, it might accentuate future cyclical swings in the economy by, for instance, encouraging excessive risk - taking. with respect to monetary policy stance in this fairly uncertain environment, the bank of japan has no prejud | 1 |
wealth in the hands of total strangers. the promise of high returns is so tempting that individuals who are in other circumstances perfectly rational and ready even to advise others of good investment outlets get carried by enchanting talks and end up losing their money. the responsibility of microfinance practitioners the wide - spread existence of spurious microfinance institutions in the society projects the entire microfinance industry as a fraudulent activity in the eyes of the public and law enforcement authorities. this is not a healthy sign for the future of microfinance industry at all. microfinance practitioners should put a stop to this unhealthy development by establishing a proper governance structure in microfinance institutions. they teach the poor of the importance of and the need for leading a responsible life. this responsible life includes behavioural traits like being truthful, being honest, being respectful and being exemplary. the cultivation of these qualities in life makes the poor wholesome individuals and that is the ultimate goal of any microfinance intervention in the society. if the microfinance practitioners do not practise what they preach, then, it is a serious lapse of the governance structure of microfinance institutions. since governance principles are rules of good behaviour and there is no effective way of ensuring their proper practice, the practitioners should make an extra effort to follow them. it requires full commitment and devotion on the part of microfinance practitioners and, in turn, depends on the personal qualities which they have cultivated in themselves. such quality developments come from long - term training, discipline and fear of losing credibility and reputation. in other words, microfinance practitioners should have the long - term sustainability, and not quick profit, as their goal. it is, therefore, necessary to develop microfinance practitioners before they are allowed to develop microfinance beneficiaries. noble eight - fold path is a guide for everyone the buddha preached the noble eight - fold path to be followed by both the kings and the subjects alike. it is a complete personal development programme for those who aspire to become successful and be of help to others in the society. it is a moral code that requires people to speak rightly, act rightly, live rightly, make efforts rightly, know rightly, concentrate rightly, think rightly and understand rightly. the noble eight - fold path is not a moral code that should be enforced by means of a moral law. it is simply a voluntary action which everyone should follow for | and it is now managed by an executive board consisting of six persons who make all of the strategic decisions. the price stability target has also been stipulated in the law text since 1999. the riksbank β s monetary policy strategy has been developed and modified. we do not think, act or communicate in the same way today as we did when the inflation targeting regime was new. the driving force behind the changes has come partly from practical experiences, both in sweden and other countries conducting inflation targeting. academic research has also played an important role. before i go into greater detail on how the riksbank β s strategy has developed and how it looks today, let me begin by describing the background to the establishment of an inflation target in sweden. background to the introduction of an inflation target in sweden on sunday, 19 november, the swedish krona will have been floating for exactly fourteen years. the date 19 november 1992 will always have a special significance for the riksbank, as it was the day that we were forced to abandon the fixed exchange rate, under dramatic circumstances and following a dogged defence of the krona against speculation. this happened in the midst of the most serious economic crisis in sweden since the 1930s β a crisis that can generally be described as a tragic climax to almost twenty years of stabilisation policy problems. the economic policy conducted during the 1970s and 1980s tended for various reasons to be overly expansionary and it proved difficult to maintain price rises and wage increases at a reasonable level. the idea behind the fixed exchange rate policy was to ensure that inflation in sweden would be in line with our most important trading partners β inflation rates and that the fixed exchange rate would function as a nominal anchor. instead, price and wage developments repeatedly came on a collision course with the fixed exchange rate and sweden suffered cost crises. to rectify this situation, the krona was devalued a total of five times during a period of seven years. however, the trend increase in domestic prices and wages continued to rise, so the fundamental problem was still there in the background. the result was modest economic growth, poor productivity growth and more or less stagnant real wages. this performance was markedly weak both compared with earlier periods and in relation to other countries. during the crisis years at the beginning of the 1990s the situation deteriorated even further. unemployment increased fourfold in the course of a few years and the central government finances deteriorated dramatically. long - term interest rates rose and the interest rate differential vis - avis | 0 |
the region, the usual suspects that could trigger a financial crisis must be avoided. this implies sustained emphasis on fiscal consolidation, low inflation, appropriate policies to manage volatile capital bis central bankers β speeches flows, and a sustainable balance of payments. the approach to reforms, going forward, must seek to balance the β growth and efficiency gain β goals on the one hand with β growth and equity goals β on the other. fourth, since national policies at times may not be adequate in a globalised world, voice of countries in the region in global governance may have to be collectively raised. global safety nets and global surveillance would have to be seen as an integral part of financial stability initiatives. fifth, financial sector development would require a cautious approach but without stifling innovations, as the financial markets remain incomplete in the saarc region. finally, i must thank now all involved in organising this symposium, having worked tirelessly for making this event a unique experience. i thank governor dr. subbarao for his guidance for the conduct of the event. our thanks to the distinguished guests from the saarc region for making the discussions so lively. i thank the senior management of the reserve bank who are present in full strength. the burden of organisation primarily fell on the regional director of kerala and the staff from our kochi and trivandrum offices. our deepest appreciation to all of them. thanks are due to the organising teams from the department of external investment and operations ( deio ) and department of economic and policy research ( depr ) from the central office of the rbi. i thank the government of india and government of kerala for their support. i thank the kerala police for providing security coverage. special thanks are due to the hotel staff and management of zuri resort and ergo, the service provider for making excellent arrangements. i once again thank all those who have been associated with this conference directly or indirectly. thank you. bis central bankers β speeches | third to 70 per cent. this represents increase of 50 million middle income households in rural areas. β’ retail credit has grown in the last four years by nearly 50 per cent per annum mostly at urban centres. as incomes increase, there is growing demand for retail credit in rural areas that is perhaps being met by the informal sector. anecdotal evidence suggests that moneylenders in rural areas face more competition from other moneylenders rather than from the banks. β’ with the growing rural connectivity and tele - density, a host of non - farm activities are mushrooming in the rural sector. currently, the rural market accounts for 53 per cent of the fast moving consumption goods ( fmcg ) and 59 per cent of the durable market in india. the rural consumers represent more than 50 per cent of the country's ` consuming classes '. part β iii : the way forward β some thoughts having discussed the rural urban divide in banking and the potential in rural banking, the question that remains to be addressed is β how can banks meet the challenges of banking in the hinterland? ( i ) to start with, i believe, fuller utilisation of existing capacity can itself give huge dividends. given the existing number of nearly 48, 000 rural and semi - urban branches, an increase of loans by rupees one crore per branch could imply additional profits of about rs. 480 crore to the banking system. ( ii ) currently each rural branch services only around 1000 loan accounts. if we assume that a bank branch can serve at least 3000 households, it would imply at the minimum tripling of the business at rural branches this might require redeployment and some increase in staff, especially field staff, and would be more than worth the effort considering the increase in business and profitability that it would result in. ( iii ) banks would need to decide the kind of delivery channels required for meeting the banking and remittance needs of the rural population. today the branch is not the only way of delivering banking services. all options such as mobile and satellite offices, rural atms, smart card and mobile phone based banking, use of intermediaries including shgs, including post offices need to be explored for penetrating into the rural markets. several banks have tie - up arrangements with corporates engaged in contract farming. it solutions can take banking to the remotest corner and cut costs apart from providing valuable databases for furthering business strategies. whatever be the mode of penetration, it is clear | 0.5 |
that they are difficult to redress. and it must be acknowledged that here a good deal of progress has been made over the past year. the unfolding of the crisis has shown that the governance model in place to date in the eu has been of no use in ensuring economic policy consistency or in managing crisis episodes flexibly and effectively. it β s now clear that public finances were not sufficiently restructured in the upturn, that macroeconomic divergences were excessive and that we need a well - designed financial aid mechanism to assist ailing countries swiftly and effectively. mindful of this, european governments and institutions have taken major steps towards correcting deficiencies in three fundamental areas : the strengthening of fiscal discipline, closer surveillance of macroeconomic maladjustments and the creation of a permanent crisis - management framework. starting with fiscal discipline, public debt levels will be more closely monitored and countries will have better incentives to comply with their commitments, through the introduction of broader and transparent sanctioning arrangements, which will moreover be applied at an earlier stage and, as far as possible, automatically. further, the reform of national fiscal frameworks is being promoted, so that budgetary policy rules and surveillance systems will be adopted that help curtail spending. moreover, a new framework for the prevention and correction of macroeconomic imbalances is being established. the aim of this mechanism is the early identification of the emergence of potentially β excessive imbalances β. when imbalances are considered to be too big, an excessive imbalance procedure will be initiated which will include recommendations for the adoption of corrective measures. the third key element of eu economic governance reform is the creation of a permanent crisis - management instrument, the so - called european stability mechanism, which will come into force in mid - 2013. geared to lend up to β¬500 billion, this mechanism will provide funds to countries with liquidity problems under strict conditionality. finally, a mention for the euro plus pact, approved in march by the euro area heads of state and of government. this pact involves a commitment at the highest political level to adopt the measures needed to attain competitiveness and employment - promoting objectives, to contribute to the sustainability of public finances and to reinforce financial stability. there β s always room for improvement and, at the ecb, we have called on heads of state to strengthen governance procedures further, for instance by making sanctions more automatic in cases of non - compliance so as to prevent governments succumbing to the temptation of being | integration projects came unstuck, the number of institutions needing additional capital rose to 13. on 14 april, the banco de espana approved the strategies and timetables submitted by these 13 institutions or groups. two were subsidiaries of foreign banks, which have been recapitalised by their respective parents ; the two spanish banks have reinforced their capital by resorting to the markets ; four savings bank groups have considered an initial public offering or the raising of capital from investors as a priority option, with a subsidiary alternative of resorting to the frob ( fund for the orderly restructuring of the banking sector ) if their initial approach did not work out as planned ; another savings bank has stated its preference to participate in an integration process with another more capitalised institution ; and, lastly, the remaining four savings banks have expressed their preference to reach the required level of capitalisation by means of the frob taking a stake in their capital. before 28 april, those institutions that had considered going to the frob as a priority source submitted their specific recapitalisation plans to the banco de espana. in the meantime, the frob has formally undertaken, with all institutions that have submitted strategies envisaging the possibility of resorting to it, to provide the necessary funds so that all institutions in the spanish banking system may comply with the new core capital ratio. at present, the recapitalisation plans submitted by the institutions are being analysed, as a further step in the timetable. by 30 september 2011, these institutions must have completed what was stipulated in their strategies. this deadline may, as provided for in the decree - law, be extended by three months by the banco de espana if considered necessary for justifiable operational reasons, and by up to six months if an initial public offering is involved. a conclusive step will thus have been taken in the savings banks sector restructuring strategy, which has entailed unprecedented change on many levels : balance - sheet write - downs at institutions ; integration projects among savings banks to achieve bigger and more efficient institutions ; a change in corporate model to smooth access to capital and to encourage enhanced governance, and, lastly, the recapitalisation of the sector. if these three reforms are resolutely seen through, there will be a favourable change on the markets similar to that seen in the first half of this year when the pensions reform and the recapitalisation of credit institutions were approved. spain might feature next year as a euro area country that still has a high | 1 |
even into negative territory. at face value, such estimates are consistent with the secular stagnation hypothesis. but as policymakers, can we really base our actions on such an intangible variable? my answer is no. this is why the ecb has always followed a comprehensive monetary policy strategy, based on two pillars, and has in practice always looked at a broad range of indicators to assess its monetary policy stance. second, policy instruments. proponents of the secular stagnation hypothesis typically argue that a low equilibrium real interest rate makes monetary policy ineffective, since interest rates cannot fall low enough to absorb the excess of saving over investment. and though several central banks have shown the zero lower bound is not, in fact, a constraint to the interest rate instrument, there is an effective lower bound on interest rates, which is probably not too far from zero. so does that mean central banks have reached the limit of their actions? again my answer is no. instead we have used non - standard measures to flatten the term structure of interest rates and lower financing costs in the economy directly. and the ongoing economic recovery is testament to their effectiveness. what this shows is that theoretical constraints can be lifted in practice, because the economy is much more complex than models can capture. third, the relationship of monetary policy with other policy areas. this is the thorniest issue. there is always a risk for a central bank of becoming the only game in town, even though large parts of the growth challenge are clearly beyond its remit. the drivers of long - term growth are innovation, technology diffusion, which is to say, productivity growth. to manage this risk, central banks should always staunchly stick to their mandate. this is the only way for them to do their part effectively while ensuring that the overall policy response remains comprehensive, consistent, well - sequenced and incentives - compatible. 1 this is the full text of remarks delivered in an abridged form in paris on 16 january 2017. 2 / 2 bis central bankers'speeches | jean - claude trichet : how to better protect the euro area against financial instability β interview in la stampa interview with mr jean - claude trichet, president of the european central bank, in la stampa, italy, conducted by mr stefano lepri, 14 october 2010. * * * mr president, is the crisis of the euro over? i interpret your question as applying more to financial stability in the euro area than to the euro itself. i do not think there has been a crisis. the euro is the single currency of 330 million people and enjoys a high degree of confidence among investors and savers because it has delivered price stability remarkably well over the last 11Β½ years. what we had was a situation in which a number of countries had not respected the stability and growth pact. these countries have now engaged in policies of fiscal retrenchment that were overdue. they have to implement vigorously these policies which are decisive for the preservation and consolidation of financial stability in europe. but, from now on, the rules must be strengthened. it was necessary to fully respect the letter and the spirit of the stability and growth pact. we have made that point constantly over the last years. on top of that, the governing council of the ecb β with mario draghi, the governor of the banca d β italia β calls for a β quantum leap β β a very, very significant improvement β as regards fiscal surveillance inside the euro area. we must also engage in surveillance of monopolies and, in particular, of relative competitiveness and of current account imbalances. to that end, we must exploit the possibility of secondary legislation under the current treaties to the maximum extent possible. even by imposing automatic sanctions? france, italy and some other countries would prefer not to. for us, the proposals of the european commission move in the right direction. but more ambitious reforms are needed. with the benefit of hindsight we know now that it is very important to engage in quasi - automatic sanctions, and with an accelerated procedure, with the countries that break the rules. if we want the euro area to better protect itself against financial instability, room for discretion in applying the rules must be reduced. sanctions must be possible in the early stages of macroeconomic surveillance. if this is not a common, it is a collective economic policy. but is it necessary to add a new rule on debt levels? in italy some are afraid a swift debt reduction β 2. 75 points each year in our case | 0.5 |
and senior insurance managers regimes. under these regimes all senior managers, including certain non - executive directors, will be held to a clear standard of behaviour. but the primary role of all neds is independent oversight and challenge of the executive and the pra recognises that the actual responsibilities of neds within the scope of the regimes differ from those of executive senior managers and they should be clarified and limited accordingly. key messages from the statement are : bis central bankers β speeches β’ it is a responsibility of boards to establish strategy, set the risk appetite and monitor risk across the business and hold management to account ; β’ the risk appetite must be clearly owned by the board, integral to the strategy and actively used to monitor and control risks and inform key business decisions ; β’ boards should articulate and maintain a culture of risk awareness and ethical behaviour ; β’ boards should include individuals with a mix of skills and experience that are up - todate and cover the major business areas in order to make informed decisions and provide effective oversight of the risks ; β’ but this does not mean expertise in every aspect of a broad and complex financial business β the point is to have the diversity of experience and capacity to provide effective challenge across the full range of business ; β’ boards should act in a co - operative and collegiate manner whereby the nonexecutives support and encourage executive management and vice versa ; β’ but this should not inhibit the non - executive directors from challenging executive management and holding them effectively to account ; β’ non - executive directors should ensure they have the time and resources and access to the business they need to fulfil their duties ; β’ executive management have a responsibility to ensure the board can exercise its role and should exercise their judgement in bringing key issues to the board β s attention at an early stage ; and β’ the principle of good governance, including independence of the chairman, should also apply to material subsidiaries. boards of regulated subsidiaries need to be able to take decisions where required to meet their own legal and governance responsibilities or in the interests of the safety and soundness of the subsidiary. but, that does not mean they should operate outside the general governance and objectives of the group to which they belong. independence in this context is carefully defined and limited. as you will all be aware, we have undertaken significant engagement with the boards of banks and building societies on governance. through our supervisory work, we are seeing improvement but in our view there is more to do. board effectiveness will therefore remain a key priority. to conclude, governance matters | generally reduced their commercial property loans, and non - prime has declined too. the main area of growth has been buy - to - let lending, which is true not just for societies but for lenders in general. now, i don β t want to demonise buy - to - let lending. we are watching carefully, and for the societies we see no evidence today that btl loans are of poorer quality than prime owner - occupier, and we see a fair amount of stability over time in maximum ltv and minimum rental cover. but, we are watching carefully, and of course applying stress testing across all loans. looked at more broadly, we are not seeing an upward surge in high ltv lending of the sort that was so damaging in the past, but there is an upward direction to the β admittedly small β share of lending at high ltv and high loan - to - income ( ie the two together ). we are, again, watching this carefully, and it is why in 2010 we implemented the building societies sourcebook to encourage appropriate risk management of lending and funding. the latter will be supported in future when we implement the net stable funding ratio which is the international standard to discourage reliance on short - term funding. we are also increasingly focussed on operational risks and the prudential implications of conduct risk, as i know are societies. i want to pick out one area of operational risk which is important, namely it systems risk. one aspect of this is the cost and complexity of updating legacy it systems in the face of growing demands on those systems from innovation in products. cyber risk is also very high on our list of priorities. i recognise that not all societies have an internet presence, though i do know, of course, that you all use the internet. we will be seeking to ensure that cyber risk is properly tackled by societies as appropriate. in saying this, i am not seeking to pick out societies from other firms that we supervise, but we do think that these risks are in important respects common to all firms. societies have generally been less affected than the large banks by conduct mis - selling costs, though not fully immune. we are watching again very carefully, and i can assure you that as prudential regulator we want to see sensible outcomes that balance the objectives of all parties and ensure that we maintain a stable financial system that can support the activity of today β s customers. nobody wants to see a world where ex - post enforcement weakens the | 1 |
but for more than four years now, we have been experiencing turbulent waters, storms, unexpected hurricanes. in demanding times, regular, real - time and transparent communication is more important than ever. the channels of national, european and global communication which you are responsible for are crucial for the appropriate functioning of markets, for the correct understanding of economists and economic agents, and for the information of the people of europe, our fellow citizens, to whom, as an independent institution, we are accountable. eight years ago the concept of a press conference immediately after the meeting of the governing council was still considered a bold innovation. today it is part of the global state of the art. and the vice - president and i also have to thank you for that. we are now at your disposal for questions. bis central bankers β speeches | the coming months. conclusion in conclusion, the health of the u. s. economy depends importantly on the vitality of the small business sector, and continued access to credit on competitive terms is central to that vitality. our 2007 report to you indicates that, since our 2002 report, small business access to credit has been robust. credit conditions have no doubt tightened since mid - august, but small businesses seem generally to have been able to retain access to credit. however, the effects of recent events are complex, the data are spotty and mixed, and it is far too early to draw the two components sum to more than 45 percent because some loans are collateralized by both business and personal real estate. any firm conclusions. moreover, the current level of uncertainty about the future is unusually high. thus, the federal reserve will continue to monitor closely the effects of current financial market conditions on small business finances as part of its efforts to ensure that distress in financial markets does not spill over into the broader economy. more generally, i assure you that the continued good health of the small business sector is an important consideration for the federal reserve as we strive to fulfill the dual mandate given us by the congress to promote both price stability and sustainable economic growth. | 0 |
you well in taking the profession forward. 4 / 4 bis central bankers'speeches | risks that banks undertake. second, there may have been an agency issue similar to credit rating agencies : as i mentioned earlier, external auditors are often remunerated by those very banks that they oversee. they may, thus, be tempted not to report evidence of any simmering malfeasances for fear of losing their business and third they may not fully endogenise the financial stability implications and may limit themselves to audit rules while discharging their duties. an externally audited account undoubtedly constitutes a thumbmark of the quality of reporting. however competently conducted, it cannot be interpreted as a blanket cover that everything is perfect in an organization. the instances of corporate failures that had escaped the radar screen of external auditors and gained notoriety afterwards as with enron, worldcom, nortel, tyco and parmalat are still vivid in our minds. accounting irregularities at leading corporate entities are a stark reminder as to how much the absence of accurate, timely and comparable financial information can impede the effective working of markets. auditors were the first ones to face a backlash and in some instances, their independence was even questioned. i cannot overlook the criticality of international standards in my remarks this morning. the implementation of international standards provides credence to our financial system and facilitate comparison across jurisdictions. countries β financial systems are increasingly built on a compendium of best - practice international standards. the international financial reporting standards ( ifrs ) form part of them. ifrs optimizes the decision making process by helping investors better identify opportunities and risks. these investors not only include individuals but also the big powerhouses such as sovereign wealth funds, pension funds and asset management companies, with billions of dollars and thousands of employees concerned. they need to maximize returns, minimize risks and maintain a diversified portfolio. as funds are invested in many countries, the adoption of ifrs has simplified matters when compared to the 3 / 4 bis central bankers'speeches pre - ifrs world of wildly diverging national accounting standards. i have, so far, highlighted the importance of accountants in the process of economic development of a country. as a final remark, let me very briefly reflect on a subject that many of us refrain from referring to for fear of being politically incorrect. it β s on greed, governance and ethics. in financial markets, devoid of proper institutional rules and discipline, there is the law of the jungle β because of greed. in my view, depending on how the concept of greed is understood, there | 1 |
, the ecb, and the chicago fed for making this event possible and successful. however, it is not the institutions themselves that make things work, it is the people behind the big names. my special thanks go to fiona van echelpoel, paola donati, william jones and zhanna unger from the ecb ; alessandro cocco, maggie sklar and ketan patel from the chicago fed ; and my bundesbank colleagues elvira scheben, susanne kretschmann and ayan hassan. β good friends never say goodbye. they simply say : see you soon. β 3 / 3 bis central bankers'speeches | target and non - sustainability practices will lead to an increase cost of business exporting into these markets. malaysia β s halal food and beverages segment, which makes up 80 % of malaysia β s halal production and 86 % 5 of total halal exports may be adversely affected by climate change. an increase in temperature will lower the resilience of the agroecosystem against pests and pathogens, resulting in lower yields and quality of crops, affecting the supply of raw materials. in addition, more mncs are embracing the sustainability agenda compelling halal smes to factor in sustainability as part of their business strategies, operations and decision making. it is heartening that prominent halal mnc manufacturers have already started imposing sustainable practices across their supply chain. nestle for example, has established the paddy club back in 2012 as an initiative to ensure rice used for the company β s cereal products is sourced sustainably and responsibly. another example is the sustainability agriculture code as a pre - requisite for suppliers to enter unilever β s supply chain as part of the group β s ambition to sustainable sourcing. towards this end, the islamic financial institutions have put together a lot of efforts and resources in place, underpinned by the concept of value - based intermediation ( vbi ) such that financing and banking activities are in line with sustainability practices. the vbi community of practitioners have collectively issued sectoral guidelines on palm oil, renewable energy and energy efficiency, that serve as an impact - based risk assessment toolkit to assist financial and investment decisions of banks. the takaful industry has followed suit with the issuance of the vbi for takaful framework that integrates the principles of vbi into products and business practices that promote financial resilience and climate risk management. conclusion before i end my remarks, i would like to touch on the importance of the right skill set that can future - proof our halal industry. as we navigate beyond the pandemic, leaders in halal business community have to be agile and forward looking. this includes keeping abreast of the latest technology and constant up skilling to embrace digitalisation. in recognising the potential of digitalisation as a key ingredient to assist halal businesses, the bank provides an enabling environment for financial institutions to foster innovation such as through the fintech regulatory sandbox and facilitation of pilot projects. these avenues enable the bank to identify potential adjustments or responses | 0 |
activity. and, unlike the first lockdown in march, we now have a clearer sense of the way forward, thanks to effective vaccines that have arrived sooner than we had anticipated. as these vaccines are distributed, they will save lives and livelihoods. governing council spent a lot of time discussing our expectations for growth once we get past the current surge in the virus. we recognized that, while the arrival of vaccines has reduced uncertainty from exceptional levels, uncertainty remains elevated. in particular, the timing and strength of the economic recovery will depend importantly on the evolution of the virus and the rollout of vaccines. 1 / 2 bis central bankers'speeches based on the current vaccine rollout plans, as we move into the second half of this year and more canadians are vaccinated, we expect to see sustained strength in consumption, with services picking up from very depressed levels. this should support job creation, particularly for workers who have been most affected by the pandemic. and as we move toward broad immunity, we can expect uncertainty about the pandemic to fade and business confidence to improve. this will lead to stronger business investment and exports, consistent with a more broad - based and sustainable recovery. all this will translate into strong economic growth in the second half of this year and first half of 2022. expressed in annual average terms, we project an expansion of 4 percent this year and almost 5 percent in 2022, easing to about 2Β½ percent in 2023. but even with this strong growth, governing council expects the recovery will be protracted, reflecting how far the economy still has to climb back to reach its full potential. in the mpr projection, economic slack is not fully absorbed until into 2023. let me say a few words about the outlook for inflation. in recent months, cpi inflation has increased to near the bottom of the bank β s 1 to 3 percent target range. we now project inflation to return to around 2 percent in the first half of the year, but this is expected to be temporary. the anticipated increase in inflation mainly reflects the effects of the sharp declines in gasoline prices at the onset of the pandemic. as those base - year effects fade, inflation will fall again, pulled down by the significant excess supply in the economy. as the economy absorbs this excess supply, we expect inflation to move up gradually and return sustainably to the 2 percent target in 2023. in sum, there is clear reason to be more optimistic about the direction of the | economy over medium term. but we are not there yet. the resurgence in covid - 19 cases weighs heavily on the near - term economic outlook. and this underlines the ongoing need for extraordinary fiscal and monetary policies. governing council spent a good bit of time discussing the amount of monetary stimulus the economy needs. in view of the near - term weakness and the protracted nature of the recovery, we concluded that the exceptional degree of monetary stimulus currently in place remains appropriate. we agreed that if the economy turns out to be substantially weaker than we are projecting β leading to more disinflationary pressures β then we have options to add even more stimulus. and we are prepared to use these options as needed. we also agreed that it is too early to consider slowing the pace of our purchases of government of canada bonds. however, if the economy and inflation play out broadly in line or stronger than we projected, then the amount of quantitative easing ( qe ) stimulus needed will diminish over time. in view of these conclusions, the governing council reiterated our commitment to hold the policy interest rate at its effective lower bound until economic slack is absorbed so that the 2 percent inflation target is sustainably achieved. in the projection we released today, that does not happen until into 2023. to reinforce this commitment and keep borrowing costs low for consumers and businesses, governing council decided to maintain our program of government bond purchases at the current pace of at least $ 4 billion per week. we will continue the qe program until the recovery is well underway. and as we gain confidence in the strength of the recovery, the pace of net purchases of government of canada bonds will be adjusted as required. we remain committed to providing the appropriate degree of monetary policy stimulus to support the recovery and achieve the inflation objective. let me stop there, and turn to you for questions. 2 / 2 bis central bankers'speeches | 1 |
responsible for the area of payments, i am a member of this group. on 2 october, we published the first results of our analysis. 4 the main question to be asked is this : under what conditions might it become necessary to introduce cbdc for the general public, or a digital euro? a structural decline in demand for cash, general support for digital transformation, and potentially competing other offerings of digital money from bigtech firms or other central banks are mentioned as possible motives for issuing a digital euro. this brings me back to disruption. the debate on the digital euro has just started. my impression is that many stakeholders in the economy have only now begun to understand this thing called cbdc. banking sector players who run successful business models for cashless payments, especially, need to grasp what it means to issue a digital euro in the euro area. some challenges would need to be overcome in this regard, particularly concerning the potential impact on banking business, financial stability and the central bank balance sheet. whether we will issue a digital euro is something which has not yet been decided. i would like to mention the ongoing public consultation which is open until 12 january 2021. the aim of this consultation is to find out the opinions of individuals, companies and other stakeholders on the digital euro, which we need to take on board when reaching a decision about an imminent β go β, a β no - go β or a β go later β. considering what covid - 19 has taught us about real disruption, i think there needs to be a response to the growing demand in the economy for cheap, quick and convenient means of payment which can also be used in new payment situations, like machine - to - machine payments. the bundesbank is deeply engaged in the debate on cbdc. but we are also thinking about alternative solutions, which could avoid disruption and help overcome the existing challenges, reap the benefits of going digital, and support new payment use cases without introducing cbdc. one way could be to enhance conventional payment systems, both at a domestic and a global level. in this respect, we urge the market to develop a pan - european payment solution with full deployment of the new instant payments infrastructure. in addition, we believe that the roadmap developed by the financial stability board ( fsb ) provides an excellent plan to enhance crossborder payments. 5 in this respect, it also becomes clear that cbdc is not a panacea ; the challenges we face are multi - faceted, and we | joachim nagel : the benefits of diversity for central banks speech by dr joachim nagel, president of the deutsche bundesbank, at the g7 cebadi diversity, equality and inclusion summit 2022, frankfurt am main, 4 november 2022. * * * 1 welcome good morning everybody, when i was invited to give the " opening speech " at your cebadi summit some time ago, i happily agreed. unfortunately, my schedule changed in the meantime and i wasn't able to make it yesterday. thus, i am only joining you on the second day of this summit. and i would like to share some thoughts with you : the experts who are driving diversity throughout central banks worldwide, who are attending this summit either in person or virtually. 2 why diversity does matter let me start with the basics. the bundesbank, as a federal authority in germany, is of course committed to the values of our society. diversity is a cornerstone of our liberalpluralistic system of values. it is enshrined in our constitution and a key human rights issue. as a public authority, we also want to reflect the society we serve. this is a question of fair participation for all. looking at the bundesbank as an employer, however, there is another aspect that needs to be taken into account. we need more diversity because diverse teams can achieve better work results. the reason is that diverse teams are more likely to question traditional structures and to think creatively. they tend to find different ways of solving a problem. this is how innovation is achieved and how an organisation remains capable of learning and developing. 3 dimensions of diversity to attain this diversity of thought, we need to promote all dimensions of diversity in all its facets. over the last decade, the focus of diversity at the bundesbank has been first on the inclusion of people with disabilities and second on equality between men and women. we have already been very successful in the inclusion of persons with disabilities. in 2014, the bundesbank further developed the previously existing integration agreement and adopted the inclusion agreement. in doing so, it became one of the first federal authorities in germany to adopt the un disability rights conventions and to firmly anchor the guiding principle of inclusion within the bank. in recent years, the bundesbank has significantly exceeded the legally required quota of 6 % for employees 1 / 3 bis - central bankers'speeches with disabilities. last year, this quota was even slightly above 9 %. however, for me | 0.5 |
in advance of our schedule in satisfying the requirement stipulated in article viii of the imf articles of agreement. in the next five years, china will continue to adopt an appropriately tight monetary policy. the adoption of this policy means firstly, we will have an appropriately tight monetary stance to keep inflation at a level lower than the rate of economic growth. secondly, money supply should grow at an appropriate level. in the next five years, the annual growth rate of m1 will be kept at around 18 % and m2 at 21 % to 23 %. thirdly, reforms and improvements will continuously be made to the approach in making macro - economic adjustment. that is, we will move from reliance on direct control of the volume of credit towards regulating money supply by means of indirect monetary policy instruments such as reserve requirements, open market operations and interest rate policy. appropriately tight monetary policy is not limited to the control of total credit but also adjustment of the credit structure, deepening of monetary reforms, and timely adjustments to the different aspects of the monetary system. an appropriately tight monetary policy is conducive to the healthy, stable and sustained growth of the national economy. it also helps to create favourable conditions for the resumption of sovereignty and the continued prosperity of hong kong. stability in china is the very basis for hong kong β s stability while hong kong β s stability will certainly enhance economic reform and developments in china. foreign investors in hong kong will, at the same time, benefit from the stability of china and hong kong. those sceptics who have doubted china β s commitment to the open door policy no longer can have such doubts after witnessing the implementation of our economic reforms and its achievements. i hope you will recognise that china is firmly committed to implementing the principle of β one country, two systems β and maintaining the prosperity and stability of hong kong, just as we have been firmly committed to the implementation of economic reform in china. the principle of β one country, two systems β is the realisation of the spirit of our constitution and has become a long - term irreversible national policy. as china continues to pursue its economic reform, hong kong β s role as the international financial centre in china will become more and more important. we will do our best to help maintain the existing economic system of hong kong and keep up its economic dynamism. we also hope that the international financial community will join us in our efforts to maintain hong kong β s prosperity and stability. ladies and gentlemen, when you | to 12 months. trading rules are also specified and updated in relevant regulations, and the deliver - versus - payment ( dvp ) approach is introduced in settling draft transactions to reduce risks. going forward, the pbc and financial institutions should strengthen communication and training, and focus on innovation and risk prevention. in particular, it is important that merits of electronic drafts are effectively communicated to their major user, i. e., the enterprises. financial institutions should leverage the new system to consolidate their businesses and create better products. it is also critical that we make efforts to address potential security risks facing the system. the development of the electronic commercial draft system received support from many financial institutions. a number of banks and finance companies, including the china merchants bank, china citic bank, china minsheng bank, and industrial and commercial bank of china contributed to the discussions, drafting of regulations, and system testing that eventually lead to the creation of the system. on behalf of the people β s bank of china, i would like to thank these banks, and other banks, finance companies, and the clearing center for rural credit banks for your contribution. thank you. | 0.5 |
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