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michelle w bowman : empowering community banks speech by ms michelle w bowman, member of the board of governors of the federal reserve system, at the conference for community bankers, sponsored by the american bankers association, orlando, florida, 10 february 2020. * * * thank you to the american bankers association for inviting me to address this year β s conference for community bankers. i am delighted to be here with you again. let me begin by stating that the views i express today are my own, and not necessarily those of the federal reserve. as community bankers, you have worked hard to develop a deep understanding of your local economies, while also keeping perspective on the broader economic picture. there is little i could tell you about your local communities that you do not already know, but i thought i might say a few words on the national economic outlook before turning to my main topic for today. my colleagues and i on the federal open market committee had our most recent meeting about two weeks ago, when we decided to keep our target range for the federal funds rate unchanged at 1 - 1 / 2 to 1 - 3 / 4 percent. this policy setting should help support the economic expansion, which is now in its 11th year. my outlook for the u. s. economy is for continued growth at a moderate pace, with the unemployment rate β which is the lowest it has been in 50 years β remaining low. i also see inflation gradually rising to the committee β s 2 percent objective. so on the whole, the national economic backdrop looks very favorable, which should be broadly supportive of your local economies. and of course, by ensuring that consumers and businesses in your communities have access to financial services, you are key contributors to the health of our national economy. let me now turn to my main topic for today, the interaction between innovation and regulation for community banks. as the federal reserve board β s first designated governor with experience in community banking, i am committed to maintaining a strong and thriving community bank sector. small banks are the lifeblood of their communities β and they ensure that consumers and businesses have access to financial services. this capacity to address local needs is fundamental to a strong and stable financial system. to community bankers, customers are much more than their credit score or their annual income, and small businesses are far more than their most recent revenues. by extending credit and offering specialized products and services that meet the needs of their borrowers, these banks empower communities to thrive. we live in an exciting time, when | and a bank with $ 10 billion in assets. further, expectations of due diligence when applied to a potential fintech partner may require more financial history or information than that partner can provide. due diligence for new third - party relationships, even those that are not start - ups, can require a community bank to collect and analyze a significant amount of complex information. also, the annual monitoring that is required adds an additional significant and ongoing burden. the process for managing the annual collection and review of the financials, audit results, and other operational compliance materials for multiple vendors can take weeks of time for several employees. bank employees must review thousands of pages of documentation, and the workload per vendor can be the same for all banks, regardless of their asset size and number of employees. and as someone who has been involved in this compliance work, i know that it β s not as if other responsibilities can wait β community bank employees often wear several hats. community banks must weigh the benefit of any third - party relationship against the additional work required to evaluate the third party. and even when new product offerings emerge from service providers that already serve the bank, contract terms can be complicated to adjust, adding to the costs of obtaining technologies, which may ultimately be prohibitive. flexible core systems are important for this reason. collaboration between a bank and its core system provider is critical to ensure that technology solutions can be integrated quickly and cost effectively within the core system. creating the right regulatory environment responsible innovation, especially for smaller institutions, requires two key aspects : a clear idea of how the technology serves a bank β s strategic objectives and a regulatory environment that supports innovation. i will touch today on the important interplay between these factors, and in particular, the role that regulators can play in creating a regulatory environment that is conducive to innovation, preserves the safety and soundness of the financial system, and protects consumers. as regulators, we need to ensure that banks uphold sound risk - management practices. yet we also have information that can help community banks meet those standards. we should closely examine opportunities to share that knowledge, subject to appropriate safeguards, in order to support innovation. responsible innovation begins with a bank β s strategy. banks need to identify their goals and then look to identify the kinds of products and services that can help them move forward to implement that strategy. in the past, i have spoken about the importance of considering the impact of new technologies and finding ways to leverage them, if a | 1 |
hermann remsperger : macroeconomic risk and policy responses welcome address by professor hermann remsperger, member of the executive board of the deutsche bundesbank, at the 7th bundesbank spring conference " macroeconomic risk and policy responses ", berlin, 27 may 2005. * * * i have the pleasure of welcoming you to the 7th bundesbank spring conference which is organised jointly by the humboldt university berlin, the london - based centre for economic policy research and the deutsche bundesbank. the focus of this year β s conference is on β macroeconomic risk and policy responses β. risk and uncertainty are key elements of many decisions, above all those extending into the future. hence, the optimal response to risk has always been a topic of great interest to political, military and economic decision - makers. concern with this crucial issue is also reflected in the works of our great philosophers and writers. among those men of letters, a rather positive attitude towards taking risks seems to prevail. for example, the roman poet ovid claimed that β both fortune and love befriend the bold β. and friedrich von schiller wrote β he that is overcautious will accomplish little β. 1 now, in general, central bankers are not known for their boldness or love of risk, and i would claim that there are some good reasons for this. so β as a cautious central banker - i was very happy to find that at least the greek dramatist sophocles displayed a more balanced attitude towards risk when he warned that β quick decisions are unsafe decisions β. there is no need to explain to this audience that central banks face many forms of risk when taking monetary policy decisions. this was particularly true for the ecb when it started monetary policy in january 1999, but it is also true for central banks who act under more normal circumstances. alan greenspan has repeatedly made the point that : β... uncertainty is not just a pervasive feature of the monetary policy landscape ; it is the defining characteristic of that landscape β. 2 against this background, it comes as no surprise that the forms and consequences of risk and uncertainty for the optimal conduct of monetary policy have been a very active field of research in recent years. let me use this opportunity to render a very brief summary of what we have learned and what we have not learned - from this research so far. today it is generally recognised that maintaining price stability is the best contribution which monetary policy can make to | long - run macroeconomic welfare. therefore, most central banks β like the ecb and the bundesbank before it β are committed to the primary objective of achieving and maintaining price stability. in order to be able to assess the risks to price stability, monetary policy makers need models which represent the relevant structural relationships between the price level, the monetary policy instruments and other factors affecting price movements like changes in oil prices or exchange rates. however, the exact nature of these relationships is surrounded by a high degree of uncertainty. as a consequence, the question of which relationships are the β relevant β ones and which simplifications are β adequate β is β and will probably always be - a contentious one. one of the lessons that we have learned from recent research is that focusing on specification errors or parameter uncertainty in the neighbourhood of a particular reference model may dramatically understate the true degree of model uncertainty. it is therefore advisable for central banks to base their decisions on a broad range of models which reflect various assumptions regarding the transmission process. in fact, this is the approach which most central banks β and certainly the ecb β are already practising. β wer gar zu viel bedenkt, wird wenig leisten β aus : wilhelm tell. siehe greenspan, alan : monetary policy under uncertainty, rede auf dem symposium der federal reserve bank of kansas city, jackson hole, wyoming, 29. august 2003, sowie greenspan, alan : risks and uncertainty in monetary policy, rede auf dem treffen der american economic association, san diego, california, am 3. januar 2004. now, the question is which weights should policy makers attach to each of these competing models when assessing the risks to price stability? this is a very controversial issue. part of the academic literature assumes that policymakers or their staff form priors over the models and choose the approach which minimises average expected loss ( bayesian approach ). in contrast, the robust control approach assumes that policymakers are completely agnostic with respect to the probability that a specific model may represent the actual economy and thus choose the approach which minimises the maximum loss across all models ( minimax preferences ). in order to implement the bayesian approach, policymakers need to be able to attach a specific probability weight to each of the competing models. while this may be a very difficult task, the minimax approach also suffers from several drawbacks. 3 one fundamental problem | 1 |
council β s inflation aim in a sustained manner. let me now explain our assessment in greater detail, starting with the economic analysis. euro area real gdp increased by 0. 2 %, quarter on quarter, in the third quarter of 2018, following growth of 0. 4 % in the previous two quarters. the latest data and survey results have been weaker than expected, reflecting a diminishing contribution from external demand and some country and sector - specific factors. while some of these factors are likely to unwind, this may suggest some slower growth momentum ahead. at the same time, domestic demand, also backed by our accommodative monetary policy stance, continues to underpin the economic expansion in the euro area. the strength of the labour market, as reflected in ongoing employment gains and rising wages, still supports private consumption. moreover, business investment is benefiting from domestic demand, favourable financing conditions and improving balance sheets. residential investment remains robust. in addition, the expansion in global activity is still expected to continue, supporting euro area exports, although at a slower pace. this assessment is broadly reflected in the december 2018 eurosystem staff macroeconomic 1 / 3 bis central bankers'speeches projections for the euro area. these projections foresee annual real gdp increasing by 1. 9 % in 2018, 1. 7 % in 2019, 1. 7 % in 2020 and 1. 5 % in 2021. compared with the september 2018 ecb staff macroeconomic projections, the outlook for real gdp growth has been revised slightly down in 2018 and 2019. the risks surrounding the euro area growth outlook can still be assessed as broadly balanced. however, the balance of risks is moving to the downside owing to the persistence of uncertainties related to geopolitical factors, the threat of protectionism, vulnerabilities in emerging markets and financial market volatility. according to eurostat β s flash estimate, euro area annual hicp inflation declined to 2. 0 % in november 2018, from 2. 2 % in october, reflecting mainly a decline in energy inflation. on the basis of current futures prices for oil, headline inflation is likely to decrease over the coming months. measures of underlying inflation remain generally muted, but domestic cost pressures are continuing to strengthen and broaden amid high levels of capacity utilisation and tightening labour markets, which is pushing up wage growth. looking ahead, underlying inflation is expected to increase over the medium term, supported by our monetary policy measures, the ongoing economic expansion and rising wage | 2018 ), op. cit. [ 24 ] see gourinchas, p. - o. and rey, h. ( 2019 ), β global real rates : a secular approach β, bis working paper, no 793, bank for international settlements ; jorda, o. and taylor, a. m. ( 2019 ), β riders on the storm β, federal reserve bank of san francisco working paper, 2019 - 20 ; and kiley, m. t. ( 2019 ), op. cit. [ 25 ] for further discussion, as well as an explanation of the complementarities between these measures, see lane, p. r. ( 2019 ), β reflections on monetary policy β, keynote speech at bloomberg, 16 september, london ; coenen, g., montes - galdon, c. and smets, f. ( 2019 ), β effects of state - dependent forward guidance, large - scale asset purchases and fiscal stimulus in a low - interest - rate environment β, working paper series, ecb, forthcoming ; and hammermann, f., leonard, k., nardelli, s. and von landesberger, j. ( 2019 ), β taking stock of the eurosystem β s asset purchase programme after the end of net asset purchases β, economic bulletin, issue 2, ecb, pp. 29 - 46. [ 26 ] the importance of fiscal policy for the equilibrium real rate is discussed in summers, l. and l. rachel ( 2019 ), op. cit. [ 27 ] see esrb high - level task force on safe assets ( 2018 ), sovereign bond - backed securities : a feasibility study, vol. i and vol. ii, together with the underlying working papers. for an overview, see leandro, a. and zettelmeyer, j. ( 2019 ). β the search for a euro area safe asset β, working paper, no 18 - 3, peterson institute for international economics. european central bank directorate general communications sonnemannstrasse 20, 60314 frankfurt am main, germany tel. : + 49 69 1344 7455, e - mail : media @ ecb. europa. eu website : www. ecb. europa. eu reproduction is permitted provided that the source is acknowledged. media contacts copyright 2019, european central bank | 0 |
assessment of licence applications β and this explicitly also addresses the question of fintech credit institution licence applications. i urge banks and fintechs to use the consultation phase constructively. 3 / 6 bis central bankers'speeches 5. banks and savings banks must become more efficient i come now to the cost side and to the challenge of compensating for declining income through greater efficiency. this brings me to my fourth theory : german credit institutions could provide their services more efficiently. once again, i would draw your attention to the low - interest - rate survey, whose findings suggest that small and medium - sized german institutions are expecting their cost - income ratio to increase. unfortunately, this puts german credit institutions at the bottom of the european league. if the cost - income ratio remains poor because of a failure to significantly bring down administrative costs, then more has to be done. an optimist would therefore hope that the only reason why the numbers remain unsatisfactory is that the banks and savings banks are busy investing in things such as new it infrastructure, better risk management systems and more efficient processes. i fully support those institutions which are doing just that, but i have to say that there are still many institutions which are not. and i am talking here about all three pillars of the german banking system, although perhaps not to the same extent in each case. we point out these differences in our conversations with the sector associations, and i hope that what we tell them sinks in, because differences can definitely be a sign that more has to be done in some quarters than in others. banks and savings banks will have to become even more efficient, and they will have to do so in a new, tougher regulatory environment. what i am getting at here is that the regulatory framework cannot be loosened so as to allow inefficient institutions to kick structural change into the long grass. i readily admit that credit institutions incur costs because of regulation and oversight. but a bank or savings bank which cannot survive in an effective regulatory and supervisory environment needs to urgently rethink its business model. it goes without saying that adapting to the new regulatory requirements is a mammoth task, and the uncertainty surrounding the regulatory reforms which have yet to be put in place is clearly a problem. what will basel iii bring with it, and what will it mean for banks in the eu? this is why we are making every effort to complete basel iii without creating excessive burdens. once that has been done, basel iii should, | customer needs are not automatically better served. 7. conclusions ladies and gentlemen, an animal that tries to resist evolutionary change because it is not congenial risks becoming another animal β s dinner. similarly, technological progress changes value creation in the banking sector. there is no escaping this simple truth. adapt or die. it is undeniable that monetary policy and regulation are currently having major side effects on the banking sector, but we cannot allow these side effects to blind us to the uncomfortable fact that it is precisely the new, creative and innovative forces that are destroying existing structures in the banking sector. every bank and every savings bank must ask itself if it wants to be part of the creative force, part of the new structures, or part of a ruined structure. i dare to suggest that most of you wish to belong to the first group. do you believe that it is possible without taking courageous decisions? without risky decisions? or without unpopular decisions? i do not. creative decisions presuppose creative questions : questions which show the world in a new light. in germany β s banking landscape, the questions which are being asked are all too often framed in a decades - old mould of thinking. so, to misquote title of a song by german singer ina deter, perhaps the country needs new bankers? essentially, it does, because you will not be able to lead your institutions to a new era with the old thinking. banks are becoming service providers with banking licences ; account holders and bank customers are becoming β users β who require a broad spectrum of flexible financial services. so, yes, a new world needs new bankers, or at least experienced bankers who have the courage to take innovative decisions. my challenge to the sector is therefore to perform a mental demolition of established institutions wherever necessary and to rebuild them on green - field sites. today β s banks will only be successful tomorrow if they have enough new bankers, or take new decisions. i will be pleased to take your questions and hear your comments. 5 / 6 bis central bankers'speeches 1 the findings of the low - interest - rate survey suggest that two - thirds of institutions are expecting competition from other banks to increase, and no fewer than 85 % of them expect greater competition from fintech companies. 6 / 6 bis central bankers'speeches | 1 |
the bancassurance captured 45. 3 % of the new life insurance business premiums generated in 2005. through efficient cost structures of bancatakaful and with the entry of joint - venture takaful operators involving banks and savings institution with extensive nationwide branch network, the takaful industry should maximize the potential of this alternative distribution channel. finally, on the global front, islamic finance has made significant inroads and has achieved growing global recognition. another significant milestone in the progress of islamic banking and finance as recently announced by bank negara malaysia is the initiative to enhance the position of malaysia as an international islamic financial centre ( mifc ). with the vibrant domestic islamic financial industry that has become an integral component of the financial system, malaysia is now well positioned to be an international centre of origination and issuance of islamic financial instruments, fund and wealth management, islamic financial activities in international currencies and takaful and retakaful businesses. as at year 2005, the total gross contributions from takaful business outside malaysia recorded an insignificant proportion of the total contributions of the industry. the relatively low participation of takaful operators in international business, is however set to change with the recently announced mifc initiatives, to allow qualified local and foreign financial institutions to conduct the full range of islamic banking and takaful businesses in foreign currencies. it was also announced in the recent budget that attractive tax packages in terms of 10 year tax holiday are given to all takaful operators on their international currencies takaful business. in addition, mifc accords greater operational flexibility for the islamic financial institutions to conduct islamic financial services in foreign currencies from anywhere in malaysia. to ensure effective delivery system under mifc initiatives, the mifc executive committee, with bank negara malaysia as secretariat, has been set up to provide directions and drive implementation of policies and strategies to foster effectiveness and efficiency of the mifc. well capitalised and reputable financial institutions that possess sound track record are encouraged to set up international takaful operation in malaysia to conduct out - out takaful and retakaful businesses. the malaysian takaful operators should seize the opportunity to venture into out - out takaful business establishing an international currency business unit to offer takaful business in international currencies. ladies and gentlemen, in tandem with the rapid changes and expansion of the islamic financial sector, it is vital for us to have a strong, continuous support in talent management and | connected. to facilitate networking opportunities, a special section has been created on iclif β s website to cater for the activities of the alumni association. this would include the facility to disseminate information among its membership, including the publication of an alumni directory, highlights of important events and latest developments that may be of interest to its members. the centre will serve as the secretariat to support all activities undertaken by the alumni association. as we advance forward, the reputation, image and stature of the centre will depend on the performance of its participants and their contributions to the environment and the organisations they represent. iclif regards its alumni members as important and looks forward to your continuous support to building iclif into a regional centre of excellence for leadership development in financial services. while iclif has put in great efforts in working with leading international consultants and the best schools in the design and delivery of its leadership development programmes, we see this as an evolving process. in this context, we see alumni members as an important sounding board in providing feedback to enhance the relevance and effectiveness of iclif β s programmes. as beneficiaries of iclif β s programmes, the alumni members are the best intermediaries in making iclif better known to the industry. ladies and gentlemen, iclif leadership competency model one of the first initiatives by iclif upon its inception is to develop a unique leadership competency model that will analyse and enhance the understanding of what makes for great corporate leaders in the regional context. the competency model was developed through a participatory process involving strategic insights by industry leaders in the country and the region. this was achieved through behavioural - event interviews as well as benchmarking exercises based on literature research and the database of leadership competency models of world class companies. the preliminary model was further refined in a validation seminar attended by visionary and prominent leaders with proven track record of business performance excellence from both the private and public sectors. the model forms the foundation to guide the philosophy and drive the design and delivery of iclif β s leadership development programmes. i wish to take this opportunity to express our appreciation to the industry luminaries who have given so much of their time in participating in the validation seminar for the iclif leadership competency model. let me share with you some of the interesting findings of the consultants in assessing our leaders based on the competencies identified in the model. among the positive findings of the exercise was the observation by | 0.5 |
##lateral approach to financial stability that until now has proven very effective. this was best demonstrated by the g20 reforms following the great financial crisis. these reforms have served the financial system well during the covid pandemic. greater resilience of major banks at the core of the financial system has allowed the system to absorb, rather than amplify, the economic shock. without the g20 reforms, governments would now have to deal with a crippled banking sector in full deleveraging mode, on top of an economy hit by covid restrictions. we would have had a crisis within a crisis. in my view, this success is in large part thanks to the g20 β s commitment to dealing with global challenges together, and to the fsb β s broad membership, its agility and its engagement with other stakeholders. we will need to fully use these strengths, to which i will return later on, if we want to tackle the new financial stability challenges successfully. so let me now discuss the nature of these challenges and what it means for the work of the fsb in the coming years. a big challenge for policy makers worldwide at this moment is navigating their economies out of the covid pandemic. two years after its onset, the economic fall - out of the pandemic appears to be subsiding, and the extraordinary fiscal and monetary support measures that kept economies 1 / 4 bis central bankers'speeches afloat are being gradually unwound. but as the economic recovery is proceeding at an uneven pace across regions, this unwinding process is increasingly likely to be asynchronous. this creates the potential for cross - border spill - overs. moreover, since the onset of the pandemic, both public and private sector debt have increased, while asset prices have grown amid a search for yield. this has made the global financial system more vulnerable to a disorderly tightening of financial conditions β a concern that has been accentuated lately by the return of high inflation. the fsb is monitoring and analysing developments closely and stands ready to facilitate global coordination of financial policies, where necessary, to minimize the risk of a disorderly exit. this is being underpinned by the fsb β s new financial stability surveillance framework. the framework enables us to identify global financial vulnerabilities in a systematic manner. it draws on the collective expertise of the fsb β s broad membership. it places particular emphasis on incorporating multiple perspectives in the identification and assessment | with a view to limiting the exchange rate, credit and concentration risks of its foreign currency investments. the snb had already begun diversifying its investments in the late 1990s. the snb foreign currency investments are considerably more diversified than those of many other countries, with many central banks investing their foreign exchange reserves mainly in us treasuries, that is, in public debt titles and in dollars. while the snb also holds the large majority of its portfolio in the form of government securities, it also currently holds as many as 10 % of its reserves in equities and 5 % in corporate bonds. in order to limit credit risk, the large majority of our public debt holdings have the highest ( aaa ) or second - highest rating ( aa ). in effect, our current allocation corresponds to 86 % aaa - rated and 13 % aa - rated public debt holdings. the snb diversification strategy is, however, subject to limits. these spring from the stringent requirements with regard to the security and liquidity of the investments. many investment markets are too narrow, and do not meet the snb β s liquidity requirements. the snb β s investment universe β and thus its scope for diversification β is therefore limited. the bulk of the worldwide supply of highly rated public debt instruments is denominated in euros and us dollars. it is thus due to the instruments available on the market that the largest part of our foreign currency investments is in euros ( 55 % ) and in us dollars ( 25 % ). the remainder of our investments is composed of yen ( 10 % ), canadian dollars ( 4 % ), pounds sterling ( 3 % ) and other currencies ( 3 % ). finally, taking a general and somewhat longer - term view, the following point should be noted. the snb β s currency reserves are made up of foreign currency investments and gold. in a risk - averse environment, losses tend to occur on foreign currency investments and profits on gold, while in a risk - friendly environment the opposite is true. consequently, diversification of a portfolio to include gold and foreign currency helps to stabilise earnings over an entire risk cycle. bis central bankers β speeches | 0 |
market manipulation and avoid serious market dislocations developing. so after much agonizing we acted on two fronts. first, we intervened in the stock and futures markets to deter market manipulation, by making sure that the manipulation did not pay off. second, we followed this action through with various measures to strengthen our monetary and financial systems. on the monetary side, we introduced technical measures to modify our currency board arrangements of our linked exchange rate system to make it less susceptible to manipulation. on the securities side, we are in the process of introducing a series of reform measures to lessen the potential for market dislocation. i am happy to say that our actions have been successful. there has been no indication of further market manipulation since the end of august. we have seen substantial unwinding of the short positions in our currency by the hedge funds, with considerable losses. and with the stock market having recovered substantially from the level at which we entered the market in the middle of august, more considerable losses were incurred also in their short positions in the stock index futures. much of the interest rate premium of the hong kong dollar over the us dollar has disappeared, clearly reflecting with hindsight the extent of the excessive pain that had been so mercilessly inflicted on the community by the manipulative plays. i hope you are now more sympathetic towards the controversial actions that we have taken. but in case you still have doubts, let me specifically address four accusations that have been hurled at us. the first accusation is that we were trying to jack up the market against trends dictated by fundamentals. alan greenspan used those words. but this is simply not true. we do not mind where the level of the market is, if that is what the adjustment process demands. no official view on the β right β market level has been taken and there never will be such a view. so if somebody shorted the market thinking that the adjustment should be deeper, and if the market did fall and he benefited from the short position, we would even congratulate him for having excellent foresight. but we are against market manipulation, specifically the manipulation of our currency market, taking advantage of our passiveness under the discipline of the rule - based currency board arrangements, to produce very high interest rates with a view to sending the stock market into a nosedive and benefiting from a short position in stock index futures. such manipulation was conducted with no regard to economic fundamentals. this presents serious risks of market disl | march, we issued two circulars to all banks in hong kong. the first one reminded them to undertake risk assessment and make preparation for the necessary transition. the second one served to clarify that genuine amendments to existing derivatives contracts which are made to give effect to interest rate benchmark reform will not be considered new contracts from the perspective of the hkma β s margin requirements. this removes one of the uncertainties about the transition. for the time being, we have not specified a timeline for the banks to get ready their transition plan but we will approach them at a later stage to understand their progress and readiness for the transition. hibor and honia 15. as financial institutions in hong kong are gathering pace in their preparation for the libor transition, we are also making progress in identifying an alternative reference rate for hibor. we understand market participants are keen to have forward - looking term rates to mirror the structure of hibor. therefore, the hkma conducted a feasibility study of compiling hkd term rates based on actual wholesale funding transactions by major banks. but the results showed that while transaction - based wholesale term funding rates generally followed term hibors, they exhibited a high level of daily volatility, which made them an impractical substitute for term hibors. 16. more recently, tma proposed adopting the hong kong dollar overnight index average ( honia ) as the alternative reference rate for hibor. similar to many alternate reference rates chosen in other currency areas, honia is an overnight interbank funding rate. while lacking a term structure on its own, this reference rate is robust and based purely on transaction data. 17. in early may, tma completed a consultation with the industry on several technical refinements to honia. this is part of its ongoing initiative to further enhance the robustness of its benchmarks. it is now reviewing the feedbacks received, and will consider how best to put in place the relevant enhancements. 18. when these enhancements are done, tma will work with the industry to promote development and trading of honia - based financial products. later on, it will also try to promote trading in the ois market, and hopefully develop an ois curve from honia. but this would have to depend on market conditions. 19. while honia serves as an alternative to hibor, there is currently no plan to discontinue hibor. hibor has been in place for many years and is still widely recognised by market | 0.5 |
34 % of the total workforce in the hospital sector, compared with 23 % in spain and 21 % in germany. furthermore, in other countries, medical systems that focus more on prevention improve healthy life expectancy and limit the incidence of chronic diseases. spending on education is 0. 7 percentage point of gdp higher than the euro area average excluding france, partly due to the higher proportion of the population attending school in france. xxvi however, the way this expenditure is allocated between primary education ( under - resourced compared with other countries ) and secondary education ( relatively over - resourced in comparison ) is rather atypical. the proportion given over to administrative and operating costs is significantly higher than in other countries ( see the dark blue component in the left - hand chart below ). our high level of spending did not prevent a sharper decline between the pisa 2018 and 2022 surveys. in this respect, finland gets better value per euro spent. housing, which contributes an estimated total of approximately 2 % of gdp ( 0. 8 point of gdp more than the euro area average excluding france ), is also a major source of expenditure. six million households β one in five β currently receive housing benefits, xxvii which therefore appears to be means - tested to a much lesser extent than in other countries. these substantial amounts can ultimately push up market prices β including rents. on top of this, there are numerous tax credit schemes. the cour des comptes has therefore reported that france β s housing policy β struggles to demonstrate its effectiveness β. xxviii as a final example, which partly overlaps with previous ones, subsidies and transfers ( unrelated to social protection ) amounted to eur 210 billion in france in 2023, that is 7. 4 % of gdp compared to an average for the rest of the euro area of just 6. 0 %. their increase in france since 1996 has contributed 2. 2 points of gdp to the rise in public spending. among this expenditure, certain tax credits and support for apprenticeship programs would benefit from being more clearly targeted. more generally, there are grounds for reviewing certain acquired rights and for de - indexation. 2. 3 reopening the β blind spot β in the public debate : qualitative levers and public governance every year, the world bank publishes an index of government effectiveness, xxix which draws from a range of studies and surveys. xxx in particular, it focuses on the degree of independence from political pressures, public policy formulation and | results were largely attributable to retail banking business in france. consumer credit and home loans continued to grow, along with specialised financial services. in addition, falling interest rates had a positive effect on interbank business - which in france has always been significant - and drove down the net expense on these transactions. by contrast, capital market activities and asset management were hit by financial market turbulence, giving rise to substantial provisions in some cases. furthermore, for the second year running, fees and commissions contracted as a percentage of net banking income, falling to 26 per cent compared with nearly 30 per cent in 2000. 1. 3 diversification has helped french credit institutions to offset negative cyclical trends as in previous years, conventional retail banking activities cushioned the negative impact of trends in investment banking and asset management in 2002. on the international front, too, retail banking was a major avenue of development for leading french banks. it must be stressed, however, that the consolidated accounts of france β s largest banks were slightly less positive in 2002, even though the overall situation was satisfactory. in this regard, the dollar - euro exchange rate had an impact on the foreign activities of these banks, denominated in euros, which were also exposed to the negative earnings momentum of subsidiaries specialising in equity - related businesses. 2. french banks must buttress the elements that have allowed them to withstand cyclical contingencies for the past few years in addition to diversifying their business lines - and i am pleased to note that securities analysts are now taking this factor into account when assessing different banking industries - french banks have improved their capacity to withstand cyclical contingencies. that ability must naturally be maintained and strengthened. 2. 1 french banks used the healthy profits of the late 1990s to strengthen their capital base french credit institutions have entered the cyclical downswing on a sounder financial footing. to illustrate that point, a review of the french banking system since the late 1960s is included in the appendixes to this annual report. book capital is now equivalent to 5. 2 per cent of total assets, compared with 4. 2 per cent in the mid - 1990s. the commission bancaire is at pains to ensure that all french banks - small and large - build up their capital gradually but steadily until it well exceeds the regulatory minimum. furthermore, provision cover for doubtful loans now stands at 60. 4 per cent. the industry must pursue this prudential policy. in particular, as we have been urging for several years, | 0.5 |
that we too must continue to improve our defenses. in this regard, there remains many issues which the bank of thailand, along with other central banks in the region, intend to drive forward, such as overseeing more comprehensive cyber resilience policies and promoting the development of human resources. in response to cyber - attacks that may target vulnerable customers, it is crucial that we strive to increase consumer technology literacy to nudge them towards safer cyber behaviors and ensure a sufficient level of cyber hygiene. ladies and gentlemen, i would like to take this opportunity to thank the thai bankers β association and tb - cert for organizing β asean banking cybersecurity conference 2019 β which has brought our asean members together today. this is an opportunity not only to gain knowledge from expertise in different areas, but also to enhance connectivity and collaboration among professionals which is vital to improve our cyber resilience going forward. i wish all of you a fruitful conference and an enjoyable stay in bangkok. thank you. | vulnerability of response plans are often discovered during these exercises which allow organizations to continually improve their response processes. regular practice is the best practice. not only should these exercises be done by individual firms, but also at an industry level. the financial sector, for example, has started these exercises within the banking sector and will soon expand to other parts of the financial sector. as time goes by, our society becomes more interconnected, and eventually these cyber resilience exercises need to be done at the inter - industry level. for instance, the banking sector needs to have joint exercise with telecommunication companies for scenarios involving mobile banking attacks, or with the utilities sector for power outage scenarios. third, collaboration and information sharing are crucial in strengthening the overall cyber resilience. cyber threats are becoming much more complex that an individual organization β s defensive technology may not be able to catch up. close cooperation and sharing of cyber threat information will help organizations better monitor the development of cyber threats, recognize unfamiliar threats, and develop more comprehensive plans for dealing with such issues. cooperation is also more than just information sharing : whether it is cooperation in terms of supervision, development of standards, cyber exercises, or capability building. these kinds of cooperation that would eventually create a β cybersecurity ecosystem β requires efforts from all sides, including governments, regulatory agencies, the private sector, and the education sector. it is very welcoming that today there are already a number of information sharing platforms available at the national, regional, and international levels. thailand β s finance, banking, capital markets, and insurance industries have established a computer emergency response team ( cert ) for their respective industry. the teams share cybersecurity information on a daily basis. at the regional level, asean has established the cybersecurity resilience and information sharing platform ( crisp ). the central banks, regulators, and supervisors ( ceres ) forum serves as a platform for the international community. these collaborations on multiple levels present opportunities for countries to learn from one another. more recently, under our capacity as the 2019 asean chairman, thailand has collaborated with the bank for international settlement ( bis ) to organize the asean financial regulators β program on cyber resilience, a series of training programs, the last of which concluded just yesterday. we envision that these cyber range collaborations will continue to be held for asean members going forward. although the financial sector has made significant progress in terms of cyber resilience, the never - ending development of cyber threats means | 1 |
caleb m fundanga : employing african resources for african development speech by dr caleb m fundanga, governor of the bank of zambia, at the 2009 africa investment forum, istanbul, 5 october 2009. * * * introduction i feel particularly honoured and grateful to be a discussant at this important forum, whose theme is β employing african resources for africa β s development β. this forum could not have come at a more opportune time than now when all our economies are faced with the challenges emanating from the impact of the global financial and economic crisis. this seminar is also timely in that the fiscal policy response is going to play a large role in determining how well african economies emerge from the financial crisis. this is because africa must sustain and enhance investment flows in infrastructure, energy, health and education if it is to accelerate the growth momentum achieved prior to the crisis. the question of resource mobilisation for development, whether this is at a national, regional or international level, is thus something that policy makers in africa are grappling with. global financial crisis and africa β s development for most of the current decade, several african countries have been registering positive economic growth rates averaging 5. 3 percent between 1999 and 2008, with growth in subsahara africa slightly higher at an average of 5. 6 percent over the same period. 1 this growth has contributed to rising income levels in several african countries leading increased investments in education, health, water sanitation and general infrastructure development. however, despite improvements in growth witnessed since 1999, significant reductions in poverty will not occur without a significant increase in growth rates to above 7 % on a sustained basis. one of the ways in which growth can be scaled up is through the employment of the vast african resources for the development of the continent. prior to the global financial and economic crisis, the african continent experienced a surge in investment flows in many sectors including mining, manufacturing, tourism, transport and construction. this inflow of foreign capital helped to finance the development registered in africa over the past decade. the inflow of foreign capital coupled with high prices of commodities on the global market led to high international reserve accumulation in most commodity exporting countries, including those in africa. however, following the global financial and economic crisis the accumulation of international reserves declined as commodity prices plunged and foreign capital inflows, both private and public slowed significantly or were reversed. this has had a negative impact on the availability of resources to finance africa β s development. the challenge going forward is recovering, | built each year and between 30, 000 and 40, 000 units a year need to be renovated. activity may then grow rapidly in certain regions. now that construction is recovering, the increased concentration among construction companies and producers of construction materials, as well as the shortages in certain categories of skilled labour, are liable to push costs and wages up. certain problems with bottlenecks are already discernible ; in the business tendency surveys from the national institute of economic research, labour shortages are reported by 7 per cent of construction firms as against 2 per cent in march 1998. these shortages are accompanied by a high overall level of unemployment among construction workers ; part of the explanation is that unemployment is high in certain regions and those who are unemployed there are reluctant to move a long way to regions where labour demand is stronger. bottleneck problems in the construction industry are being studied on behalf of the government by industry representatives. this construction sector group has found that approximately one - third of unemployed construction workers lack occupational experience and around 6 per cent also lack formal training. in that the average age of construction workers is rising and young people do not find construction work attractive, the bottleneck problems may become even greater in the future. in order to prevent this from leading to sizeable problems, proposals have been put forward for increased mobility, improved competence and marketing of construction courses, for example. construction costs are measured by the factor price index ( fpi ) ; the largest item is wage costs. the price of completed dwellings, on the other hand, is measured by the building price index ( bpi ), which also includes the construction companies β productivity and profit margins. these indexes do show relatively large price increases but there are no actual signs of any direct risks of an inflationary development in sweden in the coming years, provided that the bottleneck problems do not increase. the rising costs associated with earlier upswings in activity have been connected with the contemporary subsidy systems as well as the high degree of concentration in the construction market. the revised system for financing residential construction has appreciably reduced one of these problems : construction companies as well as consumers are exposed more directly to production costs. but the problem of concentration in the construction market still remains and may be a future cause for concern. future monetary policy in the main scenario in the december inflation report, the 12 - month change in the cpi was projected to be 1. 2 per cent in december 1999 and 1. 4 per cent in december 2000. inflation β s underlying | 0 |
sales, the ratio of firms β current profits to sales has recently reached around 5 percent for all industries and firms of all sizes β a high level that exceeds that prior to the global financial crisis ( chart 7 ). corporate profits are expected to continue to be on an improving trend as falling crude oil prices and the yen β s depreciation to date are likely to contribute to pushing up profits. with corporate profits improving, business fixed investment has been on a moderate increasing trend ( chart 8 ). as for the outlook, with corporate profits continuing to be on an improving trend, business fixed investment is likely to continue following a moderate improving trend against the background that ( a ) the sense among firms that they have excess capital has been waning, ( b ) firms are expected to increase labor saving investment due to the tightening of labor market conditions, and ( c ) with the depreciation of the yen, japanese firms appear to have started to increase the share of fixed investment at home. in fact, with regard to the last point, at the meeting of general managers of the bank β s branches in january there were reports of cases where firms were increasing their production and fixed investment at domestic bases against the backdrop of the yen β s depreciation. production decreased for two consecutive quarters in the april - june quarter and the julyseptember quarter last year, but due in part to subsequent progress in inventory adjustments, it started to increase again in the october - december quarter and continued to increase in january this year ( chart 9 ). against the backdrop of an increase in final demand, production is expected to moderately increase going forward. therefore, with a virtuous cycle from income to spending operating in both the household and corporate sectors, japan β s economy has continued its moderate recovery trend. going forward, this virtuous cycle is likely to continue operating with the fall in crude oil prices to date and the government β s economic stimulus working as boosting factors, and thus japan β s economy is expected to continue its moderate recovery trend. in terms of the bank β s policy board members β forecasts released in the january interim assessment of the october 2014 outlook report for economic activity and prices ( hereafter the outlook report ), the real gdp growth rate was projected to be minus 0. 5 percent in fiscal 2014, but 2. 1 percent in fiscal 2015, and 1. 6 percent in fiscal 2016 β in other words, it was expected to grow above the potential growth rate, which | headline hicp inflation has been revised down slightly, mainly reflecting the recent appreciation of the euro exchange rate. turning to the monetary analysis, broad money ( m3 ), despite some monthly volatility, continues to expand at a robust pace, with an annual rate of growth of 4. 5 % in july 2017, after 5. 0 % in june. as in previous months, annual growth in m3 was mainly supported by its most liquid components, with the narrow monetary aggregate m1 expanding at an annual rate of 9. 1 % in july 2017, down from 9. 7 % in june. the recovery in the growth of loans to the private sector observed since the beginning of 2014 is proceeding. the annual growth rate of loans to non - financial corporations increased to 2. 4 % in july 2017, up from 2. 0 % in june, while the annual growth rate of loans to households remained stable at 2. 6 %. the pass - through of the monetary policy measures put in place since june 2014 continues to significantly support borrowing conditions for firms and households, access to financing β notably for small and medium - sized enterprises β and credit flows across the euro area. to sum up, a cross - check of the outcome of the economic analysis with the signals coming from the monetary analysis confirmed the need for a continued very substantial degree of monetary accommodation to secure a sustained return of inflation rates towards levels that are below, but close to, 2 %. in order to reap the full benefits from our monetary policy measures, other policy areas must contribute decisively to strengthening the longer - term growth potential and reducing vulnerabilities. the implementation of structural reforms needs to be substantially stepped up to increase resilience, reduce structural unemployment and boost euro area growth potential and productivity. regarding fiscal policies, all countries would benefit from intensifying efforts towards achieving a more growth - friendly composition of public finances. a full, transparent and consistent implementation of the stability and growth pact and of the macroeconomic imbalances procedure over time and across countries remains essential to bolster the resilience of the euro area economy. strengthening economic and monetary union remains a priority. the governing council welcomes the ongoing discussions on further enhancing the institutional architecture of our economic and monetary union. we are now at your disposal for questions 2 / 2 bis central bankers'speeches | 0 |
vladusic ljubisa : recent developments in the central bank of bosnia and herzegovina speech by mr vladusic ljubisa, vice governor of the central bank of bosnia and herzegovina, at the 9th meeting of the governors'club in the region of black sea, balkans and central asia, bucharest, 23 may 2003. * * * thank you mr. chairman, your excellency, ladies and gentlemen, i wish to pay my respect to you all on behalf of the cbbh. i will speak about several key development components which have represented current issues in the cbbh since the last meeting. currency board arrangement in the period since its establishment to date, the central bank of bosnia and herzegovina has developed according to the basic principle of monetary policy, this being the currency board arrangement. the currency board in bih has been set up on very clear principles : β stability of the local currency and its issue and withdrawal from circulation ; β fixed exchange rate with full coverage in free convertible foreign exchange funds ; β management of foreign exchange reserves in a safe and profitable way ; β setting up and maintaining payment and settlement systems ; β coordination of activities of banking supervision agencies ; β provision of the required reserve maintenance. by conducting such monetary policy, we have achieved the following results : β confidence in the local currency ; β stable exchange rate ; β growth of foreign exchange reserves which have now stabilized at around euro 1, 1 billion, which is a four - month imports coverage ; β price stability ; β decrease of inflation, which is now slightly above zero ; β improvement of the country β s payment foreign exchange position ; β stability of public sector. during the previous months, there has been a discussion in bih whether we should keep such strict currency board rules. the international conference was organized in april on the role of the currency board in monetary policy - history and practice. some of the participants were representatives of east european countries which have their monetary policy based on currency board. the basic opinion expressed during this conference was that currency board was successful in all these countries, but also that currency board in those countries was more flexible. as a result, the opinion expressed at this conference, and also that of the central bank and bih authorities is that bih should keep the currency board set up as presently, with the aim to provide global financial stability, searching additional possibilities to make the currency board serve development and to enable the central bank to participate more actively in the financial sector and to issue short - term securities | . the additional reason is that the currency board arrangement is important for bih economy and it is a base for continuation of maintaining and improving financial stability, through which the development of other sectors of economy is influenced. required reserves the required reserve is the only instrument of monetary policy available in bih, within the currency board arrangement. the purpose of the required reserve is to provide appropriate liquidity of the banking sector and accomplish the global financial stability in the country. one of the most significant changes in monetary policy which is related to required reserve will start as of 01 june. the goals to be achieved by the suggested measures are the following : β efficiency and stability of monetary policy within the currency board arrangement. the aim is to give more flexibility to the cbbh so that it can react to prompt changes in the surrounding ; β harmonization aimed at adjusting the regulations on the required reserve to the european standards ; and β financial stability, meaning that global financial stability should be increased by means of banks'required reserves. in order to achieve the mentioned goals, the cbbh has made four changes in the implementation of banks'required reserves : 1. the base for required reserve is expanded to include also foreign exchange deposits, in addition to km deposits. the defined required reserve in the previous period ( 10 % on deposits and borrowed funds in km ) fulfilled its function and did not endanger the liquidity. however, as only local currency km was included in the base for required reserve settlement, it resulted in unequal position of the local currency compared to deposits in foreign currency. 2. cash held by banks in their vaults will no longer be eligible for maintenance of required reserves. it will be possible to meet the requirement only with deposits held by banks in the reserve accounts with the cbbh. 3. now, the cbbh can determine the rate at any level within the scope of 0 - 20 %. this change will provide more flexibility to our governing board. the required reserve rate has already been defined. from 01 june, it will be 5 % on the expanded base, instead of the previous 10 % on km deposits. 4. the central bank has more flexibility to determine compensation to be paid to banks on reserve deposits. results of monetary policy the successful monetary policy has influenced the improvement of situation in the banking sector. the consolidation of the global banking sector has taken place, as it follows : β privatization of banks has been completed ; β minimum capital requirement was increased to km 15 million ; β merger of banks ; β | 1 |
general equilibrium model and the bayesian var model. 1 another study has evaluated our indicator models. 2 in addition we publish information to enable an assessment of the monetary policy conducted over the past 2 - 3 years in a special appendix to the first monetary policy report of every year. it contains, for instance, comparisons of our forecasts with other forecasts and with outcomes. the material we produce in our annual evaluations forms an important basis for the riksdag committee on finance β s report on monetary policy. every year the committee evaluates at its own initiative the monetary policy conducted during the previous years. they have done so since 1999 when the riksbank became independent. last year we also had two external researchers, francesco giavazzi and frederic mishkin, who made a more in - depth evaluation of monetary policy. this was commissioned by the committee on finance and covered the entire ten - year period of inflation targeting. new study of the riksbank β s forecasting performance as a step in the evaluation work, three economists at the monetary policy department of the riksbank recently made a comprehensive analysis of our forecasting performance during the β modern forecasting models in action : improving analyses at central banks β adolfson, m., m. k. andersson, j. linde, m. villani & a. vredin, ( 2007 ), international journal of central banking, in the process of being published. β the riksbank β s new indicator procedures β andersson, m. and m. lof, sveriges riksbank economic review 2007 : 1, sveriges riksbank. period 2000 - 2006. 3 they have analysed the forecasts of the most important variables for monetary policy β gdp, employment, productivity and inflation. 4 in the study they have tried to estimate how accurate the forecasts have been on average by comparing them with outcomes. to gain a perspective of the accuracy, our forecasts have also been compared with forecasts from a simple time series model. the so - called ar models, which are often used as a standard comparison in evaluations of this type, quite simply function so that one adjusts the variable in question with the aid of its own historical data. the type of time series model chosen for the comparison is, despite its simplicity, difficult to surpass, according to several international studies. moreover, they have analysed how far ahead we can make forecasts with good accuracy, that | 2015, would have amounted to about β¬50 billion, or 5 per cent of all loans disbursed, close to precrisis levels. the growth of npls was strongly influenced by recovery times, which until now have been particularly long in italy ; the measures approved in the last year will shorten them significantly. as the bank of italy has emphasized in the past, reducing average recovery times even by just two years would have determined, together with a higher valuation of npls, a ratio of bad debt to total loans close to half of what it is today. most italian banks are capable of dealing with the still fragile cyclical conditions, lending to the economy and competing efficiently on the market. a number of assessments made in the last few weeks put the recapitalization needs of the entire italian banking system at somewhere in the order of tens of billions of euros, based on the assumption that the total stock of bad loans, and possibly even some of the loans that are β unlikely to be repaid β, must be sold at once by all banks at a price equal to approximately half the value of the bad loans recorded in banks β balance sheets. in italy a loan is classified as β non - performing β based on harmonized criteria established at the european level and published by the eba in 2013, which are largely aligned with those previously applied in italy and with international practice. for the valuation of non - performing loans in their balance sheets, italian banks must comply with international accounting and reporting standards ( ias / ifrs ). as they permit discretion we have constantly encouraged banks to adopt prudent valuation policies that take sufficient account of the degree of uncertainty in recovery times and flows. our supervisory action on provisioning in 2012 and 2013 is a clear example of this. in the approach traditionally taken in italy, npls can be divided into at least two large and very dissimilar categories based on the degree of difficulty faced by debtors : of the β¬360 billion worth of gross npls outstanding at the end of 2015, bad loans accounted for β¬210 billion ; β¬150 billion were in loans classified as β unlikely to be repaid β, past - due or in breach of overdraft ceilings. these two categories of npls obviously have different requirements in terms of coverage and write - downs. both types of loans must be booked in the balance sheets with due prudence, but not at values corresponding to their immediate liquidation. loans in the second | 0 |
decline in the price of betelnut and lower imported prices of food and fuel, supported by the appreciation of the kina exchange rate. underlying inflation as indicated by the exclusion - based and trimmed mean measures were 7. 7 percent and 6. 5 percent in the december quarter of 2011, respectively. these outcomes were lower than the forecast made in the september 2011 mps, despite the strong domestic demand associated with the png lng project and high government expenditures. the bank projects annual headline inflation for 2012 to be around 8. 0 percent, while trimmed - mean and the exclusion - based inflation are projected to be around 7. 5 percent. the forecasted headline inflation is lower than the 8. 4 percent average for 2011, due to the strength of the kina, lower imported inflation, and stable international food and fuel prices. the kina is expected to remain strong through 2012, mainly due to high capital inflows and export receipts. while this has the effect of lowering inflation, it can adversely affect the traditional export sector. on the other hand, firms must be fair in the conduct of their businesses by passing the benefit of kina appreciation through lower prices to consumers. inflation in png β s major trading partners eased in the second half of 2011 and is expected to pass through to domestic inflation in 2012. food, in particular cereal, and fuel prices dropped in the second half of 2011, though both have increased slightly in the first few months of 2012. however, inflationary pressures still prevail, attributable to domestic demand pressures arising from the ongoing construction of the png lng project and subsequent increase in business activity in 2012, and increased private and public spending in relation to the national elections. the elections will also increase the transactions demand for money. bis central bankers β speeches supply - side shocks in early 2012, attributable to bad weather and subsequent damage to agricultural output and transport infrastructure are also expected to contribute to inflation. for the medium term, headline inflation is projected to be around 7. 5 percent in 2013 and 7. 0 percent in 2014. these projections are based on a number of factors including the winding - down of the construction phase of the lng project in late 2013, the continued strengthening of the kina and easing global demand ( see chart 1 ). there are upside risks to these projections, including higher domestic demand and associated inflation expectations by firms due to the png lng project, any substantial increase in food and fuel prices | mobile banking giving access to banking services to needy segments of the population in villages throughout the country. the mobile bank is today a legacy. bank of baroda also made significant contributions towards financial literacy and commercial education. a couple of years later, habib bank joined the bank of baroda in this mission, followed by the state bank of mauritius ltd. a centenary bank has past successes. however, it cannot afford to be complacent about its success stories. a centenary should also be an occasion to look at challenges ahead. the world today is fiercely competitive. innovation, creativity and re - engineering should be on the business agenda of our banks. our banking sector should be always on its toes and tap new markets. the banking sector will be faced with stronger competition by the end of this year with the opening of three new banks, which have been granted banking licences last year. also, as part of the outfall of the honourable prime minister β s visit to china, we expect a chinese bank to be part of our financial landscape before long. the sector is becoming more and more competitive and consumers can only stand to gain in this process. as the regulator and watchdog of the banking sector, we at the central bank shall keep an eye on developments to ensure that credit standards are not lowered, that depositors β interest are safeguarded and that our reputation as an international financial centre is not at risk. our consumers expect no less from its central bank. mauritius enjoys cultural and economic ties with asia and africa and offers huge potential for the provision of banking services in the region. i strongly urge our banks to take full benefit of opportunities that lie ahead. islamic financial services are being introduced. in this context, i will shortly be meeting with the islamic financial services board of malaysia to discuss the adherence of the bank of mauritius to this international standard setting body comprising regulatory and supervisory agencies worldwide which have interest in enhancing the soundness and stability of the islamic financial services industry. i believe that the time is now right to envisage a suitable currency exchange system between our two countries. there has been significant expansion in trade and tourism between india and mauritius. i understand that around 50, 000 tourists from india are expected to visit mauritius this year and that 20, 000 mauritians would have travelled to india. this measure will avoid the inconvenience for travellers having to convert their indian rupee banknotes into a foreign currency first when travelling to mauritius and secondly, to reconvert them into | 0 |
close to the target number, we would not only need scaling up of efforts by institutions like aif, but also the involvement of many more such governmental and non - governmental organizations. our experience with the financial inclusion programs has highlighted that unless the intermediaries involved develop sustainable delivery models and are able to run these activities as a viable business proposition, success would remain elusive. therefore, apart from a sense of commitment, what we really need for these drives to succeed is a sustainable delivery model, which other institutions could imbibe from aif and emulate. it is, indeed, very heartening to note that the aif has chosen to focus on the subject of financial inclusion of urban poor for its annual seminar and i compliment the foundation for this. as you all know, financial inclusion has been a key area of focus for the reserve bank of india and i firmly believe that forums such as this provide us an opportunity to put our minds together to introspect on what more needs to be done to meet the ambitious goals we have set for ourselves. i, therefore, thank the organizers for inviting me and providing me the opportunity to present my views on the topic. though the indian economy has witnessed tremendous growth lately, vast sections of our society have remained excluded from the india growth story due to various socio - economic factors. it is ironic that despite our cities seeing widespread affluence, large pockets of financial exclusion should exist right at the very heart of these cities. every year, a large number of people migrate from villages to cities in search of a better life for themselves and their families. they take up non - contractual and non - permanent jobs of vendors, porters, hawkers, construction workers, domestic workers, rickshaw pullers, etc. these people need fast, low cost, convenient and safe avenues of savings, credit and remittances to meet their needs. however, in view of the non - permanent nature of their occupations, they frequently bis central bankers β speeches shift base within city or even across cities. bankers are generally found to be shy in providing them banking services, for obvious reasons. what do we mean by financial inclusion? before i turn to the specifics of financial inclusion of urban poor, let us spend a minute in understanding the meaning of the term itself. we have defined financial inclusion as β the process of ensuring access to appropriate financial products and services needed by all sections of the society in general and vulnerable groups such as weaker sections and low income groups | overall integrity and efficacy of the internal grievance redress mechanism. further, regulated entities must comprehend that they are the first touch points in the overall grievance redress framework. re - directing the aggrieved to the alternate grievance machinery of the rbi ombudsman is not desirable. as i can see from some of the complaints that land at my desk, many of the cases are such that they should have been resolved at the level of the regulated entities. ( iii ) data analysis for improving quality of services regulated entities serve as repositories of data on financial transactions, customer interactions, and operational activities. within this extensive repository lies a unique opportunity to enhance customer service through robust data analysis. by harnessing the power of data analytics, regulated entities can proactively anticipate customer needs, address issues promptly, and streamline processes. a data - driven approach would not only optimise operational efficiency but also reinforce the commitment to providing exemplary customer service. with the rise in fraudulent transactions, it is critical to strengthen monitoring systems and use technology to detect potential frauds before they materialise. maintaining a focus on root cause analysis of consumer grievances can result in preventing such 2 / 5 bis - central bankers'speeches complaints to come up repeatedly. with the advent of artificial intelligence ( ai ), cybersecurity challenges can rise manifold. they can expose consumers to identity theft, fraud, and unauthorized access to personal information which can affect consumer trust. financial institutions must dedicate substantial efforts to protect customer information and ensure that vulnerabilities exposing customers to risk are promptly identified and addressed. ( iv ) consumer education and awareness a financially aware and vigilant consumer is best placed to handle threats such as phishing, phone scams, deepfakes and more. lack of proper understanding can impede consumers'ability to navigate the financial landscape effectively, leaving them vulnerable to exploitation or fraud. while we have made good progress in our objective of enhancing consumer awareness, there is considerable scope for further deepening consumer awareness and financial literacy activities, particularly among the marginalised, less savvy and rural communities. all the stakeholders need to refocus themselves in this direction. recognising that consumer education is essential for their protection, the reserve bank also undertakes various public awareness campaigns in the mainstream and social media. the'rbi kehta hai'or'rbi says'campaigns featuring our mascots money kumar and ms. money, are | 0.5 |
become a candidate country soon. joining the eu will most probably be a long process, as nobody expects see countries to become the eu members before 2025. since 1997, the cbbh has been operating the currency board arrangement, under very strict criteria. our currency, the convertible mark ( bam ) was pegged to the deutsche mark and then, to euro, after its introduction. in addition, supervision of banks is not in the cbbh mandate, but nested in two separate banking agencies. there are certain stands that operating under currency board arrangement means we have no independent monetary policy or exchange rate policy. at a surface it might seem true. but, we are far more 2 of 7 than a β big exchange office β, as some call us. in other words, operating under currency board regime does not mean that the cbbh does not play an important role in this process of joining the eu and euro area and in monetary policy itself. and this has not changed with the gfc, i. e. we still have limited powers to stabilize the economy. so, we might be one of rare institutions that have not changed way we operate due to the gfc. let me remind you that we have some important instruments at our disposal and we do our best to use them efficiently on bh's way to the eu, including firstly reserve requirement ; the cbbh is in charge of regulating reserve requirement imposed on commercial banks. we used it actively in the past, especially after the gfc, boosting the liquidity in the system. furthermore, we amended the decision on required reserves also in order to harmonize with the ecb policies. when ecb increased its β penalty β on banks overnight deposits in march 2016, as part of non - conventional monetary policy measures, we almost immediately introduced negative interest rates on excess liquidity that commercial banks hold with us. currently, we charge - 0. 2 %, i. e. 50 % of the ecb overnight deposit rate. we will continue to follow trends in the euro area and in our economy and use our decision on reserve requirement and excess reserves in the future, as well. secondly, the cbbh is in charge of the overall payment system in bh. we constantly improve it, adhering to the sepa ( single european payment area ) and the psd2 ( payment system directive 2 ). as you know, changes in payment systems are dynamic and we are ready to continue building a robust and resilient payment | , there is a lot of work to be done to resolve issues from the past financial crisis. at more than 11 percent of total loans, npls continue to burden the balance sheets of banks. in this respect, adoption of new bankruptcy legislation at the entity level and clarification of tax - treatment of npl sales will help address this issue in the period ahead. 3. third, we should redouble our efforts to improve our institutions and address governance shortcomings. foreign direct investment is stuck at around two percent of gdp per year. this is too low to support higher growth rates that will reduce unemployment and emigration. improvements in regulatory quality, fair and transparent β rules of the game β, and transparent and accountable institutions will help attract higher levels of foreign investment. therefore, we have to send clear message about positive outcomes of our reforms, increase reputation of bosnia and herzegovina, improve our competitiveness to increase investments and growth, and at the same time strengthen the single economic space to finally pave the way to our european future. thank you very much for your time, and i hope that you have a wonderful event. | 0.5 |
employment : by fostering the exchange of ideas and knowledge as researchers, students, and technologies move across europe. 21 i am sure that many of the students here have been on an erasmus exchange, or have come from other european countries to study here. there is clearly a european dimension to education. and europe can contribute by investing in such exchanges as well as more broadly in the advancement of science. the new erasmus +, which now offers more opportunities for learning and training, is thus a welcome development. and the bologna process makes it easier for young people to work in another eu country by facilitating the recognition of qualifications across borders. moreover, the youth guarantee programme provides welcome support to the commitment by member states to ensure that young europeans under the age of 25 receive a good quality offer of employment, training or continued education. labour mobility is often, when undesired, the result of poor cyclical and structural labour market conditions. it is those conditions that should be addressed in the first place. the completion of the single market, the continuing progress in european integration and the deepening of our economic and monetary union, will further expand the opportunities for young people beyond borders, and job matching possibilities. labour mobility across countries and sectors is bound to increase. this will require adequate supranational policies. conclusion let me conclude. in some countries, and ireland is one of them, some progress in reducing youth unemployment has been achieved. more generally, the strengthening of the recovery in the euro area will continue to reduce its extent. but to address structural causes of youth unemployment, a uniform degree of protection among workers, flexible labour arrangements, effective vocational training programmes, high degree of trade openness, and support to reduce the social cost of mobility are all necessary conditions. i have highlighted the economic reasons that make addressing youth unemployment an invaluable undertaking. but there is a more fundamental reason to continue addressing this challenge with determination and as a priority. we have seen how in several countries the weight of the crisis has fallen disproportionately on the young people, leaving a legacy of failed hopes, anger and ultimately mistrust in the values of our society and in the identity of our democracy. 5 / 7 bis central bankers'speeches some say that a more equitable distribution of income and wealth is the answer and that it would bring those who have lost out from globalisation back into our compact. but that cannot be enough for the young people who are the future of our democracies | would otherwise be the case if confronted with a similar macroeconomic outlook under more normal market conditions. given the uncertainty surrounding the appropriate monetary policy stance under such circumstances, it could consider to err on the side of caution by trying to avoid feeding the bubble with an overly accommodative policy. these issues, which have been extensively discussed, deserve further analysis and consideration. v. the implications of globalisation for monetary policy and the global responsibilities of central banks my final remarks relate to the last, very challenging and open question raised by alan on the global responsibilities of the main central banks. this is an important question that cannot be answered in a simple, straightforward manner and in a limited period of time. and alan does not provide an answer, either. i would like to pose, however, a set of related questions on the implications of globalisation for monetary policy. in a globalised economy, should the role and orientation of monetary policy be changed? should the framework for analysis and policy formulation be amended? is the required analysis for setting policy becoming more demanding? the direct and brief answers i recently gave to these questions are : no, no and yes to some extent. it is sometimes argued that the monetary policy of a major central bank should help guide the domestic economy β s adjustment to the evolving global economic environment and the competitive pressures associated with globalisation ; and that it should foster the adjustment of global imbalances and even assume responsibility for the smooth functioning of the global economy. in my opinion, globalisation does not affect the central role and overriding responsibility of central banks to preserve price stability β at home β. on the contrary, maintaining price stability in a rapidly evolving, globalised economy that may influence the dynamics of inflation in various ways becomes more essential and challenging, particularly in situations where adverse inflation shocks or inflationary pressures in some economies are now more easily transmitted to others. consequently, if the primary objectives of monetary policy are unaffected by globalisation, the appropriate strategic framework for analysis and policy formulation should remain the same. however, the analysis required for policy formulation will have to carefully take into account the various effects of globalisation on the dynamics of inflation, economic growth and asset prices. for example : in the a globalised economy, traditional measures of core inflation are even more difficult to interpret and use as indicators of underlying domestic inflationary pressures ; the estimates of potential output are more difficult to calculate in a robust manner ; and the measurement and usefulness of output gaps are subject to greater | 0.5 |
er hub retail banking β delivering for consumers? - deputy governor ed sibley 12 november 2019 speech the banking & payments federation ireland ( bpfi ) - national retail banking conference β β delivering for the customer β 12 november 2019. introduction1 good morning ladies and gentleman. i am delighted to be here today at the banking & payments federation ireland ( bpfi ) annual retail banking conference. the theme of the conference β delivering for the customer β is clearly important β arguably never more important, given the low levels of trust that customers have in the retail banks operating in ireland. indeed, this is so problematic that an entirely new organisation, the irish banking culture board ( ibcb ), has been set up with one overriding mission : β to make banking in ireland trustworthy again. 2 β while not unique to ireland, it is remarkable that this is necessary. moreover, as is evident from the agenda of and speakers at today β s conference, the approach to delivering for your customers is undergoing fundamental change. the central bank β s mission is to serve the public good by safeguarding monetary and financial stability and working to ensure that the financial system is operating in the best interests of consumers and the wider economy. the central bank β s aspiration is for a functioning financial services system that sustainably serves the needs of the economy and its consumers. this requires functioning and trustworthy financial markets and firms. it also requires that the financial system and firms operating within it are resilient β this resilience being a fundamental aspect of protecting consumers. the functioning of the retail banking market and how it delivers for its customers is clearly important to the delivery of this aspiration. today, i am going to focus my remarks on : 1. the theme of delivering for your customers, and the continued dissonance between what you say and what some of your customers β experience. i will highlight that delivering for your customers requires more than branding and marketing slogans β being trustworthy requires you to deliver in line with them on a consistent basis. 2. technology risk, noting that more needs to be done to build operational resilience at the same time as developing innovative solutions to deliver in line with your customers β needs. 3. some of the environmental issues facing the retail banking sector - encouraging you to take a long - term view in building sustainable business models, such that the foundations of the irish retail banking sector are strong enough to continue to serve the needs of your customers over the long term. delivering for the customer | remarks by tiff macklem governor of the bank of canada canadian chamber of commerce february 9, 2022 ottawa, ontario ( delivered virtually ) the role of canadian business in fostering non - inflationary growth introduction it is a pleasure to join this summit to talk about the economic recovery. i β m particularly pleased to be here to discuss the challenges canada must overcome to sustain strong growth. and when i say, β sustain strong growth, β to be clear, that means β non - inflationary growth. β there is no better time than now to have this discussion. our economic recovery from the deepest recession on record has been strong. canadian businesses and workers have shown impressive ingenuity and resilience. employment is robust, household savings are high, and immigration is rebounding. as we emerge from the covid - 19 pandemic, canada has the opportunity to make long overdue gains in productivity. in the years ahead, business investment decisions will determine the path of canada β s productivity growth. and productivity growth is vital to non - inflationary growth and rising standards of living. at a time when inflation is already well above our target, this is more vital than ever. today, i β d like to talk to you about two things. first, i want to unpack what is behind the bank of canada β s latest economic projection and explain why we expect a pickup in investment and productivity growth. and second, i β d like to outline the path to get there β crossing a bridge from the ingenuity we β ve seen through the pandemic to long - term productivity growth. unpacking the projection canada has come through the pressure cooker of the pandemic with impressive resilience, and critical business investments in digital technologies were an important element of this success. those of us who could shifted to remote work. almost everyone learned how to buy and sell online, and many businesses shifted supply chains as borders closed. by january 2021, during the second canadian lockdown, one - third of canadian employees worked most of their i would like to thank tatjana dahlhaus, christopher hajzler, james ( jim ) c. macgee, temel taskin and ben tomlin for their help in preparing this speech. not for publication before february 9, 2022 12 : 00 pm eastern time - 2hours from home, compared with just 4 % in 2016. 1 these digital investments have been essential to sustaining our economy through the pande | 0 |
of a financial institution by itself nor applying modern strategies are guarantees of quality. the process of concentration in the banking industry will continue and probably result in fewer banks as well as a general increase in the size of units. mergers in germany are in many cases welcome, as they improve the viability of institutions. the idea here is to safeguard the diversified nature of business inherent in the universal banking concept through suitably sized banks. the situation is different in the united states, where mergers sometimes take place in order to surmount the restrictions on business imposed by the specialised banking system and to achieve a higher level of diversification. mega - mergers have the disadvantage of making structures less transparent and groups more difficult for management to control. on the whole, the number of institutions which, in terms of systemic risks, are β too big to fail β, will rise. alternatively or complementary to the massive growth we are seeing in many places at present, specialisation, the return to core business or measures denoted by the term β lean banking β, i. e. the attempt to reduce costs by outsourcing activities, shrinking the range of in - house banking services or purchasing outside services. from an economic point of view these may be important strategies for the banks in the future, but outsourcing must never affect regularity of business or the possibility to control business for the management as well as for the supervisory authorities. fourth statement : changes in the banking scenery also affect supervisors - supervision must be kept efficient, time has not come for an β outsourcing β of core functions of supervision. supervisors must also react on global integration. one proposal to reform supervision is to leave supervision and development of supervisory concepts to a large extent to the market, respectively to a small group of global players. supervisors are open to new approaches. there are, however, some fundamental reservations against this proposal. the current proposals of self regulation do not respect the context between stipulating risk control norms and the responsibility for preventing systemic risks. more self regulation would simultaneously require that market participants take over major responsibility for preventing systemic risks and therefore setting up private agencies to intervene during liquidity crises. but as long as private institutions are not prepared to install such agencies and to take over responsibility for systemic risks, time for outsourcing of essential elements of supervision has not come. fifth statement : in the information age, central banks can operate as an anchor of prudential supervision owing to their β natural β presence in the market. the central bank establishes | mr. meister discusses the future of money and financial services statements by mr. edgar meister, a member of the directorate of the deutsche bundesbank, to be put forward at the generation bridge symposium β money tomorrow β in eltville on 11 / 9 / 98. first statement : supervisors are open to innovations in banking business β but banks and financial intermediaries in general must be able to manage the risks arising from new techniques. supervisors have never stood in the way of innovations in banking, but instead have always worked hard to give entrepreneurs in this field a reliable legal basis for product development. for example, the legal definition of banking operations in germany was extended to include prepaid card business and network money business by amending the banking act. yet attention must always be paid to sensitivity in confidence and to possible dangers for the functioning of the financial system. disruptions in payment transactions β even the defaulting of a financial market participant β can rapidly affect financial markets adversely and even hamper the development of the real economy. things are only in their infancy. the issuance of electronic money should generally be restricted to banks. that is primarily for reasons of safety ; banks as issuers of electronic money are regulated and monitored according to prudential guidelines. to keep monetary policy efficient the option to introduce minimum reserves on electronic money makes sense. second statement : recent financial crises have proven again : progress in information technology and new risk management techniques cannot replace solid capital requirements for banks. internal risk models for the calculation of capital requirements for market risks are important innovations in the field of risk management - supervisors respect such developments. but risk models are not infallible. against the background of recent financial crises there are some doubts whether short - term high market volatility has always been covered adequately by the assumptions of the models ( which use 250 days averages for volatility ). credit risk models which are developed now can help to measure credit risks more exactly. capital requirements however must cover all risks of a bank, i. e. operational and legal risks, too. consequently a licence to use credit risk models or generally new risk management techniques must not result in weaker capital requirements for banks considering generally rising risks in the financial world. precisely the recent financial crises demonstrate how difficult it is to determine bankspecific risks with sufficient accuracy. own capital as a cushion for losses is therefore a modern prudential requirement. third statement : the banking world will be changing even faster - but neither the size | 1 |
activity β, where notary departments of banks mediated loans with flexible interest rates outside the official system. the β grey economy β was an indication of the pressures created by tight rationing of the finnish financial system in the 1980 β s. references : honkapohja s. ( 2014a ), financial crises : lessons from the nordic experience, journal of financial stability, 13, 193 β 201. honkapohja s. ( 2014b ), lessons from the financial liberalization in the nordic countries in the 1980s, in woo, w. t., pan, y., sachs, j., qian, j. ( eds. ), financial systems at the crossroads. world scientific publishing, singapore, 2014, 135 β 163. reinhard c. m. and k. s. rogoff ( 2008 ), is the 2007 us sub - prime financial crisis so different? an international historical comparison. american economic review 98, 339 β 344. reinhard c. m. and k. s. rogoff ( 2009 ), this time is different, eight centuries of financial folly, 1 / 2 bis central bankers'speeches princeton university press, princeton. 1 see reinhard and rogoff ( 2008, 2009 ). 2 the finnish crisis and those of norway and sweden are well discussed in the literature. for example, see honkapohja ( 2014 a, b ) and the references there in. 2 / 2 bis central bankers'speeches | spring of 1993, simultaneously with other applicant countries. in the finnish referendum of october 1994, the eu membership was approved with 57 percent against 43, i. e. with a large majority. on the 1st of january 1995, our membership entered into force β and you could say that we were again united with britain in the same club. britain has traditionally been a supporter of a wider europe, and also we finns enjoyed the support from the uk during our accession process. as members, we both have been strong supporters of free trade and the single market. * * * finland and the uk were first together in efta. then the uk moved on and joined the eec. our reunion in the eu took place in 1995, 22 years later, in 1995, when finland joined. now, in 2017, we have been members together for another 22 years. the general assessment of the membership in finland is overwhelmingly positive. i just quote two respected statesmen and thinkers from finland. max jakobson, the great finnish diplomat and historian told his daughter linda two years after finland had joined the european union : " listen, only during last few days i have understood that finland is, for the first time in her history, fully independent " mauno koivisto, our late president, said at his 90th birthday dinner : " i belong to the generation which fought for independence. then we worked for integration in order to gain more influence. the pessimists were wrong. " 4 / 5 bis central bankers'speeches from 1990 onward, i followed and participated in the events as the finnish ambassador to the ec. the autumn of 1991 was a decisive period. sweden had followed austria and applied for the ec membership. the soviet union was falling apart. in the uk, john major was the new prime minister after margaret thatcher, defending british interests in the negotiations leading to the maastricht treaty. i had great colleagues in the british foreign office. john kerr was the permanent representative then. let me mention, that as eu commissioner from 1995 i had of course the good fortune to cooperate with outstanding individuals from the uk : leon brittan, neil kinnock, and chris patten. i have very fond memories of cooperation with them. there have also been differences between our countries β choices and policies within the eu. most importantly, finland became an early member of the economic and monetary union in 1999, while the uk remained outside the euro. britain has of course stayed outside the schengen area | 0.5 |
. second, was recognition that the policy approach had failed and this meant that it needed to be replaced. i would pinpoint the location of the flaw in the policy approach to regulation as lying in the presumption that the instinct for self - preservation of well - governed firms would be sufficient to protect the system, thereby allowing light - touch regulation. ( the presumption was mistaken : the banks were not well - managed from the risk point of view ). this is not an approach or a flaw that was unique to ireland, of course, and many in the room will recognize and recall the global rhetoric β political and otherwise ) that rationalized such an approach ( though in ireland i believe that it was accompanied by a greater degree of deference than was necessarily entailed in the mind - set that brought light - touch financial regulation to the world ). bis central bankers β speeches actually, the approach might work reasonably well in an environment where risk aversion in the market is high, the incentives to avoid institutional failure are large and the system β s access to funding is limited. but in ireland the approach presided over a property price and construction boom fuelled by the globalised financial market on a scale exceeding that of anywhere else except iceland. at some point, common sense should have kicked in and generated a pragmatic regulatory override. in fact, there was an effort in ireland to impose supervisory discretion through a capital surcharge on developer loans, but it was too timid, too late and based on inadequate information. third, i won β t repeat what has been written already about the quantitative insufficiency of the supervisory resources that were brought to bear on banking in ireland. this prevented a sufficient flow of information that could have made top decision makers aware not only of the possibility that there could be a property bust β everyone knew that this was not only possible but inevitable, with only the scale in doubt β but also the degree to which property loans were insufficiently secured against anything other than the bubble - inflated property itself. well, all three of these challenges needed to be addressed : the first has been a slow and painful process of refining loss estimates in the face of what has been a surprisingly gradual erosion of wishful thinking, an inadequate information base, a protracted slide in asset prices and in the economy generally ( exports apart ). large capital injections have been needed to cover now - projected losses. the third has been met with a substantial increase in staffing | , outsourcing arrangements involving certain customer information will be subject to a higher standard of care. β’ third, a greater focus on fis β outsourcing risk management framework. fis were previously expected to pre - notify mas of any material outsourcing arrangements, and mas would impose prudential requirements on the fi, where necessary. with the growing prevalence and complexity of outsourcing arrangements, such a caseby - case approach has become less tenable. instead, mas will continue to assess and monitor the robustness of fis β outsourcing risk management frameworks while fis will continue to be responsible for ensuring the safety of all of their outsourcing bis central bankers β speeches arrangements. the revised guidelines will no longer require fis to pre - notify mas of any outsourcing arrangements. 24. the guidelines are not intended to be exhaustive. mas recognises that the diverse range of outsourcing arrangements and rapid pace of progress in digital technology preclude a prescriptive approach to risk management practices for outsourcing or a one - size - fits - all set of rules. mas will adopt a risk - based approach in implementing the guidelines. conclusion 25. let me conclude. 26. a tougher macrcoeconomic environment and growing complexity of operational and technology risks will place greater demand on banks β risk management and compliance systems. even as banks continue to upgrade their systems and processes to strengthen their risk resilience, it is equally important that banks regularly test the robustness of their contingency plans and capability to manage tail risk events. i am glad that the industry continues to demonstrate its commitment to sound risk management with your investments in systems, technology and in your people. mas appreciates your close co - operation to develop and update our risk management guidance, and your active participation in iwst exercises. thank you. bis central bankers β speeches | 0 |
( csef ), university of naples, italy. roland de bruijn, henk kox, arjan lejour ( 2008 ), β economic benefits of an integrated 9 european market for services ", journal of policy modeling 30, pp 301 β 19. 10 copenhagen economics ( 2010 ), the economic impact of a european digital single market, final report. 11 muge adalet mcgowan and dan andrews ( 2005 ), β insolvency regimes and productivity growth : a framework for analysis ", oecd working paper ( 2016 ) 33. 12 see, for instance, r martin, t munyan, b a wilson ( 2015 ). potential output and recessions : are we fooling ourselves? board of governors of the federal reserve system international finance discussion papers number 1145. 13 hoffmann, m and sorensen, b ( 2012 ), don β t expect too much from ez fiscal union β and complete the unfinished integration of european capital markets, voxeu, 9 november 2012. 6 / 6 bis central bankers'speeches | be emphasised that, on average, the export volume of swiss products has reacted comparatively little to exchange rate movements. the qualification on average is an important one. in fact, the dependence on exchange rate movements of the two largest sectors in terms of export share ( chemicals, including pharmaceutical products, and precision instruments and watches ) is distinctly below average. thus, these sectors β share of total exports has gone up over time. by contrast, the adjustments some companies and industries have made to the strong franc have been β and still are β so far - reaching that they are having to completely rethink their future in switzerland. third, i am aware that it is easy for an outside observer to talk about the advantages of a strong currency. at the same time, the snb β s various direct contacts with companies allow us to gain concrete insights into current problems. during the last six months, my colleagues from the governing board and i have held frequent meetings with representatives of the business community ; these discussions were very heated. it is therefore clear to me that adjustments to a strong currency do not happen just like that. on the contrary. adjustment processes as a result of appreciation shocks are always very painful. underlying these processes is a great willingness to take risks on the part of companies and investors, and a high level of commitment and flexibility from employees. in addition, our eight delegates for regional economic relations are constantly in touch with companies from different industries throughout switzerland. the results of the special survey on the effects of swiss franc appreciation conducted in the last two quarters show that a large portion ( 70 % ) of the companies surveyed are being negatively affected by swiss franc appreciation. many companies β margins have come under pressure. however, the surveys also illustrate how quickly β and differently β companies have reacted to the challenges. the fact that our most current survey suggests a slightly improved economic outlook is encouraging. economic developments abroad are even more crucial for swiss exports than the exchange rate. the importance of global economic trends for our country can be clearly seen in chart 2. it shows that downturns in world trade and dips in growth in switzerland occur almost concurrently. but the characteristics of demand from abroad differ in important ways. internal snb studies have shown that short - term changes in demand from neighbouring countries have an especially strong effect on exports ; in the case of demand from emerging economies, d. fauceglia, a. lassmann, a. shingal and m. wermelinger, backward participation | 0 |
while in the old member states the growth rate of comparable salaries has slowed down. the purchasing - power - adjusted difference in the standard of living has narrowed down. in some professional groups, however, such as doctors and nurses β who in earlier communist times were notoriously badly paid β emigration has been wide, causing substantial problems to the countries which have been drained of employees in these professional groups. it is nevertheless evident that the majority of people prefer to remain in their home lands. the need for labour to migrate will decrease if capital moves towards labour. this has, in fact, happened broadly throughout europe. differences between global developments and the eu's internal development can also be found in capital flows. developments within the eu have followed the'normal theory ', investment has flowed from wealthy economies to economies with a low capital stock. in contrast, global developments have taken the opposite direction : investment has flowed from developed and from not so developed economies with surplus to the united states. this has been the cause of a major debate. investment flows to new member states are generally reflected in large current account deficits in these economies. these imbalances in financing conditions must be taken into account in economic policies and at central banks. a large current account deficit is often a serious problem, but not always. if the deficit is financed through a stable and long - term arrangement and the funds are directed in effective real investment, a large current account deficit is an indication of the strength of the economy, rather than of its weakness. by and large, deficit financing in the new member states is quite reliable. arrangements such as internal financing in international corporations have already been experienced. yet, the rate of indebtedness of some countries raises certain doubts. it can be taken as a positive development that the primary reason for the transfer of investment capital does not seem to be only the member states'cheaper labour, but largely companies'desire to establish their presence in new member states'rapidly growing markets and to diversify their supply chain. although capital flows in the eu are free from currency regulation, flexible movement of capital even within the euro area is not fully effective. european financial market integration is still not complete. many surveys show that higher depth and liquidity and improving the efficiency of payment transfers and the securities markets would make a substantial contribution to transforming the structures of the economy. movement of labour is complicated by a number of problems. it is difficult for individual people with poor language skills to move to a foreign country and take up | note here that the pleasant level of our foreign exchange reserve is one of the main indicators supporting the positive risk assessment of the country in international financial markets. the european integration process, where the direct responsibility fields of the bank of albania are evidenced as the closest contact points with the european union legislations, or acquis communutaire. in terms on national currency management, the bank of albania has ensured the normal supply of market with cash, even in the presence of considerable operational challenges triggered by the pandemic. also, we have refreshed the entire series of existing banknotes. this process was finalised at the beginning of this year with the introduction of the last two denominations. in parallel, with the refreshment, in response to both the requirements posed by the time and the economic and financial developments, the series is completed with a new banknote, with a nominal value 10, 000 leke. the entire series of the banknotes has a contemporary design and meets the highest security standards. financial education, a crucial investment for the awareness of the management of personal finances and enhancing the welfare of the society. communication with public, the bank of albania is already a more transparent institution and in turns more accessible to the public at large. the regular communication of our decisions and views, the organisation and participation in academic conferences, and the rigorous accomplishment in a timely manner of requests for information, are assessed by our international partners. in more concrete terms, the national bank of austria in the last report, ranked the bank of albania first among all the banks of central, eastern and south - eastern countries, for the level and quality of public communication. dear members of the committee, notwithstanding the successful results that i listed above, i still do not consider my mission as complete so far. looking forward, i see that the bank of albania has a lot to achieve in all aspects. allow me to briefly list the priorities in my agenda for the second term. first priority is related to monetary policy and price stability. in capacity of the governor of the bank of albania, i have been heedful and i will make sure that the quantity and cost of money in economy enables : the stability of prices ; the sustainable economic growth and the improvement of welfare. in the medium term, addressing inflationary pressures stemming by the upsurge of prices in international market will be the main challenge. in my view, commitment to the legal mandate of price stability is a non - negotiable objective. | 0 |
mario draghi : the target2 - securities framework agreement address by mr mario draghi, president of the european central bank, at the event marking the first signatures to the t2s framework agreement, frankfurt am main, 8 may 2012. * * * ladies and gentlemen, i am very pleased to welcome you to frankfurt today on the occasion of the signing of the t2s framework agreement by a first group of central securities depositories, or csds. t2s is an important project for the eurosystem and for europe. it is a key component of the european market infrastructure, and the governing council of the ecb remains committed to delivering it. i fully share this commitment, and i am glad to be here today representing the eurosystem, together with fellow governor visco, and other colleagues from national central banks. allow me to thank them for taking the time to be here with us. i joined the governing council as governor of banca d β italia in early 2006, and it was around that time that we started discussing t2s. it was in july 2006 that we decided to consult and involve european csds and market participants, to ensure that t2s would fulfil the needs of the market. the main reason for the eurosystem to embark on this project was to address the costly fragmentation of securities settlement market infrastructure, and to achieve greater technical harmonisation in the european securities settlement market. t2s allows for efficient and integrated securities settlement. the fundamental objective of t2s is to contribute to making europe a better place to invest, by fostering a single market in post - trade services. it will make financial markets safer and more efficient, and it will increase transparency in the post - trade environment. ultimately, investors will benefit from lower cross - border transaction and liquidity costs and from better investment possibilities. issuers will benefit from deeper and more diversified sources of funding. t2s is important for europe. it will be a major contribution to the strengthening of the single market. the single market has already brought many benefits, which are, at times, forgotten or taken for granted. it is during times of crisis that we should not allow our commitment to the cause of further market integration to fade. it is during difficult times that we should remember the importance of cooperation and coordination. there has been much progress towards further integration in recent years. the most visible example was the adoption of the single market act in april 2011 by the european commission. | , known as scope 3 emissions. in many sectors, this is crucial for understanding a company β s climate risk. we will also work on other climate - related issues where we believe international standards may be useful. one example is the use of emission allowances. our work with companies begins with setting clear expectations. we have formulated our expectations in a set of expectation documents. when it comes to climate change, we already expect companies to have a climate strategy, set emission targets, report on progress, and stress - test their business models against various climate scenarios. in future, it will be natural for us to emphasise towards a net zero emission horizon. this will give clearer direction to our ownership activities. exercising ownership active ownership will play a key part in work on addressing the fund β s climate risk. a dialogue with companies will be particularly important. chart : climate increasingly a dialogue topic our dialogue with companies reflects our expectations. last year, we held around 3, 000 meetings with companies. as you can see from the chart, sustainability is increasingly on the agenda. 3 / 6 bis central bankers'speeches we plan to increase both the breadth and the depth of our climate - related ownership activities. we will give particular priority to the highest - emitting companies and companies that have not published climate plans or have inadequate climate reporting. we will also step up our ownership activities aimed at the financial sector, which is exposed indirectly to climate risk through loans and investments. we tailor our dialogue to the sector and the situation. steel and cement are good examples. these companies currently have high emissions, but their products will still be needed in the lowcarbon economy. much of our dialogue on transition plans is therefore about the technological advances and investments needed. we also raise the need for industry standards and the issue of lobbying, which is a major challenge. chart : companies β climate reporting is improving we are seeing signs that our efforts are paying off. for example, when we analysed the reporting of 1, 500 companies, we found that those we have actively engaged with have made more progress in their reporting on climate strategy than the other companies. of course, we cannot claim all the credit for this progress. but progress it is. in future, we will provide more information on our dialogue with companies β what we talk about and the changes we see. drawing attention to it is a tool in itself. reporting and voting our dialogue with companies will not have the desired result in every case. we can then hold boards to account | 0 |
tharman shanmugaratnam : banking β serving people and growing with your clients remarks by mr tharman shanmugaratnam, chairman of the monetary authority of singapore, at citibank β s 200th anniversary cocktail reception, singapore, 21 august 2012. * * * mr vikram pandit and friends, thank you for inviting me to this celebration of citigroup β s 200th anniversary. when we think about the history of economies, it β s sometimes best told through the history of individual firms and institutions. when we think of the history of the global economy too, the tumultuous changes that we β ve been through in the post - war era as well as the last hundred years, let alone 200, it β s again very interestingly told through the story of individual institutions β although few have survived that length of time. i think the history of citi, in its own way, tells a fascinating story of what happened in the united states and what happened in the global economy. but the exhibits that i was looking at as i walked in say something that is worth reminding ourselves of β that despite all the transformations, all the new technologies that have been brought to bear, the new management methods and regulations, the innovations in finance, banking has still at its core to be about the basics β it still has to be about providing security to ordinary people, providing new standards for global trade, about growing economies. it β s about serving and growing with your clients. and i find it encouraging that citi has been at the fore of this refocus on the basics of banking and finance. you β ve gone through a process of introspection in the last few years, because of the crisis and through the crisis, and you β ve come out stronger. not just because of better capital and liquidity β although that β s obviously a pre - requisite for strength in the post - crisis era. but more fundamentally because you β re asking yourselves important questions about culture β questions about responsibility, and about the source of your profitability as an enterprise that intends to be around for a long time to come. so the story of citi, and like the story of several other global institutions, is also about the recurring importance of certain basics. and the most important basics in banking have to be about serving your clients and growing with your clients, and about managing risks well. there β s a risk that we β re placing a too much importance in recent policy debates | ##print to do this. in india, the critical task is to improve the business environment and build the infrastructure necessary for a strong manufacturing sector that will provide jobs and bis central bankers β speeches raise incomes. the new government has signalled clearly that india is open for business. in indonesia, the urgent need is to shift fiscal spending from costly food and fuel subsidies to infrastructure investment and human capital development. the newlyelected president jokowi has just announced a β working cabinet β and a resolve to deliver on reforms. in singapore too, we are in the midst of economic restructuring β to reduce our dependence on labour inputs, move into higher value - added activities, and increase productivity as the basis for sustained and healthy wage growth. structural reforms are often painful. they take time to bear fruit and entail significant adjustment costs in the interim. growth may slow temporarily, as margins are squeezed and resources flow from declining activities to emerging ones. restructuring is a process of creative destruction, and quite often the destruction of the old must take place before the creation of the new. but if reforms are delayed, or worse still reversed, in response to short - term pains, the long - term health of the economy suffers. countries ranging from china to singapore are facing this trade - off today, between the imperative to restructure the economy for more sustainable long - term growth and the need to minimise the transitory effects on short - term growth. governments must get businesses and workers to understand these trade - offs, and work together to press on with restructuring while smoothening its rougher edges. but avoiding reform or restructuring is not a choice. financial development and integration is an enabler for the broader structural reform effort underway in emerging asia. the financial sector is key to mobilising asia β s large pool of surplus savings more efficiently and channelling it to investment opportunities in the region. situated at the heart of emerging asia, singapore serves to intermediate the flows of savings and investments, helping to finance growth, manage risks, and connecting markets. singapore β s financial centre is able to play this role because of four factors : the credibility of its financial regulatory framework ; the competencies of its workforce ; the connectivity it has with the rest of asia ; and the collaboration mas has with the financial industry. let me say a few words about collaboration. working closely with industry is an important part of mas β work β be it in formulating regulatory policies or growth strategies. regulation must be appropriate to the risks they are meant | 0.5 |
increasing international trade and competition is one important reason for the slow rise in prices in that period. high labour force growth, partly owing to labour immigration, has also had a dampening impact on wage growth in many countries. these drivers may be changing direction. we saw signs that globalisation was slowing down even before the pandemic. the pandemic may also have amplified a trend whereby an increasing number of businesses see the need to secure their own supply lines and locate more of their production chain closer to their customers. at the same time, labour supply is growing more slowly in advanced economies as the population ages. the period where some countries struggled with too low inflation appears to be over, and central banks may be facing more demanding trade - offs between meeting the inflation target and supporting employment. volatility in the value of the sovereign wealth fund must be taken into consideration norges bank economic perspectives 17 february 2022 alongside its central banking tasks, norges bank has another important mission, namely the management of norway β s sovereign wealth held in the government pension fund global ( gpfg ). since the first capital transfer in may 1996, the gpfg has grown larger than anyone had imagined ( chart 9 ). and the investments have paid off handsomely. cumulatively over the entire period, we have now earned more on investments abroad than the transfers to the gpfg. we have more than doubled our money. chart 9 the money is more than doubled gpfg. in billions of nok total value deposits returns petroleum revenue spending exchange rate β 4000 β 4000 sources : ministry of finance and norges bank the fiscal rule ties petroleum revenue spending to the value of the gpfg. as its value has increased sharply, petroleum revenue spending has followed suit ( chart 10 ). in the years prior to the pandemic, one krone in six of government expenditure was covered by the gpfg. chart 10 the gpfg finances a large portion of government expenditure structural non - oil deficit as a share of government expenditure. percent sources : ministry of finance and norges bank as a nation, we are in a fortunate position thanks to our strong public finances. but substantial government wealth also entails challenges that must be addressed. more than 50 years as an oil nation have taught us an important thing : oil prices are volatile. this is why it was important to establish the petroleum fund mechanism and the fiscal rule. we have succeeded in shielding government budgets from widely fluctuating oil revenues | in asian economies, japanese manufacturing firms have been increasing local production. japanese firms also have been focusing on local consumers in a wide range of businesses, including retail and other services. in response to these developments, japanese banks have been making efforts to further localize their asian business. for firms expanding their businesses in asia, securing stable funding in the local currency is becoming a challenge. to meet this challenge, it is important to establish ways in which firms can obtain local funds from banks. development of domestic financial markets can provide banks with stable access to liquidity and underpin their provisioning of funds to firms. this will not only contribute to stabilizing the domestic financial system in asian economies, but also create a virtuous cycle encouraging the entry of more global firms and the localization of their businesses. the challenge for central banks is to nurture a sound banking system that ensures secure funding and fosters liquid interbank markets. the availability of local currency funding differs across countries, depending on the stage of development of money markets and of funding tools using collateral. the bank of japan has agreed on cross - border collateral arrangements with other asian central banks as one of the backstops for developing financial markets in this region ( chart 3 ). for example, with the bank of thailand, the bank of japan has already established a framework providing thai bahts to financial institutions against japanese government securities and japanese yen as collateral. in running a regional safety net, it is important to monitor carefully the regional financial and economic conditions. it is also necessary to share relevant information among the region β s countries in a timely manner. information on macroeconomic policies and the challenges that each country faces should be exchanged on a regular basis. at the same time, it is essential to create a network of swift information sharing and rapid response to sudden changes in international financial markets. to help strengthen such cooperation among central banks, the bank of japan has been actively participating in the executives β meeting of east asiapacific central banks ( emeap ), together with the bank of thailand and other asian central banks. bis central bankers β speeches concluding remarks compared with european countries, asian countries are much more diverse in terms of their economic and social makeup, so that the challenges of managing the economy vary significantly. at the same time, however, asian economies face challenges similar to those of other economies, including the advanced economies. therefore, active discussion in the region to share the experience and wisdom in asian economies can also be beneficial to other regions | 0 |
lim hng kiang : sharpening risk management capabilities keynote address by mr lim hng kiang, minister for trade and industry and deputy chairman of the monetary authority of singapore, at the 43rd association of banks in singapore annual dinner, singapore, 28 june 2016. * * * chairman and council members of abs, ladies and gentlemen, it is my pleasure to join you at the 43rd abs annual dinner this evening. the global economy : slower for longer 2. since i addressed the abs in 2014, the global economy has continued to recover. but growth has been lacklustre and uneven. risks remain, not least the prospect of political instability and the possibility of a rise in protectionist tendencies in the major economies. 3. in the near term, the unexpected results of the uk β s eu referendum or brexit, would very likely continue to reverberate across financial markets around the world. it is a clear reminder of the risks that we face and how financial institutions and regulators must work together to ensure the continued resilience of our banking system and financial sector. β’ mas had been prepared for this possible outcome, and had taken precautionary measures, including keeping in close contact over the past weeks with banks in singapore, foreign central banks and regulators. our markets continue to function in an orderly manner and our financial system remains sound. 4. beyond the immediate market turbulence, brexit will also have wider economic implications for the region and singapore. while it is too early to make a firm call on the longer term consequences of the event, it will certainly weigh on both market confidence and on an already listless global recovery. β’ among the developed economies, the us has been most advanced in its recovery. this provided the impetus for the first interest rate hike in more than nine years in december 2015. however, the federal reserve has since held back from further rate increases amid a moderation of growth in the us and in many other parts of the world, as well as a rise in financial market volatility. β’ some central banks in europe and japan have adopted negative policy rates alongside other monetary easing measures to further support their economies, with mixed results. central banks will have to be vigilant against undue financial market stresses arising from last thursday β s referendum in the uk, and to be prepared for a period of heightened uncertainty that such an unprecedented event might entail. β’ in asia, china β s economic slowdown, softer commodities prices and weak demand in key | , outsourcing arrangements involving certain customer information will be subject to a higher standard of care. β’ third, a greater focus on fis β outsourcing risk management framework. fis were previously expected to pre - notify mas of any material outsourcing arrangements, and mas would impose prudential requirements on the fi, where necessary. with the growing prevalence and complexity of outsourcing arrangements, such a caseby - case approach has become less tenable. instead, mas will continue to assess and monitor the robustness of fis β outsourcing risk management frameworks while fis will continue to be responsible for ensuring the safety of all of their outsourcing bis central bankers β speeches arrangements. the revised guidelines will no longer require fis to pre - notify mas of any outsourcing arrangements. 24. the guidelines are not intended to be exhaustive. mas recognises that the diverse range of outsourcing arrangements and rapid pace of progress in digital technology preclude a prescriptive approach to risk management practices for outsourcing or a one - size - fits - all set of rules. mas will adopt a risk - based approach in implementing the guidelines. conclusion 25. let me conclude. 26. a tougher macrcoeconomic environment and growing complexity of operational and technology risks will place greater demand on banks β risk management and compliance systems. even as banks continue to upgrade their systems and processes to strengthen their risk resilience, it is equally important that banks regularly test the robustness of their contingency plans and capability to manage tail risk events. i am glad that the industry continues to demonstrate its commitment to sound risk management with your investments in systems, technology and in your people. mas appreciates your close co - operation to develop and update our risk management guidance, and your active participation in iwst exercises. thank you. bis central bankers β speeches | 1 |
gfsns ), which took on detailed form at the seoul g 20 summit. in this context, notable advances were achieved last year in the improvement of the imf loan facility. there remain, however, some aspects of it in need of further refinement. therefore the french initiative set out this year in this area is greatly welcomed and i look forward to its successful realization. no jurisdiction is opposed to the idea of international coordination in principle, but when the interests of individual countries are in conflict, when the benefits from coordination are not obvious, or when there is no urgent call for it, then it is very hard to bring about international policy coordination in practice. that at any rate was korea β s experience as the g 20 chair last year. it seems there is already a firm consensus among the g 20 member countries as to the overarching imperative of policy coordination through the g20 framework for the synchronous growth of the world economy. this being the case, it binds us all to put into practice in all good faith what we may term the mutual trust built up through negotiation and agreement. 2. domestic dimension from a domestic perspective, the coordination problem lies in the institutional arrangements in relation to macroprudential policy. if the institutional setting for macroprudential policy is not configured properly, its coordination with monetary, fiscal, and other policies may well become problematic. as macroprudential policies are thrust into the spotlight, it is possible, misguidedly, to take the view that it is feasible to deal with inflation by means of macroprudential tools. accordingly, monetary policy is increasingly likely to be adversely affected by the overzealous use of macroprudential tools. hence, it is critical that there should be a clear understanding that macroprudential policy does β not substitute β for monetary policy but rather β complements β it. iv. the way forward lastly, i wish to draw attention to the following two issues that may shed some light on the trail that lies ahead. first, potential imbalances in the future may arise from entirely new sources. as the boundaries between differing spheres are being dissolved in the process of globalization and increasing interconnectedness, social political and geopolitical risks once remote may well spill over more easily to the real economy and result in increased economic risk. one example springs readily to mind. the current events unfolding before us in the middle east are upping the geopolitical risks and triggering such | inaugural address 21 april 2022 rhee, chang yong governor bank of korea my fellow members of the bank of korea, it is a great pleasure to meet you all. i stand here today having been appointed governor of the bank of korea. as an economics major - - whose career over the years was spent in academia, government and international organizations - - i cannot help but feel emotional, as i now find myself here with you at the central bank at the forefront of financial and monetary policy. it is a great honor for me personally, but i also feel the heavy weight of the expectations and responsibilities on my shoulders. first, i would like to take this opportunity to express my heartfelt gratitude to all the governors, to my fellow staff, and to the members of the monetary policy board, for their dedication to advance the national economy and the bank of korea. in particular, i pay tribute to my predecessor, governor lee juyeol, for showing such excellent leadership over the past eight years and taking the initiative during the post - pandemic recovery to preemptively normalize monetary policy. i am committed to further build on the public trust and reputation earned over many years by my predecessors. fellow members of the bank of korea, after being nominated as governor, i inevitably found myself reflecting on the korean economy in a new light. from a short - term perspective, the difficulties surrounding monetary policy are being compounded by a prolonged russia - ukraine war, a faster - than - expected normalization of monetary policy by the us federal reserve, and a possible slowing of the chinese economy following the spread of the omicron variant. amid a further rise in inflationary pressures, it appears that the momentum of recovery is going to be weaker than originally forecast. with the trade - off between growth and inflation further constraining the conduct of monetary policy, it is time to steer policy with an aim to strike a delicate balance. together with other 1 / 6 members of the monetary policy board, our consensus - oriented decision - making body, i will always do my best to arrive at the optimal policy decisions. what weighs on my mind, however, is not just the immediate difficulty of deciding policy. from a longer - term perspective, the korean economy stands at the crossroads of a great transformation. there is growing likelihood for the accelerated pace of transition to a digital economy, together with the decline in globalization, to take root as the new, postpandemic normal. as conflicts between nations deepen | 0.5 |
##c ministers for finance and investment agreed to recognise cosse as a private sector association at their meeting held on 18 july 1997 in south africa. in terms of the aims of cosse, the nsx and the jse play an important role in the institutional structures of stock exchanges in sadc. among others, cosse has set itself the challenging goal of establishing by 2008 an integrated real - time network of the national securities markets within sadc, thus facilitating progress with the process of financial integration within the sadc region. this will pave the way towards cross - border listings and, therefore, trading and investments among the different member exchanges of sadc. however, like all successful developments in market infrastructure, this should also be driven by market participants, who will seek the optimum balance between cost and risk. recent monetary policy developments in south africa as i indicated earlier, the existence of the cma implies that south africa effectively determines monetary policy for the whole cma. cpix inflation has been within the inflation target range since september 2003 and averaged 4, 3 per cent and 3, 9 per cent in 2004 and 2005 respectively. since march of this year, cpix inflation has been steadily rising, mainly as a result of rising energy and food prices, and in august inflation increased at a year - on - year rate of 5 per cent. buoyant consumer demand, which increased at an annualised rate of 8 per cent in the second quarter of this year, has been posing a further risk to the inflation outlook. this demand has been fuelled by credit extension growth in excess of 25 per cent. these developments contributed to the expanding current account deficit which measured in excess of 6 cent of gdp in each of the first two quarters of this year. this is turn has contributed to the recent weakness in the rand, which has depreciated on a trade weighted basis by approximately 23 per cent since early may. this degree of depreciation, in turn, poses a further risk to the inflation outlook. in response to these developments, the monetary policy committee of the south african reserve bank has raised the repo rate by 50 basis points at each of the past two meetings of the monetary policy committee. this change in the monetary policy stance has occurred against the backdrop of a strongly growing domestic economy. south africa's economic growth averaged 4, 5 per cent and 4, 9 per cent in 2004 and 2005 respectively. despite the change in the monetary policy stance, we do not anticipate | to approximately 98 per cent whilst south africa has, in effect, retained the bulk of the excise component β which typically amounts to about 50 per cent of the total ; the balance has then been transferred to the other sacu member states, constituting a charge on the services account of south africa β s balance of payments ; an income in the services account of the balance of payments accounts of the other sacu member states. with imports rising rapidly in recent years, import duties collected have also been buoyant and the total amount paid over to the governments of lesotho, namibia and swaziland has risen threefold over the past five years. within sadc, recent developments have been guided by the memorandum of agreement ( mou ) on macro - economic convergence, signed in august 2002 on the one hand ; and the regional indicative strategy development plan ( risdp ), on the other. the mou identifies the following indicators as convergence criteria and proposes the timetable indicated in table 4 for their achievement, whilst table 5 adumbrates the timetable for achievement of the quantitative targets for the so - called secondary macro - economic indicators. stated in words, the sadc convergence criteria require member states to achieve the following by 2018 : an inflation rate of less than 3 per cent per annum ; a budget - deficit - togdp ratio of less than 3 per cent ; a ratio of public - sector debt to gdp of less than 60 per cent and a ratio of the deficit on the current account of the balance of payments to gdp of less than 5 per cent. table 5 can be interpreted in similar fashion, mutatis mutandis. the desire for a stable macro - economic environment is one to which most policy - makers would assent. clearly, though, there will be a need to re - assess the quantitative dimensions of the desired end - state if severe macro - economic dislocation is to be avoided in the period which is to extend beyond 2012, in terms of the sadc timetable. conclusion to conclude : 1. south africa has a well regulated banking system, well capitalised, compliant with basel ii and largely unaffected by contagion arising from the financial market turmoil which started in the sub - prime market of the united states of america last year. 2. the relevant south african authorities maintain vigilance with regard to further development of the banking and financial system. evidence of this is to be found in recent regulatory pronouncements, in particular changes to the regulations under the | 0.5 |
is still underway and the financial stability board is expected to provide recommendations to the g20 summit of november in seoul, the european council has recently agreed that eu member states should introduce systems of levies and taxes on financial institutions to ensure fair burden - sharing and to set incentives to contain systemic risk. as regards these initiatives, i would like to underline that the ecb has always been supportive of exploring the feasibility of such measures. however, for such measures to have the desired effect, it is important that an internationally coordinated solution is ensured. i am also of the view that any contribution by financial institutions should be complementary and coherent with supervisory and regulatory regimes. sequencing of the implementation of measures is thus of utmost importance. finally, it is important that the higher overall cost of funding is not passed on to the customers, for instance in the form of higher lending rates / fees or lower remuneration on deposits. another important area of regulatory reform is the efforts underway to achieve a single set of high - quality global and independent accounting standards by june 2011. in order to have a sound regulatory framework having high - quality and convergent accounting standards is crucial. we have to ensure that the current gap between the ifrs and us gaap narrow rather than widen. it seems that the current fasb proposals on classification and measurement of financial instruments would result in more financial instruments to be measured at fair value, leading to an overall expansion of fair value accounting. accepting this would not address some of the key lessons from the financial crisis, namely that fair value accounting does not always provide decision - useful information and it may exacerbate pro - cyclical effects. in addition, an expansion of fair value accounting would be in direct contradiction to the β mixed measurement model β as endorsed by the iasb, and therefore represent a major setback on achieving accounting convergence. supervisory reform let me turn to briefly touch on the progress with the supervisory reform. if there is one uncontested lesson from the crisis it is the need to further develop the capacity of the authorities to conduct macroprudential supervision. the ultimate aim of macro - prudential policies is to contain the build up of financial vulnerabilities and ensure that the financial system is able to withstand their unwinding, minimising potential spill - overs to the real economy. an effective macro - prudential framework aims at delivering a thorough analysis of systemic risks, as well as the formulation of appropriate policies to address such risks identifying, in | all of this should contribute to making public finances in the euro area credibly robust. the ecb welcomes this outcome. as regards the euro area crisis management instruments, we welcome the decisions of the heads of state or government of the euro area to strengthen the efsf and the esm in a number of areas. first, there is now greater flexibility in the euro area crisis mechanisms to act as backstops, thanks to the decision to accelerate the entry into force of the european stability mechanism, esm, to july 2012 and for the european financial stability facility, efsf, to remain active in financing programmes that have started until mid - 2013. second, the clarification that as regards private sector involvement, the euro area will adhere to established imf practice is also helpful in reassuring investors. third, the decision to include an emergency procedure into the voting rules of the esm1 is essential for effective decision making procedure, especially in crisis situations. as regards the efsf, the governing council of the ecb has decided that the ecb will be able to act as agent for the efsf in its market operations. the ecb β probably supported by a number of national central banks β will make its technical infrastructure and know - how available to the efsf. the technical and legal preparations have started and we hope to complete them in january. iii. credit rating agencies the activities of credit rating agencies, notably in relation to sovereigns as well as the efsf, have lately occupied centre stage in the debate in europe. calls for better regulation have become louder. against this background, the commission β s recent legislative proposals on credit rating agencies, which the ecb broadly supports, is also discussed by this committee. credit ratings have a direct impact on the market functioning and the wider economy. a sound and robust framework must thus be created. this framework should be geared towards the following objectives : to reduce market volatility ; to enhance the quality of rating process ; and to restore market confidence. the two issues that are of particular importance are, first, the assurance of appropriate underlying methodologies and the transparency of ratings ; and second, the reduction of hardwiring of ratings in legislation and market practices. ratings simplify complex risk assessments. but they should only be one of several inputs for investors. in particular, they should be no substitute for financial institutions and other investors to carry out their own assessment. this is the main step towards avoiding mechanistic | 0.5 |
. β i can assure you that we have moved on a bit from those days. with this uncertain outlook and a volatile environment, communication becomes essential, and much has been said recently about central bank communications. the national bureau of economic research4 highlighted the increasing importance of communication as a powerful tool that has the ability to move financial markets, enhance the predictability of monetary policy decisions and help achieve central banks macroeconomic objectives. this is because central bank communications influence short - term interest rates which in turn influence long - term interest rates and other asset prices which affect macroeconomic variables such as inflation and output. having said that, it is also true that poorly executed communications can do more harm than good and in these instances sometimes β less is more β. janet yellen5 made reference to a growing body of research and experience around the topic of communication which demonstrates that clear communication is itself a vital tool for increasing the efficacy and reliability of monetary policy. she pointed out that the challenges capital flows to emerging market economies, june 26, 2013. central bank communication and monetary policy : a survey of theory and evidence, april 2008. communication in monetary policy, april 4, 2013. bis central bankers β speeches facing the us economy in the wake of the financial crisis have made clear communication more important than ever before. often, comparisons are made between the 1994 fed rate hiking cycle and that of 2004 and many have contemplated whether we could be headed for a repeat of 1994. in 1994 the fed hiked interest rates from 3 per cent to 6 per cent in the space of 12 months. there was significant spillover effects on global financial markets in particular as they related to a sharp decline in portfolio inflows into latin america and the mexican crisis ensued. in contrast, the fed β s exit in 2004 had a much more muted impact on global markets. nonetheless, markets reacted quite differently in the two episodes β¦. what was the difference? the 1994 exit was unanticipated while the 2004 exit was anticipated. expectations created and communication provided played a big role in how markets reacted. suffice to say, of course, preparing the market and clear communication does not in and of its own ensure a smooth transition, but it can certainly help limit volatility and uncertainty. this time around, the task at hand is made even more complicated by the fact that monetary accommodation provided is much more than was provided in the past and much more creative than in previous episodes. it is clear that consistent and clear communication will be | philipp m hildebrand : monetary policy situation and economic prospects summary of a speech by dr philipp m hildebrand, member of the governing board of the swiss national bank, at the centre for banking studies, lugano, 28 september 2004. the complete speech can be found in french on the swiss national bank β s website ( www. snb. ch ). * * * in formulating its medium - term monetary policy, the swiss national bank ( snb ) must take the uncertainty surrounding the development of the economic environment into consideration. the snb believes that the economy is well on the road to recovery, both in switzerland and abroad. for our country, it anticipates real gdp growth of close to 2 % in 2004. sustained growth is also expected for the coming years. consequently, the utilisation of the economy β s production capacity will steadily improve, while unemployment will gradually decline. the improved utilisation rate will be accompanied by a rise in inflationary pressure in the medium term. this scenario could be revised, however, if new information were to come to light. the snb will thus continue to monitor economic developments closely and will subsequently draw the necessary monetary policy conclusions. | 0 |
principles of islamic finance. however, they are not as visible and omnipresent as their conventional peers. the case is compelling for islamic finance to take on a more prominent role in the fintech ecosystem. the technology is ripe, with higher penetration of mobile and internet across markets. consumers are also becoming more and more tech - savvy. digital - banking consumers stand at an estimated 670 million in asia alone and are expected to reach 1. 7 billion by 2020. in malaysia, within a population of 31 million, there is high mobile and internet penetration rate at about 141 % and 81 % respectively. with a diverse population and a growing middle class, malaysia is an ideal test bed for developing and commercialising fintech solutions. the emergence of fintech has opened up new opportunities which can greatly benefit the financial industry. at its core, fintech has led to the creation of various business models that help improve and simplify financial transactions, which 10 or 20 years ago seemed impossible. here, i would like to highlight three key areas that islamic finance stand to gain from fintech. entrepreneurs too stand to gain from fintech. first, fintech provides the technological underpinnings to realise the goal of islamic finance in creating a risk sharing economy. this will in turn benefit entrepreneurs who will gain wider access to bank - intermediated credit. an example is the investment account platform ( iap ). iap is malaysia β s first multi - bank online 1 / 3 bis central bankers'speeches platform that combines the credit evaluation expertise of islamic banks and the power of technology to channel funds from investors to economic ventures. this virtual β multisided β platform facilitates a collection of interesting investment ventures and projects, with transparent risk - return rewards for investors. second, fintech has opened up new sources of funding to entrepreneurs, in what is increasingly being referred to as the alternative financing space. crowdfunding and peer - to - peer ( p2p ) funding platforms have emerged as highly efficient β matchmakers β between entrepreneurs and investors. from the usd10 million raised globally in 2009 through nine major platforms, crowdfunding platforms mobilised over usd767 million in 2016 with backers from over 200 countries. this has facilitated the growth of entrepreneurs by providing finance to about 1. 3 million crowdfunding projects. crowdfunding platforms also allow entrepreneurs to closely engage with their customers β themselves investors β to shape and refine product ideas. a good example is the role played by crowd | ##ing population during their retirement years. malaysians today live longer and have fewer children. by the year 2020, the percentage of the population above the age of 60 years is estimated to more than double to 16 % of the population, from only 7 % in 2000. the demographic changes also have significant implications for healthcare financing. with the ageing population and medical inflation, total expenditure on healthcare has continued on an increasing trend. a large proportion of that is borne directly β out - of - pocket β by individuals, or by employers as part of employment benefits for staff. going forward, private pensions and health insurance will have an increasingly important role in supporting sustainable financing in the long term for retirement and healthcare. more malaysians are already turning to the private insurance industry to finance their healthcare expenditure. as a result, the medical and health insurance business has grown significantly in the last five years, averaging at an annual growth rate of close to 30 %. about 80 % of this business is written by life and composite insurers, mainly as riders to life insurance policies. similarly, a larger role for private pensions may be envisaged under the pension reform initiative. at the same time, there is also a growing awareness among malaysians of individual responsibility in financial planning. planning for retirement and healthcare needs are clearly among the most important of financial decisions, but sound financial planning also includes individuals protecting themselves and their dependents from financial vulnerabilities arising from death, disability or unemployment, providing for children β s education and as well as making sound investment choices. these developments present enormous opportunities for the life insurance industry, particularly given the large untapped market that still exists with less than 45 % of the population having a life insurance or family takaful policy. by the same token, however, they place equally important responsibilities on insurers to make sure that the products sold are suitable, that insurers have assets which match their liabilities ; and that customers are given enough information to enable them to make responsible decisions. to its credit, the insurance industry has taken important strides in rising to the challenges faced. generally, bank negara has been encouraged by the positive response of the industry to new regulations that further strengthen corporate governance and risk management standards and promote the fair treatment of consumers. of course, some companies have been more progressive than others in absorbing the regulatory principles within their companies. but overall, our supervisory interactions with the industry have shown that the industry as a whole has made good progress in lifting | 0.5 |
by extension demand for commodities such as crude oil β’ second, how to ensure that nigeria β s economy is insulated from the adverse consequences facing emerging and frontier markets, due to rising rates in the united states. β’ third, what is the likely impact on the crude oil market from the sharp rise in us oil production, which currently stands at 11. 7m barrels per day and is likely to rise to over 14m barrels in 2 years? 12. as you may recall, nigeria β s political - economy experienced significant challenges over the last few years revealing its structural deficiencies particularly with regards to its dependence on crude oil, as a major source of its revenue and foreign exchange, as well as over dependence of our people on imported items even when these goods could be produced locally. the 60 percent decline in crude oil prices between 2015 and 2016 helped shape the trajectory of our economy, ultimately triggering the economic recession in q1 of 2016. road to recovery 13. the country β s overdependence on crude oil for fx revenue meant that shocks in the oil market were transmitted entirely to the economy via the fx markets as manufacturers and traders who required forex to purchase their inputs as well as goods, were faced with a depleting supply of foreign exchange in the country. the impact of this decline on our reserves was evident in the rise in the value of the us dollar relative to the naira ; and a rise in the consumer price index due to the increase in the cost of imported inputs and goods. in a bid to contain rising inflation and to cushion the impact of the drop in fx supply on the nigerian economy, the bank took three bold steps ; 14. first, the cbn tightened money supply in order contain inflation while improving yields in local bonds, which attracted the attention of foreign investors. second, we analyzed our import bill and encouraged manufacturers to consider local options in sourcing their raw materials, by restricting access to foreign exchange on 41 items. third, the investors and exporters fx ( i & e ) window was introduced, which allowed investors and exporters to purchase and sell foreign exchange at the prevailing market rate. 15. the impact of these three measures led to an increase in foreign exchange inflows into the country ; transactions in the i & e fx window reached $ 24 billion ( $ 6 billion net inflows ) in 2017 and nigeria β s foreign exchange reserves rose to over $ 48billion at the end of may 2018 from $ 23bn in october 2016 foreign | since january 1999 this standardised deduction has been set at 10 % for both types of securities. today, following a review of new statistical evidence available, the governing council decided to increase the standardised deduction to 30 %. this decision shall have effect as from the determination of the reserve requirement to be fulfilled in the maintenance period starting on 24 january 2000. a separate press release presenting this decision and some background information on standardised deductions from the reserve base will be issued to you here today. the governing council today approved the ecb β s budget for 2000, which gives the ecb the green light to recruit further staff needed to support the ongoing activities of the ecb. this will bring the ecb β s staff to slightly over 1, 000 ; the number of staff employed to date stands at 750. at its meeting on 18 november 1999 the governing council approved the publication of an update of the book on β european union balance of payments statistical methods β ( the β b. o. p. book β ). this important book documents the statistical methodologies applied in member states in compiling balance of payments statistics and, as such, improves the transparency of the compilation of euro area statistics. this new version includes additional chapters on : ( i ) investment income ; ( ii ) estimation methods, especially for goods, investment income and portfolio investment ; ( iii ) financial derivatives ; and ( iv ) the stocks compiled for international investment position statistics. the book was published on the ecb β s web site at 4 p. m. yesterday and will be available from the ecb in hard copy format during the course of next week. finally, let me inform you that the general council discussed the monetary policy objectives, strategies and intentions of the non - participating eu central banks against the background set by the monetary policy of the eurosystem. this is the second time that such an exercise has been undertaken since the ecb was established. | 0 |
raghuram rajan : strengthening our debt markets annual day address by dr raghuram rajan, governor of the reserve bank of india, to the foreign exchange dealers association of india, mumbai, 26 august 2016. * * * thank you for inviting me to speak to fedai. in the last few weeks, in successive speeches, i have outlined the rbi β s approach to inflation, distressed debt, financial inclusion, and banking sector reform. i want to speak today about debt markets and associated derivatives ; why we need them to be deep and liquid, why, in addition to central and state governments, we need riskier firms and projects to be able to access the bond markets for funds, why we need to encourage product innovation, and finally the dilemmas that regulators like the rbi face. in the process, i hope to touch on some of our recent successes, as well as failures, and our ambitions for the future. there are three important reasons why debt markets have become a lot more attractive in recent months. first, we finally have a framework that commits us to low and stable inflation. yes, july β s inflation reading was a high 6. 07 %, but i have no doubt that inflation will fall in the months ahead. the key point is that market participants know that the monetary policy committee has to maintain low and stable inflation, certainly over the next five years for which its remit has been set, and it will do what it takes. this lowers the inflation risk premium, and thus reduces the nominal fixed interest rate for everyone, from the government to the riskiest borrower. in this regard, i am confident that dr. urjit patel, who has worked closely with me on monetary policy for the last three years, will ably guide the monetary policy committee going forward in achieving our inflation objectives. a second development has been the reluctance of public sector banks ( psbs ) to lend, and together with private sector banks, the reluctance to fully pass through past policy rate cuts into bank lending rates. short term market rates, however, have seen full pass - through. no wonder highly rated firms are bypassing banks to borrow from the commercial paper ( cp ) markets, with outstanding commercial paper having more than doubled in the last two years to over 3 lakh crores ( see chart below on cp outstanding juxtaposed against incremental bank lending ). but what of lower rated firms? unfortunately, the difficulty of debt recovery in india has meant that credit | the highest rating, it is important that there be no explicit or implicit default or restructuring of such obligations. while a restructuring may seem like a way to postpone obligations, its ramifications, not just for the yield the market will demand of the particular state government issuer in the future but also for the yields on obligations of other state governments, are large enough that such actions should continue to remain β unthinkable β. bis central bankers β speeches regulations we are conscious of the limitations placed on netting of derivative contracts, and thus the higher associated capital requirements on banks. the issue has been taken up with the government, and we hope to amend the rbi act to make such netting possible. as with the tax issues associated with securitization, which have recently been addressed by the government, resolving this issue should hopefully lead to substantial market activity. finally, while the rbi is a liberalizer, we have to be careful not to relax prudential regulations simply because an entity or activity is deemed of national importance. dispensation on prudential regulation is the wrong instrument to favor such activities. a nationally important activity such as infrastructure may be very risky. to require lower provisions, or to allow higher leverage or ecbs against such activities, may increase systemic risk. in the long run, the activity may be damaged by the regulatory dispensation ( too many infrastructure projects that do not have dollar earnings will be financed with dollar or yen loans and cannot repay ) and stability may also be compromised. it is far better for the government to directly subsidize such activities if it deems them important than for rbi to sacrifice systemic stability on the altar of national importance. conclusion let me conclude. while the rbi has been cautious in reforming during the recent period of global market turmoil, it has not stood still. market reforms have proceeded at a steady measured pace. observers may be impatient, but my belief is that steady and irreversible reform and β mini bangs β like yesterday β s rather than β big bang β is the need of the hour. as global conditions become less uncertain, the pace of reform can pick up. the lessons we have learnt during this period on what works will be invaluable then. thank you. bis central bankers β speeches | 1 |
. notwithstanding these increasing efforts, demand continues to outstrip supply, and there is the widely - held view that the sme sector is still underserved. perhaps that is the main justification for this seminar β to provide an opportunity for small business entrepreneurs and associations, financial institutions, government bodies, the private sector as well as academic institutions to ( a ) examine the major challenges facing the sector ; and ( b ) to identify some necessary priority actions that can contribute to building a more vibrant small business sector in trinidad and tobago. today β s programme is organized around four ( 4 ) main themes ( a ) characteristics of the sector and the constraints affecting smes ( b ) fostering entrepreneurship and developing an appropriate business environment, ( c ) financing sme development, and ( d ) setting priorities for sme development. one of the major obstacles to developing appropriate policies for the sme sector is the lack of an organized set of information on the sector, its contribution to national output, investment and employment. the first session of the seminar is devoted to a discussion of these issues, drawing from the preliminary findings of two studies that are currently in the field. the second and third sessions of the seminar take a more in - depth look at some key factors that are critical to fostering entrepreneurship and to the development of appropriate business environment, drawing on current best practices. in the final segment of the programme, we have invited a number of associations connected to small and medium sized enterprises to identify some of the areas that need to be given priority, if smes are to play their role in the development and transformation of the economy. the central bank has a deep involvement in small business development β not by actually providing financing ourselves, but in a catalytic way, by encouraging financial institutions to be responsive to the financing needs of smes. recently, the bank expanded its support for sme development through its national financial literacy programme. we are now in the final stages of preparing a sme handbook, which is geared to helping small entrepreneurs better understand the business climate and to providing them with relevant material to assist in the effective management of their businesses. this handbook will cover issues such as product pricing, product distribution, marketing, sourcing finance, budgeting, the development of an appropriate business plan and the preparation of financial statements to mention a few. ladies and gentlemen, today β s programme could not have come at a more opportune time, since we need our small business sector to bolster our economy β s resili | do with the sustainability of the movement and with enlightened self - interest. the financial environment is changing very rapidly β more so now than at any period in our history, because of the proliferation of modern information technology. the credit union movement will have to continue changing with the times to meet its members β needs, to fend off competition from other financial service providers and to remain relevant. the sustainability of the movement will require that credit unions get into increasingly riskier activities to survive and thrive. in these circumstances, formal, rigorous supervision will become more critical and more urgent. i should add that it is in everybody β s self - interest to have effective formal regulation since poor financial practices by one or two credit unions could undermine confidence in the entire movement and could conceivably have contagion effects on the entire financial system. i must concede that formal arrangements for the prudential regulation of credit unions are a relatively recent phenomenon. we, in trinidad and tobago, are not alone in lacking adequate credit union legislation. in fact, data published by the world council of credit unions ( wccu ) indicate that only about one - third of 104 member countries surveyed, have credit union - specific legislation. in most developing countries credit unions continue to be regulated under cooperative societies legislation. the united kingdom brought credit unions under the authority of the financial services authority ( the regulator for the commercial banks ) only in 2002. in jamaica, legislation shifting the regulation of credit unions to the bank of jamaica ( the central bank ) was passed in 2004 but the operating details are still being worked out. in barbados, starting last year the five largest credit unions accounting for 80 percent of total credit union assets are supervised jointly by the central bank and the registrar of credit unions. recently, the trinidad and tobago government announced the intention to amend the financial institutions act to bring large credit unions under the regulatory control of the central bank. the rationale was that that these institutions were essentially conducting business of a β banking nature β and should be regulated as banks, while the other credit unions involved in more traditional activities would continue to be supervised elsewhere. having examined the fia, it may indeed be more complicated than originally envisaged to adapt this piece of legislation to the credit unions. our research shows that legislation intended for commercial banks is generally inappropriate for credit unions, whose purpose is to provide cooperative financial services to members who are their depositors, their borrowers and their owners. credit unions are different from commercial banks because of a number | 0.5 |
failing to pay for the negative externalities they created, some changes in the corporate decision - making are expected. the second point is that β there is a strong link between financial stability, on the one hand, and capital and financial discipline, on the other. β a competitive and stable economic framework has to ensure an appropriate balance between rights or liberties and obligations or accountability of entrepreneurs. while many efforts have already been made on the macroprudential side, we should also pay attention to the micro level. when a crisis hits, you have to have your house in order. that means you have to address preemptively your own vulnerabilities. at the heart of any economy lies the capital, which in developing countries is the main factor of production. the quantity and quality of capital ensure the competitiveness of the economy, which creates the conditions for reaching an optimal macroeconomic equilibrium. the segregation between freedom and responsibility at the level of firms seriously undermines the foundation of the market economy and creates deep social disparities. 3 / 4 besides a strong capital base, a fully functional market economy needs strong financial and payment discipline. without these, financial instability would likely appear. * * * and, i would like to conclude by expressing, on behalf of the national bank of romania, our appreciation to all the participants for attending the seminar and to the imf for their constant support in organizing such useful debates. as the purpose of the seminar is to discuss current financial stability challenges and to exchange knowledge in dealing with such challenges, i believe that the objective has been achieved during these two days event. finally, taking into account : first, the issues i have mentioned above ; second, the direct and strong correlation between the capital and the real economy and third, the fact that the distinguished participants who will take part in the next year seminar can offer the possibility to share experience among countries and institutions, i would like to suggest that the 2020 event topic to be β the capital in the real economy as a cornerstone of the financial stability β. 4 / 4 | target level until the wage gap is closed. for philips curve to work, the loss of welfare from a negative wage gap has to be fully compensated first β as a stock measure, not as a flow. the policy recommendation from here is that countries which closed their wage gap should be much more prudent in further wage increases β because they will be seen in inflation much faster and larger than in the recent past. and for countries which have not closed their wage gap the implication is 3 / 5 bis central bankers'speeches that inflation will remain subdued until this happens. i fully agree with the imf β s recommendation that central banks in nms with their own currencies should be alert to the inflation risks of higher wage growth, while bearing in mind that raising policy rates could trigger capital inflows and exchange rate appreciation β which could further deepen current account imbalances. while the real monetary policy stance may differ between euroarea and emerging europe, there is broad heterogeneity even among emerging europe. this is why it is important not to give the wrong incentives to capital flows. this reminds me of my days as a child when, being asked what i want to become when i grow up, i confessed that i wanted to be a firefighter. it turns out that i am now a central banker, which is not far from being a firefighter in these uncertain times. national bank of romania has started the tightening cycle of the monetary policy, to contain the higher inflation and inflation expectations. although most of it is supply - side and temporary, and fighting fiscal loosening with monetary tightening is a sub - optimal policy mix, we considered that the 3 rate hikes we implemented this year were warranted to preserve a hard - fought public good : price stability. coming to an end of my intervention, i would like to express a few thoughts on one of the most important remarks of the reo. it states that β the recovery provides an opportunity to move faster to deepen the economic and monetary union β. the report details three lines of action in this regard : completing the banking union, creating a central fiscal capacity, and advancing with the capital union. too much financial innovation, deregulation and the blind, theological belief in self - regulating markets have brought us here, back to the era of re - regulation ; but coordination is needed for that, and glexit is threatening this coordination. it is however undeniable that the completion of the banking union | 0.5 |
##chanisation while the jobs created in the growing services sector may offer lower pay. furthermore, the returns that go to the developers and designers of technology now far exceed the returns to the people who assemble the products or even the people who extract the raw materials for the product. these distributional challenges arise in a global context. with a rising share of profits going to the design companies who are generally located in advanced economies, less of the value addition occurs in poorer countries. to put it differently, more of the value of the product accrues from the research, development, marketing, logistics and intelligence of the product than in any other part of the supply chain. the pace of technological change appears to be accelerating exponentially. the internet, mobile telephony, networked computing and more recently artificial intelligence have implications for the world of work and for our lives that are difficult to comprehend. joseph stiglitz in his 2010 book freefall, argues that the jobs lost in agriculture at the end of the 19th century contributed to lower aggregate demand, leading to the great depression. this catastrophe was only resolved through the rise of manufacturing, initially prompted by the demands arising from the outbreak of second world war. is the unemployment we are witnessing today a result of a great dislocation of workers from manufacturing to services, or a replacement of workers β both skilled and unskilled β by artificial intelligence, or are there new work opportunities that are yet to be identified that could absorb the growing army of unemployed across the globe? bis central bankers β speeches these trends pose complex questions for policymakers. should we protect certain sectors, and if so, how? does protecting certain sectors or firms weaken the ability of the economy to transform or to innovate? again referring to the growth commission report, the preferred approach is to protect people through sensible welfare safety nets and retraining opportunities rather than protecting specific jobs. it also brings back into focus the role of the public sector not only as provider of public goods such as education and research and development but also as employer in labour intensive services such as health care, transport, crime prevention and education. does this level of unemployment not require all of us to reconsider the role and responsibility of the state in filling the gaps in services to all citizens that the private sector is not adequately meeting? conclusion south africa and the world face difficult challenges in reviving economic growth and creating jobs. sensible counter - cyclical policies combined with longer term structural reforms aimed at promoting growth, employment | 2004, so did the external fund management programme. in 2004, south africa β s gross reserves amounted to approximately us $ 8 billion and this had grown to us $ 50 billion by 2011. however, with the most recent review, which took place this year, we decided that the funds under external management would be reduced, primarily because the latest saa supported benchmarks and related portfolios that could largely be managed internally. currently, we are at an advanced stage of reviewing the custodial arrangements we have in place, including the type of model which we would like to follow going forward. the custodial review entails : β’ benchmarking services received from custodians against current world custodial service standards ; β’ reviewing the current ratings of custodians against minimum ratings standards ; β’ reviewing services required from custodians against the bank β s business requirements ; and β’ determining the capabilities of custodians to provide ancillary services such as accounting, performance attribution, settlements and risk measurement and reporting. prior to the custodial review, the bank embarked on a comprehensive systems renewal project in order to upgrade the bank β s it and risk management systems, so as to create a superior reserve and risk management operational platform. the two projects, the systems renewal and custodian review, of course have a direct bearing on each other. we hope to make final decisions for the systems renewal later this year and hopefully be in a position to start implementing whichever system is chosen by the end of the year or early in 2014. the decision regarding custodial arrangements we also hope to make early next year. 4. asset tapering and reserves management what will keep reserves managers up at night? no doubt an important issue for reserves managers going forward is that of asset purchase tapering and the timing of policy tightening after the asset purchasing programme has been completed. the implementation of asset purchases by the us federal reserve in a bid to dampen yields on the longer end of the yield curve resulted in significant increases in prices of us treasuries, and prices of other advanced economy and emerging market bonds. in such an environment, it was not too difficult for reserve managers to earn good returns as yields rallied substantially, albeit with a fair amount of volatility. but as they say, everything that goes up must come down. the mere expectation of tapering by the us federal reserve had a significant impact on markets, bis central bankers β speeches introducing significant volati | 0.5 |
debt was under control, private debt was not. returning to figure 5 shows the rapid expansion in net foreign debt of the irish banks. recalling what i have said about the banks β earlier behaviour, the speed and scale of this accumulation was altogether new. the irish banks were moving into unfamiliar deep waters, where they would soon get into difficulties and drown. growth in the new millennium relied increasingly heavily on bank - financed property - related revenues to support β directly or indirectly β employment, profits, dividends, wage and salary income levels, and tax revenue. the rapid reversal in the trend of public debt after 2007 has been quite explosive. it reflects both the injection by the government of funds into the failed private banking system, as well as the emergence of a huge deficit on the rest of the government β s accounts, shorn as they now are of the boom - time tax revenues. 8 once again, it seems that the irish economy has shown a propensity for rapid changes of fortune. it is not to understate the severity of the debt challenge, public and private, currently facing the irish economy to recognise this propensity, and to believe that it reflects in part a flexibility which will clearly be a very helpful ingredient in the recovery. 9 had it not been for the official funding from eu and imf sources, the budgetary cutbacks would have had to be much more severe, and economic wellbeing would have been much more badly affected. indeed, the collapse in incomes and the rise in unemployment in the crisis largely predates the arrival of the troika. unemployment at the end of the programme was lower than at the beginning. but now the legacy of debt, public and private ( only some of which can be attributed to the famous bank guarantee ) presents major challenges for government and for over - indebted households, firms and their bankers. for the government, there has been the challenge of dealing with indebtedness. of course the early decision to socialise the risks of bank losses has turned out to be much more of an unnecessarily open - ended gamble than it can have seemed at the time to the decision - makers, blindsided as they were to the lack of well - quantified underpinning of the advice they were being given. from that point on, as more and more information emerged 2002 ; and perotti, 2012 ). we therefore have not included this episode in our case studies because it does not seem repeatable | being re - appreciated, leading to some reappraisal of the relationship model for sme lending. community - based lenders can be key actors in this dimension. 13 and innovations in such areas as crowd - funding could also come to complement other forms of non - bank finance which are sure to grow in importance as banks repair their balance sheets and respond to regulatory demands. not every financial innovation makes sense ; finance attracts many crackpot schemes and is a happy hunting ground for populism. but it is clear that there are several different proven models of organising finance that are equally good in delivering growth outcomes, 14 and which can have different impacts in other dimensions. income inequality returning to the question of income inequality, i would argue that ireland is not exceptional in this dimension either. as far as the income share of the top 1 per cent is concerned, the last quarter of the 20th century saw ireland β s figure growing midway between that of a group of β anglo saxon β countries and a group of β continental β countries ( alvaredo, atkinson, picketty and saez, 2013 ). indeed, in ireland, despite the substantial loss of national income in the bust, policy has gone some way towards limiting the rise in poverty in the downturn ( callan et al., 2013 ). this surely reflects a broad political consensus in ireland ; indeed some will argue that more should have been done. actually the data suggest that the later years of the boom did allow relative poverty to decline in ireland, at a time when the opposite was happening in many countries ( figure 8 ). and the corresponding data for 2010 and 2011 suggest that any reversal in this improvement has been small and mainly concentrated among young adults ( the data for 2012 are not yet available ). a similar story is shown by the gini coefficient, another indicator of inequality. of course, holding inequality or relative poverty constant at a in line with standard international practice, the recorded profits of the banks contributed to measured gdp, whereas their loan losses have been treated as a capital item, and have not been subtracted from the gdp of any year. this is why i regard strengthening of the credit union movement both financially and institutionally β a task which has been conferred on the credit union restructuring board ( rebo ) as worthy of the substantial financial resources that have been earmarked for it. for instance the choice between relying mainly on stock markets or on universal banks for the financing of firms. bis central bankers β speeches time of falling | 1 |
changing the interest rate, the riksbank can affect actual output growth in the short term but not the potential, long - term growth rate. monetary policy can possibly indirectly lay the foundation for good growth in the long term by ensuring that our payment and price - setting system functions in an efficient and confidence - inspiring manner. what determines long - term growth? as you understand from what i have said this far, it is important for the riksbank to make a good assessment of the swedish economy β s potential growth capacity in order to conduct successful monetary policy. we therefore return to this issue fairly often in, for instance, our inflation reports. one difficulty is that potential output and potential growth cannot be observed directly in the same way as actual gdp and employment. instead, the measure must be estimated using statistical methods and there are a number of these, each with its own advantages and disadvantages. in other words, there are several different ways of drawing the orange line in figure 1, and the different methods have demonstrated fairly differing results. the riksbank therefore uses several different methods of calculating the output gap. we also supplement our analysis with a number of other indicators of resource utilisation in the economy. as i mentioned earlier, long - term sustainable growth in the economy is determined partly by technological developments in society. this means that production per hour worked shows an increasing trend over time and thus is one of the more important contributions to long - term growth. but long - term changes in the factors of production can also affect potential growth. if we measure the labour force β s contribution to production in the number of hours worked, one can express it simply as our long - term growth potential depending on how much we work and how productive we are. however, it is important to point out that it is the more long - term developments in productivity growth and the change in labour contributions that are significant in this context. i mentioned earlier that different methods of estimating potential growth can give quite different results. one of the reasons is that it is difficult to distinguish the more long - term sustainable trend from temporary developments. it is of course no easy task to determine whether a change is permanent when we receive new statistics on economic developments. however, it appears that this can even be difficult to determine afterwards, when studying the historical trend. as i intend to illustrate, this applies to both productivity and labour supply. so, allow me to proceed to look more closely at the determining factors behind long - term growth and | , problems arise if the economy grows at a more rapid rate than that allowed by potential growth over a longer period of time. then production resources become strained, bottlenecks arise and tendencies appear towards overheating. in this way, potential growth for the economy can be likened to a recommended speed from which it is important not to deviate for too long a period. it is in this short - term perspective that monetary policy can play a role in influencing growth. as the output gap reflects the demand pressure in the economy and the demand pressure in turn affects inflation, monetary policy is largely about choosing an interest rate that will make the output gap as small as possible. if actual and potential output coincide so that the output gap is closed, inflation is in line with the riksbank β s target of 2 per cent, assuming that there is confidence in the policy conducted. this means at the same time that the size of potential growth affects the scope for conducting monetary policy. the higher the long - term sustainable growth rate, the higher the actual growth rate can be without resource utilisation becoming so high that inflation takes off and the riksbank is forced to intervene to subdue demand. this reasoning is of necessity somewhat simplified. in actual fact, temporary shocks to inflation can occur that lead to inflation not being on target, despite the fact that actual and potential output are at the same level. however, in this case, inflation is in practice probably close to the target, so a more realistic description is therefore that the target on average is met when the output gap is closed. moreover, monetary policy affects demand with some lag. consequently, the riksbank adjusts the interest rate in accordance with forecasts of inflation a couple of years ahead. during this period shocks can of course occur in the economy that couldn β t be foreseen at the time of the forecast. we therefore attempt to avoid excessive fluctuations in the economy by gradually bringing inflation back towards the target. thus, in the short term, the riksbank can affect output and employment by adjusting the interest rate, thereby stimulating or cooling down economic activity. but in the long run, attempts, for example, to make the economy grow faster than its long - term sustainable rate would only result in higher inflation without any change in output or employment. as i mentioned, the economy β s long - term capacity is limited by the size of the factors of production and their productivity. these factors cannot be governed by monetary policy. by | 1 |
adjustment effort, including addressing interest costs on selected debt on a voluntary basis, to reflect current borrowing constraints. the impact of the fiscal developments was manifold. first, fiscal adjustment attempted to compensate for the substantial loss in taxes from foreign sources by substituting with domestic taxes. as a result, sequential reforms were made to the personal income tax and property taxes, new taxes were introduced to stabilise revenue and the value added tax was reformed and the rate increased. secondly, potential growth enhancing capital expenditure absorbed much of the initial non - interest expenditure adjustment. however, state enterprises were able to cushion the impact on growth through their capital works programmes. however, since some of these enterprises lack the financial capacity to service the ensuing debt, central government is expected to absorb the costs over the medium term. thirdly, the persistence of large deficits and rising debt led to deterioration in the sovereign credit rating, with adverse effects on access to capital markets at reasonable costs. increased reliance on domestic financing while servicing debt has added to the depletion of reserves. fourth, government encountered cash flow difficulties that encumbered its ability to make payments on a timely basis, including to some of its public enterprises. fifth, policy makers were forced to review how longstanding entitlement programmes, particularly for education and health, should be financed in an environment in which financial resources were insufficient to meet demand. sixth, policy makers have had to review the size of the public sector, its scope of activities and its efficiency in delivering its services. jobs were cut from the public sector roll in 2013 and steps taken to identify agencies which could be merged to avoid potential duplication of services. this review is ongoing. in addition, some state assets have been identified for divestment, creating resources to ease short term financing flows. some of the challenges being experienced in barbados are being replicated across the region. deficits, debt and access to low cost finance are interrelated. it is important for us to recognise that every dollar of the fiscal deficit has to be financed or arrears will accumulate. the sale of state assets, when judiciously applied, can enhance cash flow by providing one - time revenue. but in general, only productive assets can be quickly sold for what there are worth, while the sale of such assets may have, inter alia, competition, relative prices, income distribution and foreign exchange effects. moreover, divestment does not substitute for the need for fiscal adjustment. against this backdrop, what therefore | , to their regional partners, branches and subsidiaries, and to their head offices and activities outside the region as well. surveillance must be undertaken in collaboration with other domestic regulators, and a framework must be set up to provide for regional financial surveillance on a sufficiently frequent basis. for this analysis and reporting, data collection and reporting must be more comprehensive, analytical tools will need to be strengthened, some international guidance will have to be revisited, and staff of regulators and financial institutions will need to be trained in the upgraded systems. there is much to be done, and it will be necessary to proceed on parallel tracks, in practical steps. the main items which the public can look forward to in 2010 are : β’ an action plan for regional financial surveillance, to be undertaken as a collaborative effort of all caribbean regulators, coming out of the march 3 β 5 workshop ; β’ the publication of financial soundness indicators online by the central bank of barbados, starting with indicators for banks ; and β’ the publication of the inaugural financial stability report by the central bank of barbados. financial stability is in all our interests, the regulators, the financial institutions and the general public. by actively working together with the institutions we supervise, the financial regulators will be able to keep the public up to date on the health of the financial system, and provide the facts, figures and analysis to support their assessment of its stability. | 0.5 |
equity market since 2011, the average core tier 1 capital ratio has risen from 5. 7 to 10. 8 per cent ; the ratio stands at 8. 8 per cent for the other banking groups and at 13. 8 per cent for the smaller banks, mostly mutual banks. the capital of the smaller banks is generally adequate. some large and medium - sized groups must make further progress in strengthening their own funds. capital strengthening will permit compliance with the basel 3 rules and achievement of the objectives that will be set for the assessment of banks β overall risk profiles. it makes it possible to limit the degree of leverage without reducing credit support to the real economy. capital strengthening is in the interest of shareholders : the resulting decrease in risk lays the foundation for reducing the cost of capital and, looking ahead, raises the return on the resources invested. a low exposure to financial risks also helps to curb the cost of funding. in 2012 the capital gains on government securities purchased at prices far below those consistent with the fundamentals of the italian economy cushioned the impact of the macroeconomic deterioration on banks β income statements. any dividends paid must not draw on banks β capital reserves ; they must be compatible with capital targets communicated to banks at the end of the annual supervisory and review process. banks β profitability given the persistently unfavourable economic and financial situation, it has been contended that banks β profits are high, especially compared with those of firms. so the banks, the argument runs, should be called on to expand the supply and lower the cost of credit, to reduce their fees, and to offer an array of services free of charge. actually, two recessions in the span of three years, undermining the quality of banks β assets, have generated loan losses that seriously erode profitability. the sovereign debt crisis has made funding in the wholesale markets harder and more costly, further reducing the profitability of traditional credit activity. the profitability of the major banking groups is low. in the first nine months of 2012 their return on equity, annualized and net of extraordinary goodwill impairments, was just above 3 per cent. the modest growth in the volume of business and the incidence of loan losses will continue to compress banks β earnings until the economic recovery takes hold. the uncertainty over economic and financial market developments will continue to weigh on the speed and the extent of the rebuilding of profit margins, which are in any event bound to remain below their unsustainable pre - crisis levels. | stock of them is kept large by the slowness of recovery procedures. it should also be noted that in the last few years the proportion of impaired loans backed by guarantees has risen for italian banks. in the meetings with the international monetary fund, which is currently performing its periodic assessment of the stability of the italian financial system, we stressed the need to bear these aspects in mind when attempting to draw policy implications from international comparisons. another question that is sometimes raised is whether the loan assessments that we require banks to make are not excessively cautious and therefore likely to slow the financing of the economy. here again it is necessary to be clear. the prudence we require in the assessment of loans helps to safeguard the integrity of banks β capital and contributes to increasing the market β s confidence in them. analysts and investors want the amounts stated in balance sheets to reflect the actual quality of banks β assets and provide reliable indications of the risks involved. prudent provisioning policies encourage the disposal of impaired items. it also needs to be recognized that such policies are likely to be hindered by a harsh tax treatment, which should be gradually removed. in periods of market tension, the intensity of supervision cannot be relaxed until the economic recovery produces its effects on banks β accounts. tolerance towards situations of persistent support to borrowers with a precarious financial condition and no prospect of growth would not only risk undermining the soundness of the banks but also hinder the efficient allocation of resources to the economy. the inspections we perform make it possible to assess the situation of each intermediary on a case - by - case basis. we pay due attention to the risk of generating procyclical effects. to this end, above all we ask banks that need to strengthen their capital bases to free resources by reducing their costs, selling non - strategic assets and retaining earnings in the business. beyond the short term the prudent assessment of assets is beneficial to the financing of customers, especially if coupled with action by the banks to increase their ability to resist and bis central bankers β speeches react to external shocks. efficient production processes and attention to strategic sectors contribute to the growth of credit business and in this way to the support of the economy. in recent years italian banks have increased their capital resources considerably, especially core tier 1 capital. since 2007 the core tier 1 ratio of the banking system has risen from 7. 1 to 10. 4 per cent. for the five largest banking groups, which have raised β¬17 billion on the | 1 |
further out. the mortgage interest rate is projected to decline to just above 4 percent. even though there is substantial uncertainty about the future level of the neutral rate of interest, we must be prepared for a higher interest rate level than we had been accustomed to over the past decade. 2 / 3 bis - central bankers'speeches chart : inflation will slow and unemployment will increase somewhat given the current policy rate path, we expect inflation to slow further and approach 2 percent towards the end of 2027. growth in the norwegian economy is expected to pick up slightly in the years ahead, but we expect some increase in unemployment. the decline in some business sectors, especially the construction industry, may continue for a while longer before conditions turn around. many consumers have less money to spend, which has made it difficult for some people to make ends meet. interest expenses are set to remain high, but wages are expected to rise faster than prices. most households will then see their spending power increase and a debt burden that will be easier to bear. the economy may move on a different path than we now envisage, and the policy rate path may then also change. the policy rate is now likely sufficiently high to bring inflation back to target within a reasonable time horizon. but we cannot say this with certainty. if capacity utilisation increases or the krone depreciates, wage and price inflation could remain elevated for longer. in that case, there may be a need to raise the policy rate. on the other hand, if unemployment rises more than expected or price inflation declines more rapidly, the policy rate may be lowered earlier than we now envisage. inflation has come down. this is good news. but we must keep in mind that the last mile of disinflation may take time. to maintain confidence in the inflation target, we must do our job and bring inflation back to the 2 percent target. we will then be able to reap the benefits of our efforts. 3 / 3 bis - central bankers'speeches | this year. but norges bank's regional network enterprises are a little more optimistic than they were earlier this year and expect some increase in activity ahead. there are still wide differences across industries. companies supplying goods and services to the petroleum industry are still doing well. in the construction industry, activity is low and companies expect a further decline ahead. sales of new homes are sluggish, but activity in the secondary home market is high and prices have risen markedly so far this year. labour market tightness has eased in recent years, as have recruitment difficulties facing businesses. registered unemployment has increased somewhat from a very low level. at the same time, employment has continued to edge up and the employment - topopulation ratio is high. chart : wage growth is high wage growth has risen over several years. while pay increases have been high, they have not kept pace with the rise in prices. we expect wage growth to reach 5. 2 percent this year, which is the same rate as last year. chart : inflation has slowed, but is still above target inflation has fallen markedly since the end of 2022. in may, consumer prices were 3 percent higher than one year ago. excluding energy prices, which have decreased, inflation is around 4 percent. in norway, like in other trading partner countries, goods inflation has fallen sharply, particularly imported goods inflation. services inflation is still elevated, partly owing to the sharp rise in labour costs in recent years. with modest growth in productivity, higher pay increases mean that businesses are facing higher costs. this could contribute to keeping inflation elevated ahead. chart : the policy rate will probably be kept unchanged for some time in order to bring inflation back to target within a reasonable time horizon, it will likely be necessary to maintain a tight monetary policy stance for somewhat longer than envisaged earlier. in recent months, inflation has been a little lower than expected. at the same time, the economy appears to be performing slightly better than we had expected, and wages appear to be rising faster. both developments indicate that it will take longer to bring inflation back to target. if the policy rate is lowered prematurely, inflation could remain above target for too long. if the economy evolves as we currently envisage, we will keep the policy rate at 4. 5 percent to the end of the year before a gradual easing of monetary policy can begin. towards the end of the projection period, the policy rate will be close to what we now assess to be a neutral range somewhat | 1 |
contribute to economic growth mission : to foster pn'ce stability and a sound financial system macroeconomic stability vision : to be a centre of excellence in upholding and development, it remains an emerging field in the financial system worldwide. i, therefore, urge all stakeholders to clearly understand islamic banking and finance model ; appreciate its unique tenets that distinguish it from conventional banking and at the same time acknowledge the similarities between the two ( 2 ) models. this will significantly contribute to the effective rollout and growth of the islamic banking sector in uganda. on its part, bank of uganda will continue to collaborate with all stakeholders and ensure that the requisite regulatory and supervisory structures for supporting the growth of islamic banking and finance in this country are robust and conducive for all investors. with those remarks, it is now my honour to declare the workshop on the fundamentals of islamic banking operations officially open. i wish you fruitful deliberations. i thank you. e. tumusiime - mutebile governor bank of uganda kampala mission : to f oster price stability and a sound financial s ystem macroeconomic stability vision : to be a centre of excellence in upholding | bank of uganda the workshop on the fundamentals of islamic banking operations organized by tropical bank limited speech by prof. emmanuel tumusiime - mutebile governor, bank of uganda november 28, 2016 - hotel africana, kampala speech by the governor at the workshop on the fundamnetals of islamic banking operations at hotel africana kampala - november 28, 2016 the chairman board of directors, tropical bank limited, honourable gerald m. ssendaula, senior management of tropical bank limited, resource persons from malaysia, representatives from the banking sector and the business community, participants, ladies and gentlemen. on behalf of the bank of uganda and on my own behalf, i wish to welcome you all to this very important workshop on islamic banking. i further wish to extend a very special welcome to the delegates from malaysia. please get some time off to enjoy the beautiful sites and sounds of uganda, the pearl of africa and gifted by nature. let me congratulate tropical bank limited upon organ1z1ng this workshop, which is aimed at sensitizing the public on islamic banking. the bank of uganda believes that creating public awareness on islrunic banking is one of the key ingredients for achieving a smooth rollout of islamic banking. it is for this reason that the bank of uganda continues to participate in sensitization programmes like these whenever called upon. as you may recall, in may this year, bank of uganda participated in a similar conference, organized by the islamic university in uganda at this very hotel. i must add that such initiatives augment bank of uganda's islamic banking sensitization programmes and are very welcome. mtsston : to foster price stability and a sound financial system macroeconomic stability vision : to be a centre of excellence in upholding furthermore as part of the financial literacy strategy, bank of uganda has in the past undertaken mult imedia sensitization campaigns on islamic banking entailing radio talk shows, newspaper inserts, workshops and journals, among others. uganda's commitment to continuing i wish to pledge bank of with the above - mentioned sensitization campaigns. the topic of this workshop is " the fundamentals of islamic banking operations " and i note that the resource persons include delegates from malaysia, a country that possesses enormou s experience in the islamic banking field. i therefore call upon the participants here today to take full advantage of the opportunity presented to you in this workshop. i urge you all to seek as much information as | 1 |
play a major role in the esrb. however, wherever central banks are involved in financial supervision, it is imperative that this does not compromise their independence and their primary objective, which is to maintain price stability. 5. conclusion ladies and gentlemen there is no doubt that the regulatory and supervisory framework has to reflect the global nature of the financial system. nonetheless, heterogeneous national structures make it imperative to maintain a certain degree of flexibility when reforming regulation and supervision. to strike the balance between uniformity and subsidiarity is certainly a formidable challenge but i am confident that we will eventually succeed and create a more stable and more resilient financial system. thank you for your attention. bis central bankers β speeches | time. let me now turn to our open market operations. as tensions and uncertainty rose in mid - march, investors moved rapidly toward cash and shorter - term government securities, and the markets for treasury securities and agency mortgage - backed securities, or mbs, started to experience strains. these markets are critical to the overall functioning of the financial system and to the transmission of monetary policy to the broader economy. in response, the federal open market committee purchased treasury securities and agency mbs in the amounts needed to support smooth market functioning. with these purchases, market conditions improved substantially, and in early april we began to gradually reduce our pace of purchases. to sustain smooth market functioning and thereby foster the effective transmission of monetary policy to broader financial conditions, we will increase our holdings of treasury securities and agency mbs over the coming months at least at the current pace. we will closely monitor developments and are prepared to adjust our plans as appropriate to support our goals. amid the tensions and uncertainties of mid - march and as a more adverse outlook for the economy took hold, investors exhibited greater risk aversion and pulled away from longer - term and riskier assets as well as from some money market mutual funds. to help stabilize shortterm funding markets, we lengthened the term and lowered the rate on discount window loans to depository institutions. the board also established, with the approval of the treasury department, the primary dealer credit facility ( pdcf ) under our emergency lending authority in section 13 ( 3 ) of the federal reserve act. under the pdcf, the federal reserve provides loans against good collateral to primary dealers that are critical intermediaries in short - term funding markets. similar to the large - scale purchases of treasury securities and agency mbs that i mentioned earlier, this facility helps restore normal market functioning. in addition, under section 13 ( 3 ) and together with the treasury department, we set up the commercial paper funding facility, or cpff, and the money market mutual fund liquidity facility, or mmlf. millions of americans put their savings into these markets, and employers use them to secure short - term funding to meet payroll and support their operations. both of these facilities have equity provided by the treasury department to protect the federal reserve from losses. after the announcement and implementation of these facilities, indicators of market functioning in commercial paper and other short - term funding markets improved substantially, and rapid outflows from prime and tax - exempt money market funds stopped. in mid - march, | 0 |
r basant roi : banking in mauritius address by mr r basant roi, governor of the bank of mauritius, at the inauguration of the mahebourg branch of mpcb ltd, 8 july 2004. * * * hon. minister of tourism and leisure chairperson and members of the board of the mpcb ladies and gentlemen good afternoon i am pleased to be here with you all for the opening of the mahebourg branch of the mauritius post and cooperative bank ltd. in the last two years i have been asking chief executives of all the banks operating in mauritius to upgrade the layout of their bank branches to international standards. i am particularly delighted to actually see that the premise housing the mahebourg branch of mpcb ltd. is of the desired standard. having a pleasant looking building is a good thing. the quality of services provided as well as the balance sheet of any bank should match the good setting of the premises. every week i receive numerous complaints from bank customers from across the country. seldom do i come across justified complaints. let me clarify a fundamental point. banking, as we are all aware, involves risk. no banker, anywhere in the world, is absolutely certain that money lent out will be fully repaid in time. the risk of default is ever present. and many borrowers do default - often in an obscene manner. in such circumstances bankers have no other alternative than to take unpleasant actions for the bankers are answerable to their shareholders. never borrow sums of money if your repayment capacity is limited. never borrow sums of money thinking that in the years ahead your own financial standing will somehow improve and along with it your repayment capacity will improve. your financial standing might never improve. the securities you have provided to the bank would be at stake. let not the infectious greed catch you. borrow such sums of money that you are certain to be able to repay in time. already banks have become mindful of risks involved in their lending operations. in the wake of financial liberalization, regulatory and supervisory authorities are requiring banks to give due weight to credit risk, amongst other things, in their operations. less than two weeks ago, the g10 governors of central banks reached a consensus on basel ii that requires banks to exercise far greater discipline in their lending activities. all the banks in mauritius have been requested to adhere to the principles laid down in the accord. gone are the days when one could obtain credit through a mere telephone call to the manager of a bank. let me move on to a | mardayah kona yerukunondu : implementation of targeted financial sanctions speech of mr mardayah kona yerukunondu, first deputy governor of the bank of mauritius, at the workshop on the implementation of targeted financial sanctions, port louis, 20 november 2020. * * * mrs jennifer bairner, counter illicit finance advisor at the british high commission, ladies and gentlemen, i wish you all a very good morning. it is indeed a great pleasure for me to welcome you at the bank of mauritius auditorium for this workshop on implementation of targeted financial sanctions. i must, at the outset, extend our sincere gratitude to the british high commission and the financial intelligence unit for having provided us mrs jennifer bairner, counter illicit finance advisor and mrs anushka radhakissoon - pochun, manager legal of the financial intelligence unit, to partake their experience with us during this workshop. ladies and gentlemen, this workshop forms part of the bank β s outreach programme specifically designed to enable licensees to better understand their legal obligations. it also serves as a platform for the bank of mauritius, as the aml / cft regulator for the banking sector, to convey to its licensees its expectations regarding the implementation of their legal obligations. you will, today during the workshop, be provided with guidance to enable you to fulfil, in an effective manner, your obligations under the targeted financial sanctions regime. the united nations has during the past decades imposed a number of sanctions regimes. sanctions, in fact, are important tools in the hands of the international community to promote international peace and security. some of these sanctions regime, however, have been criticised for causing excessive suffering to civilian populations or inflicting economic damage on third states. to address these concerns, the concept of β targeted sanctions β was developed. these sanctions are designed to focus on groups of persons responsible for the breaches of peace or threats to international peace and security. the financial action task force ( fatf ) as the global standard setter on aml / cft, has also made it mandatory for countries to implement the targeted financial sanctions regimes to comply with the united nations security council resolutions relating to the prevention and suppression of terrorism and terrorist financing as well as the prevention, suppression and disruption of proliferation of weapon of mass destruction and its financing. the term targeted financial sanctions means both asset freezing and prohibitions to prevent funds or other assets from being made available, directly or indirectly, for the benefit of designated persons and | 0.5 |
gentlemen, let me introduce to you for the first time in our history the 35th anniversary commemorative k2. 00 circulation coin. alongside it is the commemorative k2. 00 note which will circulate concurrently. another historical introduction is the new 35th anniversary 50t circulation commemorative circulation coin which has the bank logo in red on the back. a new look k50. 00 banknote is also launched. it has new security and design features which now standardizes the features with the other banknotes. | l wilson kamit, cbe : an overview of financial and economic developments in papua new guinea th speech by mr l wilson kamit, cbe, governor of the bank of papua new guinea, at the 38 seacen governor β s conference, manila, 13 - 14 february 2003. * * * introduction thank you for inviting me to this year β s seacen central bank governors conference, and i am happy to present a brief update on the economic development in papua new guinea ( png ). please allow me firstly to summarise the structural developments that have taken place over the last 2 - 3 years during my absence from this conference. 1. legislative and policy changes in 1999, the government embarked on a comprehensive structural reform program, which was endorsed and partly financed by the international multilateral financial institutions ( imf, adb, world bank ), and the bilateral friends of png, including australia and japan. one important objective of the reform program was to rebuild the state owned institutions through legislative changes so as to avoid political influences, and to privatise the public enterprises that continue to operate inefficiently. substantial progress has been made under the reform program to strengthen transparency, accountability and independence in these institutions. the reforms included the financial sector, whereby structural reforms at the bank of papua new guinea were considered necessary to achieve macroeconomic stability over the medium term. a new central banking act ( cba 2000 ), which became effective on 16 june 2000, enhanced the independence of the central bank in the formulation and conduct of monetary policy. a revised banks and financial institutions act ( bfia 2000 ) and the new life insurance and superannuation acts were also passed by parliament in 2000, which enables the central bank to regulate and supervise these industries. the bfia 2000 aims to broaden the scope and improve the effectiveness of financial sector regulation, drawing on international best practices. the supervision of life insurance and superannuation industries was previously under the responsibility of the finance and treasury department, and will be initially taken over by the central bank with a view to separate it out in the future. to strengthen its capacity, the central bank is receiving technical assistance ( ta ) from the australian government, imf and world bank to have in place a supervisory framework to assimilate the life insurance and superannuation participants under its supervision. 2. developments in the financial system as at december 2002, the financial system in png consisted of four commercial banks, six finance companies, 17 savings & | 0.5 |
mr. mcdonough gives his perspective on the year 2000 problem and the challenges it poses remarks by the president of the federal reserve bank of new york, mr. william j. mcdonough, before the regional y2k meeting for financial regulators in the asia / pacific region, held in sydney on 19 / 10 / 98. i am delighted to be here today at the first of several regional forums on the year 2000 problem that the joint year 2000 council is organizing. as an original sponsor and ex officio member of the council, i am especially pleased that it has been successful in rapidly organizing today β s events to coincide with the international conference of bank supervisors meetings. this gathering provides another example of how financial market supervisors and regulators such as yourselves are leading the way in tackling this issue around the world. in my remarks today, i will provide my perspective on the year 2000 problem and the challenges it poses. my experience with the issue draws first on my role at the federal reserve bank of new york, where we are addressing year 2000 challenges as a central bank, as a bank supervisor, as a payment system operator and as a business much like any other business. internationally, i became involved with the issue through the g - 10 committee on payment and settlement systems and spoke out about the need for payment system operators worldwide to address the year 2000 problem. more recently, on the basle supervisors β committee, i have been learning about the year 2000 issues that confront bank supervisors around the globe. scope simply put, i do not think it would be possible to overstate the importance of the year 2000 problem as an issue for the financial markets. naturally, the tendency in these turbulent times is to focus on day - to - day concerns, and to leave future problems to be dealt with later. this tendency must be resisted strongly if we are to succeed in addressing the year 2000 problem. i say this because the year 2000 problem is an issue for every country, firm, organization, government agency, bank and piece of critical infrastructure in the world. if the year 2000 problems that exist within software programs and embedded computer chips are not repaired by january 1, 2000, the affected systems will cease to function or will malfunction. those firms that have checked for year 2000 problems overwhelmingly have found that their systems were affected and would not have functioned normally in the year 2000 without being fixed. moreover, the efforts of firms around the world have demonstrated that while the extent of the year 2000 problem varies, no | in norwegian labour costs has been around 5 - 6 per cent in recent years. this is 1Β½ - 2 percentage points higher than among our trading partners. the higher interest rate level in norway reflects this fact. at the moment, there is no clear indication of a marked slowdown in the norwegian economy. the price of oil remained high for a long time, despite the international downturn, but fell more than usd 3 yesterday, 24 september. the price of aluminium has fallen somewhat but is still high compared with the average price in recent years. the year - on - year increase in the export of metals, excluding iron and steel, was 0. 7 per cent in the second quarter of 2001. the price of fresh salmon remains at the same level as in the last half of the 1990s. exports of fish and fish products increased by 3. 9 per cent from the second quarter of 2000 to the second quarter of 2001. due to international developments, the uncertainties and the downside risks are now greater for many export industries. the krone has appreciated recently measured against our trading partners ( trade - weighted exchange rate index ). this partly reflects more than 20 per cent appreciation against the swedish krone since spring 2000. measured by the trade - weighted exchange rate index, the krone is now about 2 per cent weaker than in 1990 and on a par with the level in 1994 - 95. so far this year, the volume of traditional merchandise exports have increased more than in the same period last year, but growth is levelling off. the exposure of norwegian exports in the ict sector, where the international downturn has been most severe, is limited. norway β s manufacturing output has declined somewhat this year, but less than in other countries. on the other hand, norwegian manufacturing industry did not experience the upswing in 1999 and 2000. the business sentiment indicator does not suggest a severe decline. the order situation is still satisfactory in many industries. this does not necessarily mean that the turnaround will not occur in norway as well. a sharp fall in share prices, tighter borrowing terms and an imbalance in international credit markets may quickly affect investment, prices, profitability and expectations. so far, however, it is difficult to draw any conclusions except that uncertainty has increased. the norwegian economy is operating at capacity limits and there are few if any available resources in the labour market. unemployment has declined throughout the country. unemployment in western norway, which increased marginally last year, has returned to its previous level | 0 |
ben s bernanke : the policy response to the crisis in korea and other emerging market economies speech ( via video recording ) by mr ben s bernanke, chairman of the board of governors of the federal reserve system, at the bank of korea β s international conference β the changing role of central banks β, seoul, 30 may 2010. * * * it is a pleasure to be able to participate in this conference on the occasion of the 60th anniversary of the bank of korea. i would especially like to congratulate governor kim on his recent appointment. over the years, the bank of korea has made an important contribution to the impressive economic performance of south korea, a performance that includes a more than 10 - fold increase in the country β s real gross domestic product ( gdp ) per person over the past four decades. the global economic and financial crisis caused hardship around the world and tested central banks in both advanced and emerging market economies. like their counterparts in the advanced economies, central banks in several key emerging market countries responded to the crisis by sharply lowering policy rates and by undertaking a variety of unconventional policy measures to support their economies. the bank of korea was among the first of the emerging market central banks to respond by reducing its policy rate by a cumulative 325 basis points between october 2008 and february 2009. it also took effective steps to increase the liquidity available to the korean financial system, for example, by expanding the set of counterparties for repurchase transactions and broadening the pool of assets eligible as collateral. to help the banking system remain stable and able to continue lending to creditworthy borrowers, the bank of korea also helped set up a bank recapitalization fund. korean banks, like those in a number of countries around the world, experienced shortages of dollar liquidity during the crisis. to alleviate these shortages, the bank of korea drew on its foreign exchange reserves. it also established a dollar liquidity swap line with the federal reserve in october 2008, which provided short - term dollar funding to the bank of korea that it, in turn, could lend to financial institutions when the operations of private dollar funding markets had become impaired. the bank of korea β s efforts were complemented by substantial fiscal stimulus put in place by the korean government. this suite of policy responses helped stabilize korean financial markets and promote a swift recovery of economic activity. the equity market bottomed in late 2008 and has since then retraced much of its losses. real gdp, which contracted at a remarkable 17 | where do we stand? sri lanka is now a lower middle income country with a per capita income of around us dollars 1, 355. the per capita income is projected to increase further to around us dollars 1, 500 by the end of this year and is expected to continue to increase during the coming years. so, there is a clear indication that we are growing amidst several challenges and that people are enjoying the gains of the growth although some may tend to down play or disregard these national gains for whatever reason. with increased personal incomes, we also observe that living conditions of the people are improving. i already spoke about it. but, at the same time, we would be the first to admit that a lot more needs to be done. we have to attempt to double our per capita income every 6 - 7 years from now onwards. we must also aim at increasing the per capita incomes in the provinces from the present levels of between us dollars 700 - 800 to at least us dollars 1500 in the next 6 - 7 years. that is not a dream. it can be done. towards this objective, the government has clearly identified as a priority, the importance of having quality infrastructure facilities in the country. in that regard, mega infrastructure projects, particularly in the areas of power and energy, highways, rail roads, ports and aviation are currently being implemented. in fact, the government has given the highest priority in its public investment programme to complete these projects as early as possible so that development process would be accelerated. the government has also identified the need to focus on developing regional infrastructure facilities in order to stimulate economic activities in the regions as well as to quickly distribute the gains of higher economic growth to the people who are living in remote areas. the ongoing β maga neguma β, β gama neguma β and β neganahira navodaya β programmes are particularly aimed at fulfilling this need. in the meantime, the central bank, in collaboration with the finance commission has initiated a new approach to examine new ways of maximizing the provincial councils β contribution in the regional development process. we have observed that even after the existence of provincial councils for about two decades, the inequalities among the provinces still prevail and in fact have widened over the years. hence, it is clear that we have to introduce a new and innovative strategy to develop our provinces. in line with this objective, as the first step of this new initiative, the central bank and finance commission, along with | 0 |
sharon donnery : the departure of the uk from the eu β implications for the irish economy and financial system internal dinner address by ms sharon donnery, deputy governor of the central bank of ireland, to visiting staff from other central banks, dublin, 5 march 2019. * * * introduction first, welcome to dublin! it is a great pleasure join you this evening. 1 the departure of the uk is particularly important for us in the central bank of ireland given : the significant trade and investment links with the uk mean that the irish economy is more exposed to the risks from the uk β s departure than any others, apart from the uk ; the largest domestic irish banks have very substantial uk exposures and any deterioration in the uk economy could impact on their asset quality ; dublin is one of the small number of european capitals that is likely to see considerable inward investment of financial sector firms, which will significantly affect the size and complexity of the financial system here ; in policy fora, ireland will lose a close ally on certain issues ; and uk firms passport into ireland across a range of sectors including insurance and payments services, for example, and for consumers there will be implications when this is no longer possible. therefore, in this context, in my remarks this evening, i will first take the opportunity to outline the broad approach we have taken in the central bank in our preparations. i will then go on to discuss some of the contingency planning and outline some specific areas where public authorities have had to take action. third, i will outline the structure of the irish economy and discuss some of the more macroeconomic aspects to the departure of the uk. i will highlight some of the channels through which a no - deal / no - transition outcome would affect the economy here in ireland. finally, i will conclude with some thoughts on life after the uk β s exit for european authorities. our broad approach in addition to our national central banking functions, the central bank of ireland also acts as national competent authority for the supervision of credit institutions, investment firms, and insurance firms. the central bank is also the securities and markets regulator and the national financial conduct authority, as well as being the national macroprudential authority and national resolution authority. given this wide range of mandates, we must look at economic and financial sector issues in a holistic fashion, and this is particularly the case for brexit. this means analysing the macroeconomic effects and addressing possible financial stability implications, ensuring firms across the whole financial system are | prepared, and minimising the potential impact on consumers. the international nature of the financial sector here means we cooperate closely with our european partners : not just the ecb and single supervisory mechanism ( ssm ), but also the single resolution mechanism ( srm ) as well as extensive engagement with the european supervisory authorities ( esas ) : the european banking authority ( eba ), the european insurance and occupational pensions authority ( eiopa ) and the european securities and markets authority ( esma ). 1 / 8 bis central bankers'speeches we consider the work we undertake on international engagement to be of such importance that it is one of the five strategic priorities in our three year strategic plan we launched earlier in the year ( the uk leaving the eu is another ). 2 broadly speaking our work on the uk leaving the eu has focused on four key areas. these are ensuring that : 1. risks to the irish economy and consumers are understood ; 2. regulated firms prepare appropriately for all scenarios ; 3. where necessary, the required policy and legal adjustments are prepared to counteract the cliff - edge risks of a hard exit to the delivery of vital financial services ; and 4. we perform our gatekeeper role in a robust and efficient manner for new firms seeking authorisations or existing firms revising business plans. 3 to meet these objectives, we established a task force in 2016. more recently a steering committee was set up to oversee the final stages of the central bank β s preparations for cliffedge risk mitigation. in line with our commitment to transparency, the reports of the task force are regularly published in redacted format. 4 we have made every effort to ensure that the financial system has the necessary level of resilience to avoid financial stability risks in the event of a no - deal scenario. our preparations have involved a significant amount of engagement with financial firms and this has focused on ensuring that all necessary steps have been taken to mitigate the risks to their customers and businesses from the uk β s exit, with a particular focus on a disorderly scenario. the scale and complexity of the irish financial system has already changed considerably as a result of the uk leaving the eu. work dealing with the authorisation or extension of business for over 100 firms has required the central bank to substantially increase our workforce as well as prioritising and reallocating our existing resources to ensure that we took decisions in an effective, efficient, predictable and timely fashion. the central bank does not view the authorisation | 1 |
6 percent of gdp can be met from excess liquidity of financial institutions, over and above the demand they encounter for private sector credit. domestic financial institutions continue to roll over maturing government local currency 4 obligations, in the absence of other low risk options with adequate rates of return. in sum, the barbados economy is on the right path. we know from experience that sustainable growth is not an overnight phenomenon. growth may be slow in coming, but when it arrives it will persist, because it will be soundly based on the things we do best. in the meanwhile, we will do all that is necessary to keep the economy steady as we go. bis central bankers β speeches | and natural disasters. the recent global financial crisis is but the latest of these exogenous factors that has had a profound impact on regional economies which are yet to recover sufficiently to achieve pre - crisis growth levels. in the early stage of the post - crisis period, growth was driven by the commodity - based producers but, over the last three years, activity in the service - based economies has exceeded, if only modestly, that in commodity producers as commodity prices have weakened. to put this in perspective, while the average growth for the region recovered to 1. 7 % in 2014, regional output declined by 0. 7 % in 2016 due to the weak performance of commodity - based economies. forecasts for 2017 and 2018 are for a moderate recovery as the world economic outlook remains positive and the regional economic outturn continues to be driven by international economic developments. however, the regional underperformance suggests that that economic growth cannot be linked solely to activity in our main trade partners. rather it reflects the impact of the structural factors identified earlier as well as the slow adaptation to the changing global environment. of particular note is that the region as a whole ranks in the bottom half of most of the world bank β s ease of doing business indicators. this is a source of concern as foreign investment is a vital element of regional growth strategies. notwithstanding the exogenous shocks which these economies face, it is increasingly clear that a sound macroeconomic framework is a prerequisite for sustainable growth. at the same time, structural weaknesses often undermine resilience and compromise the buffers necessary to cope with economic shocks. several regional economies face chronic external current account imbalances which are funded by a combination of foreign direct investment, public sector borrowing and the depletion of international reserves. persistent fiscal deficits resulting from deliberate fiscal strategies or the inadvertent outcomes resulting from economic or natural shocks have led to the significant build - up of sovereign debt in several jurisdictions. these trends tend to place pressure on foreign exchange holdings in fixed rate countries and exchange rates in floating rate economies and have forced several regional governments to embark on adjustment programmes designed to address these imbalances of large deficits and high debt ratios. fiscal space to use countercyclical policies have been eroded as high interest costs have resulted in the need for large primary surpluses in some countries in order to restore balance to the public finances. it is in this context that i refer to the barbadian experience. the barbadian economy has encountered | 0.5 |
ewart s williams : investment strategies in an uncertain world address by mr ewart s williams, governor of the central bank of trinidad and tobago, at the business insight caribbean investor conference, port - of - spain, 1 december 2006. * * * good afternoon, ladies and gentlemen. let me first thank the organizers, business insight limited, for inviting me to this very interesting conference which focuses on β investment strategies in an uncertain world β. the media release couple days ago observed that the conference was prompted by the significant declines experienced in the stock markets of trinidad and tobago, jamaica and barbados over the last two years and noted that investors and market practitioners were looking for answers. i saw from the programme that there was a discussion this morning on the evolution of the market in trinidad and tobago and it may well be that you have already solved the problem. i hope it is not too late to give my take on the matter and discuss some options, which in my view, could ease some of the current pension funds restrictions while maintaining prudential standards to protect the workers β savings. let me first give the background to the current issue. since its inception in 1981 there has been little growth in the number of companies listed on the trinidad and tobago stock exchange. in 1981 there were thirty - five listed companies with a total market capitalization of $ 2. 3 billion. twenty - five years later, there are thirty - two listed companies with a market capitalization of approximately $ 110 million. it is estimated that institutional investors ( largely pension funds ) account for about ninety percent of total demand in a market in which only about twenty - two percent of shares are actively traded β the remainder having been bought to hold. since it was established in 1981, the value of stock market capitalization in trinidad and tobago has grown by over 50 times and much of the increase has taken place since 2002. in that year market capitalization was $ 48 billion and this grew to a peak $ 120 billion in mid 2005 before falling to $ 107 billion at end of 2005. since then market capitalization has declined by a further 18 percent. when the imf conducted its financial sector review in mid - 2005, prior to the slide in the market, it observed that, β the sharp increase in stock market capitalization was not reflected in earnings β. from a sample of 13 firms, representing some 60 percent of market capitalization, stock prices between 2001 and mid - 2005 rose 1. 5 times while earnings per share increased 0. 5 | bank is projecting real gdp growth of 1 - 2 per cent ; some increase in unemployment, perhaps to 6 - 7 per cent ; an inflation rate of 7 - 8 per cent and little, if any, increase in official reserves. the non - energy fiscal deficit is projected at around 12 per cent of gdp while the overall deficit is projected to widen to around 1 - 1. 5 per cent of gdp. i would admit that these forecasts are subject to wide margins of error since the global environment is still extremely unstable and thus some of the basic parameters are subject to considerable volatility. the current economic environment is a nightmare for policymakers. in the u. s. for instance, some commentators are complaining that obama β s massive rescue package is too small, while the traditionalists think that it is far too large. here at home, there is a view in some quarters that the bank should move immediately to lower interest rates. while a reduction in interest rates may contribute to boosting domestic demand and containing the economic slowdown, it β s our view that, with inflation currently at 14. 3 per cent, lowering interest rates without some reasonable indication that inflation is on a downward path, would carry serious risks of further entrenching inflation and an inflationary psychology. some people see a depreciation of the currency as being inevitable. i disagree, pointing to our significant foreign reserve cushion which gives us the ability to stabilize our foreign exchange market, if needed. let me end with a few words about the opportunities that the current economic setting presents. there is no doubt that the economic situation will be difficult in 2009, but i am confident that we will weather the storm and do just fine. calling to mind the old adage that β behind every dark cloud there is a silver lining β we should keep reminding ourselves that, even if the crisis is prolonged it would eventually come to an end. what is perhaps most important in all of this is that we should be preparing ourselves for the new opportunities that must arise once the situation stabilizes. this is the time for the business sector to be introducing productivity enhancing measures which would help tide you through the down - turn and serve you in good stead in the recovery phase. this is the time to engender a culture of increased productivity among your workers and set the stage for linking wage increases to productivity, when the recovery comes. if the current economic slowdown brings an end to the unsustainable real estate bubble and the splu | 0.5 |
among globally active firms, and the high degree of correlation in their assets, underscored the vulnerability of the entire international financial system to the potential failure of these firms. in response to these revealed regulatory shortcomings, the basel committee has announced four sets of changes to minimum prudential standards for internationally active banks : first, in 2009 it revised and strengthened the market risk requirements of basel ii, in what has become known as basel 2. 5. second, last year it issued basel iii, which improved the quality and increased the quantity of minimum capital requirements, created a capital conservation buffer, and introduced an international leverage ratio requirement. third, and coincident with basel iii, the committee issued a framework for quantitative liquidity requirements. fourth, it has just today released the rules text of its assessment methodology for determining an additional capital requirement for global systemically important banks ( g - sibs ) β popularly referred to as a β capital surcharge. β bis central bankers β speeches in the basel committee itself, work on basel 2. 5 and basel iii has been essentially complete for some time. as reported recently by the committee, 1 implementation of basel 2. 5 and basel iii into national legislation or regulations is at various stages of progress around the world. two points are worth making with respect to u. s. implementation. first, while u. s. bank regulatory agencies have published a proposed regulation for the new market risk capital requirements, we did not include the trading book securitization and resecuritization portions of basel 2. 5. the complication here, and with part of basel iii implementation, lies in the use of agency credit ratings. the dodd - frank wall street reform and consumer protection act requires the removal of agency credit ratings from all regulations throughout the government. the banking agencies thus need to develop substitutes for agency ratings in each of the quite different contexts within the capital standards where they are used. this has not been the easiest of tasks, but i believe we are now close to convergence on the approaches we will take in fashioning these substitutes. thus we should soon be able to draft a proposed regulation for the rest of basel 2. 5. work on the basel iii rule has had to compete for staff time with all the other rulemakings currently underway at the banking agencies, but i would expect a proposed regulation in the first quarter of 2012. my second point pertains to the six - year transition period for basel iii, which by its terms phases | norman t l chan : brief remarks on the development of the rmb market opening remarks by mr norman t l chan, chief executive of the hong kong monetary authority, at the second hong kong β australia rmb trade and investment dialogue, hong kong, 22 may 2014. * * * treasury secretary ( martin ) parkinson, ( deputy governor ) philip ( lowe ), distinguished guests, ladies and gentlemen : 1. good morning. it is my great pleasure to welcome you to the second hong kong β australia rmb trade and investment dialogue. i would like to especially extend a warm welcome to our friends from australia. this dialogue attests to the spirit of collaboration that we share, and indeed it is collaboration that will take us forward in the development of the rmb market. the seminar today will be a good opportunity for us to take stock of recent developments, exchange views and share experiences, and identify our priorities ahead. 2. i recall that three years ago, in march 2011, i visited sydney on a roadshow to talk about hong kong β s newly created offshore rmb business platform. this was in fact the very first in a series of roadshows that i and my hkma colleagues organised, covering key markets in south america, russia, middle east, japan, spain, the uk and the us. in our sydney roadshow, i was particularly impressed by the keen interest and high level of curiosity of the australian audience, who wanted to understand more what rmb internationalisation was all about and what it meant for them as corporates with trading and investment links with china. we were then at an early stage of this long and exciting journey of rmb internationalisation. at that time, the cross - border rmb trade settlement scheme was still a β pilot β and only covered selected provinces in the mainland. rmb trade settlement handled by banks in hong kong was only some rmb100 billion a month, which is less than one - fifth of the rmb600 billion registered in march this year. 3. the offshore rmb market in hong kong has indeed achieved phenomenal progress in the past three years. hong kong β s rmb real time gross settlement system registered an average daily turnover of close to rmb700 billion in april this year, which is about twelve times the level when i visited sydney in 2011. in the foreign exchange market β another area where activities have picked up sharply β we are seeing an average turnover of rmb spot and forward transactions of some | 0 |
information on the risks posed by a firm β s group is critical to the pra β s approach to supervising international banks. our expectations are set out in two parts. firstly, a clear baseline of information we want on all international banks. this concerns : the nature of the firm and group β s business model ; the resilience of the firm and its parent from both an operational and financial perspective ; material risks to the firm β s strategy ; and resolution planning. then, on top of that, a proportionate and tailored set of data that reflects a firm β s business model, its scale and potential impact on uk financial stability. proportionality is key here. we need more detail on a firm β s group where it is larger, more systemic and where its business model is highly integrated globally e. g. trading and custody. this is because the more highly integrated uk operations are within the group, so the more readily losses or disruption can be transmitted to the uk operations. all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice for highly - integrated businesses such as the trading activity of gsibs, we expect access to regular profitand - loss and risk data for key trading business lines. these are often fast moving so we need to monitor them on a daily or weekly basis so we can ascertain how businesses are performing and to identify product or risk management vulnerabilities. good practice examples of the data we typically receive where a strong and cooperative relationship exists with home state supervisors and firms, are set out in the statement. they include : a. daily or weekly profit and loss figures covering global and local business lines ; b. weekly or monthly group market risk reports ; c. the outputs from reviews e. g. the supervisory review and evaluation processes ; d. information on stress tests and how these affect the uk entity ; e. group liquidity information regularly in normal time and more frequently once there is a period of market stress ; f. any material change in the operational resilience of the firm or group, for example, cyberattacks that may affect the group systems and are used by the uk business or which threaten the survival of the firm or group ; and g. material findings from internal risk or audit functions, or external audit reviews ( particularly where there are common group wide systems and controls ). i would stress that, where we ask for group information, we are | these assets more accurately than capital markets. banks serve as a β delegated monitor β for investors. 4 this means the risks and uncertainties around the valuation of bank assets are fundamentally different than for non - financial firms. to willingly finance loans to banks, however, investors need to be capable of monitoring and pricing these risks ( known unknowns ) and uncertainties ( unknown unknowns ). 5 risks to banks β balance sheets include the credit, market and liquidity risks associated with different asset classes. pricing these risks is, in some respects, the less difficult task. standard asset pricing models, such as the capital asset pricing model ( capm ), put the pricing of risk at their core. pricing uncertainty is an entirely different kettle of fish. that uncertainty arises in part from the absence of a single, well - defined model for pricing some assets. when there is model uncertainty, the equilibrium price of an asset is no longer uniquely defined. instead equilibrium prices are defined by a range. 6 the wide range of prices at which similar - risk assets have recently been carried on the balance sheet of banks is testament to the scale of this model uncertainty ( chart 1 ). to price that uncertainty, investors would need information on the potential range of valuations, looking across sets of models and classes of assets. historically, that information has not been made available to investors. post - crisis, this may have contributed to investor aversion to bank instruments. pre - crisis, it may have contributed to a lack of timely action by banks themselves to restrict exposures to assets with significant valuation uncertainty. in the light of this, the bank of england has recently helped initiate a programme to enhance information on the valuation range of banks β fair - valued assets, working alongside the financial services authority ( fsa ) and the auditing profession. a framework for capturing such uncertainty was put forward in an fsa consultation paper on β proposed regulatory prudent valuation return β, published in december 2011. 7 this framework suggests that an upside and downside range for fair - valued assets be identified, categorised into distinct buckets. 8 this would give a guide to the potential variation in a bank β s solvency position arising from model uncertainty. it also asks banks to identify portfolios where valuation uncertainty is so severe that it is not possible to provide a plausible bound and to make disclosures around portfolios of particular interest to regulators. a varequivalent figure needs also to be disclosed for each asset class | 0.5 |
longer - term refinancing operations ( ltros ) and decides the main refinancing operations to be carried out through a fixed - rate tender procedure with full allotment. ecb cuts the base interest rate from 2. 50 % to 1. 00 %, and introduces the first covered bond purchase programme ( cbpp1 ). ecb activates the securities markets programme ( smp ). the ecb launches the second covered bond purchase programme ( cbpp2 ) and introduces the 3 - year ltros. the ecb announces the outright monetary transactions ( omts ). the ecb cuts the base interest rate to 0. 25 % and introduces forward guidance. the ecb cuts the base interest rate to 0. 05 % and the deposit facility rate to - 0. 20 %, bringing it for the first time in negative territory and introduces the targeted longerterm refinancing operations ( tltro ) with a 4 - year maturity. ecb introduces the expanded asset purchase programme ( app ) and cuts the deposit facility rate to - 0. 30 %. ecb accelerates the expanded asset purchase programme ( app ) and cuts the main refinancing operations ( mro ) rate to 0. 00 % and the deposit facility rate to - 0. 40 %. indeed, the 10 largest central banks now own assets totaling $ 21. 4 trillion, accounting for 29 % of the world economy, up by 10 % from end - 2015, double what it was in midseptember 2008 and almost half the value of all debt in bloomberg β s global bond index ( as shown in chart 1 )! chart 1. the combined assets of the 10 largest central banks finally, almost 75 % of the world β s central bank assets are controlled by policy - makers in four regions : china, the us, japan and the eurozone. the following six β that is, the central banks of england, brazil, switzerland, saudi arabia, india and russia β each account for an average of 2. 5 %. the remaining 107 central banks tracked by bloomberg, mostly with imf data, hold less than 13 % ( see chart 2 ). chart 2. central banks β combined assets chart 3. stock of assets purchased by the four major central banks as a percentage of national gdp source : bank of greece, european central bank, fed, bank of england and bank of japan. note : the ecb β s purchased assets in the context of the | , under the first programme changes were made that were important, but still insufficient in relation to the size of the economic problem at hand. this explains the repeated underperformance with respect to the targets of the adjustment programme after the first memorandum. the related revisions would have been avoided had we accepted from the outset our full responsibility for the necessary change in course, once it had become clear that the growth model followed was no longer sustainable. bis central bankers β speeches the needed adjustment did not take place to the extent required. the memorandum, which, in any case, contained reforms that should have been implemented long ago, was handled defensively and treated as an external imposition. this defensive stance, however, proved to be totally counter - productive β it magnified the costs of adjustment and deepened and prolonged the recession. a promising new start : a battle has been won, but the war is not over the lack of sufficient policy adjustment brought us to the restructuring of debt and the new loan agreement β choices which, given the circumstances, had become unavoidable. the restructuring improves the dynamics of public debt and creates a more favourable framework for the economy. thus, a very difficult phase of the crisis comes to an end, at great social cost, but without any devastating effects. we now find ourselves at a promising new starting point. in this sense, a battle has been won, but not the war. this is why there can be no slackening off or complacency. on the contrary, continued vigilance, an intensification of efforts and a faster pace are required. in order to succeed now, we need to promptly make fundamental qualitative changes [ mainly ] to the functioning of the state, the operation of the public administration and, more broadly, institutions, the political system, the judicial system, the social partners, as well as the values and attitudes that shape our behaviour. the agreement of society and of political forces is needed on the main issue : the country β s european prospects and growth for these changes to proceed, what is needed is the broadest possible consensus across society and the spectrum of political views. citizens must be convinced of the necessity of the changes stemming from the country β s choice of euro area membership ; further, they must understand that an eventual failure to implement the changes would entail losses many times greater, as well as an irreparable break - up of social cohesion. it is to be hoped that political forces will agree on | 0.5 |
see bank of england monetary policy report august 2021 pp. 12 - 13 2. see monetary policy summary and minutes of the mpc meeting - august 2022 3. there is a growing body of work assessing the economic impact of qe, to which the bank has contributed. for a recent summary of qe at the bank of england, see qe at the bank of england : a perspective on its functioning and effectiveness | bank of england. the bank β s approach to qe has also be assessed in detail by the bank β s independent evaluation office : ieo evaluation of the bank of england β s approach to quantitative easing | bank of england. mpc members have contributed through speeches β broadbent ( 2018, 2023 ), ramsden ( 2021 ), tenreyro ( 2023 ). 4. global central banks also used other tools including the funding for lending scheme and term funding scheme in the uk and the ecb tltro. 5. the bank β s balance sheet is in practice even larger because of the size of drawings under the tfsme, which peaked at Β£193bn in december 2021. 6. asset purchases involve large flows of cash during the lifetime of the portfolio because of factors such as income from coupon payments on the bonds held and interest paid on the loan used to fund them. 7. see chart 3 in asset purchase facility quarterly report - 2023 q1 and box 4. 1 in obr report on fiscal risks and sustainability - july 2023 8. see bank of england monetary policy report august 2021 pp. 12 - 13 9. for further discussion, see bailey et al ( 2020 ) : the central bank balance sheet as a policy tool : past, present and future. 10. see asset purchase facility : corporate bond purchase scheme sales programme β market notice 5 may 2022 | bank of england 11. see thirteen days in october : how central bank balance sheets can support monetary and financial stability β speech by andrew hauser ( bankofengland. co. uk ) 12. thirteen days in october : how central bank balance sheets can support monetary and financial stability β speech by andrew hauser ( bankofengland. co. uk ) pp. 13 - 14 13. see exchange of letters between the governor and the chancellor on the asset purchase facility - february 2022 | bank of england 14. see asset purchase facility : gilt sales β provisional market notice 4 august 2022 | bank of england 15. explanatory | ##c β s Β£80 billion target, based on the market value of apf gilt holdings. overall, the evidence to date supports our expectation that qt effects on gilt yields, while greater than zero, appear to be materially smaller than the effects of qe. given our experience so far, as a very rough indication of scale, bank staff estimate that a one - off additional Β£80 billion of qt relative to expectations is likely to increase 10 year gilt yields by less than 10 bps in prevailing market conditions. based on our experience of qe, that would map across into an impact on activity and inflation of less than 0. 2 % and 0. 1pp respectively. these small numbers are welcome. the mpc β s key principles have been designed exactly to support a relatively small economic impact from qt, such that it can proceed as a process in the background. importantly, to the extent any qt impacts β while relatively small β are coming through, the mpc will have observed the associated effects on asset prices, conditioned its forecasts accordingly and has full flexibility to adjust its active tool β bank rate β to the extent that any offsetting action is deemed necessary. given the limited evidence for qt impact to date, particularly in the context of the other large shocks to the economic outlook, from my perspective qt has not had a bearing in determining my votes on bank rate since the qt programme commenced. qt operations β mindful of market function bank staff are constantly monitoring market liquidity and functioning, drawing on a combination of market intelligence and data analytics. [ 18 ] dedicated market intelligence teams speak to a broad set of market participants about conditions in the gilt market and broader uk - relevant financial markets. we combine this with a wide range of quantitative indicators on market liquidity, including indicators based on transaction - level data. as already stressed, the bank β s qt operations are designed to operate in the background. based on our experience to date and in line with the second of the mpc β s key principles, we have found no evidence that our operations have themselves disrupted market functioning. first, some context. as already flagged and covered in detail elsewhere, market conditions deteriorated rapidly in late september 2022. [ 19 ] metrics of gilt market illiquidity spiked, reaching similar levels to the 2020 β dash for cash β ( chart 5 ). ( a ) this is a composite measure, calculated by the bank of | 1 |
mario draghi : fact - finding on issues affecting the banking and financial system testimony of mr mario draghi, governor of the bank of italy and chairman of the financial stability forum, before the finance committee of the chamber of deputies, chamber of deputies, rome, 17 march 2009. * * * all the main advanced economies recorded a sharp contraction of output in the fourth quarter of 2008. consumption and investment demand is falling owing to the rapid, generalized deterioration in household and business confidence, the increase in unemployment, the drop in share prices and house values, and tighter access to credit. the recession has passed to the emerging economies, hit by the drop in exports to advanced countries, the decline in raw material prices, and the sudden reversal of capital flows. the countries that depend most heavily on financing from abroad, such as those of central and eastern europe, are especially vulnerable. the international monetary fund and other official and professional forecasters have progressively revised their estimates of world economic growth downwards. in january, the imf projected that world trade would contract by almost 3 per cent in 2009 and that gdp would fall by 1. 6 per cent in the united states, 2 per cent in the euro area and 2. 6 per cent in japan. it has already announced that the estimates are being newly revised in the light of more recent data. world gdp growth will probably be negative on average for the year. economic policymakers have acted promptly to contain the spread of the financial crisis and counter its effects on the real economy. central banks supplied ample liquidity to the financial system, with interventions of unprecedented size and degree of international coordination. governments have introduced or strengthened guarantees for bank deposits and securities and have prepared or taken measures to recapitalize financial institutions. these actions have prevented the collapse of the system but they have not yet shed full light on the financial situation of those banks that invested most heavily in β toxic β assets : there is still uncertainty as to the size and distribution of the losses on the balance sheets of what were once the world β s largest banks. moreover, it is likely that the recession will cause a further deterioration in banks β assets. the restoration of confidence in financial institutions and properly functioning credit markets is essential, along with support for demand offered by monetary and fiscal policies, in order to restart growth. official interest rates now stand at minimal levels in the leading economies. there is limited scope for the monetary policy lever to work, although there remains the option of unconventional measures, which are being implemented | relatively short time. the terms of the italian instruments are in line with those offered by other european countries. i expect banks to make use of them in suitable amounts. the recapitalization law also provides for monitoring the transactions and their effects on the economy and institutes special observatories at prefectures, with the participation of the interested parties. the bank of italy will supply the ministry for the economy and finance with data and analyses on the evolution of credit and borrowing costs on a regional basis, as an additional supplement to the ample geographically disaggregated data already released in its publications. the statistical information will allow any specific situations of tension to be identified. it is essential that analysis of credit conditions at local level not stray into a role of pressuring banks, prompting them to relax the standards of sound and prudent management in the selection of borrowers. in my opinion, political and administrative interference in assessments of individual cases of creditworthiness must be avoided. lending is and must remain an entrepreneurial activity, based on a prudent, professional evaluation of the validity of companies β plans. sooner or later, imprudent banks end up in distress and also cease lending. but the test posed by the crisis is severe and requires the ability to be good bankers even when the economy is doing badly. the inevitable deterioration in loan quality due to the recession calls for far - sighted choices : just keeping the accounts straight is not enough. firm support for creditworthy customers prevents an excessive credit squeeze, which would aggravate the recession, thereby worsening the position of banks β customers. as i have already said, every opportunity must be taken to strengthen the capital of banks, choosing the most appropriate form in each case : recourse to the market, retained earnings, or the instruments offered by the state. the restoration of confidence in the banking system is a global, not a national question. in my view, four conditions are essential. first, the uncertainty still surrounding the value of the most troubled assets on banks β balance sheets must be dispelled ; this must become an integral part of public interventions in support of the financial system. it is indispensable, especially in europe, that similar measures be based on common principles, in order to avert competitive disparities between intermediaries of different countries and between banks exposed in differing degrees to the problem of impaired assets. second, in determining recapitalization objectives, it is vital that the definitions of bank | 1 |
- all solution will probably not be reached, given the country - specific financial conditions and institutional arrangements. however, this does not necessarily exclude looking into the arguments for or against either alternative. as i already said, i believe that it is better to have supervision integrated in the central bank. first of all, the ongoing complex challenges to financial and economic stability call for identifying, using and corroborating tons of information in order to articulate the adequate policies. the central bank relies on its database and expertise, which are prerequisites for managing such a challenging environment. beyond this major advantage, there are also other benefits of such an institutional arrangement. independence from political influence is essential for effective supervision. and central banks are institutions enjoying a high level of independence that a newly - established government agency would not be able to gain, at least in the short run. besides, clearly acknowledging the links between price stability and financial stability means that they need to be taken into account when formulating the monetary policy. moreover, as benoit cΕure pointed out, data collected and analyses conducted as part of banking supervision provide valuable information about the financial sector and may feed into the assessment of the state of the economy, being useful for the monetary policy decision - making process. of course, literature identifies some disadvantages of integrating supervision in the central bank. the risk of this arrangement resulting in a too loose monetary policy, due to the conflicting objectives, which i have already referred to, is an important drawback. however, as beck and gros stressed in an article from 2012, with the rise of macro - prudential regulation as an additional tool, it is not clear whether price and financial stability still conflict with each other. bis central bankers β speeches another disadvantage is that the reputation and / or the independence of the central bank might be undermined : if its decisions and actions in the area of supervision and resolution are perceived as wrong or suboptimal, this may negatively affect the credibility of the monetary policy, as it is conducted by the same institution. moreover, the temptation of politicians to capture the central bank may rise, as it has much more power than in the case when its only mission is to deliver price stability. the various arrangements on assigning banking supervision also have a bearing on the design of the national macroprudential authority. depending mainly on who conducts the supervision of banks, different institutional solutions are adequate for this authority : it may be represented by a committee or board comprising representatives of | out that the nbr shifted from an internal auditors β commission to the auditing of financial statements by external auditors as early as 2001, while the following year saw the establishment of the audit committee as a substructure of the nbr board ( at a time when not even the ecb had such a committee in place! ). in addition to the audit committee, the nbr β s internal control system includes several control layers. in fact, there are three lines of defence against any factors that might jeopardise the fulfilment of the nbr objectives. bis central bankers β speeches first of all, the national bank of romania takes a functional approach to risk management, meaning that each organisational unit has primary responsibility for identifying, assessing and managing the risks associated with its own activities and operations. the risk management process is an integral part of the nbr β s internal control system and represents the bank β s first line of defence. each organisational unit implements operational control procedures within its area of responsibility, in accordance with the levels of risk tolerance set in advance by the executive management. furthermore, the nbr applies the approach known as the β chinese wall β, which separates the departments in charge of monetary policy formulation and implementation, on one hand, from the departments entrusted with other statutory tasks, on the other. the second line of defence is functional on certain business segments with high - risk financial exposure, e. g. international reserve management. this line of defence monitors compliance with the risk limits approved by the bank β s executive management and reports any breach. a major role in this line of defence is played by the decision - making / advisory committees within the central bank. apart from the two committees dedicated to monetary policy and supervision that i have already mentioned, particularly significant is the foreign reserve management committee. in addition to the risk monitoring by the operational structures, the nbr β s internal audit department β which functions as the third line of defence β examines the overall controls in place and determines whether they are properly designed and functional, so as to ensure the reliability and integrity of financial and operational information, the effectiveness of the activities carried out, asset protection, as well as compliance with applicable legal and contractual provisions. 5. different institutional arrangements for banking supervision and financial stability as we all know, the responsibility for banking supervision rests in some countries with the central bank, whereas in others it lies with a distinct authority. both options are valid and a one - size - fits | 1 |
is the present and expected future stock of assets the central bank holds, or is anticipated to hold. the β flow view β suggests instead that the effect on asset prices relates to the pace at which assets are being added or removed from the balance sheet at that time. many speeches have been given, and journal articles published, about the relative importance of these effects with respect to their impact on financial conditions and the broader economy, a topic that i do not intend to wade into today. 16 instead, i think it β s important to make a few points on β flow effects β relevant to policy implementation, and in particular related to possible β flow effects β associated with an overly rapid pace. overly fast flows of securities into private hands can be disruptive to market functioning. in particular, there is evidence that the agency mbs market, due to the nature of its trading conventions, is prone to dislocation when market participants expect large transitions in central bank agency mbs flows. 17 such concerns can be self - fulfilling : if market participants are concerned that an abrupt shift in flow might be disruptive, they might, for example, withdraw from liquidity provision. an overly fast redemption flow of treasuries could also create challenges in the government β s management of public debt auctions and result in communications challenges. 18 a sustained portfolio runoff at an overly fast pace could also shrink the balance sheet so quickly that it impacts other aspects of monetary policy implementation. rapid portfolio declines could have unforeseen impacts on overnight money markets, for example by creating significant shifts in dealers β demand for overnight repo financing. we have seen such impacts in the past. during the maturity extension program, the federal reserve sold substantial amounts of shorter - dated treasuries. some of these securities accumulated in dealers β inventories, and secured financing rates rose a bit as dealers sought to finance these holdings. this sort of volatility did not, and would not now, pose a major problem to markets or policy implementation, but it is something worth avoiding if possible. rapid portfolio runoff could also make it more likely that bank reserves become scarce unexpectedly or more quickly than policymakers had anticipated. finally, overly fast portfolio runoff could introduce undesired noise into financial conditions. 5 / 15 bis central bankers'speeches policymakers have indicated that they want the portfolio β s size to decline β in the background, β and that the federal funds rate be the primary instrument of monetary policy. rapid portfolio runoff could lead market participants | well, our economists have played a role in developing international and domestic regulatory policy with respect to bank capital and liquidity standards. for instance, measurement of capital losses over time, and various run - off rates of different types of liabilities by our economists informed this work. also, our economists β work on broker - dealer liquidity informed the design of the liquidity coverage ratio. finally, our economists pay special attention to the emerging area of financial stability monitoring. this takes place in a number of realms, including participation in the work of the basel committees, such as the committee on global financial stability ( cgfs ) of the bis, that i currently chair, and the committee on payments and settlement systems ( cpss ), which i once chaired, the numerous workgroups and committees of the financial stability board, and ongoing contributions to the financial stability oversight council ( fsoc ). with respect to the fsoc, for example, new york and chicago fed economists have played a key role in editing the fsoc annual reports. a few other examples of our economists β involvement in prudential and regulator policy include : gse reform and housing market policy. our economists, working with staff in the markets group, have published two staff reports detailing a framework for replacing the gses and implementing an explicit government guarantee to protect against tail risks in residential real estate. this work has included briefings of congressional staff and congressional testimony. triparty repo reform. working with the other areas of the bank and board of governors staff, economists have helped to design and implement reforms that make the triparty repo market more stable and less prone to β run β risk. reference rate reform. new york fed economists and members of the markets group are deeply involved in the fsb β s efforts to reform the reference rate setting process for libor and other reference rates. monetary policy and macroeconomic policy economists provide invaluable input to the new york fed president, who serves as vicechairman of the fomc, and to the markets group, which is responsible for the operational aspects of monetary policy implementation. this work has many aspects, including : independent macroeconomic forecasts. this includes a new york fed dsge model and a suite of products to analyze labor market developments. 2 the development and implementation of new tools, such as the large - scale asset purchase programs, the payment of interest on excess reserves, and the development and testing of a fixed rate, full allotment | 0.5 |
than p 107 billion, allowing the rural banking sector to provide more loans for agriculture as well as micro, small and medium enterprises. our figures indicate that nearly half of the rural banks β total loan portfolio of p106. 6 billion in december 2008 went to agri - gra loans. i am also pleased to note that loans granted by rural banks in 2008 went up in 13 of our 17 regions. the business of rural banking has likewise been profitable with net income after tax at more than p 3 billion in 2008, slightly higher than the 2007 level. a clear indicator of the rural banking sector β s strength is its strong capital position : its capital adequacy ratio at 13. 8 % as of september 2008 remains well above the bsp β s mandatory standard of 10 %. of course, your car remains a bit lower than that for our thrift banks and universal / commercial banks. still, 13. 8 % car of rural banks compares well with the overall car of the banking sector in malaysia with at 12. 6 % and korea with 11. 2 %. and so, ladies and gentlemen, let us celebrate the continued growth and development of the philippine rural banking sector with a long round of applause! nevertheless, these positive indicators must not lull us into a false sense of complacency. the rural banking industry achieved these by maintaining business discipline. and clearly, rural banks stand to perform even better if all members of rbap will work on having even stronger capital positions, become more vigilant in managing liquidity and credit risks, and faithfully adhere to the good governance tenets of fairness, accountability and transparency. i am happy to know therefore that we are on the same page, so to speak, as your convention theme this year is β banking on governance. β as declared by the organization for economic cooperation and development ( oecd ), good corporate governance is key not only to the integrity of corporations, financial institutions and markets it is also central to the health and stability of our economies. further, an oecd study released this year entitled β corporate governance lessons from the financial crisis β concluded that to an important extent, the current financial crisis can be attributed to failures and weaknesses in corporate governance arrangements. the choice of governance as the central theme for your convention is therefore timely as it is compelling. i take this as a message of the deep commitment of rural banks to good governance principles, strong capital buildup, and better liquidity and risk management | be examined in terms of the macroeconomic transmission and influence of monetary easing. in sum, with interest rates at historically low levels, monetary policy design going forward necessitates a new paradigm of monetary economics, by broadening the focus of analysis from short - term interest rates to the entire yield curve. conclusion today, i was able to discuss only a couple of topics that are covered in the bank of japan's " comprehensive assessment. " in fact, we have conducted in - depth analyses of hotly debated issues in monetary policy, including the impact of large - scale government bond purchases on long - term interest rates, the mechanisms of inflation expectation formation, and the effects and impact of the negative interest rate policy. as i mentioned at the outset, monetary policy under a low - growth, low - inflation environment is becoming a challenge that major economies around the world have in common. to conclude my remarks, i sincerely hope that the bank's " comprehensive assessment " and the introduction of the new policy framework based on this assessment will contribute to constructive debate in this field. thank you very much for your attention. | 0 |
). economic outlook let me close with a few words about the economic outlook. the intensification of the global financial crisis has led in canada to an increase in credit spreads and a tightening in credit conditions generally. the global recession is deepening, and with it there have been further declines in the prices of many commodities and a deterioration in canada's terms of trade, which reduces canadian incomes. the nature of the slowdown in the united states, with the acute weakness in the housing and auto sectors, is particularly problematic for our exporters. these factors present serious challenges to canadian industries, including key nova scotia industries in the primary resources, manufacturing, and tourism sectors. thus, while domestic demand in canada remains relatively healthy and the depreciation of the canadian dollar will offset some of the declines in external demand, the risks to growth and inflation in canada identified in the october monetary policy report appear to have shifted to the downside. in the face of the crisis, we have already cut official interest rates by half, to 2 1 / 4 per cent over the past year and have stated that some further monetary stimulus will likely be required to achieve the inflation target over the medium term. conclusion let me conclude. we have avoided the worst effects of the global financial crisis, thanks to a resilient financial sector built on the conservative lending practices of canadian banks, and to our effective regulation and prudent practices in the sector. still, the crisis is being felt in our economy. but we have taken bold steps to re - open financial markets and i can assure you that the bank of canada will continue to provide as much liquidity as is needed to encourage the re - establishment of the normal functioning of canadian financial markets. you can also count on the bank to add its voice to calls for initiatives to strengthen the resiliency of both the domestic and international financial systems. | pierre duguay : fostering financial system stability remarks by mr pierre duguay, deputy governor of the bank of canada, to the pictou county chamber of commerce, pictou, nova scotia, 27 november 2008. * * * good evening. it's a great pleasure to be here. when i last spoke in nova scotia three years ago β almost to the day β i discussed the bank of canada's role in strengthening the country's financial system to make it resilient to shocks so as to limit damage from inevitable economic and financial storms. it was a timely metaphor, given that i spoke shortly after hurricane katrina had breached the levees of new orleans. we were concerned at that time about the buildup of global economic imbalances, and about the narrowing of risk spreads which suggested that risk was perhaps being underestimated and vulnerable to a sudden reversal. these factors have since proven to be key contributors to the current, worldwide turmoil in financial markets. a third contributing factor, which we didn't foresee, has been the extent to which financial markets had expanded without proper support structures, like a house built on sand. i'll have more to say on this point a bit later in my remarks. so, i thought it would be worthwhile to review the risks we were aware of leading up to the current crisis, what took us by surprise, and what we have learned must be done to strengthen financial system resiliency for the future, both here and abroad. the canadian financial system has fared relatively well through this crisis, thanks to effective regulation and prudent practices that have worked like sandbags to protect our financial system from the storms in today's global economy. in this respect, we may be a model for much of the world. but, because our prudential regulation is focused on protecting institutions, rather than supporting core financial markets, we have learned that there is still much work to do in this area. so i will also discuss some reforms that may be necessary to mitigate the effects of future global financial crises. i will close with a few words on the current economic situation in canada. the global financial crisis we have all heard a great deal about the tumultuous global events that began in the summer of 2007 as a result of rapidly rising delinquencies on subprime mortgages in the united states. the sudden realization that exposure to these defaults was both widespread and difficult to locate ( because of | 1 |
in canada but in many other countries, about the appropriate interest rate setting when economic growth is rapid but inflation is low. governing council examined this issue closely from two perspectives. the first asks whether there are special factors that are temporarily pushing inflation lower, and we discuss this issue in a technical box in the mpr. generally speaking, central banks prefer to look through temporary factors. of course, our new core measures of inflation were developed to help us see through the noise in inflation data, but even these are not immune to temporary fluctuations. after careful assessment of the evidence, governing council agreed that a significant portion of the recent softness in our measures of inflation should prove to be temporary. nevertheless, even a one - time price change affects inflation for a year, simply because we gauge inflation on a year - over - year basis. some temporary factors are themselves gradual rather than one - off, such as increased competition in retail food stores. this all serves to underscore the data - dependent nature of monetary policy. 1 / 2 bis central bankers'speeches all things considered, governing council judges that in the absence of temporary factors, inflation would be running at around 1. 8 per cent, as excess capacity in canada is estimated to account for an inflation shortfall of about 0. 2 per cent. accordingly, as the gap closes in the months ahead, we expect inflation to head toward 2 per cent, with the rate of convergence determined by how quickly these various temporary factors unwind. our projection shows a modest overshoot of the 2 per cent inflation target in 2019. this is a product of the dynamics of our model, but it is an important reminder that, while our target is 2 per cent, our control range is a symmetric 1 to 3 per cent. having a target range acknowledges the uncertainty inherent in economic forecasting and inflation control. the chances of an overshoot will depend on how investment and potential output respond to tighter capacity constraints, a process that the bank will monitor closely. the second perspective on the low - inflation issue concerns the lags between monetary policy actions and their ultimate effects on inflation. it is worth remembering that it can take 18 to 24 months for a monetary policy action to have its full effect on inflation. this means that central banks must target future inflation by anticipating future deviations from target. and because inflation is measured with a lag, reacting only to the latest inflation data would be akin to driving while looking in the rear view mirror. in contrast, imagine a world where | europe about the chances of a credit - less recovery, given the actual very weak credit growth. while the long - term objective should be to create conditions for achieving a more balanced and diverse financial system, the shorter times objectives should focus one having a stable financial system that provides adequate financial services to its customers, both savers and borrowers, thus maintaining its fair share of contribution to the economic developments of a particular country. the banking sector in albania has felt the impact of the international financial crisis, as the weaker credit standards before the crisis and the weaker economic growth afterwards, have been translated into lower asset quality and difficulties to consistently maintain positive financial results. in front of higher credit risk, credit terms have been tightened and credit growth has been sluggish. in september 2013, credit growth turned negative driven by credit in foreign currency and to businesses. however, the banking sector remains well capitalized and liquid. banks have been able to raise new capital and financial support from their mother banks. especially, greek banks operating in albania have enjoyed strong support from their mother banks so far, and we expect this to continue in the future too, if needed. overall, in september 2013 the risk bis central bankers β speeches weighted capital of the banking sector stood at 17. 8 %, while the ratio of liquid assets to short term liabilities was 36. 5 %. the sector has shown strong preference for investments in albanian government debt securities and placements abroad. bank of albania has been taking a number of measures to support credit growth and address the loan quality problems. given the subdued inflationary pressures, we have lowered the policy rate to the record level of 3. 5 %. the path of the credit interest rate has followed this trend, although at a slower pace. given the weakness of the credit channel in the monetary transmission mechanism, we have tried to strengthen our impact by adopting some countercyclical measures to promote credit growth. in this regard, we have temporarily increased capital requirements for placements of banks abroad and have reduced those for credit in the domestic economy. in addition, we are promoting credit restructuring at an early phase by reducing provisioning requirements if that is the case. several legal and regulatory measures have been taken in cooperation with other authorities and the banking industry, to improve collateral execution process and facilitate loan write - offs. the results of such measures have been mixed so far, but in the coming months we expect their impact to be noticeable. this is also linked with the commitment of the government to pay | 0 |
##turing, and developing talent must therefore be the number one priority of every financial industry ceo. ibf has been organising these annual conferences β to bring together industry leaders to deliberate on how we can do better in building talent for the industry. today's conference will focus on leadership development β how we can build a robust pipeline of leaders in our organisations and develop our talent base. i wish you a fruitful session ahead and i look forward to your continuous partnership in our common journey of learning and growing in the year ahead. thank you. bis central bankers β speeches | without taking into account the environmental cost presents a classic case of the tragedy of the commons. problems caused by climate change and global warming affect all of us. as a country lacking in natural resources, singapore sees a critical need to promote sustainable development. singapore β s national research foundation has dedicated significant resources to facilitate research efforts and encourage commercial spin - offs. r & d initiatives have been complemented by both domestic and foreign investment in the areas of sustainable water and solar energy projects. some of you would have read about renewable energy corp from norway, which is building a euro 3 billion plant in singapore for the manufacturing of solar modules. by 2010, newater, our very own water recycling industry, will be able to meet 30 % of singapore β s water demand. singapore has also adopted a model to promote sustainable urban design for housing development, environmental management and transportation. for example, singapore is working with china on a project to help develop environmentally friendly townships via the singapore - tianjin eco - city project. access to funding for such projects is the key to the success of developing a sustainable model of urbanization and production of renewable energy. in this respect, i am pleased to note that singapore capital markets has already facilitated the funding of projects such as hyflux water treatment plants in china via a sgx listed business trust ipo completed last year. underlying all the initiatives i have just mentioned is the potential demand for environmentally sustainable solutions. the promise of such solutions, besides in offering economic opportunities, lie in their potential to address the rising challenges of urbanization, increasing energy prices and shortage of clean water. asian businesses should position themselves for the gradual shift towards greener living as such technologies are not only socially acceptable, but also socially demanded. corporate governance before i conclude, let me share one final thought. asian smes, in their bid to become top asian and global companies, should devote attention to corporate governance. a sound corporate governance structure will help to ensure proper management practices, robust internal processes, and prudent controls. in the long term, these practices will help foster a strong reputation and increase the franchise value of the company, paving the way for asian smes to expand into global markets. indeed, global competition will require companies to be held to such high standards, especially those demanded by institutional shareholders. closing to sum up, asia and asian businesses are poised for exciting times in an era of rising prosperity and growth. there will be both challenges and opportunities. one need not be daunted | 0 |
one of the cornerstones of the turkish economy. a set of reforms for developing a functioning market economy was put into practice. interest rates were more and more determined in the markets, and some measures were taken regarding the supervision of the banking sector. however, before taking the necessary actions for strengthening the domestic financial markets, such as measures for more transparent balance sheets and more careful risk management in the intermediation process, the capital account was liberalized at the end of the 1980s. the turkish economy with an inefficient banking sector became open to intensive capital movements. in my view, the turkish economy turned into an open one before it became strong enough to cope with capital movements that would occur in the 90s. the sequencing of reforms for the turkish economy in general and its financial system in particular should have been set differently. what went wrong in the turkish economy in the 90s? policies did not concentrate on ensuring and maintaining macroeconomic stability ; different priorities, delayed reforms, loose fiscal policy and accommodative monetary policy led to dynamic instability throughout these years. as a result, inflation climbed to 79 percent on average, budget deficit widened so much that the public sector borrowing requirement reached 15. 5 percent of the gnp by 1999, the output growth was very low on average and volatile compared to other emerging markets. so, poor macroeconomic fundamentals and a fully liberalized capital account brought about vulnerability of the economy to external shocks and the turkish economy faced severe financial crises and turbulences in the 90s. such an environment had also important implications on the financial system. having suffered from the reckless and unstable macroeconomic management together with inefficient supervision, the system deteriorated severely and faced a serious moral hazard problem. dear participants, a closer look at the turkish financial system would be helpful to characterize its weaknesses and structural problems during that period. first of all, because of the high public sector borrowing requirement, fiscal dominance increased considerably in the financial markets and led the public sector to crowd out the private sector. hence, the relationship between the banking sector and real sector could not develop as it should have done. instead, the relationship between the banking sector and the public sector strengthened year after year. secondly, the banking sector as a whole failed to exercise good risk management in its credit allocation. since financing the public sector budget deficits with high real interest rates was an easy way to make profits, banks did not pay much attention to basic principles of risk management, such as maturity and currency | , we kept our oil price assumption constant at 44 usd for 2016, and increased it to 54 usd for 2017. on the food front, food inflation remained far below the level envisaged in the july inflation report due to unprocessed food inflation in the third quarter of 2016. taking account of the current trend of unprocessed food inflation as well as the decrease in the demand for food stemming from the fall in tourism revenues, food inflation, which we assumed to be 8 percent by end - 2016 in the july inflation report, was revised downwards to 6 percent. due to the ongoing weakness in food demand owing to the tourism sector that will persist in 2017 coupled with the measures taken by the food and agricultural products markets monitoring and evaluation committee ( the food committee ), we expect food inflation to be lower than its historical average in 2017 as well. accordingly, we revised our assumption for food inflation downwards from 8 percent to 7 percent for end - 2017. our medium - term forecasts are based on an outlook that adjustments to taxes and administered prices will be consistent with the inflation target and automatic pricing mechanisms. for medium - term fiscal policy stance, we use the mtp projections covering the 2017 β 2019 period. 3. inflation and the monetary policy outlook esteemed guests, now, i would like to present our inflation and output gap forecasts based on the outlook i have described so far. given a cautious policy stance that focuses on bringing inflation down, we estimate inflation to approach gradually to the 5 - percent target. inflation is likely to be 7. 5 percent in 2016, falling to 6. 5 percent in 2017 and stabilizing around 5 percent in 2018. accordingly, we expect inflation to be, with 70 percent probability, between 7 percent and 8 percent ( with a mid - point of 7. 5 percent ) at end - 2016 and between 5 percent and 8 percent ( with a mid - point of 6. 5 percent ) at end - 2017 ( chart 17 ). 8 / 10 bis central bankers'speeches the turkish lira fluctuated following the july inflation report, while oil prices increased. we revised our assumptions for tl - denominated import prices upwards for the upcoming period compared to the previous reporting period. on the other hand, we envisage that the latest domestic developments will curb domestic demand particularly in the short term. accordingly, we revised our output gap forecasts downwards. the year - end consumer inflation forecast for 2016 remained unchanged as downside effects and upside | 0.5 |
therefore not yielded to calls to relax our monetary policy stance. if we did, monetary policy would only strengthen the shock - related inflationary pressures. at the current juncture, however, with inflation in the euro area having reached a record high and inflation risks still on the upside, there is the concrete risk that longer - term inflation expectations will start creeping up more strongly. the experience of the great inflation demonstrates that a stability - oriented central bank is well - advised to fight the risk of broad - based second - round effects decisively and proactively. by doing so, it will keep the costs of curbing inflation dynamics relatively low. our commitment to a systematic focus on price stability is even more important, as the recent rounds of wage settlement in the euro area have not contributed to curbing inflation pressures. on the contrary, recent wage dynamics in conjunction with elevated and persistent energy and food price pressures have increased the risk of a prolonged period of intolerably high inflation. at our last meeting of the ecb governing council, we emphasised that, given the uncertainty about the economic outlook and the prevailing downside risks to economic growth, the continued vigorous expansion of money and credit and the strong upside risks to price stability, the governing council is in a state of heightened alertness. financial markets should by now have understood our readiness to act. it is our strong determination to secure a firm anchoring of medium and long - term inflation expectations in line with price stability. after all, the best contribution that the eurosystem can make to sustainable growth in the euro area is to safeguard price stability in the medium to long term and lastly we should also not forget that a reliable monetary policy also helps to reduce uncertainty in times of an ongoing financial market turmoil. thank you for your attention. references beyer a., v. gaspar, c. gerberding and o. issing : β opting out of the great inflation : german monetary policy after the breakdown of bretton woods β, paper prepared for the nber conference β a retrospective on the great inflation β, organised by michael bordo and athanasios orphanides, woodstock, september 2008. borio, c. ( 2008 ), β the financial turmoil of 2007 -? : a preliminary assessment and some policy considerations β, bis working paper no 251, march 2008. clarida, r., j. gali and m. gertler ( 2000 ) : monetary policy rules and macroeconomic stability : evidence | andreas dombret : global reforms and the market economy system welcome address by dr andreas dombret, member of the executive board of the deutsche bundesbank, at the reception given by the deutsche bundesbank at the annual congress of the verein fur socialpolitik, frankfurt am main, 6 september 2011. * 1. * * welcome ladies and gentlemen, members of the verein fur socialpolitik, on behalf of the deutsche bundesbank, i would like to warmly welcome you to this reception. i am especially delighted to accept the role of host at the bundesbank β s reception once again this year. the bundesbank is a true friend and supporter of the verein fur socialpolitik β and not without a certain degree of self - interest. the bundesbank considers science and research to be fields of great importance, since the work of central banks is today β more than ever β research and knowledge - based. time and again, research work has been the starting point for central bank policy decisions. conversely, problems we are currently witnessing in the central banks β various areas of operation stimulate new research projects. moreover, central banks offer an attractive research environment. i am therefore convinced that a close exchange with research institutions and universities benefits all concerned. the bundesbank maintains contacts and works together with a wide range of institutions and academics at the goethe university. one such example is the institute for monetary and financial stability ; it is financed by the monetary stability foundation, which in turn is run by the bundesbank. but cooperation also takes place on a less formal level, for instance with the center for financial studies and the graduate school here in frankfurt, to name but two examples. 2. lessons from the crisis β comments on the g20 agenda the topic of this year β s congress is β the order of the world economy : lessons from the crisis β, and the scope of the programme demonstrates the range of the related questions and answers. what are the right lessons to be learned from the crisis? this question was the subject of debate even before the first escalation of the crisis, namely the collapse of lehman brothers in september 2008. initially, it was thought by more than just a few that technical improvements in financial market regulation β notably concerning the securitisation market β would be a sufficient response to the crisis. however, when the most severe global economic crisis in decades took hold in the autumn of 2008, two points became | 0.5 |
##ushek, stephen j. machin, and ludger woessmann, eds., handbook of the economics of education, vol. 4. amsterdam : north holland, pp. 573 - 613. council of economic advisers ( 2016 ). investing in higher education : benefits, challenges, and the state of student debt. washington : executive office of the president of the united states, https : / / www. whitehouse. gov / sites / default / files / page / files / 20160718 _ cea _ student _ debt. pdf. kahn, lisa b. ( 2010 ). β the long - term labor market consequences of graduating from college in a bad economy, β labour economics, vol. 17 ( 2 ), pp. 303 - 16. oreopoulos, philip, and uros petronijevic ( 2013 ). β making college worth it : a review of the returns to higher education, β future of children, vol. 23 ( spring ), pp. 4165. oreopoulos, philip, and kjell g. salvanes ( 2011 ). β priceless : the nonpecuniary benefits of schooling, β journal of economic perspectives, vol. 25 ( winter ), pp. 159 - 84. oreopoulos, philip, till von wachter, and andrew heisz ( 2012 ). β the short - and longterm career effects of graduating in a recession, β american economic journal : applied economics, vol. 4 ( 1 ), pp. 1 - 29. - 8pew research center ( 2014 ). the rising cost of not going to college. washington : prc, february, www. pewsocialtrends. org / files / 2014 / 02 / sdt - higher - ed - final02 - 11 - 2014. pdf. posey, kirby g. ( 2016 ). β household income : 2015, β american community survey briefs, acsbr / 15 - 02. washington : u. s. census bureau, september, www. census. gov / content / dam / census / library / publications / 2016 / demo / acsbr1502. pdf. | just one member of the university of baltimore β s class of 2016 - - i am trying to describe every one of you. in different ways, i expect all of you have overcome obstacles and demonstrated resilience and determination to succeed. all of you have gained knowledge and used your intelligence and talents to complete your degrees. as impressed as i am with any individual graduating today, i am more impressed with what all of you have achieved. let me tell you what else i have learned. more than the students of some colleges and universities, i know that many of you have deep roots in this city and in the county. many of you will start careers, build your lives, and raise your families here. the challenges you have overcome are the challenges faced by many people in baltimore and in communities throughout america. your success, which we celebrate today, is also the promise of a brighter future for this city. the degrees you have worked so hard to earn and the opportunities now opening up to you represent the stubborn, earnest hope that anyone and everyone who strives to succeed still can succeed. and that is why i consider it a rare privilege to speak to you today, and a great honor to be associated with the university of baltimore and the members of the class of 2016. thank you, and congratulations. references altonji, joseph g., lisa b. kahn, and jamin d. speer ( 2016 ). β cashier or consultant? entry labor market conditions, field of study, and career success, β journal of labor economics, vol. 34 ( s1 ), pp. s361 - s401. bishaw, alemayehu, and brian glassman ( 2016 ). β poverty : 2014 and 2015, β american community survey briefs, acsbr / 15 - 01. washington : u. s. census bureau, september, www. census. gov / content / dam / census / library / publications / 2016 / demo / acsbr1501. pdf. board of governors of the federal reserve system ( 2016 ). experiences and perspectives of young workers. washington : board of governors, december, https : / / www. federalreserve. gov / econresdata / 2015 - experiences - and - perspectivesof - young - workers - 201612. pdf. bound, john, and sarah e. turner ( 2011 ). β dropouts and diplomas : the divergence in collegiate outcomes, β in eric a. han | 1 |
suggested that unemployment has continued to fall back a little from its peak, it has not moved much. and nominal regular pay growth ( which strips out bonuses, but includes merit related increases in pay ) has remained subdued over the past year, averaging around 2 %. assuming that the potential growth rate of the economy has not been damaged by the financial crisis ( and there is no compelling evidence to suggest that it has ), then this level of wage growth would be too low to be consistent with the inflation target in the medium term. looking ahead, it is most likely that there will remain a reasonable margin of slack in the labour market, which should help contain any pressure on nominal wages and hence price inflation. but this is unlikely to persist indefinitely. historical analysis of the uk labour market shows that the longer individuals are unemployed, the lower their chances of getting a job become. hence, persistently high actual unemployment tends to be followed by an increase in the level of structural unemployment. theory and empirical evidence predict that the structurally unemployed exert less downwards pressure on wage inflation. major shifts in the pattern of employment β as we are likely to see from the shifts in growth from services to manufacturing, and from the public to private sector β tend to reinforce that effect. if structural unemployment rises sufficiently, then the downwards pressure on inflation from spare capacity will eventually start to dissipate. for now, contacts of the bank β s agents confirm that the margin of slack in the labour market should continue to restrain wage growth in the coming months. in my view, that should continue for the next few years, even if structural unemployment begins to rise : the latter is a relatively slow process. given the inflation outturns so far in 2011 and the prospects for nearterm inflation outlined in the may inflation report, the squeeze on household real incomes is likely to be intensifying in the short term. overall, it could be quite some time before we start to see rising real take - home pay. the marked decline in household confidence since the start of the crisis might also have played a role in the weakness of consumer spending during 2010. for a given level of income, households may decide to spend less ( and hence save more ) if they are uncertain about the outlook for the economy and, especially, about the security of their job. although survey measures suggest that households β unemployment expectations have fallen slightly, bis central bankers β speeches the fiscal consolidation now underway might encourage greater precautionary savings among some households β indeed, | , either organically, or through the isda protocol. the message remains clear : those who can transition away from libor should do so on terms that they themselves agree with their counterparties. conclusion libor transition is challenging. it has been embedded in the financial system for a number of decades across a broad range of products. but we are moving away from libor and the problems of libor. this means facing up to transition now, taking action to ensure new issuance moves to robust alternative rates and concrete plans are in place to deal with https : / / www. parliament. uk / business / publications / written - questions - answers - statements / written - statement / commons / 2020 - 0623 / hcws307 / all speeches are available online at www. bankofengland. co. uk / news / speeches legacy exposures. the uk government announcement on its intention to legislate and the finalisation of the isda protocol are important steps in the β endgame β becoming clearer. there is more to do and work is underway to remove the remaining barriers to transition. after john has spoken we β ll be joined by the chairs of the uk and us industry groups who continue to lead this work, building consensus on key areas such as product conventions and cash fallback mechanisms. hopefully, the message is now clear to those who have remained on the side - line : this is a necessity not a choice and there are eighteen months left to transition. and, for the avoidance of doubt, i β m taking it that eighteen months in libor is past the middle of the seventh, so you don β t need to get up now, stretch and sing β take me out to the ball game β before john speaks. all speeches are available online at www. bankofengland. co. uk / news / speeches | 0.5 |
##c ) from 2002 to 2018, the longest - serving governor of 1 / 2 bis central bankers'speeches the pboc. dr zhou became one of the most respected central bankers on the international circuit. in february this year, dr zhou was awarded the lifetime central banking award by london - based publication central banking, a most fitting recognition of his contributions to the chinese economy and financial sector. from a bilateral perspective, during dr zhou β s tenure, the pboc and mas forged close ties and deepened financial and regulatory cooperation. we collaborated successfully in several areas over the years, particularly in promoting the greater use of rmb in the region. pboc β s decision in 2013, under dr zhou β s leadership, to appoint the industrial and commercial bank of china as singapore β s rmb clearing bank was a significant milestone and spurred the growth of singapore as a key rmb offshore centre. in 2016, mas announced that rmb assets would be included as part of our official foreign reserves, three years ahead of the inclusion of chinese bonds in key global bond indices. at the personal level, i have had the pleasure and privilege to interact with xiaochuan at many international and bilateral meetings. i have always found his views insightful. at our bi - monthly meetings of central bank governors in basel at the bank for international settlements, i would sometimes ask xiaochuan some rather inconvenient questions β about risks related to shadow banking or industrial overcapacity in china. xiaochuan would always answer these questions, as well as those from other governors, with a disarming candour and clarity, never avoiding the hard issues. this not only helped to build trust among his counterparts in the international community but also endeared xiaochuan to many of us as someone we could count on for insights into the complexities of the chinese economy and financial system. today, dr zhou will speak on β the rise of technology in finance β opportunities and challenges for central banking β. many of us are familiar with dr zhou β s views on financial and economic reforms. but not many of us know that that when it comes to technology, dr zhou was ahead of the curve amongst his peers. in 2014, before the words β fintech β and β digital currencies β became popular, dr zhou set up a digital currency research institute within the pboc to explore how new technologies like the blockchain and digital tokens could improve and strengthen china β s financial system | am pleased to see that the major banks in singapore have committed to provide at least 200 places for polytechnic graduates in the coming year, through the earn and learn programmes or their in - house structured programmes. ( they include all three local banks β dbs, ocbc, uob β as well as anz, barclays, bnp paribas, citibank, jp morgan, maybank and standard chartered bank. ) these will be in the banks β core functions of technology, consumer banking, operations and risk management. 42. wherever you start, we will help you progress. to give an example, oryan ang, graduated from nanyang polytechnic and joined dbs in 2004 as a home advice specialist. he was given opportunities to learn on the job, demonstrate his abilities and rise through the ranks, and is today a vice - president in consumer banking ( deposits and secured lending ) at the bank. developing strong core of singaporean leaders in finance 43. let me turn finally to the second thrust of our initiatives to develop professional talent and skills, which concerns leadership development. this too is a key priority under skillsfuture. the development of a strong core of singaporean leaders in finance, working in diverse global teams, will define our continued success as a financial centre. mas takes this very seriously. bis central bankers β speeches 44. we have in recent years introduced several initiatives to promote the development of singaporean leaders in the financial industry. β’ the finance associate management scheme ( fams ) offers promising young professionals exposure to different aspects of a financial institution β s global operations and mentorship by senior leaders. β’ the international posting programme ( ipost ) has supported more than 35 overseas postings of singaporeans in finance since its launch in 2013. they have acquired valuable practical experience in diverse working cultures over their 6 to 24 - month attachments to regional and global offices of financial institutions. asian financial leaders programme ( aflp ) 45. to further strengthen these efforts, i am pleased to announce the launch of the asian financial leaders programme ( aflp ). β’ the aflp will take advantage of singapore β s strong and expanding linkages in the region, including asean, china and india, and aim to strengthen those links through leadership development. β’ it is aimed at equipping finance professionals aspiring to c - suite roles with the knowledge and capabilities to operate effectively across diverse business, regulatory, and legal environments. β’ participants will be given the opportunity to learn from and interact with | 0.5 |
roughly 4Β½ %, and in switzerland only 3 %. excessive government debt therefore represents a massive threat to price stability. putting an effective limit on government borrowing is thus a primary pillar of any policy of stable money. monetary union, as a union of stability, therefore required sound public finances. having said that, it soon became clear that calling for sound public finances would not be enough. a requirement of this kind had to be reinforced by fiscal rules. in this context, a part was played by the following considerations. first, the finding that public budgets have a tendency to excessive borrowing ; think, for instance, of the theory of political business cycles. second, the concern that governments in a monetary union have an even greater incentive to borrow because the costs of an unsound policy can be spread more widely. and, third, from the outset there was the fear that, despite the no bail - out principle, market discipline on its own would not be enough to control such a tendency to incur debt. 3. monetary union and crisis the framework of monetary union was quite coherent, it reflected well - established regulatory policy principles, and the attempt was made to learn the lessons and not to repeat the errors of the past. nevertheless, the crisis has shown that, in some places, this framework was too weak. the fiscal rules, for example, lacked the necessary bite. instead, the reform of the stability and growth pact in 2005 in fact saw some of its teeth drawn as a result of political influence. at the same time, the disciplining effect of the financial markets was even smaller than had already been feared. at times, the risk premiums for government bonds from the countries now in crisis shrank to a few basis points. the fiscal rules and market discipline were thus too weak, and many euro - area countries ran up too much debt. in any event, the dangers that excessive government borrowing posed to monetary union were at least recognised. the dangers of unsound macroeconomic developments, on the other hand, were largely blanked out. it is true that the 1989 delors report warned about potential imbalances resulting from the adjustment process after completion of economic and monetary union or from differing economic policy stances. in contrast to the field of fiscal policy, however, there were no precautions to limit such risks. thus, in the run - up to the crisis, housing bubbles and large current account deficits emerged, while many countries β competitiveness deteriorated. we see these developments | vaut en particulier a la veille de l β elargissement de l β union europeenne. valery giscard d β estaing et helmut schmidt ont rappele, a juste titre, dans un article commun publie il y a quelques jours, que β le succes de la monnaie unique depend, a terme, de l β accomplissement de nouveaux pas sur le plan politique. sans cela, les changements de gouvernement intervenant dans l β un ou l β autre des pays membres risqueraient de remettre en cause la solidite de l β union. (... ) on aurait pu s β attendre a ce que le traite d β amsterdam contienne des decisions prises par les pays participants, mais ceux - ci n β etaient pas capables de s β accorder sur des reformes. (... ) l β union monetaire est un projet federal qui doit etre accompagne et soutenu par d β autres mesures. elle n β a jamais ete faite pour rester un ilot isole dans l β Εil d β un cyclone d β interets nationaux. β pour toutes ces raisons, il est necessaire que la cooperation franco - allemande devienne encore plus intense, afin que le dynamisme de l β integration ne faiblisse pas apres l β entree dans l β union monetaire. l β unification europeenne est et reste un objectif porteur. | 0.5 |
the basis of the feedback received from various quarters. in this context, i would only make two brief comments. first, the banking system is central to the country β s economy irrespective of whether banks are locally or foreign owned. some countries like australia feel that banks are so systemically important that foreign controlled banks are precluded. our stance in india is on the middle ground where foreign ownership of banks has been permitted on certain conditions. secondly, we must not forget that the cost of bank failures is not limited to rescuing banks or bailing out depositors but there can be large real economy costs. thus, a well reasoned approach of regulating ownership of banks is a necessary concomitant of a stable financial system. anti - tying measures i would now refer to an issue which is at the frontiers of regulation. banks and financial institutions are increasingly offering a broad measure of financial services and thereby endeavoring to build customer loyalty. in some countries there are anti - tying restrictions to prevent banks from forcing customers to take unwanted products to obtain needed services. these issues are interlinked to corporate ethics, a robust internal control culture and transparent disclosures. i would submit for debate that sooner or later we in india will need to consider the feasibility of antitying regulations in the financial sector. i would invite attention to an interesting presentation by ms. susan schmidt bies. ( bis review no. 42 ). further, with increasing consumer spending the data bases of the banks β customers are also being shared with various product sellers and the cross - selling is acquiring a new dimension of invasion of the privacy of the customer. this is an area where banks need to exercise self - regulation. concluding observation i would end here by saying that the rationale for financial regulation lies in the economic costs imposed on the society by financial market failure. the adverse consequences include threat to systemic stability, the potential for gridlocks due to adverse selection and moral hazard problems as well as undermining the substantial benefits which would otherwise accrue from correction of market imperfections, reduced transaction costs and providing people with a financial system they can trust. in a rapidly changing economic environment the financial system necessarily has to undergo change, however painful it may be. | standalone basis if they were to redefine their business strategy in favour of conservative growth which can be supported by internal accruals and by having an effective control on their risk exposures. this would perhaps be possible when they carve out a niche for themselves. self - regulation the international experience with reference to banking sector suggests that statutory regulation by the banking regulator cannot be substituted by self - regulation. it could at best supplement the banking regulation. having recognised that self - regulation has its relevance even when banking regulator is present we would encourage self - regulation. if self - regulation has to establish itself firmly the first and foremost prerequisite would be establishment of sound principles of corporate governance in the banking system as a whole. the supplementing factor, which is also enshrined in pillar 3 of basel 2, namely, transparency and disclosure should also take strong roots in the system. transparency and disclosure under pillar 3 is expected to facilitate active role for market discipline. a thought which occurs to me is whether indian markets are equipped to discipline the participants. one opinion is that the markets in india lack adequate depth and width which would qualify them as efficient markets. the above reaffirms the need for intensifying supervisory / regulatory efforts, at least in the short term, before self - regulation and market discipline stabilise in the country. in the interregnum it would be useful for the banks to take proactive measures on both, corporate governance and transparency / disclosure aspects. following the ganguly report, issues of governance in the banking system have come to the fore. increasingly exacting standards of board accountability will need to be introduced and issues relating to penal action if directors fail to properly discharge their duties need to be addressed. i raise this issue not to create panic among directors or to generate media headlines but to pose the issue of wider and effective powers for bank boards commensurate with increased accountability. ownership issues in banks in the recent period there has been considerable debate on the question of ownership of the banking system and the issue of restriction on ownership of a bank by a single individual, institution or group. in view of the importance of corporate governance in banks, it was considered necessary to lay down a comprehensive framework of policy in a transparent manner. accordingly, we have recently placed in public domain a draft paper on β a comprehensive policy framework for ownership and governance in private sector banks β. the rbi has been openly encouraging a debate on this issue and the draft would be reviewed on | 1 |
holders at the federal reserve bank of new york ( which include central banks and other monetary authorities ) can enter into overnight repos ( repurchase agreements ) with the federal reserve, temporarily exchanging u. s. treasury securities in their accounts for u. s. dollars, which can then be provided to institutions in their respective jurisdictions. all of these facilities have had a very constructive effect in calming down dollar funding markets and supporting a return to more normal conditions in global financial markets more generally. of course, as members of the fpa, you are well aware that developments in the u. s. economy do not happen in isolation from the rest of the world. we live in a globally integrated economy. with covid - 19, all countries have been hit by a global common shock, not only directly by the virus and the measures necessary to combat it, but also by the economic spillovers from those actions around the world. as in the united states, many foreign authorities have taken swift and forceful actions in response. my colleagues and i have worked closely with others β bilaterally and in international forums like the group of seven, group of twenty, bank for international settlements, and organisation for economic co - operation and development β to monitor and address the effects of the pandemic. the forcefulness and synchronized timing of actions by fiscal authorities, central banks, and regulators have helped support the incomes of households and firms and reduce market stresses that could have amplified the shock. not only is the federal reserve using its full range of tools to support the economy through this challenging time, but our policies will also help ensure that the rebound in activity when it commences will be as robust as possible. that said, it is important to note that the fed β s statutory authority grants us lending powers, not spending powers. the fed is not authorized to grant money to particular beneficiaries, to meet the payroll expenses of small businesses, or to underwrite the unemployment benefits of displaced workers. programs to support such worthy goals reside squarely in the domain of fiscal policy. the fed can only make loans to solvent entities with the expectation the loans will be paid back. direct fiscal support for the economy is thus also essential to sustain economic activity and complement what monetary policy cannot accomplish on its own. direct fiscal support can make a critical difference, not just in helping families and businesses stay afloat in a time of need, but also in sustaining the productive capacity of the economy after we emerge from this downturn. fortunately | expansion while they grew steadily in previous expansions ( figure 5 ). consumer credit has risen at a modest rate in this recovery β comparable to that of the last cycle ( figure 6 ). this category includes auto loans, credit cards and other consumer debts that are mainly originated by banks. but it also includes student loans where the federal government is the dominant lender. student loans have risen robustly during this expansion, and have driven much of the rise of overall consumer credit. we will have much more to say about them later in today β s briefing. the u. s. financial system relies more heavily on capital markets than other advanced economies. bonds and other negotiable debt instruments are an important source of funding to credit - worthy corporations. indeed, the growth rate of real nonfinancial corporate bonds outstanding during this expansion has been roughly similar to that of previous expansions ( figure 7 ). a similar pattern is evident in the commercial paper market ( figure 8 ). notwithstanding the robust performance of debt markets during this expansion, the sharper decline in outstanding bank loans to businesses that i mentioned earlier was likely a contributing factor to the slower economic recovery we have observed this time around. these developments appear to have had adverse consequences on the cost and availability of credit for bank - dependent borrowers. also, in the early years of this recovery, bankdependent firms appear to have deleveraged more and invested less than firms with access to capital markets. so, the impairment of banks β ability to extend credit still has the potential to hinder investment and adversely affect the overall economy. we see similar correlations when it comes to lending to households. the expansion in auto lending that commenced in 2010 coincided with a recovery in auto sales, which have now essentially regained the ground they lost during the recession. until recent quarters, overall consumption growth has been slow, consistent with a pattern of slow growth in credit card balances. the most obvious case is mortgages where β after a massive tightening from 2007 to early 2010 β underwriting standards remain very tight. this tightness, especially for nonprime borrowers, has likely been a factor behind a persistently sluggish housing market that has held back this recovery relative to earlier ones. overall, these patterns of credit growth support the idea that the weakness of banks at the end of the great recession has been a contributing factor to the slow recovery of the u. s. economy since the recession. these patterns are consistent with evidence provided | 0 |
market liquidity and the opportunity for risk sharing. the bond market β s depth has recently increased to 11 trillion dollar, outnumbering the size of euro area β s gdp. admittedly, the corporate bond market in the euro area is still substantially smaller than in the us, as european firms traditionally rely more on bank financing. however, firms on this side of the atlantic increasingly make use of debt securities. between 1998 and 2006, the value of outstanding bonds in terms of gdp has doubled, while it increased β merely β 60 percent in the us 4. more efficient and deeper financial markets benefit companies through lower borrowing costs. the challenges for emu as we speak, the euro area is undergoing an upturn. economic figures have been better than expected. in 2006, gdp grew by 2. 9 percent, outstripping the united states for the first time in 5 years. unemployment has fallen to 7. 5 percent in 2006, the lowest level in 15 years. while the recovery reflects a cyclical upswing, these figures also suggest that structural reforms in the past are starting to pay off. however, as henry kissinger once said : β each success only buys an admission ticket to a more difficult problem β. monetary union β s problem is twofold : weak public finances and subdued per - capita - income growth. things have improved, but i am convinced we can do much better. without aiming to be exhaustive, i will mention a few steps that enable countries to tackle these issues and to further capitalise on the advantages of the single currency. creating sustainable fiscal positions a first challenge will be to bring public finances on a sustainable footing. in periods of buoyant revenue growth, there is often a tendency to overestimate the strength of the underlying budgetary position. that is partially because economists can only tell you tomorrow why things predicted yesterday didn β t happen today. if spending is allowed to increase on a structural basis, but higher revenues turn out to be transitory, the budgetary position starts to deteriorate as soon as economic conditions turn nasty. this was exactly the mistake made by some countries in the beginning of this decade. let β s not repeat that mistake. countries with sizeable deficits and public debts should use the current windfall in tax revenues to consolidate. sound public finances are also crucial for dealing with the costs due to population ageing. while living longer is good news, public expenditures in the euro area are projected to increase by up to 10 percent | to further integration. fortunately, the right initiatives are underway. it already started in 2001, with the regulation on cross border payments in euro. better known as the bolkestein regulation. this regulation paved the way for the single euro payments area. an ambitious initiative, where european citizens should by 2010 be able to make payments throughout the euro area from their bank account as easily and safely as in their own country today. by creating a pan - european infrastructure and identical payment tools, all payments in the euro area essentially become domestic payments. 15 years ago this goal was beyond imagination. now it appears within reach. concluding remarks to conclude, the euro has seen a number of successes : the introduction of a new currency for more than 310 million people, price stability, low interest rates and progress in the integration of the goods and financial markets. these achievements are remarkable, as they have been realised in a short period of time and in a unique political context. indeed, europe is the world β s laboratory : we created the first supranational entity based on a sense of solidarity rather than coercion. of course it is not all plain sailing. in the fields of public finances and the internal market work remains to be done to reap the full benefits of the euro. it is therefore important to remain ambitious in the near future. not ambitious to be, but ambitious to do. how monetary union will evolve in the future is hard to predict. but if the past 8 years offer a compass for the future, i am optimistic we find the right answers to our current challenges. g. tumpel - gugerell ( 2007 ), the competitiveness of european financial markets : an economic framework for effective policy making, speech at washington economic policy conference, 12 march 2007. | 1 |
and stable will help to provide an environment in which the canadian economy can enjoy solid growth and achieve its full potential. | competitiveness, and profitability. sound accounting systems also enable investors in assessing the real financial value of enterprises. the systems also assist in attracting capital, both foreign and domestic. looking ahead, i believe that a major challenge for directors and executive management is to find directors who are sufficiently independent but still knowledgeable about the business of the financial institution. independence reflects qualities of objectivity, experience, insight, and force of character. the need for directors to possess this blend of technical knowledge plus independence is critical, given the increased complexity of most banking activities and the rapid pace of change in financial markets and practices. getting the right balance of expertise and independence so that the board does not rubber - stamp the decisions of top management is a major challenge. now, turning to saudi arabia, as the central bank and the banking supervisory authority, sama has played a leadership role in strengthening corporate governance in the banking industry in saudi arabia since its establishment. you may be surprised to learn that as early as 1981, sama issued a document entitled " powers and responsibilities of the board of directors of commercial banks in saudi arabia ". this document, in a comprehensive manner, guided the board members on compliance to banking control and company laws, required the implementation of a system of accounting and internal controls and assigned the board the responsibility for monitoring the assets and liabilities, investments and profitability of the bank. this was followed by a guidance document in 1996 on the role of the audit committee of the board. this document in substantial detail provided guidance to the banks on the composition, mandate, role and responsibilities of their audit committees. in 2004, sama issued another important circular affecting the bank directors and senior managers entitled : " qualifications and requirements for appointments to senior positions in banks licensed in saudi arabia ". the circular is aimed at ensuring that directors and senior managers have sound reputation and are persons of integrity and honesty. furthermore, over the past two decades, sama has issued additional governance related regulations and guidance to banks operating in saudi arabia. these include circulars on internal controls ; know your customers rules, anti - money laundering and combating terrorism financing and prevention of fraud. also, there are specific regulations on the role of the external auditors and on the internal audit function. sama also requires the board of directors to establish a specialized compliance function that monitors the compliance of the organization with regulations and standards, and has a reporting line to the board or one of its committees. moreover, sama requires all banks to apply the | 0 |
to allow financial markets exchange markets, interest rates, and stock and bond prices - to take the strain, and to seek to restore confidence, and moderate the impact of market movements, by restrictive macro - economic policy adjustment. the second is to limit the financial market impact and the extent of the associated macro - economic adjustment by providing or arranging alternative external financing. in practice these options are not, of course, mutually exclusive and the real question is the appropriate balance between them. where a country has transparently been pursuing an undisciplined and unsustainable macro - economic policy, most people find it easy to accept that that country should bear the burden and adjust, painful though that may be. many people find that harder to accept where, as in the present case, conventional macro - economic policies have, for the most part, been relatively responsible. there were certainly adjustments to macro - economic policy that needed to be made - a more flexible exchange rate regime in some cases, for example, or a somewhat tighter overall macro - economic stance, with perhaps some adjustment between fiscal and monetary policy. and, once the capital outflow had started, adjustment needed to be more abrupt than might otherwise have been necessary, in order to re - establish confidence. but there are real dangers in extreme market movements or in excessively severe macro - economic adjustment to contain them. that could cause a vicious circle of domestic default and systemic financial weakness in the affected country. and it would have seriously adverse implications - in terms of both financial and economic knock - on - effects - for the global economy. that, essentially, is why it is in the self - interest of the international community to attempt to mitigate the market and macro - economic adjustment pressures in asia by providing financial support. it is why the international community responded to the crisis in asia by promptly offering very large amounts of official assistance - $ 17 billion in the case of thailand, $ 43 billion for indonesia and $ 57 billion for south korea. but such official financial help cannot be unlimited and it cannot be provided without strings. it, too, has real dangers. if it were too readily forthcoming it could encourage β moral hazard β, partly by encouraging macro - economic laxity in other potential borrowing countries, but especially by encouraging commercial lenders - particularly foreign currency creditors - in the belief that they will be bailed out if things go wrong. that would be likely to add to the problem of potentially volatile capital inflows next time around. not surprisingly | but, with the benefit of hindsight, the increasing scale of the inflow, and particularly the form that it took, became an important part of the problem. it was not all effectively employed. there was overinvestment in some production sectors ; much went into ambitious property development ; and much went into financial rather than real assets. the hoped - for higher returns could not be maintained. again with the benefit of hindsight, it is possible to identify a number of structural weaknesses in the mechanisms for financial resource allocation in the recipient countries. there was, for example, a general lack of reliable financial information, and a lack of transparency in relation to the financial position, of both public and private sectors. complex and opaque links between government, financial institutions and non - financial companies made it difficult for outsiders to understand the real nature of their exposures. financial markets were not well developed, leaving the system heavily dependent upon the banks. there was inadequate regulatory or supervisory oversight. there was widespread government influence over financial flows, which importantly also contributed to a perception that much of the borrowing was effectively under - written by the government. the list could go on. the problem was compounded by the absence of any real perception of exchange rate risk. borrowers were evidently confident that governments would maintain their exchange rate pegs against the dollar so that unhedged foreign currency debt, much of it at short term, appeared a cheap alternative to domestic currency borrowing. the result was a build - up of short - term private sector foreign currency liabilities, by banks and non - banks, which was not fully appreciated, and which left the asian economies especially vulnerable to a flight of capital in the event of a change in sentiment. the problem is that national authorities can create their domestic currency, if they choose to do so, even if it leads to inflation, but they cannot simply create foreign currencies in the same way. so, once the run started, it was violent and contagious. there are certainly all sorts of lessons to be drawn from asia β s experience for the future relating to the structural weaknesses in the financial system that allowed the problem to emerge. these weaknesses certainly need to be addressed in the borrowing countries β own interests if they are to continue to reap the great benefits of the free international movement of capital without similar extreme volatility in the future. but the immediate question was, and is, how to contain the present problem. essentially there are two broad options. one is simply | 1 |
us, and what they cannot. in addition, we plan to publish an article in the federal reserve bulletin discussing and interpreting the data. the article will be published at the same time that the federal financial institutions examination council ( ffiec ) publishes summary tables of the hmda data, in late summer or early fall. an institution that might soon - as early as today - have to disclose its own price data, should already have analyzed its data and be prepared to respond to comments from others interpreting its data. first, an institution should take the steps necessary to reach a high degree of confidence that its data are accurate. after that, an institution may want to determine how its data will appear to the public in the disclosure tables the ffiec will release by the early fall ; the precise formats of those tables were published in december. a lender may also want to determine if the hmda data reflect price disparities that are not adequately explained by other information in the hmda data set - such as income, loan size, and lien status - and, if so, to analyze those disparities in light of price variables known to the lender. the analysis could include a review of pricing discretion provided to loan officers. it also could include, where applicable, a review of the pricing patterns of mortgage brokers through which the lender has originated loans. should a lender discover risks in its hmda data, it goes without saying that the lender should manage those risks. as with other risks, those related to the hmda disclosures should be managed with an eye to the entire enterprise, including the bank and the non - depository affiliates. compliance with the bank secrecy act since the usa patriot act of 2001 significantly amended the bank secrecy act, compliance in this area has been a major concern for the banking industry. in large part, bankers β concerns center on the increased burden of complying with the additional requirements, the apparent lack of consistency in oversight and supervision, and law enforcement issues. the federal reserve recognizes that banking organizations have devoted significant resources to helping the government identify and prosecute those who are involved with the funding of terrorist activities, money laundering, and other crimes. but some recent events are affecting bankers β perceptions about their role in this critical area, and have raised serious questions about what bank regulators and other government authorities - most notably law enforcement agencies - expect of bankers. today, i want to provide some background information and describe what the federal reserve is doing, in coordination | " defensive " sars in an effort to avoid any criticism of their judgment about whether some activity is illegal or suspicious, and to avoid sanctions for failing to file particular sars. the treasury department β s financial crimes enforcement network ( fincen ) has reported that these defensive filings threaten to clutter the sar database with information that cannot be properly analyzed due to the volume. bank regulators and fincen recognize that no process for fraud or money - laundering detection and control can reasonably be expected to perfectly detect every transaction. but, financial institutions are expected to have a sound anti - money - laundering compliance program. this must include well - defined processes to identify suspicious activities, and those processes should be tailored to the risk and complexity of each business line. banks should provide sufficient training to line staff, compliance officers, internal auditors, and legal staff to keep employees on the alert for suspicious activities. further, when questionable activity is detected, the bank must respond promptly and effectively, and work with appropriate law enforcement authorities and bank regulators. i am sure that you are aware by now of the interagency efforts to develop and issue new, enhanced bank secrecy act examination guidelines and procedures within the next few months. the federal reserve and the other federal banking supervisors, with the active participation of fincen, are drafting these more - detailed uniform examination guidelines and procedures. supervisors, on a pilot basis, have been using the new guidelines at financial institutions. once the procedures are completed, we will work hard to educate our examination forces and the industry about the new guidelines and procedures. these efforts are intended to better ensure consistency in the bank secrecy act and anti - money - laundering supervision programs of the bank regulators and fincen - the entity within the u. s. treasury that is statutorily responsible for the implementing the bank secrecy act. in addition, the federal reserve and the other federal bank supervisory agencies recently signed a memorandum of understanding with fincen to share critical information about banking organizations β compliance with the bank secrecy act. by providing pertinent bank secrecy act information to fincen, which is adding additional staff to fulfill its responsibilities, the federal reserve and the other regulators can now better coordinate their supervision and enforcement efforts, thus further reducing the potential for unwarranted compliance burdens. fincen is also committed to providing both bankers and regulators information about emerging money - laundering schemes and guidance for continually improving bank secrecy act compliance. the federal reserve is also working with senior justice and treasury officials to ensure they understand the | 1 |
in other words, we should aim to build a strong and deep economic and political union in europe, which would be to the benefit of all members of the single currency. as i said at the beginning of my remarks, today β s social question is not just a national one. it transcends borders. and this path β building a stronger union based on mutual trust β is the way to answer that question for europe. bis central bankers β speeches conclusion let me conclude by returning to the theme of cardinal reinhard marx β that the economy should be in the service of humanity. our common currency exists not as an end, but as a means. as nobel prize winning economist amartya sen has reminded us, our β instrumental objectives β like the single market and monetary union β should not overshadow our social commitment to the well - being and basic freedoms of the people. β 4 the euro is a means to foster peace between nations ; and a means to further our collective prosperity. in many ways, we have already achieved this. war among the countries of europe is unthinkable. we have integrated our nations and our markets. the ecb has overseen the longest period of price stability in post - war history. but there are also important ways in which we have not succeeded. the terrible economic hardship in some parts of the euro area is testament to this. so what we cannot afford now is to stay where we are. federal president joachim gauck recently called upon all of us to have more courage for more europe : β what europe needs now are not doubters but standard - bearers. β 5 we need to reinvigorate our social models by reforming our economies. and we need to harness the market mechanism in the service of humanity. in this way we can safeguard our primary capital, which is the human person in his or her integrity. thank you for your attention. sen, a. k. ( 1996 ), β social commitment and democracy : the demands of equity and financial conservatism, β in p. barker ( ed. ), living as equals. joachim gauck, speech on the prospects for the european idea, 22 february 2013. bis central bankers β speeches | development β. we cannot have an economic model that allows excesses to go uncorrected, which relies exclusively on self - regulation of markets and in which individuals believe that β anything goes β. 1 ultimately, we must be guided by a higher moral standard and a profound belief in creating an economic order that serves every person. m. draghi β non c β e vero sviluppo senza etica β β articolo per β l β osservatore romano β del 9 luglio 2009 : β la crisi attuale conferma la necessita di un rapporto fra etica ed economia, mostra la fragilita di un modello prono a eccessi che ne hanno determinato il fallimento. un modello in cui gli operatori considerano lecita ogni mossa, in cui si crede ciecamente nella capacita del mercato di autoregolamentarsi, in cui divengono comuni gravi malversazioni, in cui i regolatori dei mercati sono deboli o prede dei regolati, in cui i compensi degli alti dirigenti d β impresa sono ai piu eticamente intollerabili, non puo essere un modello per la crescita del mondo. β bis central bankers β speeches here i find myself in the company of marx. not karl, but reinhard. cardinal reinhard marx has rightly insisted that β the economy is not an end in itself, but is in the service of all mankind. β and caring for the welfare of our neighbours is not only an ethical principle of the christian faith : it also makes eminent economic sense. no - one knows this better than the successful entrepreneurs of bavaria. interdependence is not just a catchword. the economic health of the countries around you affects us here and now. so these are the challenges facing european policy - makers today : how do we recreate confidence in the capacity of our economies to grow and generate prosperity so that they can ultimately serve the people? how do we shape our economic model so that it reconciles individual freedom and social justice? and how, as the european union, do we strike the right balance between the responsibilities of individual countries and those of the union as a whole | 1 |
sharon donnery : financial markets and institutions - collaboration and knowledge dissemination welcome address by ms sharon donnery, deputy governor ( central banking ) of the central bank of ireland, at the policy research meeting on financial markets and institutions, dublin, 15 june 2017. * * * good morning to you all and a very warm welcome to our new campus here at north wall quay in dublin. our official opening took place in late april, with staff on the ground since january, so you really have come here at a time of renewal and great excitement for us as an institution. i hope that you enjoy your time here. we are delighted to be welcoming such an eminent group of speakers to the bank today. i would particularly like to thank our colleagues from the federal reserve who first initiated this event, which has been running since 2012 with previous workshops having taken place in turkey, luxembourg, the netherlands, belgium, rome and stockholm, along with the proceedings in helsinki earlier this week. special thanks also to wayne passmore and scott frame who have provided the impetus, helped shape the program, and ensured the participation of such a distinguished group of speakers from across the federal reserve system. cross - institution collaboration and knowledge dissemination is of critical importance in central banking. the coming together of people with a rigorous background in empirical research, yet with such a keen focus on the ways in which research, data analytics, empirical evidence and policy decision making are interwoven is fundamental to the development of evidence based policymaking. this is entirely consistent with the type of working environment that we continually strive to develop here at the central bank of ireland. i hope that we will all leave here tomorrow having learned a great deal. i am impressed by the breadth of topics being discussed over the two days of this event. the discussions about the implementation and effects of unconventional monetary policy are taking place at a historic time for central banks. the differing paths faced by the united states and euro area economies over the past half - decade mean that we find ourselves at an extremely interesting juncture. a stock - take of the effectiveness of unconventional policy, the risks associated with tapering and the differing experiences in the american and european systems is highly important for the calibration and effectiveness of monetary policy on both sides of the atlantic. at the nexus between unconventional monetary easing and the legacy impairments of the previous crisis lies the issue of bank profitability, which will be the subject of a session that i will chair later this morning. given my work on the issue of | faculty members of the banks β training institutes, business development teams etc.. my colleagues have also been visiting banks to hold rtgs awareness programmes. we have also been regularly meeting with your rtgs nodal officers to take stock of your preparedness for participation in the rtgs system. as the chiefs of the banks, all of you have to play the role of a catalyst to build up the critical mass of opinion in your respective organizations in this regard. you will not only have to facilitate internal dissemination of information on the rtgs system, but will also need to ensure complete infrastructural and human resources readiness including connectivity and security at your respective ends, so that the rtgs facilities could percolate to the ordinary customers. i appreciate that all of you have initiated necessary actions. you have already put in place the payment systems gateway, the box that is going to host all the payment system applications including the rtgs module for the banks, called the participant interface ( pi ) and connected it to our primary and standby sites. limiting the preparedness only to this will facilitate transfer of large value funds among the bankers only and the customers at large may not benefit from the rtgs system, defeating one of our primary goals in this regard. therefore, you will have to take urgent steps to ensure that all your banks β branches including those in the countryside are networked. further, the security infrastructure for message transfer in the form of public key infrastructure ( pki ), as per idrbt ca, will also have to be urgently implemented in your organizations, covering all the branches, which will be offering rtgs services to the customers. you will appreciate that not only those of us who live in cities, but the ordinary customers in the country side must also enjoy the fruits of our efforts and in fact, should also be the target group for all our new initiatives. the rtgs facilities will have to be available at every nook and corner of the country and therefore, the required network has to be in place for the purpose. sfms is already web - enabled and ready for use. here, i would like to caution you that any indecisiveness / delay on your part to provide the requisite cost effective and efficient systems for the purpose will only deprive your customers of the rtgs benefits and it will not be an unusual scene to be countenanced in the days to come, when exodus of customers will take place to fully rtgs - | 0 |
mario draghi : ecb press conference - introductory statement introductory statement by mr mario draghi, president of the european central bank, and mr vitor constancio, vice - president of the european central bank, frankfurt am main, 25 january 2018. * * * ladies and gentlemen, first of all let me wish you a happy new year. 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, which was also attended by the commission vicepresident, mr dombrovskis. based on our regular economic and monetary analyses, we decided to keep the key ecb interest rates unchanged. we continue to expect them to remain at their present levels for an extended period of time, and well past the horizon of our net asset purchases. regarding non - standard monetary policy measures, we confirm that our net asset purchases, at the new monthly pace of β¬30 billion, are intended to run until the end of september 2018, or beyond, if necessary, and in any case until the governing council sees a sustained adjustment in the path of inflation consistent with its inflation aim. if the outlook becomes less favourable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation, we stand ready to increase the asset purchase programme ( app ) in terms of size and / or duration. the eurosystem will reinvest the principal payments from maturing securities purchased under the app for an extended period of time after the end of its net asset purchases, and in any case for as long as necessary. this will contribute both to favourable liquidity conditions and to an appropriate monetary policy stance. incoming information confirms a robust pace of economic expansion, which accelerated more than expected in the second half of 2017. the strong cyclical momentum, the ongoing reduction of economic slack and increasing capacity utilisation strengthen further our confidence that inflation will converge towards our inflation aim of below, but close to, 2 %. at the same time, domestic price pressures remain muted overall and have yet to show convincing signs of a sustained upward trend. against this background, the recent volatility in the exchange rate represents a source of uncertainty which requires monitoring with regard to its possible implications for the medium - term outlook for price stability. overall, an ample degree of monetary stimulus remains necessary for underlying inflation pressures to continue to build up and support headline inflation developments over the medium term. this continued | both sides will benefit from each other β s know - how. prior to the finalisation of the detailed rules of this supervisory model, a public consultation will be held this autumn. β’ fourth, a comprehensive assessment of the banks that will be directly supervised by the ecb. as this comprehensive assessment β which will involve a risk assessment, balance sheet assessment and a stress test β is currently attracting most attention, i would like to deal with it in more detail. for it makes clear that the banking union can only be a success if we take the correct approach from the out - set. for various reasons, two stress tests have not led to a restoration of confidence in the european banking sector. this will be our third and last chance. before launching the single supervisory mechanism, we should know the state of the banks that we will be supervising. we want to be free of old liabilities when we take on our new task. but it is also beneficial for the supervised banks themselves for us to have a clear picture of the health of each individual institution. bis central bankers β speeches by performing the comprehensive assessment we will provide transparency for investors β and that is exactly what is required to sustainably reinforce confidence in the banking sector. the average price / book ratio for large and complex banking groups in the euro area is currently just over 0. 5. this reflects the opinion of investors that banks overestimate the value of their assets, will not deliver the expected rate of return or will require fresh capital. moreover, confidence in the banking sector is much lower in some euro area countries than in others. that also causes fragmentation in the single market, as reflected in the difficulties some banks face in obtaining market funding. the results of our β inventory β are then incorporated in a stress test, which the european banking authority ( eba ) will perform in close cooperation with us. our staff members are now elaborating the methodical details of the comprehensive assessment. the final decisions will be made as soon as the legislation comes into effect and the decision - making supervisory board is in place. to enable the supervisory board to start operating promptly, the chair and vice - chair should be appointed as soon as possible after the final adoption of the legislation. we should now consider how to deal with any weak spots that are revealed during the assessment. funding for any capital shortfalls should preferably come from the market. but we also need a backstop in the event that some banks fail to raise the necessary capital. this is | 0.5 |
development. let me focus on one aspect, which i believe is essential to achieve sustained economic growth : to development of a long - term market in local currency. particularly in the case of economies in transition towards its long - term equilibrium, central banks include on their agenda other specific tasks that their policy actions cannot ignore : the need to increase the depth of the financial system, develop new financial instruments and complete existing markets in local currency becomes a priority. there is a strong consensus about how important this is for the emerging countries. different kinds of factors, at both the macroeconomic and microeconomic levels are noteworthy. among the macro factors, progress in the de - dollarization of the economy and the reduction of vulnerabilities associated with the possibility of sudden stops stand out. this is of special significance because the presence of currency mismatches has been at the root of the most important financial crises ( or has at least contributed to amplify them ). a significant dependence on debt in strong currencies means that countries are more vulnerable to depreciations of their currencies ( which are severely contractive ). also, the development of markets for debt in domestic currency tends to be associated with a better liability management. in fact, the development of a yield curve that serves as the base to develop new products ( like derivatives ), makes it easier to mitigate risks. of the micro factors, it is fundamental to develop a yield curve in domestic currency that reflects the opportunity costs of funding at different maturities, collaborating to achieve more efficient resource allocation. the development of these markets is a more stable source of funding for the financial system. in addition, the countries with deeper domestic markets face a broader variety of policy instrument choices. therefore, the lender of last resort role avoids the limitations observed in a highly dollarized context, for example. likewise, less reliance on external capital flows ( usually at short terms ) allows for more control over the monetary policy. despite the achievements observed during this decade, there is still significant progress to be attained, which is even clearer for latin america. especially as regards the terms of the issues ( so that the change from issuance in hard currencies to soft currencies does not imply excessive currency risk for interest rate risk ) and a larger share for the nominal fixed rate issues ( with the aim of reducing the interest rate risk ). in addition, although the liquidity of the secondary markets for debt has increased in recent years, it remains limited | guido sandleris : the ongoing need for tight monetary policy to fight argentinian inflation speech by mr guido sandleris, governor of the central bank of argentina, at a press conference, buenos aires, 13 june 2019. * * * good afternoon. thank you all for coming. a few minutes ago, the national institute of statistics and censuses ( indec ) released the inflation figure for may. i believe it is a good opportunity to share some thoughts about it, as we did in the last three months. inflation went down in may once again. headline inflation was 3. 1 %, down 0. 3 percentage points against april, whereas core inflation was 3. 2 %, down 0. 6 percentage points. these figures are still very high, though. they are far from an acceptable level. i am convinced that inflation will go on decreasing if we stick to the tight monetary policy we have conducted so far. in fact, we expect june β s inflation will be lower than may β s figure. the inflation reduction process is slow and, as i have said many times, it is not linear. let me explain why inflation drops slowly despite the fact that we have met our target of zero growth in the monetary base since we launched the scheme more than 8 months ago. first, in argentina, the exchange rate pass - through to prices and indexation are significant, after over a decade of high inflation. that is why the great depreciation in 2018 caused inflation to shoot up, which persisted over time. something similar happened in march 2019, though to a lesser extent. second, most increases in fares and utility rates occurred in the first months of the year, which fueled inflation further. although these factors were identified, the way in which they were combined and fueled by sectorial shocks resulted in a higher than expected inflation rate, which in turn demanded extra effort from monetary policy. inflation will continue falling because the current macroeconomic conditions are finally conducive to this. we have recovered the basic macroeconomic equilibrium : fiscal balance, competitive foreign exchange rate and undistorted relative prices. we will continue conducting a tight monetary policy on these grounds. reaching a one - digit annual inflation rate will take time and effort. perseverance is key to this process. as i have already told you on previous occasions, we must take into consideration the experience of argentina β s neighbors that reported high inflation rates for decades. they put their fiscal accounts in order, adopted consistent monetary policies and managed | 0.5 |
been a gradual increase in the pace of growth of economic activity outside of the mining sector, owing in part to the very low level of interest rates. subdued investment ( outside the mining sector ) has been consistent with a period of greater uncertainty and below - average confidence. however, a number of indicators suggest that uncertainty has declined to levels seen prior to the global financial crisis. also, measures of business confidence have picked up over the course of the past year to be a bit above longrun average levels. while this is a welcome development, it may not be sufficient to spur investment if businesses β appetite for risk remains relatively low. moreover, the still - high level of the exchange rate may be weighing on investment of firms in the traded sector. nevertheless, there are tangible indications that non - mining business investment will grow at a modest pace this financial year. and if firms β willingness to take on risks improves, investment could easily be stronger still. it β s always hard to know if and when such a change in sentiment might occur. but it is more likely to do so when the fundamental determinants of investment are in place. the ready availability of internal and external finance, at very low cost, is one element of that. the stronger growth of demand across the non - mining parts of the economy over the past year or so is another. if history is any guide, eventually the period of elevated risk aversion is likely to give way to a concern among businesses, not of losses, but of lost opportunities and a loss of market share. survey ; for details, see berkelmans l and g spence ( 2013 ), β realisation ratios in the capital expenditure survey β, rba bulletin, december, pp 1 β 6. it is also worth noting that the capex survey provides only a partial read on non - mining business investment because it excludes firms from a number of key industries, including agriculture, health care and education ( which accounted for about 16 per cent of private non - mining business investment in 2012 / 13 ) and it excludes investment in intangible assets ( which accounts for about 15 per cent of total private business investment ). bis central bankers β speeches graph 1 graph 2 bis central bankers β speeches graph 3 graph 4 bis central bankers β speeches graph 5 graph 6 bis central bankers β speeches graph 7 graph 8 bis central bankers β speeches | global phenomenon. our liaison provides other evidence of a more cautious approach to investment over recent years. in particular, many firms now require investment projects to satisfy shorter payback periods and be approved at higher levels of management than was typical in the past. 9 other longer - term determinants? the current weakness in non - mining business investment may reflect the effect of some longer - run determinants of investment. one such candidate is ( multifactor ) productivity growth. relatively weak growth of productivity over much of the past decade would have weighed on the return to capital and reduced the incentives to add to the capital stock in nonmining industries ( graph 7 ). ( in principle, this effect should already be reflected in levels of tobin β s q. ) if productivity growth were to remain relatively low, that would weigh on overall growth of the economy. low growth of investment would naturally follow from low productivity growth, but it would not be the cause of weak growth of the overall economy. in any case, it β s hard to know exactly what productivity growth is likely to do in the future. more recently, multifactor productivity growth appears to have increased a little. it is currently not far from growth rates seen prior to the mid 1990s, which was a period of especially rapid growth. in summary, some of these explanations have more merit than others. external finance is generally readily available and at very low cost, so this can β t explain the weakness in nonmining business investment. looking at the available data, it β s hard to argue that heightened uncertainty is playing much, if any, role. rather, some combination of relatively low growth in domestic demand, the effects of the high exchange rate, a lack of confidence and a lower appetite for risk ( than in the past ) appears plausible. there are some metrics consistent with this, and it aligns too with what businesses say is holding them back. what do the data suggest about the future? the australian bureau of statistics capital expenditure ( β capex β ) survey provides a measure of firms β investment plans for up to 18 months ahead. 10 the saving rate has drifted down a little over the past couple of years, and the stronger growth of household credit of late suggests that there has been some pick - up in the appetite for risk among households. for a discussion of the experience of us firms, see sharpe a and g suarez ( 2014 ), β the insensitivity of investment to interest rates : evidence from a | 1 |
more health professionals, investing in better equipment, and enhancing research and innovation. the government is also focused on the delivery of other key commitments to canadians, including : β’ high - quality early childhood development ; β’ predictable and long - term funding to municipalities for critical infrastructure needs ; β’ meaningful action on the disparities that impede opportunities for aboriginal canadians ; and β’ meeting the imperatives of national defence and national security. as minister goodale said in his economic and fiscal update presentation, meeting these priorities will require ongoing fiscal discipline. it will also require attention to improving productivity. but given the current high ratio of employment to population, and given that canada β s population will soon begin to age rapidly, we will have to rely increasingly on productivity to raise living standards in the future. to increase productivity, we canadians need to invest in human capital, physical capital and innovation - the three drivers of productivity growth. the key will be to adapt to change through policies that promote flexibility. that β s why canada is investing in the skills and knowledge of our people, and is creating a competitive environment through lower taxes that encourage investment in physical capital and reward the efforts of entrepreneurs. these flexibility - enhancing policies, along with lower barriers to trade, smart regulation and openness to international investment, are the building blocks of canada β s modern and prosperous economy. collaboration between canada and germany is part of this effort to encourage international investment. as one example, our two countries have a long - standing relationship in science and technology. the driving force behind this relationship is the bilateral s & t cooperation agreement, signed in 1971. and there is the very successful partnership between the national research council of canada ( nrc ) and the helmholtz association of german national research centres. the canadian embassy in berlin deserves real credit for encouraging this flourishing collaboration, and promoting technology - oriented partnerships. such cooperation is critical in an increasingly connected global economy. so, too, are forward - looking initiatives such as the trade and investment enhancement agreement between canada and the eu, which would allow qualified workers to move much more easily between the eu and canada and would enhance the ability of our financial sectors to seize investment opportunities. once concluded, this agreement would present germany, europe and canada with a unique opportunity to make our economies more global, more efficient and more prosperous. now let β s turn to a different issue. as you know, g - 20 finance ministers and central bank governors met in berlin over the weekend. among the themes of our discussions were the | et al. ( 2022 ) use twitter to analyze the most actively discussed topics related to the covid - 19 pandemic and build a real - time indicator for the average sentiment of the users. 5 aprigliano et al. ( 2022 ) analyze around 2 million articles from four main italian newspapers and compute a text - based sentiment indicator that closely mimics the confidence indicators for households and businesses from our nso. 6 they also compute a daily economic policy uncertainty ( epu ) index both for the general economy and for specific sectors or topics. they use these indicators to nowcast the economic activity in italy showing that using a bayesian model averaging technique their indicators greatly reduce the uncertainty surrounding the short - term predictions of the main macroeconomic aggregates, especially during recessions. they also employ these indices in a weekly gdp tracker, achieving sizeable gains in forecasting accuracy. we also use credit and debit card transaction records to build models and indicators for the short - term forecast of economic activity. ardizzi et al. ( 2019 ) analyze the reaction of consumer expenditure in italy ( measured using daily data on debit card payments at the pos ) to daily epu, built using textual data from news and the social network twitter. the authors show that an increase in epu temporarily reduces debit card payments and raises the ratio of atm withdrawals to pos payments, signaling an increase in the preference for cash. we make large use of online ads on the real estate from the largest platform in italy ( the website www. immobiliare. it, the equivalent of zoopla or zillow in the uk and us ), to follow developments and prices in the housing market. loberto et al. ( 2022 ) show the potential of this new database7 to study the real estate market, while guglielminetti et al. ( 2021 ) show the impact of covid - 19 on housing demand for italian households. 8 accornero m. and moscatelli m., β listening to the buzz : social media sentiment and retail depositors'trust β ( 2018 ). bank of italy temi di discussione ( working paper ) no. 1165, http : / / dx. doi. org / 10. 2139 / ssrn. 3160570 astuti, v., crispino m., langiulli m., and marcucci, j., ( 202 | 0 |
jarle bergo : monetary policy and business cycles speech by mr jarle bergo, deputy governor of norges bank ( central bank of norway ), at kunnskapsparken bodΓΈ, 25 september 2003. the text below may differ slightly from the actual presentation. the address is based on the assessments presented at norges bank β s press conference following the executive board β s monetary policy meeting on 17 september and on previous speeches. the charts in pdf can also be found on the website of the norges bank. * * * the operational target of monetary policy as defined by the government is inflation of close to 2. 5 per cent over time. the inflation target provides economic agents with an anchor for their decisions concerning saving, investment, budgets and wages. the inflation target also provides a framework for monetary policy β s contribution to stabilising output and employment. this intention is also expressed in the regulation on monetary policy. high demand for goods and services and labour shortages normally point to higher inflation. when interest rates are increased, demand falls and inflation is kept at bay. when demand is low and unemployment rises, inflation will tend to slow. interest rates will then be reduced. norges bank sets the interest rate so that future inflation will be equal to the inflation target of 2Β½ per cent. the interest rate has been reduced since december last year in response to the change in the inflation outlook. this was the result of weaker cyclical developments in the world economy and a sharp drop in interest rates internationally. in addition, the norwegian business sector has felt the effects of the high norwegian cost level and the strong krone exchange rate. public agencies have also had to adapt activities as a result of last year β s wage settlement. the weak prospects abroad and at home have in turn had an impact on the norwegian labour market and the outlook for wage growth and inflation in the years ahead. the mandate implies that the interest rate must be adapted to the outlook for the norwegian economy. if it appears that inflation will be higher than 2Β½ per cent with an unchanged interest rate, the interest rate will be increased. if it appears that inflation will be lower than 2Β½ per cent with an unchanged interest rate, the interest rate will be reduced. normally, this orientation of monetary policy will also contribute to stabilising output and employment. the impact of monetary policy occurs with a lag. the current inflation rate does not provide sufficient information to determine the level at which interest rates should be set now. | of the fall of the iron curtain. we recall from those times the russian word glasnost, which means openness. mikhail gorbachev sought to modernise the soviet union and used glasnost as a means of reducing corruption and abuse of power. in western democracies, the term glasnost took on a broader meaning, and was associated with detente between east and west in the 1980s. 11 as mentioned, the shift towards a more decentralised economy both in norway and abroad reflected the failure of centralised planning. monetary policy is an important component of the economic policy framework. 12 in my lecture here last year, 13 i noted that it can be demanding for the political authorities to ensure price stability because low interest rates are often more popular than high interest rates. an appropriate interest rate may therefore be demanding to see nou ( official norwegian report ) 1973 : 36 om prisproblemene ( on price problems ). for an account of economic policy in norway in the twentieth century, see tore jΓΈrgen hanisch, espen sΓΈilen and gunhild j. ecklund ( 1999 ) : norsk ΓΈkonomisk politikk i det 20. arhundre. verdivalg i en apen ΓΈkonomi ( economic policy in norway in the 20th century. ethics in an open economy ), hΓΈyskoleforlaget. see i. e., chapter 5 in the norwegian act on securities trading. in norway, the concept is also associated with jahn teigen β s contribution β glasnost β in the national final of the eurovision song contest 1988. during the financial crisis last winter the government wrote : β monetary policy is the first line of defence in countering a setback in the economy β. see report no. 37 ( 2008 - 09 ) to the storting ( norwegian parliament ) β om endringer i statsbudsjettet 2009 med tiltak for arbeid ( on changes in the 2009 budget and labour measures ), ministry of finance, p. 6. the lecture entitled β on keeping promises β, remarks by endre stavang and henrik syse and francis sejersted β s summary of the debate have been published in nytt norsk tidsskrift 1 / 2009. set in government corridors. 14 most government authorities in democratic countries have solved this problem by delegating interest rate setting to an independent central bank. but | 0.5 |
firms due to mismanagement and breakneck expansion. we will keep a close eye on all these problems so that they do not evolve to become systemic risks. we have maintained a prudent monetary policy. the pboc cut the reserve requirement ratio by half percentage point in july, and recently added additional 300 billion yuan special central bank lending to support small and micro firms. fiscal policy is also trying to be more effective and sustainable. direct fiscal expenditure to key areas, such as supporting the unemployed people and social benefits, is now secured at all levels. to fend off financial risks, the pboc is working on keeping macro - leverage ratio basically stable, resolving the risks of a handful of financial institutions, such as the baoshang bank, and 1 / 2 bis central bankers'speeches replenishing capital, for small and medium - sized banks in particular. apart from the above policy responses, we are also moving ahead on the following two fronts. first, green finance. we are working to promote china β s green transition. we have revised the green bond endorsed project catalogue. in line with suggestions made by the task force on climate - related financial disclosures, we have released guidelines for financial institutions on disclosing environment information. monetary policy tools for reducing carbon emission are in the pipeline for the pboc. we are also actively engaging in international cooperation and helping with the green transition in the developing world. second, fintech. fintech has made financial services more accessible, efficient and inclusive. at the same time, we should not neglect its side effects such as abuse of monopoly power, and excessive collection and exploitation of clients β data. therefore, while promoting healthy development of the fintech industry, we have also worked hard to level the playing field, improve financial inclusion and protect privacy. hopefully, such efforts will improve anti - monopoly regulation and make our policies more transparent. the pboc stands ready to work more closely with the international community to jointly usher in a strong, sustainable, balanced and inclusive recovery of the global economy. thank you! 2 / 2 bis central bankers'speeches | k c chakrabarty : banking and finance in india β developments, issues and prospects inaugural address by dr k c chakrabarty, deputy governor of the reserve bank of india, at the 62nd international banking summer school ( ibss ), jointly organized by the indian institute of banking & finance and indian banks β association, new delhi, 31 august 2009. the assistance provided by dr. deba prasad rath and mr. sujit k arvind in preparation of the address is gratefully acknowledged. * * * mr. m. v. nair, chairman iba and chairman and managing director of union bank of india ; mr. bhaskaran, chief executive officer, indian institute of banking and finance ; representatives from ebtn, distinguished participants from different parts of the globe, invited guests, ladies and gentlemen : i am delighted to be here amidst all of you at the 62nd international banking summer school ( ibss ) being organised by the indian institute of banking and finance ( iibf ) jointly with the indian banks'association ( iba ). i am thankful to the organisers and sponsors for providing me an opportunity to share my views and interact with you at a forum which i personally rate very high. central bankers talk among themselves in various fora, it is high time that the bankers talk with each other. the school, open to senior bankers and financial professionals, as we are aware is a 10 days'brisk academic exercise that provides a platform for the practitioners of banking and finance to learn and share the latest developments in the banking and finance field, best practices and products available in today's fiercely competitive global banking arena. in the present situation of global turmoil that we have been going through in the last two years, this forum will provide opportunities to the bankers and finance professionals for understanding each other better. the exchange of views and the ideas which are going to be generated here during the next ten days will certainly throw useful insights and better understanding on how to overcome such problems in future which will be of great relevance in shaping the banking operations in future. i am saying so, as i am sure, in times to come, many of you are going to occupy high positions in banks and financial institutions including positions of chief executive officers ( ceos ). the takeaway from the school is, therefore, of great importance. considering the theme of ibss this year and more focus on managing banks in the era of turbulence, i think it would be appropriate if | 0 |
international commodity traders in coffee, tea, horticulture, cotton and sugarcane, with donors funding various projects in the region. building sustainability in the programs has been the key focus. secaec recognized that to achieve success, financial linkages are important. secaec has been able to link 75 percent of its smallholder farmers to microfinance institutions such as krep, kwft and mainstream banks such as cooperative bank, chase bank, equity and kcb. it has remained focused and diligent in implementing its programs through integrating quality system management, leading to the award of the iso 9001 β 2008 certification, which guides its program management. bis central bankers β speeches today, we are all gathered here to celebrate part of this achievement through a documentary and iso 9001 β 2008 certification. this is satisfying and deserves credible support and appreciation. thank you. bis central bankers β speeches | njuguna ndung β u : combating structural poverty amongst producers in africa remarks by prof njuguna ndung β u, governor of the central bank of kenya, at the launch and celebration of solidaridad β s achievement of iso 9001 β 2008 certification, nairobi, 20 march 2014. * * * the solidaridad eastern and central africa expertise centre ( secaec ), was officially established in september 2008 in nairobi, kenya with the vision to be a regional leader in combating structural poverty amongst producers in africa and promoting social and environmental sustainability. β this is what i term binding constraints in our economies. its mission is to facilitate the smallholder producers to produce commodities in an economically, environmentally and socially sustainable manner that ensures good market access, improved prices and high incomes for better quality of life. to achieve this, seceac is working in the eastern and central africa region, impacting over 400, 000 smallholder farmers in coffee, tea, livestock, horticulture and food security, cotton, gold and sugarcane. the 2008 world bank β s β agriculture for development report β recognized the enormous potential of agriculture in offering employment globally. seceac programs in kenya are also aligned to the achievement of vision 2030, which recognizes the agricultural sector as one of the key sectors within the economic pillars for the country β s economic growth. it envisages β a food - secure and prosperous nation β. regionally, the program targets to achieve six out of the eight millennium development goals targeting reduced poverty and hunger by half by the year 2015 ; promoting gender equality and empowering women through integrating gender issues in their projects, reducing child mortality, ensuring environmental sustainability and developing a global partnership for development. secaec programs on these value chains are currently valued at 16 million euros, targeting improvement of productivity and quality for better incomes, with the overall objective of improving the livelihood of the smallholder farmers in the region. in achieving its goals and mandate, indirectly secaec are contributing towards the economy of the region through foreign exchange, creation of employment and empowerment of women and youth through programs designed to address gender and youth disparity. within the region and internationally, secaec has established a network of experts and consultants in all the value chains, working with a wide range of collaborators including key government departments. in public private partnership projects ( ppp ), the organization values the role played by both public and private institutions. notable partnership in the region has been with | 1 |
##da master agreement provides standard definitions and a general outline for the contract but allows latitude in customizing terms. the master agreement also sets forth a template for workout procedures if a counterparty defaults, allowing parties to the agreement to adjust their risk - management strategies in light of the agreed - upon work - out process. this standardization reduces uncertainty about the instruments, which lowers transaction costs and facilitates price discovery and market liquidity. the examples from the long - and more recent - past may hold some valuable lessons for how improvements in standardization could help to address some of the challenges in the subprime market. uncertainty about the work - out process and the options that are available, for example, could be contributing to the difficulties in reviving price discovery and liquidity in the market for subprime residential mortgage - backed securities. part of the valuation challenge is gauging the extent of the difficulties that borrowers will have in making payments and being able to stay in their homes given the reduction in house price appreciation β or actual declines in some areas β and the large number of interest rate resets coming on many adjustable - rate mortgages. from now until the end of next year, monthly payments for an average of roughly 450, 000 subprime mortgages per quarter are scheduled to undergo their first interest rate reset. in addition, tightening credit conditions as reported in the federal reserve β s senior loan officer opinion surveys on bank lending practices suggest that refinancing may become more difficult. lenders and servicers generally would want to work with borrowers to avoid foreclosure, which, according to industry estimates, can lead to a loss of as much as 40 percent to 50 percent of the unpaid mortgage balance. loss mitigation techniques that preserve homeownership are typically less costly than foreclosure, particularly when applied before default. borrowers who have been current in their payments but could default after reset may see randall s. kroszner ( 1999 ), β can the financial markets privately regulate risk? the development of derivatives clearing houses and recent over - the - counter innovations, β journal of money, credit, and banking, vol. 31 ( august ), p. 600. see kroszner, β can the financial markets privately regulate risk? β, p. 601. be able to work with their lender or servicer to adjust their payments or otherwise change their loans to make them more manageable. it is imperative that we work together as | randall s kroszner : innovation, information, and regulation in financial markets speech by mr randall s kroszner, member of the board of governors of the us federal reserve system, at the philadelphia fed policy forum, philadelphia, pennsylvania, 30 november 2007. * * * good afternoon. i am pleased to participate in the excellent annual philadelphia federal reserve policy forum to discuss this year β s timely topic of innovations in financial markets. innovations in financial markets have created a wide range of investment opportunities that allow capital to be allocated to its most productive uses and risks to be dispersed across a wide range of market participants. yet, as we are now seeing, innovation can also create challenges if market participants face difficulties in valuing a new instrument because they realize that they do not have the information they need or if they are uncertain about the information they do have. in such situations, price discovery and liquidity in the market for those innovative products can become impaired. in my remarks today, i would like to explore the role of information in the development of new financial products and then draw some lessons about risk management and regulation. in particular, i will examine the role that investment in information gathering, processing, and evaluating plays in supporting the price discovery process and how such investment can lead toward a tendency to greater standardization as markets for innovative financial products mature. examples from both history and current experience will help to illustrate this tendency with respect to loan work - outs and restructurings. i will then conclude by considering how a regulatory approach that encourages transparency and sound risk management, such as basel ii, can be valuable in fostering a robust environment for the introduction of innovative financial products. experimentation and learning in new instrument development typically, when a new product is being developed, there is an initial experimentation phase in which market participants learn a great deal about the product β s performance and risk characteristics. this phase involves gathering and processing information and modeling the performance of the product in various scenarios and under different market conditions. it may then take time for market participants to understand what, exactly, they need to know to value a product. during the early phases, a fair amount of due diligence is appropriate, given the greater uncertainty associated with innovative products. the investment in gathering, processing, and evaluating information then, as i will discuss, often leads to greater standardization of products and contract terms, which can enhance liquidity of products as their markets mature. in the initial experimentation phase, the terms and characteristics of a new product are | 1 |
out in the maastricht rules. we are in the midst of a very complex situation, and like i said before, we must build up reserves in various areas, and among other things, we must make sure that we can raise money in the markets if it becomes necessary. when the global crisis broke out, the australian government was able to allow itself to spend immense sums because its debt burden before the crisis was very low. if we enter a recession, the debt - to - gdp ratio will jump, and we will find ourselves in a situation where the government cannot finance the deficit at a reasonable rate of interest, like the situation in 2003. we must be in a situation where we can deal with various problems, even if we don β t know whether those problems will actually take place. bis central bankers β speeches if we must increase defense expenditures because it is vital to the future of the country, as some people claim, we will need to pay for it, through an increase in taxes. i don β t understand those who say, for instance, that β we have needs in education, so we must increase the deficit. β if we have such needs, then we must finance them, mainly through taxes. i don β t think that the defense budget can continue increasing at the rate it has for the past few years. which brings me back to what i said about the importance of a peace agreement. when people say that there is no partner for a peace agreement, that is always true : you need two to tango, and it is very important to start this tango. regarding monetary policy, the interest rate is a tool that affects the entire economy. we cannot use the interest rate in order to solve the housing problem. we must obviously take the problems in housing into account. but if there are problems in a certain area, and the central bank β s tools are not sufficient to handle these problems, someone else has to deal with it. in such a case, we are talking about increasing supply, which is currently in the realm of responsibility of the israel lands administration and planning authorities. we have tried various foreign exchange regimes over the years. my experience shows that, regardless of the exchange rate regime we are in, there will always be times when we will want to have other regimes and systems. however, experience shows that it is always correct to allow the exchange rate to change based on market forces. everyone is impressed by the success of the swiss in strengthening the exchange rate and preventing | asia at this time have been in a better position to weather the first round impact of the turmoil, both the direct impact on banks and the impact on financial markets from de - leveraging and capital flow reversals, is a clear testimony to the importance of this second role. for emerging markets, both these roles are powerful, and they put the financial sector at the center of any efforts to ensure economic and financial stability in the long run. the third observation is that the turmoil shows that the risk of systemic instability can be greater with financial globalization, and this raises an important question about the appropriate monetary policy framework for maintaining macroeconomic stability. for central banks, price stability remains the first and foremost objective of monetary policy. but in the context of today β s financial globalization when the source of systemic danger is clearly external, the idea that price stability in itself might not be enough to ensure macroeconomic stability is now gaining more acceptance. one approach to deal with this is to combine conventional monetary policy framework like inflation targeting with a macroprudential framework. the latter is aimed at addressing the risk to financial stability by implementing measures to counter excessive lending or the procyclical nature of the financial system. this is the approach that we have taken at the bank of thailand, and i will speak more on this later. so, the current turmoil is a reminder of things that can go wrong with financial globalization, and the three observations i cited point to the key challenge faced by policy makers in emerging markets. in this context and in relation to the financial sector, the challenge for policy is three - fold. the first is how to ensure that we have a strong and resilient financial sector with disciplined risk management so that it can help mitigate the risk of major imbalances in the economy. the second is how to reduce the procyclicality of the financial sector so that the risk of a credit - driven bubble can be avoided, especially at the time of strong and persistent capital inflows. and the third is how to develop a deep and liquid financial market that can help improve the ability of the economy to adjust to shocks. in the context of financial regulation in emerging markets where the dominant part of the system is typically the banking sector, the challenge for policy is to calibrate a regulatory policy that fosters a strong and resilient banking sector with good and disciplined risk management, that makes use of the necessary macroprudential measures when needed to help reduce or counter the pro | 0 |
anita angelovska bezhoska : efforts for further development of the financial education and improving the financial literacy among the population address by ms anita angelovska bezhoska, governor of the national bank of the republic of north macedonia, at the meeting with the teaching staff on the occasion of the european money quiz, skopje, 22 february 2019. * * * dear deputy minister of education and science, dear president of the macedonian banking association, dear teachers, dear guests, first of all, please allow me to greet and welcome all of you here in the national bank. this is the first such meeting, which i hope will become a regular practice in the future, within our efforts for further development of the financial education and improving the financial literacy among the population in our country. the global financial crisis that arouse from the deficient regulation of the financial system, as well as from the poor financial knowledge of the population, clearly emphasized the necessity for additional efforts in the financial education segment. therefore, in the global context of the postcrisis period, the policy - makers, including central banks, undertake numerous activities, making financial education an integral part of central banking operations. being aware of the importance of financial literacy, both for each individual and for the society as a whole, the national bank has been undertaking activities in the field of financial education for the younger population for many years, and many students from primary and secondary schools, of course, together with their teachers, have already visited our bank. this enables to gain broader knowledge about our operations ( what are the main goals and tasks of the central bank, what are the instrument we use for their realization and the challenges for achieving and preserving the macroeconomic stability ). through our publications and interactive games in the field of finance, we try to attract the interest of the youngest generations to get acquainted with terms such as saving, investment, inflation, etc., while through the rich collection of coins in our numismatic museum, to get acquainted with the history of our money. in the future we will continue to enrich the spectrum of activities in the field of financial education, by including the elderly population, as well. within these frameworks, we are particularly pleased with the exceptions engagement of the banks in the field of financial education of the youth in the country, as a relatively new area of activity and one of the recent challenges in the financial area. more active involvement of banks in this area verifies their increased social responsibility, | ##equacy and liquidity are at exceptionally high levels. the net external borrowing of the country decreased by euro 220 million only in the last quarter of the last year, and by euro 280 million, or by one fourth, over the entire last year. finally, immediately prior to our decision to redesign the monetary instruments, the ministry of finance announced cut of budget expenses by 5 %. to summarize, we face low level of risk in the external and the banking sector, low to moderate level of risk in the public sector, the denar exchange rate is stable, the inflation is lower than in the euro area, and the economic activity decelerates. what would be more suitable in a situation like this than to send signal that there are conditions for enhanced banking activity without jeopardizing the stability? this is exactly the goal of our measures. it is not our intention just to conclude that the credit growth does not develop as expected, and to revise the rate downward all over again. we consider that the credit growth could range around 7 β 8 % without jeopardizing price and financial stability, and we clearly signalize this. bis central bankers β speeches the question is whether the banks will follow our signal? the promptness and intensity of banks β response depend on the power of monetary policy transmission. the recent researches conducted by my coworkers show that the power of monetary policy transmission in our banking system is limited. this was yet another reason to redesign the monetary policy instruments. we hope that the new monetary framework will improve the monetary transmission. otherwise, we will keep on advancing the monetary instruments setup. cb bills are the national bank basic instrument used to absorb excess liquidity by banks. cb bills are not investment vehicles. in many countries there are no cb bills. when the national bank intends to absorb more liquidity it could make the interest rate more attractive for the banks. but, if it considers that it should not sterilize such excess liquidity, it will make the interest rate less attractive or will restrict the amount allowed for the banks to subscribe. distinguished ladies and gentlemen, at this very conference last year, i also said that the national bank will not build its relations with the banks from the position of arrogance. quite contrary, the banks are our partners. therefore, the national bank will keep on informing and consulting with the commercial banks about the regulatory measures. in this respect, presently we analyze the latest request of the banking association concerning the treatment of fore | 0.5 |
support the modest economic recovery and ensure debt sustainability, while remaining in full compliance with the eu β s fiscal rules. with bond yields subject to volatility, high - debt countries in particular need to pay attention to risks related to a reversal of the current low interest rate environment. we have achieved significant progress over the past year, with banking union becoming a reality and with the single supervisory mechanism and the single resolution mechanism starting their operations. however, developments in greece in the first half of this year served as a reminder that the euro area architecture remains unfinished. as spelled out in the five presidents β report, a more complete union is necessary to make our monetary union in europe stable and prosperous. the economic and monetary union will notably need to strengthen its tools for managing and preventing the build - up of fiscal, financial and other macroeconomic risks. it is also necessary for the euro area to move towards completing banking union in order to create a truly single banking system and achieve its objectives of breaking the banksovereign nexus, making the financial system more resilient, and protecting the interests of taxpayers. in parallel, the authorities will need to decisively deal with remaining crisis legacies to create a better foundation for bank lending to the real economy. to further widen the scope for cross - border private risk - sharing in europe, the eu will have to make progress in developing a capital markets union ( cmu ). cmu will also play a key role in supporting european growth by diversifying sources of funding and increasing companies β access to financing. a long - term vision accompanied by an ambitious agenda for further action will be necessary in order to achieve the ultimate aims of cmu. a more complete union in europe will not only create a more prosperous and resilient euro area economy for its own citizens, but will also be in the best interests of the global economy. bis central bankers β speeches | . the new series of targeted longer - term refinancing operations ( tltro - ii ) are also providing additional stimulus by allowing banks to secure long - term funding under very attractive conditions, which they can pass on to their customers. in terms of quantities, bank lending to the private sector has been gradually recovering since early 2014. in the latest bank lending survey, banks continued to report that the ecb β s asset purchase programme ( app ) and the negative deposit facility rate had contributed to more favourable terms and conditions on loans, and are supporting lending volumes. 2 meanwhile, other survey data indicate improvements in the availability of external sources of financing for smes. 3 1 / 3 bis central bankers'speeches corporate bond issuance has also picked up since the announcement of the cspp in march, while the tltro - ii should help to further support bank lending volumes to the non - financial private sector. so our policy measures are clearly effective and are trickling down to the funding rates that matter most for the real economy, such as the ones faced by smes, which provide jobs for around two - thirds of those in employment in the euro area. 4 favourable financing conditions, along with other factors such as employment gains and improvements in the demand outlook, are expected to further support private consumption and investment expenditure going forward. investment however remains well below its pre - crisis levels and its sensitivity to the borrowing conditions faced by companies is lower than historical norms. according to the september ecb staff macroeconomic projections, annual real gdp growth is expected to increase by 1. 7 % this year, and by 1. 6 % in each of the next two years. turning to price developments, headline inflation increased in october to 0. 5 % in year - on - year terms, owing to a continued increase in annual energy inflation. so although price dynamics are improving, inflation remains at low levels β far below the level which we consider consistent with our price stability objective β reflecting past declines in oil prices and weak wage growth. underlying inflation in particular has yet to show clear signs of a more dynamic upward movement. the annual rate of hicp inflation excluding food and energy has hovered around 0. 8 % for the last three months as domestic cost pressures remain fundamentally weak. yet, as the effect of past oil price declines fades, annual hicp inflation is expected to pick up from 0. 2 % this year to 1. 2 % in 2017. moreover, we expect that as the recovery continues and economic | 0.5 |
firms and households remained solid, benefiting from the continued passthrough of our accommodative monetary policy stance to bank lending rates. the annual growth rate of loans to non - financial corporations increased to 4. 3 % in august, from 4. 0 % in july 2019, while the annual growth rate of loans to households remained unchanged at 3. 4 % in august. the euro area bank lending survey for the third quarter of 2019 indicates a slight easing of credit standards and increasing demand for loans to households, while demand for loans to firms remained broadly stable. our accommodative monetary policy stance will help to safeguard favourable bank lending conditions and will continue to support access to financing, in particular for small and medium - sized enterprises. to sum up, a cross - check of the outcome of the economic analysis with the signals coming from the monetary analysis confirmed that an ample degree of monetary accommodation is still necessary for the continued sustained convergence of inflation to levels that are below, but close to, 2 % over the medium term. in order to reap the full benefits from our monetary policy measures, other policy areas must contribute more decisively to raising the longer - term growth potential, supporting aggregate demand at the current juncture and reducing vulnerabilities. the implementation of structural policies in euro area countries needs to be substantially stepped up to boost euro area productivity and growth potential, reduce structural unemployment and increase resilience. the 2019 country - specific recommendations should serve as the relevant signpost. regarding fiscal policies, the mildly expansionary euro area fiscal stance is currently providing some support to economic activity. in view of the weakening economic outlook and the continued prominence of downside risks, governments with fiscal space should act in an effective and timely manner. in countries where public debt is high, governments need to pursue prudent policies and meet structural balance targets, which will create the conditions for automatic stabilisers to operate freely. all countries should intensify their efforts to achieve a more growthfriendly composition of public finances. likewise, the transparent and consistent implementation of the european union β s fiscal and economic governance framework over time and across countries remains essential to bolster the resilience of the euro area economy. improving the functioning of economic and monetary union remains a priority. the governing council welcomes the ongoing work and urges further specific and decisive steps to complete the banking union and the capital markets union. 2 / 3 bis central bankers'speeches we are now at your disposal for | european central bank : press conference - introductory statement introductory statement by mr willem f duisenberg, president of the european central bank, and mr christian noyer, vice - president of the european central bank, at the press conference, held in frankfurt, on 5 october 2000. * * * ladies and gentlemen, the vice - president and i are here to report on the outcome of today β s meeting of the governing council of the ecb. the following decisions were taken today : 1. the minimum bid rate on the main refinancing operations of the eurosystem will be raised by 0. 25 percentage points to 4. 75 %, starting from the operation to be settled on 11 october 2000. 2. the interest rate on the marginal lending facility will be raised by 0. 25 percentage points to 5. 75 %, with effect from 6 october 2000. 3. the interest rate on the deposit facility will be raised by 0. 25 percentage points to 3. 75 %, with effect from 6 october 2000. including today β s adjustment, since november 1999 we have raised ecb interest rates by a total of 225 basis points, with the objective of sustaining price stability in the euro area over the medium term. today β s decisions continue to aim at ensuring that upward pressures on consumer prices stemming from oil prices and the foreign exchange rate of the euro do not translate into more permanent inflationary tendencies. it is important to address these risks adequately in order to preserve steady gdp and employment growth in the medium term. let me explain our decisions in greater detail by reporting on our regular examination of recent monetary, financial and economic developments and their implications for monetary policy aiming to maintain price stability in the medium term. starting with the first pillar of the monetary policy strategy of the ecb, the three - month average of annual m3 growth declined to 5. 3 % in the period from june to august 2000, from 5. 5 % in the period from may to july 2000. as had been indicated earlier, in august the preparations of telecommunications firms to transfer the funds due in early september to purchase licences in the german umts auction appeared to have a temporary upward impact on m3 growth. taking this special factor into account, short - term developments in monetary aggregates seem to be more moderate than the august data would suggest. this notwithstanding, from a medium - term point of view, liquidity conditions continue to be ample in the euro area. this assessment is based on the protracted deviation of m3 growth | 0.5 |
. clearly, then, in order to achieve real results, we must act on several fronts at once while bearing in mind the big picture. firstly, we have to create regulatory labour market instruments that combine employer flexibility and safety of the employee. moreover, such instruments should stimulate more active participation of different population groups in the labour market. i am thus thrilled that the keynote speech will shortly be delivered by professor werner eichhorst, one of the most prominent experts of labour market regulation policy in europe. it is also obvious that lithuania is in desperate need of long - term and far - sighted migration policy to both entice emigrants to return home and attract foreign workers. what is more, when discussing quantity, we should not forget quality, especially if we seek to prepare ourselves for technological changes and the impending fourth industrial revolution. what skills will be most in demand? no one knows. and anyone who thinks they do are probably mistaken. as the astronaut buzz aldrin once said, β you promised me colonies on mars. and instead, i got... facebook β. i take this to mean that we can only guess what the future has in store for us. which is why we have to move towards an educational system that is flexible and oriented towards lifelong learning, both formal and informal, including adult education and effective retraining. such a system is the only way to prepare our people for rapid structural change. lastly, we need a real regional policy β one that is effective and adequate for the current situation. one that would not only help maintain economic life throughout lithuania, but would also prompt a shift towards higher value - added economic activities. undoubtedly, education should have an especially important place in this policy in order to ensure equally good quality of education to all children in all parts of the country. in lithuania, schoolchildren in cities are ahead of their peers in rural areas by one year in assessment of their mathematics skills. this difference is two times larger than the average for the developed countries4. hence, we are not providing equal opportunities for young people to graduate from school, obtain high - level qualifications and find a well - paid job. and this is an especially unfair form of inequality of opportunities. it creates a vicious cycle : the number of jobs that ensure dignified income in rural regions is not increasing, at least not at a rate that we would like. yet, with the lack of a qualified labour force, investors who create high added - value are not coming to | these regions β so they are not creating such work places. dear colleagues, as i have mentioned, we have chosen the topic of the labour market for this conference because we consider it one of today β s most burning issues. additionally, we chose it because economists β projections, unfortunately, show the worst - case scenarios as the more likely ones. but the main reason is that we can still adjust those scenarios so that the curves go upwards rather than downwards. 3 / 4 bis central bankers'speeches i am aware that we will neither make nor implement decisions today. yet, seeing such a professional, engaged and competent group of participants, i am confident that we can stimulate a positive turn. that is my hope for all of us here. i thank you for your time, and wish you fruitful discussions. 1 eurostat projections. 2 e. g. abeliansky a., prettner k. 2017 ; acemoglu d., restrepo p. 2018. 3 nedelkoska l., quintini g. 2018. 4 oecd 2017, education in lithuania, reviews of national policies for education, oecd publishing, paris. 4 / 4 bis central bankers'speeches | 1 |
effectively. on external liquidity dynamics β we will retain a pragmatic approach to handling foreign exchange so that our current account continues to be in surplus, supported by overseas filipino remittances, business process outsourcing ( bpo ) revenues, tourism receipts and exports. we will also manage international reserves as appropriate. our strong external liquidity position will continue to provide a cushion against external shocks. all these would help enable the philippines to remain competitive and be able to hurdle the challenges as well as reap the benefits from the numerous opportunities of the forthcoming asean integration of financial and goods markets. granted, much more needs to be done to make the asean story β whole β, we find the initial conditions and our policy thrusts conducive to make this story come true. assessment : given such sound initial macroeconomic conditions, should we / you worry? would any uncertainty rock us / you? and the million dollar question β what can you expect from the bsp? a tilting in any / or all of the risks i enumerated could tip the balance of volatility from low to high. for certain, the sound macro conditions we walked through earlier would help to temper the impact of a significant and sudden shift to greater volatility. but, how each of your individual bottom lines would ultimately be affected would depend on your specific circumstances. clearly, the philippines is in a good spot, and the prospects are bright. our sound fundamental story is intact. this should not, however, lull us to complacency. i admonish each of you to use this time of low volatility wisely β take stock of your positions and carefully reassess these against the risks. it is a fundamental truth β in everything we face, there are two circles of concern that confront us : 1 ) those concerns that are within your control, and 2 ) those outside of your control. quite often, the latter circle is larger than the former. as market practitioners, you need to be mindful of these two circles. what can you control? certainly your risk appetite. controlling this when greed gets the better of you is very difficult. so in a period of low volatility such as what we have been experiencing, practice the discipline of setting limits. this discipline will not only help you to avoid the pitfalls of β chasing the market β. more importantly, this discipline will help you take advantage of the obvious opportunities, as well as unearth those that are | β instead of singling out one risk β consider each item on the list and try to address what i believe are burning questions in your mind. let β s start with the fed moves. you may ask, will the bsp follow the fed β s cue in terms of the timing and magnitude of the lift - off? my answer β not necessarily. we won β t have to sing the same tune, but we will certainly have to sing in harmony. what do i mean? recall q2 last year when we embarked on a series of monetary tightening actions. the fed had not yet moved, but markets were certainly talking about it at the time. a number of factors were at play during that period last year. 1 ) domestic inflation was threatening to breach the inflation target on the upside, and 2 ) m3 had been growing over 30 percent as a result of the operational adjustments in our sda facility that we put in place to account for capital inflows. fortunately, the economy was growing robustly then, and therefore there was no need to provide any monetary stimulus. in other words, it was our assessment that the economy could withstand some tightening in financial conditions at that time. you will recall that in our communication then, we further indicated that the moves were also motivated by the anticipation of fed normalization. it was pre - emptive monetary tightening in order to help guide the domestic markets and break any tendency to under value / appreciate risks. our concern was that an acute / unabated undervaluation of risks would create financial stability pressures, particularly in the real asset markets. while the risk of overhearing in the asset markets has since dissipated, we are not about to reverse that course of action yet. we will, however, consider 1 ) the actual and expected capital outflows that may result from the current global financial market rout and their impact on m3 growth, and, 2 ) carefully review the balance sheets / portfolios of the banking system to see if there is a need to adjust policy settings or tweak macroprudential measures. we will also, and more importantly, monitor inflation expectations. we have shared with you that for 2015, inflation is likely going to be lower than the government β s target band. even so, inflation is seen to move higher and into target range in 2016 and 2017. mindful therefore of the significant lags of monetary policy, we will be careful in making adjustments to policy settings going forward. now let β s | 0.5 |
called β foreign β fees β are not always properly disclosed ( and in many cases are higher than necessary ) ; the earnings stream for owners of independent atms β about half the atms in australia β are limited to the interchange fees paid by banks, which are of course their competitors ; and access by new entrants is difficult, potentially limiting competition. under the new arrangements, there will be no interchange fees. an atm owner will be able to charge the customer directly a fee for the use of the machine, but must disclose the fee prior to the transaction. banks will probably continue to allow fee - free withdrawals by their customers at their own machines, because they expect to cover those costs with the revenue earned across the entire customer relationship. use of another bank β s atms will presumably attract a fee by that other bank to cover the costs. but the only cost to a cardholder β s bank associated with use of a β foreign β atm is the cost of processing the transaction electronically β a matter of no more than 10 cents. given this, we cannot see any strong case for a β foreign β fee. independent atm owners will charge for the use of their machines, but that will maintain an incentive to grow their network. otherwise, it is likely that the independents as a source of competition would diminish over time, reducing consumer choice. access to the system will be governed by a code, which caps the price of connections, so that new competitors cannot be unduly hampered by the incumbent players over - charging to connect. the essence of the changes is simple. people have always been paying, one way or another, to use atms. atms do have a cost of operation and somehow that cost has to be covered. even where no explicit charge is levied, somewhere or other the financial institution is making up that cost. they do not provide services for free. now people will know exactly what the price of an atm transaction is, and they will know it before completing the transaction. there should be no β foreign β fees of any significance. and competition will be maintained, by allowing the independent atm owners to remain viable and new competitors to enter more easily. that is, in our judgment, an improvement over the arrangements of the past and is the best way of keeping costs down in the long run. my colleagues and i now look forward to your questions. | services has meant that labour markets have been resilient and remain tight. here in australia, employment growth has been strong and the unemployment rate has been 1 / 5 bis - central bankers'speeches close to around 3Β½ per cent for a year now, which is the lowest level of unemployment for almost half a century. the participation rate is also at a record high, and many women and young people are benefiting from this. this is one of the positive legacies of the policy response to the pandemic and it is something we should all welcome. the recent data indicate that there has been some easing in the labour market, with firms reporting that it is less difficult to find workers than it was late last year. nonetheless, employment growth is still strong at a time of rapid population growth. we expect employment to continue to grow, but below the rate of growth in the labour force. as a result, the unemployment rate is forecast to rise gradually to reach around 4Β½ per cent late next year. the australian economy is currently experiencing a period of below - trend growth and this is expected to continue for a while yet. many households are facing a painful squeeze on their budgets and consumer demand has slowed considerably, not least because high inflation is eroding people's real incomes. the increase in interest rates is also weighing on disposable incomes for many households, although others are benefiting from the higher interest earned on their savings. the rba's staff are working hard to look beyond the aggregate figures and to understand where the financial pressures are most acute and the impact these pressures are having on people. it is clear that some households who borrowed at low interest rates during the pandemic are finding conditions very difficult, as are some renters. looking forward, the bank's central scenario is that economic growth remains subdued for the rest of this year before gradually picking up to around 2ΒΌ per cent by end 2025. the ongoing moderation in inflation will mean that real incomes start rising again and this will ease the financial pressures that people are feeling. business investment has also been in an upswing as firms respond to the pressures on capacity utilisation. and dwelling investment is expected to increase again next year, after the recent difficulties in that sector. recent monetary policy decisions i would now like to turn to the reserve bank board's monetary policy decisions since the previous hearing in february. since that hearing, there have been six board meetings. at three of those the board | 0.5 |
to be moderate until around the middle of fiscal 2010, since the pace of recovery in the global economy is likely to remain moderate and, in japan, pressure for adjusting employment and wages is likely to remain. going forward, as balance - sheet adjustments in the united states and europe make fair progress, in japan the improvements in the corporate sector originating from exports are likely to spill over to the household sector. therefore, in fiscal 2011, japan β s economic growth is likely to clearly accelerate. in terms of figures, the economic growth rate is projected to be around 1 percent for fiscal 2010 and around 2 percent for fiscal 2011. however, the bank is fully aware that the baseline scenario is accompanied by various uncertainties, and thus will continue to examine economic developments without having any prejudgment. i will now turn to price developments in japan. since i will discuss the so - called β deflation issue β in a moment, let me, for the time being, simply look at the figures. since 2008, consumer prices have been swinging widely due mainly to the fluctuations of prices of petroleum products and other commodities. the year - on - year rate of change in the consumer price index ( cpi ) excluding fresh food peaked at 2. 4 percent in the summer of 2008, followed a downward trend thereafter, and posted the largest decline on record, minus 2. 4 percent, in august 2009, mainly because of the base effect of the previous year β s surge in oil prices. subsequently, with the fading of the effects of the decline in the price of petroleum products, the rate of decline in the cpi in december moderated to a year - on - year rate of change of minus 1. 3 percent. looking ahead, the pace of the year - on - year decline in the cpi is expected to continue moderating due mainly to the gradual improvement of the supply and demand balance associated with the pick - up of the economy. however, given that the recovery started from a level of unprecedented weakness in demand and the pace of economic recovery going forward is expected to be moderate, downward pressure on prices is likely to remain for a considerable period. the policy board members β forecasts of the year - on - year change in the cpi released early this week is around minus 0. 5 percent for fiscal 2010 and around minus 0. 2 percent for fiscal 2011. iii. the thinking behind monetary policy let me now explain the thinking behind the bank β s conduct of monetary policy. earlier, i pointed out the | to 0. 1 percent at the end of 2008, given the outlook for economic activity and prices described earlier, the bank considers it necessary to maintain the extremely accommodative financial environment. at the beginning of december 2009, the bank introduced a new funds - supplying operation so as to further enhance easy monetary conditions. with this operation, the bank provides ample longer - term funds to the money market at an extremely low interest rate of 0. 1, which is equivalent to the policy rate, by employing the existing framework of funds - supplying operations against pooled collateral, which accept a wider range of collateral such as japanese government securities and corporate bonds. the bank recognizes that it is a critical challenge for japan β s economy to overcome deflation and return to a sustainable growth path with price stability. as the central bank, we will continue to make every effort to contribute to achieving this goal. iv. the β deflation issue β and achieving sustainable growth finally, i would like to refer to the so - called β deflation issue. β recently, in discussions of various economic phenomenon, they have increasingly been argued in association with deflation. therefore, it is all the more important to correctly understand the cause of deflation. since the 1990s, inflation has been falling worldwide. reasons for this include the success of central banks β monetary policies aimed at price stability and the substantial decline in costs as planned economies made the transition to the market. however, the arguments frequently heard today are not about this general decline in inflation but about why the inflation rate in japan is lower than in other advanced economies. in fact, japan β s inflation rate as measured by the cpi has been about 2 β 3 percentage points lower than that of other advanced economies even in the bubble period in the late 1980s. there are three possible reasons why inflation in japan has been low for a protracted period. first, rationalization of the distribution system and deregulation. while one rarely hears it mentioned today, from the 1980s to the mid - 1990s, high prices in japan, that is, the need to address the difference between domestic and foreign prices, were frequently identified as a major issue with regard to japan β s economy. rationalization of the distribution system and deregulation were implemented to address the issue. rationalization of the distribution system, together with globalization, led to an increase in low - priced imports. moreover, deregulation exerted downward pressure on prices by reducing margins in industries and of firms that were protected by | 1 |
" central banks, economic stability and social capital : what β s the connection? " - remarks by governor gabriel makhlouf at the london school of economics 16 february 2023 speech good evening. it is a pleasure to be here today to talk about central banks and social capital. my thanks to niamh for the invitation, and i look forward to the discussion with david and alan, and, of course, yourselves the audience. in economics, the concept of capital is embedded in our production function view of what drives economic growth. for adam smith, capital referred to the physical assets and machines of production. financial capital was also important, allowing rms to buy more physical assets. financial capital also had a risk mitigation or loss absorption role, as any nancial regulator knows all too well. as our ability to measure economic growth improved, and it became clear that growth in output far exceeded growth in labour and ( physical ) capital, human capital β the growth and transfer of knowledge in society β came to be seen as an additional important factor of production. increasing interest in ecological and climate - related issues during the 1970s saw the emergence of another, natural capital. natural capital includes aspects of the natural environment ( such as minerals, energy resources, land, soil, water, trees, plants and wildlife ), as well as broader ecosystems ( such as forests, soil, aquatic environments and the atmosphere ). 1 given the urgency of the climate - related challenges we face, natural capital is increasingly centre stage for public policy, including for central banks. as the ecb β s 2021 monetary policy strategy review sets out, climate change and policies to reduce emissions have an impact on in ation and growth β in other words they are part of our knitting - so we need to account for these risks in our policy choices. 2 but it is not just central banks. recent moves by the us government to include natural capital in national economic statistics is an important step that will help inform current policy choices that impact future climate - related outcomes. 3 i cannot over emphasise the importance of measurement to informing policy analysis. but i am here today to talk about another kind of capital : social capital, which i tend to think of as β the social connections, attitudes and norms that contribute to societal wellbeing by promoting coordination and collaboration between people and groups in society. β 4 in the past, i have referred to all the capitals collectively as our economic capital. the potential for social capital to promote collaboration and coordination | ##rs resolution service ( abhaile ), the personal insolvency regime, and a court mentor service. collectively, these protections have kept the vast majority of distressed borrowers in their homes, despite the scale of mortgage arrears experienced following the financial crisis. at the end of 2018, less than one in sixteen mortgages relating to private dwelling homes are in arrears over 90 days. in 2018 there were over twenty two thousand ( 22, 171 ) new restructure arrangements for mortgages relating to private dwelling homes. this brings the total number of private dwelling homes loans categorised as restructured to over 1 / 3 bis central bankers'speeches one hundred and ten thousand ( 111, 504 ) as at the end of 2018. in addition, over three thousand distressed borrowers have secured personal insolvency arrangements, which return borrowers to solvency, while keeping them in their home in over 95 % of cases. the enactment of this bill will not offer new or existing borrowers any additional regulatory consumer protection and it could have negative consequences for the functioning of the mortgage market, with wider implications for all mortgage borrowers. functioning of the mortgage market the enactment of the bill in its current form would hamper the ability of banks to access marketbased sources of financing using mortgages as collateral, such as securitisations and covered bonds. access to such forms of finance helps diversify the funding base and achieve lower funding costs relative to issuing unsecured bonds. constraints on the ability to mobilise mortgages as collateral to raise funding through these market - based channels could ultimately limit the availability, or increase the cost, of mortgage credit. at a time when the severe dysfunction in the irish mortgage market is finally easing, this bill could, unintentionally, slow or even reverse that progress. it would certainly give further pause for thought for any firm considering entering the irish market by increasing the cost of doing business in ireland and effectively limiting the funding available for mortgage lending. we do not believe this in the interests of current and future mortgage borrowers. financial stability during the financial crisis, the ability of irish banks to post securitisations and covered bonds as collateral was crucial to allow them to borrow from the eurosystem to meet their acute liquidity needs. total monetary policy lending provided to irish - domiciled banks rose to a high of β¬140 billion towards the end of 2010, of which approximately 40 % was collateral | 0.5 |
improvement has been made in the cheque processing infrastructure, cheque remains an expensive payment instrument to process at about rm3 per cheque. the total cost is even higher when we take into account the cost incurred by the payer and payee in delivering and depositing cheques. it is estimated that cheque processing cost malaysia about rm768 million5 per year. this amount is huge and a sheer wastage. correcting distortion between paper - based and electronic payments despite the cost incurred in processing cheques, cheques have not been priced directly to reflect its costs except for the stamp duty of 15 sen per cheque. on the contrary, electronic payment services such as the interbank giro ( ibg ) are priced above cost at about rm2 per transaction. such price distortion does not incentivize the adoption of the more efficient electronic payments on a mass scale. in advanced countries such as australia, norway and sweden, electronic payment services are priced lower than cheques consistent with their respective cost of production. the correct price signals that reflect the real cost of cheques and electronic payments had facilitated a broad shift from the use of cheques to the use of electronic payments. we need to correct this price distortion between cheques and electronic payment services, bank negara malaysia has announced a new pricing strategy for payment services in march this year where the price of ibg and cheques are aligned closer to their cost of production. with effect from 2 may 2013, the transaction fee for ibg conducted via internet and mobile banking was reduced to 10 sen from rm2 previously. in addition, a cheque processing fee of 50 sen per cheque leaf will be imposed 11 months later on 1 april 2014. norway, sweden, denmark, finland. rm636 million ( banks ) + rm19 million ( myclear ) + rm113 million ( businesses ). rm113 million for businesses was computed based on the ecb study that businesses incur a cost amounting to 0. 012 % of gdp. bis central bankers β speeches the 11 - month grace period before the implementation of the cheque processing fee is intended to afford both the public and the businesses ample time to familiarize with, adjust and migrate to using electronic payments such as the ibg for their payment transactions. improving accessibility, security and convenience of electronic payments based on a recent survey conducted on businesses, we have identified 4 key hindrances to the adoption of electronic payments, namely : β’ concern of | inia naiyaga : engineers β role in economic growth and financial stability speech by mr inia naiyaga, deputy governor of the reserve bank of fiji, at the fiji institute of engineers β ( fie ) workshop, suva, 2 june 2011. * * * welcome the president, mr pratarp singh and members of the fiji institute of engineers ; distinguished speakers ; distinguished guests ; ladies and gentlemen ; introduction my presentation this morning is β engineers β role in economic growth and financial stability β. let me begin with the outline of my presentation. firstly, i will look at the recent developments in the international and domestic economy followed by the contribution of the building and construction industry to the fiji economy. i will also elaborate on the economic costs arising from natural disasters and the importance of the national building code to fiji and the way forward. global economy developments in the world economy remain promising. although the world gdp growth forecast was unchanged in april, conditions remain significantly varied across major regions of the world. while the recovery in the us economy is showing signs of slowing, growth in most of asia remains strong. however, the outturn in asia is still below the rapid pace experienced in the earlier recovery, with the exception of japan where earthquake - related damage is having a significant effect on economic activity. at the same time, growth in other emerging markets and transition economies has been encouraging. however, uncertainties linger on the horizon. global risks prevail in terms of rising unemployment and inflation, and even though global food prices were unchanged in april this year β they are still higher by 36 percent when compared with the same period last year. furthermore, global imbalances are anticipated to widen further if overheating in asia worsens. domestic economy domestically, the performance of the economy last year was supported by the improved global economic recovery. in 2010, fiji β s economy is estimated to have grown marginally by 0. 6 percent driven by the positive performance of the manufacturing, hotels and restaurants, mining, financial intermediation and services, and real estate sectors. this year, aggregate growth is expected to be 2. 7 percent. growth is predicted to be broad based in 2011 with the only decline ( marginal ) expected in the construction sector. most sectors of the economy ( like tourism and mining ) are expected to maintain their 2010 momentum into this year. additionally, the sugar sector is forecast to increase production this year given the reforms currently undertaken within the industry. bis central bankers β speeches looking forward | 0 |
central bankers β speeches a. growth potential of japan β s economy now let us look at the potential growth rate of japan β s economy, which represents β from the supply side β the pace of growth that is consistent with the economy β s growth potential. according to the bank β s estimates, the rate has recently been in the range of 0 to around 0. 5 percent, and thus remains at a low level. the potential growth rate is unlikely to rise markedly in the short term, considering, for example, that the pace of firms β accumulation of capital stock remains moderate, although business fixed investment has turned to an increasing trend. on the other hand, the bank β s estimates of the output gap in japan have generally been at the neutral level of around zero recently. the output gap is also at a favorable level on an international comparison using the estimates made by the organisation for economic co - operation and development ( oecd ). labor market conditions remain very tight. of course, such estimates are subject to a considerable margin of error. however, if, under these circumstances, the economy continues to grow at a pace well above the potential growth rate, supply - side constraints such as labor shortages will become more pronounced. in my view, stable economic and price conditions are most likely to be maintained, as japan β s economy will probably continue growing moderately at a pace that does not diverge considerably from the potential growth rate. b. the decline in crude oil prices and the global economy the decline in crude oil prices facilitates income transfers from oil - producing countries to oilconsuming countries. the net effect of the decline will likely tend to be positive in terms of the global economy as a whole due to the difference in price elasticity of demand between these countries. nevertheless, financial markets often shift to a β risk - off β mode. this is probably because the decline in crude oil prices is associated with signs of oil - producing countries β currency depreciation and of the heightening in their economic and fiscal risks. another reason seems to be that market participants are still uncertain about the extent of positive effects stemming from the crude oil price decline. in measuring the extent of these effects, the degree to which the decline in crude oil prices will benefit the u. s. economy warrants attention. in this regard, the decline in such prices might not push up private consumption by as much as anticipated due to structural changes in the united states such as an increase in energy efficiency. the fall in crude | in advanced economies that conduct unconventional policy are still finding a way to achieve better communication with the markets. the bank, for its part, needs to continue to facilitate effective communication while paying close attention to the experiences of the other economies. f. combined use of two policy tools it is my understanding that an unconventional policy such as the asset purchase policy implemented under qqe is effective as a temporary tool to generate upward momentum in economic activity and prices and affect the direction of such momentum under the zero lower bound on nominal interest rates. on the other hand, a conventional interest rate policy can be regarded as a usual, fine - tuning tool that is used when it is time to encourage economic activity and prices to reach desirable levels. in a situation where the unconventional policy has already been effective to a reasonable extent, accommodative financial conditions are starting to further strengthen as policy effects generated by maintained zero interest rates are gradually added to the effects of qqe. on the other hand, precisely because the unconventional policy is a new policy measure with a short history, its side effects in general could have many unknown parts. moreover, it would probably take considerable time for monetary policy to be normalized with the unwinding of the unconventional policy β the main component of which is the asset purchase policy. thus, a forward - looking policy stance is required to achieve the smooth normalization of monetary policy while maintaining financial market stability. taking these factors into account, if developments in economic activity and prices continue to steadily follow an improving trend, i think that it will be necessary in the future to examine the option of gradually starting to shift the focus of monetary policy conduct from the asset purchase policy to the zero interest rate policy, in view of the role of the two policy tools as well as the balance of their positive effects and side effects. bis central bankers β speeches | 0.5 |
christian noyer : inflation, financial innovation and monetary policies β some contemporary challenges speech by mr christian noyer, governor of the bank of france, at the gic and cepii conference, paris, 13 may 2008. * * * inflation pressures are now at work in most parts of the world. today, i would like to start with offering some comments on this worrying development and then elaborate on the challenges raised by financial innovation for monetary policies. the current rise in global inflation appears in stark contrast with the price stability recorded over the past decades. during the last twenty years, globalisation has made a significant contribution to price stability. with new large players ( such as china and india ) entering the world economy, cheap imports of manufactured goods have become available to developed countries. the fall in import prices has allowed real consumption wages to grow without impacting real production wages. this, in turn, has lowered the inflation rate for any given level of employment. in parallel, the effects of globalisation have been felt more indirectly through increased competition, both on products and labour markets. inflation dynamics have also changed. maybe the most documented and commented - on of these changes has been the so - called flattening of the phillips curve. this, in economic jargon, means that domestic inflation has become less sensitive to the domestic output gap, or, alternatively, that it has become more stable during the business cycle. there are several possible β and not mutually exclusive β explanations for this phenomenon. expectations may be more solidly anchored, which would lessen the impact of the output gap on current inflation. it is also possible that, as a result of structural reforms, the nairu has decreased in many countries in recent years, thus giving the " optical " impression of a horizontal phillips curve during this period. in a broader sense, globalisation itself may also be responsible for the flattening of the phillips curve. in an open economy, domestic demand changes can easily be satisfied through increased imports. as a consequence, domestic inflation may become less sensitive to the domestic output gap and more sensitive to global tensions on production capacities. overall, these developments have made it easier for central banks to bring down inflation without real costs to the economy. but it is clear, today, that these effects are being reversed. the prices of oil, food and other commodities are now increasing fast. there might be three reasons for this rise ( the importance of which is currently hotly debated ) : first a supplydemand im | jean - claude trichet : central bank cooperation after the global financial crisis video address by mr jean - claude trichet, president of the european central bank, at the bank of korea international conference 2010 β the changing role of central banks β, seoul, 31 may 2010. * * * ladies and gentlemen, first, let me congratulate the bank of korea on its 60th anniversary. the bank has made essential contributions in korea β s economic development, the reform of the country β s financial system and its integration into the global financial system. the clear focus on controlling inflation and the strengthened independence further buttressed the role of bank of korea in the economy. and recently, the bank β s timely and decisive measures helped korea weather the global financial crisis. hence, there are many reasons to congratulate and wish bank of korea a very happy birthday! * * * let me now say a few words about central bank cooperation during and after the crisis, which the bank of korea is so closely involved in. the cooperation among central banks has recently taken numerous forms, such as information sharing and the setting of general standards and rules. such cooperation has been mainly channelled through the various fora at the bank for international settlements ( bis ) in basel. these include the governors β global economy meeting and the other committees that meet under the aegis of the bis as well as the financial stability board. the global economy meeting comprises the esteemed governor kim and some 30 other governors from all systemically important economies. it is held every two months in basel and provides a unique opportunity to discuss the global economic outlook, policy challenges as well as any other topics of mutual interest. until january this year, the global economy meeting was primarily concerned with assessing global economic and financial conditions. since then, it was entrusted with an additional assignment : it now provides guidance to, and formally decides on, issues discussed by the various basel - based central bank committees. this responsibility had been in the hands of g10 governors for decades. i have the privilege to chair the global economy meeting and find the frank and in - depth discussions of invaluable importance for my own work and for the central bank community at large. central bank cooperation is part of a more general trend that is reshaping global governance, and which has been spurred by the global financial crisis. one distinctive aspect of this crisis has been its originating in industrial economies. emerging countries have also been severely affected, but as a group remained a source of strength for the | 0 |
in public debt ) ; and of monetary and other financial policies, which reacted promptly and forcefully to the mother of all exogenous crises, ensuring that financial meltdown and a 2008 - style downward spiral were avoided. last week, the imf released their updated projections on global growth. they now expect an expansion of 5. 9 per cent this year and 4. 9 per cent in 2022. for italy, the imf β s projection for growth this year has improved from 4. 9 to 5. 8 per cent, while for 2022 it has been confirmed at 4. 2 per cent. our own expectations are similar. many advanced countries ( and, among the emerging ones, china ) have already reached, or are about to reach, pre - crisis output levels. in italy, we expect this to happen in the first half of 2022. there is unavoidable uncertainty about such projections. the latest crisis was utterly unprecedented. one can never rule out the possibility, for instance, that the pandemic will take another nasty turn, or that investor attitudes will suddenly change. and some delayed bankruptcies may well occur with the end of moratoria and other provisions. 1 / 5 bis central bankers'speeches meanwhile, fast growth has resulted in production and distribution bottlenecks, which may yet restrain further expansion, and have already pushed prices higher. we discussed this issue at length during the g20 meeting last week, and there was agreement that such bottlenecks are still likely to be transitory. this means that the markedly higher inflation rates that have recently been observed throughout the developed world can also be expected to recede over time, in part given the absence, so far, of wage pressures. as governor visco said in his introductory statement to the press conference that followed the g20 meeting, β inevitably, the widespread uncertainty surrounding the current situation requires central bank governors to monitor price dynamics closely β. he also said that β economic policies should remain supportive for as long as necessary β. last year β s crisis hit disadvantaged groups such as low wage earners, women, and the young in a disproportionate way. it also hit small enterprises and the self - employed, though with an extremely variable intensity. certain industries, especially in services, suffered a much heavier shock than average. there is evidence that in many countries, including italy, fiscal support has been broadly effective in countering the sharp increase in inequality that would otherwise have emerged. differences remain | have unintended business - cycle effects. the safety net - - particularly deposit insurance and access to the discount window - - clearly has an impact beyond the stability it brings by containing the deposit runs that once led to financial implosion. it induces intermediaries to take on more risk with less capital, creating what is arguably the largest problem facing modern bank supervisors - - wide swings in credit quality. even without government rules, however, cyclicality still would exist in financial markets, the real economy, and in the actions of financial intermediaries. cyclical financial volatility, for example, was significant from the civil war to world war i, a period that - - abstracting from some of the perverse currency rules that came from the banking act of 1863 - - was not characterized by substantial regulation and rulemaking. moreover, behavioral factors, even if there were no rules or regulations, would still be a formidable force in inducing cyclical changes in both the quantity and the quality of assets acquired and issued in the financial sector. the most basic is human response to risk. the often - repeated pattern in financial markets has been the periodic shift in risk attitudes, initiated by the state of the economy, among lenders and other asset holders. history instructs us that, during recoveries and booms, risk discounts erode as the level of optimism lowers the barriers to prudence. even those lenders less inclined to reach for more risk - laden proposals are driven to maintain their share of the rising credit flow, if not to increase it. the only way bankers can adhere to lending policies significantly more stringent than those of their competitors is to effectively exit significant areas of banking, pending, in their judgment, the return of sanity to banking practices. such an approach, however, is not consistent with a viable long - term banking franchise. to the majority of banks, the environment of contagious optimism makes more and more proposals seem bankable. ever less attention is paid to potential problems as the cautious voices appear curiously quaint and have little quantitative support because all the recent news and facts are favorable. even the supervisors and policymakers tend to be caught up by the process. their voices of caution are rarely raised because they, too, find it difficult to make a case for restraint because the quantitative indicators do not support caution until too late in the lending expansion. as cyclical imbalances inevitably develop, the typical pattern has been an evaporation of optimism among | 0 |
time directors should devote to their duties and what the appropriate remuneration should be. 2. executive compensation i have already publicly expressed my views on the trend toward excessive executive compensation. as i argued earlier this month, i can find nothing in economic theory to justify the levels of executive compensation that are widely prevalent today. i believe that corrective action - taken voluntarily - is not only overdue but also morally sound. this evening, i would like to focus on the effects of public policy on executive compensation. as you know, in 1993, the irs ruled that the maximum tax - deductible salary a company can pay an employee is $ 1 million per year. compensation above $ 1 million has to be β performance - related β to be considered a tax - deductible expense. this change in public policy gave firms that wanted to minimize taxes the incentive to introduce performance - related pay structures for executives earning above $ 1 million a year. the policy change is a key reason that stock options have become the most prevalent performance - related structure for executive compensation. option - based executive compensation raises a number of issues. for example, one feature of the 1993 irs ruling is that the $ 1 million salary cap for tax deductibility is nominal and not indexed. this means that as the average total compensation for executives rises over time, the incentive to use stock options increases. another issue stems from the fact that stock options are non - transferable. therefore, an increasingly large fraction of an executive's compensation in the form of stock options represents a non - diversified risk. moreover, if the firm goes bankrupt, the options become worthless at the same time that the executive β s job is lost. as a result, firms may have to increase the amount of options they offer an executive to offset the increased riskiness of this form of compensation. from my perspective, a more neutral tax policy toward executive compensation would reduce the reliance on stock options and not penalize firms if they opted instead to use other forms of contingentpay mechanisms. a reconsideration of stock options is already under way. clearly, there is room for changing the incentives that have been driven by tax policy. for me, what is key is that firms have the flexibility to structure new types of incentive compensation and that public policy be responsive to these initiatives. a deeper issue, in my view, relates to dividends. it is true that dividend payout ratios - dividends divided by earnings - have fallen over time | interest rates and a depreciation of the canadian dollar. obviously, more targeted labour market policies lie beyond the bank β s purview. still, it makes sense for policymakers to address impediments that make it hard for workers to be matched up with those half - million job vacancies. there may be new ways of helping people deal with the risks involved in relocation, or overcome regional barriers to job matching. for example, there may be areas where we could make it easier for skilled workers and professionals to recertify to qualify for a job in a different province. we may also be able to learn from international experience in terms of improving our educational, training and retraining programs. i mentioned earlier that, despite low unemployment, people express a sense of dissatisfaction and unease about their future. it is possible that the distribution of income is contributing to this. total labour income as a share of the canadian economy began to trend downward nearly 30 years ago and has remained in a lower range for the past 10 β 15 years. opportunities for globalization of supply chains and the steady increase in automation technology have no doubt reduced employee bargaining power over time, not to mention declining union membership. 3 / 5 bis central bankers'speeches bearing in mind that globalization and automation also generate economic growth that benefits everyone, it is clear that there is no simple solution to this. however, it is a useful metric to track when considering alternative policy ideas. yesterday β s decision all that said, the canadian labour market has certainly been important to the economy β s resilience. its strength has helped support the growth in incomes and household consumption that we have seen. however, it is just one factor that the bank β s governing council looks at when we sit down to take our monetary policy decisions. let me turn now to yesterday β s announcement. it is important that we put recent developments into proper context. business investment has been falling short of expectations in canada for the past three years. six months ago, we were seeing signs that the us β china trade war was beginning to affect canadian exports and investment even further. in october, we pointed to canada β s two - track economy, where soft exports and investment were being offset by a recovering housing sector, a strong labour market and solid consumer spending. but we were concerned that the effects of the trade war could eventually tilt the balance of risks against us. with the economy operating very close to its potential, the unemployment rate near historic lows and inflation | 0 |
these markets : but there is no corresponding data matrix at the global level. it will be important that the emir dataset can be linked to other datasets to understand the total balance sheet exposures. the adoption of common identifiers, such as the legal entity identifier ( lei ), across the various granular data initiatives is critical to facilitate these linkages. another challenge posed by globalisation is the dual roles played by multinational firms in production and in the international financial system. 1 it is increasingly difficult to interpret national economic and financial accounts, given the mis - match between the global - level integrated 1 / 3 bis central bankers'speeches activities of international firms and the residency - based concepts that underpin national accounting. in particular, the scale of cross - border intra - firm transactions is a severe challenge in working out the implications of observed balance of payments flows. the wide spread use of special purpose entities in the financial transactions of multinational firms further adds to the difficulty in accurately capturing the underlying trends. at european and global levels, developing a shared understanding among statisticians of the international activities of multinational firms is a high priority due to the threat to the relevance of statistics. the statistical system will also need to become more agile, as the activities of multinational firms evolve at a rapid pace and the underlying rules and manuals can take several years to catch up. so, from a financial stability perspective, in identifying next steps for escb statistics, an important priority is to continue the painstaking work to develop sufficient momentum and trust across jurisdictions to enable more data sharing at a global level across these various dimensions. let me turn to the data requirements for effective macroprudential policymaking. in particular, let me focus on borrower - based measures such as loan - to - value ( ltv ) or debt - to - income ( dti ) ceilings that can help improve the stability of mortgage markets. since risks are concentrated in the higher - risk tail of the distribution of mortgage loans, it is very helpful to have granular, loan - byloan data in calibrating borrower - based measures. in particular, a full risk assessment requires a capacity to match loan data with borrower characteristics such as income level, employment status, household composition, non - mortgage debts and other financial assets and liabilities. in relation to gaining an overview of the aggregate debts of a household, it is important to highlight the value of a comprehensive consumer credit register. since loan balances and | services are widely available, not just for households but also for retailers and companies. there are more than 20 million cards in sweden and just over two hundred thousand card terminals. recently mobile card terminals and opportunities to accept card payments by mobile phone have also arisen. this chart, which shows how often households say they have not been able to pay by card or cash, illustrates the high level of acceptance among payees. a large majority say that they are unable to pay by either card or cash less than once a month. close to atms and good internet connections cash should not only be possible to use in shops. households also need to be able to withdraw cash and the retailer has to be able to deposit his daily takings. this makes the physical distance to service points and atms important. the average distance for a shopowner to the nearest service point to deposit his daily takings is 6 km for sweden as a whole and more than 10 km for jamtland county, which has the longest distances. the distances for cash withdrawals are less ; around 4 km for the country as a whole and around 7 km in norrbotten county. for electronic payments, access to the internet is the equivalent of geographical proximity. it is also becoming increasingly important for both households and companies to have good internet connections to be able to make and receive payments. in sweden as a whole, around 500 households and companies are unable to have access to the internet. given that we are a sparsely - populated, but geographically large, country, this is nevertheless an impressively small figure. of course, what i have just said does not mean that individual shops and households may have much longer distances, that the fees paid by a shop - owner for card payments or for handling daily takings can be perceived as high or that it is not a problem for those who are unable to have access to the internet. i shall shortly return to the challenges we have identified on the market, but before i do so i would like to say a few words about current trends and developments. trends and changes sweden is in the forefront i said earlier that sweden is in the forefront with regard to using other payment services than cash, and this is illustrated in this chart, which summarises the situation in a few selected countries. 5 the picture that appears is that use of cash is much lower in sweden than in most other countries and that the use of cards, primarily bank cards, is higher. the situation is roughly the same in | 0 |
anita angelovska bezhoska : the denar was and remains one of the key pillars of the stability of the macedonian economy address by ms anita angelovska bezhoska, governor of the national bank of the republic of north macedonia, on the 29th anniversary of the monetary independence, skopje, 26 april 2021. * * * monetary sovereignty is one of the main components of the sovereignty of any state. today we mark 29 years since the laying of the foundations of our monetary independence β the day when the denar replaced the yugoslav dinar, and the national bank began to function as an independent central bank, facing numerous challenges in those turbulent times of separation from the former yugoslav state. looking back through years, we can freely say that the monetary independence took place in an extremely difficult period marked with high macroeconomic instability as its main feature. frequent exchange rate devaluations, when there were almost no foreign reserves, along with structural problems, ignited inflation, which reached four - digit levels, and all this had strong effects on the economy and the living standards of citizens. the economy has been declining 1996, when economic growth of 1. 2 % was registered for the first time since independence. hence, no doubt that establishing a stable macroeconomic environment required great courage, commitment and professionalism of the national bank team. the efforts of the national bank, together with other policy makers and the academic community, have played a key role in ceasing the inflation spiral and stabilizing the exchange rate of the domestic currency. in 1995, the monetary strategy of stable exchange rate of the denar was formalized β a strategy for which then and now there is a broad consensus that it is one of the key pillars of the stability of the macedonian economy. the benefits of macroeconomic stability have been enjoyed for 24 years. our economy is small, commercial and financially open and hence, prone to external shocks. despite the numerous external and internal shocks, the national bank constantly succeeds to keep inflation at a moderate level, which is similar to the european level. low inflation is extremely important for the protection of the real purchasing power of citizens, but also for maintaining the competitiveness of our exports without which small economies like ours can not achieve higher and sustainable growth. the maintenance of low and stable inflation, as the main goal of the central bank, is underpinned by the stable exchange rate of the domestic currency against the euro. the prudent monetary policy, as well as the good coordination | to global factors that are not exclusively related to the commodity prices fluctuations, but also to the impacts of the globalization of production and digitalization of trade worldwide, both having impact on competition and prices in each economy. in such surrounding of prolonged lower inflation, the re - assessment of the time lag in affecting the inflation as well as the inflation measurement, the outlook of inflation expectations and their possible de - anchoring are to be considered. the current economic developments and outlook point to new a global cycle and the need of gradual normalization of monetary policy. gradual approach is required to avoid the so - called β taper tantrum β episodes that financial markets have already experienced during the us tapering. a stronger and clear monetary policy communication should be in favor of preparing market agents for the future monetary policy changes and smother reaction when they take place. 1 / 2 bis central bankers'speeches the monetary policy normalization in advanced economies could produce different impacts for emerging economies and their monetary policy. any capital outflows would be highly dependent on the size and structure of the financial liabilities, especially regarding the existence of interest rate sensitive capital flows, that is not always the case in emerging economies with lower level of financial integration, where more usual are the direct investment, trade credits and banking sector capital flows. on the other hand, the more restrictive financial conditions in advanced economies in a medium run could eventually lead to lower external demand in the emerging economies. the impacts on the fiscal policy are more serious, implying stricter conditions for external budget financing, signaling the need to start or continue with fiscal consolidation, in the emerging economies where it has already started. having in mind country specific reasons, monetary policy normalization in emerging economies may come with different lag. speaking about the macedonian economy and countries from western balkan region in terms of facing the new global cycle, we have to mention some strong points and some still existing weaknesses. generally, sound and stable banks have additionally strengthened due to the new capital requirements during the last several years, as well as due to the stronger efforts for better nonperforming loans management and resolution. current account deficit region - wide has reduced as a result of the favorable price impact, in line with commodity prices slowdown and in the macedonian case, due to the contribution of new companies with foreign capital that significantly changed our export structure into higher value added products. we have seen positive results in the dealing with unemployment as one of the main problems in the region. in macedonia, it | 0.5 |
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