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tiber - eu framework 8 european commission, digital operational resilience framework for financial services : making the eu financial sector more secure, consultation document. 3 / 3 bis central bankers'speeches | system i will finish with an update on progress on regulatory reforms and supervisory actions to strengthen the financial system. in october, the federal reserve board proposed a rule to strengthen the liquidity positions of large and internationally active financial institutions. 1 together with other federal agencies, the board also issued a final rule implementing the volcker rule, which prohibits banking firms from engaging in short - term proprietary trading of certain financial instruments. 2 on the supervisory front, the next round of annual capital stress tests of the largest 30 bank holding companies is under way, and we expect to report results in march. regulatory and supervisory actions, including those that are leading to substantial increases in capital and liquidity in the banking sector, are making our financial system more resilient. still, important tasks lie ahead. in the near term, we expect to finalize the rules implementing enhanced prudential standards mandated by section 165 of the dodd - frank wall street reform and consumer protection act. we also are working to finalize the proposed rule strengthening the leverage ratio standards for u. s. - based, systemically important global banks. we expect to issue proposals for a risk - based capital surcharge for those banks as well as for a long - term debt requirement to help ensure that these organizations can be resolved. in addition, we are working to advance proposals on margins for noncleared derivatives, consistent with a new global framework, and are evaluating possible measures to address financial stability risks associated with short - term wholesale funding. we will continue to monitor for emerging risks, including watching carefully to see if the regulatory reforms work as intended. since the financial crisis and the depths of the recession, substantial progress has been made in restoring the economy to health and in strengthening the financial system. still, there is more to do. too many americans remain unemployed, inflation remains below our longer - run objective, and the work of making the financial system more robust has not yet been completed. i look forward to working with my colleagues and many others to carry out the important mission you have given the federal reserve. thank you. i would be pleased to take your questions. see board of governors of the federal reserve system ( 2013 ), " federal reserve board proposes rule to strengthen liquidity positions of large financial institutions, " press release, october 24. see board of governors of the federal reserve system, commodity futures trading commission, federal deposit insurance corporation, office of the comptroller of the currency, and securities and exchange commission ( 2013 ) | 0 |
is not under the direct control of monetary policy, and it is not our objective. we target a 2 per cent inflation rate. that means that it is the outlook for overall inflationary pressure and related risks that matters most when we consider the appropriate stance for monetary policy. so even if only a few sectors were expanding enough to absorb the excess capacity in the aggregate economy, we would need to take the appropriate monetary policy action to meet our inflation target. so let us look at how the economy has been performing recently. signs that growth is broadening when we assess the extent to which the sources of growth are broadening, we look at the economy from a number of perspectives. these include the progress made in adjusting to lower oil prices, the range of industries that are growing and the evolution of the labour market. as i discuss each in turn, i will point to some signs that growth is broadening across regions and sectors, although not to the same extent. adjustment to lower oil prices let us start with the adjustment to lower oil prices. in 2015 and 2016, the starkest effects of the drop in oil prices on gdp were in business investment. firms in the oil and gas sector cut capital spending in half, shutting down oil rigs and cancelling investment plans. investment in the rest of the economy was also subdued, in part as a result of the weakness in non - commodity exports, especially last year. the economy kept growing, thanks to household spending, and activity was concentrated in regions where the energy sector was not as important. today, as we move past the adjustment to lower oil prices, we are seeing the economy pick up. a couple of weeks ago we got the national accounts data from statistics canada for the first quarter of this year. it was pretty impressive, with growth at 3. 7 per cent. and the figures show business investment growing again. this is in large part because capital expenditures in the oil and gas sector have bounced back. that is good news. that said, investment growth in this sector is likely to moderate if oil prices stay around where they are today. more generally, ongoing uncertainty about the policies of the us administration is weighing on investment plans. and, given how business investment has declined in the past two years, we flagged it as one of the downside risks to the outlook in our april monetary policy report. growth in the first quarter was also fuelled by the usual suspects β consumer spending and residential investment. however, growth in the housing sector is | mark carney : bank note launch remarks by mr mark carney, governor of the bank of canada, to the mars discovery district, toronto, ontario, 14 november 2011. * * * it is a great pleasure to be here in the mars discovery district, where science and innovation meet. i am here to announce the issue of the new $ 100 bank note which is available, as of today, in banks across the country. we are very proud of our innovative polymer bank notes. they are more secure, more economical, and better for the environment than any we have issued previously. these notes are also potent symbols of our rich heritage. the design of the $ 100 bank note celebrates canadian innovation in medical research, including the discovery of insulin to treat diabetes. we are honoured to issue this note on the site where banting and best conducted their groundbreaking research almost a century ago. many forget that diabetes was once a death sentence. the discovery of insulin changed that. it was at that desk, sir frederick banting β s desk, where science and innovation met and the lives of hundreds of millions of people changed. today β s date is no coincidence. november 14 is world diabetes day and the 120th anniversary of sir frederick banting β s birth. this $ 100 note is a tribute to canadian researchers who have left their mark in many areas. allow me to mention the transformational work of john hopps, who invented the pacemaker in 1950. he developed this life - saving device at the university of toronto's banting institute, located across the street from here. this spirit of innovation carries on today and so the note also celebrates the scientists who continue to make our world a better place by improving the lives of many. here in mars, medical professionals are mapping the human genetic code as well as tackling some of the most daunting medical challenges of our time, including cancer and macular degeneration. these polymer notes don β t just celebrate innovation ; they are themselves at the frontier of bank note technology. they were developed by a team of physicists, chemists, engineers and other experts from the bank of canada and from across the bank note industry. there is no other currency like it anywhere in the world. these new notes contain a unique combination of transparency, holography and other sophisticated security elements. in addition to impressive security features to stay ahead of counterfeiting threats, these bank notes will last longer β at least two - and - a - half times | 0.5 |
us residential investment, must not be repeated. otherwise, the crisis risk will remain high, and globalized finance will be seen only as a threat to long - term economic stability. managing this risk and growing safely will be the stake of emerging market economies going forward. to achieve this, policymakers will need to acknowledge the risk and come up with the appropriate safeguards. first and foremost for emerging markets is the continued strengthening of the domestic financial sector as i have noted, which is the key pre - requisite for raising the ability of the financial system and the economy to manage risk. next, regional financial mechanism will also need to be strengthened to provide additional safeguards in the context of market surveillance and coordination of crisis prevention and resolution efforts. one lesson we have learnt dearly from the current crisis, as well as from the asian financial crisis, is that globalized finance can be a source of serious risk to global economic and financial stability. policymakers at the global level must accept this fact and be prepared to respond to it in a forward - looking way. i probably have used up the allocated time. again, i want to thank the central bank of peru and reinventing bretton woods committee for the invitation. it has been a pleasure, and thank you for your attention. | given to the agenda of long - term competitiveness and sustainable growth. this calls strongly for structural reforms of the supply side of the economy, where the constraints are particularly binding and a large - scale upgrading long overdue. bis central bankers β speeches pursuing demand management policies alone can only take us so far β somewhat akin to stepping on the gas pedal without upgrading or modifying the car we drive. pursuing demand β side policies can also come with a steep price tag, especially when the policy borders on the realm of populism. such policy would add to micro - level risks by making households undisciplined and addicted to β easy β money, while also add to macro - level risks by stretching fiscal resources without enhancing competitiveness in any meaningful way. the bank of thailand views the need to address structural issues to be very timely and pressing. β lifting barriers to sustainable growth β was indeed the central theme of investigation of the bank of thailand symposium this year, which was held at the bangkok convention center last week, and i hope some of you had a chance to participate in the event. my comment today, however, is my personal view and is not intended to be related to the symposium. successful reforms, in my opinion, will need concentrated efforts on the following three areas : relieving labor market constraints, engineering a β transformative β upgrading of the supply side, and leveraging opportunities surrounding us. let me elaborate on each of them. relieving constraints in the labor market ladies and gentlemen, moving the country forward requires taking a step backward to examine closely what is holding us back at the moment. the first area that has been particularly binding is the labor market β an issue that has been nagging us all along, but often fails to get attention amid the clamor of short - term economic issues. over the past decade, both the total workforce and labor productivity have been growing very sluggishly. another related problem is that of skill mismatch, where workers with needed vocational training are in much shorter supply relative to university graduates. these pose serious limits to capacity expansion and innovation efforts of the private sector. to alleviate the problems in the near term requires that distorted incentives be corrected. policy distortion such as the rice mortgage scheme and subsidy of other agricultural prices should be kept to a minimum, for these incentives drive workers away from high valueadded sectors to the agricultural sector. to solve the problems in the longer term requires educational reforms that tackle two major challenges : namely, raising | 0.5 |
monetary policy report presentation before the finance committee of the honorable senate of the republicβ mario marcel governor central bank of chile 2 april 2018 see the march 2018 monetary policy report at http : / / www. bcentral. cl. β mr. president of the senate β s finance commission, senator juan pablo letelier, senators members of this committee, ladies, gentlemen, i am grateful for your invitation to present the vision of the board of the central bank of chile on the latest economic developments, their perspectives and implications for monetary policy. this vision is contained in detail in our monetary policy report ( the report ) of march 2018. first and foremost, let me introduce to you our new board member mr. alberto naudon, who became part of the board only a few days back, after being unanimously recommended by this committee and then his appointment approved, also unanimously, by the senate. it is worth noting that this is the first time we present the report under the new monetary policy scheme that we began this year and under which we have tied its release with the monetary policy meetings. with these changes, we have significantly increased the information we deliver, establishing its relationship with monetary policy decisions more clearly. the greater transparency required by this scheme makes it necessary for the dates of our meetings and the subsequent publication of the monetary policy report to be communicated to the market well in advance, so that there are no surprises in this regard. for the same reason, as was the case with this report, the time span between the report β s publication and this presentation has been a little longer. please note that we see this delay as a one - time thing and we are willing to attend this committee to present our monetary policy reports with all the haste that you may require. we have used this opportunity to add some information that came after the report β s cutoff date to this presentation, plus some issues that have come up in the days following its publication. thus, we look forward to an exchange with the committee as enriching as it can be. now let me share with you the main conclusions and projections of our report. first, it is important to stress that this report clearly marks a turning point in the business cycle that translates into higher growth and lower risks to both activity and inflation. the national accounts figures we published two weeks ago showed two important developments. on one hand, the economy was quite weak between late 2016 and early 2017. in retrospect, these figures are consistent with other recent | the analysis of the information set out above, the supervisory council holds that the risks around the expected inflation trajectory remain balanced. on the demand - side, below - potential economic growth will continue to generate low inflationary pressures, while supply - side shocks are also expected to remain contained. at the end of discussions, the supervisory council decided to keep the key interest rate unchanged at 4. 25 %. this decision aims to create adequate monetary conditions for meeting the inflation target in the medium run. it also provides proper support to boost aggregate demand. bis central bankers β speeches | 0 |
to the destabilizing effects of high foreclosure rates. i visited california's inland empire and los angeles, as well as areas in atlanta, that until recently were economically vibrant. many coastal cities β even those with jobs and growing populations β now are in distress because of high rates of foreclosure. for instance, the florida cities of cape coral, miami, orlando, tampa, and sarasota are among those with the highest rates of foreclosure β between 3. 8 and 10 percent. these areas, and others in the west, such as las vegas and phoenix, experienced very high rates of new home construction and speculative investments that resulted in unsustainable price escalation throughout the early part of this decade. 4 vacant properties are creating a different kind of problem in some california markets. indeed, as investors sense that home prices have bottomed out, they are approaching servicers with cash offers for the bulk purchase of properties. in fact, community organizations in areas of california complain that investor interest has heated up to the point that qualified first - time homebuyers and local community organizations are being crowded out of the market. foreclosure rescue scams that have taken up residence in nearly every community appear to be even more prevalent in stronger market areas where retaining title to a home is more economically feasible. one counselor in los angeles told me that as many as 80 percent of the homeowners she counseled had been victims of rescue scams. mallach, alan. stabilizing communities : a federal response to the secondary impacts of the foreclosure crisis. brookings institute. february 2009. mallach, alan. stabilizing communities : a federal response to the secondary impacts of the foreclosure crisis. brookings institute. february 2009. http : / / www. detroitagriculture. org / garden _ resource _ program. htm. mallach, alan. stabilizing communities : a federal response to the secondary impacts of the foreclosure crisis. brookings institute. february 2009. in addition to the economic dynamics of any particular city, it is clear that, even within metropolitan areas, community stabilization issues can vary from neighborhood to neighborhood. for example, cleveland's highest vacancy rates are primarily in its urban core, while in atlanta, the problem of high foreclosure rates is found not only in the urban core, but also in outer suburban communities that experienced significant growth | janet l yellen : confirmation hearing testimony by ms janet l yellen, vice chair of the board of governors of the federal reserve system, before the committee on banking, housing, and urban affairs, us senate, washington dc, 14 november 2013. * * * chairman johnson, senator crapo, and members of the committee, thank you for this opportunity to appear before you today. it has been a privilege for me to serve the federal reserve at different times and in different roles over the past 36 years, and an honor to be nominated by the president to lead the fed as chair of the board of governors. i approach this task with a clear understanding that the congress has entrusted the federal reserve with great responsibilities. its decisions affect the well - being of every american and the strength and prosperity of our nation. that prosperity depends most, of course, on the productiveness and enterprise of the american people, but the federal reserve plays a role too, promoting conditions that foster maximum employment, low and stable inflation, and a safe and sound financial system. the past six years have been challenging for our nation and difficult for many americans. we endured the worst financial crisis and deepest recession since the great depression. the effects were severe, but they could have been far worse. working together, government leaders confronted these challenges and successfully contained the crisis. under the wise and skillful leadership of chairman bernanke, the fed helped stabilize the financial system, arrest the steep fall in the economy, and restart growth. today the economy is significantly stronger and continues to improve. the private sector has created 7. 8 million jobs since the post - crisis low for employment in 2010. housing, which was at the center of the crisis, seems to have turned a corner β construction, home prices, and sales are up significantly. the auto industry has made an impressive comeback, with domestic production and sales back to near their pre - crisis levels. we have made good progress, but we have farther to go to regain the ground lost in the crisis and the recession. unemployment is down from a peak of 10 percent, but at 7. 3 percent in october, it is still too high, reflecting a labor market and economy performing far short of their potential. at the same time, inflation has been running below the federal reserve's goal of 2 percent and is expected to continue to do so for some time. for these reasons, the federal reserve is using its monetary policy tools to promote a more robust recovery. a strong recovery | 0.5 |
mario draghi : ecb press conference - introductory statement introductory statement by mr mario draghi, president of the european central bank, and mr luis de guindos, vice - president of the european central bank, frankfurt am main, 12 september 2019. * * * ladies and gentlemen, the vice - president and i are very pleased to welcome you to our press conference. we will now report on the outcome of today β s meeting of the governing council. based on our regular economic and monetary analyses, we have conducted a thorough assessment of the economic and inflation outlook, also taking into account the latest staff macroeconomic projections for the euro area. as a result, the governing council took the following decisions in pursuit of its price stability objective. first, as regards the key ecb interest rates, we decided to lower the interest rate on the deposit facility by 10 basis points to β 0. 50 %. the interest rate on the main refinancing operations and the rate on the marginal lending facility will remain unchanged at their current levels of 0. 00 % and 0. 25 % respectively. we now expect the key ecb interest rates to remain at their present or lower levels until we have seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2 % within our projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics. second, the governing council decided to restart net purchases under its asset purchase programme ( app ) at a monthly pace of β¬20 billion as from 1 november. we expect them to run for as long as necessary to reinforce the accommodative impact of our policy rates, and to end shortly before we start raising the key ecb interest rates. third, we intend to continue reinvesting, in full, the principal payments from maturing securities purchased under the app for an extended period of time past the date when we start raising the key ecb interest rates, and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation. fourth, we decided to change the modalities of the new series of quarterly targeted longer - term refinancing operations ( tltro iii ) to preserve favourable bank lending conditions, ensure the smooth transmission of monetary policy and further support the accommodative stance of monetary policy. the interest rate in each operation will now be set at the level of the average rate applied in the eurosystem β s main refinanc | over a very long distance. and competition in the banking industry is becoming increasingly tougher and more international. not only competition for customers, but also competition for investors. global regulation and european supervision are creating an international β level playing field β in which investors will put their funds where the returns are greatest. german banks are therefore increasingly being forced to face international competition. and they are not performing all that well. in the current issue of its global financial stability bis central bankers β speeches report, the imf notes that return on equity in the euro area is low compared with that in other regions such as the united states or asia. 1 german banks are underperforming the rest of europe, too : in 2013 their return on equity, at 1. 26 %, and return on assets, at 0. 06 %, were both below the european average. a recent study has concluded that currently only 6 % of germany β s banks even earn enough to cover their cost of capital. 2 a business model which is relatively dependent on interest income is the main culprit for these weak earnings. in a protracted phase of very low interest rates, this imposes a particularly severe strain. at the same time, commission income and net trading income are insufficient to provide adequate compensation. given these factors, german banks would be well advised to rethink their business models and to gear them towards the objective of sustainable profitability. however, the imf sees germany as being more towards the bottom of the international rankings with regard to overhauling business models. there is yet another important aspect to profitability : if the circuit is clogged with runners, they will get in each other β s way. mergers could therefore be beneficial, particularly in the german banking industry β the focus here should, of course, always remain on achieving a sustainable business model. to sum up : in the comprehensive assessment, german banks demonstrated that they are robust enough to withstand even severe stress but have to increase their profitability in order to cross the finishing line at the front of the pack. 3. stability β much progress already made but a good deal left to do however, investors are not only interested in banks β profitability but also in their stability β and the same is true of us supervisors, of course. and when measuring a bank β s stability, capital is still the crucial factor. the stress test has shown that german banks are sufficiently capitalised even in a very adverse scenario β after all, the german banks that were | 0 |
to offset this impact as part of our planned 2017 review of the leverage ratio framework. to be clear, removing central bank reserves from the leverage exposure measure will not neutralise all of the impact of the leverage ratio that darell and arvind highlight β for example repo will be unaffected by this change. however it should address some of the other issues around money market rate dispersion and pass - through efficiency raised in the paper. β’ if central bank reserves are included in the leverage exposure measure, banks must think carefully before accepting a deposit. if it implies an increase in their overall asset size, their leverage capital requirement will increase commensurately, and that will bring a shadow regulatory cost of the same order of magnitude as those calculated in the paper. this disincentivises competition for deposits, and drives a wedge between the central bank policy rate and rates that banks will pay on wholesale deposits. β’ if central bank reserves are removed from the exposure measure it instantly gives banks somewhere to place cash without impacting their leverage ratio. they would therefore maximise profits by competing for deposits at rates all the way up to the rate that can be earned on reserves at the central bank, thus improving passthrough to average bank deposit rates and strengthening the transmission of for example, imf ( 2009 ) and aikman et al ( 2014 ), and others. bis central bankers β speeches monetary policy to the real economy. and the early indication from market participants is that they do indeed expect this change to strengthen the link between money market rates and bank rate. in short, although regulatory innovations such as the leverage ratio are here to stay, we can and should attenuate some of their impact on money market function where it is possible to do so without reducing the financial stability benefits. this process of reducing unintended consequences is made easier by close co - ordination of different policymakers, which at the bank of england is facilitated by having monetary, macro - and micro - prudential policy all under one roof. the role of central banks in money markets let me turn to the role of central banks as a participant in money markets. just as private market participants have grappled with new challenges in the post - crisis world, so too have central banks. and we have responded in three ways. first, we have become more flexible in the way we implement changes in the policy rate. the frameworks we use to influence market rates need to recognise the fact that there are a | supervised the solvent exit of nineteen banks, excluding branches of foreign firms, resolutions, mergers / acquisitions and licences surrendered as part of a wider group restructurings. 16. in the uk, a key element of this is the resolvability assessment framework : resolvability assessment framework | bank of england 17. for example, the need to make so - called β fair value adjustments β to the book value of the acquired bank β s assets can create a negative capital impact on the acquiring bank β s balance sheet at the outset. 18. minimum requirements for own funds and eligible liabilities. 19. this evidence is discussed in our consultation on the topic : cp10 / 23 β solvent exit planning for non - systemic banks and building societies | bank of england 20. in principle this argument might apply to large, complex firms as well β but those firms are required to issue bail - in debt instead and in practice it seems less likely that we could pull off such a solvent wind - down for the whole of a large firm. 21. while this speech is focused on banking, i should note that we are undertaking similar work on ease of exit for insurers β taking account of differences in business models across the two sectors. 22. the pra has consulted on the definition of a firm that would be in scope of the simpler prudential regime for small domestic - focused banks and building societies ( these proposals were first consulted on in cp5 / 22 - the strong and simple framework : a definition of a simpler - regime firm | bank of england, and updated in cp16 / 22 β implementation of the basel 3. 1 standards | bank of england ). for instance, a firm must have total assets ( measured on a three - year moving average basis ) of no more than Β£20 billion. the pra has also consulted on simplifications to liquidity and disclosure requirements for these firms in february 2023 ( see cp4 / 23 - the strong and simple framework : liquidity and disclosure requirements for simpler - regime firms | bank of england ). 23. and many of the future tools i β ve just discussed about continuity and outcomes in insolvency would also only be applicable to subsidiaries, not branches. sam woods deputy governor for prudential regulation and chief executive officer of the prudential regulation authority | 0.5 |
available pricing data, are incorporated into statistical management systems that analyze lending patterns and help direct the examination process to aspects of the bank's program that may warrant a closer look. even in smaller banks where a statistical analysis cannot be performed, the hmda data can be used to start the fair lending review. however, as we know, hmda data have limitations. for example, the data do not include credit - risk factors such as credit scores and loan - to - value ratios. because of these limitations, the examination process looks at additional information about a lender's practices, and about particular loans, before any conclusions are drawn. examiners consider - together with hmda data - information derived from consumer complaints, risks apparent from various business lines, and the adequacy of the institution's compliance - risk management program. since examiners will be looking at the data, it would be advisable for a bank to make a review of the data a component of a comprehensive fair lending compliance program and community reinvestment act strategy. in fact, examiners will look carefully at analyses of hmda data performed by a bank and talk with the bank to understand the reasons for any disparities in lending patterns. the bank is probably in the best position to understand what the hmda data suggest about its ability to reach prospective borrowers. consequently, its own assessment is useful to an examiner establishing the fair lending examination scope. examiners want to know how banks have addressed any disparities and how the bank's analysis has led to any changes in controls that were made to ensure that policies are followed. i want to emphasize that, as with compliance - risk management programs, the breadth of a banking organization's program and system review should be commensurate with the size and complexity of its operations, the range of its products, and the demographics of its markets. beyond this review of hmda data, examiners evaluate whether an organization's fair lending compliance framework makes it possible to identify, monitor, and effectively control risks. examiners are looking for a clear articulation by the board of directors of the institution's lending strategy, including defined risk parameters and the execution of appropriate risk - measurement and riskmitigation initiatives. examiners will evaluate the extent to which management controls reflect the risk associated with the institution's lending strategy. as with the broader area of compliance - risk management, examiners will look closely at how the compliance culture established at | based on the new knowledge gained from this additional analysis, the u. s. agencies collectively decided to move ahead with our next proposal but adjust the plan for u. s. implementation of basel ii - - as announced in our joint news release on september 30. among a number of adjustments, we indicated our intention to extend the timeline for implementation and augment the transitional floors, which should provide bankers and regulators with more experience with basel ii before it is fully implemented in the united states. in terms of the specifics of the qis4 analysis, we learned that the drop in qis4 capital was largely due to the favorable point in the business cycle when the data were collected. while the previous qis3 exercise was conducted with data from 2002, a higher credit loss year, qis4 reflected the more benign credit conditions present in 2004. we learned that the dispersion among institutions was largely due to the varying risk parameters they used, permissible in the qis4 exercise, and also due to portfolio differences. that is, banks have different approaches to risk - management processes, and their models and databases reflect those differences. importantly, we also learned that some of the data submitted by individual institutions was not complete ; in some cases banks did not have estimates of loss in stress periods or used ad hoc estimates, which might have caused minimum regulatory capital to be underestimated. based on the results of qis4, the federal reserve recognizes that all institutions have additional work to do. in our view, the findings did not point to insurmountable problems, but instead identified areas for future supervisory focus. in that way, the qis4 analysis was critical in enabling us to move forward. we were also pleased to see that general progress is being made toward developing more risk - sensitive capital measures. as most of you know, the plans for u. s. implementation include a year of parallel run - - a period in which minimum regulatory capital measures for basel ii will be calculated parallel to the existing basel i measures - - as well as three years of transitional floors. the agencies expect to perform additional indepth analyses of the basel ii minimum capital calculations produced by institutions during the parallel - run and transitional - floor periods before we move to full implementation without floors. we want to ensure that the minimum regulatory capital levels for each institution and in the aggregate for the group of basel ii banks provide an adequate capital cushion consistent with safety and soundness. it is also helpful to remember that | 0.5 |
and implications of basel ii, central bank of the republic of turkey, istanbul, 16 may 2005. * * * ladies and gentlemen, i thank the organizers of this conference for inviting me to be here today. i am especially pleased to be speaking on such an important issue. the concept of financial stability, considered from different perspectives, which is the main focus of the conference, is appropriately receiving considerable attention in the light of the variety of risks confronting financial systems. my presentation will deal with the practice of financial stability assessment in greece, key aspects of the basel ii implementation process in greece, and some implications of basel ii for financial stability. it is generally agreed that the objective of financial stability assessment is to review the main sources of risks and vulnerabilities likely to affect the stability of the financial sector and to evaluate its capacity to absorb the impact of adverse disturbances. the bank of greece β s assessment of the stability of the greek financial sector is contained in a section devoted to that issue of its semi - annual report to the greek parliament. moreover, the bank β s annual report to the general meeting of its shareholders also contains a section on the stability and the supervision of the greek banking sector. before presenting the bank β s approach to financial stability assessment, let me provide some key aspects of the greek supervisory framework and of the greek financial sector. effectively there are three bodies responsible for supervision of the financial system as a whole. β’ the bank of greece regulates and supervises credit institutions and some special institutions such as credit companies, financial leasing and factoring companies, etc. it also has a mandate to contribute to the overall stability of the financial sector. β’ the hellenic capital market commission regulates the capital markets and supervises investment firms and collective investment funds. β’ finally, the recently - established commission for the supervision of private insurance is responsible for insurance companies. cooperation between the three domestic supervisory authorities is crucial to the pursuit of financial stability. to this end, a memorandum of understanding has been signed between the bank and the capital markets commission which lays down the practical arrangements for cooperation ; in addition a representative of the bank sits on the commission β s board. cooperation with the new supervisory body for the insurance industry is expected to be organized along similar lines once the authority is fully operational. banks dominate the greek financial sector, accounting in terms of assets for approximately 85 % of the entire financial sector. the banking sector itself is characterized by relatively high concentration with the 5 largest banks controlling 65 % of the total assets of the | . in fact, until not long ago, the consensus in academia on monetary policy mostly overlooked the issues related to structural change and uncertainty β as reflected, for example, in lars svensson β s presentation at the 1999 jackson hole symposium. this literature implicitly assumed that we, central banks, were aware of the true economic model, that we were able to correctly observe all relevant variables, and that we accurately knew the nature and sources of the various random forces affecting the economic system. in this conceptual approach, the only remaining β uncertainty β was actually the effective value of these stochastic disturbances. in terms of the knightian distinction between risk and uncertainty, it was, at most, a risk situation where policymakers seemed to know the random distribution within the various contingencies. they also seemed able to quantify the likelihood of the several possible events occurring, ultimately assuming that the future would replicate the past. however, in most cases central banks evidently face a quite different reality : many risks are essentially not quantifiable because quite often not only the likelihood of each individual event is unknown, but also the whole range of possible contingencies. in short, uncertainty makes monetary policy implementation an extremely hard task, even in industrial economies. in emerging countries, where institutions are still in the process of consolidation, the central banker β s task is even harder : the instruments have a limited power and the boundaries between the scenarios which require intervention due to market failures and those that belong to the usual turbulences in a dynamic market are not so well - defined. this is especially true for countries that have had a fixed exchange rate for decades and, for several reasons such as fiscal, financial, or external dominance, have suffered from macroeconomic instability, marked by currency substitution and the dollarization of liabilities, which have hampered monetary policy implementation. uncertainty about how the economy really works and about the true value of the parameters together with data quality and timeliness ( and, consequently, the robustness of estimates ) is an essential constraint that not only affects the central bank, but also the private sector. there is huge uncertainty about the future behavior of the main domestic variables, especially in relation to ( both goods and factors ) relative price dynamics and that of the various sectors of the economy. another important restriction is given by the difficulty in identifying the nature of shocks, especially external shocks. the world continues to tread today a path of sustained expansion in a context of stability. this pattern of growth is even healthier than | 0 |
, the board is not required to include a person regulated by a state insurance regulator or a regulated foreign subsidiary or affiliate of such person engaged in the business of insurance. 6 / 6 bis central bankers'speeches | 2015 in the june tankan, with corporate profits increasing to a historical high. in the household sector, despite the effects of irregular weather, private consumption has been resilient, reflecting steady improvement in the employment and income situation, as seen in, for example, the continued improvement in the active job openings - to - applicants ratio. in addition, housing investment has started to pick up. given these developments, a virtuous cycle from income to spending is expected to continue operating steadily in both the corporate and household sectors. with regard to prices, the year - on - year rate of increase in the consumer price index ( cpi ) for all items less fresh food had slowed toward the end of fiscal 2014, due in part to the effects of low crude oil prices. excluding the direct effects of the consumption tax hike, the rate has been about 0 percent recently. 2. outlook japan β s economy is expected to continue recovering moderately. on the price front, the year - on - year rate of increase in the cpi is likely to be about 0 percent for the time being, due to the effects of the decline in energy prices. nevertheless, as the underlying trend in prices steadily rises and the effects of the decline in crude oil prices dissipate, the rate is likely to accelerate toward 2 percent β the price stability target. risks to the outlook are those that primarily stem from overseas factors. specifically, these include developments in emerging and commodity - exporting economies, the prospects regarding the debt problem and the momentum of economic activity and prices in europe, and the pace of recovery in the u. s. economy. the bank compiles and releases the policy board members β forecasts for economic activity and prices on a quarterly basis. looking at the medians of the members β forecasts released in july 2015, the real gdp growth rate is projected to be 1. 7 percent for fiscal 2015, 1. 5 percent for fiscal 2016, and 0. 2 percent for fiscal 2017. the year - on - year rate of increase in the cpi ( all items less fresh food ), excluding the direct effects of the consumption tax hikes, is projected to be 0. 7 percent for fiscal 2015, 1. 9 percent for fiscal 2016, and 1. 8 percent for fiscal 2017. the bank projects that the timing of the rate reaching around 2 percent will be around the first half of fiscal 2016, assuming that crude oil prices will rise moderately from the recent level. bis central bankers β speeches 3. | 0 |
2. it must have a price performance that is sustainable and an average inflation rate that does not exceed by more than one and a half percentage points that of the three best - performing eu countries in terms of price stability ; 3. it must have had an average nominal long - term interest rate that does not exceed by more than two percentage points that of the three best - performing eu countries in terms of price stability ; 4. its national currency must have participated in the exchange rate mechanism ii for at least two years and thus have respected the defined fluctuation margins of the currency towards the euro ; 5. it should ensure that it meets the requirements of legal convergence. bis central bankers β speeches in its regular convergence reports, the european central bank has emphasised that these criteria be met in a sustainable manner. with regard to romania, achieving an environment conducive to sustainable convergence requires, inter alia, a stability - oriented monetary policy and the strict implementation of its fiscal consolidation plans. let me now return to the euro exhibition itself. the euro exhibition has been on display at many locations throughout the eu, so far including bratislava, barcelona, rome, berlin, frankfurt, luxembourg, warsaw and tallinn. after bucharest, it will continue its journey across europe to paris, sofia and athens. the main objective of the euro exhibition is to give citizens of all ages the opportunity to familiarise themselves with the euro. visitors will have the chance to explore subjects ranging from the history of money to the production of euro banknotes. in addition, they will be able to learn how to check the security features of euro banknotes through the many interactive displays. as you walk around the exhibition, you will no doubt recognise the images of bridges that feature on the back of the euro banknotes. these bridges symbolise communication between the people of europe, and between europe and the rest of the world. they also represent the connection between the past and present, and symbolise a common european future. the diversity of europe is also reflected on the national sides of the euro coins, which depict national icons and symbols representing the national heritage and culture of each euro area country. the euro exhibition also takes the younger generations into consideration. in the kids β corner, children can play the educational computer games, learn more about the features of euro banknotes from the interactive displays or follow the story of anna and alex as they catch counterfeiters. for those of you here who have children, this is a good opportunity for them to | ##s the political rationale for monetary union β that all members are better off over time inside the union than they would be outside β it also weakens its longterm cohesion. that has negative spillovers for all member economies. it is in this context that several of my colleagues on the ecb executive board have recently called for stronger common governance at the european level over economic policies. 1 the ability of all countries to adjust well to shocks is not only key for the delivery of our mandate, it is vital for the integrity of the currency. this is an area of legitimate interest for the central bank which is the guardian of that currency. however, it is important to stress that the ecb β s interest in structural reforms should not be misinterpreted as a call for centralisation along a β one size fits all β model. we do not need all euro area countries to adopt identical structural reforms. what we need is a framework that takes into account both how countries differ based on their national conditions, and how they are similar by virtue of being in a monetary union. within those parameters there are various combinations of country - specific institutions that can produce smooth adjustment. let me illustrate what i mean by focusing on one example : labour markets. theory suggests that, in a monetary union, there are certain principles that should apply to labour markets across countries. for instance, without the option of exchange rate devaluation, maintaining wages in line with productivity over time is thought to be central to sustaining competitiveness and avoiding painful internal devaluations. ensuring that wages can respond to changes in labour demand or supply is also seen as a key element in limiting the employment cost of shocks. if firms have the scope to cut costs on the intensive margin β i. e. wages, bonuses and working time β they are less likely to cut costs through the extensive margin, that is, labour shedding. wage - productivity links have indeed proven to be an important factor in countries β external positions. france, for example, has experienced large losses in export market shares since the start of monetary union in 1999, and part of the reason for this is that labour market institutions have allowed wages and productivity to de - link across firms. micro - level data show that wages have grown almost as much in the least productive french firms over the last decade as they have in the most productive. by contrast, in germany there is clear wage dispersion according to firm productivity. for instance, see draghi, | 0.5 |
rigid hierarchy until the day comes when a junior economist can say β governor, your last speech was disappointing β while having lunch with me. in addition, we should always keep in mind that the end - user of our policy services is not the team head, director general, or governor, but the economic agents on the outside. no matter how many reports we make, without this customer - oriented mindset, the reports will be good only for internal use and will be little known of or looked for by the public. let us now ask ourselves if, under pressure to maintain the neutrality of the bank, we have tried to avoid any controversy that our policy implications or suggestions might stir, and have tended to end with only fragmented and technical analysis of data. only when we thoroughly analyze the information and present policy suggestions focusing on customers β needs will we be able to solidify our status as a think tank for the national economy as well as a policy authority. the shift to a horizontal relationship and the customer - oriented mindset is also complementary with nurturing expertise in individual staff members. in order to share information and vigorously debate with each other to come up with results that can win recognition from our customers, individual staff must have their own expertise, supported by the culture of recognition and evaluation. let us improve our system so that each person is given discretion and opportunities to show their full potential, and their work product is assessed in an objective and fair manner. in this sense, i will make sure that not only the 4 / 6 name of the department you have worked in but also every detail of your performance, including the matters you have worked on and the papers you have written, is included in personnel records, to enable longer - term and systematic management of assessment - relevant information. i will also provide full support for your efforts toward capacity building, by strengthening training programs as well as mentoring and coaching. maintaining a work - life balance is also important. here, i do not mean only the passive dimension of having after - work hours at your disposal. the quality of life and livelihood must be guaranteed in a balanced way, for which satisfaction about wages or welfare benefits is a pre - condition. only then will our staff members be able to carry out their jobs with a high sense of self - esteem and motivation. although we do have some practical constraints, as governor, i will look carefully into every nook and cranny to see what improvements we can make. given that our organization consists of over 2, | 400 employees of various responsibilities and positions, i will work hard to find ways to improve our staff β s treatment so that they are not left behind, no matter where they are. what is as important as the level of salary and benefits is support for career development. it is inevitable that the younger generation of our staff who will live in the so - called β homo hundred era β will be making plans for life after retiring from the bok. considering this, enhanced individual capacity will not only result in stronger competitiveness of our institution but also should be considered as accumulation of a valuable asset outside the bank in the future. supports for career advancement and expertise development must be provided in a way that nurtures human capital while, at the same time, increasing the market value of individual employees, with our institution serving as a stepping stone for each staff member to grow. lastly, in order for the organizational reform to bear fruit, everyone regardless of rank must join in the efforts. the executive management should lead by example, by being open and receptive to changes. changes need to flow from top to bottom. i ask you to take the lead so that the difference can be really felt this time. junior employees should seek to further hone your skills. you should ask yourselves whether you have chosen the convenience of complaining, blaming the organizational culture as the root cause of everything, without 5 / 6 making sufficient efforts on your side, particularly in this ict era where anyone, if they want to, can find the most up - to - date information, and the most renowned experts at a click of a button. i will stand at the forefront of this collective endeavor toward change. my door will always be open to you. please do not hesitate to share your ideas, if you have anything you wish to add on to our discussions so far. and let us act on it together. as the old saying goes, a chick can hatch from its egg when the chick and its mother hen peck from inside and outside together. i hope that the external expectation for constructive reform, combined with our own internal efforts, help us break away from the existing framework and adapt swiftly to the changes of our time. the improvement we make might be small, but certainly not its implications. as we celebrate our 72nd anniversary, i would like to once again express my sincere appreciation for your hard work. i wish you and your family good health and happiness. thank you. 6 / 6 | 1 |
have made cybersecurity one of our strategic priorities. and secondly, personal data and big data. naturally, the spread of connected objects that is triggering an exponential rise in the amount of data available on insurance policyholders represents an opportunity for the business of insurance, which consists precisely in collecting and exploiting data in order to quantify and put a price on risk. nonetheless, i would urge insurers to take a responsible approach : we need to strike the right balance between segmentation and the sharing of risk between policyholders. the basic principles of solidarity and risk - pooling that are intrinsic to insurance are at stake. and we must not lose sight of our collective values regarding individuals β right to privacy. before concluding, i would like to add a few words about brexit. the french authorities are mobilised and committed to making paris a leading destination for insurance undertakings. the acpr has taken the lead with an english - language fast - track authorisation. we are holding serious and discrete discussions with various business prospects. the recent announcement by the american group chubb, the united states β leading property and casualty insurer, of its intention to transfer its operations to paris demonstrates that our expertise in supervision in particular is a recognised asset. but mobilising must not mean abandoning our high standards and requirements, and brexit cannot be an opportunity for british entities to simply set up empty shell corporations in europe, mere company name plates, while keeping their resources in the united kingdom. in this respect, i fully agree with the vigilance called for by eiopa. and lastly, brexit also brings with it certain risks, and consequently the need for contingency plans : i am thinking particularly of the french policyholders who took out insurance directly with british undertakings, and by way of symmetry, the french undertakings with commitments in the united kingdom. beyond what the insurance sector can do for our economy, i would like to conclude by telling you what we can do for you. at the banque de france and the acpr, we are ready and committed to supporting you through all the current upheavals that are forcing you to rethink your business models and professional reflexes. that could be digital technology β for which we have created a fintech unit and put in place the fintech forum β and could also be regulatory developments or even climate change, which we will discuss again on 11 and 12 december in paris. i know that you are | central bankers'speeches increasing, but remains below our target. already before the 2008 crisis, central bankers firmly believed that price stability is a necessary β and for some even a sufficient β condition to ensure financial stability. this view is referred to as the β jackson hole consensus β. following the financial crisis, financial imbalances were seen as a huge source of disruption which decision - makers needed to remedy, questioning the relationship between monetary and financial policy tools and objectives. let me give two polar views on that. a first approach, in line with the β jackson hole consensus β, is to clearly separate monetary stability from financial stability. in line with the tinbergen rule and the mundell efficiency principle respectively, one policy should fulfil one objective and each policy tool should be assigned to the objective it can fulfil the best. in this regard, monetary policy would not be efficient at mitigating financial imbalances but would not generate them either. on the other side, an extreme approach is to consider that both policies are strongly intertwined and that their respective objectives could be merged : in this case, monetary policy could reduce risk taking and target asset price bubbles. i consider that full adherence to the separation principle and the combining of objectives are both approaches that are too radical to conduct monetary and financial stability policies. the implementation of unconventional policies has blurred the frontier between the two objectives. let me quote here my colleague vice - president vitor constancio : β macroprudential policy and monetary policy rely on separate tools and aim to achieve different objectives. yet, they need to be co - ordinated, which is a non - trivial task. β 3 it is a wise view. keeping monetary policy aligned with its primary objective of price stability but not blindly sticking to the separation principle may help us to manage our two main objectives and strengthen our credibility. as you may know, the banque de france, like many other central banks, has had the dual mandate of maintaining price stability and preserving financial stability since 2013. the financial stability mandate is demonstrated by the fact that the governor of the banque de france has the sole right and responsibility to make proposals for implementing macroprudential instruments to the high council for financial stability, the french macroprudential authority. i consider this specific role assigned to the governor of the banque de france as an opportunity to make price and financial stability objectives more consistent. first, macroprudential policy complements the monetary policy framework decided | 0.5 |
moderation in all things speech by charlotte gerken given at the 20th annual conference on bulk annuities published on 27 april 2023 the bulk purchase annuity ( bpa ) market is in a period of accelerated growth, and insurers may be tempted to over - indulge in new business in the short run. charlotte gerken outlines three areas where we are already seeing this in practice : an expansion of bpa insurer risk appetites ; an increased reliance on third party capacity ; and greater interconnectivity with the wider financial system. insurers will be playing an increasingly important role in providing financial security to millions of annuity policyholders and as investors in the uk real economy. to be successful in both over the medium to long term, insurers β senior managers need to exercise moderation in the short term. their decisions today commit them and their successors to pay pensions for many decades to come. charlotte explains how, working with insurers, the pra aims to strengthen senior management accountability and enhance market discipline through the implementation of the solvency uk package. speech introduction thank you for your introduction, and for inviting me back to the bulk purchase annuities conference. a lot has happened since i spoke at last year β s event [ 1 ] β in financial markets, the economic outlook and on the regulatory side. and a lot is happening in the bulk purchase annuities ( bpa ) market : pension scheme funding levels have greatly benefited from the rise in interest rates [ 2 ], and the uk insurance industry is preparing itself for record levels of bulk purchase annuity transfers [ 3 ]. de - risking corporates of their legacy defined benefit schemes brings substantial benefits to uk plc, and the additional capital insurers inject contributes to the security of pension scheme members. this structural shift in the provision of retirement income also gives insurers an increasingly important role as long term investors in the uk real economy. insurers therefore need to balance the short term financial and reputational incentives to grow rapidly, with long term and enduring financial strength, to meet the long term needs of policyholders and the economy. i spoke to you last year about the conditions for long - term sustainable growth in the annuity sector. this year, in the face of considerable temptation to capture business opportunities, i will argue that bpa writers need to exercise moderation. in that vein, let me invite you to a not quite epicurean three course | now, it β s still a long way from where it was before all this began. growth of 5 % in q2 would still leave uk gdp 4 % lower than at the end of 2019. and economic contractions don β t normally lead to higher inflation. we can identify a number of contributory factors, things that help to account for this contrast, right off the top. one is base effects. arguably, comparing economic growth over the past eighteen months with the change in prices over the past twelve isn β t quite fair. one of the reasons annual inflation has risen so steeply through this spring is that prices of goods ( energy in particular ) fell significantly a year earlier, during the first phase of the pandemic. over the past year and a half as a whole, so including that initial drop, headline and core cpi have both risen at an average ( annualised ) rate of 1Β½ - 1ΒΎ %, a little weaker than pre - pandemic rates. we know too that quite a bit of the drop in output has been matched, on the supply side, by the significant numbers on the furlough scheme. the cjrs has successfully protected millions of jobs. but, because those on furlough aren β t available for others, it β s had the effect of matching part of the decline in labour demand with a decline in labour supply. during the second quarter of this year it β s likely that an average of over 2Β½ million people were furloughed β more than 7 % of the workforce. some of those employees were actually working, at least on a part - time basis, and furloughed jobs tend to be less well paid than the average. but, taking account of these things, the scheme was still holding back effective supply in the economy by an estimated 2 % - 3 % in q2 ( chart 1 ). all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice finally, we also know that the share of the population either in or actively looking for work β the so - called participation rate β has also fallen ( the red line in chart 2 is the year - on - year change ). this too will have reduced the supply of labour. chart 1 : by protecting jobs cjrs had the effect of reducing labour supply alongside labour demand1, 2 sources : ons, hmrc, obr and bank calculations. | 0.5 |
, perhaps, are the implications arising out of the basel ii accord. banks, as we all know, are subjected to more intense regulation as compared to the non - financial firms. this is probably because the banks possess certain β special β characteristics : banks are much more leveraged than the other firms due to their capacity to garner public deposits. the asset - liability structure of the banks is also different from not only the non - financial firms but also the financial firms. to illustrate, the risk in an insurance company arises mainly from the liability side of the balance sheet in the form of insurance claims whereas for the bank the risk mainly comes from the diminution of asset values ( for example, illiquid loans that are not fully recoverable ). the deposits which constitute a major part of the liability of banks are repayable on demand, unsecured and their principal amount does not change in value whereas the loans of a bank are illiquid and there can be erosion in the value of loans or of other assets. the liquidity transformation by an insurance company is in the reverse direction as compared to a bank. the balance - sheet structure of an insurance company is the least likely to give rise to systemic risk, whereas banks due to their typical asset liability mismatches i. e. long term assets funded by short term liabilities, may be prone to β run β and pose a very high degree of potential systemic risk. the resolution costs of systemic bank insolvencies and significant banking problems can be substantial. the financial services regulators and central banks are increasingly focusing their attention not only on the health of the individual banks and financial institutions but also on issues of financial stability. bank regulation is now increasingly getting risk - centric. this process had its origin in the cooke committee or the basel i proposals which for the first time prescribed a risk - based capital adequacy framework for banks by recognizing that different counterparties had different risks and therefore had to be risk - weighted differently. accordingly, the risk - weights of 0 %, 20 % and 100 % were assigned for the exposures to government, banks and corporates, respectively. further, for the first time the framework required capital to be maintained for the off - balance sheet exposures also. moreover, capital was seen as multi - tiered with tier 1 and tier 2 capital and some jurisdictions permit the use of tier 3 capital as well. these proposals were path - breaking considering the credit risk management capabilities of the banks in 1980s | karnit flug : where is society headed? main points of a speech by dr karnit flug, governor of the bank of israel, at the central bureau of statistics conference, jerusalem, 17 february 2014. * * * i will begin my remarks with data from the oecd, which compared gdp per capita in its member countries with the us, broken down into factors which explain the gap between the various countries and the us. in 2011, the gap between gdp per capita in israel and the us was close to 50 percent. the oecd also tried to project what the picture will look like in 2060, assuming that current policy trends in the various countries, and expected demographic trends, continue. the gap between israel and the us is expected to remain more or less the same, as israel is forecast to decline by four places in the country ranking. this is clearly a troubling picture. economic policy is conducted under various trends and constraints, though we must obviously remember that over the long term we can affect the overall framework of the constraints as well. these trends and constraints include demographic trends, the geopolitical situation, the level of governance and efficiency in the public sector, the scope of public expenditures, taxes and the debt, and of course, the global environment in which we work is very challenging. expected demographic trends point to two very dominant factors. a change is expected in the composition of the population, by sector, with an increase in the share of the arab sector, and more so of the ultra - orthodox sector, in the overall population. there is also a change expected in the age distribution β israel β s population is relatively young, compared with advanced economies, but there is an aging trend by us as well, and the share of those 65 years and older, currently around 10 percent, is expected to reach 17 percent. in the labor market, the employment rates of ultra - orthodox men and arab women, as known, are low. the productivity of the people from those population segments who do participate in the labor market is low, on average. the good news is that there is improvement, albeit slow, in the employment rate of these two segments of the population. however, if we make a radical assumption, that the participation rates of those sectors will remain at current levels, demographic trends on their own are expected to reduce the employment rate by 7 percent in the long term. thus, it is important that we continue to invest in increasing the participation | 0 |
the bsp has adopted various disclosure and reporting mechanisms which you are familiar with. these mechanisms are intended to help the public understand what the bsp is doing and the reasons for its monetary policy actions. for instance, we have the : 1 ) press statement after the meeting of the monetary board on bsp β s monetary policy stance ; 2 ) highlights of the monetary board discussion which is published in our website after a lag of six weeks ; and 3 ) quarterly inflation report and the related media briefing. as a bonus, you also get a monthly dose of our inflation forecast relative to our annual target. we also hold public discussions to increase public understanding and ownership of the monetary policy process. the public information campaign in various locations around the country has helped increase the public β s familiarity with inflation targeting and monetary policy in general. the bsp β s communication approach has been aimed at the very broadest audience possible, with the policy stance articulated in layman β s terms as much as possible. this approach has generated positive feedback from various quarters and served bsp in good stead. the role of economic journalists in assessing our performance in the communications front, i believe we are making good progress and headed in the right direction. we are well aware that earning the people β s trust in the credibility of the bsp remains an ongoing challenge. we know that the familiarity of the general public with the bsp and its functions still needs to be further enhanced. in this regard, economic journalists have a very important role to play. along with other forms of media, you have the responsibility of informing the public about the bsp β s monetary and banking policies. in the process you contribute to constructive public dialogue on such policies and not simply noise. the central purpose of journalism is to provide citizens with accurate and reliable information that they need to function in a free society. to achieve this, we conduct regular briefings for you and other members of the press on economic concepts and issues. we hope that you will continue to help us convey to the public the bsp β s policies and decisions in a clear, accurate and balanced manner. malaki po ang inyong naitutulong sa pagpapalaganap ng mga layunin namin sa bangko sentral. naniniwala po ako, na dahil sa inyong tulong, mas mabilis na nagiging malinaw sa ating mga mamayan ang mga polisiya ng bang | transparency and communication β. transparency broadly relates to the openness of a central bank in making explicit its monetary policy decisions and explaining the reasoning behind them. from a strategic perspective, it also encompasses clear communication of the longer - run objectives and strategy of monetary policy. through your insightful reporting, you actually help us operationalize our communication policy at the bsp. in the past, there has been a general view that central banks tended to operate with considerable secrecy and mystery. however, over the past decade or so, most central banks have moved towards increased transparency and greater communication in the conduct of monetary policy. a brief look at the developments in financial markets and the conduct of central banking in recent decades will show that this trend developed partly out of necessity. what are these developments? first, it has become increasingly clear over the last few decades that central banks need to have a considerable degree of independence to ensure consistency in the implementation of monetary policy over time. but along with a high degree of independence, central banks are required to be transparent to establish accountability. in effect, without transparency, nobody knows what an unelected bunch of central bankers do or commit to do. there is no basis for assessing their performance and accountability. as a parenthetical remark, let me say here, this principle of independence requiring transparency, leading to accountability, further leading to performance and commitment works well even in other areas, including the area of politics. second, financial markets have increasingly become globally interconnected such that monetary policy, whether good or bad, can be rapidly transmitted and thereby, impact on the behavior of market participants. it then becomes imperative for central banks to effectively communicate their actions to allow financial markets to figure out policy decisions. this is good for business and macroeconomic planning and promotes general stability. finally, inflation targeting, our monetary policy framework, is forward - looking, and the only way to establish accountability is to be transparent about the commitment to promote price stability. central banks, however, did not embrace transparency ( and necessarily communication ) only because they were forced to do so. increased transparency and greater communication have their benefits. it is in a central bank β s own interest to be transparent in its monetary policy actions. clearly communicating the level of price stability and the strategies to achieve it β¦. help to anchor the inflation expectations of the business sector and the public in general. what is the practice of the bsp in terms of transparency and external communication? in the past four years of the inflation targeting framework, | 1 |
in japan during the crisis, bank lending substituted the financial intermediation function during such phase and underpinned the rapidly deteriorating firms β funding. subsequently, when the functioning of the capital market was restored, bank lending started to decline. therefore, it became clear again that the existence of multiple financial intermediation channels is important for the availability of firms β funding and the robustness of the financial system. bis central bankers β speeches second, the existence of multiple financial intermediation channels alone would not be sufficient to ensure financial system stability. former federal reserve board chairman greenspan once pointed out that one reason for japan β s protracted crisis was that its financial intermediation was concentrated on banks, and the financial system like that in the united states, which has a variety of financial intermediation channels, would be more robust against shocks to the financial system and the real economy. however, the fact that the crisis deepened in the united states implies that such view is not necessarily correct. what is important is that each financial system participant maintains business soundness and pursues solid risk management, and, at the same time, that the regulatory and supervisory authorities and central banks recognize where the risks lie in the financial system as a whole from a macro perspective and take proper responses. namely, i believe it is critical for financial system stability to maintain not only the robustness of the financial system structure but also self discipline of financial system participants and the risk capturing capability of the authorities at a high level as a whole. c. challenges for japanese financial institutions : micro perspective i will next talk about two specific challenges for japanese financial institutions. i will touch on the challenges for the authorities in the final part of my speech. selecting business models and sustained improvement in profitability the first and the biggest challenge for japanese financial institutions is to raise their profitability in a sustained manner. looking at the recent business performance of japanese financial institutions, core profitability has been trending down due partly to a narrowing profit margin and declining lending outstanding. for that reason, an increase in profitability is an imminent challenge. in doing so, while it applies to every industry, it is essential to choose the optimal business model that utilizes an institution β s respective realms of expertise. as i have mentioned earlier, competition in commercial banking business, in which japanese financial institutions are mainly engaged, is expected to intensify at home and abroad. japanese financial institutions that receive domestic stable personal deposits have an advantage, including funding for overseas activities, in | ##ncy. consideration of the lessons from the financial crisis and the introduction of improvements to the eu framework for supervision and crisis management has already started. in october, the european commission set up an independent high level group to develop proposals to strengthen the supervision of european financial institutions and markets and financial stability arrangements. the group shall present its report to the european commission in view of the spring european council 2009. i will assure you that the ecb governing council will examine very carefully all proposals which will be made by the high level group, as well as by the european parliament and by the industry itself. conclusion ladies and gentlemen, continued financial integration is of key importance for europe. the financial crisis that we are currently facing may have caused a freeze on this development in some markets ; all the more i urge us all to keep the momentum in this important process. the ecb remains firmly committed to fostering further financial integration. the successes of target and target2 demonstrate the importance of the work done in the field of market infrastructures. we will now continue working hard in order to address the still remaining gaps. finally, the financial crisis confirmed the importance of an appropriate public policy response, both in terms of crisis prevention and crisis management, to avoid cross - border spillovers in the single market. stronger coordination among member states and eu institutions for crisis prevention and crisis management is needed. the ecb will closely follow the debate and contribute to it where necessary. i thank you for your attention. | 0 |
illustrated the potential of markets for providing funding to the real economy ( particularly to the most innovative sectors ) ; but it also demonstrated the tendency of markets to over - react, moving from excessive optimism to disproportionate pessimism, with the ensuing negative consequences for the behaviour of firms and households. as a result, financial authorities have been confronted with boom - bust episodes which must be carefully monitored, since they could affect global monetary and financial stability. i would like therefore to consider two issues here : β’ firstly, experience suggests that financial cycles may have recently tended to amplify relative to business cycles ; what are the driving factors behind this move ; β’ secondly, what are the possible policy implications of this development, from both a monetary and financial stability perspective. 1. experience suggests that financial cycles have recently tended to amplify relative to business cycles. a. what are the major features of these amplified financial cycles? let us first consider credit cycles. there is no doubt that the amplitude of credit cycles is usually larger than that of business cycles. what is however noticeable here is that, over the last three decades, business cycles have been less frequent and less amplified while credit cycles have tended to remain fairly marked. thus credit cycles have been amplifying in relative terms compared with business cycles. asset price cycles have also become more pronounced even if the fixed interest rate markets have a tendency to be somewhat contra - cyclical. β’ in the last two decades market forces have indeed tended to cause clear misalignments between equilibrium and actual asset prices. stock markets in particular have experienced this phenomenon. but in foreign exchange markets as well, prices have also tended to diverge substantially from their β equilibrium level β, although those divergences have been contained through fruitful gvii cooperation during the last 15 years. β’ in addition, some markets have seen an increase in volatility and frequent volatility peaks. although cyclical moves should be clearly distinguished from volatility, the latter may in some circumstances exceed what can be considered optimal, making the price determination mechanism less efficient and thus contributing to misalignments. β’ moreover, as demonstrated by a number of financial crises during the last two decades, contagion among countries and across financial markets has been frequent. as a result, investors have faced asset price fluctuations that might be more synchronised than before. β’ lastly, the connections between credit, asset price and business cycles have tended to amplify cyclical | swings. credit, in particular, has played an increasing role in asset price fluctuations. initially observed during the β speculative bubbles β of the 1980s and early 1990s, this trend has persisted. another example is provided by boom - bust cycles in asset prices and credit activities, which have often been associated with sharp economic contractions. in sum, the recent period has experienced some amplification of financial cycles, compared with business cycles. b. what are the factors underlying this possible amplification of financial cycles? let us first consider credit cycles : β’ the first factor in play is the behaviour of banks, which is closely linked to their environment. some of them may have tended to artificially increase their return on equity through higher leverage or low provisioning during upswings. as a consequence they tend to become more fragile in the downward phase of the cycle. in parallel, investors have become more reluctant to invest in the banking sector when profit expectations are low, making it difficult for banks to raise new funds. banks β soundness therefore tends to be more correlated to economic fluctuations than in the past, contributing to the amplification of the credit cycle. β’ accounting regulations so far may also contribute to amplifying credit cycles to some extent. in most financial centres, current provisioning behaviour does not allow banks to take a forward - looking view of their risks, as accounting and tax rules only accept loan - loss provisions for impaired loans. such a regulatory environment may amplify the credit cycle, contributing to low provisioning and over - lending during upswings and paving the way to sharp corrections during downswings. using full fair value accounting for loan portfolios might further amplify credit cycles by increasing the volatility of banks β earnings. β’ prudential rules may also have been unable so far to always prevent these developments. current capital adequacy rules are not risk - sensitive ; as a result, credit deterioration does not require additional regulatory capital unless loan losses erode the capital base under minimum requirements. as most banks β particularly large ones β have capital far beyond the prudential minimum requirements, they can bear a reduction of their capital base without being compelled to restrict their credit granting. therefore, capital ratio is not pro - cyclical as such. the point is that, even while capital requirements are fulfilled, losses can reduce banks β own funds at a time when capital issuance is difficult or costly ; in such a juncture, some analysts argue that banks may be | 1 |
alessandra perrazzelli : italy is back on track - recovery, resilience and attractiveness remarks by ms alessandra perrazzelli, deputy governor of the bank of italy, at the workshop on italy β s attractiveness, dubai expo, dubai, 24 november 2021. * * * i would like to thank the organizers for inviting me to this workshop on italy β s attractiveness. in my short speech, i will focus on three aspects : the economic outlook for the italian economy ; the medium - term growth prospects and risks ; and the great opportunity represented by the national recovery and resilience plan ( nrrp ), which is the plan italy has designed and is implementing in the context of the next generation eu ( ngeu ) fund, the european recovery package to support member states hit by the covid - 19 pandemic. the economic outlook the italian economy returned to growth early this year. after a modest expansion in the first quarter, gdp rose markedly in the following two β by 2. 7 per cent in the second quarter ( on the previous period ) and, according to the preliminary estimate, by 2. 6 per cent in the third β boosted by domestic demand and, to a lesser extent, by external trade. the progress in the vaccination campaign contributed to strengthening consumer and business confidence and allowed a faster reopening of production and commercial activities. households increased spending on goods and, above all, services. firms expanded their capital accumulation plans, benefitting from favourable financing conditions and abundant liquidity. recovery was diffuse amongst the main sectors, with industrial activity now standing above pre - pandemic levels. consumer price inflation has recently reached high levels ( 3. 2 per cent in annual terms last october ), prompted mostly β as in the euro area as a whole β by factors that we assess as transient, notably the surge in commodity prices, which may continue in the coming months but is not expected to extend into the medium term. so far, the recent contractual agreements do not suggest any strong upturn in wage growth, in a context where margins of spare capacity in the labour market are still ample. that said, inflation developments and the related expectations, as well as uncertainties on the monetary policy responses by the main central banks, are reflected in higher financial markets volatility ; in the recent weeks sovereign spreads of some euro - area countries, italy is back on track : recovery, resilience and attractiveness remarks by alessandra | to the centre of the policy agenda, making the climate challenge a cross - cutting priority across all of its activities. at the g20 level, we have been exploring the issues related to sustainable finance and climate change since 2016. the italian presidency has proposed to re - establish the sustainable finance study group which will take stock of the recent developments on sustainable finance and climate risks, with the ultimate goal of suggesting a β sustainable β growth path. the urgency of the recovery could renew momentum and reshape our economic model around a low - carbon strategy : improving energy efficiency, deploying renewables and energy storage and developing carbon capture technologies. the works of the group under the italian presidency will mainly focus on improving the quality, availability and comparability of data to assess climate - related issues and, more generally, sustainability, financial risks, and opportunities. the group could also investigate the areas of future action to achieve the sustainable development agenda of the united nations, in particular access to modern forms of sustainable energy and natural capital conservation and restoration. the transition to a zero - emissions economy can be fostered by the financial system, given its key role in the allocation of resources. several analyses show that incorporating environmental, social and governance ( esg ) factors in investment strategies does not hamper their financial performance. the risk - adjusted returns to sustainable investment are indeed often higher than those achieved using traditional financial models. during the recent market turmoil, the preferences of financial investors for sustainable investments have proven resilient. another important venue to discuss all possible instruments to reach carbon neutrality, including β climate cooperation β, will be this year β s conference of the parties ( cop26 ), under the united nations framework convention on climate change. the coincidence of italy being president of the g20 and co - chair of the cop26 ( the other chair is the uk, which is president of the g7 ) may allow us to bring forward the climate change agenda on many fronts simultaneously, such as the involvement of the private sector in the financing of the green agenda. 8. the covid - 19 pandemic and the ensuing global health crisis have clearly highlighted the costs of extreme health emergencies. the risk of another pandemic is high. in 2018, in an article for the world health organisation ( who ), larry summers and two distinguished public health scholars wrote that : β few doubt that major epidemics and pandemics will strike again and few would argue that the world is adequately prepared β. 1 evidently, last | 0.5 |
post fiji limited for an image of a beautiful parrot found in the misty highlands of kadavu. β’ james siers of ba for an image of an iconic fijian flower. i understand mr. siers is not well and we wish him a speedy recovery. β’ jone niukula for images of an endemic insect species that only emerges once every so many years, β’ dr. jorg kretzschmar for images of a truly iconic bird that graces our ocean for days at a time and which is otherwise rarely seen. β’ dr. paddy ryan and aaron jenkins for images of a fresh water fish species with truly unique characteristics. ladies and gentlemen, i am led to believe by all who have collaborated on this project that we have something truly special. we have a new set of currency in vibrant colours featuring true national treasures. there will be many local and international collectors of currency notes and coins who are looking for something unique. the celebration of our biodiversity on our money is just that. the interest is so promising that we have already received numerous enquiries and a number of orders from banknote and coin collectors around the world even before the unveiling. we recognize this growing interest and have worked with our suppliers to provide limited numbers of special collector items. let me say a few words on what we have. for the first time, the reserve bank has produced a limited edition all - denomination set of coloured coins. this is a one - of - a - kind coin set depicting the flora and fauna designs in their natural colours on the front of each coin. specially packaged uncirculated coin sets will also be available for those who just want to own a piece of history. for the notes, collectors can either buy specially packaged individual denominations or the full set with matching serial numbers. uncut banknote sheets of 20 notes and 25 notes will also be available. bis central bankers β speeches ladies and gentlemen, my sincere apologies for the self - advertising. i will not draw out the suspense any longer. i am confident that we all will be proud of our new banknotes and coins. on behalf of the board, management and staff of the reserve bank of fiji, i once again extend my sincere gratitude to his excellency, the president for agreeing to be our chief guest and to you all for kindly accepting our invitation. we are truly humbled by your presence. vinaka vakalevu and god bless fiji! bis central bankers β speeches | mario draghi : 20th anniversary of the euro speech by mr mario draghi, president of the european central bank, at the session of the plenary of the european parliament to mark the anniversary of the euro, strasbourg, 15 january 2019. * * * it is with great pleasure that i am here today to celebrate with you the first 20 years of the euro. the euro is the most tangible representation of european integration that our citizens encounter, on a daily basis. it is fitting, then, to celebrate this anniversary here with the directly elected representatives of all our citizens. over the years, elected representatives and leaders here and in other parliaments have rightly recognised that ensuring economic prosperity and stability over the long term is a shared challenge that is best faced collectively. we are stronger together. with the single market, we have a powerful engine of sustainable growth to underpin our living standards. the euro has safeguarded the integrity of the single market. today, our economies are integrated to a point that was not imaginable when the euro was designed. intra - eu exports rose from 13 % of eu gdp in 1992 to 20 % today and value chains are everywhere in the euro area. the euro has produced two decades of price stability also in countries where this was a long lost memory. stable prices have fostered people β s confidence in the value of their savings, which is one of the conditions for prosperity. based on such confidence, firms invest and create new jobs. today most challenges are global and can be addressed only together. it is this β togetherness β that magnifies the ability of individual countries to retain the sovereignty over the relevant matters, sovereignty that would otherwise be lost in this global world. it is precisely in this sense that the single currency has given to all members of the euro area their monetary policy sovereignty, compared with the pre - existing monetary arrangements. it is together that we have a voice in the regulation of international financial markets ; a voice, which has been fundamental in reshaping the world financial regulation after the global financial crisis. but in some countries, not all of the euro β s benefits have been realised in full. partly, this is because reforms at national level are necessary, and they would be so under any monetary system, to produce sustainable growth ; partly, because the economic and monetary union ( emu ) remains incomplete. great progress has been achieved since the crisis struck, but more work still needs to be done ; and there is no alternative to a future | 0 |
the first half of this year is a testament to the strength in the current recovery. the economy expanded by 5. 1 % in the second quarter after a robust 3. 9 % in the first quarter. in level terms, real gdp has now exceeded its pre - crisis level. and according to the latest incoming data, the economy in the third quarter looks to remain quite robust as well. thailand β s better performance this year, notwithstanding a lackluster global economy, has been supported by the strong momentum in both domestic demand and exports. front - loaded fiscal measure sparked up the initial momentum in domestic demand, while private consumption and investment are now adding firmly to the growth process. as the regional economies began to recover in the last five months, export growth has also provided an additional impetus to the recovery. along with this recovery, inflation remains subdued, credit growth has turned positive, and business profits are improving, encouraging firms to expand their capacities through new investment. these broad movements are indicative of a positive dynamic linked to the current recovery. the most significant improvement since the crisis, however, has been the strengthening of external stability. continued current account surpluses have allowed external debt to run down in concomitant with a build - up of international reserves. the coverage ratio of reserve to short - term debt has risen to 290 % in july 2002, four times the ratio at the end of 1997. ladies and gentlemen, although i share the view that the worst may now be behind us, i believe thailand still has some way to go. the key question is how can we make it last, especially now that the global economic recovery may be somewhat slower than earlier anticipated? the answer to this question probably lies in the answers to yet another important question : what have we learnt from the recent crisis? for thailand to prosper in the future, we can no longer rely on the old way of doing business or, for policymakers, the old way of running the economy. we need a different and more effective paradigm that will not only sustain the current growth momentum but also helped the country meets future challenges. putting the crisis under microscope reveals critical flaws that beg for new approaches and strategies in all of the four major areas : ( 1 ) the real sector, ( 2 ) the financial sector, ( 3 ) the issue of governance, and ( 4 ) the macroeconomic framework. in many respects, these lessons are neither limited to thailand nor unique to the recent crisis. the challenge is perhaps how to put them | close monitoring. bis central bankers β speeches operational risk is the final area over which a close watch should be maintained. this risk relates to failures by staff and break - downs in processes, facilities and equipment in daily activities. operational risk is pervasive across all business processes and, in fact, can be the root cause of a wide range of incidents that disrupt or impede the meeting of objectives. with increasing change and complexity as well as uncertainty, operational risk inherently grows. mistakes and errors are more likely and institutions need sound policies to reduce both the underlying likelihood and impact. operational risk management is quite process oriented and is therefore one area within which businesses can focus on continuous improvement. incident capture, causal analysis and applying lessons learned from an operational risk event can serve to strengthen the wider business environment. at the bank we have a system called proactive problem management to serve this purpose. it has been in place for over a decade and it is not about attributing blame but about improving how we do things. it entails line management reporting of incidents and, with the assistance of the central risk management function, finding ways to remediate the situation and, in some circumstances, identifying any wider systemic patterns that may be of relevance. although the bank β s head of risk reports directly to me, he has an indirect reporting line to the governor and, with his team and me in attendance, meets with the governor formally once a month. he also has an independent meeting with the chairman of the board audit committee at least once a year. he has ample opportunity to talk directly with the governor or the chairman of the board audit committee if he feels that is required. currently we are refreshing our risk model and have developed an embedded enterprise risk management lead community through all of our business units. these people work with the heads of departments to identify, assess and manage the business risks. the model is enterprise driven in that it aligns risks to departmental objectives in a context of the over - riding governing mandate for the bank : the reserve bank act. the model also includes major projects and smaller initiatives and actions that relate to specific risks. by doing so it provides an insight into active risk management mitigations that are underway giving a level of validation as to how resource is being directed towards certain risk areas. conclusions the first half of this paper outlined the extraordinary events that have buffeted the world since the onset of the global financial crisis. as noted earlier there was an inevitability about the financial crash | 0 |
times when services are most needed. moreover, many government programs β in areas such as education or health care, for example β are likely to be most effective when funding sources are stable and predictable, allowing for longer - term planning. tools exist to help mitigate the effects of the business cycle on state budgets. many states deal with revenue fluctuations by building up reserve β or β rainy day β β funds during good economic times. measured as a percent of general fund expenditures, the aggregate reserve fund balances for all state governments stood at a record of about 12 percent at the end of 2006 ; the states represented by the slc had accumulated above - average reserves of around 16 percent. these high reserve - fund balances were helpful in lessening the severity of spending cuts or tax increases in many states. nevertheless, given the depth of the recent the southern legislative conference comprises the states of alabama, arkansas, florida, georgia, kentucky, louisiana, mississippi, missouri, north carolina, oklahoma, south carolina, tennessee, texas, virginia, and west virginia. see southern legislative conference ( 2010 ), β what are the revenue estimates for fiscal years 2010 and 2011 in the slc states? β question of the month, february, www. slcatlanta. org / qom / 2010 / quesfeb10. html. recession, even these historically high reserve - fund balances proved insufficient to buffer fully the budgets of most states. thus, state governments may wish to revisit their criteria for accumulating fiscal reserves. building a rainy - day fund during good times may not be politically popular, but it can pay off during the bad times. in principle, some smoothing of state government expenditures over time could take place through the capital budget. maintaining or even increasing the pace of infrastructure construction when the economy is weak fosters economic development and provides local jobs, and it may even allow the state to get more bang for the buck because of increased competition among private contractors when demand is slack. however, voters and policymakers may understandably be reluctant to approve new bond issues and take on additional costs for debt payments in a period of fiscal and economic stress. beyond balanced - budget rules, state government finances also fluctuate because of the increasing sensitivity of their revenues to changes in economic conditions. for example, capital income, which tends to vary substantially more than wage and salary income, has over time become a relatively more important source of state personal income taxes. 6 also, sales taxes that understandably | , i must recognize and thank president harker for his forward - looking leadership. the third district and the federal reserve system are both better for his service. pat, thank you! to close, thank you again for allowing me these few moments to start the day. i look forward to today's discussion and to our conversations. 1 these remarks represent my own views and are not necessarily those of my colleagues on the federal reserve board or the federal open market committee. 2 / 3 bis - central bankers'speeches 2 michelle w. bowman, " innovation in the financial system " ( speech at the salzburg global seminar on financial technology innovation, social impact, and regulation : do we need new paradigms?, salzburg, austria, june 17, 2024 ). 3 / 3 bis - central bankers'speeches | 0.5 |
case. recording these deposits on banks β balance sheet would mean they would differ significantly from stablecoins. these tokenised deposits could potentially complement a wholesale cbdc. this brings me to retail cbdc : after completing a two - year investigation phase, the eurosystem recently launched the preparation phase that will lay foundations for a potential digital euro. vi this β digital banknote β will have the same characteristics as existing cash : it will be accepted everywhere across the euro area thanks to its legal tender status ; vii it will meet the highest privacy standards ; and its basic functionalities will be free of charge for individuals. viii in addition, the digital euro will bring complementary advantages compared with banknotes : it will allow the use of central bank money in e - commerce, in remote peer - to - peer payments, as well as for conditional payments, and will foster financial inclusion in the digital era. likewise, the digital euro will be distributed through banks : we are not, and will not become competitors to commercial banks. once again, money shall remain a public - private partnership. but the trust commercial bank money inspires is anchored by its full equivalence and permanent convertibility, 1 : 1, to central bank money. loosening this public anchor would sooner or later undermine trust ; tokenised central bank money will provide the necessary β safety pivot β, and it will also act as a β β platform for innovation β. ix the payment ecosystem as a whole will therefore benefit from it : the digital euro scheme we are developing will enable the emergence of open acceptance standards, fostering convergence and offering common ground on which to build further innovations. the private - sector led european payments initiative ( epi ) with its pan - european wero digital wallet payment solution will be able to take full benefit from it. turning now to a more global perspective, we are working hard on improving cross - border payments. it is one of the g20 β s priorities to address their high friction costs, time lags, opacity and low accessibility. central banks have built their monetary set - ups along similar principles around the world, but lack page 4 sur 4 operational interoperability. the use of wholesale central bank money has the potential to address these issues, and in turn to improve cross - border payments. β’ over a short - to medium - term horizon, we are exploring the building of bridges between payment systems. some projects could be implemented quickly, for instance the bis β nexus which is aimed at enabling people | ), which offers clear benefits such as increased transparency page 2 sur 4 and interconnectedness. we look forward to shaping our construction accordingly, so that it remains state - of - the - art, fluid and consistent with its environment. central banks are therefore, one might say, also doubly in charge of ariadne β s thread, ensuring trust and creating new gateways so that anyone can find their way. everybody knows asia is tech - friendly, and that the monetary authority of singapore ( mas ) in particular is proactive in this regard. this is perhaps less known, but so are europe and france. i will illustrate this concretely by recalling what the banque de france and the eurosystem have done so far, and the projects that are in our pipeline today, many of which relate to exploratory work on central bank digital currencies ( cbdcs ). i will start with wholesale cbdc, where the banque de france has been a pioneer by conducting twelve experiments since november 2020. we have explored all identified use cases on all types of dlt ( public and private ), with a wide range of public and private partners. iii these experiments have shown that central banks will be able to steer the money supply of wholesale cbdc β which is essential to anchor the value of central bank money, and hence financial stability in the realm of tokenisation. we are testing various technologies in our experiments : we are improving our own dlt ( dl3s ), and in parallel we are exploring alternative protocols and blockchains β be they private or public. the banque de france is now also actively involved in the eurosystem exploratory work on the settlement of tokenised assets in central bank money, which was launched last april. iv with our dl3s technology, we are providing one of the three solutions that will be used over the course of 2024 in experiments and trials, the latter involving real transactions. the eurosystem has already published the envisaged eligibility criteria and a survey, v before a formal call for interest that will take place in the coming weeks, and will roll out the experiments and trials over the course of 2024. commercial banks and other financial actors will have a key role in the success of our exploratory work. in particular, i invite banks to take the opportunity of these experiments to explore page 3 sur 4 β tokenised deposits β, for which the bis has made a strong | 1 |
rate ), it mitigates the greater evil of those who have collateral to offer being denied credit altogether. this is certainly an issue we have to reflect on. flexibility and forgiveness when people complain about the high cost of credit to small businesses, they do not realise the biggest component of interest costs is the credit risk margin, not the real policy rate. the credit risk margin is not under the control of the central bank, it has to be brought down by focusing on improving the lending institutional infrastructure, as i have argued earlier. however, even though a system that allows for strong enforcement of repayment reduces the credit risk margin lenders charge, it also imposes larger costs on unfortunate borrowers. so, for example, should a student who chose the wrong college for studies and ended up having to pay back huge loans with only a mediocre job be penalised for life? we need a system that has some flexibility in repayment, so that those who make bad choices or have bad luck can get some relief. at the same time, they should not escape all responsibility, else we will see people borrowing excessively and misusing the proceeds, knowing they can get away scot free. keeping this in mind, our master circular on natural calamities allows banks to restructure agricultural loans without classifying them npa, provided there are widespread crop losses in the local area. this prevents individuals from exploiting the system, while giving collective relief when the area is hit. similarly, we have advocated that student loans be structured with an optional moratorium period, so that a borrower can survive periods of unemployment without being permanently labeled a defaulter. going forward, we should accept the possibility of individuals, including farmers, declaring bankruptcy and being relieved of their debts, provided this remedy is used sparingly, and the individual chooses bankruptcy as a last choice, knowing he will lose assets and be excluded from borrowing for a period. bis central bankers β speeches skilling and support there is a widely perpetuated myth that access to financial services is all that is necessary to set a poor farm worker on her way to riches. this is simply not true. clearly, access to institutional credit can help her pay back a money lender, and thus give her some relief. access to a bank account can allow her to put aside some savings, which protects them from the demands of needy relatives. but to generate income in a sustainable way, she needs help β in acquiring the skills necessary to | for what has been a relatively open trade policy. how effective we are in meeting this political challenge is likely to depend significantly on how effective we are in improving educational opportunity and achievement in the united states, and perhaps also in improving the design of the temporary assistance we provide those individuals who bear the brunt of the adjustment costs that come with greater global economic integration. these policies by the united states would help improve the prospects of a more benign adjustment process. but they would not be sufficient to produce a more favorable adjustment path. a more favorable adjustment scenario would require policy changes in each of the major economic areas. for global growth to be sustained at a reasonably strong pace during this period of adjustment, the desirable increase in u. s. savings, and the necessary slowing in u. s. domestic demand growth relative to growth of u. s. output, would have to be complemented by stronger domestic demand growth outside the united states, absorbing a larger share of national savings. exchange rate regimes, where they are currently closely tied to the dollar, will have to become more flexible, allowing exchange rates to adjust in response to changing fundamentals. reforms to financial systems and to social safety nets over time would help reduce the need for exceptionally high levels of domestic saving we see in many countries. the global nature of these requirements does not imply that the united states can put the principal burden for adjustment on others. if we focus adequate political capital on the factors within our control, we will have more credibility internationally in encouraging policy changes outside the united states that might reduce our collective risks in the adjustment process ahead. what does this mean for monetary policy? monetary policy itself cannot sensibly be directed at reducing imbalances, but the past and future evolution of global capital flows will of course matter for monetary policy by virtue of their impact on the outlook for output and inflation. for example, the forces that seem to be supporting an unusual level of capital flows into the united states may be materially dampening the level of forward nominal and real interest rates, and other things being equal, this would tend to produce higher levels of demand growth than would prevail in the absence of those factors. thus, the factors that have contributed to this pattern of external imbalances complicate the task of judging the appropriate stance of monetary policy in the united states today. perhaps it makes sense to conclude with the more general observation that changes in the size of global capital flows and the accompanying imbalances increase the importance of sustaining | 0 |
jean - claude trichet : educational games β β¬conomia β and β inflation island β remarks by mr jean - claude trichet, president of the european central bank, at the launch event for the educational games β β¬conomia β and β inflation island β, frankfurt am main, 8 december 2010. * * * ladies and gentlemen, i β d like to welcome you all to this launch event here today β in particular the students and teachers who accepted our invitation. i also extend a warm welcome to all the other visitors, notably the ecco colleagues and media representatives β and to ecb staff members who have worked on this project. in recent years, central banks have become important communicators and since its founding in 1998 the ecb has engaged on several avenues to broaden its outreach. the ecb was the first major central bank in the world to hold a press conference immediately after the governing council meeting to explain its monetary policy decisions. we publish a monthly bulletin for specialised audiences. we have educational videos on our website for the general public, we have games for children and of course we have our general publications. in 2010, our website was visited approximately 25 million times. every year, around 13, 000 people visit the ecb and we talk to them about the economy and our work. but there is always room for further improvement. and this is no time for complacency. we want to reach out to you β young people who have grown up in a networked, multimedia world. so we decided to develop games like these because their interactivity and playfulness could help enhance the learning experience. today we are launching β β¬conomia β and β inflation island β on our website, and we will continue our work on such tools in the next few years. we expect the games to make this institution and its activities more accessible. the games are available in 22 european languages. you have just been playing against each other in β β¬conomia β and i hope you found it interesting and fun. but perhaps it wasn β t so easy to keep inflation low and stable, in line with our definition of price stability : less than 2 %, but close to 2 %. if that was the case, then the games have already served a purpose, because in real life it is challenging to keep inflation low and stable. developing, producing and translating both games was quite a challenge as well. i β d like to thank everyone who has worked on the | . involuntary part - time and temporary work β which has to be absorbed again before wage pressures increase. in practice, we are seeing positive signs : in fact, the difference between the overall unemployment rate and broader measures of slack on the labour market has declined somewhat over the past two years. the proportion of enterprises in manufacturing and services which say that labour shortages are limiting their output has never been so high. the result is stronger wage growth, which is contributing to an increase in inflation. several measures of underlying inflation have apparently passed the turning point. i say the word β apparently β as monetary policymakers should be cautious in their judgements1. the estimates of slack in the economy differ widely and are often corrected. model results, as complex as they may be, should be treated with the requisite caution. in the end, assessments based on experience continue to be an essential part of monetary policy decision - making. monetary policy decisions should therefore not only be based on model results, but should also take into account the balance of risks. there are times when lack of action is much more dangerous than taking action and when resolute action is the most reasonable thing to do. for example, our purchase programme was necessary to avert the risk of deflation. however, there are also times when the balance of risks changes fundamentally and thus monetary policymakers should act more carefully. future challenges facing monetary policy so now let β s turn our attention to the future. i believe that the conditions for gradually ending the asset purchase programme are in place. however, it is up to the ecb β s governing council to decide on the exact timing of such a move. i β m not going to talk about the possible timing today. let me instead touch on some of the risks we will face in implementing our monetary policy over the coming years. these risks are likely to grow the longer our asset purchase programme continues. the first risk relates to the subsiding deflationary headwinds i have already mentioned. could it be that our monetary policy is suddenly too expansive? in short, because of the uncertainties and imprecisions involved in measuring slack and inflationary pressure, we might find ourselves behind the curve without realising it. as a result of the long and variable lags of monetary policy, we could end up with inflation above the rate consistent with our mandate. this would require a sharp correction of our monetary policy stance in years to come. yet such a correction of interest rates would pose risks to | 0.5 |
of the system. people will access the redress mechanism only when they are assured of an impartial outcome. it requires a lot of courage, persistence and knowledge to pursue and follow up grievances with banks / financial institutions. it will be in our own interest to usher in a culture where people are encouraged to complain if anything is amiss. the felt attributes of consumer protection are a result of the customer care policies that banks promise to have in place. but, many a times, the same are not implemented at the ground level mainly due to ignorance and lack of sensitivity on the part of the frontline managers. skill building and knowledge enhancement of bank staff is necessary, if we wish to have a pro - active consumer protection policy in the banking industry. conclusion 23. as a part of my inaugural speech i have tried to set the tone of the seminar, by touching upon different facets and attributes of consumer protection, drawing from the global as well as the indian experience. i am tempted to refer here to the comments made by the world bank β imf team in its report on the financial sector assessment for india about consumer protection : β india has comprehensive policies and compliance mechanisms for the protection of banking consumers, and is ahead of most countries in this area. going forward, including nonbanking financial companies ( nbfcs ) in the mandates of the banking codes and standards body of india and of the banking ombudsman system ( bos ), ensuring consumer protection of the entire financial system, and devising a strategic consumer awareness program, will further strengthen the system β. i accept this feedback with all the humility at my command, and i am fully aware that much more needs to be done to improve the consumers β lot. even in a free market economy with competition as the necessary pre - condition, it is not necessary that the consumer is treated as the king. but what we must strive to bring about is a culture where the consumer is treated as a good human being by focusing on the values of fairness, transparency, and non - discrimination. going forward, customer - centricity will be a must for the regulators and the regulated entities alike in the wider interest of financial stability, an essential cornerstone of which is consumer protection. 24. i hope that this joint seminar between the banque de france and the reserve bank of india lays down the foundation of a long and fruitful partnership between the two institutions and that such seminars become a regular event. considering the impressive list | the protection, safety and security of this important class of customers cannot be wished away. in this context, the regulators and governments can play an important role by providing an efficient infrastructure for mobile payments. this framework might include regulation of low β risk money transfer services, enabling non - bank organizations to facilitate low - risk / low value transactions and wherever possible, implementing regulations at the system level ( without interfering with the customer interface ). on the part of banks, rather than treating mobile payments as a threat, they need to see it as an opportunity to access otherwise unprofitable low - income segments market. banks will need strong partners and a strong platform to succeed. in india also, we have been proactively pursuing the three objectives and are even exploring the possibility of enshrining financial inclusion in the code of banking practices ( in india referred to as the code of commitments ). 17. in terms of financial education, while the thrust would continue to be on the basics in terms of products, services, risk profile and suitability, we need to think ahead and look at the scenario where self β service banking is on the rise. the evolution of atms in india is only the beginning of the self - service menu. we are yet to witness the full range of products and services where the customers will be helping themselves ( and of course the banks ) with gadgets and apps that they may not be very familiar or comfortable with. so, welcome customer education and hand holding! retail distribution of financial products 18. the retail distribution of financial products and services was subject to review in australia and united kingdom alike and the issues thrown up by these reviews have great lessons for consumer protection. the retail distribution, as is now being carried out, may not necessarily be in the best interest of the consumers. there are certain issues, particularly from the perspective of incentive structures for sale of financial products, monitoring of aml requirements, risks of mis - selling, inadequate understanding of risks by the sales persons, etc. that make it important that financial service providers and regulators to have a close look at the practices followed in retail distribution of financial products. 19. as regards regulating the activities of the financial advisers, it is very important that the people with small means get proper advise at the right time and at least cost. the regulators, perhaps, have to take this responsibility upon themselves with a view to empowering the consumers and helping them protect their life savings. regulation and market failure 20. there have been a | 1 |
norman t l chan : domestic and international dimensions of unconventional monetary policy opening remarks by mr norman t l chan, chief executive of the hong kong monetary authority, at the conference on β domestic and international dimensions of unconventional monetary policy β, organised by the hong kong monetary authority and the federal reserve bank of new york, new york city, 20 march 2014. * * * mr mcandrews, professor sims, professor woodford, ladies and gentlemen, 1. a very warm welcome to all of you for attending today β s conference jointly organised by the federal reserve bank of new york and the hong kong monetary authority. this joint conference is very timely, as it is neither too early nor too late to examine the effects of the unconventional monetary policy ( ump ) of the fed, including its spill - over effects on the emerging market economies ( emes ). as we all know, the fed has already started tapering and, if everything goes according to plan, would end the asset purchase programme by the end of this year. the fed has made it very clear in its external communications that tapering is not tightening and that there would likely to be a gap between the end of qe and the actual tightening of policy interest rates. however, the market considers that we are now in the phase of β exit β from the ump, which also marks the beginning of the normalisation of us interest rates. when chairman bernanke first talked about a possible timeline for tapering in may last year, there were strong market reactions globally and all emes experienced significant sell - off. the market then calmed down somewhat for several months before we saw another round of eme sell - off in january this year. the question that is most talked about now in the financial and central banking community is the pace of the fed β s exit and its impact on emes going forward. were these two rounds of eme sell - off merely isolated market over - actions or are they warning signals on the turbulence that awaits the emes when us interest rates normalise? 2. to assess what may lie ahead, it is useful to look back and try to understand what happened in the past five years during which the global monetary and financial environment was dominated by the ump of the us and other advanced economies. in 2009, the market expectation was basically that qe would last for a year or so, i. e. β low for a short while β. the expectation then changed to β low for long | the introduction of the amended foreign business act turned out to be unpleasant surprises to investors and the global community. and on top of all these, political uncertainty remains a material factor in the private sector's decision to invest. the concern that some of you may have is : can thailand weather all these challenges well? are we turning our back on globalization? a confluence of events in the past few months does appear to present a cause for concern. but i believe that thailand will persevere, and that we should continue to take all advantages that globalization has to offer for years to come. our outlook for the thai economy in the medium term remains positive. our forecasts, once incorporating the risks i mentioned, show the thai economy growing by 4 - 5 percent in 2007 and by 4 - 5 percent in 2008. the growth is expected to come mainly from exports, given healthy global conditions, additional government spending, and lower oil prices. these represent a respectable growth outlook for thailand in light of the challenges and our focus on stability. but a positive outlook by no means allows for complacency. we must constantly work to identify and manage the challenges. this leads me to my second point. what are the key challenges to the thai economy in the near term? the first major challenge is that of financial globalization. on the financial system front, globalization brings complex financial instruments that require significant improvement in risk management, and the challenge of meeting international standards of basel ii and ias 39. these are the manifestation of the forces of globalization that the thai banking system is already facing, and will continue to face. the overall effect is that the financial system and the economy may be subject to heightened uncertainties. and unless we strengthen our ability to manage these risks and challenges, the vulnerability can exacerbate, with possible implications for our economic and financial stability. this, in my view, is a major challenge for all of us in the financial community. the second major challenge to the thai economy is how to cope successfully with volatile global financial markets and an appreciating baht. this challenge is the more pressing of the two. let me explain why. thailand, like many emerging market economies with a small and shallow financial market, is particularly vulnerable to fast - moving international capital. such rapid movements of capital flows, if vastly out of line with our ability to absorb it, can have negative impacts on the export or import sectors, depending on the direction of the exchange rate movement. in our case, | 0 |
delisle worrell : central bank of barbardos β serving the nation welcome remarks by dr delisle worrell, governor of the central bank of barbados, at the frank collymore literary endowment awards, bridgetown, 7 january 2012. * * * in my introduction of professor cardinal warde, who gave last year β s sir winston scott memorial lecture, i paid tribute to the vision of the central bank β s first governor, sir courtney blackman, who recognised that the bank was more than a financial institution ; it was an organic part of the society and its culture, in its every dimension. governors that followed him have remained faithful to that vision. if anything, over the years we have fortified our vision of full involvement in the culture and intellectual life of our country. as you may have heard, the bank has set out to become a centre of emotional intelligence, and to guide our behaviour accordingly. emotional intelligence speaks to the realisation that the organisation is its people, and its performance requires sensitivity to their humanity and aspirations. our consultant in this endeavour, eliseus joseph, recently referred me to an article in the nov 2011 issue of the harvard business review entitled β how great companies think differently β. one characteristic of great companies, those who endure and thrive over the years while others fail, is said to be β concern for public 2 issues beyond the boundaries of the firm,... consider ( ing ) societal interests along with their business interests β. what we have come to understand is that the central bank is a community of individuals, serving the wider society that is the nation, and we must serve the nation in whichever ways our resources and varying talents permit. our mandate is economic and financial policy, but we do not conduct those policies in a vacuum ; we are to advise on policies for the betterment of the barbadian society, and all its members. as i have been at pains to emphasize on more than one occasion, the outcome of any policy action depends on the individual responses of every producer and every consumer. that is why the bank, and all of us who work for the bank, must be fully involved with the life and culture of our society. the fcle awards must therefore be seen as an essential part of our life and work at central bank of barbados. i want to say a special thanks to the endowment committee, so many of whom are personal friends, for their sterling work over the years. we have made this small award an institution, | 1980s, at around 10 per cent. one could argue that housing assets should be excluded from this latter measure, since foreigners β participation in the housing market is relatively limited. on that basis, the ratio rose somewhat in the early 1990s, but has been relatively steady since. in short, these measures do not suggest the build - up of any significant disequilibrium in the economy resulting from foreign liabilities. for developed economies with a floating exchange rate and the capacity to borrow offshore in their own currency, the risk from rising foreign liabilities is not that they will cause a traditional balance of payments crisis, but that they will undermine financial stability. the process by which this can happen typically starts with a country, for one or more reasons, becoming attractive to foreign investors. capital floods in, overwhelming the capacity of the economy to use it productively. credit is misallocated and eventually there is some form of a domestic financial crisis. this type of crisis can occur even in highly sophisticated economies, as illustrated by the recent sub - prime crisis in the united states. the policy challenge for countries in this situation is to ensure that the ready availability of offshore funds does not end up distorting or weakening the financial side of the economy. as the recipient of large amounts of offshore funds for much of the post - float period, australia has had to remain alert to these challenges. by and large, it has been able to successfully absorb significant amounts of offshore capital over many years. there are several factors that have contributed to this : first, the country β s foreign liabilities are virtually all either in australian dollars or hedged back to australian dollars. 2 australia is able to do this because foreign investors are happy to hold a certain proportion of their assets denominated in australian dollars. this means that australian borrowers do not face foreign exchange risk on the capital sourced from overseas. therefore, if sentiment turns and the exchange rate falls, domestic borrowers are largely unaffected. the large swings in the exchange rate of the australian dollar that have occurred over the past couple of decades in no way threatened the corporate and financial sectors. second, the offshore capital that has flowed into australia has been used essentially to fund high levels of investment. australia uses foreign capital not because its national saving ratio is low, but because its investment ratio is high by the standards of developed economies ( table 2 ). in the past decade, for example, the national savings rate in australia has averaged 22 per cent, much the same | 0 |
future adjustments to interest rates will be based on the evolution of the data, the economic outlook, and the risks to achieving our goals. we will continue to be data - dependent and attuned to the evolution of economic conditions in making our decisions. with monetary policy moving to a more neutral setting over time, i expect real gdp to grow between 2 - 1 / 4 and 2 - 1 / 2 percent this year and to average about 2 - 1 / 4 percent over the next two years. i anticipate the unemployment rate to edge up from its current level of about 4 percent to around 4 - 1 / 4 percent at the end of this year and stay around that level next year. with the economy in balance and inflation expectations well anchored, i expect overall pce inflation to be around 2 - 1 / 4 percent this year, and to be close to 2 percent next year. conclusion the economy has been on a remarkable journey. in two years, the red - hot labor market has normalized, and inflation has come within striking distance of our 2 percent longerrun goal - all while employment and the economy continue to grow. we instituted and maintained a very restrictive monetary policy stance until the data gave us confidence that inflation is sustainably on course to 2 percent. with this progress toward achieving price stability, moving toward a more neutral monetary policy stance will help maintain the strength of the economy and labor market. although the outlook remains uncertain, we are well positioned to achieve our dual mandate goals. 3 / 4 bis - central bankers'speeches 1 see https : / / smokymountains. com / fall - foliage - map for the forecast of foliage in this area as well as across the nation. 2 john c. williams, a bedrock commitment to price stability, remarks at the 2022 u. s. hispanic chamber of commerce national conference, phoenix, arizona, october 3, 2022 ; john c. williams, peeling the inflation onion, remarks at the economic club of new york ( delivered via videoconference ), november 28, 2022 ; john c. williams, " peeling the inflation onion, revisited, " federal reserve bank of new york, the teller window, september 29, 2023. 3 federal reserve bank of new york, global supply chain pressure index ( september 2024 ). 4 in particular, the federal reserve bank of new york multivariate core trend inflation measure was 2. 6 % in august ( august 2024 report ), while the 6 - month change in | risks. this is a much more " top - down " approach to supervision, as we are evaluating the integrity of the managerial process in a bank rather than only testing the strength and quality of individual transactions. this helps us to determine whether a bank that is healthy today will continue to be so in the future. i β m pleased to note that banks have welcomed this change in approach, as we have enhanced our ability to compare the quality of one bank β s control structure to those of other banks that face similar risks. we thus are better able to share our views of the " best practices " we see in industry risk management. supervisory review of capital supervisory review and market discipline are two other elements that can create incentives for responsible behavior, and are of such importance to contemporary supervisory thinking that they have also been adopted as two of the three " pillars " of the basel committee β s proposal to revise the international standards on bank capital requirements. there β s been a good deal of public discussion about the first pillar, in which the committee recommended changes to the guidelines that set minimum capital requirements for banks. tonight i will concentrate on the importance of the other two in promoting financial stability. adequate capital is, of course, the foundation of a safe banking system, as it provides banks with a " cushion " against unexpected losses. supervisors aim to ensure that banks set aside sufficient capital relative to the underlying risks that each institution faces, including whether the banks are addressing the relationship between different kinds of risk. this will be no easy task, as banks under the new capital accord will increasingly rely on their own internal models to determine the kinds of risk they face and to what degree. the basel committee proposed that supervisors review the methodologies through which banks set their capital levels to ensure that banks have an incentive to develop effective processes for aligning their capital levels with their risks. when supervisors engage in a more active dialogue about those processes, we expect that banks will apply greater resources to identify and analyze more comprehensively the risks that they face, seek more accurate measures of the potential costs of those risks to their businesses, and develop more sophisticated mechanisms to mitigate those risks, including maintaining sufficient capital funds. i must emphasize that the supervisory review of capital is intended neither to replace the judgement and expertise of bank management nor to shift responsibility for capital adequacy to supervisors. on the contrary, the committee recognizes that bank managers are in the best position to understand and react to the particular risks that their institutions face. supervisory review | 0.5 |
practices. standards focusing on capital adequacy and solvency and key areas of corporate governance are now an integral part of the insurance regulatory framework in place for all insurance firms and brokers operating in the kingdom. the establishment of international standards and their implementation has bolstered bahrain β s reputation as a regional centre where sound practices prevail. this has encouraged many insurance and reinsurance firms to choose bahrain as a base. the central bank of bahrain has also put in place a framework allowing for the establishment of captive insurance firms. this initiative by the cbb is the first of its kind in the middle east region, aiming to fulfill the insurance needs of major industrial, oil, and service firms that seek to establish their own insurance companies. bahrain succeeded in 2006 in attracting tabreed company as the first captive insurance company, licensed in the gcc. the lack of a specialised centre in the region aimed at fostering the development of the captives market led to the cbb β s initiative in this regard. furthermore, bahrain has also attracted takaful and retakaful insurance businesses, who are benefiting from the well structured regulatory environment. the cbb benefited from its successful experience in the field of islamic banking, supporting the successful implementation of sound regulatory framework for takaful businesses. there are several common areas shared by takaful and islamic banking. in addition, the cbb identified the need by islamic banks to transact with takaful firms to meet their insurance requirements. bahrain is a founder and an active member in many of the islamic financial standards committees. these committees are a reflection of the market realities and the need for change in an evolving industry. there is a strong demand by clients for takaful products, at a time when firms rendering such services in the arab market are still relatively few. ladies and gentlemen, the theme of today β s conference is of special significance considering the global challenges faced by the arab insurance markets to integrate, and work towards consistency in legislations. it also lays the foundations for insurance companies to enter new markets and stimulate integration to pave the way towards one arab insurance market that is capable of competing globally. i am grateful to bahrain β s insurance community for its substantial contributions and sincere efforts, and again wish to thank the organizers and participants in this important conference wishing you all successful and fruitful deliberations to further contribute in developing the integration of the arab insurance industry. | rasheed mohammed al maraj : toward a more integrated arab insurance market address by his excellency rasheed mohammed al maraj, governor of the central bank of bahrain, at the general arab insurance federation general conference 2008, manama, 26 february 2008. * * * your highness sheikh khalifa bin salman al khalifa, the prime minister, your excellencies, ladies and gentlemen i am pleased to welcome your highness to the opening session of the 27th general arab insurance federation conference. i am also honored to express my most sincere thanks and appreciation to your highness for the kind patronage of this important event. the care and attention which your highness granted to the financial sector in the kingdom of bahrain, has always reflected the pioneering role and relentless efforts exerted by your highness in the further development of this vital sector, as one of the key segments of the national economy. please accept our heartily thanks for the blessed efforts of your highness, as we have always opted for your guidance and support to further develop the financial sector in the kingdom of bahrain. i also welcome the participants and guests wishing them a pleasant stay in bahrain, and success in their endeavors. it goes without doubt that the presence of this large number of distinguished arab and foreign insurance companies shall give this conference a new positive dimension, and constitutes a qualitative leap in exploring the best methods to develop the arab insurance businesses, in order to cope with the immense developments observed by arab economies. i also wish to extend my thanks and appreciation to the organizers for their excellent preparations of this vitally important conference, which is truly one of the significant regional and international activities in which over 1000 leading elite participants are taking part. ladies and gentlemen, today β s conference is being held under the title β toward a more integrated arab insurance market β. the agenda reflects topics important to all industry players and the cbb. the development of the insurance industry in bahrain has continued its growth in line with the cbb β s strategic objectives. the financial services sector in bahrain accounts for 27 % of the country β s gdp. following the assumption of the supervisory and regulatory responsibilities for the insurance sector in august 2002, the central bank of bahrain viewed this as an opportunity to undertake several initiatives, aimed a creating a qualitative regulatory framework for the further development of the insurance sector. the cbb issued directives and regulations in line with international standards as promulgated by the international association of insurance supervisors ( iais ) while at the same time keeping in mind recognized international insurance | 1 |
medium term, rather than in reaction to very short - term developments, security of tenure for a relatively long time β in the case of the ecb β s executive board, for instance, the nonrenewable term is eight years β is quite relevant. it helps the decision - makers to set monetary policy independently of the political cycle. 1 in theory, central bank independence tends to be taken for granted. in practice, as the european experience shows, it may be challenged even when the statutes of the central bank are enshrined in a constitutional framework. the support of the people for the independence of the central bank and for the objective of price stability is additional protection against any attempt to undermine independence. in all the countries of the euro area, the support of public opinion for these two things is very strong. the fourth lesson is that clarity about the role of monetary policy also helps to clarify the role of other policies, in particular fiscal and structural policy. with respect to fiscal policy, there is now a consensus that fiscal discipline is essential, not only in a monetary union but also in individual countries, to ensure room for manoeuvre for an anticyclical budget, be it discretionary or automatic. the stability and growth pact and the 3 % and 60 % limits on a country β s deficit and debt in the treaty establishing the european community have now also found a broad application in macroeconomic surveillance in other continents. experience shows that countries that have complied with the requirements of the pact, in particular by maintaining a sound budgetary position in good times, have a wider margin to absorb the negative effects of an economic slowdown. those countries which instead delay the adjustment are certain to face the next slowdown with much greater anxiety, with negative effects on consumer and investor confidence. the main instrument for enhancing long - term economic growth and employment is structural policy. this has become universally recognised in the eu. the lisbon process enables structural policies and their results across countries to be compared, on the basis of a simple set of indicators. this has the advantage of focusing discussions within the individual countries on policies that are necessary for growth. some results have been achieved. for instance, the structural rate of unemployment has decreased substantially in most countries, following labour market reforms. overall, some 13 see l. bini smaghi ( 2008 ) : β central bank independence in the eu : from theory to practice β, european law journal, forthcoming. million jobs have been created since the introduction of the | encourage financial institutions to use scenario analysis. we also hope a common set of scenarios will make the results more comparable. more fundamentally, we hope that scenario analysis will help financial institutions better understand their exposures to transition risks, and this will increase their confidence in their ability to disclose them. in summary, we are committed to working with the financial sector to promote resilience to climate change and a smooth transition to low - carbon growth. last month, the task force for climate - related financial disclosures released its third status report. it had good things to say about canada and our country β s support for implementing its recommendations. but, to be frank, we all need to pick up the pace. so, here β s the message i want to leave with you : our financial system proved to be resilient during the global financial crisis and has been a key shock absorber so far through the covid - 19 pandemic. we need to ensure the financial system is just as resilient in the face of climate change. and in doing so, we need to position canada to seize the climate - smart opportunities that consumers, workers and investors are looking for. but to mitigate the threat and capitalize on the opportunity, we all need to mobilize. and we need to do it quickly. 3 / 3 bis central bankers'speeches | 0 |
##mal jalan. the members of the committee were dr. subir gokarn and dr. rakesh mohan, both former deputy governors, dr. a vasudevan, former executive director, dr, amitava bose of iim, kolkata and prof. dilip nachane of igidr, mumbai. the staff members and consultants in the history cell in the reserve bank, under the guidance of executive director deepak mohanty, produced this volume with exemplary diligence, intelligence and commitment. i want to place on record my deep appreciation for the work of the advisory committee, the staff and consultants. they are going to be more influential than they realize. 22. finally, prime minister, sir, thank you very much indeed for agreeing to release this volume of history today. it means a lot to all of us in the reserve bank. 23. may i now request dr. jalan who provided enormous intellectual leadership for steering the writing of this volume of history to share his thoughts with us? bis central bankers β speeches | crisis ruptured the credibility of the decoupling theory by engulfing almost every part of the world. india was no exception. the crisis spread to india through finance and real channels. 9. importantly, the crisis also spread through the confidence channel. however, in sharp contrast to global financial markets which got paralyzed on account of a crisis of confidence, indian financial markets continued to function in an orderly manner, even as the risk aversion of the financial system increased and banks became cautious about lending. the point to note is that, the global financial crisis did not pose any major threat to the banking system in india at any point of time. as such, the need for any special measures pertaining to deposit insurance did not arise. however, in line with the global trend, there was also some demand here to increase the deposit insurance cover. if one looks even at broad data, it becomes quite clear that this demand had no persuasive force. under the existing insurance cover, number - wise almost 90 per cent of the deposit accounts are fully covered. amount - wise, over 60 per cent of total insurable deposits are covered. we determined, therefore, that the cost - benefit calculus was not in favour of enhancing the deposit cover. 10. in india, the contagion of the crisis was effectively contained by coordinated fiscal and monetary measures taken by the government of india and the reserve bank respectively. the results are evident from the marked improvement in the performance of the industrial sector in recent months β upturn in domestic and external financing conditions, revival of capital inflows, increased activity in the primary and secondary capital markets, softening of interest rates and substantial easing of liquidity conditions. gdp growth of 7. 9 per cent during the second quarter of this fiscal ( 2009 β 10 ) was robust β up from 6. 1 per cent in the previous quarter. there are, however, several challenges on the way forward including the timing and sequencing of exit from the expansionary fiscal and monetary policies. these issues are being debated all over the world and occupy the central place in our policy matrix too. the challenge for the reserve bank is to support the recovery process without compromising on price stability. financial stability 11. the global financial crisis has also underlined the critical role of central banks in systemic oversight of the financial sector and in preserving financial stability. this calls for a paradigm shift not sector. financial stability needs to be understood and addressed both from the micro and macro perspectives. at | 0.5 |
willem f duisenberg : the european central bank, the eurosystem and the european system of central banks speech delivered by dr willem f duisenberg, president of the european central bank, at the ceremony to inaugurate the new building of the banque centrale du luxembourg, luxembourg, 18 may 2001. * * * your royal highness, prime minister, governor mersch, distinguished guests, allow me first to congratulate you on the inauguration of the new premises of the banque centrale du luxembourg. you decided to name parts of them β very appropriately, i find β after pierre werner, the author of the first blueprint for economic and monetary union in europe. his report of 1970 laid the conceptual foundations for many aspects of the institutional set - up and policy framework of today's european central bank ( ecb ) and european system of central banks ( escb ). most significantly, werner presented a lucid account of a fundamental requirement of monetary unification in europe : no single currency without a common central bank, or rather a " community system of central banks ", as he called it. the distinctly federal character of what werner saw as the future european monetary authority was in itself a reflection of the fact that europe is not a single nation, but a group of nations. twenty years later, the treaty on european union established the european system of central banks, with the european central bank at its core, and transferred to it the task of conducting a single monetary policy. in addition, the authors of the treaty recognised that a functioning monetary union requires centralised decision - making and harmonised governance over all those tasks which are closely related to monetary policy. consequently, responsibility for the management of foreign exchange reserves, for activities to support the oversight of payment systems, for the collection of euro area - wide statistics, for measures to ensure financial stability and for the issuance of banknotes has also been assigned to the escb. at this point, i should like to clarify that, for as long as there are eu member states outside the euro area, all these tasks are being carried out by what we call the eurosystem, rather than by the escb as a whole. the eurosystem comprises the ecb and the national central banks ( ncbs ) of the euro area member states. the eurosystem's clearly defined policy responsibilities, together with its independence, the strict orientation of monetary policy to stability and the federal institutional model could be regarded as the cornerstone | both the public and private sectors are contributing to this important communication effort by conveying information on euro banknotes and coins to their staff, customers and other target groups. we have over 2, 600 organisations which have signed a partnership agreement with the ecb and the 12 national central banks of the euro area. i would also like to stress that the media are receiving special attention in the campaign. for them, we have produced a total of six media kits, each marking a specific milestone in the countdown to the euro. these have been, and will be, distributed to more than 3000 media companies in the euro area in the course of 2001. the media kit marking today β s milestone, is e - 100 [ β e minus one hundred β ], or 100 days to go, and focuses on the final visual appearance of the euro banknotes and their security features. furthermore, we are paying particular attention in the campaign to vulnerable groups who need and will receive tailor - made information and training. we have now reached the crucial period in terms of communication on the euro. our mass media campaign, with tv and print adverts across the euro area and beyond, has just been launched. the communication offensive will continue into the first weeks of 2002, when the changeover will be taking place and people will have the euro banknotes and coins in their hands and pockets. they will then be more receptive to messages about the euro. in finland, you can watch our tv commercials for the very first time today, and see our print adverts as from 3 october. the creative concept here focuses on the positive spirit which comes from being part of a broad community with a single currency, and is reflected in the slogan, the euro. our money. because we cannot afford to miss a single opportunity to inform three hundred million europeans, two hundred million public information leaflets, in 11 languages, have been produced, enough for every household in the euro area. the leaflet is entitled getting ready for the euro, and shows the euro banknotes, with details of the security features and of the changeover plan for each country. the leaflet is tailored to the needs and circumstances of each country and will be distributed by the national central banks through a variety of channels. i would also like to mention our initiative to help the children of the euro area learn about euro banknotes and coins. seven million posters, each including a competition designed to raise awareness of the euro, will soon be sent to primary schools. | 0.5 |
requires our support if it does not emerge by itself. integration and harmonization are intended to promote economic well - being as increasingly integrated financial markets that ignore national boundaries broaden the geographic domain in which financial institutions and their customers make decisions. competition now has an inescapable global dimension, even for many small businesses. ladies and gentlemen, i do not have to explain to you neither the benefits of intense competition, nor the risks to those who do not adapt. we in the eurosystem want to support the private sector β s adaptation and success by promoting integration and harmonization of the financial system. both of these enable the realisation of economies scales ; they foster competition and the expansion of markets, and facilitate a more efficient allocation of betterpriced capital. as you may recall, the european financial integration objective was addressed in detail in lisbon in march 2000, where eu leaders adopted a ten - year programme ( the lisbon agenda ). the financial services action plan consists of a set of 42 measures, designed to strengthen the european financial industry by encouraging free market access, competition and the creation of more efficient markets. some of these measures took the shape of eu law, either as a regulation or as a directive, such as the markets in financial instruments directive ( mifid ) and the collateral directive. these have undoubtedly liberated competitive forces, with positive results for europe. other initiatives were allocated to the users of markets. in particular, providers of securities market infrastructure have adopted, with encouragement from commissioner mr mccreevey, the code of conduct, in which they commit to meet certain standards in the areas of price transparency, open access and interoperability, and service unbundling. while there has been some progress, the jury is still out on whether providers will co - operate enough to achieve the high levels of interoperability required for an integrated infrastructure. as alexander schaub from the european commission said several years ago in dublin, β financial integration is not simply a question of turning up and declaring the single market open for business β. 1 we need to accelerate the harmonization, or removal, of issues which are barriers to cross - border business β such as market practices, discriminatory provisions and domestic protectionist barriers β so that what is now cross - border business in europe becomes truly domestic. indeed, we have already helped, in various ways, in the removal of the barriers to efficient and competitive markets identified by the giovannini group, for example by providing advice to the european | is full of many successful examples, probably the most so far in the world history, of application of wide range of prudential measures, modifications in the standard set of instruments and implementation of nonstandard measures of monetary policy. the need of comprehensive risks monitoring in the economy and greater flexibility concerning the intensity and the type of measures, taking into account the ultimate monetary objectives, is probably one of the major lessons from the crisis. the economic theory clearly refers to the fact that the financial system is a relevant factor for economic growth, and the new message, clearly sent by the recent crisis, as the president of the bundesbank, weidmann, once said in one of his recent addresses, 1 is that there is a need of β well designed regulatory reform β. otherwise, a financial system which is developed and widely globalized today could become an obstacle for the economic growth. thus, even though the crisis is still present in our everyday life, the financial institutions have already been facing new banking standards, and the national regulators seek to incorporate them in the national regulation. the debt crisis in the euro area resulted in establishment of new fiscal framework of the european union and emphasized the need of fiscal consolidation. fiscal imbalances are not sustainable on a long run, which is a postulate that also applies to the countries of the region, particularly countries where fiscal consolidation is crucial for maintaining macroeconomic equilibrium. besides the experiences above, during the crisis we also gained many other experiences related to the market sensitivity, the promptness of market response to the changes arising from the development of crisis, and the slow reversible process of regain of confidence among market participants. lessons and experiences learnt from the crisis should help us face future challenges more successfully. jens weidmann, president of the deutsche bundesbank, keynote speech at the frankfurt finance summit, frankfurt, march 2012. bis central bankers β speeches conclusion please allow me to ascertain that this crisis broadened our perspectives, imposed new aspects of policy making, and increased our interdependence in the global economy. the south - eastern european countries which have been facing many challenges on their pathway to the european union will probably face new future challenges arising from the current conceptual shifts in the union. however, the countries from south - eastern europe should continue seeking to create sound macroeconomic policies, inevitably accompanied by structural reforms that need to ensure higher structural quality and structural flexibility of economies, which is a sine qua non not only for prompter | 0 |
vitas vasiliauskas : macroprudential regulation and financial stability speech by mr vitas vasiliauskas, chairman of the board of the bank of lithuania, at the highlevel international forum, minsk, 1 november 2019. * * * dear governor kallaur, ladies and gentlemen, it is my great pleasure to join you at this high - level international forum β and to celebrate the 25th anniversary of the belarusian ruble. congratulations on this important milestone. financial stability is key to ensuring trust in any currency. therefore, the topic i was invited to discuss today β namely, macroprudential regulation β fits the occasion well. in my remarks, i will consider three dimensions to macroprudential policy - making : the international, the european, and the domestic, or national, level. let β s begin with a broader international perspective. the global financial crisis taught us a lesson : microprudential regulation and supervision alone are not enough to safeguard the financial system. vulnerabilities may build up across the financial sector through complex interlinkages β even though individual entities may seem stable on a standalone basis. the crisis was thus a catalyst for the rise of macroprudential policies. the focus turned to ensuring the stability of the financial system as a whole. international cross - cutting post - crisis reforms β such as basel iii β helped accelerate this process. today, over 90 % of world economies have at least one macroprudential policy measure in place. the average number of measures per country is more than nine1. in other words, macroprudential policy has become mainstream. a saying was even born, paraphrasing milton friedman, that β we are all macroprudentialists now β 2. of course, the macroprudential domain differs across regions. in emerging market countries, tools to manage foreign exchange mismatches in the banking system are more popular than in advanced economies. such measures include, for example, limits on the net foreign exchange position. 3 many countries also differentiate liquidity tools and reserve requirements by currency. by minimising foreign exchange lending risks and encouraging local currency savings, these instruments can directly strengthen the role of local currencies. across the advanced economies, bank capital measures are the top choice. and, in recent years, more countries are activating borrower - based instruments, such as restrictions on loanto - value and debt - to - income or debt - service - to - | gediminas simkus : the future of central banking welcome speech by gediminas simkus, chairman of the board of the bank of lithuania, at the international conference " future of central banking " organised by the bank of lithuania and the bank for international settlements ( bis ) on the occasion of the centenary of the bank of lithuania, vilnius, 29 september 2022. * * * thank you, your excellency president gitanas nausda, for opening this international conference on the future of central banking. since its official establishment on 27 september 1922, the objective of lietuvos bankas has been developing a sound and sustainable monetary system that contributes to the resilience of the lithuanian economy. reestablished 1 march 1990, the lietuvos bankas continues to contribute to sustainable economic growth and the improvement of resident welfare. the fundamental principle that underlies all our activities is creating value for society. while we are all gathered here today in celebration of the centenary of lietuvos bankas, the focus of our discussions will not be reflection on what has already been accomplished. rather, we will talk about the challenges, opportunities, and changes that await lietuvos bankas β and central banking in general β over the next hundred years. dear governors, distinguished guests, ladies and gentlemen, we root our decisions in data, and as the world becomes increasingly digital, we are shifting from data - centric to data - driven policy making. in the course of this shift, we have been hearing legitimate questions as to whether central bankers will be replaced by algorithms β computers, so to speak β in the foreseeable future, given that computers can make better decisions than humans when those decisions are purely data - driven. so how will lietuvos bankas β or generally speaking, a central bank β look a hundred years from today? central banks were always data - dependent in their decision - making. but nowadays β and going forward β it no longer suffices just to have a hypothesis and validate it with data. banks must become data - driven and adept at data wrangling in order to generate useful insights. a lesson we central banks learned from the crises of the recent decades is that we don't know enough, but those who are performing the best are always the ones who know the most. 1 / 3 bis - central bankers'speeches with the power of increasingly advanced computers and near - instant access to data, it is almost certain that in a hundred years, | 0.5 |
duty to ensure and oversee the effective design and implementation of a sound control environment. work has also commenced to update and streamline the current regulatory guidelines on corporate governance for banks, insurers and takaful operators with a view to reduce the duplication across different standards and to sharpen the focus on the overall responsibility of the board for risk and control. existing prescriptive rules would give way to broader principles of behaviour. the review will also better align the regulatory framework with the current supervisory approach. a thematic review of the remuneration practices in the financial sector is also planned to take into account how it might influence risk - taking behaviours. also in train is a review of the supervisory process for assessing the suitability of persons that can serve on boards of financial institutions. this review will leverage on the work by the fide forum. looking further ahead, the financial sector blueprint sets out additional recommendations to further strengthen incentives and enablers for sound governance and risk management standards in anticipation of the growing complexities of our financial landscape. bis central bankers β speeches let me draw my remarks to a close. the task of providing stewardship, direction and oversight of financial institutions essentially falls squarely on the board. the responsibilities that go with this are great and i believe that we need the best directors in the financial industry β not just because of the importance of the financial sector to the broader economy, but because financial institutions, through their pervasive role in supporting economic activity, can be a powerful influence in raising the standards of corporate governance across corporate malaysia. i expect that the fide forum will have an instrumental role is realising this vision by professionalising the role of directors, and showing the way in the best governance practices. on our part, the bank greatly welcomes this initiative which will facilitate new opportunities for greater engagement with directors in the financial sector as a collective body, on regulatory issues and developments. on that note, it is my great pleasure to officially launch the fide forum. i wish it every success. bis central bankers β speeches | muhammad bin ibrahim : enhancing the professionalism of malaysia β s islamic financial services industry speech by mr muhammad bin ibrahim, deputy governor of the central bank of malaysia ( bank negara malaysia ), at the launch of the chartered institute of islamic finance professionals ( ciif ), kuala lumpur, 6 november 2015. * * * today β s official launch of the chartered institute of islamic finance professionals ( ciif ) marks a momentous occasion that reflects our collective effort to enhance the professionalism of the islamic financial services industry. we are embarking on a long journey to create a new landscape of talent development, one which is permeated with a strong culture of professionalism, integrity and ethics. greater professionalism among islamic finance practitioners will instil greater confidence and capability to the islamic finance industry to better serve public interest. the recent global financial crisis has brought to the fore the importance of trust, confidence and integrity in the financial services sector. the banking industry is subjected to continuous scrutiny on their values, professionalism and work ethics. this has prompted a host of initiatives both domestically and globally, aimed to strengthen the industry, given the significant role financial institutions have to the broader interest of society and the overall economy. maintaining public confidence is critical. it is therefore in the industry β s interest to always place public trust above everything else, and only if we are able to do this, we shall enjoy the confidence that ensures the long - term growth of the industry. such expectations are even greater on islamic finance given that the professed values of this industry are driven by the principles of shariah which promote fairness, equality and justice. it is from this perspective that islamic finance practitioners are duty - bound to observe the norms of high ethical conduct to uphold the values and the sanctity of shariah. the need is even more now, given the increasing complexities faced by islamic finance brought about by more competition and evolving regulatory requirements, more offerings of sophisticated products and growing cross - border activities. in malaysia, it has always been our priority from the beginning to develop talent in islamic finance as we recognise that quality talent is a crucial prerequisite for the continued success of the industry. there has been significant investment in capacity building, in line with our strategic approach in realising the visions of talent development outlined in the financial sector master plan and the financial sector blueprint. to elevate the next stage of growth would require talents with different levels of technical competency and capabilities. the knowledge of yesterday might | 0.5 |
β’ the growth perspectives are directly related to the ecb β s mandate, which has price stability as a prime goal. the ecb β and many other central banks β define price stability as an inflation rate of below, but close to, 2 %. for 2015 our inflation forecast for the euro area is 0. 1 %, for 2016 it is 1. 1 %. so we will clearly miss our target. a main cause for this is the dramatic fall in the price of oil and raw materials, which central banks clearly cannot influence. but core inflation rates are also clearly below our target. it is obvious that under such a constellation we need stronger economic growth, which should help reduce unemployment and bring us closer to bis central bankers β speeches our goal of price stability. ecb is using the monetary policy instruments available β but it is quite obvious that in the current macroeconomic situation additional sets of instruments are necessary. these include structural measures β and here we are at the heart of the conference topic : competitiveness. but let us not forget that economic growth depends not only on the supply side, but also on the demand side and the institutional settings of an economy. β’ with respect to the uncertainties regarding the future of emu and the eu, the severe crisis we experienced has reminded policymakers of the pitfalls of an incomplete monetary union. president belka already mentioned the β five presidents β report β, which highlights four pillars : an economic union that promotes convergence and social cohesion, a financial union that integrates banking and capital market regulation, a fiscal union that supports the soundness of public finances and a political union that strengthens democratic accountability and legitimacy. β’ suddenly many good ideas are on the table to push the european integration process further. but these different approaches will need to be developed in more detail and will have to pass the reality check. in this crucial moment with discussions still ongoing, it is up to research to come up with feasible approaches. β’ the oenb, for example, hosted another conference just a couple of weeks ago with the aim of stimulating academic debate on ways to proceed with integration. throughout the event, which was entitled β toward a genuine economic and monetary union, β a broad consensus emerged about the need for a fiscal and economic policy framework that combines risk reduction and risk sharing. in other words : a genuine emu needs more discipline and solidarity. β’ and here i am coming back to today β s conference topic β β boosting eu competitiveness. β i | u. s. productivity growth and the decline in what economists call home bias. in brief, home bias is the parochial tendency of persons, though faced with comparable or superior foreign opportunities, to invest domestic savings in the home country. the decline in home bias is reflected in savers increasingly reaching across national borders to invest in foreign assets. the rise in u. s. productivity growth attracted much of those savings toward investments in the united states. the greater rates of productivity growth in the united states, compared with still - subdued rates abroad, have apparently engendered corresponding differences in risk - adjusted expected rates of return and hence in the demand for u. s. - based assets. home bias implies that lower risk compensation is required for geographically proximate investment opportunities ; when investors are familiar with the environment, they perceive less risk than they do for objectively comparable investment opportunities in far distant, less familiar environments. home bias was very much in evidence for a half century following world war ii. domestic saving was directed predominantly toward domestic investment. because the difference between a nation's domestic saving and domestic investment is the near - algebraic equivalent of that nation's current account balance, external imbalances were small. 1 national income accounting establishes that the gap between domestic saving and domestic investment is equivalent to net foreign saving ; net foreign saving is a close approximation of the current account balance. however, starting in the 1990s, home bias began to decline discernibly, the consequence of a dismantling of restrictions on capital flows and the advance of information and communication technologies that has effectively shrunk the time and distance that separate markets around the world. the vast improvements in these technologies have broadened investors'vision to the point that foreign investment appears less risky than it did in earlier times. accordingly, the weighted correlation between national saving rates and domestic investment rates for countries representing four - fifths of world gross domestic product ( gdp ) declined from a coefficient of around 0. 97 in 1992, where it had hovered since 1970, to an estimated low of 0. 68 last year. 2 to be sure, international trade has been expanding as a share of world gdp since the end of world war ii. yet, through the mid - 1990s, the expansion was largely a grossing up of individual countries'exports and imports. only in the past decade has expanding trade been associated with the emergence of ever - larger u. s. trade and current account deficits, matched by a corresponding widening of the aggregate external surplus | 0 |
with loan to income ( lti ) ratios above four was around three times larger than the fall among those households with lti ratios between one and two. but the effect can be to prolong the economic pain for everyone by reducing spending, and therefore amplifying the effect on incomes and output in the economy. the evidence, across countries, recessions ( and us states ) is compelling : build - up of household debt means an economy is exposed to more severe recessions ( chart 1 ). chart 1 household debt growth in the boom and the economic severity of the subsequent bust : across us states, countries and time for gdp and unemployment source : david aikman, jonathan bridges, anil kashyap and caspar siegert, β would macroprudential regulation have prevented the last crisis? β, bank of england staff working paper no. 747, august 2018. notes : state level household debt statistics ( left hand panel ) from federal reserve bank of new york ; gdp data from bureau of economic analysis ( bea ) ; unemployment data from bureau of labour statistics. change in household debt to gdp ratio from 2004 to 2007 on x - axis, economic performance from 2007 to 2010 on y - axis. international data ( middle and right panels ) uses bridges et al. ( 2017 ) dataset : household debt data from bank of international settlements β long series on total credit and domestic bank credit to the private non - financial sector β ; real gdp and unemployment data from the oecd, the global financial database and national statistics websites. middle panel shows experience across 27 advanced economies in the global financial crisis, using same dates as u. s. state panel. right hand panel is for recession episodes in g10 countries from 1960 to 2004 ( i. e. great recession not included ). a recession is defined as two consecutive quarters of negative real gdp growth, with at least eight quarters between consecutive peaks or troughs. corporate debt a similar picture is apparent across companies. in a recession, companies with more debt tend to cut back on investment and employment by more than others. the evidence here is that companies with net debt more than about four times their cashflow cut investment twice as sharply as others ( chart 2 ). all speeches are available online at www. bankofengland. co. uk / news / speeches financing from overseas public debt, in contrast, tends not to deepen recessions, at least in countries issuing the debt in their own currency and within the bounds of | economies ) to which it β s exposed. that β s why, when we come to decide how big the banking system β s buffers of loss - absorbing capital should be, we don β t focus on any economic tremors we may feel. we don β t insist on tougher standards just because trade tensions threaten to slow the world economy or changes in sentiment hit financial markets, or because uncertainty is weighing on the domestic economy. instead we focus on debt β a key driver of how far up the richter scale economic earthquakes tend to be. 4 think of a build - up of debt as being the economic equivalent of building close to a fault line. when a quake hits, the impact is greater and more resilience is needed in the structures. this focus means we can appear contrarian. debt has a habit of increasing in calm periods, when those in the financial system think it β s safe to take more risks. so we can find ourselves demanding tougher standards when risks are thought by many to be low. and we don β t start demanding them when the tremors start, when risks are thought by many to suddenly be high. we aim to be countercyclical. our work shows three features of debt to be of particular importance. thomas fuller, β inside apple β s earthquake - ready headquarters β, new york times, 4 june 2019. this approach was exactly what andrew crockett outlined almost 20 years ago : β the received wisdom is that risk increases in recessions and falls in booms. in contrast, it may be more helpful to think of risk as increasing during upswings, as financial imbalances build up, and materialising in recessions β¦ and because the timing of downswings is exceedingly hard to predict, the approach implies a focus on measuring the vulnerabilities that build up in the upswing and on the more recurrent features of cycles. we may not know exactly when the rainy day will come, but we can be pretty sure that it will. it is not wise to decide on policies or business strategies on the assumption that it will not, or that we can predict its timing with sufficient foresight. β all speeches are available online at www. bankofengland. co. uk / news / speeches mortgage debt households with more mortgage debt tend to cut back more in downturns. people do everything they can to pay the mortgage. during the financial crisis, the fall in consumption relative to income among uk households | 1 |
which they can collaborate. bou and ucc are discussing the essentials to be included in the mou. future developments we envisage that mobile money will become an integral part of the national payment system. the bank of uganda act is being amended to include powers of the central bank to regulate and supervise the payment systems, and a national payment systems legislation is being developed whereby payment service providers will be licensed by the central bank. once this legislation is enacted, payment service providers will be directly licensed as payment operators. bis central bankers β speeches | will be the consequent dutch disease impact. we must be very careful to try and avoid, as much as is possible, rendering our non oil traded goods industries economically unviable, because that would be very detrimental to long term growth and structural transformation. if dutch disease drives up the costs of producing traded goods in uganda, the competitiveness of traded goods industries can only be maintained if these industries can become more efficient, for example by raising the productivity of labour. thirdly, oil prices are inherently volatile. this poses acute problems for the short term management of fiscal policy. in particular the volatility of oil revenues often leads to procyclical public spending which amplifies the business cycle and thus destabilises the macroeconomy. to avoid this, it is necessary to de - link public spending from contemporaneous oil revenue receipts, in a manner which is consistent with long term fiscal sustainability. again, this presents political challenges because of the need to maintain fiscal discipline during periods of above normal oil revenue receipts, when optimal fiscal policy dictates that government budget balances should improve, but when pressures for more public spending will intensify. good public policy decisions are more likely to be taken and implemented if they are a product of well informed public policy debates ; debates which involve public officials, the academic community, the business sector and civil society. i hope that this seminar, which includes participants from the parliament, government, the business sector, academia and civil society, will strengthen our understanding of the critical issues relevant for oil revenue management and will help to promote public debate about these issues. distinguished delegates, i would now like to invite the honorable minister of finance, planning and economic development to officially open this seminar. bis central bankers β speeches | 0.5 |
support the recovery while preserving financial stability. the second document we discussed is the final report on the effects of too - big - to - fail reforms, which updates the interim analysis, also in light of the experience of the pandemic. the key message, on which we concurred, remains that the β too - big - to - fail β reforms for banks are working as intended, reducing moral hazard and systemic risk with no material side effects. we agreed to work on filling some remaining gaps, concerning the information available to public authorities for financial stability risk monitoring and some residual obstacles to resolvability. we also concurred on the need for a system - wide approach to monitor risks that have moved 1 / 2 bis central bankers'speeches outside the banking system. we are therefore committed to strengthening the resilience of nonbank financial intermediation, building upon the fsb β s β holistic review β of the march 2020 turmoil and on the further work that the fsb will conduct under the italian g20 presidency and beyond. we are now ready to take your questions. 2 / 2 bis central bankers'speeches | ignazio visco : press conference remarks by mr ignazio visco, governor of the bank of italy, at the second g20 finance ministers and bank governors meeting, 7 april 2021. * * * good afternoon, today we discussed sustainable finance and two specific topics relating to financial regulation. on sustainable finance, the discussion concerned the work plan of the sustainable finance study group, which we decided to reactivate at our february meeting and which is co - chaired by china and the united states. the group has made rapid progress in the last few weeks and, following the inputs of the presidency, has agreed to focus its work this year on three areas : the first is sustainability reporting ; the second is related to the metrics for classifying and verifying investment sustainability ; and the third concerns how to enhance the contribution of international financial institutions to the goals of the paris agreement. in addition, the group will develop a multi - year roadmap on sustainable finance to address the most pressing issues relating to sustainable development. this will help in prioritizing its activity, which will initially be focused on climate but will subsequently look at sustainability more broadly. ministers and governors concurred on the importance of this agenda and agreed that the study group should be upgraded to a fully fledged working group. as regards financial regulation, today we discussed two documents submitted by the fsb : a report on the covid - 19 support measures and the main issues concerning their future evolution, and the final evaluation report on the effects of too - big - to - fail reforms. the first report shows that in the current and still uncertain circumstances most of the covid - 19 support measures remain in place, and their withdrawal is generally not imminent. authorities tend to view the potential risks to financial stability arising from the early removal of support measures as significant, and as being greater than those associated with a late withdrawal. we, ministers and governors, shared the main message of the report, which is that the persisting uncertainty over the evolution of the pandemic and the uneven pace of the recovery across countries call for a state - contingent and data - driven approach when deciding whether to adjust or end the support measures. this should be done in a gradual and targeted way, in order to minimize long - term financial stability risks. we also agreed on the need to maintain an internationally coordinated approach in responding to the pandemic, with the support of the financial stability board ( fsb ), to ensure that the financial sector continues to | 1 |
account deficit, which is equal to the foreign savings that come into south africa, is close to 4 % of gdp. almost all our peer countries borrow less. if we try to cut rates too far, despite the country risk, investors won β t have enough reason to be in south africa. they would be better off investing in less risky places. so we need to become less risky, to enjoy more of the benefits of low global rates. key public - sector drivers of inflation, like the public sector wage bill and administered prices, could also help ease inflation. this is where fiscal and monetary policies need to be in sync. finally, and more fundamentally, we need to appreciate the limits on what any monetary toolbox can do for growth. let me give you the example of italy. italy is part of the euro zone. euro area inflation has been very low, and the european central bank has made a major effort to push it back up again, with policies including negative interest rates and quantitative easing. but italy has a large debt burden. it has problems of political and fiscal policy uncertainty. over the past five years, italy has had average growth of less than 1 %. germany, with the exact same monetary policy, has had average growth closer to 2 %. spain, which, like italy, was a major victim of the 2011 - 2012 euro crisis, has averaged nearly 3 %. 7 clearly, the tailwind of easy monetary policy was not enough to overcome the headwinds of italy β s other challenges. of course, south africa is a different country. but what you should take away from this is that there is much more to growth than monetary policy, and it is still possible to stagnate with the loosest monetary policy imaginable. the fact of the matter is, south africa has not made itself a high - growth country. we do not save enough to fund adequate levels of investment. we invest less than 20 % of gdp ; to sustain strong growth, we should have investment of at least 25 % of gdp. we have focused on domestic the federal reserve β s targeted measure of inflation. 7 the exact averages are 1. 7 % for germany, 0. 9 % for italy, and 2. 9 % for spain, for the period 2015 - 2019. the data are drawn from the imf world economic outlook database. 6 this number refers to the change in the private consumption expenditure deflator, consumption as a growth driver, on the grounds that it | start - ups. specifically, alternative finance instruments, such as venture capital ( or vcs ) and peer - to - peer lending, can help fill the funding gap for early stage and growth stage firms, who typically possess risk profiles less suited for bank - based debt financing. alternative finance instruments can also help crowd - in additional capital from other large private and public capital providers, enabling firms to support their subsequent stages of growth, as well as foster a greater culture of innovation, dynamism, and entrepreneurship in the malaysian economy. at present, the domestic alternative finance industry is still nascent. according to our estimates, 3 / 4 bis central bankers'speeches malaysia β s alternative finance market size constitutes only 0. 2 % of gdp, which is small when compared to developed and peer markets. realising the need to accelerate growth of this area, we have identified several strategies to develop alternative finance under the financial sector blueprint 2022 β 2026. notably, this includes the formation of a dedicated platform with the securities commission and other stakeholders to streamline measures for development of the national alternative finance ecosystem. additionally, initiatives such as the deployment of dana penjana under penjana kapital, a 1 - to - 1 matching program for funds raised by venture capitals, are important public private partnerships utilising alternative finance to spur early - stage innovation. the investee companies here today, involved in a variety of innovative fields across finance, are testament to this. beyond regulator or government - led efforts, capital market intermediaries β such as asset managers and large institutional investors β can also play a critical role in mobilising capital more actively to firms, especially smes and start - ups. for now, a large proportion of venture capitalbacked deals in malaysia remains facilitated by the public sector entities. there is considerable room to increase private sector involvement here. another potential avenue for unlocking investor funds could be through greater corporate venture capital ( cvc ) participation in vc funding activities. by investing in the vc firm, as opposed to the start - up itself, the technical know - how in start - up investing could be built up over time, without the instance of crowding - out vcs through direct competition in deal flow. closing let me conclude. the digital era is already upon us. in the next few years we will see more advancements and some of this, are unknown to us today. some of you as industry entrepreneurs have a better vision on this. the late henry ford once | 0 |
regulatory measures. consistent with this, the securitisation dataset shows that a rising share of non - bank lending has been to investors. indeed, there has been at least a five - percentage - point increase in the share of investor loans across all outstanding non - bank deals in the securitisation dataset over the past two - and - a - half years ( graph 8 ). 11 this is in contrast to the share of total bank loans to investors, which has been declining over that period. similarly, the share of non - bank loans that are on an interest - only basis has been stable over the past couple of years, whereas the share of bank loans that are interest - only has declined significantly over the same period. 10 / 16 bis central bankers'speeches the increase in the share of investor housing in deals issued by non - banks is one of the few noticeable changes in the composition of the collateral underpinning rmbs in the past couple of years. indeed, for deals by non - banks the share of loans with riskier characteristics such as high lvrs or self - employed borrowers has been little changed. one of the other changes to loan pools in new deals is a fall in seasoning ( i. e. the age of loans when the deal is launched ). this has been most pronounced for non - banks ( graph 9 ). it is consistent with non - banks writing a lot more loans. hence, warehouses of their loans are reaching desired issuance sizes more quickly. despite the pull - back in rmbs issuance by the major banks over recent years, the broader stock of asset - backed securities ( abs ) on issue increased by around $ 20 billion over the past 18 months, after remaining broadly stable for the previous 5 years ( graph 10 ; in addition to rmbs, abs cover other assets such as car loans and credit card receivables ). demand for these additional asset - backed securities has been driven by non - residents. 11 / 16 bis central bankers'speeches as well as a shift in the composition of investors in abs, we have observed some changes in deal structures over recent years. of particular note, the average number of tranches per deal has increased from around four to eight ( graph 11 ). the increase has been broad - based across different types of issuers. this general trend covers deals with a greater number of tranches with differing levels of subordination, as well as deals where the top tranche | inflation targeting average ; market services excludes holiday travel and telecommunications ; retail goods is consumer durables and groceries excluding fruit & vegetables. sources : abs ; rba. you can see that through 2022 and 2023, most components of the cpi basket were growing faster than usual. inflation in housing and goods prices was particularly high over that period. but over the past 18 months, goods price inflation has declined substantially as supply disruptions associated with the covid - 19 pandemic and war in ukraine have subsided and global demand for goods has eased. inflation for retail goods β consumer durables and groceries β is now close to its historical average. inflation for administered prices β which are at least partly regulated or relate to items for which the public sector is a significant provider β is only a little above its long - run average. the key drivers of elevated inflation at the moment are housing costs and market services inflation, which remain above their average levels and have been easing only gradually. on the housing side, this reflects both construction cost growth and strong increases in rents. year - ended growth in advertised rents is still high, reflecting pressure from a rebound in housing demand and limited supply response. [ 1 ] rents on new leases take time to impact overall cpi rents because only a small share of the stock of rental properties update leases in a given month and so cpi rents inflation is likely to be high for some time ( graph 3 ). new dwelling inflation has declined from its earlier peak as materials costs have eased, but it remains elevated. there is still a large pipeline of work and ongoing labour shortages for certain trades. graph 3 rent prices capital cities, 2019 = 100 index index advertised rents cpi rents sources : abs ; corelogic ; rba. market services is making the largest contribution to above - target inflation. while year - ended inflation has been moderating across most market services β particularly those that are more discretionary, such as eating out and recreational activities β inflation in this category remains high at 5. 3 per cent over the year to the june quarter. we typically think of market services inflation as reflecting overall domestic inflationary pressures β a combination of costs and margins. domestic non - labour costs ( including, for example, electricity, insurance and warehousing and logistics rents ) continue to increase strongly, and labour cost growth is also strong, reflecting both wage increases and weak productivity growth ( graph 4 ). graph 4 change in firms β costs ppt ppt non - labour costs * net balance, rb | 0.5 |
municipal commission of commerce ( smcc ) 2 source : shanghai municipal commission of commerce ( smcc ) 3 the bond indices, designed by cfets and boc, track the movements of the chinese bond market and can be used by investors to benchmark their chinese bond portfolio performance. 5 / 5 bis central bankers'speeches | here in shanghai. this is a reflection of the close bonds with our partners in china, which mas greatly values. in the next five years, we look forward to broader and deeper financial cooperation with china, reaching more milestones in a range of areas including belt and road collaboration, capital markets connectivity, rmb internationalisation, and fintech cooperation. 1 / 5 bis central bankers'speeches singapore β shanghai economic relations against this backdrop, we expect shanghai - singapore cooperation to grow from strength to strength, building on the strong economic and financial relations between both cities. a. in 2017, shanghai - singapore trade amounted to us $ 17. 5 billion1, an increase of 33. 8 % from 2016. on the investment front, singapore has been china β s largest foreign investor for five consecutive years. shanghai was singapore β s second largest investment destination in china while singapore was also shanghai β s second largest foreign investor in 2017. with growing affluence of shanghai β s resident population, shanghai continues to be an attractive investment destination for singapore companies. b. similarly, shanghai companies view singapore as an important asian commercial and financial hub as they expand internationally. as of end 2017, there were close to 110 shanghai companies in singapore, with more than us $ 6 billion in investments2. c. notably, singapore minister for trade and industry chan chun sing visited shanghai from 4 to 6 november 2018 for the inaugural china international import expo ( β ciie β ), which allowed singapore companies to take part in business matching sessions and explore collaborations with chinese partners to enter and expand into china. d. during premier li β s recent visit to singapore, both sides welcomed the discussion between singapore and shanghai to establish a comprehensive mechanism for cooperation. the new platform will focus on belt and road initiative ( β bri β ), modern and financial services, urbanisation and sustainable development, technology and innovation, and people - to - people exchange. this new strategic, progressive and comprehensive platform will expand and deepen china - singapore engagements. 5 as economic and financial relations between shanghai and singapore expand, there is scope to foster even closer collaboration between both financial centres, and reinforce key areas of cooperation undertaken at the government to government ( β g2g β ) level. let me outline five key areas, which i hope would lead to further discussion during the forum today. belt and road collaboration between shanghai and singapore 6 first, shanghai β bridgehead of the bri β and singapore can foster the development of a comprehensive financial ecosystem | 1 |
. one of my roles is to inspire everyone in our organisations to walk the talk on corporate ethics and values. these values must filter down to all aspects of the organisations. and we must align our system to reward those that uphold these values. we have therefore integrated the organisational values with our formal recognition and reward system in the bank. alignment to these values now determines the rewards that one will be awarded at year end. i have spoken many times in the productivity awareness week organized by productivity authority of fiji β s ( tpaf ). in one of my speeches i emphasised that β productivity is not an end in itself. it is simply a means to an end. and what is the end? that end must be prosperity at the individual and household levels β. being productive means working smarter and nor necessarily harder. it means producing more from the same resources and even producing more from less. in fiji our resources are limited. the biggest resources that we have are land and our people. how productive are we using these resources? i am sure that you will agree with me that we could do a whole lot more in this area. no wonder our long term economic growth rate is a meager 2. 5 percent β not enough to absorb our school leavers! at the bank, we have tried to take a macroeconomic measure of productivity by taking the total output produced by each worker. this is a very aggregative and crude measurement. it shows that productivity has grown by an average of around 1 percent since 1996. this is very low. some asian countries are achieving over four percent growth. my crude estimate says that the multiplier effect of a rise in the growth rate of productivity on economic growth is at least 2. this means that if we raise productivity growth from 1 to say 2 percent every year, we can raise our average economic growth rate from 2. 5 to 4. 5 percent. and that makes a lot difference in jobs, in incomes and in poverty alleviation. customer service let me say a few words on the second part of your theme that of customer service. when we talk about customers, we are really talking about you and me. we may be entrepreneurs or workers but we are all customers. and here the best motto is to do to others what you want done to you. firstly, we all want to be understood. communication and feedback are therefore important. listening is the best way of communication and believe you me listening is not an easy thing to do. | everybody may bring to the table what they can contribute, what they expect from others, but also possible doubts about feasibility. a special focus should be on policy coordination amongst the key players and maybe our discussants even want to present concrete steps forward. i am looking forward to an open discussion without taboos. of course, the challenge of tackling climate change has a global dimension β individual countries, like austria, or even the eu are too small to make an important difference. we have three options to prevent free riders from offsetting national efforts. first, a carbon border adjustment mechanism that comes close to an import tax ; second, a carbon - pricing club as proposed by nobel laureate bill nordhaus, which incentivizes countries to join in order to avoid their exports being taxed ; and finally, the imf proposes a globally agreed carbon price floor that differentiates between countries by their level of income. you will not be surprised to hear from somebody who has devoted a good part of his life to multilateralism that i would prefer the last option. central banks must worry about the costs and the impact on price stability. in a brilliant recent policy brief, jean pisani - ferry1 made clear that climate policy is macroeconomic policy, and its fiscal and inflationary implications will be serious. according to estimates, global investment costs would correspond to roughly 2 % of gdp per year, implying a climate policy shock comparable to the oil shock in the 1970s. however, pisani - ferry also lists mitigating factors : co2 prices are likely to be introduced not globally at the same time, but more gradually, and they will be far from unexpected and, ultimately, trigger technological advances, also because the world economy has become more flexible. of course, these costs must be contrasted with the benefits, albeit over a different time horizon. the benefits of climate risk mitigation materialize later while the costs occur now in terms of expenditure, inflation and public debt, even if green finance initiatives attempt to mobilize private capital for climate investment. unfortunately, government debt levels are already high due to crisis support and pension commitments, which raises the question of who should and could pay the bill? many argue that the cost of inaction is much greater than the cost of action β yet the cost of transition is the devil we ought to know. to my knowledge, austria has the second most ambitious climate goal of all eu countries β namely, achieving carbon neutrality by 2040. while boldness is welcome | 0 |
4 bis - central bankers'speeches # # # 4 / 4 bis - central bankers'speeches | done so in past crises, and we will do it again. 1 / 4 bis - central bankers'speeches anchored on three pillars our actions are anchored on what we call our three pillars : price stability, financial stability, and a safe and efficient payments and settlements system - these are the three pillars of central banking. allow me to provide updates on each. on price stability, as an inflation - targeting central bank, we aim to bring inflation back to the government's target range over the medium term. based on our latest estimates, we expect inflation to ease from the projected 5. 6 percent this year to 4. 1 percent next year and further to 3. 0 percent in 2024. as you know, next thursday, we will be holding our policy meeting. i have already communicated that we are prepared to match the us fed. since they hiked by another 75 basis points, you can expect that i will be voting to raise the policy rate by a similar magnitude. the reason we do this is to increase the likelihood that headline inflation will be within target by the second half of next year and, hopefully, for the rest of 2024. the bsp's policy rate hikes will also prevent a significant narrowing of the interest rate differential between the us and the philippines. keeping a comfortable differential between our policy rate and that of the us lends support to the peso. as you know, the bsp observes a flexible exchange rate policy. as such, we do not target a specific exchange rate nor set a specific line in the sand. nevertheless, we recognize that significant and persistent depreciation of the peso can dislodge inflation expectations. we, therefore, intervene in the market as needed, consistent with our price stability mandate. in addition, the bsp also exercises flexibility in selling dollars. the philippines has ample gross international reserves - standing at 94. 1 billion us dollars as of the end of october 2022 - allowing us to sell dollars and help smoothen foreign exchange market volatility. in summary, the bsp uses three tools to cushion the economy against disruptionsinterest rate adjustment, a flexible exchange rate, and foreign exchange market participation. we use a combination of these tools in a well - calibrated manner to keep the impact of external shocks manageable. meanwhile, there is a fourth tool, which are non - monetary measures implemented by the national government to help boost the supply and moderate the prices of key food commodities. the bs | 1 |
the board of governors on its upcoming review of whether the liscc operating committee receives information that is sufficient to reach sound supervisory decisions. one subset of this system - wide inquiry will analyze regulatory capture β specifically, how divergent views are presented to decision makers at the board. the review is expected to take several months. effective supervision means tough supervision and demands a focus on large banks that pose systemic risk. bank supervisors cannot prevent all fraud or illegal conduct or forestall all undesirable behavior in large, complex financial institutions. but we can help create more bis central bankers β speeches resilient, less complex, and better managed organizations that promote, rather than undermine, financial stability. v. conclusion the federal reserve will continue to improve its supervision and regulation of financial institutions. we understand the risks of doing our job poorly and of becoming too close to the firms we supervise. we work hard to avoid these risks and to be as fair, conscientious, and effective as possible. of course, we are not perfect. we cannot catch or correct every error by a financial institution, and we sometimes make mistakes. but in my view, a good measure of the effectiveness of supervision is the improved strength and stability of banks since the financial crisis. thanks in part to enhanced supervision and regulation, banks β have the ability to meet their financial obligations and continue to make a broad variety of financial products and services available to households and businesses even in times of economic difficulty. β 12 i can promise you that we will always strive to improve and that we will work hard to earn and retain your trust. i look forward to taking questions. scott g. alvarez, regulatory rulemakings, testimony before the committee on financial services, united states house of representatives, april 8, 2014. bis central bankers β speeches | guy debelle : the global code of conduct for the foreign exchange market speech by mr guy debelle, assistant governor ( financial markets ) of the reserve bank of australia, at the fx week europe conference, london, 25 november 2015. * * * thank you for giving me the opportunity to talk to you tonight about two important pieces of work currently occurring in the foreign exchange market. first, i will summarise developments in fx benchmarks. second, i will talk about the global code of conduct for the foreign exchange market. but before that, let me step back and ask why is the work going on? the reason, as many of you are painfully aware, is that the foreign exchange industry is suffering from a lack of trust in its functioning. this lack of trust is evident both between participants in the market, but at least as importantly, between the public and the market. trust is the lynchpin of all financial market transactions. without trust, markets do not function well. 1 at an fx week conference earlier this year, 2 my colleague simon potter outlined the important role that the foreign exchange market plays in the global economy. we clearly need the market to be functioning as effectively and efficiently as possible. but for that to happen, we need to restore the trust in the foreign exchange market. fx benchmarks i will start by summarising the current state of play in fx benchmarks, reiterating remarks i made in sydney last week. 3 roberto schiavi has talked about this from a european perspective earlier today. from early 2013, concerns were increasingly raised about the integrity of fx benchmarks, particularly around the potential for market misconduct in the trading around the time of benchmark fixings. accordingly, the financial stability board ( fsb ) formed a group co - chaired by paul fisher of the bank of england and me to firstly analyse the structure of the fx market and the incentives that might promote inappropriate trading activity around a fix, and then come up with some potential remedies to address the problems we found. after talking to participants from all sides of the fx market around the world, in september 2014, we proposed 15 recommendations to reform the fx benchmark process, which were endorsed by the fsb. 4 these recommendations were in four main areas : benchmark methodology ; execution of benchmark transactions ; market conduct ; and guidance on reference rates produced by central banks. earlier this year, at the request of the chair of the fsb, mark carney, i chaired | 0 |
circumstances but also by changing public expectations. this brings me to my third observation : that banks and financial institutions ( and, it might be added, regulators ) are now operating in a more sceptical, more demanding, even hostile environment. we see this around the world, and, particularly in the aftermath of the lehman brothers collapse, we have seen it in hong kong. there is also discontent and anxiety locally that pre - dates the crisis β for example, about access to banking services, about the risks of new technology β that result partly from the changing business landscape and partly from changing expectations. we must expect this trend to continue, and it will be necessary for the banking industry and the regulator to take more and more account of wider public opinion, and to tackle areas of concern. as the industry organisation, hkab has already become quite deeply involved in such matters : for example, it has played an important co - ordinating and think - tank role in ensuring the safety and efficiency of e - banking, and in promoting accessibility to banking services, particularly among vulnerable groups ; it is also one of the joint issuers of the code of banking practice, the reference - point for relations between banks and their customers. hkab can, i believe, contribute even more in the future, and consolidate its role as industry representative, by strengthening its resources, for example by creating a separate secretariat with a professional chief executive. one of the key causes of the recent financial crisis was the use β or abuse β of innovation by financial intermediaries for short - term private gain at the expense of longer - term stability and effective working of the financial system as a whole. and one of the reactions to this has been a call β a very loud call in some places β for banks to go β back to basics β in conducting their business. if such a reaction were to lead to a return to the sort of inflexible banking services many of the older among us remember, then this would be a pity. if, on the other hand, it were to result in greater reflection and rethinking about the true function of banking in society, then this would, in my view, be a healthy development. at the heart of such thinking must be the view that the banking system exists to provide financial intermediation in support of the larger economy : it cannot be some abstracted, disembodied realm of activity in which intermediaries compete with each other to dream up ever more | , what and how the funds were spent ( according to budget or if there is a case of misuse of funds ). finally, the society can be the vehicle, at the least, for us get to know each other in our profession and exchange views and ideas, and socialize. networking is an important element of every professional β s working life today. i as the governor of the central bank of png welcome very much the birth of this society and encourage all who are eligible to become members. i have asked all my economics graduate staff to join. the bank supports this course as evident by it being the very first entity to make a financial donation to the society, under the former governor. this fund has enabled the society to set itself up and eventually arrange this launching. i encourage other employers of economists to assist the society in its endeavours so it can grow and meet its strategic objectives, and for the enhancement of the profession in the country. i note and appreciate all the efforts by the four interim executives in initiating and ensuring the birth of this society through the formal incorporation of the society by ipa under association incorporation act on 19th december 2007 and in organizing the launching. it has taken this long to have the society formally launched but the important thing is the moment has arrived and it is happening now. thank you very much for that. i am also pleased to note that the society will hold its first full meeting in one month time to elect the first full office bearers. i encourage all you potential members to pay up your membership fees so you can be able to vote on that day and support the society to see it mature through time from this birth. let us take pride in our profession and in this moment β the launching of the ekonomic society of papua new guinea. with all these words, i hereby declare that the ekonomic society of papua new guinea is launched. thank you. | 0 |
approaching real convergence not as a race where the fastest track is also the right one, but rather as a complex process giving the steady runner ( a marathoner rather than a sprinter ) the opportunity to reap most of the potential benefits, while avoiding excessive risks. speaking about risks, it is worth noting that relatively sizeable current account and fiscal deficits may erode the very foundation of this edifice that is the national economy. it is therefore much wiser to adjust them in a gradual manner than leave market forces to cause a sudden correction. fiscal discipline, consistent economic policies and an ambitious, yet viable, calendar should make a successful euro adoption possible, so that the economy adequately withstand competitive pressures within the euro area. equally important is to reduce the still overly large disparities across romania β s development regions, as it takes the entire country to join the euro area, not only bucharest and ilfov county. economic growth is not enough, it should be accompanied by lasting economic development. before ending my speech, instead of my personal view about the future, let me quote a recent column in financial times by tony barber 2 relevant for the state of affairs in the region : β nevertheless all is not well in the region. why? one reason lies in the model that western governments in the 1990s prescribed for the east β s transition to free - market democracy. as it shed its communist past, the east was told to embrace not just liberal democracy but globalisation, open borders and the lightly regulated financial capitalism that the west viewed as the touchstone of its own economic success. this model β s flaws were exposed in the 2008 financial crisis and the european refugee and migrant emergency of 2015 β 16. [ β¦ ] eu membership, too, has brought more pluses than minuses. access to the single market, regional aid and, from ordinary people β s viewpoint, europe - wide freedom of movement are cherished gains. [ β¦ ] this resentment has much to do with the western model grafted on to the east. in 1989, as during europe β s 1848 revolutions, the people wanted civic freedoms and, in many cases, liberation from foreign overlords and their first independent states of modern times. but after 1989 the adoption of the western model β complete with eu membership, global capitalism and a liberal political philosophy β created tensions between liberalism allied to internationalism and the assertion of a newly acquired national sovereignty. [ β¦ ] now central and eastern europe is experiencing its own contest between populist | leonardo badea : on financial ( in ) stability and systemic risks in a world with high uncertainty and multiple disequilibria closing remarks by mr leonardo badea, deputy governor of the national bank of romania, at the15th edition of the seminar on financial stability issues " on financial ( in ) stability and systemic risks in a world with high uncertainty and multiple disequilibria ", sinaia, 4 october 2024. * * * distinguished guests, esteemed colleagues, ladies and gentlemen, first of all, allow me to express my sincere regrets for not attending the seminar in person, due to an overlap with the last meeting of the national bank of romania's board, in the current mandate. i am, however, pleased to have had the opportunity to join you virtually today, following the stimulating discussions that took place in sinaia. as we conclude the 15th edition of the seminar on financial stability, i wish to express my sincere appreciation to all of you for your active engagement and valuable contributions. over the past few days, there were explored a wide range of critical issues that shape the stability of the global financial system, from the main challenges faced by policymakers in the current geopolitical context, to the evolving risks of digital finance or the vulnerabilities in the real estate sector. financial stability today goes beyond managing traditional risks such as liquidity, credit or real estate booms ; it now requires an understanding of technological advancements, climate change, and geopolitical uncertainty. moreover, mounting fiscal imbalances and high levels of both public and private debt in many countries represent other elements to closely monitor. the first panel provided an excellent coverage of the key systemic risks we are currently facing, along with the challenges they pose to financial stability. with that in mind, the natural question arises regarding the appropriate measures to implement. in this context, the second panel took a deep dive into the topic by exploring the effectiveness of macroprudential policy. considering the vulnerabilities observed in housing markets across the globe, we gained valuable insights from the panel's examination of potential spillover effects from the real estate sector on financial stability. lastly, i found the dynamic discussions on emerging challenges particularly engaging, especially regarding the interaction between the rapid advancement of ai technologies and the stability of the financial sector. as emphasized in today's panel, artificial intelligence has the potential to fundamentally transform financial systems and is swiftly 1 / 3 bis - central bankers'speeches evolving into a | 0.5 |
2 % at the time of the global financial crisis to over 4 % today. this partly reflects a steady increase in the labour supply, coming from higher female participation in the work force, measures to increase the effective retirement age and the influx of foreign workers, mainly from eu countries. apart from the increase in labour supply, the quality of human capital has also improved. at the same time, a pick - up in investment, partly driven by developments in the energy sector, has boosted the capital stock. however, there is ample scope for improvement of labour productivity in the coming years. indeed it is critical that it must improve. a sound and stable financial system is an essential pre - condition for strong and sustainable economic performance. the performance of the domestic financial system, especially the core domestic banks, which have the strongest linkages to the domestic economy, remained sound with strong capital ratios, high liquidity and remained very profitable despite the challenges of a prolonged low interest rate environment. asset quality continued to improve, as non - performing loans, especially to the non - financial corporate sector declined by almost 12 %, mostly reflecting improved creditworthiness and an increased commitment by borrowers to honour their loan commitments. as a result the non - performing loan ratio declined to 6. 5 % by mid - year and is expected to decline further to below 6 % later on this year. while banks have continued to adopt a prudent stance by increasing provisions, and while such loans are generally covered to a significant extent by collateral, nevertheless they need to build further coverage and exercise restraint in dividend distribution to shareholders to preserve further the soundness of the banking system. in this regard, the authorities, namely the central bank and the malta financial services authority through the joint financial stability board, have taken policy measures to ensure that by preserving its soundness, the overall banking system remains supportive of economic growth. during 2016, the authorities introduced the other systemically important institutions capital buffer, to preserve capital in those banks that are the most systemically important for the domestic economy. we have also launched the countercyclical capital buffer, although this has been currently set at 0 % as credit growth has not been excessive relative to economic growth or contributing to asset price inflation. page 4 of 8 other decisions to maintain the soundness of the banking system relate to addressing the stock of npls, which is incidentally also high on the agenda of the single supervisory mechanism. in this regard the authorities launched a consultation process with the stakeholders involved | france, they managed to cater for smes as well as for other environmental and infrastructure investment through promotion or development banks. a development bank would contribute to economic growth by funding sectors and projects that are not catered for by commercial banks on their own. the central bank looks at such an initiative as a necessary diversification of our financial base. i understand that progress is being made on this initiative and i find this to be a very positive development. the road ahead against a rapidly changing economic landscape, malta needs to be attentive to take advantage of its flexibility and adaptability. in the past years, the maltese economy went through significant structural change. not only by diversifying into a number of new growth sectors such as aviation services, pharmaceuticals and internet related activity, but also by upgrading its investments in the traditional sectors. for example, the tapping of new source markets for tourists in european cities that were newly serviced by low - cost airlines allowed the hospitality sector to overcome the recession - driven weak demand in already serviced markets. similarly, the financial and other services sectors continued to expand, thanks to the right conditions for growth, including the appropriate legislative environment. there are a number of reasons for being positive and optimistic about malta β s potential growth in the future. in contrast to various developed countries, malta has some structural issues that, if addressed, can provide opportunities for an on - going momentum to growth. take for example the labour participation rate in malta. although it is among the lowest in the euro area ( as shown in chart 4 ), malta has gone a long way in achieving progress on this issue. over the past ten years, malta registered the largest increase, among the member states, in the female activity rate, which rose from 36 % in 2004 to over 50 % this year. the recently introduced incentives for female participation will continue to steer our labour market in the right direction, also boosting malta β s potential economic growth. at the same time, we also observe a higher number of foreigners who are contributing to economic activity in a variety of sectors. first, it has to be remarked that an expanding labour force through this route is in itself a sign of malta β s strong rate of economic growth relative to other areas of the eu. secondly, it reduces the likelihood of skill gaps in the labour market. though this added flexibility needs to be recognised for the positive effect it has on potential output, the role of retraining programmes by the etc remains of utmost importance in better matching skills with | 0.5 |
ardian fullani : bilateral opportunities between albania and china speech by mr ardian fullani, governor of the bank of albania, at the meeting with the banking sector, introducing the bilateral swap agreement on national currency exchange between the bank of albania and the people β s bank of china, tirana, 2 april 2014. * * * dear bank executives and representatives, dear guests, i would like to welcome you to this round table between the bank of albania and the banking system in albania. today β s discussion will focus on the bilateral agreement signed by the bank of albania and the people β s bank of china ( pboc ), and the opportunities the agreement offers. on 12 september 2013, in yerevan, armenia, with the governor of the people β s bank of china, mr. zhou xiaochuan, we signed a swap agreement on the bilateral national currency exchange between the republic of albania and the people β s republic of china. for the bank of albania, this important financial instrument will have a positive impact on widening and deepening of trade exchanges between the two countries. most importantly, this agreement will have a positive impact on another aspect : expansion and deepening of the financial market in albania. the economy, its agents, including financial institutions, are provided with an additional opportunity to contribute together to the quick recovery of economic activity, lending more to the economy, and the country β s financial soundness. the agreement is reached in the light of the considerably increasing share of the people β s republic of china in both the global economy and international financial system. the financial cooperation between the two central banks reconfirms the excellent relations between the two institutions, which culminated with the landmark visit of pboc β s governor zhou xiaochuan to the bank of albania in 2011. this cooperation materialises the increasing share of trade exchanges between albania and china. moreover, it precedes the potential increase in financial and capital transactions between the two countries. despite quantitative differences between the economy of albania and the economy of china, we expect the trade exchanges with china to increase in the period ahead. potentially, financial ties will also be strengthened. china is albania β s third trading partner, by origin of imports ( behind italy and greece ), and is an important station of our exports. in the last year, 5 % of albanian exports targeted the chinese market and 6. 7 % of our imports originated from china. strong trade relations provide the foundations for strong financial relations. history has proven that trade | conducive to a balanced and sustainable growth of the economy. promoting macroeconomic stability is crucial because it serves as a solid springboard for households and businesses to flourish. as us president franklin d. roosevelt famously declared in his state of the union address in 1944, and i quote : β true individual freedom cannot exist without economic security and independence. β indeed, ensuring economic stability and security is in the best interest of a nation. i am pleased to report therefore that we continue to register solid gains in providing a stable environment for our economy to grow and for our people to benefit from opportunities that development brings. among others, philippine inflation in may was 1. 6 %, our lowest in 20 years. at this rate, we are able to preserve and protect the purchasing power of our people. by comparison, our inflation reached its highest at 50 % in 1984 or three decades ago, when problems related to politics and economics converged. we had a debt crisis : with our gross international reserves insufficient to meet our overseas obligations, we declared a moratorium on foreign debt payments, which in turn triggered a credit freeze. as a consequence, government had bis central bankers β speeches to ration scarce foreign exchange by prioritizing importation of critical commodities such as oil, medicines, and dairy products. the credit squeeze also pushed domestic interest rates higher, with housing loans going for over 30 %. it was during this period when many filipinos went overseas to find better opportunities. today, things are so much better in the philippines. we now have ample international reserves that have enabled us to fully prepay our loans to the international monetary fund, after 45 years of indebtedness. and we have liberalized foreign exchange transactions. among others, with minimal documentation, individuals can purchase as much as one hundred twenty thousand dollars ( $ 120, 000. 00 ) per transaction from banks. interest rates have also been lower, with some housing loans going for 5 % per year. the banking system is sound, stable and liquid, with bank capitalization more than compliant with global standards. in fact, last year, in a field of 69 jurisdictions, the philippine banking system earned the distinction of receiving the only positive outlook rating from moody β s. moving forward, we are confident that our banks can hold their own when asean banking integration takes place by 2020, as part of the wider implementation of the asean economic community ( aec ) by the end of 2015. in preparation for this, a new law was passed | 0 |
eddie yue : hong kong - the asian hub for sustainable finance opening remarks by mr eddie yue, deputy chief executive of the hong kong monetary authority, at the euromoney β s 2nd asia sustainable & responsible capital markets forum, hong kong, 25 june 2019. * * * distinguished guests, ladies and gentlemen, 1. i would like to thank euromoney for inviting me to speak at this 2nd asia sustainable and responsible capital markets forum today. it is indeed an honour to have this opportunity to talk about this important topic, especially here in hong kong, where we place a high priority on and direct much effort towards developing our sustainable finance platform. 2. i understand that we will have a very comprehensive programme today, covering not just the potential of sustainable finance in the region and the role of different stakeholders, but also exciting developments of green bonds and other innovative products. allow me then to focus my remarks on the bigger picture and on three areas in particular : ( i ) first, the potential for sustainable finance in asia ; ( ii ) second, hong kong β s role as asia β s hub for sustainable finance ; and ( iii ) third, some of the hong kong monetary authority ( hkma ) β s latest initiatives on this topic. potential for sustainable finance in asia 3. the effects of climate change are already visible around the world : more severe weather events, infrastructure damage, problems with food security, water resources, and even human health. no country or community is immune. according to the international monetary fund ( imf ), in the past four decades, we have witnessed the warmest years on record and the number of natural disasters has more than doubled. 4. the global community is already taking concrete actions to tackle climate change and there have been many admirable efforts. for example, countries around the world are putting in place policies to implement the 2015 paris agreement. in the world of finance, central banks, financial regulators and institutions are increasingly adopting agendas to promote green finance. the imf has highlighted in its latest global policy agenda the importance for international collaboration to combat climate risk and what the imf will do to support this effort. 5. here in asia, huge investments in green and climate - resilient infrastructure are needed across the region. the asian development bank ( adb ) estimates that us $ 1. 7 trillion per year will be needed through 2030 for the region to maintain growth momentum, eradicate poverty and respond to climate change. 6. there is also | the united states. by investor type, 29 % was distributed to banks, 30 % to fund managers, private banks and insurance companies, and 41 % to sovereign wealth funds, central banks and supranationals. based on some rough calculations by our joint global coordinators, about half of the investors participating in our deal could be loosely defined as β green investors β. 19. by going through the issuance process ourselves, along with the help of external parties, we have hopefully showcased to potential green bond issuers, both locally and overseas, that hong kong is a convenient platform for issuing green bonds, for three reasons : 3 / 4 bis central bankers'speeches ( i ) hong kong has a strong presence of finance and legal professionals, who can advise on all aspects of the bond offering and assist in arranging, managing, co - ordinating and marketing the green bond certification and issuance ; ( ii ) hong kong combines the best market practice from internationally renowned green reviewers and local agencies. for example, we obtained a second party opinion from vigeo eiris for the green bond framework and the inaugural transaction under the framework has also received the β green finance certificate β ( pre - issuance ) from the hkqaa ; and ( iii ) hong kong is home to leading international institutional investors, including many of the investors who have made strong commitments to green investments. 20. during the roadshow for the green bond, we were joined by our environment bureau colleagues to reach out to overseas investors in major cities such as london, new york, paris, and frankfurt, in order to demonstrate to the international community the hksar government β s coordinated commitment to green finance and our broader objective to address climate change risks. we believe the exercise has gone a long way in asserting hong kong β s branding as the premier regional green finance hub to the leading institutional investors around the world. 21. to join like - minded peers globally in promoting best practices in green and sustainable finance, we have signed up to or are in the process of joining several international charters or organisations, such as the united nations - supported principles for responsible investment ( unpri ), focusing capital on the long term ( fclt ), the financial stability board ( fsb ) β s task force on climate - related financial disclosures ( tcfd ), and the central banks and supervisors network for greening the financial system ( ngfs ). 22. the hkma is not alone in driving green and sustainable finance | 1 |
consecutive years, led by the finance and shipping industries. however, among manufacturers, firms in the automobile and steel industries in particular, earnings decreased for the first time in four years, mainly due to the slowdown in china and other overseas economies and to intensified price competition. japan's trade balance deficit continued in october, making it the fourth consecutive month ; consequently, the nominal gdp growth rate for the julyseptember quarter remained low at a 0. 5 percent quarterly increase. however, many listed firms have been conducting business portfolio restructuring that strengthens the earning power of core businesses. i am closely monitoring the progress in this restructuring, and hope that its benefits will spill over to small firms. japan's economy is expected to head toward a growth path, albeit at a moderate pace, mainly led by growth - oriented large, medium - sized, and small firms. the bank will gradually adjust its monetary policy accordingly. in response, small firms will need to move away from closed innovation, which relies on in - house expertise, and hasten structural reforms to step up the scale of their businesses, in order to reinforce the management resources necessary for growth - oriented business development. from this perspective, i am also paying attention to developments that feed into greater earning power, such as those in business fixed investment and exports, as well as mergers and acquisitions ( m & as ) and third - party business succession ( chart 10 ). b. improving the dynamism of firms and employment to make industries highly profitable if firms improve their capacity for innovation to make japan's industrial structure highly profitable and enhance export competitiveness, these firms will be able to capture growth in overseas markets to a greater extent. this, in turn, will generate sustainable demand for business fixed investment in japan and promote industrial clusters. such moves are expected to spill over across small and medium - sized firms. research and development ( r & d ) expenses - - which are critical in terms of boosting the declining international competitiveness i mentioned earlier - - were sluggish, amounting to 200. 7 billion u. s. dollars in japan in 2022, reflecting stagnation in its economic growth. in comparison, r & d expenses for the united states and china increased in line with their economic growth, standing at 923. 2 billion u. s. dollars and 811. 8 billion dollars, respectively. one reason for this sluggishness in japan's r & d expenses is that, due to | a higher rate, ( 3 ) whether progress is made in stepping up business fixed investment as well as wages and bonus payments, ( 4 ) whether more small firms are making virtuous wage hikes, ( 5 ) whether households'thriftiness has improved, and ( 6 ) whether japan's exports have become more competitive. i will return to these points later, along with a discussion of the structural issues facing japan. iii. toward sustainable economic growth that overcomes structural issues i would now like to share my personal views from a medium - to long - term perspective on the " dynamism " of firms, employment, and households needed to achieve sustainable growth in japan's economy, which is facing structural issues. a. improving japanese firms'earning power and capacity for raising wages as discussed so far, employment was prioritized over wages in japan. this hindered business metabolism, generated delays in productivity gains, and led to stagnant wages. following the 2008 global financial crisis, many large firms shifted the focus of their management from reforming their cost structures to restructuring their business portfolios, thereby strengthening earning power. to secure human capital, 2 i think large and medium - sized firms that have boosted productivity will strengthen their mid - career hiring by offering higher wages than those of existing employees, and they will continue to raise wages at high rates to bridge the gap between the wages of existing employees and wages formed in the labor market. labor shortages among large firms spur the movement of labor from small firms to large firms, creating employment dynamism ( chart 7 ). developments in the following components of nominal wage growth show positive signs : the inflation rate ( maintenance of living standards ), the labor productivity growth rate ( fruits of productivity gains ), and changes in labor share ( capacity for raising wages ) ( chart 8 ). nonetheless, i believe that the benefits of restructuring at large firms have not yet sufficiently spilled over to small and medium - sized firms. according to the financial statements statistics of corporations by industry, annually, for fiscal 2023, operating profits per employee among medium - sized firms was around 40 percent of that of large firms, and only around 10 percent among small firms ( micro firms " human capital " is a term coined to express the idea that human resources are valuable for corporate management. excluded ). personnel expenses per employee among medium - sized firms was around 70 percent of that of large firms, and around half among small firms ( micro firms excluded ). in terms of | 1 |
tiering. the two most important characteristics of community banks for purposes of establishing regulatory objectives and supervisory practices are their size and their business model. my reference to size is obviously a bit tautological, but size is worth emphasizing precisely because of what it says about the risks community banks do not pose. the possible failure of a community bank self - evidently poses no risks to the financial system. and while individual community banks in smaller communities provide sources of credit that would be hard to replace, their limited size means their failures would not result in credit contraction in significant swaths of the country. see, e. g., daniel k. tarullo ( 2015 ), β application of enhanced prudential standards to bank holding companies, β testimony before the committee on banking, housing, and urban affairs, u. s. senate, washington, march 19 ; daniel k. tarullo ( 2014 ), β a tiered approach to regulation and supervision of community banks, β speech delivered at the community bankers symposium, chicago, november 14 ; and daniel k. tarullo ( 2014 ), β rethinking the aims of prudential regulation, β speech delivered at the federal reserve bank of chicago bank structure conference, chicago, may 8. bis central bankers β speeches the business model of nearly all community banks is grounded in the most traditional form of commercial banking β lending to businesses and households with funds predominantly obtained from deposit accounts. and, as this audience well knows, lending by community banks is built substantially on relationship banking. while community banks over the years have found it increasingly difficult to compete with larger banks in the types of lending that can be efficiently scaled through larger volumes and standardized credit models, they maintain a competitive advantage relative to larger banks through knowledge of their local communities and their individual borrowers. as a result, community banks play a unique role in their local economies, particularly with regard to lending to small - and medium - sized businesses. the relationships these institutions have with their customers oftentimes mean they can look beyond traditional credit factors to consider unique borrower characteristics when making credit decisions and to reduce information failures about borrowers β willingness and capacity to repay loans. numerous studies have documented these advantages and their value to economic development. one recent study found that loans extended by rural community banks to small businesses default less frequently than similar loans granted by their urban counterparts, and that the performance advantage is greater when the bank and the borrower are located in the same county. 2 the traditional inter | joachim nagel : getting inflation under control in turbulent times speech by dr joachim nagel, president of the deutsche bundesbank, at the peterson institute for international economics, washington dc, 14 april 2023. * * * check against delivery 1 introduction ladies and gentlemen, it's a pleasure for me to be with you here at the peterson institute for international economics in washington d. c. over the last couple of days at the spring meetings, we have intensely debated current events in economics and finance. i now look forward to sharing and discussing my views with you. the current economic policy debate is somewhat similar to the stage comeback of actors we haven't seen in a long time. and who had already been forgotten by some. inflation is the one actor we had not seen in a long time. obituaries to the supposedly deceased had already been written β too early! the other actor who recently returned to the scene after a lengthy absence is financial turmoil. i hope it's just a " cameo ". 2 inflation back on stage inflation had been persistently low for many years, but over the last one and a half years, it has reached rates not seen in decades. in the euro area, the so - called harmonised index of consumer prices ( hicp ) rose on average by 8. 4 % compared to 2021. never before in the history of the single currency was inflation in the euro area as high as in 2022. for several months, we even recorded double - digit figures. however, high inflation has not been a euro area - specific problem, but a global issue. according to the imf, consumer prices in the advanced economies rose in 2022 by 7. 3 %. that was the highest increase in four decades. first, disruptions in the supply chain and the wave of demand for goods during the pandemic led to supply bottlenecks. initially, many assumed that these were " transitory ". over time, however, it became increasingly apparent that inflation could remain high for longer than expected. 1 / 7 bis - central bankers'speeches russia's terrible war of aggression against ukraine and the resulting energy and food crisis then accelerated the rise in inflation significantly, especially in the euro area as a whole and in germany, which had become overly dependent on russian gas. energy and food prices rose sharply, pushing euro area headline inflation into double - digit territory. while the headline rate has since returned to single digits, underlying inflation is constantly becoming broader | 0 |
participants, in conclusion i would like to underline that this project provides to the market an important infrastructural element. starting from today, the securities market will speak in the language of electronics. however, the bank of albania will introduce in april a full package of improvements which will focus on the development of the financial market and stability. hoping that you will be using the new system efficiently, thank you. | amando m tetangco, jr : maximising the benefits of remittances from overseas filipinos remarks by mr amando m tetangco, jr, governor of bangko sentral ng pilipinas ( the central bank of the philippines ), at the signing of the memorandum of agreement between the commission on filipinos overseas ( cfo ) and the bangko sentral ng pilipinas on the remittance for development council, manila, 26 march 2012. * * * secretary imelda nicolas ; officers and staff of the commission on filipinos overseas ; fellow advocates in promoting the interest of overseas filipinos and their families ; distinguished stakeholders ; fellow bspers ; special guests ; friends from the media ; ladies and gentlemen, good afternoon. welcome. what we have today is a short and simple ceremony for the signing of the memorandum of agreement between the commission on filipinos overseas and the bangko sentral ng pilipinas covering the remittance for development council. short and simple ; β¦. but full of significance. to the bangko sentral, this partnership with the cfo on the remittance for development council, is yet another step forward in our continuing efforts to maximize the benefits from remittances from overseas filipinos β¦. not only for themselves and their dependents in particular, β¦ but also for our country in general. as a multi - stakeholder advisory and policy recommending body, the remittance for development council can address the matter of channeling individual and collective remittances to productive use and β¦ at the same time β¦.. serve as a venue for discussing issues related to the remittance environment affecting overseas filipinos. over the past decades, the steady growth of migrant remittances has become a dependable and major source of foreign exchange for the philippines. in fact, the world bank reports that in 2011 β¦ the philippines ranked as the world β s fourth largest remittance - receiving country. remittances from overseas filipinos coursed through banks was up 7. 2 percent in 2011 and reached over $ 20 billion ; this is equivalent to about 9 percent of the country β s gross domestic product. clearly, remittances from overseas filipinos are a major driver of consumption activity in the philippines, which in turn has supported economic growth. nevertheless, while remittances boost domestic consumption, their impact on the financial security of households and on the country β s long - term economic development | 0 |
jwala rambarran : implications of the proposed regulatory regime for credit unions feature address by mr jwala rambarran, governor of the central bank of trinidad and tobago, at the 42nd annual general meeting of aero services credit union, port of spain, 29 march 2014. * * * ladies and gentlemen, it is my honour to be asked by the board of directors of aero services credit union co - operative society limited to address its 42nd annual general meeting. i believe this invitation comes at an opportune time for the central bank to once again reach out directly to the credit union movement, as we move even closer towards regulation of the credit union sector. it is also my pleasure to speak directly to you, the membership of aero services credit union. i have known some of your board directors for close to a decade and i am aware that aero services credit union has been responding to the challenges of a harsher socioeconomic climate. i note that, in light of an aging demographic, you have had to expand your membership bond outside the aviation industry. equally impressive is that you have managed to grow your resource base to over tt $ 200 million while managing delinquency in a historically low interest rate environment and more competitive financial services sector. apart from building wealth for your members, aero services credit union continues to demonstrate the fundamental values sacred to the credit union movement, a clear indication that you are living up to your motto β the credit union where every dream counts β. you are an example of how credit unions when managed properly can meet their members β expectations, maintain their trust and confidence, and fulfill your commitment to those who trust you with their hard earned money. for this reason, i want to underscore that the central bank recognizes the important contribution that credit unions are making to our society, especially in fostering greater financial inclusion by reaching out to the ordinary working men and women who are underserved by traditional financial institutions. today, about one - third of the population can boast of membership in credit unions. credit unions have collectively amassed an asset base of over tt $ 9. 5 billion or 3 percent of the assets of the total financial system assets in trinidad and tobago. your relevance, however, is much richer than your asset base. credit unions have helped their members to develop a healthy savings habit, educated them on financial matters and financed small business start - ups, all while experiencing considerable turbulence and consolidation. you have propelled the ideals of financial inclusion as well. these ideals are | and small and micro enterprise development, the co - operative credit union league, the association of co - operative credit union presidents, and members from the credit union movement. during the seven - year consultation period, the central bank made several concessions from its original negotiating position in an attempt to reach out to the credit union movement and to narrow, as much as possible, the existing gap between intention and policy. in fact, when i closed consultations last july, i made several concessions on our negotiating positions in the spirit of compromise and consensus building. by my count, the central bank made more than ten substantial concessions spanning governance, prudential requirements, non - financial services and penalties affecting credit unions. ladies and gentlemen, i must indicate that the draft credit union bill recognizes the cooperative principles, democratic structure, service to members and social goals of credit unions. in developing the legislation, the central bank considered it important that many of the current services and practices of credit unions be maintained. however, we also considered it absolutely necessary that relevant and appropriate prudential limits be put in place and enhancements made for more effective governance. in these two areas of governance and prudential limits, we did not accept several suggestions made by the sector, as they were not consistent with the desired safety and soundness objectives of the credit union legislation. governance requirements the draft credit union bill recognizes that members are the ultimate decision - making body for the credit union. the bill contains provisions for proper governance and effective risk management in order to ensure the safety and soundness of credit unions. credit unions that are sound can best meet the needs of their members, including providing financial services, training members in entrepreneurship and in financial literacy. governance proposals seek to ensure that the directors of a credit union are fit and proper and that the board is effective, accountable and transparent in the management of their credit union. as far as fit and proper goes, the proposed legislation seeks to establish minimum qualifications for board directors. the bill requires that board directors who do not meet the minimum qualification requirements would have to obtain relevant training within a reasonable period of 18 months of becoming a director. today β s dynamic financial environment requires persons who are knowledgeable, who understand the complex products being offered as investments, and who can guide the credit union based on an understanding of the environment and the changes taking place. prudential criteria requirements in addition to strong governance, there must be standards, limits and prohibitions which guide the financial management and operations of the credit union | 1 |
financial markets now let β s look at how opening financial markets to foreigners promotes financial development. globalizing the domestic financial system by opening financial markets to foreigners encourages financial development and growth in wealth in two ways. first, opening financial markets to foreign capital directly increases access to capital and lowers its cost for those with productive investments to make. 7 we know that labor is cheap in poor countries, and so we might think that capital would be especially productive there. just think of how hugely profitable a factory might be in a country where wages are one - tenth of those in the united states. although some of that differential would likely reflect the higher productivity of american workers, capital should, nevertheless, have extremely high returns in such countries, and, in principle, we should expect substantial flows of capital from rich countries ( where the returns on capital should be relatively low ) to poor countries ( where they should be far higher ). such capital flows could lead to substantial benefits for poor countries in the form of larger capital stocks, higher productivity, and more rapidly growing incomes. in fact, as we well know, at present capital flows are moving, on net, from poor countries to rich ones, that is, in a direction opposite to the one we would expect. many reasons have been proposed for this apparent paradox, but one of them certainly is the weakness of financial systems in poor countries, as described earlier. this point leads us to a second benefit of financial globalization : opening markets to foreign financial institutions promotes reforms to the financial system that improve its functioning. allowing foreign financial institutions to operate in an emerging - market country brings in expertise and a survey of the literature that links a lack of sufficient prudential regulation and supporting institutions to excessive risktaking and the possibility of a subsequent banking crisis is in demirguc - kunt and detragiache ( 2005 ). dell β ariccia and marquez ( 2006 ) also argue that under certain circumstances lending booms can make the banking system more unstable and can lead to a higher probability of a banking crisis. the literature on microfinance is vast. one thorough discussion is in armendariz de aghion and morduch ( 2005 ). when stock markets in emerging - market countries are opened to foreign capital, dividend yields fall, average stock prices increase, and liquidity goes up. see levine and zervos ( 1998 ) ; bekaert, harvey, and lumsdaine ( 2002 ) ; and henry ( 2000a, b | today, which is fostering better communication between csbs and state banking commissioners and the board of governors. improved communication is a top priority for me for several reasons. 2 / 4 bis central bankers'speeches first, it is very much my approach to government service, and leadership in particular, to do a lot of listening. a wise person once said that the most effective leaders do more listening than talking. when i became kansas β state bank commissioner, i started a twice - yearly series of roundtables with the chief executives of banks across the state. it was an excellent way for me to better understand the issues that were impacting bankers in a way that was less formal than when banks comment on rules and less fraught than the supervisory process. sure, it took time away from the office, from consultation with the legislature, and the deadlines all of us have faced. in my case, considering the size of kansas, it was also time away from home and family. however, i don β t have to tell those of you who have also found a lot of merit in such tours that it is an enormous advantage to find out what is on the minds of those in the field. the second, very straightforward reason to foster better communication with all of you is that the nature of financial regulation and supervision in the united states argues strongly for better coordination. to a much greater extent than in other nations, in the united states financial oversight is divided between the federal government and subnational authorities β the states. at the federal level, responsibility is further divided between different agencies, such as the fed, the fdic, the office of comptroller of the currency, and the national credit union administration. this system evolved over time, and as things stand, there are some advantages to this specialization. but this division of labor may, at times, inhibit information sharing, and as a general principle, better communication can help overcome this challenge. more specifically, better communication and information sharing between state banking commissioners and the federal reserve can further improve the early identification and resolution of emerging issues at community banks. harnessing and sharing these sometimes divergent views can serve to strengthen a financial regulatory system that shares responsibility among many state and federal agencies. better communication and information sharing will benefit both you and the federal reserve, but my motivation is that the fed has much to gain here. because states are responsible for chartering and co - supervising the large majority of community banks, they can provide a broader perspective into local community | 0.5 |
6 june 2010 report - 6 september 2010 report ( * ) gray area shows forecast as from the third quarter of 2010. source : central bank of chile. table 2 economic growth and inflation ( annual change, percent ) 2010 ( f ) 2011 ( f ) gdp domestic demand domestic demand ( w / o inventory change ) gross fixed capital formation total consumption goods and services exports goods and services imports current account ( % of gdp ) 3, 7 7, 6 7, 5 18, 6 4, 0 3, 1 12, 2 - 1, 5 - 1, 5 - 5, 9 - 2, 8 - 15, 3 1, 8 - 5, 6 - 14, 3 2, 6 5. 0 - 5. 5 16, 1 11, 3 21, 2 8, 3 - 0, 3 26, 3 - 1, 1 5. 5 - 6. 5 6, 2 7, 4 13, 6 5, 3 6, 1 6, 4 - 2, 5 average cpi inflation december cpi inflation cpi inflation in around 2 years ( * ) 8, 7 7, 1 1, 6 - 1, 4 1, 7 3, 9 3, 3 3, 2 average cpix inflation december cpix inflation cpix inflation in around 2 years ( * ) 8, 4 8, 6 2, 8 - 1, 8 0, 8 3, 5 3, 6 3, 5 average cpix1 inflation december cpix1 inflation cpix1 inflation in around 2 years ( * ) 7, 8 7, 7 2, 8 - 1, 1 - 0, 3 1, 5 3, 0 3, 2 2012 ( f ) 3, 0 3, 1 3, 0 ( f ) forecast. ( * ) inflation forecast to the third quarter of 2012. source : central bank of chile. figure 8 national figure 9 employment and unemployment rate ( percent ; millions of ( * ) persons ) rate real exchange ( index, 1986 = 100 ) universidad de chile ( * ) 2, 8 2, 6 2, 4 2, 2 2, 0 1, 8 03 04 05 06 07 08 09 10 rer average 1990 - 1999 unemployment rate ine ( * ) the dot shows the real exchange rate as of 6 september 2010. employment 7, 5 7, 0 6, 5 6, 0 5, 5 mar. 09 ago. 09 ene. 10 jun. 10 5, 0 average 1995 - 2009 unemployment rate employment source : central bank of chile. ( * | in the inflation process. that is, inflation is often initially transmitted from labor market excess demand to wage change and then to price change. this third principle may be especially important today because, in my view, there is an important disparity between the balance between supply and demand in the labor and product markets, with at least a hint of excess demand in labor markets, but very little to suggest such imbalance in product markets. it is important to understand that the phillips curve is a model of inflation dynamics, not a model that determines the equilibrium inflation rate. for this reason, the phillips curve paradigm is not at all inconsistent with the view that inflation is, in the long run, exclusively a monetary phenomenon. perhaps the easiest way to appreciate this is to recall that the long - run phillips curve is widely understood to be vertical. in other words, nairu is consistent with any constant rate of inflation, including zero. the phillips curve therefore cannot determine inflation in the long run because it is consistent with any constant rate of inflation. what does determine the rate of inflation in the long run? the rate of money growth, of course, though one needs to assume a stable money demand function to get a stable relationship between money growth and inflation. what does the phillips curve explain, if not the long - run level of inflation? the answer is that it explains the dynamics of the inflation process, how the economy evolves from one inflation rate to another, for example, in response to an increase in the rate of money growth. the dynamics of changes in inflation operate through excess demand in labor and / or product markets. thus the phillips curve indicates that, if the unemployment rate is maintained at a level below nairu, inflation increases over time, progressively and indefinitely. the initial source of an increase in inflation can be anything which produces excess demand in labor and output markets. it could also be a supply shock, but i am ignoring this possibility so i can focus exclusively on the implications of the current strength in aggregate demand. under an interest rate operating procedure, an increase in aggregate demand which increases output, utilization rates, and, ultimately, inflation will itself generate an increase in the money supply to support the higher nominal income. money is not pinned down in such a regime, but passively adjusts to changes in nominal income. despite the sharpness and force of the phillips curve / nairu model, it can be difficult to implement in practice. still, this relationship was about the most stable tool in the | 0 |
. such shifts have not been limited merely to the diversion of the production of goods requiring unsophisticated techniques to the developing countries. indeed, some developing nations, particularly in asia, are establishing themselves as important suppliers of a wide range of internationally traded products, including high - technology manufactured goods. at the same time, industrial economies are moving more towards the export of services, as a result of improvements in communications and information technology. all in all, these changes are to the good, in that they should result in expanding international trade, more rapid increases in productivity and, hence, improved living standards everywhere, but especially in developing countries. however, these ongoing globalization trends and adjustments to new technology do imply changes in the structure of national economies. canada and other industrial countries are having to cope with these changes. but change is never easy and is often stressful. even in the large u. s. economy, there has been considerable concern over the uncertain job prospects, especially for unskilled workers, in light of the changes in technology, production and trade trends that i have just described. however, the process of adjustment in the united states to these developments began early, and their economy has been operating successfully at full capacity. why is it that in canada we seem to have had a more difficult time of it? there are a number of reasons for this. but, in my view, one of the most important is the fact that in canada we started adjusting later and, as a result, we were further behind. why was that? the depreciation of the canadian dollar in the mid - 1980s, by easing the pressure from foreign competition, blunted the urgency to adopt more efficient production processes. and through much of the second half of the 1980s, because many canadians were still acting on expectations of accelerating inflation, we were devoting a good part of our energies and resources to speculative activities, rather than investing in improvements in productivity and competitiveness. rising government deficits, which were absorbing increasing amounts of domestic savings, were not helping either. thus, with poor productivity growth, rapidly rising wages and generally weak cost control, canadian businesses and exporters found it increasingly difficult to compete, especially at the end of the 1980s, when the canadian dollar had reversed its earlier depreciation. for a nation that is highly dependent on foreign trade, canada certainly was doing all the wrong things to get ready for the new world of changing technology and increasing global competition. it was not until the early 1990s | rating agencies in flagging the risks built up in banks and sovereigns, ahead of the crisis. most credit rating agencies also tend to apply ordinal ranking of credit, rather than specific risk metrics that can be mapped to default probabilities or expected losses. in my view, one of the major weaknesses of credit rating agencies is their objective to establish rating stability by applying smoothing methodology that can potentially delay minor downgrades, but trigger cliff - like and abrupt downgrades in the event of sharp credit deterioration. the abrupt regrading of credits tend to spook markets and is certainly not good for investors with a heart condition. regional central banks and major institutional investors are aware of such limitations ; hence the best way forward is to complement rating - embedded investment guidelines with a more robust and rigorous internal credit risk evaluation framework. in tandem with diversification into alternative asset classes, there is a growing emphasis to improve the sophistication of risk modelling, taking into account how risk can be initially understated when herding behaviour dominates, but rears its ugly head during reversals. iv ) the growing importance of islamic finance as events unfolded in the midst of the financial crisis, the sustained expansion of global growth and development in islamic finance has emerged as one of the most prominent trends in global financial landscape. the industry continues to draw significant interests from all corners of the world. the global financial crisis underscores the potential role and relevance of islamic finance as a viable approach in investing. due to the shariah prohibition of excessive leverage and unproductive cash hoarding, shariah - compliant funds have outperformed their conventional peers since the onset of the crisis. as a result, there has been greater appreciation of the principles of islamic finance, as evidenced by the expansion of interest and demand for islamic financial products on a global scale. in line with the rapid growth of islamic finance, emphasis has been placed on the development of the international financial infrastructure such as setting prudential standards and international best practices, a role spearheaded by the islamic financial services board. the most recent significant development was the establishment of international islamic liquidity management corporation in kuala lumpur. this corporation will act as a conduit to issue highly rated short - term islamic instruments to enhance cross - border liquidity management and provide islamic financial institutions with an additional avenue to manage their short - term liquidity. complemented by other initiatives under the β malaysian as an islamic financial centre β, i am quite confident that | 0 |
guy debelle : remarks at the funding australia β s future forum β a look at australia β s financial system remarks by mr guy debelle, assistant governor ( financial markets ) of the reserve bank of australia, at the funding australia β s future forum, sydney, 7 august 2013. * * * as i said at the launch of these papers a few weeks back1, the australian centre for financial studies ( acfs ) 2 has put together a very interesting and timely body of work on an important topic. i will make two points, the first about global financial regulation, the second about the way forward for this project. at the launch i talked about the need for a holistic review of global financial regulation. i think this does need to be done at a global level. there is a vast global regulatory reform agenda which is complex and interacting in a number of different ways. we need a better understanding of how some of these interactions occur. as i said before, each of these regulatory changes may well make sense in their own right, and when looked at in terms of their impact on their own particular market segment. i just don β t get the sense that we have a good idea on how they will all interact and affect market functioning. one good example of this is in the demand for collateral. quite a number of the global reforms require banks, as well as others, to hold more high quality collateral than they did in the past. the shift to central clearing is one such reform. in a number of cases, margin has always been posted, but depending on how the shift to central clearing actually occurs, we may or may not get all the benefit of netting which would mean a greater demand for collateral. then there are some transactions on which margin has not previously been required. the sort of collateral which can actually be posted is also changing. the liquidity reforms under basel iii also imply a material increase in demand for high quality liquid assets ( hqla ). i β ll have some more to say on that in the australian context next week. the bottom line is that demand for hqla is going up. as it so happens, this is occurring at a time where the supply is also going up quite a bit, given the fiscal situation around the globe. so how is that greater demand for collateral going to play out? what are the implications? is it just an issue of price working to clear the market or will there be impacts on market functioning? the bis committee on global financial stability | ##3, on which i sit, has published some work on that recently, but there is more to be done. this is just one example where we don β t really know the full implications of the many interacting reforms underway. that said, what i am not saying is that we should delay implementing some of these reforms in australia, or pick and choose the ones the financial sector likes. i do not agree with that. we do not have that luxury. as the papers we are discussing today highlight, the australian system is part of the global financial system. the capital inflows are sourced from the global financial system. given that, we don β t have the option to opt out when we feel like it. remarks at the launch of funding australia β s future β 10 july 201. http : / / www. australiancentre. com. au /. http : / / www. bis. org / publ / cgfs49. htm. bis central bankers β speeches the second point i β d like to make gets right to the heart of the acfs β agenda : funding australia β s future. it β s a good question to ask. but i suppose i β m not sure how much further we can go with it. the australian financial system has undergone a severe stress test over the past five or six years. and it has come through that pretty well. are there some things that can be done to make it function better and be more resilient? yes, and some of them have already been put in train over the past few years, so that the system now is more resilient than it was in 2007. some of them are the reforms that are being done at the global level. the fact that the problems didn β t happen here is also not a good argument for not implementing them. the reforms have been developed with the aim of increasing the resiliency of the financial system, which would seem to make them worthwhile in their own right. i don β t see the logic in not learning from what happened elsewhere rather than waiting to learn the lesson painfully ourselves. learning from others β mistakes is a lot less painful approach to life. as the past few years show, the financial system is just that, a system, as rod maddock and peter munckton β s paper highlights. it is also a set of markets where there is demand and supply and a market - clearing price. as the system evolves and is stressed in | 1 |
the time to push ahead on tackling climate change speech given by andrew bailey, governor of the bank of england corporation of london green horizon summit, mansion house 9 november 2020 all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice it is a great pleasure at least to have the opportunity to meet virtually. today, i want to focus on how we ensure that we get back to the vital subject of tackling climate change and the role of the financial system. first, i want to say what a pleasure it is to be sharing a platform today β so to speak β with mark carney. as i have told mark quite a few times, timing is everything, and midnight on march 15th was an interesting choice of date to hand over as governor. but let me also say that in everything that has happened since at the bank we have benefitted from the many things that mark did during his term, and for that we owe him great thanks. mark has gone on to push forward his deep commitment to tackling climate change, and the role of the financial system in doing that. there have been times since march when we have faced very stark decisions in the face of the covid crisis. we decided in the spring to prioritise preserving people β s jobs and livelihoods in this emergency, and as far as possible the businesses that provide employment and the life blood of the economy. these short - term interventions did not discriminate on the basis of climate change. i believe that was the right response. in the face of such an emergency in all conscience it was not right to say to people that they would be denied a livelihood because their employment was of the wrong sort for the climate. i say this very starkly, because there is no point hiding from reality. but that does not mean that we have abandoned our commitment to tackle climate change and indeed the uk government has made a firm commitment to transitioning the economy to net zero by 2050. if we needed reminding of the importance for the uk and the 125 other countries who have made similar commitments of delivering on them, this year we have seen record wildfires in australia and california, record - breaking temperatures in the arctic circle and of course the powerful witness of sir david attenborough. these are a striking reminder of the need for sustained action by government, public authorities and the private sector. and it is important that, even in the face of the | inflation variance 1958 - 1992 p 1993 - 2012 2008 - 2012 1993 - 2007 output gap variance table 1 : monetary base data are month averages for uk, us, japan and end month for the euro area. sources : bank of england, federal reserve, bank of japan, ecb. bis central bankers β speeches table 2 : size of central bank balance sheets uk us japan euro area mar 2013 ( % nominal gdp ) increase since dec 2007 ( pp of nominal gdp ) sources : datastream, bank of japan. bis central bankers β speeches | 0.5 |
##ystem also developed the european framework for threat intelligencebased ethical red teaming ( tiber - eu ) 3. red teaming helps entities assess, by means of controlled β ethical hacking β, if and how they are capable of withstanding a cyberattack. and because tiber - eu involves high - end testing on live production systems, we are currently reflecting on how to foster an accreditation and certification capability in the eu. this would allow cybersecurity service providers to raise standards around threat intelligence and red team testing and to have their capabilities in this field validated. i am pleased to say that, since its publication, tiber - eu has been implemented β or is currently being implemented β in belgium, denmark, germany, ireland, the netherlands, romania and sweden, and by the ecb in its oversight capacity. the ecb is also in close dialogue with other eu and non - eu jurisdictions that are considering tiber - eu as a tool for their respective financial sectors. the gradual roll - out of tiber - eu will ensure that threat - led penetration testing is conducted in a harmonised way across the eu, avoiding duplication of work for financial entities and authorities alike. already in march 2018, at the first ecrb meeting, we presented the results of a cyber resilience survey that had been developed under the eurosystem oversight cyber resilience strategy. the survey had been conducted across more than 75 payment systems, central securities 1 / 2 bis central bankers'speeches depositories and central counterparties throughout europe. you will recall that the survey highlighted a number of weaknesses prevailing at the time, such as cyber governance, training and awareness, and cyber incident response. today we will update you on the second round of the cyber resilience survey, which we conducted again across mostly the same population of fmis throughout europe. the results have given us an insight into how the sector has progressed, and indeed, while we see improvement in some areas, there is still much to be done. when we established the ecrb, the aim was essentially to create a forum for strategic discussions at board level, to raise awareness of the topic of cyber resilience, to catalyse joint initiatives to develop effective solutions for the market and to share best practices and foster trust and collaboration. in this context, i am very pleased that the spirit of the ecrb is living up to expectations. as you will recall from the unitas crisis communication exercise last year 4, we identified | sabine lautenschlager : euro cyber resilience board for paneuropean financial infrastructures introductory remarks by ms sabine lautenschlager, member of the executive board of the european central bank, at the third meeting of the euro cyber resilience board for paneuropean financial infrastructures, frankfurt am main, 28 june 2019. * * * it is a pleasure to welcome you back to frankfurt. as you may know, i recently became responsible for market infrastructures and payments at the ecb. as this includes the ecb β s work on the cyber resilience of financial market infrastructures ( fmis ), i have taken over benoit cΕure β s chairmanship of the euro cyber resilience board for pan - european financial infrastructures ( ecrb ). i would first like to thank benoit for his contribution in establishing the ecrb and for this opportunity to continue the excellent work on cyber resilience at european level which he has personally driven forward. six months have passed since our last meeting in december, during which time, all of us β whether on behalf of a public or private financial infrastructure, a supervisor or an overseer β have been busy enhancing the cyber resilience of our respective financial infrastructures and of the financial sector as a whole. but cybercriminals have been making progress too, and they remain persistent and relentless in their pursuits. as widely reported in the press, a major cyber incident occurred at a significant bank earlier this year, seriously affecting the real economy in a specific european country. this publicly known incident reminds us of the debilitating impact a cyberattack can have on our financial system. so the need for continued vigilance, work and collaboration in this field is imperative. you will recall that β in december 2018 β the ecb published its cyber resilience oversight expectations1, a tool meant for both fmis and overseers. these expectations contain detailed best practices for implementing the cpmi - iosco cyber guidance2 and are now being followed by fmi operators at national and european level. overseers are working with their respective fmis to ensure that they do what is necessary to enhance their cyber resilience. i am also pleased that the world bank has recently embraced our cyber resilience oversight expectations with a view to boosting the cyber resilience of fmis in developing and emerging countries under its mandate, and consequently promoting global harmonisation. last year, the euros | 1 |
the back of the resilience we have built up in recent years β the banking system has been able to support the economy in the first phase of the pandemic. but the shock has not yet fully transmitted to the balance sheet of the banking system. however, as we transition from temporary forbearance measures that addressed liquidity for borrowers there is a need for longer term solutions for those borrowers experiencing solvency and affordability difficulties. we are seeing that some sectors are being more affected than others, e. g. the hospitality and accommodation sector, where economic disruption is affecting employment and the viability of businesses. the inevitable effects of unemployment and business closures will take time to materialise on bank balance sheets. european institutions have played an important role here too. the european banking authority ( eba ), for example facilitated the delivery of payment breaks. they did this through guidelines providing regulatory flexibility so that lenders could offer temporary relief to borrowers in the form of payment moratoria that suspended regulatory rules on loan classifications. while the extent of the effects on the financial system will depend on the evolution of the virus and the scarring effects of this crisis, the deeper european regulatory and supervisory integration has created a more robust and resilient system to withstand the initial shock. the banking system is one element of the financial system, and following the global financial crisis an increasing share of financial intermediation has moved to parts of the non - bank or market - based finance system. to give a sense of scale, non - bank financial institutions now account for almost 60 per cent of total euro area financial assets. the equivalent number in the early years of the euro was under 40 per cent. 10 the scale of the sector in ireland is relevant to the global picture, as our jurisdiction hosts 10 per cent of global money market funds ( mmf ) assets and 5 per cent of global investment fund assets ( excluding mmfs ). 11 there are a range of diverse business models domiciled here, including investment funds, securitisation vehicles and non - securitisation vehicles. the sector in ireland is dominated by investment funds, including mmfs. market - based finance provides a valuable alternative to bank financing and can facilitate risk sharing across the financial system. recognising this, the european commission has produced an action plan to complete the capital markets union ( cmu ) in europe. 12 deeper and more developed capital markets can facilitate long - term investment, by allowing | ambitious targets for capital spending as part of the national development plan. public investment, both by itself and as a means of crowding in private investment, is necessary to build our economic resilience. appropriate levels of investment in priority areas such as housing will reduce the impact of future adverse shocks by addressing the structural challenges we face in infrastructure and climate change. balancing the effective delivery of needed public investment in the current high - inflation environment will require careful management and prioritisation in other areas, in particular when it comes to choices regarding current expenditure and taxation. recent analysis by central bank staff shows that further stimulating economic activity with additional permanent current spending would risk creating excess demand and in the process would add to already high inflation. as the ecb β s governing council said last week, β fiscal support measures to cushion the impact of higher energy prices should be temporary and targeted at the most vulnerable households and firms to limit the risk of fuelling inflationary pressures, to enhance the efficiency of public spending and to preserve debt sustainability. β increases in permanent core expenditure should be funded by permanent revenue - raising measures to avoid introducing a vulnerability in the public finances as well as reducing the risk of creating imbalances in the economy as a result of excess demand. the economy in general, and the public finances in particular, have benefited from the exceptionally low interest rate environment that has prevailed over recent years. as policy rates increase β and over the next several meetings the governing council expects to raise interest rates further β sovereign financing costs will increase. the reduction of public debt, supported by a sustainable funding base for public expenditure, should remain a key priority in the years ahead. as interest rates rise, financial markets are more likely to increase the focus on fundamentals such as relative debt levels when pricing sovereign bonds. credit worthiness will continue to matter. the longer term : building resilience from a policy perspective it is important to also take a step back and consider the longer - term. in fact, i think this should be a more central part of our policy deliberations. our experience of the past few years suggests a greater tendency for medium - to - longer term issues and economic shocks to coincide more frequently with day - to - day conditions. the current experience of energy prices is a case in point, where the challenges and opportunities presented by the necessary transition to a less carbon - intensive economy are becoming obvious in a shorter time period than previously expected. consequently, anchoring public policy in achieving a more resilient | 0.5 |
rates low in view of the new economy. in response, let me emphasise the following point. the new economy is primarily a supply - side story. an inappropriately lax monetary policy would not create better conditions for the emergence of a new economy. on the contrary - by jeopardising the maintenance of price stability - such a policy could seriously endanger the credibility of the ecb. it would thereby undermine confidence, raise risk premia in interest rates and damage the prospects for economic growth and job creation. it is for precisely this reason that the ecb will, in line with its mandate, continue to preserve price stability in the euro area. this ensures that monetary policy makes its full contribution to overall economic welfare, while also providing an environment in which the new economy - should one emerge - will be able to flourish. 2. transparency and communication policy i should now like to turn to another issue which has been frequently discussed within the framework of our regular dialogue, namely the issue of transparency. i have already referred to the regular dialogue between the european parliament and the ecb, the transcripts of which are published on the websites of our institutions. moreover, at the press conferences held after the first meeting of the governing council every month i present the ecb β s assessment of the economic environment underpinning our monetary policy decisions. you will also be aware of the broad variety of ecb publications, in particular the monthly bulletin, and of the numerous press releases issued and speeches held by the members of the executive board of the ecb. these, as a rule, are also made available to the public via the ecb β s website. therefore, i can only confirm my conviction that this wide range of communication tools, in which not only the considerations in favour, but also the arguments that were raised against a decision are presented, resemble in substance β summary minutes β. it should also be borne in mind that, by virtue of the regular press conferences and the rapid publication of the transcripts of the questions and answers on the ecb website, detailed information about the governing council β s reasoning is made available very shortly after the meetings. we thereby avoid the delays that are inherent in the publication of all forms of official minutes. let me also seize this opportunity to recall that we always take our decisions from a euro area - wide perspective. this is fundamental to the conduct of a truly single monetary policy. the publication of ecb reports on the economic developments of individual euro area member states, | financial instruments. as already underlined on the occasion of previous hearings in front of you, this calls first for much more transparency, without any consideration of vested interests ; second for much less short - termism in the decision - making processes, contrary to the most recent trends ; and third for a systematic elimination of the procyclical aspects of our regulatory, prudential, accounting and taxation rules, which are amplifying considerably the fluctuations that are inherent in the functioning of market economies. the financial stability forum ( fsf ) has identified the main avenues for such reforms. what we now need is strategic lucidity and, where appropriate, a great deal of political energy to counter considerable vested interests. the g20 and the imf are and will be decisive in this respect. but a much better functioning of the financial sphere does not suffice. we also need sound macroeconomic policies that are sustainable in the medium and long run. in particular, we need to avoid the creation of the large domestic and external imbalances which are very much at the root of the present difficulties. an effective surveillance of macroeconomic policies of the major systemically important economies is of the essence. only the imf can perform this decisive function, provided its mandate is strengthened. in terms of institutional set - up, we need two major improvements : β’ first, the international financial architecture requires a strengthening of the informal groupings, in particular the fsf and the g20. the fsf is unique in that it links all the authorities and institutions that have a systemic influence on financial markets, which are very largely decentralised and β for many of them β independent from the political sphere. the necessary enlargement of the fsf is key. particularly important in a time of global crisis has been the new authority of the g20, which is a truly global informal grouping in comparison with the g7, which itself continues to be useful in a situation where the turbulence comes from the industrialised countries. β’ second, on top of the imf β s strengthened surveillance mandate, the governance of the international financial institutions, particularly the imf but also the world bank, should become more effective and representative. in particular, a full representation of emerging market economies, commensurate with their importance in the global economy, is indispensable. * * * by way of concluding my introductory remarks, i would like to stress two points. first, as regards euro area policies, persistent wage growth | 0.5 |
trend in public investment as a proportion of gdp, which has already lasted more than a decade, would continue. interest payments are expected to continue to decline as a result of the expected favourable developments in financing conditions, although at a more moderate rate than over the last two years. the increase in revenues included in the stability programme is based mainly on the measures approved in december last year in royal decree - law 3 / 2016. notable among these is the amendment to corporate income tax to broaden the tax base, the increase in duties on alcoholic drinks and tobacco products, the increase of 3 % in the maximum social contribution base and the 8 % increase in the minimum wage. notwithstanding the positive impact of these measures, achievement of the government β s medium - term revenue target is subject to some uncertainty, as revenue will need to perform more favourably relative to activity than it would if the historical relationship between these two variables were to remain unchanged. as a result, the performance of revenue and the impact on spending of the plans announced for public - sector employment will need to be monitored over the next few years, so that, in the event of any deviation from the projections, action can be taken in time to avoid the risk of failure to achieve deficit commitments. the importance of budgetary consolidation finally, it seems to me necessary to stress the importance of completing the budgetary consolidation process. the current environment of high growth and low interest rates is a very favourable one in which to reduce the structural budget deficit and public debt to levels more in line with those in the main euro area economies, and this opportunity should not be wasted. the cost of financing public debt ( which still stands at 100 % of gdp ) would be reduced and there would be some scope for fiscal policy to respond to possible adverse scenarios. moreover, consolidation is essential to address the challenge that an ageing population will pose for spending on health, dependency and, above all, pensions. in this respect, the magnitude of the adjustment needed to achieve sound public finances in spain is still significant. hence the need to comply with all the domestic and european budgetary framework requirements. following their strengthening in recent years, this means not only that the budget deficit ( defined in total and structural terms ) and public debt must be progressively reduced, but also that the so - called spending rule must be observed. the spending rule is especially important in the case of those government entities that have already achieved budget balance. 6 / 8 under the rule, neither the budgeted nor the | 16. 07. 2020 50th anniversary of the unaac margarita delgado deputy governor good afternoon. thank you very much, manuel. and my thanks also to cristina for this invitation for me to speak to you today, on the 50th anniversary of the unacc. it is a shame that we have not been able to celebrate this anniversary as was originally planned. we are living through strange and difficult times, but we must adapt to them. yet despite this unique scenario, a 50th anniversary is an event well worth celebrating. anniversaries, especially those which mark the passage of a decade, not least a halfcentury, are an ideal time to take stock of our achievements. undoubtedly during this period a great deal has been achieved, but if you will allow me, in my supervisory capacity, i would like to make some mention of those areas where we must continue to improve. over these 50 years we have been through several banking crises. the picture of our financial system as it stands today is naturally the result of these crises. and one point to note in this β family β photo is the large number of cooperatives which are present. the truth of the matter is that a highly significant number of credit cooperatives, or rather, a highly significant number of yourselves, have overcome these crises. to do so, you have undoubtedly used your strengths, which i believe most notably include your close relationship with your customers, your extensive knowledge of the local economic situation and your down - to - earth management ( far removed from speculative business models and focused on harnessing your knowledge of those customers and their needs ). furthermore, on a day like today, i feel that it is fair to highlight as one of your strengths your ability to support one another when necessary. you know better than i do that mutual support is one of the basic principles of the cooperative movement, and over these 50 years you have demonstrated that solidarity is an essential means for overcoming problems and difficult situations. indeed, if we look back in time we see that today β s society β and economy β are very different from those of 50 years ago. so another key to your success lies in your ability to adapt to that changing reality. the crisis triggered by covid - 19 is clearly a dramatic test of how changeable things can be. it is obvious that, for once, the origin of the crisis is not financial and is not linked to macroeconomic imbalances. nevertheless, although this crisis is unrelated to previous ones, there is something that | 0.5 |
using harmonized payment products to the overall speed of the integration process. smes β financing conditions under stress let me start, first, with how smes have weathered the crisis and would therefore like to take a closer look at smes β financing conditions. the resilience of our economy in the period of the financial crisis is crucially dependent on the ability of smes to appropriately provide for their financial needs. unfortunately, very few quantitative statistics are available. therefore, i am happy that direct evidence regarding smes β access to finance is now available from a new, large - scale survey implemented jointly by the ecb and the european commission, the first wave of which was conducted in july this year. when asked what type of external financing they would prefer to use in order to fund growth opportunities, 70 % of smes replied that they would apply for a bank loan. hence, the financing conditions of smes are closely linked to the situation of the banking sector, i. e. the lending rates and the availability of credit. for us at the ecb, this aspect of the smes β financing structure is absolutely crucial for our assessment of the monetary policy stance and the transmission of our monetary policy decisions to the economy at large. during the crisis, securing financing has proven difficult for many smes and a source of serious concern for monetary policy. let me take this opportunity to stress that the decisions taken by the governing council of the ecb in terms of monetary policy and the support of the banking system via our refinancing operations have been instrumental in preventing the risk of credit drying up completely. nonetheless, it is clear that smes have experienced a severe deterioration in their economic environment over recent quarters and have seen their access to finance significantly constrained. smes have been widely affected by sluggish demand and a slump in export markets. at the same time, they have also been affected in their role as suppliers, sub - contractors and service providers to large firms which themselves were struggling with economic difficulties. according to the survey evidence, smes experienced a significant deterioration in their turnover and profits in the first half of 2009, and they were more adversely affected by the crisis than large companies. indeed, a higher net share of smes than of large firms indicated that their capital base had deteriorated. of course, the economic uncertainty and unfavourable outlook was anything but conducive to an increase in firms β demand for loans. at the same time, the deteriorating situation of | without a problem. banking software may need to be updated, but this can be accomplished in the course of the normal investment cycle of the firm in question. in my view, the transition costs are certainly outweighed by the benefits stemming from faster and cheaper payments, legal certainty and the ease of doing business throughout europe. i sometimes hear the question : is it really working? are banks really delivering? all the building blocks for an integrated retail payment market are in place. it is important that customers too demonstrate demand for sepa benefits and urge their banks to make sepa a reality. small and medium - sized companies should aim for the benefits of sepa. conclusion europe has come far in terms of integration. the single market for labour, goods, services and capital was fully established 16 years ago with the maastricht treaty. this single market now requires a single market for payments. the european retail payment systems will be integrated by means of common standards, common payment instruments and common business rules and conditions. the sepa project is an integral part of this process. i highlighted four main benefits for end - users, which include smes. β’ the legal certainty regarding payments will remove another important barrier to trade β’ faster payments will improve liquidity conditions for all companies β’ enhanced competition in payment services will contribute to lower costs and will be a key driver of innovation and β’ standardisation will provide easier access to banking software and payment terminals, including for smes. given these tremendous potential benefits arising from sepa and the overall harmonization process, we need to make a further leap forward in the sepa implementation. this entails existing sepa instruments, the credit transfers and direct debit, but also innovations in the field of esepa, such as e - payments which can greatly benefit the payments business of smes. the take up of the sepa products β until now β is rather modest. the ecb is convinced that a binding migration end date for sepa is needed. it is in the interest of all stakeholders to migrate quickly to the sepa instruments. and let me emphasize β once more β that also smes as key users of payment instruments can make an important contribution to the successful implementation of a harmonized and integrated retail payments market. the financial crisis has put severe strains on smes and i have mentioned the results of our survey on the access to finance of smes conducted jointly by the ecb and the european commission in this respect. therefore, on the one hand, | 1 |
435 - 448. 23. rose a. k. ( 2000 ) : one money, one market? the effect of common currencies on international trade, β economic policy β no. 30, pp. 449 - 461. 24. rose a. k., van wincoop e. ( 2001 ) : national money as a barrier to international trade : the real case for currency union, β american economic review β vol. 91, no. 2, s. 386 - 390. 25. mundell r. ( 1961 ) : a theory of optimum currency areas, β american economic review β vol. 51, no. 4, s. 657 - 665. 26. schadler, s., drummond, p. f. n., kuijs, l., murgasova, z., elkan van, r. 2005. β adopting the euro in central europe : challenges of the next step in european integration β, occasional paper no. 234, international monetary fund, washington. 27. wicksell, k. 1898. β interest and prices β, tΕum. r. f. kahn, macmillan, new york, 1936. 28. woodford, m. 2003. β interest and prices β, princeton university press, princeton and oxford. | result of solid fundamentals and to what extent it is just another β no - brainer β trade that may last for quite a while but may also end suddenly. research conducted at the national bank of poland and by other institutions indicates that financial markets have become much more integrated in recent years, global factors drive the performance of emerging market currencies much more than just a few years back, that home bias is being reduced and even a well - known feldstein - horioka puzzle is almost gone 10, ie the cross - country correlation between saving and investment rates has declined markedly. favorable global liquidity conditions, attractive rates of returns and good economic prospects draw global investors to polish financial markets. additionally, poland β s accession to the eu and the future see dooley m., folkerts - landau d., garber p. β an essay on the revived bretton woods system β, nber working paper 9971, september 2003 ; and a series of other papers published by these authors in 2004 and 2005. http : / / www. um. warszawa. pl / v _ syrenka / miasto / mosty - 9. htm international monetary fund β global financial stability report β, march 2006. bank for international settlements β bis quarterly review. international banking and financial market developments β, march 2006. feldstein m. β monetary policy in a changing international environment : the role of capital flows β, nber working paper 11856, december 2005. entry into the euro area have made the polish t - bond market, with the average daily net turnover of pln 6 billion ( the largest and the most liquid market in the region ), more attractive to foreign investors. eu membership has enabled institutional investors, that are allowed to invest in instruments issued within the community, to increase their exposure to polish securities. in 2004, non - residents β investments in t - bonds issued in poland rose by about pln 20 billion, and in 2005 - by a further pln 7 billion. the beginning of 2006 was also marked by new records on the warsaw stock exchange amid purchases made by foreign investors and domestic investment funds. in 2005, the number of ipos amounted to 35 and the market capitalization increased by almost 50 %. however, one should not take these favorable global liquidity conditions for granted. federal reserve has already raised the interest rate to 5 percent. the ecb is in the process of normalizing interest rates and the bank of japan has | 0.5 |
together is success. if everyone is moving forward together, then success takes care of itself. " congratulations to the financial sector forum member agencies for taking this step to improve 1 / 2 bis central bankers'speeches the supervision of financial conglomerates in the philippines for the benefit of the filipino people. thank you and good morning! 2 / 2 bis central bankers'speeches | benjamin e diokno : opening remarks during the signing of the establishment of a supervisory college for financial conglomerate supervision opening remarks by mr benjamin e diokno, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), during the signing of the multilateral mou on establishment of supervisory college for financial conglomerate supervision, manila, 24 january 2022. * * * good morning. it is my pleasure to welcome our financial sector forum principals, emilio aquino, chairman of the securities and exchange commission ; dennis funa, commissioner of the insurance commission ; and sandra diaz, senior vice president of the philippine deposit insurance corporation to witness another momentous event for the forum. in line with the principles for the supervision of financial conglomerates of the basel committee on banking supervision, the financial sector forum created the financial conglomerate supervision committee which is tasked to work towards identifying conglomerate risks in the financial system ; and to plan ahead supervisory initiatives to mitigate conglomerate risks. the basel principles highlight, among others, the need for a clear legal framework that provides supervisors with the necessary powers, authority and resources to perform, with independence and in coordination with other supervisors, comprehensive group - wide supervision. the principles re - affirm the importance of supervisory cooperation, coordination and information exchange. in the 2020 financial sector assessment program technical note on supervision and regulation of financial conglomerates, the international monetary fund recommended the implementation of a multilateral agreement among financial sector forum member agencies on the establishment of supervisory college to agree on the approach of group level risk assessment for financial conglomerates. the establishment of a supervisory college is an important regulatory platform in achieving effective and efficient supervision of financial conglomerates. it is also an international practice amongst international financial supervisory authorities. thus, this memorandum of understanding shall govern the establishment of an inter - agency cross - sectoral supervisory college which shall serve as the forum, to facilitate cooperation and coordination between and among the financial sector forum member agencies specifically, for the supervision of financial conglomerates in the philippines. this supports a clear process for coordinating various roles and responsibilities of the financial sector forum with clearly delineated responsibilities for effective supervision. as such, we would like to re - affirm the spirit of collaboration by signing the memorandum of understanding on the establishment of supervisory college for financial conglomerate supervision. finally, let me share a quote from the american industrialist and business magnate, henry ford. he said that aβ¬Εcoming together is a beginning, staying together is progress, and working | 1 |
key risk to inflation dynamics and economic development the war continues. accordingly, the risks of a further decline in economic potential remain, in particular due to the loss of people, territories, and production facilities. the speed of the economy's return to normal will depend on the nature and duration of the war. 2 / 4 bis - central bankers'speeches what is more, it continues to generate the following risks : the emergence of additional budget needs, mainly those to maintain defense capabilities the likelihood of an additional hike in taxes, which β depending on its parameters β may drive up pressures on prices further damage to infrastructure, especially energy and port infrastructure, which will restrain economic activity and put supply - side pressures on prices a deepening of adverse migration trends and a further widening of labor shortages on the domestic labor market. there is also a risk of increased geopolitical tensions in the world amid the war in the middle east, the electoral cycles in some countries, and russia's attempts to form a coalition of states. at the same time, a number of positive scenarios are still likely to materialize, resulting from further acceleration of european integration processes and recovery in the energy sector. in order to maintain the sustainability of the fx market, bring inflation back to its target over the coming years, and keep inflation expectations in check, the nbu board decided to keep the key policy rate at 13 % per annum given that inflation has not yet peaked, and that pro - inflationary risks have even increased for the coming months, the nbu believes it appropriate to remain cautious while conducting its interest rate policy, and to take prudent measures to safeguard the sustainability of the fx market. to counteract price pressures, the nbu suspended its interest rate policy easing cycle in july. this has supported interest in hryvnia savings, the interest rates of which currently provide adequate protection against inflationary depreciation. in particular, the inflow of households'hryvnia term deposits resumed in the fall, and investments in domestic government debt securities continued to grow. the policy of protecting hryvnia savings from being eroded away by inflation will continue to help limit pressures on the fx market and preserve international reserves. using the regime of the managed flexibility of the exchange rate, the nbu will compensate for the structural shortage of foreign currency in the private sector and smooth out excessive exchange rate fluctuations. the exchange rate will fluctuate moderately in both directions in response to changing market conditions, which will further strengthen the | days into the war. in the first hours of the invasion, and further on, the nbu received overwhelming support from central banks and international organizations and institutions. the unprecedented support we have obtained from the international monetary fund, the world bank, the european union, and the united states has been truly invaluable, and has enabled ukraine not only to confront the consequences of the war, but also to look ahead and plan for long - term recovery. 3 / 4 bis - central bankers'speeches we took full advantage of this help, and now that we are on the path to recovery, we are actively exchanging our experience with our colleagues from other countries, via events such as this workshop. sharing knowledge is also a powerful resource, and, we are excited to share our expertise with you while continuing to refine our approaches. the challenges facing us may differ, but we all share a common goal β to create a sustainable economy capable of ensuring the stable development of countries. i believe that integrated approaches, the exchange of experience, and international cooperation are key elements for success in this endeavor. today we will review cutting - edge research into topics such as fx interventions, capital controls, international reserves, and the interaction between fiscal and monetary policies. we will be honored to hear a report from leading imf economists jesper linde and marcin kolasa on the integrated policy framework. i'm confident that their presentation will set the foundation for fruitful discussions on the practical aspects of an integrated approach. another highlight of today's workshop will be a presentation of the imf's extended quarterly projection model, or qpm. following the qpm presentation, we will hold a panel discussion with leading industry experts, chaired by natan epstein of the imf, about the specifics of implementing an integrated approach in our core macro models. this is of great practical importance to us, as we have been working closely with the imf team to improve our own modeling toolkit. i hope that today's event will be a source of new ideas and solutions for us all. thank you for your attention, and i wish you productive discussions!. 4 / 4 bis - central bankers'speeches | 0.5 |
it is important to recognise that the last ten years have been a period of remarkable stability for the uk β s economy. it has certainly been the most stable and successful period for the economy in my lifetime. 1 when the mpc was set up, charlie bean β then a leading academic, soon to be my fellow deputy governor β estimated that inflation would be away from the target by more than 1 percentage point in nearly 5 months of every year. yet this week the governor β s open letter to the chancellor to explain why inflation last month had deviated by more than a percentage point from the target was only the second written in over 10 years. and taking the past decade as a whole, this stability of inflation has not come at a cost to growth β quite the opposite in fact. output growth has been high both relative to the rates indeed work done at the bank suggests that in terms of inflation, it has been the most stable decade in many lifetimes β that is, since the restoration at least ( benati ( 2006 ) ). achieved on average over the preceding 30 years and in comparison with our european neighbours. it also has been remarkably stable. 2 of course that stability at the macro level disguises some big changes in the structure of the economy. indeed it has provided a platform for change. the north east for example is now much more diverse than it was and less reliant on a few large industries. and, overall more people are employed in the region : the number employed in the north east has risen by more than 100, 000 in the past ten years. and export growth remains relatively buoyant. in contrast to this picture of stability, the preceding 3 decades were scarred by painful recessions where unemployment rose sharply, and inflation fluctuated wildly. in particular, there were three episodes between the mid - 1970s and early 1990s, when inflation rose very sharply, and at around the same time output contracted. while there are many in the room that don β t need reminding, i thought i would just give the younger members of the audience a reminder of just how desperate those times were ( chart 1 ). in 1975, rpi inflation peaked just shy of a staggering 27 % while at the same time output fell. it was this era that entrenched the term β stagflation β in the minds of the public. inflation fell back sharply over the subsequent year or so, only to rear its head again in 1979 - 80 β this time peaking at around 22 % | feeding into price and wage setting in a more persistent way. what is clear is that our monetary policy measures have been successful in avoiding a deflationary spiral and securing the anchoring of inflation expectations. in the past, as interest rates approached zero, some did question our ability to add sufficient accommodation to combat a prolonged period of too - low inflation. we answered those doubts by demonstrating that we would take any measures necessary within our mandate to deliver our mandate, and that those measures were effective in further easing financial conditions. deflation risk premia, which had been growing in 2014 and 2015, have now been more or less priced out of market - based inflation expectations. that being said, a prolonged period of low inflation is always likely to be exacerbated by backward - lookingness in wage and price formation that occurs due to institutional factors, such as wage indexation. this has plainly happened in the euro area. ecb analysis finds that, compared with long - term averages, low past inflation dragged down wage growth by around 0. 25 percentage points each year between 2014 and 2016. the evidence as to whether backward - lookingness has increased recently is mixed. there were signs that indexation had fallen in the early part of the crisis, and ecb empirical estimates 4 / 7 bis central bankers'speeches suggest that the weight of past inflation in current inflation has decreased. yet there is also evidence that indexation has returned in some large euro area countries. in italy, for example, backward - looking indexation of wages now covers around one - third of private sector employees. 7 still, even if indexation rose, it would only create inertia in price formation : it would not obstruct the transmission process. as economic slack shrinks, upward pressure on prices will materialise and gradually enter the indexation ratchet. so once again we see temporary forces at work that should not affect medium - term price stability. and this assessment is broadly what we see in market - based inflation expectations today. interpreting with some caution, they are now consistent with the picture that our policy is effective, but that its full effects will take time to materialise. accompanying the recovery so what do these various explanations imply for our monetary policy stance? the first point to make is that we face a very different situation today from the one we encountered three years ago. then, we also faced global shocks and significant labour market slack. but the recovery was still in its infancy. global growth was slowing, | 0 |
not appear to matter decisively. the relative lack of support for globalisation among lower - skilled workers and the least educated could indicate that they are uncertain about the general costs and benefits of globalisation, but see the individual costs and benefits more clearly, perhaps more rationally. concerns about the economic costs of globalisation for certain groups in society have led to the creation of the european globalisation adjustment fund, an eu initiative which aims to help workers made redundant as a result of changing global trade patterns to find another job as quickly as possible. i should also note that, generally speaking, surveys indicate that people in the eu are not protectionist, though they are somewhat more so in france. however, europeans are more inclined to support redistribution, and this is in keeping with recent results in the literature indicating that europeans are more concerned about inequality more than the americans. 4 third, there is no prima facie evidence that measures of reported happiness or β life satisfaction β are negatively affected by globalisation. regression analysis suggests a positive relationship between β life satisfaction β in oecd countries in the mid - 2000s against the ranking of each oecd country in a globalization index ( see figure 1 ). 5 more globalisation seems to make people happier, at least according to this simple bivariate evidence, although the correlation could also mean that happier countries tend to become more globalised. 6 fourth, and this an important issue to which i will turn later in my speech, eu citizens believe that globalisation is influenced far more by the eu than by national governments. indeed, it is unlikely that any european country can have sufficient weight to influence the course of globalisation and the β rules of the game β of the global economy. only the eu as a whole can i draw here from a range of opinion polls, including eurobarometer ( 2007 ), ccfr ( 2006 ) and worldpublicopinion & ccfr ( 2007 ). note that the methodology across opinion is not necessarily directly comparable. see alesina, di tella and macculloch ( 2004 ). they show that concern for inequality is high among the poor and the leftist in europe, while it is restricted to rich leftists in the united states. this is the a. t. kearney / foreign policy globalization index, which tracks and assesses changes in four key components of global integration, incorporating measures such as trade and investment flows, movement of people across borders, volumes of international telephone traffic, internet usage | the poorer members of society. the degree of financial literacy of the population, according to the evidence, raises concern as to people β s ability to reap the benefits of globalisation. these are matters which central banks and other policy - making authorities should have a keen interest in pursuing. to sum up, the recent financial turmoil will not make financial globalisation more popular. unless policy authorities, starting from those in charge of financial supervision, draw the appropriate lessons and have the courage to recognise what went wrong and how their task can be improved, they risk loosing the confidence of citizens, and ultimately their independence. in europe, a reflection on the degree to which the current lamfalussy framework can be pushed to accommodate a much increased cooperation between national supervisory authorities is certainly required. 5. what can europe do? to summarise, policy - makers should acknowledge more fully the negative perceptions of the european public opinion towards globalisation. in addition to uttering the globalisation - isgood - for - you mantra, policy - makers should make it clear that they are aware of the painful adjustment costs for those workers and firms confronted with increasing global competition. the same policy - makers need to ensure that the necessary policy steps are taken to help those individuals and groups adjust to the new circumstances. what is the role for europe in all this? as i said, european citizens are aware that the challenges of globalisation can hardly be tackled at the local level. there thus seems to be an important role to be played by european institutions in the governance of globalisation. so why is this not happening? there may be two related reasons. the first is that for europe to be more effective at the global level, it has to act in a united way. such unity requires that actions conducted at the national level are more coordinated or even replaced by a european actor. the creation, or strengthening, of a european actor is objected, in many areas, by the national policy makers. β turkeys don β t vote for christmas β is a dictum that would apply well to the case. over the last few years national political or technocratic players have developed a resistance to the continuous strengthening of the european policy role and increasingly defended their national prerogatives, opposing further devolution of power to the european level. the argument β which is related to the second reason why europe is not more present on the world scene β is that such a devolution is not supported by the people of europe, often | 1 |
erkki liikanen : the proposed regulation on structural measures for banks comments by mr erkki liikanen, governor of the bank of finland and chairman of the highlevel expert group on reforming the structure of the eu banking sector, on the european commission β s proposal of 29 january 2014 for a regulation on the separation of certain trading activities from credit institutions. * * * the european commission has today presented a regulatory proposal based on the report of the high - level expert group on reforming the structure of the eu banking sector. in october 2012 our group proposed that proprietary trading and certain risky trading activities including market - making as well as exposures to shadow banking entities such as hedge funds ought to be separated from deposit - taking and lending activities. the commission proposal has the same objectives as the recommendations in our final report. the set of activities which the proposal would affect are also similar. in some respects, the proposed regulation does, however, differ from our recommendations. the commission β s proposal includes an outright ban on organised proprietary trading instead of requiring it to be assigned to a separate and separately capitalised legal entity. in this respect the commission proposal resembles the structural reform implemented in the united states. this would allow for regulatory convergence at the international level. as for market - making, risky securitisation and complex derivatives, the proposal empowers the competent authority to require separation when specific conditions prevail and also empowers the competent authority to require separation of other trading activities. the high - level expert group asked the commission to work on the calibration of the thresholds for application of the new rules. the commission has accordingly included the thresholds in its proposal. the proposal would cover the largest and most trading - intense banks in europe. while striving for the same objectives as the high - level expert group, the commission proposal leaves an important role for the future judgment of the competent authorities, the eba and the commission itself. in implementation of the regulation, the commission could grant individual credit institutions derogations from application of the regulation if national primary law in their home country is already adopted and considered at least as stringent as the regulation itself. moreover, competent authorities or member states may decide to impose similar measures also on some smaller banks, or exempt some qualifying banks from the requirement if these banks can demonstrate that they do not compromise the objectives of the regulation or threaten financial stability. these elements of discretion entrust the competent authorities, the eba and the commission with | 8 since 1960, the 3 - month treasury yield has moved above the 10 - year treasury yield before every recession except the one in 1990, and, conversely, there has only been one case where the yield curve has inverted and a recession has not followed - - in 1966. this correlation between yield curve inversions and recessions might arise for a variety of reasons. first, let us take a case where short - term rates rise relative to longterm rates. when the fomc is undertaking a deliberate tightening in policy, short - term interest rates typically rise, as do expectations of short - term interest rates in the medium term, while interest rates in the distant future may be less affected. for example, if shortterm interest rates were raised to stabilize temporary swings in the economy, the logic of the expectations hypothesis would suggest that long rates would not rise as much. and if tighter monetary policy were to weaken the economy with a lag, this would lead to long rates not rising by as much or at all. second, let us take a case where long - term rates decline relative to short - term rates, perhaps reflecting a flight to safety. if market participants become concerned about a future macroeconomic risk that could lead to a weaker economy, this concern would an earlier paper discussing the predictive power of the yield curve is estrella and mishkin ( 1997 ). in more recent work, bauer and mertens ( 2018 ) emphasize that the predictive content of the yield curve is still largely intact. johansson and meldrum ( 2018 ) and favara and others ( 2016 ), however, argue that adding information about bond risk premiums reduces somewhat the predictive power of the yield spread. - 7tend to lower expected longer - term interest rates, both because monetary policy would be expected to become more accommodative in the future and because market participants may increase their relative holdings of safe assets, such as treasury securities. in this case, longer - dated treasury yields may fall, and if short - term interest rates do not adjust commensurately, the yield curve will invert ahead of a weaker economy. turning to current conditions, the spread between the 10 - year and 3 - month treasury yields has declined from 375 basis points in early 2010 to about 125 basis points in the first quarter of this year. while that represents a considerable flattening, the current spread between the 10 - year and 3 - month yields is only about 20 basis points narrower | 0 |
esala masitabua : designing inclusive green finance policies and initiatives closing remarks by mr esala masitabua, deputy governor of the reserve bank of fiji, at the rbf - afi virtual joint learning programme on inclusive green finance implementation, 21 october 2020. * * * salutations afi colleagues participants, speakers ladies and gentlemen introductory comments ni sa bula vinaka and warm greetings from the reserve bank of fiji ( rbf ). it gives me great pleasure to deliver the closing remarks for this virtual joint learning programme ( jlp ) on inclusive green finance implementation, that we are proudly co - hosting with afi. as each of you would have learnt over the last few days, inclusive green finance ( igf ) is a new and evolving policy area. it is an honour for the rbf and our fellow fijian stakeholders to not only share our experiences with you, but also listen to and learn from the progress of our fellow afi members and the various technical personnel that have shared their expertise over the past three days. as you have heard, dealing with climate change is an issue close to our hearts here in fiji and the pacific. while much of the world β s attention is firmly fixed on responding to the covid - 19 pandemic and its economic implications, history tells us that pandemics will pass. the looming climate crisis however has not abated and still firmly remains a threat to decades of development and progress. as central bankers and policy makers responsible for ensuring both financial and macroeconomic stability, we have an obligation to integrate climate change into our business and policy frameworks. i think there is a growing consensus on this, globally. as financial regulators specifically, our opportunity is to steer the financial sector towards serving the needs of the people in mitigating the contributors towards climate change and building long - term resilience. we acknowledge that we will not be able to do this alone and that public and private partnerships will need to be forged in order to ensure that climate financing needs are met. in this regard, we are grateful to afi for the opportunity to co - host this jlp in order to interact with countries that have made great strides in developing frameworks conducive to enhancing inclusive green finance. designing igf policies and initiatives at the beginning of this virtual jlp, we heard inspiring remarks from governor ali and dr hannig that laid the foundation for the sessions that ensued. following this, we learnt that while we have a comprehensive 4p i | barry whiteside : brief comments on fiji β s economy opening address by mr barry whiteside, governor of the reserve bank of fiji, at the launch of bsp life β s new β bula elite β product, suva, 13 june 2013. * * * mr. robin fleming, chief executive officer, bsp group mr. kevin mccarthy, bsp fiji country manager mr. malakai naiyaga, managing director, bsp life limited members of the board, management and staff of bsp life limited and bank south pacific distinguished guests ladies and gentlemen introductory comments bula vinaka and a very good evening to you all! i am delighted to be here this evening at yet another key bsp event, this time to launch bsp life β s new bula elite product. thank you, malakai, for your kind invitation. since establishing its presence in fiji, the bsp group has elevated the standards of innovation for financial products and services in both banking and insurance, and has become a leading player in both industries. the launch of another life product is a further endorsement of the success of the bsp group and the key role it plays in fiji β s financial system. we at the reserve bank are seeing the flow - on effects of such business success in our domestic economy, through increased positive sentiments and actions by the private sector. let me therefore make some comments on the economy. economic update & outlook we all know that fiji is a small open economy β so what happens globally will generally find its way back to us in one form or the other. while global growth is trending upwards, it is really being pulled along by growth in the major emerging economies ( or the brics as we refer to them ). in contrast, slowdowns are forecast for most of our trading partners in 2013, with much of the eurozone in recession and having been there for the last 4 to 6 quarters. but all this has not dampened our own recent domestic output and the forecasts we have set for the near term. on the domestic front, gdp growth this year is forecast at 2. 7 percent, a little improvement on the 2. 5 estimated for 2012. an important takeaway is that our growth is broad - based with almost all sectors making a positive contribution. in 2013, growth is being led by agriculture, manufacturing, the finance and construction sectors. while we know that investment is the β driver β of growth, it is the private sector that is the recognized β | 0.5 |
john hurley : the eurosystem approach to monetary policy speech by mr john hurley, governor of the central bank and financial services authority of ireland, at the conference β the global interdependence center abroad in ireland β, co - organised by the central bank and financial services authority of ireland and the irish american business chamber and network, dublin, 11 - 12 june 2007. * 1. * * introduction ladies and gentlemen, let me begin by saying how pleased i am to have the opportunity to participate in this conference. we in the bank have co - organised this event and we feel that the high quality of the speakers and participants will ensure its success. it is both a networking exercise and an opportunity for participants to exchange views and hopefully gain further insights into financial and economic issues. i have been asked to speak on the topic of monetary policy in the euro area. the single european currency project commenced towards the end of the 1980s and resulted in the adoption of the single currency eight years ago. although the euro area is comparable to the united states in terms of population and gdp, it differs significantly in a number of respects. in particular, it is not accompanied by political union, nor is there a common language. these factors have not presented major difficulties and, by any standards, it can be said that emu has been a success. i will start by briefly recalling the background to the creation of the european single currency. i will then talk on the monetary policy strategy of the european central bank as well as its communication strategy. after briefly describing actual monetary policy since the launch of the euro, i will examine the benefits of monetary union for the euro area economy. finally, i will refer briefly to the effects of the single currency on the irish economy. 2. background the adoption of a single currency by eleven members of the european union at the start of 1999 was an ambitious and unprecedented event. it was a very challenging task for all concerned. despite considerable scepticism about the project in some quarters, it has been an undoubted success. reflecting this, it has attracted two new members, greece in 2001 and slovenia in 2007. it has also resulted in the physical replacement of national currencies by euro notes and coin in 2002. at this stage, the general public in the euro area has effectively altered its mindset to think in terms of the euro rather than their previous national currencies. how was this success achieved? one important impetus was the strong belief that the full benefits | joint action from all relevant stakeholders β including member states, the commission and eu fora β is therefore critical. in this context, we welcome initiatives β such as this β to connect the market, policy, and supervisory discussions on this topic and promote a dialogue between respective professional communities to define a shared agenda for npl workout and resolution. 5. conclusion to conclude, we were given a clear mandate to deliver a consistent supervisory approach to the treatment of non - performing loans across the euro area. the guidance delivers on this objective, by setting the standard for npl management going forward. it ensures supervisors have the necessary tools available to them, and banks have the necessary capacity to tackle npl problems. however, publishing the guidance is only the first step. implementation is our next challenge and this will not happen overnight. we also need strong and clear support from member states to tackle legal and related issues. boards will play a crucial role in developing, owning, and implementing bank specific strategies, and we expect pro - active engagement going forward. as madame nouy has repeatedly emphasised, this will be reinforced by tough but fair supervision. thank you for your attention, i look forward to the discussion. 4 / 5 bis central bankers'speeches 1 for ireland see β the irish banking crisis : regulatory and financial stability policy 2003 β 2008. a report to the minister for finance by the governor of the central bank. for spain, see for example cuerpo, carlos and pontuch, peter, ( 2013 ), β spanish housing market : adjustments and implications β, european commission β ecfin, 10 ( 8 ). 2 see garrido, jose, anke weber, and emanuel a. kopp, ( 2016 ), β cleaning - up bank balance sheets : economic, legal, and supervisory measures for italy β, imf working paper wp / 16 / 135. 3 the draft guidance to banks on non - performing loans can be found here. 4 see'the hard road : npl workout and resolution in the euro area ', address by sharon donnery at the peterson institute for international economics, 6 october 2016. 5 the ecb stocktake of national supervisory practices and legal frameworks related to npls can be found here. 5 / 5 bis central bankers'speeches | 0.5 |
and the moral of this story is this : the miracle of money creation by a bank may stimulate industry and trade β the upward phase of a business cycle in modern language β and give almost everyone a warm feeling of well being. but taken to excess, this miracle may result in a terrible day of reckoning. how to have the wonder without the reckoning? that is the question. mankind has progressed somewhat from the times of the 1720 β s with the creation of modern central banks whose functions typically include an element of oversight over the banking system. but the cupidity of certain people is eternal ; and requires eternal vigilance. beware of financial geniuses. this, i would like to suggest to you, provides the best firm reason for the continued existence of the iob. it must equip all those who are going to work in the banking system with the requisite set of j. k. galbraith ( 1975 ) money : whence it came, where it went, penguin books ethics with which to restrain people β s greed and cupidity : and protect bright, keen and energetic young men β and women β from the ways of nelly, the mentor, by providing them with the requisite training. that done, we will all proudly be able to assert as we look back on our contributions to a safe and sound banking system, β finis coronat opus β. thank you for your attention. ndi gqibile. | its support for a design that honoured the first australians. the new note will continue the rba's proud tradition of having first australians'imagery on australia's banknotes. some of you might recall the $ 1 dollar paper banknote issued in 1966 and the first $ 10 polymer banknote issued in 1988, both of which featured the art and culture of first nations peoples. australia's coins, which are produced by the royal australian mint, will continue to have the image of the monarch on one side. the rba is now embarking on a process of consultation with first australians on the new design. we anticipate it will be at least a couple of years before the new banknote is ready for circulation. the current $ 5 banknote will continue to be issued until then and it will still be able to be used once the new banknote enters circulation. thank you for your attention. next time we meet, the review into the reserve bank will have been completed and we look forward to discussing the results and recommendations with you. today, my colleagues and i are here to answer your questions. 5 / 5 bis - central bankers'speeches | 0 |
an ideal opportunity to exchange views, in that it brings together a set of distinguished experts with considerably diverse experience. i encourage all participants to be active, ask questions and share their insights. ladies and gentlemen, we are also honoured to have professor juan ignacio cirac sasturain with us today as a keynote speaker. as many of you will know, our speaker is one of the leading theorists in quantum computation. his contributions range from the physics of quantum computers to quantum algorithms and quantum information theory. many here will be especially interested in his seminal work on quantum cryptography. professor cirac is the director of the theory department at the max planck institute of quantum optics in garching bei maΒΌnchen, bavaria, and collaborates with many other academic institutions. he has received an impressive number of high - level awards, including the prince of asturias award for technical and scientific research ( 2006 ), the 2 / 3 bis - central bankers'speeches bbva frontiers of knowledge award ( 2008 ), the benjamin franklin medal ( 2010 ), the wolf prize in physics ( 2013 ), the max planck medal ( 2018 ), and many others ; more are sure to come. the subject of his talk is, very aptly,'opportunities and challenges of the next generation's computers '. we are certain that his remarks on today's central issue will set the stage for a very productive seminar. please join me in welcoming ignacio cirac to the stage. 3 / 3 bis - central bankers'speeches | excessive deficit procedures in the case of germany and portugal and the early warning issued to france. countries with remaining imbalances are urged to prepare sufficiently ambitious consolidation plans for their forthcoming stability programmes. emphasis should be placed on a growth - oriented consolidation policy that strengthens the productive forces of the economy. the governing council considers the recent commission communication to be a good starting point for rebuilding confidence in the budgetary framework. as already reflected in the statement on the stability and growth pact of 24 october 2002, we fully support the commission's main objective, namely to improve the implementation of the pact within the existing framework of rules. finally, i should like to stress again that there is still an urgent need to implement decisively the structural reform agenda. we note with some concern the slow progress in many euro area countries and call on governments to take determined action. the medium - term impact of these reforms on the economic growth potential of the euro area is likely to be substantial. a prompt implementation of structural reforms in the labour, product and financial markets is particularly important at this juncture since it would contribute to strengthening confidence in the euro area, thereby also supporting economic activity in the short term. we are now at your disposal for questions. | 0 |
agencies asked for public comment on possible alternative standards for noncomplex banks, simpler than anything in the basel proposal. i will be discussing the various " simpler " options - - both from our advance proposal last fall and from the new basel framework proposed in january. one outcome after considering these options may be to retain the current system, or tweak it only modestly, for most noncomplex, non - internationally active banks. innovations in the new proposal the basel proposal represents a watershed in supervisory policy, redefining the regulatory approach to bank supervision for some banks and providing others with new incentives to improve their riskmeasurement procedures. let me call your attention to some of the most important innovations in the new proposal and, at the same time, explore whether these innovations would be appropriate for community banks. three pillars. the basel committee's approach rests on three so - called pillars : ( 1 ) the new capital standard itself ; ( 2 ) increased supervisory review of banks'internal assessments of their own capital adequacy ; and ( 3 ) additional public disclosure of bank risk profiles. in contrast, the original basel accord rested on a single pillar, a regulatory minimum for capital. pillars 1 and 2 in effect distinguish two concepts of capital adequacy : regulatory minimum capital set by pillar 1 and the supervisor's evaluation of banks'internal calculations of their economic capital under pillar 2. by " economic " capital i mean the amount of capital that management has determined is required to reflect the risks, strategy, and objectives of its individual bank, regardless of the regulatory structure. the regulatory minimum, in effect, provides a threshold for early intervention by supervisors. the procedures and assumptions embedded in the internal measure of economic capital drive business decisions of the bank by permitting management to gauge the capital costs of, and better establish the price for, credits of varying degrees of risk. using pillar 2, supervisors would plan to evaluate the internal capital - allocation process for integrity and economic sense, and to ensure that the underlying processes and assumptions used to measure economic capital are reasonable and consistent with the principles in pillar 1. finally, pillar 3 looks to market discipline to supplement and reinforce the effectiveness of pillars 1 and 2 in disciplining the risk - taking of banking organizations. in principle, the three - pillar approach applies to community banks as well as to lcbos. in practice, however, the relative importance and detailed application of the three pillars would clearly be quite different at lcbos and at community | managers'tolerance for risk and market expectations for banks'capital as from the influence of bank supervisors. bank management, the market, and the supervisors all understand that the current capital standard sets minimum capital requirements, not the economic levels that are required for prudent operations. for all these reasons, community banks have consistently maintained higher capital ratios than larger banks since long before a regulatory capital standard was implemented. at the end of 2000, for example, banks with total assets of less than $ 1 billion had an average tier 1 leverage ratio of almost 10 percent and an average total risk - based capital ratio of almost 15 percent - - both about double the minimum standard. in contrast, banks with assets greater than $ 10 billion had average ratios of about 7 and 11. 5 percent, respectively. these and often larger differences extend back as far as data are available. despite having capital ratios typically well above any minimum that regulators would require, community banks appear to have little interest in the advance proposal for noncomplex banks. in the small number of comment letters we have received, community banks did not express a clear preference for gaining a simpler regulatory capital measure in exchange for potentially higher minimum capital requirements - - requirements still well below their economic or maintained capital. the gains in simplicity were apparently not viewed as offsetting the costs of changing from the current set of rules to a purportedly simpler system. the intent of the proposal, by the way, was to reduce regulatory burden on smaller banks while ensuring that their capital remains at prudent levels. key questions i hope my comments have clarified that the new basel and interagency proposals raise some important questions about the appropriate capital standard for u. s. community banks. if community banks want to shape the outcome, they must convey their views on several key questions. who is under what standard? a crucial question that we should consider is which banks or types of banks will pursue which alternative capital standards. clearly, all or almost all of the truly global institutions, worldwide, would be expected to use an irb approach, with most of them moving to the advanced approach, if they are not there at the outset. most other large banking organizations, such as the large u. s. regional banks, are also likely to pursue that approach, at least eventually. supervisory and market pressures, alone, would presumably force the global and large regional banks in that direction. given the systemic risk posed by implications and sheer complexity of many of our largest institutions, supervisors worldwide should at least | 1 |
in the spring of 2016, which you can see in the chart on the left - hand side, would, at least at face value, nurture such concerns. it suggests that there is at most a loose correlation between the actual pace of eurosystem purchases under the app β which has been gradually declining since april last year β and the intensity of cross - border capital flows. the persistence of policy - induced cross - border capital flows the chart masks important differences across investors, however. you can see this more clearly on my next slide. up until may this year, net capital outflows in debt securities have decelerated, by and large, as a result of a reduction in the pace of net sales by non - euro area residents β as you can see in the chart on the left - hand side. in april this year, non - euro area residents became net buyers of euro area long - term debt securities β in moving annual sums β for the first time in nearly three years. as non - residents have been important counterparties to the eurosystem in implementing the app, the gradual slowdown in their net sales of euro area securities may not be surprising. it is likely related to the step - wise reduction in the actual pace of eurosystem purchases. 3 / 7 bis central bankers'speeches euro area residents, by contrast, and this you can see on the right - hand side, have reduced their purchases of foreign securities to a much lesser extent. in fact, when we cut the monthly pace of our purchases from β¬80 billion to β¬60 billion in april last year, euro area residents increased their acquisition of foreign debt securities by more than 15 % over the following six months. even when we cut the monthly pace of purchases to β¬30 billion as of january this year, euro area residents remained important buyers of foreign securities. in the united states, and this you can see in the chart on the left - hand side of my next slide, euro area residents accounted for nearly 30 % of total us treasury purchases during the first half of 2018. in 2017, their share was 25 %. now, there is no simple answer that could help explain the observed investment pattern. some would argue that foreign securities β us treasuries in particular β offer a considerable yield pickup compared with comparable euro area securities. so it should not come as a surprise to see continued outflows from low - yielding euro area bond markets. but not all investors are willing or able to assume | sector. in conclusion, data doesn't just offer numbers ; it tells a story. a story of where we've been, where we are, and most importantly, where we can go. the intersection of technology and tourism presents an avenue ripe with opportunities. let's harness these insights to ensure that our beautiful island remains a premier destination, not just for the present generation but for many generations to come. thank you, and let us work together to build a future as luminous as the barbadian sun. 4 | page | 0 |
asset price boom has turned into a bust, the effect on the macroeconomic policy settings is profound. partly this is because the contracting economy affects the policy settings, and partly it is because policymakers are quick to adjust their levers in an attempt to head off the contraction. again, a comparison with the us makes the point. on fiscal policy, the australian budgetary position has varied little over recent years, with predominantly small surpluses being the order of the day. in contrast, the us budgetary position has moved from a surplus of 2 per cent of gdp in 2000 to an expected deficit of 4 per cent of gdp in 2003. the us has used a huge amount of its fiscal ammunition, while we have not even started to do so. terms of trade march 1982 = 100 index index source : abs national budget balance per cent of gdp % % us australia - 2 - 2 - 4 - 4 - 6 official short - term interest rates % % australia on monetary policy, the contrast between the two countries is equally pronounced. the us put us interest rates up slightly more than we did in 1999 / 2000, but the difference was minor. however, since the us recession hit in 2001, they have reduced their interest rates much more than us. from a peak in the second half of 2000, sources : federal reserve bank of new york ; rba they have come down by 5Β½ percentage points, while we have come down in net terms by 1Β½ percentage points. i do not want to give the impression that i think stability of interest rates is a goal in its own right - only that it reflects the greater stability of the australian economy. - 6 sources : commonwealth treasury ; thomson financial datastream again, the contrast in both of the above policy variables between the two countries is as great as the contrast in the other variables i showed earlier, with australia again representing stability and the us instability. equally importantly, stability was not pushed at the price of lower growth : to the contrary, the australian economy has grown faster than the us, not just over the past few years, but over the past decade. this, of course, has been the main point of my presentation this evening. the other point, i hope that has come out, is that the really large examples of instability in recent decades have emanated from a species of financial event - namely, an asset price boom and bust - rather than from the normal cyclical fluctuations we are all familiar with under the heading of the business cycle | gent sejko : seventh review of the arrangement with the imf concluded speech by mr gent sejko, governor of the bank of albania, at the joint press conference with the imf mission and the minister of finance, tirana, 22 march 2016. * * * in accordance with the agreed agenda, during the last two weeks, we have held intensive talks with the imf mission, which focused on the review of the arrangement with the imf. also, in the framework of article iv discussions, talks focused on identifying those structural problems that hamper economic development in albania. the review concluded that economic indicators and macro - economic policies have been in line with our projections and commitments, despite the challenges facing the albanian economy during this period. moreover, article iv discussions noted the need for accelerating structural reforms, which should pave the way for faster and steadier development. let me now present a summarized opinion of the bank of albania on the country β s economic performance and the policies we have implemented and should continue to implement in the future. the albanian economy continues to be on a positive development trajectory. economic growth accelerated during 2015, driven by the expansion of investments and improvement of the balance of trade with abroad. private consumption showed signs of recovery in the second half of the year, whereas public consumption remained limited, in accordance with the fiscal consolidation strategy. during this period, economic activity expanded, among others, thanks to the monetary policy and supervisory and regulatory measures by the bank of albania. our accommodative monetary policy stance has contributed to lowering interest rates further down, mitigating liquidity pressures and maintaining the confidence of financial markets in price stability. in parallel, our supervisory and regulatory measures have contributed to reducing non - performing loans and improving the financial soundness of the banking sector. these developments are a prerequisite for sustainable crediting to the economy in the future. inflation remains at low levels, below our target. this performance has reflected the unutilized production capacities in the albanian economy, and the disinflationary tendencies arising from trade exchanges with abroad. in particular, over the first two months of 2016, inflation dropped, descending to 0. 2 % in february. our analyses suggest that it dropped due to external factors, namely the pronounced fall in food and oil prices in global markets. as such, the rapid drop in inflation and its low levels represent a supply shock to the albanian economy, rather than a disinflationary situation, which | 0 |
holdings in many portfolios, including in particular official holdings of reserves. these expectations were probably overstated. history has shown us that once currencies achieve the status of an international vehicle currency, as the guilder and the pound did in previous centuries, the established infrastructure of deep and liquid markets favors their continuing to be so used. we have not yet reached the three - year mark since the euro appeared as a currency - - a very short time by standards of international monetary history. as i indicated earlier, we have seen substantial development in the markets for euro - denominated bonds and other fixed - income instruments. advancements in other markets have been slower but should proceed in time. i also note that the introduction of the euro created a motive for diversification into dollars for those investors who had previously obtained some portfolio balance by holding several european currencies. as stability between the exchange rates of those currencies increased through the late 1990s and then became absolute in january 1999, some investors were induced to substitute into dollars to regain the diversification they had lost as the euro - area currencies became more closely correlated. we are left with the question of how the international role of the euro will unfold. the attraction of investing in dollar - denominated assets depends upon relative rates of return. to the extent that the capital flows we have observed from europe to the united states are a critical piece of the story, the future will be determined, at least in part, by the success in europe of matching the expected rates of return on u. s. assets. but market pressures toward portfolio diversification are clearly also going to play a major role in the future relative positions of the dollar and the euro. the world can only benefit from the competition. | to adjust wages and prices in response to what they viewed as transitory changes in energy costs. in the final analysis, i think we probably saw some pass - through of higher energy costs into core inflation once price and wage setters came to believe that the rise in energy prices would not soon be reversed. but the magnitude of the effect has been small - perhaps on the order of a cumulative 1 / 2 percentage point or less since the end of 2003. if crude oil prices hold at close to current levels over the next few years, the resulting absence or even partial reversal of these energy cost shocks should, all else equal, put some modest downward pressure on core inflation. consumer energy prices have already flattened out according to the august data, and we will probably see a big decline in september's report. this decrease will not erase the increases of the past few years, but i believe that it will contribute to a lessening of consumers'fears that continued energy - price increases will lead to a ratcheting up of inflation in the long run. indeed, the most recent readings on inflation expectations from the university of michigan survey research center showed a noticeable decline in september, especially in the inflation rate expected twelve months ahead. in financial markets, the spread of nominal over indexed yields has also retreated substantially at the near end of the yield curve. to a monetary policy maker focused on the evolution of inflation expectations, these developments are indeed steps ( albeit small ) in the right direction. another major force driving up core consumer price inflation over the past year has been shelter costs, especially tenants'rent and owners'equivalent rent. together, these two components account for a substantial part of the core price indexes - 38 percent for the consumer price index ( cpi ) and 17 percent of pce prices - and as a result, small shifts in price trends in these areas can have a noticeable effect on core inflation. for example, after running at about a 2 - 1 / 2 percent pace for several years, increases in owners'equivalent rent stepped up to an annual rate of 5 percent in the six months ending in august. as you know, these prices are imputed from the rental housing market, and quite possibly this acceleration resulted from a shift in demand toward rental housing as higher interest rates and home prices, along with reduced expectations of capital gains, made the owner - occupied market increasingly less attractive. in response to greater demand, the supply of rental housing should increase over time, in part by drawing from the over | 0.5 |
total aum managed by pe / vc players in singapore has increased more than four times 2 / 5 bis - central bankers'speeches since 2015 to over s $ 650bn as of 2023. iii. we can position singapore as a good venue for successful ipo exits, to allow companies to access growth capital and asset owners to recycle capital, creating a virtuous cycle of growth, innovation and a vibrant financial market. 7. to do so, we must strengthen our local stock market. indeed, as boon hwee mentioned earlier and in his letter to shareholders last september, a vibrant and liquid stock market is one of the key pillars of our financial ecosystem. a. last year was a mixed picture for our local equities market. i. on one hand, the straits times index was southeast asia's best - performing stock market index. it has gained more than 15 per cent β driven primarily by our three local banks β which marks its best annual performance since 2017. daily average volumes also grew in tandem, rebounding by more than 50 % compared to previous year. ii. on the other, a combination of global economic uncertainties, high interest rates and competition from regional exchanges as well as alternative fundraising methods had resulted in a dearth of new listings. b. the establishment of the equities market review group last august is timely to build on singapore's strengths and ensure we remain an attractive venue for enterprises to raise capital. 8. as we seek to revitalise our local equities market, we will need to address three key issues. a. first, on the supply - side, we need to better define the profile of companies we want to attract. i. the success of our reit market is a good example of this. i. since the launch of the first reit - namely, capitamalltrust - in 2002, sgx has grown to become the largest reits market in asia ex - japan. ii. and with a healthy ipo pipeline comprising data centres, healthcare, industrial and accommodation assets, there is good reason to be optimistic that we will continue to be a preferred listing destination for reits in asia. ii. with exchanges and equities trading becoming a lot more cross - border, it is not surprising that companies are enticed to list on foreign venues where liquidity is concentrated. the review group and sgx will therefore need to define the space where singapore can be attractive to growth companies. | i. minister chee hong tat had previously shared that the review group is looking at companies which are already based in singapore, as well as companies from emerging markets and in areas such as fintech, innovation and sustainability. 3 / 5 bis - central bankers'speeches ii. in addition to this, the review group, informed by market feedback, is studying how we can better position our equities market to attract high quality mid - cap growth companies that are likely to be less visible on larger exchanges in the us, china and japan, but can benefit from being listed on sgx due to brand familiarity with investors in the region. iii. by being clear with the profile of companies we want to attract, we can better design our incentives for these companies to consider singapore as a listing venue, as well as for fund managers to launch products that invest in the local equities market. b. second, on the demand side, we need to not only jump start interest but also make it sustainable. this will require a range of measures to attract capital and sustain post - ipo liquidity and trading volumes, so that listee companies have confidence to list, market interest is raised, and trading liquidity is maintained. i. while it is inevitable that a sizeable proportion of liquidity will be concentrated in a number of well - known counters, we must aim to broaden liquidity beyond these counters. this will be especially critical for smaller counters, for example those with market cap between $ 500 million and $ 3 billion. ii. we must also crowd in commercial capital on a sustained basis, such as institutional wealth, individual investors and family offices. while there have been suggestions to channel sovereign monies into our equities market, it is not practical to rely on sovereign monies alone to sustain these funds and to support the equity market. instead, any use of public funding has to catalyse commercial capital for trading interest in our equities market to be sustained over the long term. iii. to this end, i note that the review group is studying how we can make optimum use of seed capital to draw in more commercial capital to ensure that government developmental capital is deployed on a fiscally prudent basis. iv. we must also strengthen the larger ecosystem to build a stronger pipeline of quality listings, catalyse investor interest and sustain liquidity. for example, we can explore enhancing research coverage into the types of pre - ipo growth companies we want to | 1 |
banks should persist with their early recognition policy, as this will enable them to continue to fulfil their task of providing funding to the economy. it is important that banks analyse situations individually, distinguishing between temporary and more permanent effects. automatic reclassifications that result in excessively procyclical behaviour should be avoided. however, above all, banks must be prudent, assessing provisioning needs in accordance with plausible and conservative scenarios for the coming years. in short, especially should the crisis be prolonged, banks must ensure timely and proper recognition of the effective quality impairment of their credit exposures in compliance with the supervisory guidelines. secondly, i wish to refer to the capital buffers built up and their use during this crisis. as i mentioned earlier, solvency levels are now significantly higher than in the run - up to the global financial crisis. at the start of this crisis, prudential supervisors decided to release many macroprudential buffers β the capital, countercyclical and systemic risk buffers β and, at the same time, the microprudential authority temporarily allowed banks to operate below the level set for certain structural requirements. these decisions sought to help banks continue to provide the financing that households and firms need in such an adverse environment as the present one. our empirical analysis shows that the use of these buffers will enable banks to provide more funding to the real economy. this in turn has a positive impact on economic growth, encouraging its recovery or moderating its decline. and this positive impact is such that it, in turn, boosts credit demand and banks β income, which ultimately translates into higher solvency levels. in any event, it is important to note that it may be difficult for banks to use buffers if they fear they may be penalised by the financial markets for reaching certain capital ratios, which would increase their funding costs and could, therefore, affect their solvency levels. this market stigma effect could lead banks to avoid using capital buffers, which in accordance with the above analysis would have a negative impact on the economy. 1 in addition, the use of these capital buffers may be more difficult if there are doubts about how they will be rebuilt post - crisis. the difficulty would be if banks were obliged to rebuild the buffers at a time when their capacity to generate profit was only modest or when the market might not be very receptive. in this setting, clear communication by the macroprudential and microprudential | ##sation, more competition, a greater weight of the private sector in the economy, etc. to increase their growth potential. and, on the other, the countries with more inflationary tendencies should, as i said a couple of weeks ago in zaragoza, pursue their own structural reforms, reforming labour institutions, the rental market, etc. so that increases in demand, arising from relatively low rates, cannot generate inflation. the celebration of these ten years is taking place just as the global macroeconomic scenario has undergone a deep - seated change as a result of the financial crisis, leaving it covered in great uncertainty and powerful recessionary tendencies. now, those who are against a single monetary policy underscore the uneven impact that changes in the world economy can have on euro area members, as these are deprived of the macroeconomic stabilisation instrument that national monetary policies provided. once again, this is not an argument against emu but one in favour of accelerating structural reforms. but let us first highlight the huge benefits of emu precisely in the current crisis. can anyone imagine how the 16 euro area countries would have weathered the international financial storm had they retained their 16 currencies? anyone can appreciate the scale and seriousness of the financial problems these countries would have faced had each one retained its currency. remember what happened in the early 1990s when the effects of the us recession took some time to be felt in europe, but eventually did so with unusual virulence. amid the serious challenges arising from german reunification, the lack of a coordinated monetary policy response on this side of the atlantic then led to massive speculation against exchange rates and to a major foreign exchange crisis, which some did not hesitate to call the collapse of the european monetary system. this speculation ultimately imposed enormous costs for all the countries involved. this will not happen again now. at this time of enormous uncertainty, the key institution of the monetary union, the ecb, has reacted in an exemplary fashion. in the space of five months it has managed to reduce the euribor from 5. 3 % to 2 % through changes in monetary policy, despite the increases in spreads arising from the financial crisis. and it has further adopted a policy of unlimited liquidity provision, in coordination with other central banks, as illustrated by the agreements for liquidity provision in currencies other than the euro. the other european economic authorities have also reacted forcefully to support the financial system, to safeguard its functioning and to stimulate the various economies. amid these global difficulties, cooperation and | 0.5 |
adequate pricing of externalities, and encouraging innovative, sustainable investment, for instance through subsidies. at the same time, governments have to manage social and economic transaction costs, as we all tend to be myopic. the lessons from behavioural economics also apply to the energy transition. indeed, striking the balance between the medium - to longer - term gains of the energy transition and short - term transition costs may be the most complicated task for governments, whose mandates are in most cases no longer than four or five years. 1 / 3 bis - central bankers'speeches but also the private sector and households have a role to play. it is not appropriate to only rely on the government. the difficult message is that all economic actors bear a responsibility and their actions are not substitutes ; that is, if we want an orderly transition to be successful. at de nederlandsche bank, we definitely also play a role. as a supervisor and regulator, as a central bank and as a leader by example. as a supervisor and regulator, we have a responsibility to make sure that financial institutions manage their climate - and nature - related risks. these risks have an impact on the soundness of financial institutions, which is something we watch over. and ignoring these risks is not compatible with sound risk management. in general, financial supervisors are intensifying their focus on climate - and environment - related risks. the ecb has put climate - and nature - related risk high on the agenda. banks under its supervision must comply with the supervisory expectations for good risk management by the end of this year. at dnb, we are on the same track for the banks, insurers and pension funds under our supervision. while there has been progress, we are still not where we need to be. as supervisors, we are doing what we can to nudge the sector in the right direction. for example, by publishing good practices, like the guides on managing climate and environmental risks from the ecb and dnb. but if these efforts prove insufficient, enforcement will come into view as a viable option. as a central bank, our objective is to maintain price stability and to safeguard financial stability. climate change and nature degradation have an impact on both and, hence, fall squarely within our mandate. also, as a central bank, we are an adviser to the government, as economic and financial policies impact monetary and financial stability. in that role we aim to contribute to stable long - term climate and environmental policies by providing economic analysis | the uncertainty surrounding the level of success of the β common framework β for debt restructuring, both initiatives represent an unquestionable improvement on the part of multilateral coordination in sovereign debt resolution. third, the main multilateral development banks ( such as the world bank, the european 2 / 4 bis central bankers'speeches investment bank and the african development bank, among others ) are also playing an important role in this crisis. throughout the pandemic, these institutions have deployed a series of emergency measures in line with their mandates and spheres of influence. for instance, their fresh financial support to the middle east and north africa ( mena ) region since the outset of the pandemic amounts to over usd 8 billion, adding to the usd 4. 3 billion of imf emergency financing and usd 7. 2 billion of imf financing provided through regular programmes. finally, the recent g7 agreement to back a new global minimum tax rate for multinational companies is a step in the right direction to address the tax challenges arising from globalisation and the increasing digitalisation of economies. undoubtedly, major steps have been taken in this crisis to strengthen international cooperation, but much ground has still to be covered. on this path, coordination between multilateral and regional institutions is also important, insofar as the latter may complement the support measures provided by international financial institutions. in this setting, the eu should play a leading role in seeking to attain reinforced and inclusive multilateralism, and an area of cooperation governed by international rules. the strengthening of the european project as a support for multilateralism let me conclude these remarks by focusing on the european policy response to the crisis and on the tasks still pending on the european policy and institutional agenda. on this occasion, we have seen a genuinely common european response, in which the ecb β s monetary policy has not been the only game in town. the creation of the ngeu fund stands out as a decisive tool to support the recovery of european economies at the current juncture. this fund incorporates elements of solidarity and allows us to strengthen the possibilities for countries to transform their economies in light of the challenges ahead. some of these elements, such as the issuance of large - scale european supra - national public debt to finance reforms and investments in the countries most affected by the pandemic, are unprecedented in the history of the eu. however, the ngeu fund is not β and therefore should not be seen as β the stabilisation mechanism that the euro zone needs | 0 |
deepak mohanty : statistics and the reserve bank of india remarks by mr deepak mohanty, executive director of the reserve bank of india, at the statistics day conference, mumbai, 30 august 2013. * * * governor dr. subbarao, prof. bimal roy, prof. richard smith, prof. b. l. s. prakasa rao, prof. subhashis ghoshal, deputy governor dr. patel, deputy governors, colleague executive directors, shri a. b. chakraborty, distinguished guests from the financial sector and academia, members of the press, colleagues from the department of statistics and information management ( dsim ) and friends. i extend a warm welcome to all of you to this 7th statistics day conference. since 2007, we in the reserve bank have been celebrating statistics day in the honour of prof. p. c. mahalanobis. professor mahalanobis was not only an outstanding statistician, but a great visionary. he is regarded as the father of the indian statistical system. while we honour the sterling contribution of prof. mahalnobis, this event has turned out to be an important occasion for focusing on further development of statistics in the reserve bank. prof. mahalanobis was the founder director of the indian statistical institute ( isi ). we are happy that two isi directors β prof. bimal roy and prof. b. l. s. prakasa rao β are here with us today. prof. mahalanobis studied and spent his early years in cambridge. we are delighted that prof. smith, a leading econometrician from cambridge is with us today. we also have with us prof. ghoshal from north carolina university who represents the new generation of statisticians. i once again welcome our guest speakers. the year 2013 has added significance for statistics as it has been declared as the international year of statistics. primary objectives of this worldwide event, supported by several organizations, are to increase public awareness of the power and impact of statistics on all aspects of society, to nurture statistics as a profession, especially among young people, and to promote creativity and development in the sciences of probability and statistics. in the reserve bank, we treat statistics as a public good. it is necessary not only to aid our decision making but also for empowerment of citizens. our statistics department is playing an important role by making available macro - financial statistics in the public domain, conducting forward looking surveys and generating forecasts | and cultural diversity. graduating from roytec sets you apart in your community. it says that you can make a difference in the world. be conscious that as a roytec graduate you have the potential to do something significant and important. you should be aware also that you have the opportunity to be leaders and innovators, and an obligation to help shape your community for the better. oft times, leadership is not what is commonly thought. when i say leaders, i don β t necessarily mean politicians or ceos, or church leaders or anything of the kind. the demands on leadership will be with you all your life as parent, supervisor in your office, member of the pta, neighbor or resident in your community. with leadership goes responsibility to those who you lead and to the broader community, be it your neighborhood, your village, your church, or your club. after all, these situations provide an opportunity for you as the leader, to give back. now i know that at times community involvement would be difficult, as you also have to juggle family and career but i encourage you to make the effort. i am sure that you will find it worthwhile. in addition to looking out for the less - fortunate your new status requires you to understand the real imperatives of being a quality citizen in our still - evolving democracy β and by that i mean one who is attuned to and has an opinion on the public issues that affect the society, and who is prepared to stand up and be counted, if and when the need arises. i notice that a significant proportion of the graduands are women and some of you will need to strike a balance between career objectives and family. it is a major challenge but the balance is worth struggling for since the breakdown of the family is at the centre of so many of our societal ills. let me conclude this speech by acknowledging that graduates almost always remember their graduation ( at least they have photographs of it ) but they almost never remember anything from their graduation address. i put the question to my kids and, as i expected, they remembered little or nothing. interestingly enough i remembered something from my graduation speech almost forty years ago and it was this β education makes us what we are β. that theme stuck with me not only because it sounded profound, but because my personal experience proved it to be true. i do believe that education has made me, as a person, as a professional and as a member of the community. and | 0 |
, the gradual opening of markets is the main cause of the problems. but that view is too short - sighted. the main causes are the misguided or at least risky policies pursued by the countries in question. essentially that also applies to the countries affected indirectly. their own internal weaknesses make them vulnerable. it is also true that the global financial markets, with their tendency towards short - termism, are sometimes a factor in making the magnitude of the potential reversal so great. if a country then loses the confidence of investors because of a political error, it is punished hard - sometimes too hard, at least for a time. ii the outbreak of the crisis in some asian countries poses some new questions because some of the key fundamentals were quite sound : in many cases the public fiscal balance was in surplus or at least was not in excessive deficit. unemployment was fairly limited. the monetary policy stance was mostly quite restrained, and inflation remained moderate for a long time. for quite a while current account deficits were financed by capital imports apparently unproblematically. some indicators even showed an exceptionally positive trend. in particular, the saving and investment ratios were comparatively high, and real growth in this region was stronger than elsewhere. until a short time ago, the title of such a symposium might well have been β the asian economic miracle β. on closer inspection, however, it can be seen that the economic successes of recent years already carried the seeds of the later crisis : massive short - term capital inflows, asset inflation in the equity and property markets, in some cases a misallocation of capital, currency appreciation in real terms, decreasing competitiveness and growing current account deficits. these symptoms also pointed to internal weaknesses and political mistakes : for example, an over - rigid pegging of the exchange rate to the dollar and inadequate efficiency of the domestic financial sector. certainly, there are good reasons for pegging an exchange rate to another currency. credible pegging to a stable anchor can help to reinforce internal discipline. and it can help to lower the risk premium demanded by investors. but there are other considerations which can become a danger if the exchange rate is pegged too rigidly : they can make it hard to pursue the objective of internal monetary stability. interest rate policy becomes a hostage to the exchange rate, for - given strong capital inflows - an interest rate rise often has an opposite impact on monetary expansion than the one intended. a persistent stability gap can then arise in comparison with the anchor | became the official key currency in 1944. it served national central banks as a benchmark currency, an intervention currency and a reserve currency alike. following the collapse of the bretton woods system, and given the domestic stability problems in the united states, the dollar forfeited that formal function. even so, it retained a leading role. as before, the united states remains the world β s leading industrial and trading nation. that is why dollars are so highly acceptable worldwide. moreover, the magnitude of the us financial market ensures a wide variety of investment options. the decontrol of exchange rates, the increasing freedom of capital movements and diverging stability records are the reason why other currencies, such as the deutsche mark, have been able to establish themselves alongside the dollar - - albeit on a far more modest scale. after all, currencies, too, compete to an increasing extent for the favour of the international transactor. besides economic significance, a dynamic economy and a sufficiently large economic area ( duly integrated in world trade ), it is primarily monetary conditions that must be met. an international key currency must be able to exhibit a successful stability record over a lengthy period. while the markets may forgive short - lived slips, long - term failures are penalised. the markets β memory often stretches back a surprisingly long way. they heed the faintest signs that a currency β s stability may be at risk. it is that which makes the credibility that the responsible monetary authority enjoys all the more important. it has transpired that such credibility increases with the degree of independence from government instructions. if a central bank has to serve two masters, namely monetary stability and the promotion of economic activity, it usually comes to grief in both areas. then its credibility is compromised for a long while. iii. the introduction of the euro marks a watershed, not only for the monetary situation in europe but also for the global monetary system. little more than a year before its planned introduction, the world β s financial markets are now wondering : will the new currency be strong or weak? can it become a serious alternative to the dollar as a reserve, investment and transaction currency? in europe, great economic and political hopes are being pinned on the euro. the old continent is to be strengthened as a global economic power, european integration is to be fostered. it is hoped that it will be possible to cope more effectively with the challenges posed by globalisation. moreover, many people are hoping that the euro will constitute | 0.5 |
. at present, long - term futures prices for natural gas are, on a btu - equivalent basis, notably less expensive than those for crude oil. clearly, limited substitution possibilities across fuels have resulted in persistent cost differentials, but those very differentials inspire the technologies that, over time, reduce such limitations. a clear example is gas - to - liquids ( gtl ) technology, which converts natural gas to high - quality naphtha and to diesel fuel. given the large - scale production facilities that are currently being contemplated ( and some that have already begun construction ), gtl is poised to become an increasingly important component of the world's energy supply. current projections of production however remain modest. gtl promises to add a good measure of flexibility in the way natural gas resources are utilized. in addition, given the concerns over the long - term adequacy of liquid production capacity from conventional oil reserves, gtl may provide an attractive, competitively priced, option for making use of stranded gas, which, for lack of access to transportation infrastructure, cannot be brought to market. * * * we are unable to judge with certainty how technological possibilities will play out in the future, but we can say with some assurance that developments in energy markets will remain central in determining the longer - run health of our nation's economy. the experience of the past fifty years - - and indeed much longer than that - - affirms that market forces play the key role in conserving scarce energy resources, directing those resources to their most highly valued uses. adequate productive capacity, of course, is driven also by nonmarket and policy considerations. to be sure, energy issues present policymakers and citizens with difficult decisions and tradeoffs to make outside the market process. but those concerns, one hopes, will be addressed in a manner that, to the greatest extent possible, does not distort or stifle the meaningful functioning of our markets. we must remember that the same price signals that are so critical for balancing energy supply and demand in the short run also signal profit opportunities for long - term supply expansion. moreover, they stimulate the research and development that will unlock new approaches to energy production and use that we can now only scarcely envision. | would not say anything else. this is the governing council β s position. p. m. since france voted β no β to the referendum on the constitutional treaty, europe seems to be totally paralysed. does that worry you? j. - c. t. europe has experienced and is experiencing a complex historical episode in a rapidly changing world. i remain very optimistic. i believe that the progress of europe, which is a colossal historical undertaking, has temporarily hit a difficult patch that probably in itself results from its truly phenomenal success. who could have predicted the fall of the soviet union, and that the whole of communist central and eastern europe would join western europe very quickly? i think that in europe we are in a maturing phase. as far as we are concerned, europe has not come to a standstill. rather, it is very dynamic. we work with the twelve countries of the euro area, and the other eight countries whose currencies are directly pegged to the euro by means of the european exchange rate mechanism. in order to prepare well for the success of the european union and enlargement, 27 nations are working together in the european system of central banks, including romania and bulgaria as observers. we are proud that we have given europe a credible currency and a historically unparalleled financial environment with medium and long - term interest rates at levels that hundreds of millions of europeans could only have dreamed of prior to the euro. p. m. you still have six years left of your mandate as president with a very hectic life. don't you sometimes wish that you could go fishing in your beloved city of saint - malo? j. - c. t. along with my colleagues on the executive board, the governing council, the entire ecb staff and the eurosystem, i am very privileged to take part in such an immense historical endeavour that is of great benefit to europe. it is inspiring. this justifies all of the hard work that we do. that said, i love going to saint - malo. for me, the rance estuary is one of the most beautiful places on earth. | 0 |
mary c nkosi : promoting the development and regulation of capital markets in malawi speech by mrs mary c nkosi, deputy governor of the reserve bank of malawi, at the official launch of african alliance, blantyre, 14 january 2009. * * * the chairman of malawi stock exchange ; board members of african alliance ; chief executive officer of african alliance malawi & officials from african alliance group ; distinguished guests ; ladies and gentlemen. it is an honour to be at the official launch of african alliance securities ltd. as you are all aware, the reserve bank of malawi is the regulatory and supervisory authority and is therefore charged with the responsibility of promoting the development and regulation of capital markets, amongst others. this is done through exercising entry control, on - going supervision, policy development, enhancing competition and market development, consumer education and protection, and exit administration. in this connection therefore, we are very pleased to be here to witness the birth of a new baby ( the media often refers to such new babies as β new kid on the block β ). for the benefit of the audience, african alliance malawi was licensed in september 2008. mr chairman, ladies and gentlemen, we have observed in the recent times the favourable macroeconomic condition in the country and this has been instrumental in spearheading the expansion of capital market operations. the financial market has experienced rapid growth of market intermediary businesses and public participation witnessed by oversubscriptions during initial public offerings ( ipo ). the bank has received a number of enquiries and applications geared towards carrying out brokerage, asset management and advisory services besides banking. the recent developments are an indication of potential and existing resources that need to be channelled from surplus units to deficit units and this is therefore an opportunity and also a challenge to all intermediary market players to facilitate the movement of these funds. mr chairman, ladies and gentlemen, on the supervisory side, the reserve bank shall continue to carry out its responsibilities to achieve its mission of ensuring the existence of a fair, safe, sound and stable non - bank financial services industry in malawi in line with international supervisory standards. critical in this regard and in order to protect investors, the bank shall only allow eligible market players to operate on the market. it is expected that the players will conduct themselves in line with expected professional standards and conduct. i want to assure you that the reserve bank will perform its work with professionalism, integrity, impartiality and in a friendly and cooperative manner without compromising its | externalities. the use of contingent capital can be explored once the details of this proposal are formulated. apart from the quantitative parameters, the institution β s business model and its legal structure should also dictate the quantum of higher capital requirement. less complex and less interconnected firms may have to be provided a different leeway. the β winding down plan β seems useful since it will force the board to understand group structures and raises the credibility of the threat. it is however premised on two basic assumptions : one, the entity has been transparent enough in terms of the information content in drawing up its own demise plan β the adverse selection issue and two, the regulatory authorities would actually be able to enforce these plans in times of crisis. in unexpected scenarios, as our experience has shown, the regulatory actions would largely be a function of contextual assessments and any readymade plans may be dysfunctional. it would however be interesting to see how this plan is actually operationalised. otc markets : there is committed effort globally to move all otc derivative transactions onto exchanges / electronic trading platforms which is a welcome move.. this is a more broadbrush approach but going forward, i am sure we will need to devise a more nuanced approach in this regard as there will be continued need for otc products i. e. customized to the needs of the real sector. furthermore, in regard to central counterparties, it is imperative to examine the incentive structures. to generate more income there is need for more volumes and that can come only from leverage. there is, therefore, need to closely regulate the risk management systems and mandate margin requirements in the form of high quality liquid assets. given the nature of their functions and their systemic importance, it is worthwhile to consider central counterparties as β public utility β not - for profit entities. it would also become imperative for such systemic entities to be brought under systemic oversight and be regulated by the systemic regulator. more than the above immediate measures, what is required is a debate on some of the fundamental issues. now that the centrality of banks in the economic system has been established, a much stricter view needs to be taken regarding the activities that banks can undertake with depositors β money. should large systemically critical banks be allowed to heavily leverage themselves with depositors β money? should the banks facilitate the highrisk high - return leverage game to benefit private investors at the cost of depositor funds? in that sense, i appreciate the arguments for separation | 0 |
as β risk on, risk off β behaviour β and while this facilitates external financing in periods of elevated risk appetite, it can also reduce domestic policy autonomy. in fact, in a world where more conventional monetary policies are in place, financial risk may be priced more accurately, resulting in proper market rewards for good policies see β are countries losing control of domestic financial conditions? β in the global financial stability report, published by the international monetary fund in april 2017. page 4 of 8 β an incentive for policymakers to implement prudent policies. a reduced role for cross - border capital flows, or a lower level of dependency, could also provide more protection for emerging markets in periods of a global crisis, as it would reduce the risk that advanced economies β fund managers and banks would withdraw their investments or loans in a rush. in fact, this might greatly reduce the risk of financial crises, as international financial exposure is managed in a more risk - conscious manner. at the same time, a lesser degree of financial globalisation could help to reduce global imbalances. sizeable cross - border reallocation of capital allowed the persistence of large current account deficits or surpluses in some countries which posed threats to global financial stability. in some countries, capital inflows have exceeded financing needs, and are either being recycled into excessive domestic credit growth or forcing authorities to accumulate sizeable and costly foreign exchange reserves. in other countries, large deficits fuelled strong increases in external liabilities, endangering macroeconomic stability and putting sovereign ratings at risk. 5. role of international organisations and regional financial cooperation it is important, however, to recognise that the optimal economic development of emerging countries is still likely to require access to international financial markets. however, these countries may increasingly have to seek such opportunities within the emerging region itself. with regard to financial coordination, there are two issues that have a strong bearing on vulnerabilities in the international financial architecture that require global action from international organisations such as the international monetary fund ( imf ) and forums such as the g20. the first issue relates to the management of capital flows. the gradual liberalisation of capital flows in countries with large external surpluses provides additional scope for the foreign financing of emerging economies. however, excessively volatile capital flows and the related spillover effects remain key concerns for many emerging market economies. in instances where these are accompanied by increased credit extension and posing a threat of increased financial stability risk, a page 5 of 8 sharp focus on | finance ministers and central bank governors ( afmgm ) have unanimously agreed that financial inclusion should be a policy priority for asean. the working committee on financial inclusion, or wc - finc established in april 2016 to carry this mandate forward, has in turn, laid out clear goals to support and accelerate regional initiatives to elevate the level of financial inclusion in asean. wc - finc aims to reduce the average financial exclusion level in asean to 30 % by 2025, and increase the level of infrastructure readiness in asean to 85 % ( currently at 70 % ), based on agreed measures of financial inclusion outcomes and preconditions. particular emphasis is given to capacity building and peer learning. an especially interesting part of this journey has been asean β s incredible diversity which provides a rich and broad canvass for drawing lessons from every country on specific challenges faced and measures pursued to increase financial inclusion. for some of us, the geographic barriers to financial inclusion are the most urgent, for 1 / 3 bis central bankers'speeches others, cost or knowledge and trust are more significant barriers. in different ways, we all have something to learn from each other β s experience on strategies that worked or did not work so well. this is why we are here today. this forum on financial inclusion was organised in response to technical assistance requests and learning needs of asean countries based on a survey conducted by wc - finc last year. there was particular interest in malaysia β s experience and so we volunteered to host this first forum, but clearly, we are also eager to learn from others. the forum focuses on 5 key areas which represent core pillars of a holistic financial inclusion system. the first is the development of a national financial inclusion strategy and monitoring mechanism which are crucial to ensure that strategies are well targeted, coordinated and executed. the second is strengthening of institutions that support the implementation of financial inclusion strategies such as development financial institutions and credit guarantee corporations. third is the importance of having a national focus on sme financing and development as a key enabler for inclusive growth. the fourth area focuses on the role of digital financial services, including fintech and big data, in elevating financial inclusion. and lastly, the forum will turn to the importance of financial education and consumer protection in increasing the responsible take up of financial services and building trust. beyond these practical areas, there is also much to be gained from engaging in more strategic discussions on how financial integration itself can impact the inclusion agenda. more specifically, if we can better | 0 |
fed watcher until september 17, 2018. it has also been the inference of some private - sector forecasters as well as some other fomc participants. for example, see janet l. yellen ( 2017 ), β the economic outlook and the conduct of monetary policy, β speech delivered at the stanford institute for economic policy research, stanford university, stanford, calif., january 19, https : / / www. federalreserve. gov / newsevents / speech / yellen20170119a. htm. - 8stressed, r * and u * are uncertain, and i believe we should continue to update our estimates of them as new data arrive. this process of learning about r * and u * as new data arrive supports the case for gradual policy normalization, as it will allow the fed to accumulate more information from the data about the ultimate destination for the policy rate and the unemployment rate at a time when inflation is close to our 2 percent objective. | choose to reveal such information in their speeches and other public communications. a natural next step would be to include a matrix of output, inflation, and unemployment, and the associated policy path assumptions that each policymaker submitted. this would make the information in the sep easier to interpret and give a better sense of the linkage between changes in economic conditions and policy. second, i believe the federal reserve should do a more comprehensive monetary policy report four times a year. currently, the chairman testifies before congress twice a year β in bis central bankers β speeches fact, he is doing so today β and that testimony is accompanied by a written report. in addition, the chairman holds press briefings four times a year to summarize the sep. i think there is an opportunity to combine these efforts in a more comprehensive report on monetary policy. most central banks that have adopted an inflation target have also sought to improve communication and transparency through the publication of a regular policy report. in the u. k., for example, the bank of england issues a quarterly inflation report. other countries produce a monetary policy report that discusses the central bank β s forecasts and the longerterm context of policy. these reports offer an opportunity to reinforce the underlying framework the central bank has adopted for the conduct of policy. i think the fed should consider producing a similar report to elaborate and reinforce its policy framework and how it relates to economic conditions. these reports will help improve the public β s understanding of policy, which will help make policy more effective and the central bank more accountable. third, i believe the fomc should adopt clearer guidelines on how policy evolves with economic conditions. the better the public and the markets understand how policy is likely to be adjusted as the economy changes, the more predictable policy becomes, which promotes price stability and better economic outcomes. the history of u. s. monetary policy is filled with stops and starts and changes in direction, yet the fed has communicated little about what drives those decisions. indeed, historically, central bankers have tended not to reveal such information, since they preferred discretionary policy over systematic policy. of course, policymakers do not know with any degree of certainty how economic conditions will evolve. so they cannot and should not say with any certainty what policy will be in the future. but policymakers can provide information about the factors that will influence their policy decisions. some call this a policy rule. milton friedman advocated a rule in the form of a k - percent growth rate of the money | 0 |
of licensing and enforcement before moving to the bank of zambia. to say something about my academic qualifications, i graduated with a bachelor of laws degree from university of zambia, thereafter a master of laws degree from harvard where i was a fulbright scholar and a phd from university of london, centre for commercial law studies, queen mary and westfield college. allow me to mention that all my studies were done on scholarship. bis central bankers β speeches apart from my work, i am also involved in service to the public and to the church through sitting on various bodies. i was not appointed to this position my chance ; it took effort and hard work to be noticed. i believed in myself and knew i had to put in the best to achieve anything i wanted to achieve. so what message do i carry for you this afternoon? my theme is that you can do it! to you the students, i want to encourage you to see yourselves as leaders. you are the future of this nation. you are part of the cream that need to push this country forward. i would like you to realise that academic and professional qualifications are an integral part of settings yourselves up for one β s life. by being here, you are establishing a path for your successful career whether as an employee or an entrepreneur. the knowledge that you are gaining is assisting in developing and enhancing your ability to think and perceive as well as manage the various situations that life offers. the outcome of your academic development will obviously have a positive impact on your family, society, culture and country at large. make sure you take full advantage of this opportunity. it sets the stage for the rest of your future. if you graduate from here with poor grades will mean you have limited your access to top notch institutions, should you, for example, wish to get an advanced qualification. you are limited even to apply for scholarships. and in situations of competition, the best will be selected. zcas is one of the renowned institutions in zambia. one thing you must realise is that not everyone has the opportunity to be enrolled in an institution of higher learning to obtain an academic or professional qualification. therefore, you must make the best of this opportunity to be here at zcas and indeed, be thankful to god. many of your friends are not able to have this opportunity. i am also aware that for quite a good number, it is a great sacrifice by your parents to send you here. you should ensure that this investment pays off by putting in your best. discipline for many of | . ladies and gentlemen, in line with β goal 8 β of the millennium development goals on β environmental sustainability β, we are all expected to work together and reverse the losses of environmental resources. i am glad to report that the financial sector has taken the bold step and has become one of, if not the first, to contribute positively towards achieving this goal. in this regard i would like to call upon other corporate entities and business houses in lusaka and other cities around the country to emulate the efforts of the financial sector and help keep zambia a beautiful, clean and healthy place to live in. i must hasten to mention here that, by undertaking such initiatives, we are in no way trying to take over the responsibility of the local authorities but merely supplementing their efforts of keeping the country clean and healthy. hon minister, allow me to make an earnest appeal to the local authorities through β his worship the mayor β to assist in the maintenance of the islands by providing security to minimize the rampant vandalism, theft and destruction of plants and other essentials that occur on a daily basis. we also make a humble request to the lusaka city council to consider working on the water reticulation system, as this is one area posing a great challenge in the maintenance of the islands. furthermore, there are still a number of places, which require urgent attention in the city. your worship, we have observed that a number of incomplete buildings have been abandoned posing a danger to the lives of many while others remain without a colour wash for years giving an unattractive sight to our beloved capital city. we would like to request your good office, β your worship β to issue mandatory directives to all business houses in the country to complete construction sites within a stipulated period and to ensure that all buildings are properly maintained and where necessary repainted on a regular basis. in conclusion, ladies and gentlemen, i wish to commend the bankers association of zambia and in particular the project committee for the effective and efficient manner in which this initiative has been implemented thus far. my hope is that the initiative will not only be confined to cairo road but to all areas of the country. finally, i would like to urge all of us present here today to extend this initiative to our homes. let us keep our homes, communities and the country clean as cleanliness is next to godliness. i thank you. | 0.5 |
, and we have lived in palo alto, california ; princeton, new jersey ; and now washington. we have two children, a son and a daughter, now in graduate school and college, respectively. my wife is a teacher and is meeting her classes today in a public charter high school in washington. although the idea of leaving dillon to attend college was exciting for me, i realize now that i learned a lot from living here for seventeen years. i learned, among many other lessons, a few things about work. i saw the long hours and persistent effort my parents put in to make their independent small business successful. after i graduated from high school i spent the summer as a construction worker helping to build dillon β s saint eugene hospital, and during the summers of my college years, i waited tables six days a week at the south of the border. i took two lessons from those experiences : first, in small towns like dillon and in communities all across the united states, people work very hard every day to support themselves and their families. i remember that, on the first day i came home from the construction site that summer, i was too tired to eat and i fell asleep in my chair. the second thing i learned in dillon is that americans are economically ambitious ; they seek opportunity and advancement. i remember the fellow construction worker who wanted to become foreman someday and a waitress who was saving to go to college. i was impressed by these experiences, and i think they were an important reason i went into economics, which a great economist once called the study of people in the ordinary business of life. now i am an economic policy maker, and i sit in a nice office in washington looking at reports and tables of data and following the fluctuations of the financial markets. however, i try not to forget what underlies all those data : millions of americans working hard, trying to better themselves economically, struggling to manage their family finances, and worrying about the price of gas and college tuition. i take my work extremely seriously because i know that, if my colleagues at the federal reserve and i do our jobs right, we will help our economy prosper and give more people the economic opportunities they seek. let me thank you all again for inviting me back to dillon and for sharing this morning with me. | wealth among the wealthiest white families than for other races and ethnicities. - 9that said, the benefits of a lengthy recovery can only go so far, as the research points to some barriers to labor market outcomes for particular groups that appear to be structural. after controlling for sectoral and educational differences, the research suggests that these factors include discrimination as well as differences in access to quality education and informal social networks that may be an important source of information and support regarding employment opportunities. 13 federal reserve work on labor market disparities while the policy tools available to the federal reserve are not well suited to addressing the barriers that contribute to persistent disparities in labor market outcomes, understanding these barriers and efforts to address them is vital in assessing maximum employment as well as potential growth. the federal reserve is deeply engaged in understanding disparities through our data collection, research collaboration, and community development work. one way the federal reserve seeks to obtain a clearer picture is by collecting data ourselves. for instance, some of the data i have cited today come from the federal reserve β s triennial survey of consumer finances, which provides detailed information on income and wealth holdings by demographic groups. the survey of household economics and decisionmaking provides a portrait of household finances, employment, housing, and debt ; the survey of young workers provides insights into younger adults β employment experiences soon after entering the labor force ; and the enterprising and informal work activities survey provides information about income for example, see fryer ( 2011 ) and ritter and taylor ( 2011 ). - 10 generating activities that are often outside the scope of other employment and income surveys. 14 each recent edition of the semiannual monetary policy report ( mpr ) has focused on some aspect of the comparative economic experience of different racial and ethnic groups. in addition, as indicated in the minutes published after each meeting of the federal open market committee ( fomc ), federal reserve staff regularly report on the differential labor experiences of different racial and ethnic groups as background for the fomc β s deliberations on monetary policy. across the federal reserve system, a variety of initiatives are aimed at understanding economic disparities and how to foster more - inclusive growth. the opportunity and inclusive growth institute at the federal reserve bank of minneapolis brings together researchers from a variety of fields to analyze barriers to economic opportunity and advancement. the economic growth and mobility project at the federal reserve bank of philadelphia aims to bring together researchers with community stakeholders to focus on differences in poverty and economic mobility across | 0.5 |
lean against economic downswings and smoothen economic volatility. third, reserve management in an evolving economic and financial environment will require investment in specific skillsets, a strong governance framework, welldefined risk appetite, up - to - date it systems, and ongoing scrutiny of new investment opportunities. continuous capacity building is key to dispense the requisite knowledge and skills to our central banking staff. central banks managed to steer their way out of those stormy waters and are still doing so. they had no choice than to innovate by adjusting their investment guidelines and principles, expanding their eligible currencies and asset classes. it is as important to acknowledge that there should be clear understanding of what central banks can and cannot do, as well as an appreciation of the possible conflicts between the different objectives. we, on the african continent, need to adapt ourselves to new trends and seize opportunities to resolutely face the future. it is imperative for our reserve managers to be more dynamic to respond quickly to new market conditions. i strongly believe that there is a lot we can collaborate on to make the continent more attractive to foreign capital and international trade in order to grow our foreign assets. this will assist countries safeguard macroeconomic stability and foster sustained economic growth. ladies and gentlemen, i thank you for your attention. 4 / 4 bis - central bankers'speeches | yandraduth googoolye : the need for banking and finance to evolve through technology and innovation speech by mr yandraduth googoolye, governor of the bank of mauritius, on the occasion of the celebration of the centenary of the presence of barclays in mauritius, port louis, 15 november 2019. * * * the chairman and board members of barclays bank mauritius limited mr ravin dajee, managing director distinguished guests ladies and gentlemen good evening i wish to thank barclays mauritius, which is now part of absa, for inviting me on this auspicious occasion which is the celebration of the hundred years of presence of barclays in mauritius. soon to be renamed absa, barclays bank mauritius limited has itself been through a series of changes of name such as barclays dominion, colonial & overseas, barclays bank international, etc. this event underlines the rich history of our banking industry. barclays is the second oldest bank in the country, though mauritius has been an international trade and financial centre as far back as the 17th century. if you want to know more about our financial history, there is very interesting book entitled β from piastre to polymer β which was issued in 2018 in the context of the golden jubilee of the bank of mauritius. some of the banknotes and coins used in those days are in our currency museum, which i invite you to visit. ladies and gentlemen, history shows how players succeed when they know how to adapt to evolution and when they respond adequately to the needs of customers and clients. institutions also thrive in a competitive environment when they do not fear to embrace change and when they come forward with innovative products and services. barclays bank has an enviable track record in mauritius, which goes much beyond the anecdotal dimension. it is a bank that can pride itself of having narrowly missed the first world war, of having gone through the second world war, and sailed through economic crises. barclays is now fighting on all fronts across the global banking sector. ladies and gentlemen, over and above being the owner of the building with the first lift in mauritius, barclays has a rich history filled with many firsts. i would like to highlight some milestones : first foreign bank to start operations in mauritius that is still going strong β¦ first bank to employ ladies in mauritius β¦ with the ratio of female employees currently standing at 56 per cent first bank to employ people with disabilities β¦ first bank to obtain an offshore banking licence β¦ | 0.5 |
has been witnessed in fdi which has been gaining importance in our foreign economic relations. by now, the accumulated fdi flowed into china has reached over us $ 560 billion, a significant part of which was denominated in the currencies of the originating economies. the investment returns in the form of dividends will need to be exchanged into relevant foreign currency before being repatriated. therefore the factor of fdi has to be considered in the selection of the basket currencies. - current transfer items under the current account should also be considered though current transfers are not as important proportionally as other items in the current account, the currency structure of these transfers still needs to be considered in the determination of the weights assigned to the currencies in the basket. in sum, the reform of rmb exchange rate regime to allow rmb exchange rate float with reference to a basket of currencies is in line with the needs of diversifying foreign economic and trade relations as well as the development of the international economic and financial system. referring to a basket of currencies is not equal to pegging to such a basket. pegging means mechanically adjusting the exchange rate of rmb against the us dollar according to the exchange rate movements of the currencies in the basket in an attempt to keep the nominal effective exchange rate unchanged. quite differently, what we are having now is a managed floating exchange rate regime based on market demand and supply with reference to a basket of currencies. in comparison with an exchange rate regime of pegging to the us dollar solely, it can better reflect the competitiveness of rmb against major currencies, better absorb the impact generated by an unstable us dollar and moderate the fluctuations of rmb exchange rates at the multilateral level, safeguard the overall stability of china β s foreign economic and trade environment and consequently promote the basic equilibrium of balance of payments as well as the sustained, coordinated and healthy growth of the chinese economy. thank you very much. | money market rates, it is important that money markets are not fragmented. last time i addressed this workshop, which was in 2013, the backdrop provided by market conditions was quite different from what it is now. at that time, we observed elevated fragmentation in money markets. this related in part to sovereign risks which were prevalent at that time. since the sovereign debt crisis, the overall levels of fragmentation have receded sharply. the dispersion of risk - adjusted borrowing rates across countries is now relatively low. of course, rate - based indicators do not give direct evidence of the degree to which trading is taking place across borders. but an assessment of fragmentation based on trading quantities would be anyway rather elusive. the high level of aggregate excess liquidity has significantly curtailed the need for trading liquidity. the fact that money market rates, adjusted for credit risks, have largely converged speaks in 2 / 4 bis central bankers'speeches favour of a much reduced level of fragmentation and a more homogenous degree of access to liquidity across the euro area. this is also supported by the fact that the interest rates observed across countries are more correlated with aggregate excess liquidity levels rather than countryspecific levels. unsecured vs. secured segments second, we have observed a sustained shift of money market activity from the unsecured to the secured segment. activity in the unsecured segment has declined significantly over time, in the first place due to the heightened counterparty risk in the wake of the crisis. activity in the unsecured market has stabilised but remains subdued. this is linked to the high level of excess liquidity and reduced short - term funding needs for banks, as well as, to some extent, regulatory changes affecting banks β liquidity management. the ecb has never singled out one specific short - term interest rate as its operational target, but it is clear that the eonia, an unsecured money market rate, has provided an important point of reference to practitioners. the observed shift of activity from the unsecured to the secured market raises a number of important questions. for instance : do unsecured rates still have the same information content as before the crisis? is the arbitrage between secured and unsecured rates working efficiently? and, should the central bank focus more on steering secured rather than unsecured rates? in this regard it is also relevant that we have seen some divergence between secured and unsecured rates, which also relates to some extent to | 0 |
. the financial system is able mobilize broader based savings and channel such funds to productive activities. these can contribute not only to financial resiliency, and stability but also to inclusive growth. there is a growing body of literature on the benefits of financial inclusion. it is therefore important that policy makers and regulators pay serious attention to financial inclusion side by side our traditional objective of maintaining financial stability. a stable financial system will gain more meaning if it serves the needs of the majority, especially the three quarters of the world β s poor that have been unserved too long. thank you very much and good morning. financial inclusion efforts of the group, icici website. bis central bankers β speeches | revenue, primarily from fees for financial services such as transactions and cash out, and an additional $ 3 billion annually in indirect revenue, including reduced churn and higher average revenues per user for traditional voice and short message service ( sms ). in 2012, gsm association reported over 200 mobile money deployments globally in 83 countries. these solutions can only flourish within an enabling policy and regulatory environment that allows innovation and new ideas to thrive rather than stifle them. there is a need for policy makers and regulators to fully understand the new business models to be able to provide the appropriate and proportionate guidance. world bank, 2012 note : adult population is at 4. 7 billion. initial public offering of compartamos mexico in 2007 and sks india in 2010. commercialization of microfinance : philippines, asian development bank, 2003. covering 147 countries conducted by the gsm association ( gsma ) and the consultative group to assist the poor ( cgap ). bis central bankers β speeches this approach has characterized the way the bangko sentral ng pilipinas crafted our policies on microfinance and more recently on electronic money and mobile financial services. in microfinance, our approach is to mainstream its practice in the banking system. integral to this approach is the safety and soundness of the bank which we believe will allow it to viably innovate and serve new markets. with this, the application of prudential standards is not compromised but instead tailor fitted to better address the risks in the given activity. in our mobile financial services framework, we developed an electronic money ecosystem. we clearly differentiated e - money from a deposit which allowed a proportionate approach toward electronic money issuers. these efforts paved the way for an efficient retail payment system upon which various use - cases can be developed. examples include electronic payment of the government conditional cash transfers ( g2p ) and the electronic payment of taxes to the government ( p2g ). there remains vast potential for other functionalities. indeed, progress has been made in financial inclusion. the challenge now is to continue to take the agenda forward by leveraging on strategic partnerships and linkages : 1 ) linkages in - country which are important to ensure a coordinated approach. alignment of the policies and activities of relevant agencies and institutions will be necessary to optimize linkages and reduce duplications. 2 ) partnerships across countries that enable sharing of experiences and the ability to leapfrog in developing policy solutions. peer learning platforms | 1 |
ardian fullani : how the financial crisis has impacted central bank cooperation and eu economic, financial and regulatory developments speech by mr ardian fullani, governor of the bank of albania, at the high - level conference β on international central bank cooperation before, during and after the crisis β, hosted by the european central bank, frankfurt am main, 9 december 2013. * * * dear participants, it is an honor for me to participate in this important conference and i want to thank the organizers for inviting me. in my speech i will focus on how the recent financial crisis has changed the central bank work with respect to the adoption of macro - prudential policy and its relationship with monetary policy. then i will share some thoughts on the experience of see countries during the crisis, and highlight some of the challenges they face given the recent economic, financial and regulatory developments in the eu. the crisis we are going through, being so profound and lasting, will leave its mark on economics in general, and central banking in particular. up until the great recession, monetary policy was living in a world that we may call β the inflation targeting era β. in many ways inflation targeting made the central bank β s job relatively simple, as long as it followed the policy correctly. the central bank, seen by the public as an independent institution, had to credibly commit to an explicit inflation target, in order to anchor mid - term inflation expectations. self - fulfilling expectations from economic agents and price setters would, in turn, help deliver the objectives of monetary policy. economists believed that by stabilizing consumer prices, financial assets would also behave in a stable and predictable way. the crisis painfully reminds us that behavior in financial markets is not always rational and lack of confidence in the markets can spiral out of control, sending shockwaves throughout the economy. escalating asset prices and their sudden burst affected significantly the behavior and balance sheets of the economic agents and challenged the stability of the financial system. in this respect, the concept of financial stability was seen as a byproduct of monetary stability. micro - prudential supervision was focusing on the soundness of individual financial institutions, with the belief that this was sufficient to ensure aggregate stability of the financial system. again, the recent financial crisis made it clear that micro - prudential supervision was insufficient to detect and address buildup of risks in the entire financial system due to externalities, herd behaviors, common exposures and pro - cyclicality in financial | low carbon economy ; third, the completion of the financial union ; and fourth, institutional reforms in the governance of the economic pillar of the economic and monetary union. technological progress, product and process innovations are key drivers to long - term growth as recalled by professor christopher pissarides in his presentation at the sintra ecb forum on central banking, 6 who stated that europe as a whole was not doing very well in this field, although there were exceptions. ibid. let us note that the current accommodative monetary policy and its effectiveness should not be used as an excuse to delay necessary structural reforms. β structural perspectives on european employment : the role of innovation and growth β, sir christopher pissarides, professor, london school of economics and university of cyprus, paper presented at the ecb forum on central banking, sintra, 22 may 2015. bis central bankers β speeches this points to the need to improve the ecosystem of innovation throughout the different stages, from basic research to successful market applications. there is still a too broad and deep death valley along this process. second, the transition to a low carbon and more resilient economy represents another key challenge in this respect. this is a global problem. europe is, however, a key player in this field, as the forthcoming united nations climate change conference in paris demonstrates. climate preservation is not only a necessity but also, as continuously stressed for example by nicholas stern, 7 an opportunity for the enhancement of the co - evolution of growth and structural change. third, the financial union has also a strong potential to support future growth. the banking union has to be completed and the capital markets union has to be launched successfully. you will discuss that in detail over the next days. allow me only to touch on one specific element, which by the way was considered important enough by β the economist β for a cover story some months ago, with the title β the great distortion β a dangerous flaw at the heart of the world economy β, 8 namely the difference in taxation between debt and equity. this point has also briefly been touched upon in the comprehensive eurosystem contribution to the commission β s green paper on building a capital markets union. let me quote part of the relevant paragraph : β initiatives in taxation should aim to reduce the preferential treatment of debt financing as opposed to equity financing β¦ this can facilitate a greater reliance by firms on equity and have a positive impact on their access to other forms of finance. it could also be important to re | 0 |
the deterioration in the functioning of the u. s. and european markets for securitized products has remained significant and strains in money markets have persisted. moreover, financial institutions have increasingly been tightening their lending standards. against this background, the global economy β including the u. s. economy, which has been decelerating even more clearly β has continued to be exposed to downside risk. at the same time, the risk of inflation has been increasing globally, as prices of crude oil and other international commodities have been rising substantially. the bank considers it necessary to continue to carefully monitor developments in overseas economies and global financial markets as well as the effects of the rise in materials prices. regarding prices, the three - month rate of change in the domestic corporate goods price index has been positive, mainly due to the rise in international commodity prices. the yearon - year rate of increase in the cpi ( excluding fresh food ) has been rising since around the end of last year, and it has been around 1 percent lately. as for the outlook, it is projected to continue to be positive due to the rise in prices of petroleum products and food products in a situation where overall supply and demand in the economy are more or less balanced. given that the current increase in the cpi is the highest in 15 years β if we disregard fiscal 1997, when retail prices rose due to the rise in the consumption tax β and that the prices of daily necessities are rising markedly, close attention should be paid to the effects of price developments on consumers'inflation expectations and the price - setting behavior of firms. ii. conduct of monetary policy and disposal of stocks purchased from financial institutions as i have explained, the outlook for economic activity and prices is highly uncertain at present. in this situation, the bank considers that it is not appropriate to predetermine the direction of future monetary policy. based on a thorough examination of the economic and price situation as well as the market situation both at home and abroad, the bank will carefully assess the future outlook for economic activity and prices, closely considering the likelihood of its projections as well as relevant risk factors, and will implement its policies in a flexible manner. the bank has been appropriately providing liquidity through money market operations. as a result, despite the continued disruptions in global financial markets, japan's money market has been stable, unlike its u. s. and european counterparts. the bank will continue to carefully monitor market developments and to ensure, via appropriate money market operations, the | to 12 percent, well above regulatory minimums. on the liquidity side, the sense of abundant liquidity persistently remained, as was evidenced by very low libor - ois spreads and the narrow bid - ask spreads for complex securitized products. however, since then, the landscape has changed in a way which was almost unthinkable. of the twenty banks, more than half have received injections of capital from their government. many banks have also faced liquidity difficulties, as raising funds in money markets became restricted reflecting the sharp drop in market liquidity. some even have experienced outflows of deposits. why did both market participants and authorities let their guard down against impending risks? why couldn β t they recognize the problems beneath the surface and take mitigating actions? let me raise three facets which i believe are relevant. first, the careful assessment of both funding and market liquidity is essential in today β s financial markets. this has two dimensions. one aspect is the interaction between liquidity and capital. for example, with regard to complex products such as certain securitized instruments, pricing, and as a result, necessary levels of capital to cover risks, are dependent on both market and funding liquidity. due to their limited market size, when market liquidity drops, prices fall rapidly, putting pressure on banks β earnings and capital levels. the shortage of capital then constrains the market - making activity of key dealers, further reducing market liquidity. required capital levels are strongly dependent on the assessment of market liquidity risk, not just the underlying credit risks. there is also the risk emerging from crowded trades, where market participants accumulate similar positions in benign market conditions. when market conditions deteriorate, everyone rushes to close their positions, exacerbating market strains further, hence the fall in prices. the second dimension is the risk of liquidity mismatches when short - term funds cover long - term assets. although this is fundamental risk of the banking business, it seems to have been underestimated. before the crisis, market participants assumed that cp and interbank markets would always function and would provide access to sufficient liquidity. this led to the build - up of large liquidity mismatches, for example in sivs. they also believed in the valuation of aaa - rated assets and assumed little risk was involved. they expected that, when cash liquidity was needed, they could promptly sell such assets regardless of the complexity or the size | 0.5 |
your attention. chart 1 : average contribution to real per capita gdp growth growth rates, in % source : ecb computation on world bank, wdi database. chart 2 : trends in youth population percentage of population aged 14 years and below source : world bank. chart 3 : trends in working age population percentage of population aged between 15 and 64 source : world bank. chart 4 : developments in r & d expenditure public expenditure on r & d as % of gdp source : world bank. note : for italy and brazil the latest available data point is 2006. chart 5 : human capital and economic growth sources : barro - lee ( 2010 ) ; world bank, wdi database. chart 6 : growing wage premium to high skilled labour and wage differential in the us sources : goldin and katz ( 2007 ). note : β college graduate wage premium β is based on the college / high school wage differential ( in logs ). β high school graduate wage premium β is based on the high school / eighth grade wage differential ( in logs ). chart 7 : relative earnings from employment, by level of educational attainment for 25 - 64 year - olds, 2007 source : oecd. note : upper secondary and post - secondary non - tertiary education = 100. data for italy refer to 2006 ( latest available year ) chart 8 : level of education source : oecd. chart 9 : public spending on education total public spending on education as % of government expenditure source : world bank. chart 10 : full - time graduate students in science and engineering in the us ( i ) source : national science foundation. chart 11 : full - time graduate students in science and engineering in the us ( ii ) % of total graduates source : national science foundation. chart 12 : countries of origin of non - us citizens earning phds at us colleges and universities % of total doctorates awarded source : national opinion research center at the university of chicago. | non - financial corporations are, by and large, based on shorter - duration interest rates, even in countries in which the rate fixation period for bank credit is generally longer. as regards setting mortgage interest rates, the picture is more dispersed, with short and medium 3 / 5 bis central bankers'speeches maturities being the relevant benchmark in some euro area countries, and long - term interest rates in others. from this perspective, the complementary nature of our instruments β with forward guidance anchoring the short - to - medium term segment of the curve, and the asset purchase programme acting on the long - term segment β has given our monetary policy strategy an extra edge over the last few years. it has made it more targeted and thus more impactful. * * * as the economic prospects brighten, higher expected returns on business investment will make borrowing conditions increasingly attractive. this, in and of itself, will reinforce accommodation and make sure that inflation sustainably converges towards our objective of below, but close to, 2 % over the medium term. but our mission is not yet accomplished. we need patience and persistence. we need to be patient, because inflation convergence needs more time to show through convincingly in the data. the euro area β s economic environment is improving, and the fat negative tail to inflation expectations, which was so visible at the start of our asset purchase programme, has virtually disappeared ( see chart 4 ). this strengthens our confidence that headline inflation will gradually move towards the governing council β s objective. but measured inflation remains exceedingly volatile and metrics of underlying price pressures continue to be subdued. the entire distribution of inflation expectations still needs to shift a fair distance to the right. 4 / 5 bis central bankers'speeches and we need to be persistent, because the baseline scenario for future inflation remains crucially contingent on very easy financing conditions which, to a large extent, depend on the current accommodative monetary policy stance. 5 / 5 bis central bankers'speeches | 0.5 |
amando m tetangco, jr : rbap β sustaining reforms for an economically vibrant countryside speech by mr amando m tetangco, jr, governor of the central bank of the philippines ( bangko sentral ng pilipinas ), at the inaugural dinner for the newly elected rbap officers and board of directors, manila, 14 july 2009. * * * the leadership of the rural bankers association of the philippines ( rbap ) led by president omar andaya and immediate past president mitch gomez, the officers and members of rbap, good evening. i am delighted to be part of this inaugural dinner celebrating your new set officers at rbap. to me, this seamless transition in the association β s leadership is a strong indication that the rural banking sector will continue the many significant initiatives that have characterized the past year. united, your initiatives under rbap have kept the rural banking sector resilient in the midst of a particularly challenging environment. let us therefore give the rbap leadership a well - deserved round of applause! indeed, the past year was full of challenges, for the economy in general and for the rural banking sector in particular. and yet, latest available figures indicate that the rural banking sector continues to perform relatively well. it appears that our rural bankers have turned this period of challenges as an opportunity to further strengthen your institutions. thus, even with the series of bank closures affiliated with one group, total capitalization of the rural banking sector actually improved further from p24. 8 billion in december 2008 to p25. 4 billion as of march 2009. less measurable, but no less important, is rbap β s success in maintaining public confidence in rural banks in the face of successive bank closures. through vigilance and proactive measures, rbap ensured that your clients understood that these high profile bank closures basically involved a single group that is not representative of the management of other rural banks. i also wish to acknowledge rbap β s pioneering work on inclusive banking through technological and product innovations, as well as your continuing efforts to be more responsive and efficient in serving your clients. in particular, the rural banking sector continues to expand its operating network to reach more clients. what we have today, therefore, is a more solid and more inclusive rural banking industry. and so, once again, ladies and gentlemen, let us celebrate our rural banking sector with another round of applause! however there is much more that we have to accomplish and we are looking at rb | bank's objectives and policy strategies reduces economic and financial uncertainty and thereby allows businesses and households to make more - informed decisions. second, if practitioners in financial markets gain a better understanding of how policy is likely to respond to incoming information, asset prices and bond yields will tend to respond to economic data in ways that further the central bank's policy objectives. for example, if market participants understand that arriving information about the economy increases the likelihood of certain policy actions, then market interest rates will tend to move in a way that reinforces the expected actions, effectively supporting the goals of the central bank. third, clarity about the central bank's policy objectives and strategy may help anchor the public's long - term inflation expectations, which can substantially improve the efficacy of policy and the overall functioning of the economy. finally, open discussion of the central bank's analyses and forecasts invites valuable input and feedback from the public. the benefits of an open and accountable policymaking process have spurred the federal reserve, along with other major central banks, to take a number of actions over the years to increase its transparency. appropriately, given the unique position of the federal reserve and the sensitivity of financial markets to its communications, these steps have generally been incremental in nature ; but, taken together, they have substantially increased the ability of the american public to understand and to anticipate monetary policy decisions. the congress has also long been aware of the importance of federal reserve transparency and accountability ; in particular, a series of resolutions and laws passed in the 1970s set clear policy objectives for the federal reserve and required it to provide regular reports and testimony to the congress. 1 since 1975, the federal reserve has presented testimony twice each year to the congress on the conduct of monetary policy. these semiannual presentations have become an important vehicle for the u. s. central bank to make known its views on the outlook and on the appropriate stance of policy. other notable milestones in the federal reserve's progress toward greater openness include : in 1979, the first release of semiannual economic projections ; in 1983, the first publication of the beige book, which summarizes information about economic conditions received from the federal reserve system's business contacts ; in 1994, the decision to release a postmeeting statement when policy actions had been taken ; in 2000, the beginning of the practice of issuing a statement after each meeting of the federal open market committee ( fomc ) and including in the statement an assessment of | 0 |
jean - claude trichet : the changing role of communication introductory remarks by mr jean - claude trichet, president of the european central bank, at a dinner with members of the β internationaler club frankfurter wirtschaftsjournalisten β, frankfurt am main, 15 december 2008. * * * ladies and gentlemen, a very warm welcome to all of you and thank you very much for your invitation to this club evening. i am happy to see many familiar faces in the audience tonight. communication is a very important issue for all times. being here in frankfurt i am thinking of the very profound remark by goethe : β niemand wurde in gesellschaften viel sprechen, wenn er sich bewuΞ²t ware, wie oft er die anderen missversteht β. nevertheless let me be bold enough to share with you some thoughts on communication and central banks. communication is a key element for central banks to enhance the effectiveness, predictability and credibility of their monetary policy decisions. it becomes even more important in difficult times, when the economic outlook darkens and confidence weakens. it seems to me that central banks have improved their communication significantly in good times β and also in bad times β while some years ago communication was almost seen as a breach of their professional code. why this change? why did central banks decide to become transparent? prior to the 1990s, central banks were very much working on the assumption that monetary policy effectiveness is greatest when the central bank systematically surprises the markets. the old belief was based on the notion that a central bank would measure the success of its actions by the extent to which economic activity could be raised and maintained above potential. if rational individuals already expect a certain change, they adjust their behaviour to that expectation. and that means that a monetary policy change would have no effect. in the past fifteen years, however, two important developments changed the theory and practice of central banking. first, the assumption that successful monetary policy acts by surprises and is made by a sequence of isolated steps has been the subject of thorough theoretical scrutiny and is now close to oblivion. it became clear that policy - making by surprises and isolated steps will bear no lasting effect on the economy once the public recognises the intentions that motivate the monetary authority. a monetary policy strategy made of isolated actions with the intention of boosting output above potential is bound to lose effectiveness because the short - term inflationary impact of that policy soon becomes embedded in price and | bandid nijathaworn : global markets outlook opening speech by mr bandid nijathaworn, deputy governor of the bank of thailand, at the global markets outlook conference series 2007, organised by deutsche bank, bangkok, 8 january 2007. * * * thank you very much and good morning, first, let me thank deutsche bank for inviting me to give the opening remark this morning. last year, i was also honoured with the same opportunity, so i am very pleased to be back doing this again this year, addressing this important conference. a lot of things have happened to both the global markets and to thailand since the time we met last year. and compared to last year, to be speaking on the economy and the markets this year, i think, is much more challenging. at this time, although the mood in the markets is positive, i think considerable uncertainty still looms in the global economy to the extent that even the best of our analysts still do not seem to be coming to a common view on the key issues. for example, the pace of global slowdown and how much further would the us dollar need to adjust. but, this is, in essence, the nature of markets, and a variety of views will provide the markets with the needed latitude and balance for its continued growth and stability. so, i very much look forward to today's conference, and to the presentation on some of these issues, as well as on this year's outlook. as for my part this morning, given the limitations of time, i want to share with you my thoughts on a few issues that i think will be important for the global economy and for thailand this year. these are my own views on the global outlook and the implications for thailand. first, the global economy. conventional market view at this time is for the global economy to slow somewhat from last year, growing at about 4. 9 percent compared to a growth of 5. 1 percent last year. so, as the numbers suggest, the current view is for a moderate slowdown, reflecting for the most part a slower pace of expansion in the us. this is essentially a soft - landing scenario in the sense that the us will experience only a moderation in growth without major adverse impact on asset prices. from thailand's point of view, the slowing of global growth will have important implications for our export sector. exports, particularly last year, have been the key driver of thailand's performance. therefore, for | 0 |
hype in science. it is perfectly normal for scientists to disagree on the explanation of a given phenomenon. the inexact science of economics is second to none in this respect. scientific communication, especially the sort that aims to help you in making informed choices, should mostly be about the abcs of disciplines, and therefore largely unaffected by disputes at the frontier of knowledge. however, if you assume that truths about nature must be immutable, coherent and all - encompassing, disagreement between experts is a potential source of mistrust even for the most basic facts of science. a specific problem arises when the public becomes aware of some β resounding breakthrough β, which makes the headlines as a result of an ambitious researcher, or a journalist of a sensationalist bent trying to gain visibility, even if what is presented may only consist in preliminary findings described in a working paper. that hype can prove harmful to scientific dissemination, and sometimes even to people β s health, was shown clearly by an article published in 1998, which suggested a correlation between the measles, mumps and rubella ( mmr ) vaccine and some forms of autism. 29 it took as long as 12 years for the article, which had been recognised as not just wrong but also fraudulent, to be taken out of circulation. 30 by then, however, fear and suspicion had become rooted across broad sectors of the population β and, one surmises, this fact contributed to the suspicion towards vaccines during the recent pandemic. based on other case studies too, such as that on mad cow disease, the scientific community has responded with strategies that make it faster to β delete β fake theories. 31 3 ) fake news. if it is hard enough to keep the spread of erroneous information within the scientific community under control, the challenge becomes quite daunting on the web and in the media generally. a 2019 report prepared for the european parliament finds that about half of european citizens say they are unable to distinguish between fake and trustworthy science news, and recommends that the school system take upon itself the task of educating minds on how to recognise β false truths β. 32 4 ) antagonistic cultural meaning. as shown by several science of science communication studies, in fact the credibility of science is not systematically in doubt. on the contrary, β the number of issues that actually display the science - communication problem is orders of magnitude smaller than the number that do not, but plausibly could β. 33 in | in three key areas to counter systemic risk more effectively : better analytical tools, new instruments that counter the development of risk outside the banking sector and a clearer framework to govern policy actions. the past decade has seen a sustained improvement in the tools available to assess risks to financial stability. better data and better modelling techniques have revealed important insights. developing the analytical toolkit to adequately monitor interconnectedness and contagion requires granular datasets, and the ability to map and link data across entities and markets. the sub - prime crisis in the us banking sector spread to european banks through their direct exposures, but it also spread to insurers through the use of credit default swaps. 10 only a holistic view of the system will allow potential contagion channels to be identified and modelled. and that requires investing in new technologies for data analytics and enhancing the capacity for authorities to link and share data and technical knowledge. the second area of improvement for the macroprudential framework in europe involves keeping pace with developments in the financial system. that requires broadening the range of macroprudential instruments beyond those currently available, which focus almost exclusively on the banking sector. for the insurance sector, the contours of such instruments are taking shape. they include solvency instruments such as symmetric capital requirements for cyclical risks ; liquidity instruments for insurers with a vulnerable liquidity profile ; and instruments to target bank - like activities to ensure macroprudential policy is consistent across sectors. 11 the third area for improvement in macroprudential policy involves establishing a clearer conceptual framework to govern policy discussions and interventions. such a framework would facilitate communication with market participants and the general public, as well as help mitigate any risk of inaction bias. 2 / 4 bis central bankers'speeches for monetary policy the framework is well known and the reaction function of central banks is normally well understood by markets. by contrast, the framework that governs macroprudential policy interventions is much less developed, due in no small part to our limited experience of using these tools. the objective of financial stability is broader than the objective of price stability, so is less easily defined by a single numerical measure. developing the policy framework is challenging and will take time. the esrb approach uses the concept of residual risk, which is the difference between the level of risk and the current resilience of the financial system. 12 in setting up the framework, policymakers need to establish the level of residual risk that | 0 |
caleb m fundanga : the bank of zambia and the insurance industry speech by dr caleb m fundanga, governor of the bank of zambia, at the end of year cocktail party for the zambia state insurance corporation limited clients, lusaka, 1 december 2004. * * * the master of ceremony the registrar - pensions and insurance authority the board chairman - zambia state insurance corporation the board chairman - zambia state insurance pension trust fund madam managing director - ms muyenga distinguished invited guests ladies and gentlemen good evening! i wish to thank the managing director of zambia state insurance corporation limited - ms muyenga, for inviting me and my wife to be the guest of honour at this end of year cocktail party. despite the fact that the bank of zambia is not directly associated with the insurance industry, this function gives me a rare opportunity to say something about the relationship between the bank of zambia and the insurance industry. in the past few years, the bank of zambia has taken keen interest in the operations and performance of the insurance companies and pension funds. this is because insurance companies and pension funds have a direct impact on macro - economic variables, since most of them are leading players in the government securities market. whenever the government wishes to raise funds, it is these institutions together with commercial banks that provide them. ladies and gentlemen, many of you will agree with me that the recent downward trend and stabilisation in the macro - economic variables, such as interest, inflation, and exchange rates, has induced high levels of investor confidence in our economy. as many of us are aware, a stable macroeconomic environment is one of the critical ingredients for achieving sustainable economic growth and, ultimately, poverty reduction, in our country. in this regard, allow me to reiterate what i have been saying at other fora that the insurance industry plays a critical role in the economic growth and development of any country. here in zambia, the insurance industry, with gross annual premiums of approximately k273 billion for life and non - life business, and about k550 billion for pensions, controls colossal sums of money which could be used for investment locally ; and if properly regulated could contribute to developing a strong financial sector in zambia. however, the problem has been that the insurance industry has been under - regulated for many years. in this respect, it is high time that regulations are put in place to harmonise the operations of this important industry. i have several times been told that the insurance act of 1997 is inadequate in many areas | this area and we are monitoring the situation in the market to ensure that borrowers are enjoying a reduction in their effective lending rates. we do not want the reduction in the base lending rates to be cosmetic, but should be reflected in lower effective lending rates for measures taken so far to be meaningful. furthermore, with the reduction in the corporate tax rate for banks recently announced by the minister of finance in his 2012 budget, the expectation is for a further reduction in lending rates by commercial banks going forward. ladies and gentlemen, this initiative is positive and both bancabc and norfund should be highly commended for it. as a financing institution, i am aware that norfund financing rates are favourable. i want to encourage bancabc to pass the benefit of getting money at bis central bankers β speeches favourable norfund rates to the final borrowers so that the sme sector will experience the full benefit of this relationship. i wish to end by wishing bancabc the best and success in growing a successful sme lending portfolio. i thank you β¦ bis central bankers β speeches | 0.5 |
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