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pillar 2 requirements. secondly, the nature of climate - related risks calls for central banks and regulators to collaborate at the national level to support alignment of financial industry responses with national climate strategies and priorities. as i mentioned at the start of my remarks, central banks and financial regulators provide an important bridge between the financial sector and the government to inform national policies, targets and strategies on the one hand, and financial sector responses to climate risk on the other hand. in malaysia, jc3 serves as a focal point for engagements with the malaysian climate change action council ( mycac ) 1 on national climate policies. third, effective coordination with the industry serves to maximise transition benefits and minimise downside risks. for developing and emerging economies in particular, an inclusive strategy is key to avoid macroeconomic and social dislocations as we transition to a low - carbon economy. as financial and economic advisors to the government, we are working with the government to develop sustainable finance roadmaps that will mitigate risks of stranded assets if disorderly transition occurs. the bank β s principles - based taxonomy was developed with this in mind. the taxonomy aims to facilitate the direction of financial flows to activities that support the transition to a low - carbon and climate resilient economy. it supports businesses in transition by recognising climate risk mitigation and adaptation efforts over time, while preserving the rigour of assessments by avoiding greenwashing. the taxonomy also encourages financial institutions to nurture and nudge businesses to 2 / 3 bis central bankers'speeches transition to greener practices. it helps improve development outcomes, and builds capacity within businesses themselves to better manage climate - related risks. to further support transition activities, the bank has also established funds to assist smes in pivoting their businesses to be more sustainable in the post - pandemic world. this includes transitioning to greener activities. the bank is looking to further expand these facilities with a greater focus on green activities that are aligned with the taxonomy going forward. the bank also sees great value in pursuing a coordinated and regionally coherent financial sector response to the climate challenge. within asean, the bank is working closely with central banks in the region through the asean taxonomy board in the construction of a regional taxonomy that can provide a common language for sustainable finance in asean and promote efficiency. this will encourage the alignment of national taxonomies, building on common principles and a tiering system to cater to differences in financial systems, economic and social structures, and | , the new recovery and resolution tools, provided that they are credible, will reduce the implicit government guarantee and distortive risk - taking incentives created by bail - out expectations and artificially low funding costs. structural reform while the improved capital and liquidity requirements and the new resolution regime take us a long way in addressing the too - big - to - fail problem, they do not take us all the way. in october 2012 the high - level expert group on reforming the structure of the eu banking sector proposed mandatory separation of a deposit bank and a trading entity within the banking group to complement, not to substitute the ongoing regulatory reform. the motivation for our decision to propose separation was the following : first, to limit the spill - over of benefits from the deposit guarantee system and any implicit government guarantees to certain trading activities of banks. second, to simplify the structure of large, complex banks. reducing complexity by means of separation facilitates management and implementation of incentives and it facilitates supervision and monitoring by outside stakeholders such as shareholders, bank creditors and other market participants, thus reinforcing market discipline. third, to make it easier to impose recovery and resolution measures if a bank would nevertheless get into severe problems. simplifying the structure of the bank ex - ante would also serve this purpose. it is crucial to make credible the resolution also of the largest and most trading - intense banks. fourth, to reduce the mixing of two very different management cultures in 1 ) the customer - based retail and commercial banking and 2 ) the transaction - based trading activities. the aim was to shift the focus from short - term to long - term, which is more in line with the interests of the real economy and society at large. the choice of where to draw the line between the deposit bank and the trading entity was made so as to enable banks to service the real economy in the best way possible, while separating the activity that should not enjoy the benefit of the implicit government guarantee. because the difference between proprietary trading and market making is hard to distinguish, the group proposed to keep them together in the separated trading entity. in this way, market making would be provided on equal terms by trading units within banking groups and entities outside the regular banking sector. the high - level expert group also suggested that exposures to shadow banking entities such as hedge funds ought to be separated from deposit - taking and lending activities. finally, we wanted to preserve the universal banking model and keep the trading activity within the bank supervisory umbrella. this would also | 0 |
by the future government. recently, prof sampie terreblanche, of the university of stellenbosch has said in a book entitled : a history of lnequality in south africa, 1652 - 2002, that β in 1993 the corporate sector and some anc leaders reached a hugely important elite compromise. this happened before the transitional executive council ( tec ) accepted a secret $ 850 million loan from the imf to help tide the country over balance of payments difficulties in november 1993 β ( p96 ). he continues to say that β before the tec signed the loan agreement, the corporate sector and the np government on the one hand and anc leaders on the other signed a secret protocol on economic policy β¦ ( they ) agreed with the imf, the tec committed itself to a neo - liberal, export - oriented economic policy and a β redistribution through growth β strategy β. i was one of the people involved and i can say with confidence that prof sampie terreblanche is totally and completely wrong. there was no secret meeting of the corporate sector and the core leaders of the anc that i am aware of to agree on a secret document. this was a tec matter handled through the sub - council on finance. naturally, the delegates to the subcouncil consulted their principals. but i emphasize that any careful reading of the statement will find no contradiction with ready to govern. but that is a matter for political economists to sort out in due course. it is fair to say that the balance of payments constraint that we grappled with at the tec was only the tip of a large iceberg. here are some of the indicators of an economic crisis that we went through. the pre - 1994 period is contrasted below with what has happened in ten years. firstly, in 1985, on the back of the sanctions campaign, the government of the day declared a partial debt standstill. the affected debt was $ 13, 6 billion and the total debt was $ 23, 7 billion. from 1985 to 1993, the net financial outflow adapted from the chapter appearing under my name in a book by the world economic forum entitled south africa : the miracle continues. june 2004. from south africa was some r45 billion or 11 per cent of gross domestic fixed investment. that forced the authorities at the time to implement stringent policies to generate current account surpluses. the cost to the economy was immense. in august 2001 the final repayment was made. the | international capital markets were opened to south africa effectively in 1995 when the first post - apartheid sovereign bond issues of $ 750 million was launched. secondly, the trade regime at the beginning of the 1990s was characterised by three interrelated strategies, namely the promotion of domestic industries through import substitution, the development of specific industries to attain self - sufficiency and the promotion of mineral beneficiation. south africa β s industries therefore became heavily protected by formulae, specific and ad valorem duties and surcharges. high tariff levels were complemented by quotas that limited the quantity of imports. the tariff structure was extremely complicated. overall the strategies pursued by the authorities resulted in a complex discretionary regime fraught with corruption and bureaucratic mismanagement. as a result changes to the tariff regime became a fundamental imperative for the new government in 1994. the number of tariff categories was reduced from over 100 to only six and the average weighted import duties on manufactured goods to the total value of manufacturing imports decreased from 14, 0 per cent in 1994 to 4, 7 per cent in 2002. several free trade agreements were also signed to dismantle trade barriers and to gain increased market access. the process continues today and many global trade doors have been opened. in addition to these, measures were undertaken to promote competition, industrial policy was adjusted to enhance the competitiveness of manufacturing enterprises in export markets. in particular more emphasis was placed on supply - side measures, rather than demand - side measures such as expensive export support programmes. these measures included investment incentives for large investments of a strategic nature and for small and medium enterprise development ; training grants to firms investing in the promotion of skills ; the development of industrial development zones ; improved access to finance ; and support for investments in economic infrastructure. a new competition act was passed in parliament in 1998 to, among other things, create a greater spread of ownership in enterprises, to expand opportunities for south african participation in world markets and to provide consumers with competitive prices and product choices. thirdly, at the beginning of the 1990s an unsustainable fiscal situation had started to develop, and the deficit before borrowing and debt repayment of the government reached 7, 3 per cent of gross domestic product in the fiscal year 1992 / 93. the internationally acceptable rule of thumb is that the fiscal deficit should ideally not be more that 3 % of the gdp. government expenditure continued to rise relative to domestic production, the tax burden increased, the public sector made increasing demands on the domestic capital | 1 |
to be aware of. if there are a lot of you trying to get approval, and only one of us, don β t expect that you can all present us with your models at the last minute and expect a one - to - one service. if too many firms leave their preparations too late, then we will have to prioritise β if you want to be sure, then get in as early as you can. naturally, a significant proportion of our work relates to internal model approval, given the complex nature of many models and the detailed requirements of the solvency ii tests and standards. but the large volume of other solvency ii work is certainly not being ignored. part of the purpose of this conference is to draw attention to the requirements in relation to the standard formula, other approvals and reporting requirements ; which affect both internal model and standard formula firms. the title of today β s conference is β countdown to implementation β and in the sessions that follow we will : β’ set out, as far as policy certainty allows, some of the key requirements and deadlines for firms between now and 1 / 1 / 16 ; β’ provide you with the information you need to be ready for transposition and implementation ; β’ and provide an opportunity for you to ask questions and discuss key topics with representatives from the bank. on the internal model approval process ( imap ), good progress is now being made by some firms on their models ; however many of you are behind and timelines look very tight for remedial action. in order for the pra to review models, we must receive all necessary documentation and evidence of compliance in good time and produced to a sufficient standard. the deadline for pre - application submissions is march 2015 ; although firms should be striving to submit as soon as they are ready to give themselves more time to respond to pra feedback on their models. i understand that some of your work depends on responses by us β i can assure you that we will be making our best endeavours to react quickly and make any remaining decisions or give necessary guidance as soon as we are able. as governor mark carney noted in his speech in september, the pra will not hesitate to withhold approval for inadequate or opaque models. the responsibility to meet the solvency ii tests and standards rests solely with firms and their senior management. although the bank will continue to work with firms as they finalise their models, be under no illusion that each model will be assessed comprehensively and objectively against | the rt hon sir edward george : reflections on the uk β s economic performance over the past year and future challenges speech by the rt hon sir edward george, governor of the bank of england, at the lord mayor's dinner for bankers and merchants of the city of london, 20 june 2001. * * * my lord mayor, mr chancellor, my lords, aldermen, mr recorder, sheriffs, ladies and gentlemen. it is always a privilege, my lord mayor, and a pleasure, to be invited to enjoy the splendour, and the generous hospitality, of the mansion house on the occasion of this annual dinner for the merchants and bankers of the city of london. you provide us with an opportunity β in an atmosphere of calm β to reflect upon the events of the year that has gone by and upon the challenges to come. and the past year certainly has been eventful β though it is notable that some of those events did not result in particularly dramatic change. i think particularly of the election and i congratulate the government on the outcome, and you, chancellor, on your own re - appointment. i very much look forward to continuing to work with you. but i think, too, of our relatively stable overall economic performance β despite the devastating effect on many farmers, and on rural communities more generally, of foot and mouth disease ; despite the weather and the floods ; despite the disruption on the railways ; and despite, above all, the pressures on the internationally - exposed sectors of our economy as a result of developments abroad. in this last context, my lord mayor, i was struck by a recent newspaper comment to the effect that if we were living on an island we'd be in reasonably good shape. now i have to confess that i'd always been under the impression that we were living on an island, but i let that pass. what i think the writer was drawing attention to is the fact that despite the recent global economic slowdown β notably in the united states, despite the continuing weakness of the euro, and despite the sharp rise in crude oil prices over the past year, we have in fact, in terms of our own overall economy, enjoyed another year of steady progress. gdp growth in the year to the first quarter β at 2. 6 % β remained above our longer term trend rate, and was above the rate of inflation, whether measured by the gdp deflator or our target measure of retail price inflation ( rpix ), for | 0.5 |
owners on a quarterly basis. norges bank works to safeguard financial wealth over time. responsible investment is a key component of that task. the bank uses a number of instruments to promote active ownership, such as international principles and standards, expectations documents, voting at shareholder meetings and contact with companies. corporate governance and environmental and social considerations are integrated into the investment process and risk management. in a number of cases, the bank has sold off or refrained from buying securities as a result of concerns regarding longterm sustainability. our experience is that there are positive synergy effects between active ownership and other aspects of investment activity. it is the political authorities that lay down the criteria for exclusion of individual companies from the investment universe. the government is now proposing that the responsibility for deciding exclusion should be delegated to norges bank. an integration of instruments could bis central bankers β speeches strengthen the effectiveness of active ownership. it would make it easier for companies to relate to a single representative of the gpfg, which may also enhance consistency and predictability in its performance of active ownership. norges bank aims to expand reporting on responsible investment practices. we are well prepared to take on a wider responsibility within a clearly defined framework. norges bank must then have a sufficient degree of freedom to organise and carry out its investment management task as effectively as possible. the overriding objective of investment management must remain the highest possible return within acceptable risk levels with a view to safeguarding and building wealth for future generations. thank you for your attention. bis central bankers β speeches | . investment outside the oil and gas sector is still expected to expand, nonetheless. businesses across canada tell us they plan to invest to increase competitiveness or to meet demand for their products. here β s the bottom line : when we take into account the impact on the global economy and commodity prices, trade conflicts and uncertainty are projected to reduce the level of canadian gdp by as much as 2 percent by the end of 2021. staff did some excellent work to inform our discussion, and you can see the results in box 2 of the mpr. they analyzed two scenarios that can be thought of as extremes : an unfavourable scenario in which trade conflicts escalate significantly, and a favourable scenario in which they are resolved. they held fiscal and monetary policy unchanged so that the economic effects would be more visible. the results are clear. the impact on growth, both globally and in canada, is much larger in the unfavourable scenario than in the favourable one. that underscores how much we all have to lose if the trade war escalates. as for inflation, it actually rises in the unfavourable scenario, even as the economy weakens. that β s because a full - blown trade war would affect supply. trade patterns and global value chains would be severely disrupted. this would lower productivity and reduce economic potential. it would threaten our living standards. at the same time, slower global growth in this scenario reduces commodity prices and leads to a sharp decline in the canadian dollar. while a lower currency would help contain the decline in exports, it would also put strong and persistent upward pressure on prices, as would the direct effects of the tariffs. it β s clear that monetary policy could not simultaneously buffer the impact on growth and keep inflation in check. central banks in advanced economies have not faced this type of trade off since the 1970s. of course, during our deliberations governing council also discussed the bank β s ultimate mission β inflation control. our core inflation measures have averaged close to 2 percent in recent quarters. total inflation will likely dip in the upcoming months due to the dynamics of gasoline prices and some other temporary factors. it is expected to return sustainably to target by around mid - 2020 as slack in the economy is absorbed and these temporary effects wane. let me wrap this up. the canadian economy is returning to potential growth. however, the outlook is clouded by persistent trade tensions. taken together, the degree of accommodation being provided by the current policy interest rate remains | 0 |
currently do omo but you will continue to transact omo with our treasury department. the bsp will conduct consultations and briefings with you and other stakeholders ( possibly starting next month ) before we commence conducting omo using the irc system in the second quarter of 2016. in our pursuit of financial stability, we will continue to actively assess evolving market conditions while performing stress tests and network analysis. we have an uncompromising policy focus on mitigating the build - up of what we refer to internally as β c2l2 β ( c - l - 2 ) or the risks of contagion, concentration, leverage and liquidity. we put ourselves to be thought leaders in global and regional initiatives. this includes work on financial inclusion, financial literacy, and consumer protection as well as the integration of the regional financial market, including the requisite capacity building initiatives. we support the principles espoused by global and regional reforms but we do so in the form that is best suited for our requirements. we continue to actively engage other government agencies through the financial sector forum and the financial stability coordination council, and pursue interagency collaboration, for example, with da / dar and hlurb for agri - agra and housing issues, while openly collaborating with private sector entities such as the six organizations represented tonight. final thoughts it is clear that we all desire to be stronger in this increasingly interconnected yet fluid world. in doing so, however, we need to go beyond the confines of trade blotters, budgets, and bottom lines because financial markets β draw β a much more intricate picture on a canvas that is much larger than one β s balance sheet. for certain, how things β hang on balance β is not a trivial quest because there are many stakeholders and because financial risks evolve, comingle and recast themselves in a dynamic form. you have heard me say, year after year, at your general assembly that the overall picture is not simply the sum of each market player β s position. there are material risks that knowingly or unknowingly fall in between desks or may look benign on everyone β s balance sheet. but when these risks fester, they eventually materialize as systemic difficulties. in this light, i want to assure you that regulatory interventions do not simply serve the purpose of making the days of market players challenging. contrary to rumors, the bsp takes pains in crafting an enabling environment because we are able to see the intricacies of the | philippines β aml / cft regime. the anti - money laundering act of 2001, as amended, mandates the amlc to develop educational programs on the harmful effects of money laundering, the methods and techniques used in money laundering, the viable means of preventing money laundering and the effective ways of prosecuting and punishing offenders. ladies and gentlemen. the philippines has been making big strides in having a robust legal aml / cft framework. following the enactment by our legislators of the anti money laundering act, we have : β’ criminalized money laundering β’ created the anti - money laundering council as the philippines β financial intelligence unit β’ established the mandatory obligations for covered institutions relative to the requirements on customer due diligence, record keeping, and the reporting of covered and suspicious transactions β’ enforced mutual legal assistance and cooperation ; and finally, β’ instituted a civil forfeiture system in addition, the supervising authorities have issued circulars and guidelines to covered institutions regarding correspondent banking, politically exposed persons, wire transfers, alternative remittance systems, as well as cross border transportation of currency, and un security council resolutions on designated terrorist individuals and organizations. as of today, we have one successful money laundering conviction and 37 money laundering cases pending before the regional trial courts, the ombudsman, and the department of justice. and there are other charges we are preparing to file in our courts. however, we do face new challenges from globalization and the internationalization of money laundering and terrorist financing techniques. in addition, new and evolving technologies and financial systems are being used by money launderers to weave a complex trail that is difficult to find and unravel. as money launderers continue to refine their techniques and find new avenues for their illicit operations, so must we work together to fortify our defenses to prevent or stop them. otherwise, we risk having a threat to the reputation and viability of our financial system. it is in this context that we have been proactive in the philippines. the anti money laundering council, which i chair, has taken important initiatives to broaden the philippines β aml / cft strategy, to intensify its position as a partner of the global community in the fight against money laundering and terrorist financing, and to align our aml / cft regime with the international standards of the fatf. on the other hand, as the international watchdog on aml / cft issues, the financial action task force, has issued the fatf 40 + 9 recommendations | 0.5 |
report growith 2013 ( f ) mar. 13 jun. 13 report report 2014 ( f ) mar. 13 jun. 13 report report ( annual change, percent ) trading partners'gdp 4. 3 3. 4 3. 4 3. 6 3. 4 4. 2 3. 7 world gdp at ppp 3. 9 3. 0 3. 0 3. 3 3. 1 3. 9 3. 6 united states eurozone japan china india rest of asia ( excl. japan, china and india ) latin america ( excl. chile ) 1. 8 1. 4 - 0. 6 9. 3 7. 9 4. 2 4. 5 2. 2 - 0. 6 2. 0 7. 8 4. 9 3. 8 2. 8 2. 2 - 0. 6 2. 1 7. 8 4. 7 3. 8 2. 7 1. 9 - 0. 4 1. 1 8. 1 6. 3 4. 3 3. 3 1. 9 - 0. 6 1. 8 7. 6 5. 4 3. 8 2. 8 2. 5 1. 3 1. 3 8. 2 6. 4 4. 7 3. 7 2. 7 1. 0 1. 0 7. 5 5. 9 4. 1 3. 1 lme copper price ( us $ cent / lb ) brent oil price ( us $ / barrel ) ( levels ) terms of trade - 0. 6 - 4. 1 - 4. 1 - 1. 6 0. 4 ( annual change, percent ) - 0. 4 - 3. 5 ( e ) estimate. ( f ) forecast. sources : central bank of chile based on a sample of investment banks, consensus forecasts, the imf and statistics bureaus of respective countries. table 2 economic growth and current account ( annual change, percent ) 2013 ( f ) gdp 5. 8 5. 9 5. 6 4. 5 - 5. 5 4. 0 - 5. 0 domestic demand domestic demand ( w / o inventory change ) gross fixed capital formation total consumption goods and services exports goods and services imports 13. 6 10. 3 12. 2 9. 7 2. 3 25. 9 9. 1 9. 4 14. 7 7. 9 5. 2 14. 5 7. 1 7. 3 12. 3 5. 8 1. 0 4. 9 6. 1 6. 1 7. 2 5. 7 3. 1 5. 9 | . another portion of the adjustment has to do with our external scenario, where the world economy is expected to slow down, manufacturing industries are decelerating across the board and where, moreover, the copper price has fallen around 20 percent from the $ 4 per pound it averaged in 2011. these factors have introduced greater caution in assessing new investments, so some of them have been postponed pending further clarity in the international scene. in any case, this investment slowdown is expected to continue, but not as intensely as in the first quarter ( figure 1 ). as i was saying, there has also been important news on the external front, notably a major increase in the volatility of the world financial markets in the last month. these tensions originate in two forces. first, the consolidation of the recovery of output and employment in the united states and the federal reserve has indicated that, if the recovery continues, bis central bankers β speeches during the second half of the year it will begin to gradually withdraw the extraordinary monetary stimuli now in effect. as there is no comparable precedent regarding these policies, these signals have shaken international financial markets in recent weeks, because of the implications that such withdrawal could have. second, the chinese economy has slowed down beyond expectations and apparently the chinese authorities would be more than willing to accept lower growth rates in an effort to safeguard the stability of its financial system and achieve a better balanced growth structure. this situation creates volatility because of china β s major contribution to world growth and its enormous weight in the commodity markets. the deceleration of emerging economies has been widespread, some of them affected by slower growth in china and others by the maturation of its expansion cycle, after several years of rapid economic growth. these two forces have created uncertainty and triggered a readjustment of portfolios to accommodate falling prices of financial assets and commodities, higher risk premiums and a generalized depreciation of emerging market currencies against the dollar. overall, all these factors combined may have exacerbated the process of market adjustments, making it difficult to distinguish whether these are temporary or permanent in nature ( figure 2 ). although the aforesaid adjustments in the world are good news in the sense that they signal a transition towards a more balanced configuration of the global economy, for this year and next a less favorable international scenario for the chilean economy is being configured. accordingly, our growth projections for our trading partners are revised downwards, with higher credit costs and lower terms of trade than previously expected. | 1 |
compromised by boom - bust cycles, which is why there has been a resurgence of interest in how we might avoid or reduce these. during booms, lending standards may fall significantly and lenders may underprice risk, with too much credit being allocated to any one sector ( such as the rural sector or property development ). in turn, when the boom turns to bust, the over - allocation of credit may be revealed when physical and human resources become underemployed. international evidence suggests what might be more important for competition and efficiency is how β contestable β the banking system ( or individual banking product markets ) is, rather than simply how many banks operate ( i. e. market structure ). contestability is influenced by both the actions of incumbent banks, and by various formal and informal barriers to entry and exit. bis central bankers β speeches cross country comparisons undertaken by the oecd suggest formal regulatory barriers to entry and exit to the new zealand financial system are low by international standards. 2. while banks seeking registration must meet minimum qualitative and quantitative criteria so that their entry to the market is consistent with the soundness and efficiency objective, the reserve bank does not impose quotas of any kind nor do we restrict foreign ownership. however, the costs associated with establishing a new retail branch network in new zealand appear to be high given the small scale of the market. notwithstanding the success of kiwibank in the retail market, the fact remains that it is difficult for new players to enter the new zealand market and assume a competitive position other than through direct acquisition of an existing bank or by specialising in a narrow market segment. in terms of informal barriers to entry, one such barrier may come about from the practical difficulties customers face switching between banks. shifting one β s banking activities from bank a to bank b is usually a more involved process than shifting between cellphone providers or electricity companies. the customer inertia that this creates makes it difficult for new entrants to gain critical mass even if they price their offerings keenly. encouragingly, some of these barriers may have eased recently through technical innovations at the payment systems level orchestrated by payments new zealand ( pnz ). more switching implies greater incentives for banks to compete and innovate. figure 2 post tax return on equity β oecd comparison ( average 2002 β 2007 ) source : oecd, australian prudential regulatory authority, rbnz calculations. oecd ( 2006 ), competition and regulation in retail banking | financial institutions would strengthen the ability to leverage on the industry's expertise. the introduction of innovative islamic financial products in a specific jurisdictions can be expanded to other jurisdictions, which in turn, will contribute to broaden and deepen islamic financial markets and thus strengthen the overall development of the islamic financial industry. in addition, collaboration between academic researchers and the practitioners will enable the practical application of such research findings. in the area of education and training in islamic finance, there is now a critical shortage of talent in the islamic financial industry. collaboration between training institutions is vital to developing the pool of expertise in islamic finance that subscribes to common standards. establishing a network of mutual co - operation and collaboration would strengthen the efforts among the institutions of higher learning across regions in the areas of curriculum development, research, training, exchange of ideas and information, and resources in islamic finance. such partnerships in connecting the knowledge communities between regions would facilitate this process. in the area of shariah, the progressive convergence of shariah views and rulings, the mutual recognition of financial standards and products across jurisdictions would be major driver towards greater international financial integration. such a convergence and harmonisation can only happen with greater engagement among the regulators, practitioners and scholars in islamic finance in the international community. finally this integration process also requires greater cooperation among the regulators to ensure that the islamic financial system is not subject to vulnerabilities and abuses and thus ensuring its soundness and stability. in this respect, the sharing of information among the regulators including across borders is important especially in a more globalised and liberalised environment where financial transactions and activities have become more complex and globalised. in this regard, there is a greater need for regulators to be continuously connected to share information on key issues and developments faced in their own financial jurisdictions. in this respect, the islamic financial services board has an important role to facilitate this process. closer financial linkages among islamic financial institutions from different jurisdictions is essential to contribute towards accelerating the process and towards serving as a bridge to strengthen the relationship of the international islamic financial markets as well as the investment and trade ties between regions. such linkages within the industry could also lead to new product offerings and to co - arranging financing. there could also be mutual development of it systems and other technologies including other research and development endeavours. finally, let me touch on the development of the socio - economic aspects of islamic finance. while " profit motivated " islamic financial institutions will continue to evolve and gain greater significance, this | 0 |
. what practical changes would this bring to the work of banking supervision? the changes are of a regulatory and administrative nature. a large part of them have been prepared already and we are ready for their introduction on the date of our effective accession. under the close cooperation mechanism the ecb exercises direct supervision over the largest banks and there the bnb will be involved with the participation of bnb β s experts in the supervisory teams. an ongoing active exchange of supervisory information will be established between us and the ecb concerning the other banks that will remain under bnb β s direct supervision. countries like hungary, poland and especially the czech republic are markedly against joining the eurozone at this point. is the currency board the main difference between them and bulgaria which explains this discrepancy between policies, or are there other factors at play? 1 / 3 bis central bankers'speeches this is a political decision, above all. what β s positive in our case is that this decision is based on strategic and not conjunctural considerations. practically, there isn β t a serious political factor in our country that does not support this decision. on the technical level, the monetary regime in bulgaria allows for its implementation to happen quicker and seamlessly. you said in an interview for market news this spring that the downturn in europe could turn out to be temporary, but that would remain to be seen. how would you comment the developments in recent months? uncertainty is on the rise and a lot of current data indicates a continuing economic downturn in the eurozone. this motivates the ecb to make decisions for an even more stimulating monetary policy. the technical details and the degree to which the ecb decided to step up its policy are a subject of debate, but the basic macroeconomic motivation behind these decisions is clear, in principle. responding to a question by investor. bg, bnb says that given the lev β s fixed exchange rate, delaying the entry into erm ii cannot create direct financial and macroeconomic risks for the bulgarian economy. could the opposite happen, however? is it possible for erm ii membership to be negative for bulgaria if it comes during unfavourable times for the european economy? to put it in different words, should we be in a hurry for the eurozone or should this goal be consistent with the conditions and trends for the time being? we should follow our strategic plan with a focus on the quality of the process. due to the nature of our monetary regime | lorenzo bini smaghi : monetary policy transmission in a changing financial system β lessons from the recent past, thoughts about the future speech by mr lorenzo bini smaghi, member of the executive board of the european central bank, at the barclays global inflation conference, new york city, 14 june 2010. * * * i wish to thank luca benati, jose luis peydro - alcalde, massimo rostagno, jens tapkins and flemming wurtz for their contributions to this speech. i remain solely responsible for the opinions contained herein. introduction it is a great pleasure for me to participate in this conference. since the crisis erupted, in mid - 2007, central banks throughout the world have conducted their monetary policies using new instruments and techniques. are these changes temporary, and linked to the effects of the financial crisis? or do they mark more lasting changes in the transmission mechanism of monetary policy? these are important questions to understand the role of central banks in the current crisis and in the future. the simple answer is that monetary policy operates through financial markets, markets that have changed substantially over the last decade. monetary policy cannot be implemented without taking these changes into account. however, since central banks have to be accountable, they need to explain how they reflect these changes in their monetary policy operations without changing their underlying objective. i will try to address this issue by dividing my remarks today into three main parts. first, i will review trend developments in financial intermediation and single out a recurring theme in the evolution of the financial markets over the last 30 years : the rise of securitisation and collateralised finance. i will then consider the consequences of this innovation for the transmission of monetary policy in the post - crisis world. i will start by looking at the money markets and turn to the wider financial system, including the shadow banking sector. looking forward, the main sources of collateralisation will be an issue to consider if the present trend towards downscaling the creation of private asset - backed securities continues. public debt instruments are likely to play an important role. this will lead us to reflect on the role of central banking at a time of high public debt. 1. the rise of collateral the financial system has undergone profound changes over the past few decades. markets have grown significantly ; competition has intensified. these are well - known phenomena. i would like to focus on the consequence of this, namely that the core of financial intermediation has moved from depository | 0 |
investment in europe. the action plan on the β capital markets union project β, launched in september 2015, aims at diversifying the way the european union economy is financed. the objective is to achieve a better balance between bank credit and market - based financing. france is a euro area frontrunner in this field, with markets providing 40 % of the financing for its economy. various initiatives are already well underway, like the framework for simple, transparent and comparable securitisation instruments, or the revision of capital requirements for investment in infrastructure by insurance companies. the juncker plan and the capital markets union should complement each other and the banking union, which is already in place, to fully deliver their results in terms of growth and investment. therefore, i prefer the concept of a β financing and investment union β rather than a β capital markets union β, as it better reflects the ultimate objective which is growth, thanks to a better mix of financing instruments including, but not limited to, capital markets [ slide 8 ]. significant amounts of savings are available in the euro area and these should be directed towards long - term assets, as well as to those projects and countries that need them. innovative schemes need to be developed at european level, such as european venture capital funds, in order to support the creation and growth of new businesses. the composition of investments is equally important, as too little money is devoted to r & d and long - term investments. we also need to encourage equity financing rather than debt funding. 5 / improve european economic governance the second idea i would like to share with you relates to economic governance in europe. i believe we need to make progress towards a more economically integrated euro area. this is essential, regardless of whether or not the united kingdom remains in the european union. naturally, i would like it to stay in. my point is not purely institutional. it is not about β more brussels β, it is about more growth and employment. indeed, economists estimate that the current lack of coordination between national economic policies has cost europeans between two and five percentage points of gdp growth since 2011. contrary to the case of monetary policy, the aim is not to fully integrate all of our economic policies at the european level, but to achieve a β full coordination β of fiscal and structural policies. for this, we need to have shared economic goals, and a true β collective strategy β for the euro area, in which each country has a role to play to improve everyone β s situation. this requires trust | anchoring the inflation rate. most explanations, however, are of a more structural nature. it is possible is 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. another interpretation is that firms change their prices less frequently both because it is less necessary in a low - inflation environment and more difficult due to increased competition, including from abroad. these arguments, however, 2 have been challenged on the basis that, in an increasingly competitive environment, setting the β wrong β price has become more costly for firms in terms of foregone profits, which should encourage them to adjust their prices more frequently. if anything, according to this view, competition and globalisation should be expected to steepen the phillips curve. in a broader sense, globalisation itself may also be responsible for the flattening of the philips 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. notably put forward by laurence ball. finally, it is possible that ( due to immigration and structural reforms ) labour supply has become more elastic in many countries, and, as a consequence the cyclicality of wages ( and prices ) has been reduced. 3 flatter phillips curves may be a mixed blessing for central banks. in such circumstances, looking at actual and projected inflation may not be sufficient to detect incipient imbalances between supply and demand. in other words, inflation becomes less informative about the output gap. there is a risk, then, that imbalances are allowed to build up to a point where a stronger reaction may become necessary. to prevent that risk, central banks may want to look at information coming from a broader set of indicators, chosen because of their ability to detect, at an earlier stage, potential inflationary pressures. obviously, monetary and credit aggregates for instance are good candidates for such a job. what role for money in monetary policy? as you may know, this is precisely what is done in the context of the eurosystem β s two - pillar monetary policy strategy which assigns an important role to money. this structure is based on a particular premise and has one important implication. the premise is that even if money has no systematic and immediate influence on prices, it can provide valuable and specific information on future inflation, | 0.5 |
glenn stevens : challenges for economic policy address by mr glenn stevens, governor of the reserve bank of australia, to the anika foundation luncheon, supported by australian business economists and macquarie bank, sydney, 28 july 2009. i thank kathryn ford for assistance in preparing this address. the original speech, which contains various links to the documents mentioned, can be found on the reserve bank of australia β s website. * * * thank you all for coming today, and thank you to macquarie bank for their financial support, and the australian business economists for their logistical support for today β s function. those of you who were here at last year β s anika foundation lunch may have noticed that i have selected the same title today. 1 the challenges have changed in nature, but there are no fewer of them. the first part of my remarks will be about the general set of issues confronting policymakers in key economies. they are not about australia, unless specifically noted. i will devote time to australia - specific issues in the second part. global challenges a year ago, the international financial crisis was unfolding, but had not, at that point, spun out of control. the global economy had reached the peak of a long, strong upswing, which had stretched capacity and seen a wide range of raw materials and energy prices reach very high levels. strange as it may now seem in light of subsequent events, a wave of concern about inflation swept financial markets in the middle of last year. many countries were grappling with the lift in oil prices, which were reaching their peak last july. that was starting to reduce growth but also push up the general level of consumer prices in the advanced countries. in many emerging economies, strong growth had pushed up inflation significantly, even apart from food and energy prices. australia was experiencing high inflation too, a result of the expansionary impact of a oncein - fifty - years terms - of - trade rise in an economy already close to full employment. we were also being affected by the dampening forces of the financial events, though by less than countries whose banks were closely involved in the problem lending areas. since then, inflation rates have trended down in most countries. one thing that helped this was that the rapid final lift in oil prices during the first half of 2008 was reversed by the end of the year. much of the cumulative increase that had occurred over the preceding five years, however, remains in place. broadly parallel trends can be seen in other resource prices. all | irma rosenberg : monetary policy and the swedish economy speech by ms irma rosenberg, deputy governor of sveriges riksbank, to the swedish society of financial analysts, stockholm, 5 march 2003. * * * thank you for the invitation to come here and speak at the swedish society of financial analysts. this is my first public appearance in my new role as deputy governor of the riksbank. it is stimulating to meet people and discuss economic issues. at the same time, i feel a little nervous, as i know i am facing an audience who are used to examining and interpreting statements by the riksbank. one difference between this post and my previous work is that a member of the executive board must to some extent exercise caution when speaking publicly. this is to avoid creating any misunderstandings among participants in the financial market, who try to translate statements by representatives of the central bank into future interest rate policy. this means that some of you may not be acquainted with me, but my aim is to be as honest and clear as i possibly can. what i intend to start talking about today is the development of the economy in recent years and to follow this with a look ahead at the challenges facing both the swedish and international economic climates, and finally say something about monetary policy. those of you who are familiar with the economic assessments i have made know that i sometimes have not shared the riksbank β s conclusions. but please remember that this should not be interpreted to mean that i have a different opinion of the riksbank β s objectives. i consider it a good thing to conduct an open discussion on the policy pursued. and i hope that you intend to take part in this discussion, as the whole point of an open central bank is to facilitate such discussion and allow it to improve monetary policy. riksbank focuses on total inflation picture i shall begin by describing the way the riksbank works. the riksdag has assigned two main objectives to the riksbank : to maintain price stability and to promote a safe and efficient payment system. today i shall concentrate on the first of these two objectives. the riksbank has defined the target for monetary policy as to limit inflation to 2 per cent, with a tolerated deviation interval of plus / minus one percentage point. this tolerated interval indicates that deviations are likely, but that they will be limited. the objective is worded in terms of the consumer price index ( cpi ), which is a broad index consisting of the prices | 0 |
italy, ireland, portugal, and spain, or giips ) increased significantly during and after the crisis. moreover, the increased exposure of banks to sovereign debts exhibited a domestic bias in case of the riskier sovereigns, i. e., the giips, with share of resident banks increasing while that of non - residents declining ; the holdings of resident banks continue to be at a high level ( chart 1 ). 1 / 12 bis central bankers'speeches the large holdings of domestic sovereign debt by banks played a key role in exacerbating the sovereign debt crisis in peripheral european countries. from january 2007 until the first bank bailout announcement in late september 2008, there was a sustained rise in bank credit spreads while sovereign credit spreads remained low. during september - october 2008, bank bailouts became a pervasive feature across developed economies and there was a significant decline in bank credit spreads with a corresponding increase in sovereign credit spreads. in effect, bank bailouts transferred credit risk from the financial sector to the sovereigns ( acharya, drechsler and schnabl, 2012 ; 2015 ). however, and especially post the greek default in 2010, sovereign spreads in the giips widened too over the german bunds due to macroeconomic concerns in the european periphery, causing significant valuation losses for banks and casting doubt on their solvency. 2 / 12 bis central bankers'speeches concomitantly, rising yields on sovereign bonds enticed banks to stock up on their domestic sovereign exposures. with continuing access to short - term funding, notably in deposit and money markets, banks in giips and even some non - giips countries increased investments in giips sovereign bonds so as to purchase β carry β over the german bunds, hoping for future convergence of yield ( acharya and steffen, 2015 ). this β carry trade β was particularly attractive for under - capitalized banks as a way to gamble for resurrection, effectively chasing quick treasury gains with no additional capital requirement, but doubling up on economic risks if the carry were to widen even further... and it did. the greek default and ensuing sovereign debt crises in the giips countries showed that banks having significant exposures to sovereign debt were the most susceptible to fluctuations in sovereign borrowing costs and faced attendant market plus funding consequences. such sovereign debt - bank nexus creates a two - way feedback loop. as banks are highly exposed to the domestic sovereign, any adverse movement in yields or | financial stability report no. 14 ( 2 ) / 2017 liviu voinea, deputy governor press conference, bucharest, 4 december 2017 your excellences, dear colleagues, dear guests, thank you for your presence at the launch of the december 2017 issue of the financial stability report, no. 14 ( 2 ) / 2017. right beside me are three nbr directors who are ready to answer your questions : mr eugen radulescu, director of the financial stability department, which prepared the report β i wish to thank all the colleagues involved ; mr emil vonvea, director of the bank resolution department β an area having the role to strengthen confidence in the banking sector β the report also includes a section dedicated to resolution strategies ; and mr tudor grosu, director of the macroeconomic modelling and forecasting department, as part of the analyses in the report are based on scenarios and econometric models to the development of which his department also contributed. i would like to thank the other departments which cooperated in the preparation of the report, particularly the economic studies department for the translation. this is the 14th financial stability report launched by the national bank of romania. i would like to point out that the report we are releasing today has been discussed in two meetings of the nbr board and was unanimously approved by the nbr board in its meeting of 27 november 2017. the report presents the risks to financial stability, in close correlation with domestic and international economic developments. financial stability is a public good which refers not only to banks, but also to the economy as a whole. financial stability is influenced by the quality of the public policy mix. since the previous report ( may 2017 ), financial stability has remained robust, yet we notice that certain vulnerabilities are still manifest or have been building up, especially with regard to upward pressures on the risk premium for emerging economies, tensions surrounding domestic macroeconomic equilibria stemming from slippages and uncertainty in the budgetary and fiscal policy and higher household indebtedness, the risks being compounded by the correlation between these factors. looking at macroeconomic fundamentals, several favourable indicators are noteworthy : romania β s major advantage is the low public debt stock ( 37. 4 percent of gdp ), together with the drop in the refinancing risk, due mainly to the extension in the maturity of public debt ( figures 1 and 2 ). public debt spans mostly the medium or long term ( 94 percent of total, on the domestic and | 0 |
productivity that occurred in the recession of the late 1980s and early 1990s. figure 4 contributions to changes in gdp per capita percent contribution to annual change note : the chart was derived using 3 year averages of gdp per capita, hours worked, and population in order to show the underlying trends in labour utilisation and labour productivity. the importance of labour productivity growth to the long run economic outlook becomes very clear when we look at demographic trends. figure 5 shows labour force projections which are based on three population projections. all three projections assume medium fertility and medium mortality but each has a different assumption regarding migration. with zero net migration the size of the labour force begins to decline from 2018. higher levels of migration push the track up, but even with an annual net gain of 10, 000 from migration, the growth in the labour force slows, and the labour force eventually levels off. net gains from permanent and long term migration have averaged 13, 600 per annum over the last decade, compared with - 4, 700 per annum in the previous decade. figure 5 projected labour force people in the in labour force, millions these projections reflect the ageing of the population. birthrates underwent a long term decline from the 1890s through to the 1970s, although the post war baby boom provided a temporary interruption. around 2010, the number of people leaving the labour force - mainly baby boomers - is projected to rise sharply. even if these people were to put off retirement for a while, growth in labour utilisation is still likely to slow. any substantial growth in the labour force would have to come via high levels of migration. taking one of our labour force projections - the one based on annual net migration of 10, 000 - we can derive scenarios for future gdp per capita based on assumptions about labour productivity. let β s assume that labour productivity grows at 1. 5 % per annum, which as we have seen, is similar to the present growth rate. for each year of the projection we add this growth to the projected growth in the labour force to get gdp growth. ( in doing this, we are assuming that number employed will grow at the same rate as the labour force. that is, we are assuming that the unemployment rate will stay constant over the projection period. ) for each year of the projection, we can then calculate gdp per capita, using the projected population figure. the result is shown in figure 6, along with projections using alternative labour productivity assumptions. the lowest scenario assumes no growth in labour productivity, and | inhibit inflation. 5. the decade ahead we can use our analysis to give us an indication of what growth in gdp and gdp per capita could be in the coming decade. this is not a forecast, but rather an illustration of two scenarios. table 2 sets out two scenarios for the 2004 - 2014 period. we have seen these two scenarios before, in figure 6. the first scenario assumes that labour productivity will grow at 1. 5 % per annum, which is similar to the growth rate that we have had over the past 5 years. the second scenario assumes that labour productivity will grow at 2. 0 % per annum. given that both scenarios are based on the same demographic projections, the changes in population and labour utilisation are the same for each scenario. as table 2 shows, the projected increase in labour utilisation over the next decade is much lower than the increase that we saw over the last decade. this reflects the participation rates in the official labour force projections that we have used, as well as our assumption that the unemployment rate remains constant. these projected increases in labour utilisation are indicative only. nevertheless these low increases gel with what we know. with participation rates already very high, future rises are unlikely to be as large as they were over the last decade. furthermore, from around 2010 many baby boomers will be retiring, putting downward pressure on the overall participation rate. also, given that the unemployment rate is already low, we definitely won β t see the same falls in unemployment that occurred over the last 10 years. table 2 contributions to growth in gdp per capita average annual percent changes 1984 - 1994 1994 - 2004 2004 - 2014 scenario 1 2004 - 2014 scenario 2 labour utilisation 0. 0 1. 0 0. 3 0. 3 labour productivity 0. 7 1. 2 1. 5 2. 0 gdp per capita 0. 7 2. 2 1. 8 2. 3 population 0. 8 1. 2 1. 0 1. 0 gdp 1. 5 3. 4 2. 8 3. 3 our projections suggest that if we want to see gdp per capita grow at the same rate over the next decade as it did in the previous 10 years, we will need to lift our labour productivity. if labour utilisation was to grow by 0. 3 % per annum - which doesn β t seem to be unrealistic - then we would need to lift our productivity growth from its current rate of around 1. 5 % per annum to nearly 2 % per | 1 |
on behalf of the bank of albania, i would like to thank all the experts that have helped and have been actively engaged for their successful realisation. in addition to the precious work of the bank of albania's staff, i would like to highlight the rather 2 / 3 bis central bankers'speeches precious contribution of many renowned academics, historians, albanologists, numismatists and experts from the most experienced companies in the field of banknote production. meanwhile, the bank of albania is working on the completion of the new series with two other banknotes, 500 lek and 2000 lek, which are in production process. concluding, i like to call on the users to handle each banknote with due care, in order to preserve their durability, quality and integrity in circulation. banknotes are more than a valuable paper. they boost and sustain the economic activity of albania and similarly tie with visible threads our national identity. i wish the public will welcome both new banknotes we are presenting today, like the previous ones. 3 / 3 bis central bankers'speeches | facilitating their lives. having been instrumental in laying the foundations for the euro, the maastricht treaty will remain vital and indispensable for the successful functioning of emu. the medium - term macroeconomic policy framework laid down in the maastricht treaty has contributed to a stable macroeconomic environment, and will continue to do so. in addition, the treaty provides for a clear allocation of responsibilities between eu institutions and member states, as well as clear mandates for all involved. the maintenance of price stability β the ecb's primary objective β, the independence of the eurosystem and the provisions safeguarding fiscal discipline, in particular as enshrined in the stability and growth pact, are among the hallmarks of this framework. furthermore, the path towards participation in the euro area mapped out in the maastricht treaty, focusing on sustainable economic convergence as a prerequisite for adoption of the euro, will also serve to guide prospective member states. the name maastricht will therefore always be connected with the euro and will forever have a prominent place in the history of europe. let me now turn to our regular examination of recent monetary, financial and economic developments. the governing council concluded today that there was no reason to change its previous assessment. accordingly, the key ecb interest rates were kept unchanged at a level which remains appropriate for the maintenance of price stability over the medium term. starting with the analysis under the first pillar of our monetary policy strategy, the three - month average of the annual growth rates of m3 rose to 7. 8 % in the period from october to december 2001, from 7. 4 % in the period from september to november. the governing council considers that monetary developments thus far do not indicate risks to price stability. the build - up in liquidity reflected in these data occurred in an economic and financial environment characterised by exceptionally high uncertainty worldwide and should therefore be only temporary. this assessment of low inflationary risks is also supported by the declining trend in the growth rate of loans to the private sector. however, a continuation of strong m3 growth could call for a reassessment of monetary developments, especially if there is further evidence of a recovery in the euro area economy. regarding the second pillar, while actual euro area production growth in the fourth quarter of last year and in the early part of this year is still expected to be subdued, new data confirm our expectation of a gradual improvement in economic activity in the course of the year. uncertainty as | 0 |
the doubling of the new arrangements to borrow, as well as the renewal of the bilateral borrowing agreements to meet the members β high and growing overall demand for fund resources and the shift towards uct arrangements. we welcome the work on the 16th general review of quotas and reaffirm our commitment to a strong, quota - based, and adequately resourced imf at the center of the global financial safety net. 2 / 2 bis central bankers'speeches | transfers related to foreign direct investments ( fdis ). the measures do not give rise to any exchange restriction. the objective of the measures is to ensure the traceability of payments related to good faith transactions, hence contributing to combating the parallel sector and ensuring that banks operating in algeria effectively fulfil their responsibility in terms of first - level control of the transactions with the rest of the world, in line with the terms of their license. algeria remains committed to the stability of its exchange rate regime, commensurate with its commitments in the context of article viii of the imf β s articles and the association agreement with the european union ( eu ), notably regarding current payments and capital movements. foreign direct investment in algeria is a relatively recent development and has notably followed the achievement of balance of payments viability. for the past six years ( 2003 β 2008 ), total fdis amounted us $ billion 8. 7, of which 47. 3 % from eu countries and 25. 2 % from asian and middle - eastern and north african countries. the share of fdis in the hydrocarbon sector in total fdis, which reached 55 % in 2005, has gradually declined to 42 % on average during the recent years. non - hydrocarbon sectors which attracted fdis include the banking sector, chemical industry, food industry, electricity sector, water desalination, and construction material. the exchange rate policy is conducted by the bank of algeria in the context of a managed float regime of the dinar vis - a - vis the currencies of algeria β s main trade partners. since 2004, with a real effective exchange rate ( reer ) around the equilibrium level as determined by the economy β s fundamentals, exchange rate policy is well in line with external stability, the latter being anchored to a notably strong net external financial position. in operational terms, the bank of algeria intervenes in the interbank market to ensure that movements in the nominal exchange rate do not affect the long term equilibrium of the real effective exchange rate of the dinar. in this context, despite high volatility of consumer prices and exchange rates in trading partners, including the sharp decline in oil prices in the second half of 2008 ( one of the main fundamentals in algeria β s economy ), the reer has remained near its equilibrium level and the external financial position remains comfortable. | 0.5 |
analyze and understand today's financial innovations and evaluate their implications for welfare and policy. this year's workshop continues in that innovative spirit, keeping an eye on the future of money and banking. the papers to be presented span areas including decentralized ledgers, exchanges for crypto assets, and the impact of certain protocols on financial stability. researching these new technologies helps us deepen our understanding of the implications for the broader financial system. an important point to remember this week is that no single field of study can give the answers to all of the big questions we face relating to the evolution of money and banking. commingling of insights and techniques from monetary theory, finance theory, and other fields is vital in studying the complex interactions of modern financial systems. of course, it is also important to test our theories with available data, and many papers we will see this week deliver on that count as well. without further ado, let's get started. i hope you have a great week of engaging discussions, and i'm sure we will learn a lot from this year's workshop. 2 / 3 bis - central bankers'speeches 1 the views expressed here are my own and are not necessarily those of my colleagues on the federal reserve board or the federal open market committee. 3 / 3 bis - central bankers'speeches | effect, establish a cross - firm, horizontal perspective as an ongoing organizing supervisory principle. this new approach will have a macroprudential dimension as well. to advance both macroprudential and microprudential goals, we are instituting a quantitative surveillance mechanism ( qsm ) for large, complex financial organizations. the qsm will use supervisory information, firm - specific data analysis, and market - based indicators to identify developing strains and imbalances that may affect basel committee on banking supervision ( 2009 ), strengthening the resilience of the banking sector β consultative document ( basel, switzerland : bank for international settlements, december ). multiple institutions, as well as emerging risks to specific firms. periodic scenario analyses across large firms will enhance our understanding of the potential effects of adverse changes in the operating environment on individual firms and on the system as a whole. market discipline has been an underdeveloped policy tool despite numerous ideas put forth over the years. yet it is hard to imagine a practical counterstrategy to the undesirable consequences of too - big - to - fail perceptions that does not include a credible alternative to the current hobson β s choice of bailout or disorderly bankruptcy. consequently, most regulatory reform proposals have prominently featured a special resolution mechanism that would raise the real prospect of losses for investors and counterparties of even the largest failing institutions. at present, of course, the law provides the fdic with authority to resolve failed insured depository institutions, but there is no parallel authority for the holding companies of which these banks are a part or for other systemically important financial firms. regulatory reform : the ongoing debate the rough consensus around the reform elements just described has hardly meant an end to the debate for at least three reasons. first, as already noted, there is considerable continuing disagreement over the key features of some of these proposals, even when the basic idea is accepted. the significant differences over the best form of resolution mechanism provide one example. second, as also mentioned earlier, some ideas that may be promising ideas in concept β such as special charges calibrated to the systemic importance of a firm β are not easy to develop and put into practice effectively. until more - detailed proposals are generated, judgments on the likely efficacy of these ideas will obviously be difficult to make. third, many participants in the public policy debate who would agree with some form of this consensus agenda nonetheless believe that it falls short of what is needed to ensure financial stability. those who believe | 0.5 |
shares β so the prices of those assets fell. and in some markets for complex financial instruments, investors realised that perhaps they did not understand as much about the nature of the risks involved as they should. so not only did asset prices fall, but the markets in some of these instruments virtually closed. there were no buyers. this freezing of capital markets led to a chill in banking systems around the developed world. banks that had relied on selling packages of loans in securitised form found that they couldn β t sell them. investment vehicles that held securitised loans have found it difficult to finance their holdings by borrowing. faced with the possibility that they would have to finance these vehicles themselves, banks with spare cash have hoarded it and have become reluctant to lend to other banks beyond very short maturities. that has been evident in the spreads between interbank lending rates and central bank interest rates in the uk and equally in the euro area and united states. the bottom line is that banks that had financed themselves by borrowing from their peers, or by securitising and selling their loan assets, found that their funding dried up. in the united kingdom, northern rock was particularly exposed. it was able to borrow only at shorter and shorter maturities. the present financial crisis is of a most unusual nature in that it comes against a background of five years of strong growth of the world economy and a decade and more of remarkable economic stability at home. moreover, most banking and financial crises in the past β from the failure of overend and gurney in 1866, to the collapse of bcci in more recent times β were associated with bad loans and significant losses on assets. the remarkable fact about this crisis has been the relatively small size of the bad loans compared with the total assets of banks. the crisis has arisen instead from the way banks have managed their liabilities. what did the bank of england β as the central bank β do for the banking system? first, we did our routine work in the money markets of lending to the banking system against high quality collateral, such as government debt, and at bank rate set each month by the monetary policy committee. after some initial volatility, we achieved our primary objective in the money markets of bringing interest rates on overnight borrowing into line with bank rate. and over the past two months as a whole, overnight interest rates have, on average, been as close to bank rate in the uk as in the euro area and closer than in the us. | world commodity prices. keeping inflation close to the 2 % target is the biggest contribution the bank of england can make to economic stability generally. changes in bank rate could not prevent the profound change in the world economy that pushed down yields on low - risk financial assets and led investors to take on more risk. they cannot now prevent the re - pricing of that risk. and just as bank rate was not set to insulate the manufacturing sector from the trade deficit that resulted from the earlier change in the world economy, it will not be set now to insulate the banking system from the re - pricing of risk. but you can be sure that we will do whatever is necessary to keep inflation close to the 2 % target. tonight is the first time that the court of the bank of england, and the monetary policy committee, have gathered in northern ireland. so much has changed in the province since the troubles started and i first came to belfast to speak at queen β s university. given that we are the bank of england, it would be understandable if many in northern ireland were suspicious of our role. but i can assure you that we are most definitely the central bank of the whole of the united kingdom, including northern ireland. we pay great attention to events here, and, along with other members of the monetary policy committee, i visit regularly. we have a full time agency with a team who live and work in northern ireland and report back every month on what is happening in the local economy. at this momentous time in the history of northern ireland, i can assure you that the bank will continue to place great importance on its presence here. during my visits, i have discovered some extraordinarily successful companies, many set up during the troubles. as you continue to build the political success and economic prosperity of the new northern ireland, the bank of england will support you wholeheartedly through our efforts to provide a platform of economic stability. | 1 |
benjamin e diokno : fighting money laundering and terrorism financing speech by mr benjamin e diokno, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the anti - money laundering council's 19th anniversary, 20 october 2020. * * * ladies and gentlemen of the amlc secretariat. good afternoon to everyone. i am delighted to be with you today on the occasion of the 19th anniversary of the amlc. this year, we celebrate under unprecedented circumstances. not only are we allies in fighting money laundering and terrorism financing, but, along with the rest of the world, we are fighting an invisible but deadly virus. the covid - 19 pandemic has caused us grief and fear, both as individuals and as a nation. but it has also compelled us to address our weaknesses and to shift our assumptions and biases toward fresh, if not better, possibilities. though the pandemic has brought the world to a slowdown and even to a halt, during the first few months, the amlc soldiered on against money laundering and terrorism financing. and we have the following milestones to show for it. first β as the pandemic has presented an opportunity for money launderers and other criminals β the amlc initiated and conducted an analysis of the financial crime landscape, covering a period of the pandemic and using suspicious transaction reports ( strs ) submitted by covered persons. the amlc β s β covid - 19 financial crime trend analysis and typologies brief β has since been disseminated to supervising agencies, appropriate government agencies, law enforcement agencies, several financial intelligence units, and public - private partnership program partners. the report has also been shared with the asia pacific group on money laundering and the financial action task force ( fatf ) ; and a redacted version has been made available online. an update of the study, which expands the data set, will soon be released as well. it is interesting to note that one of the top reasons for str filing, based on the study, are associated with violations of the anti - child pornography act of 2009. child exploitation - related strs increased in 2020 compared to the same period in 2019. this increase may be primarily due to the amlc β s 2019 study on online child sexual abuse and exploitation ( csae ). the amlc β s supplemental study on the online sexual exploitation of children observes that its 2019 study on csa | ##e has prompted covered persons to proactively report strs, which led to the identification of an additional 700 persons of interests. amlc β s study on csae also paved the way for the creation of the egmont information exchange working group ( iew g ) on csae, bringing together the united kingdom financial intelligence unit, australian transaction report and analysis centre, and the amlc as project leads. in view of the increasing risk of online csae during the pandemic, the group completed the β combatting child sexual abuse and exploitation through financial intelligence : project report, β producing a consolidated list of financial indicators and keywords that can be used by financial 1 / 2 bis central bankers'speeches intelligence units to identify financial transactions likely to be linked to the online streaming of csae. a public version was released last september, sharing the report β s overarching conclusions and key findings. second. despite the pandemic, the amlc continues to strengthen its ties with other government agencies to further effective and efficient coordination. in fact, the amlc enhanced its partnership with the philippine drug enforcement agency ( pdea ), reinforcing the ability of each agency to forfeit assets related to drug trafficking through criminal forfeiture by the pdea and through civil forfeiture by the amlc. the amlc and the department of finance ( dof ) also stepped up their firm commitment against money laundering and terrorism financing. information exchange has become more strategic as the amlc now works directly with the revenue integrity protection service, which is the anti - corruption arm of the dof. apart from the inclusion of terrorism financing, the scope of cooperation between the agencies now specifies unlawful activities under the amla, as amended. in addition, the amlc signed moas on information exchange and capacity building with philippine amusement and gaming corporation, which regulates casinos ; and with the philippine national police ( pnp ) β directorate for intelligence, which manages all intelligence and counterintelligence of the pnp and serves as the link of the pnp to all foreigners with official transactions with the chief of the pnp. further collaboration is attained through the implementation of the national anti - money laundering and countering the financing of terrorism strategy for 2018 to 2022 ( nacs ), which adopts a whole - of - government and a high - level approach against money laundering and terrorism financing. 2 / 2 bis central bankers'speeches | 1 |
services. it is therefore encouraging to note initiatives by some banks to reach out to the β unbanked β populations. bis central bankers β speeches finally, may i assure you that the reserve bank of malawi will always strive to provide an enabling legal and regulatory framework to encourage innovations by all players in our financial sector in order to enhance access to financial services. in this regard, we will continue to work with stakeholders to put in place an enabling environment for business to thrive. i thank you for your kind attention, and god bless you all. bis central bankers β speeches | . aspx references angeli, marilena and gitay, shahzad ( 2015 ), β bonus regulation : aligning reward with risk in the banking sector. β bank of england quarterly bulletin, 2015 q4, volume 55, no. 4, available at : http : / / www. bankofengland. co. uk / publications / documents / quarterlybulletin / 2015 / q4. pdf. bank of england, β senior managers regime β, http : / / www. bankofengland. co. uk / about / documents / smr. pdf bank for international settlements β the foreign exchange working group ( 2016 ), β the fx global code : may 2016 update β, https : / / www. bis. org / mktc / fxwg / gc _ may16. pdf cullen, jay ( 2016 ), β a culture beyond repair? the nexus between ethics and sanctions β, just financial markets, oxford university press, ed. herzog. http : / / ssrn. com / abstract = 2783067 european central bank ( may 2016 ), β financial stability review β, https : / / www. ecb. europa. eu / pub / pdf / other / financialstabilityreview201605. en. pdf? e1a2bef79ed901d8ceaee004 f2fcecdd financial stability board ( 2015 ), β implementing the fsb principles for sound compensation practices and their implementation standards : fourth progress report β, http : / / www. fsb. org / wp - content / uploads / fsb - fourth - progress - report - on - compensation - practices. pdf rouch, david ( 2016 ). written standards and the social licence for financial markets. http : / / ssrn. com / abstract = 2850885 seagrave, sterling ( 1995 ), β lords of the rim : the invisible empire of the overseas chinese β, new york, putnam's sons. all speeches are available online at www. bankofengland. co. uk / publications / pages / speeches / default. aspx | 0 |
attenuated by macroprudential action. 4 indeed, preventing the build - up of systemic risk through the use of both microprudential and macroprudential regulation and supervision is among the tasks assigned to central banks. how deeply the central bank should be involved in such matters remains an open question, however. there are naturally pros and cons, but in speculating on the issue, in my view one crucial fact must be borne in mind : financial instability can impair the transmission of monetary policy and prevent the central bank from achieving its price stability objective. this risk materialized in the euro area with the sovereign debt crisis. there are other fundamental arguments for central banks being fully involved in banking regulation and supervision. first of all their lender - of - last - resort function : only supervisory powers can enable the central bank to determine correctly and promptly whether a bank is illiquid or insolvent, as the northern rock case in the uk made dramatically clear in 2007. 5 at the same time, putting more power in the hands of central banks is likely to increase the political pressure on them. and this is a serious challenge for these venerable institutions. influencing asset prices and credit flows throughout the financial system makes them the perfect target for both lobbies and governments β and, of course, the ideal culprit if things go wrong. it was argued in the past that an institution in charge of both monetary policy and banking supervision may be tempted to be softer in setting the monetary stance in order to avert a banking crisis. the global financial crisis has dispelled this argument. on the other hand, the historical experience of countries like italy, where monetary policy and banking supervision were concentrated in a single institution β the central bank β shows that the independence attributed to the two functions by law and by social norms tends to be mutually reinforcing when the two are put under the same roof. the monetary - policy independence of a central bank β enshrined in statute, confirmed in practice and strengthened by hard - earned reputation β can powerfully support the independence of independence and macroeconomic performance : some comparative evidence, β journal of money, credit and banking, vol. 25, no. 2, may 1993, pp. 151 β 162. paolo angelini et al. β monetary and macroprudential policies, β banca d β italia working 5 papers, no. 801, march 2011. bis, central bank governance and financial stability, may 2011. bis | central bankers β speeches banking supervision, which is essential to its effectiveness according to international principles. 6 another challenge to central bank independence comes from the resolution of banks that are no longer viable. if the central bank is in charge of banking supervision it obviously cannot abstract from bank resolution. but more often than not resolving a bank implies the use of taxpayers β money, and a non - elected institution dealing with it may find itself in an uncomfortable position, unless proper institutional arrangements are in place. this is why the banking union in europe is not a threat to central bank independence. a well - designed banking union will break the perverse feedback loop between sovereigns and banks, not undermining but strengthening the independence of the ecb and the national supervisory authorities. the banking union must contain both ingredients : a single supervisory mechanism and a single resolution mechanism, flanked by a single deposit insurance scheme. the recent proposal by the european commission points precisely in that direction. 7 the banking union will be an important step towards the completion of fully integrated european union. challenges from unconventional monetary operations the global financial crisis prompted central banks in most of the advanced countries to adopt a wide range of unconventional monetary measures, ranging from purchases of public and private assets to currency swaps and much more. while these measures undoubtedly avoided the collapse of the financial system and a devastating depression, in the perception of public opinion there was, and there still is, a risk of undesirable side - effects. compared to standard monetary instruments, unconventional operations may have substantial fiscal and re - distributional effects. a technocratic institution engaging in such operations may be perceived as lacking in democratic legitimacy, and its independence may be challenged. in a democracy the constant support of public opinion is the ultimate safeguard for a central bank. on this, i would like to quote paul volcker : in concept and practice, an informed citizenry, acting through a constitutional process and its elected representatives, can and does assign certain of its sovereign powers to a duly constituted authority. the corollary of that provision is also relevant : that delegation of authority can be withdrawn. in other words, the exercise of important governmental powers is ultimately dependent on maintaining the consent of the body politic. 8 central banks must accordingly pay increasingly close attention to defining and explaining the objectives of their action. communication to the public and to political institutions is far more important today than in the past. another possible unintended consequence of unconventional monetary policies is fiscal dominance. it is sometimes argued that large - 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these short - term contracts will appear as an increase in norway β s services imports, and contribute to increasing the supply of goods and services without drawing on domestic resources. inflation decelerated markedly from summer 2003 and continued to fall in the beginning of 2004. subsequently, consumer price inflation has picked up, albeit at a gentle pace. in july, the year - on - year rise in consumer prices adjusted for tax changes and excluding energy products was 1. 1 per cent. prices for imported consumer goods have continued to fall. the price fall may reflect high productivity growth in the production of some goods and large investments to increase production capacity, particularly in china. this has led to strong competition and a low rise in prices for internationally traded goods. the shift in imports, for example clothing imports, towards low - cost countries seems to be substantial again this year. prices for domestically produced goods and services rose by 2. 1 per cent in the twelve months to july this year. higher capacity utilisation is providing the basis for higher margins in some industries. service prices, which showed little rise last year, have increased again this year. in many industries, including the airline industry, where price competition is strong, low profitability has led to an increase in prices. high oil prices have also resulted in price increases, for example in the transport industry. on the basis of the pay increases agreed upon in this year β s wage settlement, combined with the estimates for wage drift and wage carry - over, annual wage growth is projected at around 3Β½ per cent this year. lower - than - projected wage growth may be related to the fact that there were few signs of improvement in labour market conditions prior to this year β s wage settlement. lower - than - projected consumer price inflation last year may also have contributed to restraining wage demands this year. low wage growth will contribute to dampening the rise in prices for domestically produced goods and services. information from norges bank β s regional network is important for norges bank β s analysis of the norwegian economy. information about the state of the norwegian economy is available earlier than information provided by official statistics, and it is informative to have closer contact with the labour market and business and industry. the situation in region north, as in the rest of the country, is favourable. in the may round of interviews, all sectors in the region reported continued growth. expectations concerning the next six months indicate accelerating growth for domestically oriented industry and continued solid growth for the export industry. higher | of the next inflation report on 2 november. at the monetary policy meeting of 30 june, the sight deposit rate was increased by ΒΌ percentage point to 2 per cent. at the monetary policy meeting of 11 august, the executive board stated that new information since the previous monetary policy meeting does not suggest that we should deviate from the interest rate path envisaged in the june inflation report. monetary policy easing through 2003 and into 2004 has resulted in low real interest rates. short - term real interest rates may now be considerably lower than the level that implies long - term balance in the economy β the neutral real interest rate. a low real interest rate, and expectations of a continued low real interest rate, will contribute to stimulating activity even after the effects of the interest rate fall unwind. calculations may, on an uncertain basis, indicate that the neutral real interest rate for norway lies between 2Β½ and 3Β½ %. it has probably fallen somewhat in recent years. although the projections are based on rising real interest rates, the real interest rate will be lower than the neutral rate during the entire period. the monetary policy stance is therefore expansionary. so far, the effects do not appear to be stronger than expected, but we have little experience of such low interest rates. it is uncertain how quickly prices and wages will react when growth in output and employment picks up. there is also a risk that an interest rate that is kept low for a longer period may lead to expectations of a persistently low interest rate. this may involve a risk of persistently high capacity utilisation and inflation eventually overshooting the target. household debt has increased at a faster pace than income in the last ten years. norges bank β s calculations indicate that the sharp rise in house prices in recent years may explain a large share of debt growth. higher house prices have a fairly long - lasting effect on household debt growth. as a result, credit growth will remain high for a fairly long period even though the rise in house prices is expected to slow. given the assumptions underlying our projections, it is likely that debt will continue to grow at a faster pace than disposable income through the entire projection period. as a result of high credit growth, the household debt burden has increased over the past year. the debt burden is currently record high. due to unusually low interest rates, the interest burden is, nevertheless, relatively low. a normalisation of interest rates will increase households β net interest expenses, but according to the projections | 1 |
central banks need to make their publications clearer, more readable, and more visible. in particular, if we want sound data to be shared and used, we should speak to each and every one and not just to experts. we should be more β b to c β and not only β b to b β : this is a cultural shift beyond mere technology change. e ) central banks and i would say public authorities in general can no more work in silos. data sharing is a must. in france, we have an excellent cooperation with the national statistical institute and we do share on a day - to day basis many data between supervisors and central bankers but the issue is deeper and wider. which brings me to my last point. iii. big data raise issues that cannot be solved in a national context but require a public global reflection. very large worldwide corporates are hugely leveraging on big data. public authorities have to forge answers to concerns that may arise on an international level. which themes should be addressed? i would like to propose a few leads. 1 ) data sharing has to be developed on a worldwide basis, as rightly underlined by the imf in the β data gaps initiative β that has been launched by the g20. in europe, existing legal provisions that authorize data sharing between supervisors and central bankers could become more prescriptive and be more largely implemented in practice in all countries concerned. data sharing between tax authorities and other public administrations should be facilitated, subject to the respect of individual privacy of course. 2 ) private innovation is fostering growth and is increasing economic efficiency. it should therefore not be discouraged by disenabling regulations. at the same time, it would be beneficial to the economy in the long run, and to financial stability more specifically, that the global actors that handle enormous volumes of data on physical persons as well as on private entities, comply with 3 core principles : security, transparency, accountability. in a fully interconnected world, it cannot be effectively addressed at the country level. i therefore believe that it would be useful for the international organizations to carry out a reflection and issue recommendations in this regard. let me thank you for your attention and wish you a pleasant weekend and for those who are not parisians a pleasant journey back home... today or i hope for some of you on sunday! | risks for financial stability, implying a new form of vigilance for central bankers in particular. i will elaborate a bit more on this later on. ii. terabytes of data are available and more will be coming soon. central banks will collect more and more granular data. this is a clear opportunity for better forecasting and even nowcasting. but to reap all the benefits, central banks have to be up to the technological challenge, which is huge. they have also to face a much larger competition in the new data era, with a view to maintaining trust in public information. they have therefore to become big data players and not only observers. this requires significant efforts. let me illustrate this in five avenues to adapt to the digital evolution. a ) the big data era implies large changes in the it infrastructure and a strong determination to address novel technical challenges and to build a forward - looking data management and analysis scheme. at the banque de france, we are building a data lake that covers all the new data functionalities, from data collection to machine learning. b ) central banks should also organise themselves to answer the legitimate request from academics to have access to a wide range of granular data, in a modern and researcher - friendly way. at the banque de france, we opened just one year ago a data room which gives access to 600 million of anonymized series, and it has already attracted more than 30 research teams. harvesting big data capacities is only beginning and central banks should be in the race. c ) data quality should be maintained at the same time. there should not be with central banks input / output process any β garbage in, garbage out β. managing huge volumes of data, carrying out machine or deep learning requires investing in human and automatic data technology, in training and hiring data analysts and scientists. indeed, big data requires novel and significant human resources, and this has to be anticipated and properly managed. d ) the appetite for real time intelligence, the β short - termism β that can be inflated by the big data revolution, entails risks that β bad data chase good ones β, thereby impeding the understanding of economic and financial developments by the general public and the media. we must do our best to kill fake news, and there is also economic fake news. but, in a society of communication more than of information, delivering data of good quality, which will always be a trademark of central banks, can hardly be the only answer. | 1 |
second quarter of this year. the outlook the outlook is very uncertain. the path ahead for the economy will depend on the future path of the virus, the degree to which containment measures need to remain in place or be reintroduced, and the immediate and longer - lasting effects on behaviour and economic activity. given the scale of uncertainty surrounding the economic outlook, last week we set out two scenarios, one β our baseline β assumes that the phased easing of the containment measures takes effect as planned ; the other β a more severe scenario β assumes the current containment measures remain in place for longer because of a resurgence of the virus. 1 / 3 bis central bankers'speeches under our baseline, consumer spending is projected to rebound in the second half of this year but to decline by 10 per cent for the year as a whole. overall, the recovery is expected to be gradual, reflecting a lingering effect of the shock on consumers and businesses. contactintensive sectors, which also tend to be labour - intensive sectors, are likely to be the slowest to recover. the unemployment rate is set to decline from its second quarter peak of about 25 per cent as the year progresses and is projected to be around half that level by the end of this year. gdp is projected to fall by 9 per cent in 2020. output recovers to its pre - crisis level by 2022. under the severe scenario, gdp would fall by over 13 per cent this year and output would not recover to its pre - crisis level until 2024. both scenarios assume that a free trade agreement between the eu and the uk, with no tariffs and no quotas on goods, takes effect in january 2021. if that doesn β t happen, it is likely that growth in the irish economy will be weaker. policy responses the unprecedented challenges posed by covid - 19 have been met by exceptional policy action. the irish government β s response to the pandemic is estimated to cost around β¬9 billion, with a further β¬7 billion being made available through indirect supports such as credit guarantees and rate deferments. our own immediate macroprudential policy response was the reduction in the countercyclical capital buffer which made an additional β¬940 million available to absorb losses or to be leveraged to maintain and extend lending. as for monetary policy, the eurosystem has put in place a series of measures aimed at supporting the smooth provision of credit and further operations to support bank lending, as well as expanding the large - scale asset programme, | which should also help keep the cost of borrowing for governments low. overall, the policy actions taken in the area of fiscal policy ( by the government ), monetary policy ( by the eurosystem, of which the central bank is a part ) and macro and microprudential policy ( by the central bank and other authorities ) have helped to mitigate the amplification of the immediate shock and enabled the financial system to provide support through the crisis. future policy : some considerations households, businesses and the financial system have entered the current crisis in a more resilient position compared to the onset of the financial crisis a decade ago. looking at future policy, there are three areas that i believe deserve careful consideration : first, policy should continue to focus on supporting the productive capacity of the economy and avoiding scarring effects such as long - term unemployment. any such action by the governmentis likely to be costly in the near - term but will benefit the fiscal position over the medium term if it is effective in reducing the degree of damage to the economy β s productive capacity. second, the rise in the government deficit and debt ratios is both warranted and necessary and is currently affordable. but the high level of debt will leave government finances vulnerable to future shocks and it will be important for the government to provide a clear and credible return to much lower and sustainable deficit and debt positions. third, the country β s ability to withstand the immediate impacts of the covid - 19 shock is partly a result of policy actions over the last decade. there needs to be a continued focus on building economic resilience to future shocks, including a more sustainable debt position but also the longer term structural changes that would help to manage the challenges of 2 / 3 bis central bankers'speeches international tax reform, the longer - term implications of the uk β s withdrawal from the eu and climate change ( among others ). mark and i will be happy to take your questions. β β β β β β β β β β β β β β β β β β read full transcript of the hearing. 3 / 3 bis central bankers'speeches | 1 |
the potential for hedge fund leverage to adversely affect market dynamics. perhaps the recent widening of credit spreads will engender increased caution by managers of credit risk. moreover, as in 1999, cooperative private - sector efforts to identify and implement sound risk - management practices have the potential to reinforce the efforts of individual firms and their prudential supervisors. in this regard, a very encouraging development is the recent formation, by leading banks, securities firms, insurance companies, asset managers, and hedge funds, of a new group ( crmpg ii ) to assess improvements in risk management since 1999 and to update the crmpg recommendations to reflect subsequent changes in risk - management practices and in the financial, regulatory, and legal environment. ensuring sound credit - risk management by hedge funds'counterparties remains the most promising approach to addressing concerns about hedge fund leverage. some may believe that government regulation of hedge fund leverage would be more effective. but it would be very difficult to design a set of capital requirements for hedge funds that is appropriately sensitive to the diversity and flexibility of investment strategies that different funds employ and to the lack of diversification in the portfolios of individual funds. a regulatory capital regime that was not extraordinarily risk - sensitive would be ineffective at constraining hedge funds'risk - taking. at the same time, it would impair their capacity to pursue strategies that enhance the efficiency and liquidity of our financial markets and thereby to contribute to the productivity and resilience of our economy. conclusion the rapid proliferation of derivatives products inevitably means that some will not have been adequately tested by market stress. even with sound credit - risk management, a sudden widening of credit spreads could result in unanticipated losses to investors in some of the newer, more complex structured credit products, and those investors could include some leveraged hedge funds. risk management involves judgment as well as science, and the science is based on the past behavior of markets, which is not an infallible guide to the future. yet the history of the development of these products encourages confidence that many of the newer products will be successfully embraced by counterparty risk management policy group ( 1999 ). " improving counterparty risk management practices ( 348 kb pdf ), " report available through the house committee on financial services. the markets. to be sure, for that favorable record to be extended, both market participants and policymakers must be aware of the risk - management challenges associated with the use of derivatives to transfer risk, both | least three specific concerns. first, market illiquidity may result from a leading dealer's exit and that illiquidity has the potential to adversely affect fannie and freddie and other hedgers of mortgages and mbs. second, meeting the demands for options by mortgage hedgers involves market risk to dealers, a concern that has been heightened by the fact that the notional value of options sold by dealers significantly exceeds the notional value purchased. third, the failure of a leading dealer could result in counterparty credit losses for market participants. the extent to which these concerns are valid depends on how effectively market participants manage market risk and counterparty credit risk. to obtain information on participants'risk - management practices, members of the federal reserve staff last summer interviewed some of the leading market participants, including fannie and freddie and half a dozen leading derivatives dealers. the potential for a dealer's exit to adversely affect mortgage hedgers is dependent upon hedgers'diversification of counterparties, the way in which hedgers use options, and the underlying reason for such an exit. fannie and freddie have about twenty dealers as options counterparties, including investment banks and foreign banks as well as u. s. commercial banks. however, only about five or six of them have direct access to the supply of options from debt issuers ; the others must depend on the interdealer market for a substantial portion of their supply. the exit of one of these five or six may or may not adversely affect market liquidity, depending on the reason for the exit and on the way in which other dealers react. if a dealer is forced to exit because of a credit problem unrelated to its options dealing, other dealers are likely to take its place quickly. if the exit is the result of losses from options dealing, possibly in difficult market conditions, other dealers with similar positions are likely to be pulling back as well, which could leave the options markets quite illiquid. in any event, fannie and freddie and other mortgage hedgers do not rely on continuous liquidity in the options markets. rather, they purchase options periodically and opportunistically. provided that options market illiquidity is not protracted ( say more than a month ), they could postpone transacting in those markets until liquidity returns, without exceeding their internal risk limits. by contrast, mortgage hedgers do rely on continuous liquidity in the swaps market because they currently use swap | 1 |
evolve into a single market with free flow of goods, services, investment and talent. an integrated asean is expected to boost the region β s gdp by 10 %. for businesses, an integrated asean means greater market access and more harmonized rules and standards. for investors, an integrated market of half a billion people will be an attractive investment destination. asean β s combined gdp of us $ 1 trillion is not insignificant. it is, in fact, bigger than india β s us $ 890 billion and more than a third of china β s us $ 2. 6 trillion. asean finance ministers have identified capital markets as a key area to fast - track integration. asean bond markets have tripled, from us $ 110 billion in 1997 to us $ 410 billion in 2007. from 2001 to 2006, asean market capitalization has grown by more than 120 %. asean has in place further initiatives to harmonise and integrate financial markets and boost liquidity. with further harmonisation of rules and regulations and increasing capital market linkages, we look forward to the deepening of asean market liquidity. as financial and capital markets in the region become more integrated, there will be seamless flows of investments and capital. asean has also made a strategic decision to strengthen its organisation politically. asean is finalising a charter that will lay out a bold and visionary future for asean. it will also provide an institutional framework for the grouping and transform it into a more effective and efficient rules - based organisation. the charter will be signed at the singapore summit in november. singapore β a global city as for developments in singapore, we have used the last 10 years to remake ourselves, strengthen our competitiveness and expand our economic space. we have also continued with efforts to enhance singapore β s position as a gateway to asia by transforming singapore into a global city. we have enlarged our economic space by aggressively pursuing ftas. we have concluded 11, including with the us, india, japan, south korea and australia. we are negotiating 11 more ftas, including one with china. we have progressively restructured and diversified our economy. manufacturing will continue to play a key role but we are also moving into more technology - and knowledge - intensive manufacturing. fostering world - class scientific research and strengthening singapore β s attractiveness as an r & d ( research and development ) hub is a key priority. more of singapore β s growth will come from innovation and knowledge. in the services sector, we have strengthened the key areas of tourism, healthcare, | goh chok tong : asean β the third growth engine in asia speech by mr goh chok tong, senior minister of the republic of singapore and chairman of the monetary authority of singapore, at the gala dinner of merrill lynch pan - asia rising stars conference, singapore, 9 may 2007. * * * a warm welcome to singapore. thank you for inviting me to your dinner and share my views on what is happening here. i will make a few observations about developments in the region and singapore, and hope that my remarks will help digestion, rather than cause indigestion. let me begin by thanking merrill lynch for organising this conference in singapore. such an impressive gathering helps our goal of making singapore an important financial and business centre. i hope the conference will serve as a forum not just for the exchange of business ideas but also the conception of new growth opportunities. this year will be the 10th anniversary of the asian financial crisis. despite the widespread devastation, asian economies have bounced back. according to a recent world bank report : β a decade after the financial crisis that devastated east asia in 1997 - 98, the region is far wealthier, has fewer poor people and a larger global role than ever before. led by continued strong growth in china, emerging east asia now has an aggregate output of over us $ 5 trillion, double the dollar value just before the crisis. real per capita incomes in the previously crisis affected economies ( indonesia, korea, malaysia, philippines and thailand ) have significantly exceeded pre - crisis levels. β β world bank β s β east asia & pacific update β ten years after the crisis β ( april 2007 ) asia is resilient. i am confident about asia β s future. i do not expect military conflicts as all countries are concentrating on economic growth and building cross - national and cross - regional ties. tensions may arise in cross - strait relations due to forthcoming elections in taiwan but so long as the us administration maintains its clear stand that it will not support taiwanese independence, the situation can be managed. terrorism remains a long - term threat but will not topple governments or drag economies down. but an avian flu pandemic will be a different threat altogether. it will tank many economies. barring this unpredictable risk, asia will continue to surge over the next 20 years, powered by the twin engines of china and india. the story of china is well - known and that of india becoming increasingly so. so i shall not elaborate on them. instead, i want | 1 |
benjamin e diokno : launch of the first digital financial inclusion awards speech by mr benjamin e diokno, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the launch of the first digital financial inclusion awards, manila, 13 march 2022. * * * citi philippines ceo, mr. aftab ahmed ; officers from the microfinance council of the philippines, inc. ( mcpi ) headed by mr. eduardo c. jimenez ; colleagues in the bsp ; fellow financial inclusion advocates ; and friends from the media : good afternoon. it is my pleasure to be with you today to celebrate another milestone with the launch of the first digital financial inclusion awards or dfia. the inaugural dfia marks a new chapter in the enduring partnership of citi philippines, mcpi, and bsp, which began in 2002 with the citi microentrepreneurship awards or cma. apart from building on the successful run of the cma, the dfia coincides with the launch of the new national strategy for financial inclusion or nsfi 2022 β 2028, which focuses on advancing inclusive digital finance and the financing access of micro, small, and medium enterprises or msmes. the dfia is also a timely awards program that reflects the experiences, insights, and lessons learned from the covid - 19 pandemic and conveys our commitment to ensure that every filipino β every microentrepreneur β has the means to flourish in the new, digital economy. for the bsp β s part, we remain steadfast in spearheading digitalization efforts and programs supporting msmes and the microfinance sector, which serve as financial lifelines for our microentrepreneurs. our initiatives include bringing digital payments closer to the people by promoting its use in the most common transaction points for most filipinos β the community markets and local transportation services such as tricycles. as such, we continue to actively support the implementation of philsys, our national digital id system. with its e - kyc functionality, philsys will streamline and enhance the onboarding capability of mfis, making it less costly for both the financial institution and the consumer. we also continue to facilitate capacity building and technical assistance for digitalization initiatives of the microfinance sector. there are also efforts to promote responsible use of alternative data to benefit msmes and unbanked individuals with little | , to improve the bank's governance and risk management. iv. boards, through the nomination and remuneration committees, must ensure that management remuneration is not only tied to short - term profits but takes into account long - term materialisation of risks and that appropriate ex - ante and expost checks for assessment are built into the compensation systems. v. boards must ensure a suitable policy framework for its own assessment for effectiveness, in accordance with their strategies and risk profiles. the effectiveness must be tracked at all levels - individual director, committee, and overall board. a well - qualified, engaged, and vigilant board can prevent management failures. importance of assurance functions the importance of assurance functions has already been stressed by both governor and dg shri jain. the reserve bank has also issued guidelines on supervisory expectations and for providing sufficient authority, resources and independence to these functions, among others. the board is expected to take an active role in 3 / 5 bis - central bankers'speeches identifying / approving the head of control and assurance functions. clear lines of communication between the board / board committees and heads of control and assurance functions are also mandated to ensure that information exchange happens regularly, and areas of concern and probable remediation can be identified well within time. recognising its criticality, supervision has also focused on business models and governance during the supervisory reviews. dg also referred supervision as the fifth line of defence. the classic three lines of defence are clearly under the remit of the board with audit being an independent check and supervision being the final line of defence / oversight. here the governance framework set out by the board should ensure that the three lines of defence do the job as expected β much like in the game of football, where the forwards, the midfielder and the defenders should collectively keep the ball in play and ensure that the supervisor as a goalkeeper is not engaged. coming to the link between regulation and governance, let me say that the regulators usually decide the regulatory perimeter and guide the regulated entities so that there are no accidents and surprises. while it is for the regulators to issue instructions that enjoin upon banks to adopt the best practices insofar as governance is concerned, it is for the board to set the strategic direction, engage with management, and conduct review of key policies and frameworks. the boards should manage alignment of performance with pay as well as enforce accountability to ensure adherence to the best practices while achieving the objectives set for the bank by the board. | 0 |
make an important contribution to convincing europeans that europe is not an abstract and remote idea, but something real and dynamic. the success of the euro cash changeover will depend to a large extent on the information the european citizens receive on their new money. this will help them to cope with the cash changeover. it will also help some of them get accustomed to denominations that differ from those they are familiar with. in this respect, the two following points are important : β’ the co - operation of all the professional parties directly involved - such as banks, retailers, cash in transit companies and vending machines operators β and β’ the quick acceptance of the new banknotes by the public. therefore, the ecb has embarked on the preparation of an information campaign. it has a budget of eur 80 million. we have the support of publicis, the communication agency we have selected to work with us on this crucial project. the national central banks of the euro area will implement the information campaign on a decentralised basis. our campaign addresses all users of the euro banknotes and coins. it includes users from outside the euro area, such as tourists, travellers and nationals from countries where the euro banknotes and coins will circulate widely as a parallel currency. in order to reach such a broad public, the information campaign uses relevant groups or institutions as partners or " multipliers ". in that context, banks, retailers, educational institutions or the media can be mentioned. we also dedicate particular attention to vulnerable groups, such as the elderly, the handicapped, the deaf and the blind and partially sighted, who need and will receive tailor - made information and training. our information campaign is being co - ordinated with other campaigns prepared by national authorities and the european commission. it can thus be considered a " specialised " campaign. the message of our campaign concentrates on four main issues : β’ the detailed visual appearance of the banknotes and coins, β’ their main security features, β’ the denominations of euro banknotes and coins ; and β’ the changeover modalities. i should like to emphasise how particularly well the co - ordination of the campaigns in belgium has been. the national campaign here is really complementary to our campaign. this is ensured since the national bank of belgium is chairing the national changeover board. although our information campaign, and particularly our communication towards the media and our cooperation with partners, was already started months ago, an advertising campaign focusing mainly on the details of the euro | willem duisenberg : β the euro. our money β speech by dr willem f duisenberg, president of the european central bank, at the euro 2002 information campaign conference, brussels, 6 march 2001. * * * thank you very much for inviting me to participate in this euro 2002 information campaign conference. it is the first of a series of conferences in the course of 2001 on the euro cash changeover. these conferences are being organised and hosted by the national central banks of the 12 euro area members states and will take place in the context of the eurosystem's euro 2002 information campaign. brussels is the right venue for launching these conferences, not only as the capital of belgium, but also as a city which is very closely associated with and linked to the process of integration in europe. the other national central banks of the euro area will also organise conferences in the course of 2001. the next conference is to take place on 4 april 2001 in madrid and will be hosted by the banco de espana. subsequent ones will take place on 15 may 2001 in lisbon and on 16 may in frankfurt, hosted by the banco de portugal and the deutsche bundesbank respectively. the objective of these conferences is to raise citizens'awareness of the cash changeover at the beginning of 2002 and to prepare them for it. they will bring together the key parties involved in the euro cash changeover process, both at the national and at the european level, with a view to focusing on the cash changeover preparations. 1. frontloading and sub - frontloading of euro banknotes and coins the introduction of euro banknotes and coins means an unprecedented logistical challenge for all parties involved ; 14. 25 billion banknotes and 50. 1 billion coins have to be produced. banknotes and coins have to be distributed. the european central bank ( ecb ) aims to contribute to making this exercise as smooth as possible. the ecb has decided that the frontloading and sub - frontloading of euro banknotes and coins can start as of 1 september 2001. frontloading is the advance distribution of euro banknotes and coins to those credit institutions that are counterparties for monetary policy operations within the eurosystem. credit institutions can sub - frontload euro banknotes and coins to professional groups ( retailers, cash - in - transit companies, cash - operated machine industry ) provided that certain conditions are fulfilled. each national central bank is free to decide the specific date on which frontloading and subfrontloading can start at the national level | 1 |
my own and are not necessarily those of my colleagues on the federal reserve board or the federal open market committee. 3 / 3 bis - central bankers'speeches | eddie yue : the development and future of the offshore renminbi market welcome remarks by mr eddie yue, deputy chief executive of the hong kong monetary authority, at the third meeting of the hong kong β london rmb forum, hong kong, 26 september 2013. * * * the right honourable greg clark mp, distinguished guests, ladies and gentlemen : 1. i would like to extend a very warm welcome to all of you to this seminar, which is organised as part of the third meeting of the hong kong β london rmb forum. the forum was launched in january 2012, and it aims to foster cooperation between hong kong and london on the development of offshore rmb business. by improving linkages between our two financial centres, it is hoped that the forum could help to further deepen and broaden the offshore rmb market, and to better enable businesses and financial institutions to capture the opportunities arising from the increased channels for transacting with china. 2. significant progress has been made in the development of the offshore rmb market since our first meeting in may 2012. it is encouraging to see that market practitioners are making use of the policy headroom to develop rmb products and services to meet their customers β needs. opportunities in rmb are also being factored into the decision - making of many businesses and financial institutions. 3. here, instead of focusing on recent developments in rmb, i would like to take a broader and more forward - looking view. in particular, china β s financial sector reforms and specifically the eventual opening up of its capital account would likely have profound implications for the global financial landscape. it would be interesting to view rmb developments from the perspective of these potential changes β what do they mean for the global financial landscape and what would be the role of the rmb amid these developments. 4. as we are all aware, china has been moving steadily with financial sector reforms and capital account liberalisation, taking steps towards allowing market forces to play a greater role in its financial system. recently, the chinese authorities re - affirmed their commitment to further financial reforms, including the easing of market access, the liberalisation of interest rates, as well as working towards eventually making the rmb convertible under the capital account. and this process has reached an interesting juncture. the future reform and liberalisation efforts will arguably have a greater impact on the global financial landscape than that of measures undertaken so far. 5. as china moves further along the path to open up its capital account, the | 0 |
several issues pertaining to the breakdown of the internal audit function, which led to the manipulation of the rates. despite the group internal audit functions carrying out their routine audits in this area, deficiencies in the banks β systems, controls and policies were not adequately highlighted. the lessons learnt from the above cases and others clearly reinforce the key roles played by both the internal audit function and the audit committee. my view is that the strength and effectiveness of the internal audit function will influence the risk and compliance culture in an organisation. the function has to continually be refreshed such that it remains robust and effective. bis central bankers β speeches clearly, the job is now more difficult and challenging than ever, given the increased expectations by stakeholders and heightened scrutiny when things go wrong, as well as increasing obligations under the statute that place additional fiduciary responsibilities on audit committee members. i would like to share my thoughts on four matters where efforts are necessary to raise the bar on audit standards and audit quality. firstly, the audit coverage and scope should not be confined to compliance or risk - based parameters. the audit scope should be holistic, encompassing new risk areas and tail risk events that originate from the evolving operating environment and financial landscape. the process of ascertaining the audit scope must be robust, such that audits focus on higher risk areas as the company grows and evolves in its products and processes. internal auditors should be constantly challenged to think beyond the scope of the audit framework and focus on the broader picture. the so - called ability to β connect the dots β about the implications of the audit findings across the organisation is an important starting point to identify new and emerging risks. secondly, internal audit should move beyond compliance to strategic auditing and to provide value - added recommendations for the betterment of the organisation. my view is that before an organisation seeks to venture into new or higher risk areas of growth, it is imperative for the board and senior management to seek assurance from the internal audit function so that the risk and control frameworks are rigorous in identifying gaps in the system. the audit committee should identify opportunities where the internal audit function is able to add value, through consultation and advice on business process improvements. the input from the internal audit function would also be helpful to craft initiatives to embed good behavioural norms, ethical and responsible culture within the organisation. thirdly, the internal audit function must be supported by a strong quality assurance process. this requires internal auditors to be equipped with the re | . oil prices rallied to above usd50 per barrel from an average of usd33 per barrel in the first quarter of the year, and today, oil prices have settled back to around usd48 per barrel. the oil price is likely to remain volatile over the next few years due to oversupply and recordhigh oil inventories against slow demand especially in china. lng prices are also expected to remain low for a protracted period of time. lng capacity start - ups in australia and north america which will boost new lng supplies amidst stagnating demand will put more pressure on lng prices, hence further disrupting the lng market. due to low oil and lng prices, the profitability of oil majors and national oil companies ( nocs ) has been severely eroded. the impact has been pronounced. more than 300, 000 oil and gas workers have been laid off globally since mid - 2014 ; some usd 380 billion of global oil and gas projects have been deferred or cancelled ; and more than usd 150 billion worth of assets have been planned for disposal or divestment. given malaysia β s openness and high financial and trade integration with the rest of the world, the malaysian economy is not isolated from these developments. on the external front, lower global demand continues to weigh down on malaysia β s export performance. investment activities especially in the upstream oil and gas sector, contracted for the first time since the global financial crisis in 2015, after expanding by an average of 16 % from 2010 to 2014. however, investment activity in the manufacturing and services sectors remained bis central bankers β speeches resilient, and is expected to underpin investment growth moving forward. private consumption remained relatively resilient and anchored domestic growth, especially during the first half of the year, driven by sustained income and employment levels. going forward, domestic demand is expected to remain a key driver of economic growth in malaysia. we should expect malaysian economic growth to range between 4. 0 to 4. 5 % for 2016. amid the changes in the financial landscape, there have been equally significant developments in the auditing standards both globally and locally. the standards and regulations are becoming increasingly tighter and more stringent. the institute of internal auditors ( iia ) for example, has proposed several changes to the internal audit standards, which are expected to take effect in january 2017. the changes to the standards are aimed at reinforcing the fundamental principles of internal auditing practices, promoting a broad range of | 1 |
our mediumterm steering and commitment to adopting the inflation targeting regime, making up an important link of its successful adoption. concluding my theoretical discussion of this change, i would like to underline that our longterm commitment to keeping our foreign reserve at optimal levels to cope with the shocks albania may be faced with remains an unquestionable objective of our monetary policy. in an institutional aspect, i would like to note that such a move does not only attest to the level of maturity of our interbank market. it also crowns our constant efforts in achieving its utmost efficient management. in this context, the bank of albania has made utmost efforts to develop liquidity forecast models, to dampen the impact of fiscal flows into the money markets and to develop optimal procedures and modalities of interbank market interventions. i do strongly believe that our efforts will persist in the future as well, enabling a smooth shift of the operational target and optimal functioning of their new form. interbank market development dear colleagues, bank of albania β s role in promoting the interbank market is indisputable. however, we are fully aware that the development of this market mostly reflects the results of the banking system β s own development and efforts. therefore, the bank of albania requires your utmost attention in this regard. more precisely, in our discussion today we would like to have your opinion on the three steps we consider will boost the development of the interbank market. first, setting the prime rates in the functioning of commercial banks. these rates can and should serve as a guide to setting prices on banking products, both on the assets and liabilities β side. second, the functioning of the collateralized market through repo or reverse repo contracts. although in its classical concept the interbank market is an uncollateralized market, its enhancement with the abovementioned instruments would open the way to its thorough development, ensuring a more efficient distribution of liquidity among the market operators. third, banks can and should be active in quoting the liquidity in the albanian lek, keeping the same stance as in the foreign exchange market. the constant quotation will encourage a more active liquidity management and it will enable its continuous price setting. dear bank managers, the bank of albania considers the development of the interbank and financial market as a process that requires our constant commitment but which provides tangible benefits to all of us. i invite you now to an open and fruitful discussion to share our opinions on the right | ##respective of their location, have access to adequate and timely financing, we will be better positioned to address the challenges of sustainability and resilience in agriculture. traditional lending practices have certain limitations in catering to the needs of the agricultural sector. agriculture is inherently seasonal, and returns are often delayed or reduced. innovative financial solutions are necessary - ones that are flexible and tailored 3 / 6 bis - central bankers'speeches to the specific needs of farmers. this coupled with crop insurance products that cover weather - related risks can help mitigate the uncertainties farmers face. additionally, blended finance models - where public funds are used to leverage private investmentscan be instrumental in providing the necessary capital for sustainable transitions. this would not only mobilise resources from multiple sources but also distribute the risks and returns more equitably. in this context, i would like to highlight five solutions which could go a long way in addressing the issue of financing sustainable agriculture. role of collectives farmer producer organisations or fpos have emerged as a crucial mechanism for addressing the specific challenges faced by small and marginal farmers. their growth has been significant, with over 24, 000 farmer producer companies ( fpcs ) formed by march 31, 20236. these organisations are instrumental in scaling up the adoption of sustainable farming technologies developed by research institutions. by aggregating farmers, fpos enhance their bargaining power as well as improve their access to technology and increase market opportunities for their output. to support financing to these organisations, rbi regulations provide that loans to fpos engaged in agriculture and allied activities, up to an aggregate limit of 2 crore per entity, qualify as priority sector lending. if fpos engage in farming with assured marketing of their produce at predetermined prices, loans of up to 5 crore qualify as psl. value chain financing the value chain financing model integrates various stakeholders - farmers, aggregators, traders, processors, and financial institutions - into a coordinated system that improves efficiency across the agricultural process. with changing consumer preferences towards branded, well - packed, safe, and healthy food, there is a need for increased focus on structured agriculture value chains and their financing. for financial institutions, access to various participants in the value chain offers additional business opportunities. warehouse financing agricultural price volatility is a recurring challenge in india, often forcing farmers to sell their produce at lower prices during peak harvest due to immediate financial needs. warehouse receipt financing allows farmers to store their produce in warehouses, delaying the sale until | 0 |
union. these are the decisions made by the british population, we have nothing to say in that regard. but i think that it β s going to be quite negative in terms of economic performance for the uk. the rest of the members of the union will have to continue cooperating and continue integrating our economies. i think that in that aspect further integration is the correct answer. i repeat again, it β s quite unfortunate that the uk, such a big economy, leaves the union, but this decision is taken by the british people. we regret that decision. i would like to express that we have to continue cooperating with the uk and that i hope that we will have a divorce that will be orderly and that will let us continue operating with the uk. but now the decision has to be taken by the british parliament, so full respect for the decisions taken by the british population and by the british parliament. but i think that we will have to continue our integration process in the euro area. given the current political climate in europe, do you feel that moving towards closer integration is the right step because we see a lot of backlash at this moment both in nationalistic, populist and so on? undoubtedly we have seen more populism all over europe in recent years, but i think that the correct response is to take further steps in terms of integration. there is not an easy fix to the problems of europe. but i think that the euro indicates that there is a way forward and that we can overcome difficulties together and that the very nationalistic and domestic approaches are not enough in order to do that, but that it β s much better to do it together. and in that regard the euro is the main element of coherence and the main element of political integration and financial integration that we have in the eu. if we take one case in particular β that of italy β we see that there is this new government that is really pointing the finger against these technocratic institutions, including the ecb, and saying this is not the future, we cannot go on like this. they're the third largest euro zone member, so third most important. so what can you answer to that kind of political sentiment that indeed is rising? i do not want to comment on any particular country, but even if you look at italy, if you look at the polls, there is a very important majority of the italian people who support the euro. we have seen that the italian government β and i | means strengthening the regulations to ensure that a wide range of lmi banking needs are being met. it also entails promoting financial inclusion by, among other things, providing credit for activities in areas with unmet needs outside of assessment areas, such as indian country. additionally, we aim to create incentives for investment in minority depository institutions and community development financial institutions, many of whom are icba members. we know that banking has evolved over the past 25 years, so we also sought to update standards in light of changes to banking over time, including mobile and internet banking. lastly, we wanted to continue to promote community engagement to inform the examination process. our second major goal for the anpr was to provide greater certainty, tailor regulations, and minimize burden. the anpr seeks feedback on several approaches designed to make the rules clearer, more transparent, and less subjective. for example, the proposed metrics for the retail test and the community development test would provide more clarity and transparency on how bank ratings are determined. in talking with community banks, federal reserve staff and i also heard about the need for clearer standards and greater limitations on the size of assessment 1 / 2 bis central bankers'speeches areas β especially for small banks operating just in a portion of a large county or only making a few loans in a part of a county. the anpr offers ideas to provide greater clarity in response to these concerns. importantly, the anpr proposes to tailor cra to bank size and business model. in discussing cra reform with bankers and community organizations, it has been clear that there is a need for a tailored approach for small banks and better outcomes for rural communities. i am encouraged that the anpr offers ideas that advance these objectives. so let me say a bit more about the proposals in the anpr that are tailored to small banks. small retail banks could continue to have their retail lending activities evaluated under the current framework, or they could elect to be evaluated under the proposed retail lending metric. small banks that opt for the retail lending metric can also elect to have other activities considered. additionally, the anpr minimizes data collection and reporting burden by relying on existing data as much as possible, as well as exempting small banks from deposit and certain other data collection requirements. we also heard from stakeholders like icba that rural areas, and banks in rural areas, have particular needs. therefore, the anpr proposes providing incentives for banks in rural areas to participate in beneficial civic and other nonprofit activities ( e. | 0 |
and credit quality may deteriorate. not in one's own bank, but among competitors. the banks face the major task of incorporating the new international accounting standards and the forthcoming capital - adequacy rules β basel ii. this requires considerable resources. it is also an important task requiring each bank to assess its need for buffers against bad times. other parts of the financial sector have also devoted many resources to new legislation and its implementation. the european commission has now indicated that all major legislation is in place in the financial area. now we need to make the single market for financial services work. the imf is assessing the entire financial system in denmark as part of its financial sector assessment program β fsap. let us take this as a good opportunity for a service check. it is good to take a fresh look at whether we have an optimum structure in relation to international standards. the imf has just concluded a two - week visit to denmark. i would like to thank the members of the danish bankers association and a large number of the other players in the financial system for their efforts in connection with this visit. fsap is a long process and there is still considerable work ahead in the coming months. the imf's final assessment of denmark and its recommendations are expected to be presented in mid - 2006. bodil ( nyboe andersen ) has asked me to extent her gratitude for your fine cooperation β not only over the past year, but over many years. i hope this fine cooperation will continue in the years to come. | their deposits to pool schemes. as negative deposit rates for households are still a recent development, we can only speculate on their wider implications. when new data becomes available, it will be pertinent to study to which extent negative deposit rates lead households to increase their spending β for example by this threshold typically applies only if the customer uses the bank as its primary bank β otherwise negative rates apply to the full amount. currently households pay negative interest on approximately one third of their total bank deposits. see abildgren ; kim and andreas kuchler, 2020, do firms behave differently when nominal interest rates are below zero?, danmarks nationalbank, working paper no. 164. see mandsberg, rasmus kofoed, alexander meldgaard otte and morten spange, 2021, the response of household customers to negative deposit rates, danmarks nationalbank, analysis, no. 9, page 6 of 7 purchasing a new car or move to a more expensive home. if this is the case, negative deposit rates may lead to more lending. but if households instead simply reduce their deposits by paying back debt, lending could decline. concluding remarks the transmission of negative policy rates is likely to differ across countries for a number of reasons. for example, some countries have legislation that restricts banks from imposing negative deposit rates. 8 nevertheless, the key lesson that i draw from our experience is that for the financial sector, negative interest rates are increasingly becoming business as usual. even the key non - linearity associated with negative rates β the lack of transmission to deposit rates β is fading. for non - financial firms, preliminary evidence suggests that the introduction of negative deposit rates had real effects on top of the standard effects of a rate cut. this may also have been the case for households although more evidence is needed in this area. but as firms and households become more accustomed to paying interest on their deposits, these effects may be attenuated. of course, there is a limit to how low rates can go. but we have seen that negative policy rates are a viable policy tool in a world of low equilibrium interest rates. demographic factors suggest equilibrium interest rates are likely to remain low for the foreseeable future. this suggests that the topic for this conference could not have been more relevant. thank you for your attention! see european banking authority, 2020, risk assessment questionnaire β summary of the results. page 7 of 7 danmarks nationalbank ultra low interest rates from the perspective of a | 0.5 |
and of course, global trade allows many types of goods, especially consumer goods, to be purchased at lower prices. lower prices help all consumers but may be especially helpful to those with tight budgets. indeed, a number of the large, import - intensive retail chains in the united states are focused on low - and moderate - income consumers, who benefit from being able to buy a wide variety of lower - priced goods. another substantial benefit of trade is the effect it tends to have on the productivity of domestic firms and on the quality of their output. 4 by creating a global market, trade enhances competition, which weeds out the most inefficient firms and induces others to improve their products and to produce more efficiently. the u. s. manufacturing sector, which is perhaps the sector most exposed to international competition, has achieved truly remarkable increases in its productivity in the past decade or so. in addition, international supply chains, made possible by advances in communication and transportation, reduce costs and increase the competitiveness of u. s. firms. trade also promotes the transfer of technologies, as when multinational firms or transplanted firms bring advanced production methods to new markets. the estimates ranged from $ 7, 000 to $ 13, 000. cox and alm ( 2007 ) discuss the benefits of trade in the modern global economy. bernard and jensen ( 1999 ) find that exporting firms are more productive than non - exporters. bernard, jensen, and schott ( 2006 ) document the tendency of trade to reduce production at low - productivity plants and to increase output at highproductivity plants in the united states, a shift that raises average productivity. trade and finance are closely linked and mutually supporting, and in recent decades international financial flows have grown even more quickly than trade volumes. the globalization of finance plays to the strengths of u. s. financial institutions and financial markets. the united states has a large surplus in trade in financial services, and u. s. firms are leaders in providing banking, investment, and insurance services to the world. financial openness allows u. s. investors to find new opportunities abroad and makes it possible for foreigners to invest in the united states. the ability to invest globally also permits greater diversification and sharing of risk. trade benefits advanced countries like the united states, but open trade is, if anything, even more important for developing nations. trade and globalization are lifting hundreds of millions of people out of poverty, especially in asia, but also in parts | to minimize the pain of dislocation without standing in the way of economic growth and change. indeed, the willingness to embrace difficult challenges is a defining characteristic of the american people. with our strong institutions, deep capital markets, flexible labor markets, technological leadership, and penchant for entrepreneurship and innovation, no country is better placed than the united states to benefit from increased participation in the global economy. if we resist protectionism and isolationism while working to increase the skills and adaptability of our labor force, the forces of globalization and trade will continue to make our economy stronger and our citizens more prosperous. references acemoglu, daron, and joshua angrist ( 2001 ). " how large are human capital externalities? evidence from compulsory schooling laws, " in ben s. bernanke and kenneth rogoff, eds., nber macroeconomics annual. cambridge, mass. : mit press, pp. 9 - 59. becker, gary s. ( 1964 ). human capital : a theoretical and empirical analysis with special reference to education. new york : national bureau of economic research. bernanke, ben s. ( 2004 ). " trade and jobs, " speech delivered at the distinguished speaker series, fuqua school of business, duke university, march 30, http : / / www. federalreserve. gov / boarddocs / speeches / 2004 / 20040330 / default. htm _ _ _ _ _ _ ( 2006 ). " global economic integration : what's new and what's not? " speech delivered at the thirtieth annual economic symposium sponsored by the federal reserve bank of kansas city, jackson hole, wyo., august 25, http : / / www. federalreserve. gov / boarddocs / speeches / 2006 / 20060825 / default. htm _ _ _ _ _ _ ( 2007 ). " the level and distribution of economic well - being, " speech delivered at the greater omaha chamber of commerce, february 6, http : / / www. federalreserve. gov / boarddocs / speeches / 2007 / 20070206 / default. htm bernard, andrew b., and j. bradford jensen ( 1999 ). " exceptional exporter performance : cause, effect, or both? " journal of international economics, vol. 47 ( february ), pp. 1 - 25. bernard, andrew b., j. bradford jensen, | 1 |
banks : those of chile, israel, italy, and, i might add, the united states. one of my teachers at mit, stan fischer, is a sterling example of what mit training can produce. stan followed a brilliant career as a researcher and teacher at mit with important work as a public servant, including top positions at the world bank, the international monetary fund, and, currently, the bank of israel. why did economics at mit become so successful? perhaps paul samuelson and the people he helped to attract here could have been equally successful anywhere. but i suspect that the placement of economics in a milieu where quantitative reasoning and the scientific method are the coin of the realm was an important contributing factor. the sloan school, with its close links both to the economics department and to other parts of the institute, has benefited from the same milieu and has been the source of many fundamental advances as well. notably, in recent years the global financial industry has been transformed by new quantitative approaches to pricing complex financial instruments such as derivatives and to measuring and managing risk. this transformation stemmed from the application of formal tools of mathematical economics that were developed to a substantial extent by faculty at the sloan school, including fischer black, robert merton, and myron scholes - - the latter two of whom won nobel prizes for their work. as mit economics has benefited from its proximity to the scientific and engineering expertise of mit, so the institute has benefited from the presence of a world - class economics department, over and above the addition of still more luster to the mit name. the exposure of students and faculty from other divisions to the discipline and approaches of economics has stimulated creative thinking about how technology can be used to improve the economic welfare of the average person. that thought brings me to my second topic : the link between technology and economic growth. translating technological advances into economic growth as has always been the case, technological change and innovation are today in large part driving economic growth and the improvement of living standards. but it is important to understand that even the very best ideas in science or engineering do not automatically translate into broader economic prosperity. in large measure, the material benefits of innovation spring from complementarities between technology and economics, where i include in " economics " not only economic ideas but also economic policies and, indeed, the entire economic system. when the economics is right, scientific and technological advances promote economic development, which in turn, in a virtuous circle, may provide resources and incentives that help to foster | potential to be a new way to hold money and make payments. while all of this innovation opens up possibilities to do things differently than the past, it also carries risks. just like listening to music, the " how " may change, but the " what " will remain the same. as we look ahead, it's important to remember that even as the technology changes, the role of the central bank has not. it is and will always be to supply money and liquidity to bring stability to the economy and financial system. therefore, it's critical that we understand how these transformations could affect the economy and the financial system, as well as monetary policy implementation and central bank balance sheets. in addition, we must think carefully about proper regulation to protect consumers and investors and ensure the stability and safety of the financial system. 1 so, what are some of the things that the new york fed should be thinking about? to start, digital transformation could have implications for markets and for our interactions with counterparties, as well as how we carry out monetary policy. like in the example of music, change is already underway. take the fed's overnight reverse repo ( on rrp ) facility, for example2. the on rrp facility has broadened the set of our counterparties and diversified the type of instruments on the liability side of our balance sheet. this facility has supported the control of short - term interest rates according to the fomc's policy direction. this has had profound effects on the composition of liabilities on our balance sheet. traditionally, the fed's liabilities have primarily been paper currency and reserves held by banks at the fed. for example, a decade ago, paper currency totaled $ 1. 1 trillion and bank reserves $ 1. 5 trillion. but since then, we've seen a dramatic change in the makeup of the liability side of our balance sheet. today, in addition to $ 2. 3 trillion of currency and $ 3. 3 trillion of bank reserves, there are $ 2 trillion in overnight reverse repos, representing funding from nonbank sources such as money market funds. turning to the future, the big question is what a world of digital currencies like stablecoins and cbdcs would mean for the implementation of monetary policy. how will central banks anticipate and adapt to the changing landscape brought on by the possibility of digital currencies? there is much more to discuss about these important considerations in a fast - changing world | 0 |
. it is likely that employers will be forced to make better use of their labour, recruit from abroad and support people to be mobile so that they can find the right tasks in life. employees will have to realise that if too many choose not to work, the welfare system will collapse. people that no longer feel satisfied with their work must think of alternative ways of supporting themselves. the welfare model must be designed to encourage people to work. great demands will be placed on society to think in a longer - term strategic manner so that changes can be implemented in time. competition in europe for the young, and especially the well - educated, will be fierce. more people will have to want to stay in or move to our countries. immigrants must be integrated quickly and successfully. next year ten accession countries will join the eu and become a part of the free market. the enlargement of the eu and the establishment of a common labour market around the baltic could perhaps increase the potential for an influx of foreign labour to the nordic countries. but poorer countries further away are likely to offer greater potential - and pose a bigger challenge. so it is not the nordic central banks that possess the instruments for or solutions to these problems. but if other policy areas are effective, it will help us to fulfil our objectives, i. e. to ensure price stability and thereby also favourable economic growth. it will require great leadership, a lot of cooperation and a high degree of openness in many areas in society. in particular, i believe that you, as teachers and participants in teachers'trade unions, have a vital role to play in this exciting process. thank you. | rained down on us in recent decades - mexico 1994, asia 1997 - 1998, russia and ltcm 1998 and argentina 2001. to mention but a few. many central banks have these issues on the agenda as often as monetary policy issues. as i mentioned earlier, they also play an increasingly important role in many of the international contexts we participate in. if i am to mention a couple of examples, these would be the bank for international settlements, which now devotes a much larger part of its analysis capacity to stability issues, and where we are members of a couple of groups entirely focussed on stability. the most well - known work is that being done on the new capital adequacy rules - basel ii. another example is the work the riksbank is heading in surveying central banks β work on oversight of the financial infrastructure. the riksbank is also heading the work on reviewing the principles for how public authorities should work with regard to banking supervision. within the european system of central banks we are taking part in the work on producing a european stability report. the riksbank is also heading the working group that analyses issues regarding cross - border banks with a special emphasis on crisis management. this group reports to both frankfurt and brussels. the fact that our analysis work has developed since we published our first report in 1997 does not mean that we can rest on our laurels. we have taken outside assistance in our endeavour to focus and develop our analysis work. a few weeks ago, we presented the assessment of our work on the financial stability report made by an american researcher, a manager at imf and a manager from a swedish commercial bank over the year. happily, the three authors considered that we essentially devoted ourselves to the right issues and used the right approaches. however, they also presented some interesting suggestions for improvements. several of their recommendations concerned how we motivate and explain our role in the stability work. they thought we should be clearer when describing our objectives, and also with regard to the boundary between our work and that of finansinspektionen ( the swedish financial supervisory authority ) as well as to why we write a report twice a year. most of what i have tried to describe now, in other words. these are good suggestions that we are taking into account in the report to be published in two weeks β time. the authors had other suggestions that i think are good, but probably require more time for discussion within the riksbank and for possible implementation. the possibility | 0.5 |
costs provides an incentive for the banking organization to refrain from excessive risk - taking. β indirect β market discipline is exerted through risk - sensitive debt and equity instruments when private parties, and possibly government supervisors, monitor secondary market prices of those instruments in order to help determine the risk exposure ( or default probability ) of a banking organization. in response to perceived increases in bank risk, such parties could then take a variety of actions that increase bank operating costs. for example, purchasers of bank claims could increase the bank β s cost of funds and limit its supply of credit, and both private counterparties and supervisors could reduce the bank β s ability to engage in certain types of contracts. the anticipation of these actions, which are essentially various types of penalties, provides banking organizations with incentives to refrain from excessive risk - taking. market discipline does not come naturally to banking. the federal safety net limits direct market discipline because it reduces the demand for disclosure and the risk - sensitivity of debt holders. clearly, insured depositors have almost no incentive to penalize banks for excessive risk - taking. and, uninsured depositors, because of depositor preference laws, may also perceive relatively little need to impose higher costs on banks for excessive risk - taking. given these incentives, secondary market rates and spreads on these debt instruments would be inadequate β if not irrelevant β barometers of a bank β s risks and would therefore generate little indirect market discipline. further, the real and perceived certification of soundness provided by supervisory authorities may also reduce the demand for disclosures and the risk - sensitivity of debt holders. compounding these disincentives for investors to evaluate bank risks, the raison d β etre of banks is that these institutions provide credit in environments characterized by asymmetric information. therefore, banks are inherently opaque and difficult to assess. nevertheless, there seems to be fairly strong statistical and anecdotal evidence supporting the view that both direct and indirect market discipline currently are exerted on large banking organizations. with respect to direct market discipline, econometric studies of the relationship between deposit growth and portfolio risk have generally found that uninsured depositor holdings decline with increases in the depository institution β s risk. and, other econometric studies have found that rates on uninsured certificates of deposit are sensitive to measures of risk. supervisory experience is consistent with both of these observations. other types of bank liabilities also appear to be sensitive to risk. for example, during periods of financial | - time visualization of business management. these developments could further enable a grasp of business conditions, cash flow management, the production of credit information, automated lending, and management consultation. the benefits of linking these two systems are not limited to improving the efficiency of economic activities. for example, data on deposit account activities contain various kinds of information on the account holder β s livelihoods. elaborating on the information on the customer β s lifestyle obtained from these business data could help identify where there is a hidden potential demand for financial and non - financial services. in this regard, online businesses and consumer businesses have taken the lead in adopting personalized marketing, or a strategy to increase customer satisfaction. it is likely that financial institutions will accelerate their efforts to utilize the information that they have as a business asset and find neue kombination with other business categories. thus, linking the information systems assisting people β s livelihoods and business activities and the systems supporting financial services, which were traditionally separated, could improve the convenience of both financial and non - financial services, thereby leading to the creation of new services. on this basis, it is important to understand as - a - service β which i introduced as a business model earlier β not merely as a methodology, but as a concept that provides the perspective of creating new services and expanding demand through continuous improvements to achieve economic growth and an affluent society. for example, some may think that banks are only playing a behind - the - scenes role to assist actors, or their partner firms, to provide financial services in baas. there is also a potential, however, for banks to play a role as a director who manages the production of a digitalized neue kombination 2. 0, by being actively involved in the creation of new services and maximizing the potential of the platforms. digital transformation integrating information and financial systems first requires advances in the digitalization of each system. a system needs to be put in place that supports end - to - end automatic processing, from information input on a smartphone or a business system screen, to service completion as well 2 / 3 bis central bankers'speeches as database preparation for the analysis and high value - added conversion of information for the subsequent information business. to this end, changes need to be made in the current way of work that remains bound to paperbased processes or manual transcription of information. moreover, the way work is transformed should aim at not only improving business efficiency but also creating new business models by linking information. neue | 0 |
ravi menon : a just transition in emerging economies remarks ( via video conference ) by mr ravi menon, managing director of the monetary authority of singapore, at the institute of international finance annual membership meeting, 12 october 2023. * * * mr clay lowery, ladies and gentlemen, good morning to everyone in morocco and greetings to everyone else attending virtually. i am delighted to join you, albeit virtually, at this iif annual membership meeting. i am honoured and humbled to receive the iif's distinguished leadership and service award : honoured because of the high standing that the iif enjoys as the leading global association of the financial industry ; and humbled because i know how much i owe this award to my colleagues at the monetary authority of singapore, my counterparts in the international regulatory community, and the leaders of the financial industry in singapore and elsewhere. i have been fortunate to witness the evolution of the financial industry and its regulation over the last three decades, in my own country and globally. crisis has taught us to become more resilient and better at managing risks. technology has enabled us to become more innovative and inclusive. policy reforms have paved the way for us to become more global - though some of this progress is under threat today. rising affluence β especially in the emerging world β has given us new opportunities for growth. there is one critical task though, that remains undone. in fact, it will be the ultimate test of how much of a force for good the financial industry will be. yes, i am talking about the climate crisis and what finance can do about it. today, i want to focus on what i regard as the single most important goal that the financial industry can support to help achieve net - zero globally β the energy transition of emerging economies, especially in asia. the world is not likely to reach net - zero emissions by 2050 without a successful energy transition in asia. the issues of transition are most acute in asia. asia accounts for 50 % of global greenhouse gas emissions. coal - fired power plants alone account for a third of asia's greenhouse gas emissions. if these coal plants are left to operate as planned, they will exhaust two - thirds of the carbon budget that we have remaining to keep the rise in global temperatures to within 1. 5 degree celsius. 1 / 5 bis - central bankers'speeches if we can successfully manage asia's energy transition, it will go a long way in contributing to a net - zero world. but | council for the voluntary carbon market transition credits must meet the needs of those who buy these credits. this means addressing concerns surrounding the timing mismatch between when the transition credits will be generated and when the financing will be needed. this involves exploring mechanisms that can bring forward the issuance of credits and facilitate early off - take, such as insurance solutions or advance market commitments. developing transition credits as a credible and viable financing solution is by no means easy. it requires strongly supportive policies and deep product and market innovation. i believe that the financial industry has the innovative capacity to make instruments like transition credits work. mas is therefore calling for like - minded partners from the industry to work with us on pilot transactions. we have to learn by doing. third success factor : we must ensure the managed phase - out of coal is implemented in a just manner. the early retirement of coal plants will disrupt lives and communities, particularly of those who rely on coal mining and related operations as a source of livelihood. a credible managed phase - out programme must ensure that measures are in place to mitigate potential harm to livelihoods and communities : one, robust assessment of any negative impact at the plant, community, regional and national levels ; two, mitigation measures such as workers'transition plans, and frameworks to monitor and assess the effectiveness of these measures ; and three, explicit provisions to properly finance the implementation of the necessary measures - for instance, a portion of revenue from the sale of transition credits could be set aside for re - skilling displaced workers. the coal transition is fundamentally about people. 4 / 5 bis - central bankers'speeches managed phase - out should be done in consultation with key affected stakeholders. local governments play a key role, especially in providing opportunities for redeploying a large group of displaced workers and their families under a broader energy transition plan. let me conclude. the economics of investing in climate change mitigation are attractive. the imf has estimated that a policy mix of carbon taxes and green investment stimulus could increase global gdp by 0. 7 % per year through 2036 and create 12 million new jobs through 20271. green and transition finance is potentially the next big growth story. but we need to innovate, take some risk, and work real hard to realise that potential. i believe and i hope that the financial industry and international policymakers will step up to the task. thank you. 1 imf ( 2021 ), securing a green recovery : the economic benefits from | 1 |
the market expectations. currently the market assumes that the cash rate is likely to remain unchanged for at least the next 12 months, and then rise only very slowly beyond that. the forecasts also assume that the exchange rate and oil prices remain at their current levels. historically, we have found that assuming those variables remain constant is at least as good as any other forecast, while recognising that they are highly likely to change. in saying that, it is worth noting that the exchange rate has moved within a fairly narrow range over the past two years. these small variations have probably not been a major factor in your decision - making as cfos. in contrast, i would expect that the 20 per cent depreciation of the australian dollar in 2014 β 2015 did have a material impact on decision - making at any business with an export or import - competing focus. other developments in financial conditions can affect the forecasts too. one example is developments in money market rates. in the smp, we document the recent rise in money market interest rates in the us, particularly libor ( graph 1 ). there are a number of explanations for the rise, including a large increase in bill issuance by the us treasury and the effect of various tax changes on investment decisions by cfos at some us companies with large cash pools. 3 this rise in libor in the us has been reflected in rises in money market rates in a number of other countries, including here in australia. this is because the australian banks raise some of their short - term funding in the us market to fund their $ a lending, so the rise in price there has led to a similar rise in the cost of short - term funding for the banks here ; that is, a rise in bbsw. 4 this increases the wholesale funding costs for the australian banks, as well as increasing the costs for borrowers whose lending rates are priced off bbsw, which includes many corporates. however, the effect to date has not been that large in terms of the overall impact on bank funding costs. thus far, it has not been a consequential development from a forecasting point of view. it is not clear how much of the rise in libor ( and hence bbsw ) is due to structural changes in money markets and how much is temporary. in the last couple of weeks, these money market rates have declined noticeably from their peaks. we will continue to monitor how this unfolds in the period ahead. the outlook | guy debelle : the outlook for the australian economy opening keynote speech by mr guy debelle, deputy governor of the reserve bank of australia, at the cfo forum, sydney, 15 may 2018. * * * thanks to lynne cockerell for her help in preparing this speech. today i would like to talk about the bank β s outlook for the economy. we published this in the statement on monetary policy ( smp ) earlier this month. 1 this set of forecasts was little changed from the previous set of forecasts we released three months earlier. this is because the economy, both domestically and globally, has been evolving generally in line with our expectations. when reading through the bank β s forecasts, i think it is useful to avoid false precision. an important question to ask is : are these revisions to the bank β s outlook consequential for the monetary policy decision? similarly you can ask, do i think these changes affect my own decisions about my household or my business? a tenth or two of a percentage point here or there on the outlook for gdp or inflation is unlikely to matter that much for any of those decisions. often, these revisions reflect the new information that has come to hand over the previous quarter. this leads us to reassess the starting point for our forecasts of where the economy is then likely to go. in making this assessment, we ask whether the incoming data have been viewchanging or view - validating. over the previous three months ( and, indeed, the three months before that too ), the data have generally been view - validating. the forecasts that are published can best be characterised as the modal forecast for the economy. that is, they are the path for the economy which we think is most likely to occur. but there are a number of risks to that outlook. the smp talks about some of those uncertainties too. today i will also spend some time drawing out some of the issues around those uncertainties. 2 the central forecast as i just said, the forecasts we have just published are little changed from those we published in february. table 1 shows the bank β s outlook for gdp growth, the unemployment rate and inflation until june 2020. this is generally the time horizon that is relevant for the board β s deliberations on monetary policy. the forecasts embody a number of technical assumptions. these include that the cash rate 1 / 13 bis central bankers'speeches evolves broadly in line with | 1 |
that are affecting some canadian farmers directly. on top of this, we see the potential for more friction between the united states and european union. a big part of the bank β s work leading up to the next mpr in july will be to understand the implications of all these developments. - 8of course, the trade disputes are not just a short - term concern. there are also longer - term implications for the global and canadian economies. if some of these disputes were to be resolved, that would provide a welcome boost to the canadian and global economies. but if the disputes were to worsen and become long lasting, the outlook would be quite different. not only would we see weaker economic demand, but the supply side of the economy would also take a hit as companies deal with disruptions to their supply chains. obviously, this remains a major preoccupation for us. governing council also spent some time talking about prices in financial markets. since the start of the year, financial conditions have become more accommodative in many economies, and this will help support economic growth. we talked about the signals that we should take from a very flat or, in some cases, inverted yield curve. these developments partly reflect a change in tone by many central banks and, possibly, investor appetite for long - term, fixedincome assets. they nonetheless also reflect a concern about the prospects for growth that is not reflected across other asset classes. we continue to be attentive to these signals. let β s not forget that we β re a central bank that targets inflation. on that front, inflation remains near 2 per cent. some temporary factors are boosting inflation and offsetting the modest downward pressure that is being generated by excess supply in the economy. we project that these upward and downward pressures will dissipate over the projection horizon, leaving inflation close to target. putting it all together, recent data have reinforced governing council β s view that the slowdown in late 2018 and early 2019 was temporary. at the same time, global trade risks have increased. in this context, the degree of accommodation being provided by the current policy interest rate remains appropriate. in taking future policy decisions, governing council will remain data dependent and especially attentive to developments in household spending, oil markets and the global trade environment. | our job, the bank of canada needs to understand how these factors affect investment decisions. a vibrant business sector, after all, is essential to a healthy labour market and to our economic prospects. further details about yesterday β s decision the outlook for investment was only one of many factors that went into our interest rate announcement yesterday. as i said, there have been some encouraging signs that investment outside the energy sector has firmed up. let me take you through the other main points of our discussion. naturally, governing council spent time talking about whether the economy was progressing as we had forecast in our april mpr. as a reminder, we projected that the economy would expand at an annual pace of just 0. 3 per cent in the first quarter of the year. we also projected growth would rebound modestly to a 1. 3 per cent pace in the second quarter and further accelerate later in the year. evidence has been accumulating that tells us our story is on track. we hope to see this confirmed in the national accounts data that statistics canada will release tomorrow. we β ve worked hard to understand some conflicting signals in the economic data. the labour market has been strong, with solid growth in jobs and steady growth in wages. we β ve tried to square this strength with the weakness seen in the 10 see r. barnett and r. mendes, β a structural interpretation of the recent weakness in business investment, β bank of canada staff analytical note no. 2017 - 7 ( july 2017 ). 11 see s. s. poloz, β turbulent times for trade, β ( remarks to the baffin regional chamber of commerce and the nunavut mining symposium, iqaluit, nunavut, april 1, 2019 ). 12 see, for example, the organization for economic cooperation and development β s main science and technology indicators and imd β s world competitiveness rankings for 2019, including profiles for canada and other countries. - 7spending side of the economy over the past couple of quarters. it turns out that this gap can be explained in large part by the behaviour of companies in the construction and oil and gas sectors, which have been key drivers of the recent gdp slowdown. companies in these sectors have been generally keeping their employment levels fairly steady, while reducing the hours their employees work. this is consistent with firms believing that the economy has been going through a temporary soft patch, exacerbated by the brutal winter experienced in so many parts of canada. i should point out, | 1 |
markets will therefore enable us maintain this critical balance. kenya like other developing economies is quite vulnerable to money laundering and terrorism financing due to a number of displacement factors ; key amongst them being a high volume of cash based transactions, lack of an adequate legal framework and the existence of alternative remittance avenues. i am glad to note that the government of kenya has taken a keen interest on these issues and has, and is continuing to undertake a number of initiatives towards addressing these challenges. the central bank, in addition to the initiatives i have just mentioned, is developing regulations to strengthen the money remittance sector. ladies and gentlemen ; it is my sincere hope that this forum will contribute to a better understanding of the aml / cft issues affecting the country and will generate ideas that will bring the fight against the organized crimes up to international standards. it is now my pleasure to invite the hon. assistant minister, ministry of finance, dr. oburu odinga, to address you and to officially open this forum. thank you all. bis central bankers β speeches | were negatively affected by trade tensions between the us and china, as well as uncertain prospects for brexit. in the circumstances, global inflation eased from 3. 6 percent in 2018 to 3. 4 percent in 2019. inflation was subdued in the special drawing rights ( sdr ) countries, increasing slightly from 1. 7 percent in december 2018 to 2 percent in december 2019. in south africa, inflation decreased from 4. 5 percent in december 2018 to 4 percent in december 2019. therefore, average inflation for the trading partner countries was constant at 2. 9 percent in both 2018 and 2019. domestic economic developments in 2019 domestic output expansion is estimated at 3. 7 percent in the twelve months to september 2019, compared to 5 percent in the year to september 2018. the lower increase in output is attributable to, in the main, weaker performance of the mining sector. growth in non - mining gdp also slowed, from 5. 1 percent in the year to september 2018 to 4 percent in the corresponding period ending september 2019. inflation was below the lower bound of the objective range of 3 - 6 percent for most of 2019 ; and the outcome was broadly consistent with earlier projections. average inflation decreased from 3. 2 percent in 2018 to 2. 8 percent in 2019, largely because of base effects. this is because the increase in some administered prices in 2018 was not repeated in 2019. overall, low inflation in botswana was in the context of moderate domestic demand pressures and benign foreign inflation. i hasten to mention that food prices reversed the 0. 4 percent decrease in 2018 to a 3 percent increase in 2019. the subdued pressure on inflation is also apparent from belowtrend economic activity, signified by a negative output gap, as the economy continues to operate below potential. however, government expenditure grew by 15. 4 percent in 2019 compared to an increase of 6. 6 percent in the prior year. within this, personal emoluments rose by 14. 4 percent, following the april 2019 public sector salary increase, and this would have been replicated by other major employers. nevertheless, the impact on inflation was muted. it should be recognised, in this respect, that there is significant externalisation of spending by both government and the private sector, including ready availability of imports, hence moderate impact of increased government expenditure and wages on domestic prices. the other point to highlight is that the short - term impact of government spending on domestic demand is moderated to the extent that a significant component involves infrastructure and | 0 |
industry will be achieved through bank restructuring in harmony with the appropriate business scale and capital requirement, as well as increasing the capacity to absorb business risk. in addition, several regulations will cover, among others, mergers, consolidation, sources of funds for bank acquisition, the terms for bank acquisitions, the role of individual / family owners, as well as the terms and conditions of business development. d. policy to deepen the financial market will encourage the development of financial products that can be used as an alternative by banks for productive channelling and placements to the real sector, especially infrastructure financing. therefore, the financial market is expected to become more liquid with banks becoming less dependent on bi instruments. 2. improving the bank intermediation function through refined regulations and greater availability of supporting infrastructure. the regulations in question include the statutory reserve requirement, optimizing the efficiency of bank operations and simplifying the terms and conditions governing foreign exchange in order to stimulate credit allocation. bi will also help form an institution to supply credit basis data per sector, per region to assist banks asses risk. 3. expanding the role played by sharia banks in the national economy and bolstering resilience. sharia banking policy will become more intensive to raise capital, facilitate the development of sharia business units and facilitate the requirement for competent sharia human resources. 4. improving the role of rural banks in terms of micro finance and strengthening resilience. this policy will become more intensive, among others, to raise capital and facilitate the requirement for competent human resources, as well as assert the position of rural banks as community banks. a need will arise after the global crisis for a systemic regulator that can monitor the soundness and stability of the financial system as a whole. the role of such an institution will be to collate, analyze and report information regarding significant interactions on the markets and inter - institutional risk ; investigate whether an institution is exposing the financial system to systemic risk ; design and implement regulations ; and coordinate with other regulatory institutions, including the fiscal authority, to resolve systemic crises that may emerge. there are three reasons why the central bank may take the role of systemic regulator. first, the central bank has daily contact with market players in its function of implementing monetary policy. second, the responsibility of maintaining macro - economic stability corresponds closely with guaranteeing financial system stability. history has shown that economic crises around the world are always linked to financial crises ; therefore, the central bank naturally has to consider interactions between the financial | way between almost all ownership of major banking institutions and other financial industry corporations ( such as insurance, money market, securities, mutual funds, and other related derivative activities ). over time, this has rapidly become widespread practice, producing a change in the nature of a bank β s business from conventional operations to the more complex business of universal banking. universal banking is a development that we must anticipate as part of the future of the national banking industry. considering the possible consequences, we will be very cautious and selective in the policy to open the possibility to universal banking activities in indonesia. fourth, strengthen bank internal management. the fast pace development of information technology requires a level playing field in banking activities to enable the global market to be accessible from all corners of the world. this will force us to realign our operational standards in order to survive and to win in the competitive international banking world. understanding the importance of this issue, in the coming years, the implementation of best practices in good governance and basel ii should become our focus of attention. it is hoped that when the time comes where the momentum of strengthening shifts to become the momentum of growth, we will be equipped with effective operational capacities which allow us to dynamically move forward in a sustainable manner. fifth, improve the banking industry infrastructure. we realize that a strong stable financial system, an efficient and effective operating industry, and consumers that fully understand their rights and obligations will only materialize given that the supporting infrastructure is able to facilitate the developing dynamics. it is for that reason that improvements of banking industry must receive top priority. in 2006, bank indonesia will improve and strengthen infrastructures in five areas, i. e., improving the financial sector safety net, the establishment of apex banks for rural banks ( bpr β s ), banking mediation agency, bank research institutions in various areas of indonesia, and the regulation of card based payment facilities. distinguished guests, ladies and gentlemen : all of this is what i intend to convey to you tonight. it is not hard to imagine the magnitude of problems we must face ahead if we fail to act correctly and quickly. our economic growth prospect is less than optimal, world oil prices may endure shocks, global imbalances are predicted to rise, and inflation pressure risks remain high. all the while, our time to act is very limited before the effects of those various problems make its way to the banking and financial industry, and ultimately to our daily lives. this gives us great reason not to delay our actions. it | 0.5 |
##s down to an issue of managing of policy reforms in a non - disruptive fashion. finally, standards in the areas of corporate governance, insurance and to a certain extent insolvency and bankruptcy practices take a socio - cultural dimension and pose challenges of design, adoption and implementation. it is also possible to attempt a construct of the link between transparency and macroeconomic policy. good macroeconomic policy and good standards is perhaps an ideal situation for a country. good macroeconomic policy and poor transparency though not ideal is perhaps not risky by itself. bad macroeconomic policy and good transparency has large elements of risk and warrants change in policy before launching into transparency. the most risky combination perhaps is bad macroeconomic policy and bad standards. in a more dynamic sense, it can be argued that transparency provides incentives to adopt good macroeconomic policies. practical issues in implementation it is difficult to attempt an exhaustive or universally applicable account of practical issues in implementation of standards and codes since they are country - specific. it is, however, worth exploring, albeit hesitatingly, some general observations. first, while transparency and financial stability appear fundamentally complementary, there could be a trade off at some point. therefore, codes should be treated as milestones and the exact manner and timing of dissemination of information including the structure of reporting should depend not only on constitutional, legal and institutional mechanisms but also the likely impact of dissemination on the financial sector soundness and stability in a given context. secondly, many codes emphasise legislative provisions in a concrete manner. legislation provides the shield or back up for such actions. the emphasis of the codes should be to promote a general effort to improve legislative provisions and it is necessary to recognise that the process of legislation is time consuming and complex. while it is essential to recognize the importance of legislation, given its complexity, we need to appreciate that sound practices also could be as satisfactory. thirdly, the implementation of monetary policy is centralised with a single authority, generally the central bank, while the implementation of financial policies pertaining to various sectors like non - bank financial institutions, insurance, securities markets and payments and settlement may rest with different institutions. while the standards and codes could be taken as umbrella ones for all institutions, different aspects of implementation have to be dealt with separately for different sectors. this is necessary because the objectives of the institutions may differ fundamentally. for example, banking emphasises depositor protection whereas in the case of securities market, it is investor protection. the payment and settlement system has huge | intrabank vis - a - vis inter - bank since the latter is regulated by the central bank. such happenings defy all logic and needs to be debated in forums like the iba. the banks often counter this concern raised by the central bank by arguing that such charges should be best left to the market. as a person who has seen both sides, i am of the view that while the central bank need not intervene in the pricing of various payment products, it should not hesitate to step in if it finds a large section of the customers that cannot afford or are shying away from such products on account of arbitrary fixing of charges linked to the value of the transactions in a technology - driven scenario. rationalisation of service charges for paper and electronic bis central bankers β speeches products by the reserve bank was an attempt in this direction. acquiring space in the payment systems arena is a huge opportunity for bank and non - bank entities if adopted with a level playing attitude where the increasing number of customers coming into its fold is the game changer for pricing strategy. but above all, no attempt would be considered fruitful without the benefits percolating to the aam aadmi. 19. having stated the above, i must admit that one reason for costing of electronic products at a higher band in comparison with the traditional products has been the banks β attempt to part - recover the cost of deployment of technology. the process of introducing innovative products in india has been costly for the banks due to the unsystematic developments during the initial stage of technology deployment by the banking industry. in a country of our size, co - operative efforts and sharing of infrastructure while deploying technology is a lost opportunity story. customer service β dispute resolution and frauds dispute resolution 20. the customer dispute resolution has to be given a greater attention in the promotion of electronic payment products. appropriate processes have to be implemented for speedy resolution of such complaints. the time taken for resolution of such disputes should be reasonable. in an electronic payment scenario, a time period of 45 to 50 days for dispute resolution cannot be accepted as normal. our intervention in the resolution of disputes related to failed atm transactions was necessitated by this unreasonable time period. outlier issues cannot be the bottlenecks or benchmarks for dispute resolution process. by this logic, we feel that banks can bring down the 12 day period currently prescribed by rbi for failed atm transactions by implementing systems for automatic reversals. the outlier issues like part cash disbursal have to | 0.5 |
anymore. consumers are increasingly looking for convenience, speed, and low cost remittance services. most importantly, they are looking for service providers they can trust. competition is getting more intense. to illustrate this, let me share with you a cnn article on amazon go. amazon go is the future of retail shopping. you can walk into the convenience store, grab what you need, and you will receive a message that your credit card is charged for your purchase. the question is, what will be the future of the remittance sector? for the industry players, y o u can re - shape the remittance landscape. use technology to eliminate the major pain points in remittance, to better understand consumer behavior and needs, and to offer consumers a positive remittance experience from the start. within the migrant communities, words travel fast. we know that word - of - mouth is the most effective form of marketing. although i believe that the brick - and - mortar stores are here to stay with digitalization, the savings incurred from not having to pay for overheads can translate to lower remittance costs for consumers. ultimately, when there is greater use of authorised remittance channels, we can reduce remittances that are transferred through illegal operators. currently, we have 21 remittance service providers offering digital remittance services, more than double the number 3 years ago. with the implementation electronic know - your - customer or e - kyc, consumers will be able to experience end - to - end digital remittance transactions. these are positive and exciting developments happening in our remittance market. better public - private sector alliance to strengthen compliance bank negara malaysia will continue to work closely with the industry to promote financial inclusion and this will be done primarily through the digitalization of remittance. regulators also need to keep up with the times. we are taking a different approach this time β from β regulator instruct, industry do β and β regulator knows best β, to creation of public - private sector alliance. it is vital to leverage on each other β s strengths and resources, not only to reap the benefits of technology, but also to overcome the emerging threats. we are all in this together. greater harmonisation of regulatory framework on the remittance industry at the regional and 2 / 3 bis central bankers'speeches global levels is required to increase consistency in standards and reduce regulatory burdens on industry players. as a start, we have shared with | donald joshua jaganathan : digitization of remittances for migrant workers in malaysia welcoming remarks by mr donald joshua jaganathan, assistant governor of the central bank of malaysia ( bank negara malaysia ), at the project greenback 2. 0 kota kinabalu dinner, kota kinabalu, 3 november 2018. * * * yang berbahagia datuk yeo boon hai, datuk bandar, dewan bandaraya kota kinabalu, dr. firas raad, country manager for malaysia, world bank group, it is a pleasure for me to be here this evening. on behalf of bank negara malaysia, i would like to express my appreciation to dewan bandaraya kota kinabalu for hosting project greenback 2. 0 in this beautiful city ; our project partner, the world bank, for your continued support and commitment to this important initiative ; and to all of you who are gathered here today, for your hard work and dedication to ensure the project achieves its objectives. i am also delighted that we have representatives from bangko sentral ng pilipinas and bank indonesia with us tonight. migrant remittances and project greenback 2. 0 mr. juan somavia, the former director general of the international labour organization based in switzerland once said β migrants are an asset to every country, where they bring their labour. let us give them the dignity they deserve as human beings and the respect they deserve as workers β. malaysia is a land of opportunity for many. close to 1. 8 million foreign workers, men and women, have left their loved ones behind to earn better income here. for many, they are simply chasing the β malaysian dream β. often, the money they send home is a critical lifeline for their families. malaysia is also a major remittance sending country to other asean nations. last year, migrant workers in malaysia sent 2 billion usd to indonesia and the philippines alone. for the recipient countries, these funds lifted many households out of poverty. in a way, they also supported the countries β socio - economic developments. a new game plan : digitalisation as gateway to greater financial inclusion this is where our work in project greenback 2. 0 comes in. we started project greenback here in sabah 8 months ago, with a new game plan β digitalisation. we considered the following factors β around 70 % of the migrants here work in the agriculture and plantation sectors ; they are scattered across the remote areas ; | 1 |
peter pang : policies adopted by authorities in different jurisdictions with respect to international reserves welcoming remarks by mr peter pang, deputy chief executive of the hong kong monetary authority, at the international monetary fund independent evaluation office ( ieo ) / hong kong institute for monetary research ( hkimr ) workshop, hong kong, 24 march 2011. * * * it is a pleasure to welcome all of you to this event co - hosted by the hong kong institute for monetary research ( hkimr ) and the independent evaluation office of the imf. the hkimr, as some of you already know, is a subsidiary of the hong kong monetary authority. its objectives are to promote research on longer - term and wider policy issues of relevance to the monetary and financial development of hong kong and the asia region ; and to foster cooperation and cross - fertilisation of research efforts between academics, international financial institutions and the hkma research activities. for this reason we are particularly pleased to co - sponsor this workshop which deals with the important topic of policies adopted by authorities in different jurisdictions with respect to international reserves and with the advice the imf gives in this regard in its consultations with policy authorities. the accumulation of international reserves has become one of the issues at the center of debates about the functioning of the current international monetary system as well as about reforms of this system. one lesson that authorities in this part of the world drew from the financial crisis in the late 1990s was that strong policy fundamentals are not always enough to guard against the vagaries of international capital flows. a sizable cushion of international reserves is important as a buffer to guard against sudden changes in market sentiments that can lead to capital outflows and pressures on the currency. starting shortly after the asian financial crisis reserves were thus accumulated in the region to build up such buffers. but holding large amounts of reserves is of course costly as they are typically invested in highly liquid assets with relatively low yields compared with some alternative uses of the funds. it is partly for this reason that authorities in the region have taken steps to create a mechanism for pooling some of their reserves in the form of the chiang mai initiative which started in year 2000 and its multilateral extension which was agreed on in 2010. while the size of the pool of reserves under the chiang mai agreement is relatively modest compared to the potential needs for some of the larger economies in the region, the importance of the agreement goes far beyond the aggregate amount of reserves involves. it reflects a desire by authorities in | in many instances served to strengthen their trade and investment links with china. bis central bankers β speeches 16. for financial institutions, things are also in motion. it can be envisaged that the intermediation and servicing of capital flows into and out of china present fresh new opportunities, not least with the entry of a whole new grouping of investors into international capital markets. also, with the institutional management of household savings being relatively low in china at present, an increase to levels more commonly observed in other economies would signify a great deal of opportunities for the asset management sector. 17. hong kong, being the gateway to china, has become the hub for cross - border asset management, and it has been a natural base for the managers of qdiis, qfiis and rqfiis. as we look ahead, while the investments funds are coming through hong kong as a first step, it does not mean that the flows necessarily have to stop here. as a global financial centre and an important base for asset management, london makes a natural partner for hong kong when it comes to serving the growing needs of chinese investors when they start investing into a wider array of markets and instruments. and similarly, london and hong kong could explore synergies when it comes to sourcing the funds for investments into china. 18. i hope i have given you a taste of the many possibilities that lay before us as the rmb moves into the international financial landscape. this is a very exciting juncture and i hope that we β financial institutions, businesses, policymakers β would work together to address some of the issues that may inevitably come up along the process while creating values out of this collaboration. to begin with, today β s seminar is a good opportunity for us all to share experiences in rmb and to learn from each other. let me once again extend the warmest welcome to all of you. 19. thank you. bis central bankers β speeches | 0.5 |
improved more modestly, and the bulk of the evidence, including help - wanted advertising and surveys of employers β hiring plans, suggests that the job market is not poised for marked improvement in the months ahead. indeed, my own expectation is that while the trend in unemployment will be gradually lower, the path to get there might be choppy. on a brighter note, consumer spending looked a bit stronger in the latter part of last year after an anemic first half ( chart 4 ). the pickup in consumer spending was fairly widespread through november and, although we don β t yet have a full set of december data in hand, sales of motor vehicles remained solid at an annual rate of 13. 5 million units last month, and reports of holiday spending were upbeat. that said, there are some reasons not to get too optimistic about this sector of the economy : many of the underlying forces that typically support consumer spending are still quite weak, including the high unemployment rate, sluggish income growth, sentiment that remains relatively low despite recent improvements ( chart 5 ), and the lingering effects of the earlier declines in household wealth. bis central bankers β speeches housing markets β which i will discuss in more detail shortly β have shown only slight signs of improvement : housing demand and homebuilding ( chart 6 ) continue to be restrained by weak income and sentiment, tight lending standards, and a large overhang of vacant properties ( chart 7 ). as for the business sector, the uncertain durability of the recovery appears to be discouraging businesses from decisively increasing their productive capacity. notwithstanding a surge around mid - 2011, on balance, firms appear to have increased their spending on equipment and structures at a less robust pace in 2011 than they did in the prior year. the pace of inventory accumulation was also quite modest. the most recent indicators bis central bankers β speeches suggest more of the same : orders and shipments of capital goods have been subdued in the past few months, commercial vacancy rates remain elevated ( chart 8 ), and most indicators of business sentiment remain mediocre ( chart 9 ). the government sector also continues to be a substantial drag on activity, both at the federal level ( chart 10 ) β where defense and nondefense spending look to have dropped last year β and at the state and local levels ( chart 11 ). the declines in state and local government expenditures reflect continuing cutbacks in both employment and construction outlays. the budgets of these governments are quite strained by the ongoing phase - | different policies each have the potential to yield incremental improvement in housing and economic recovery. in the long term, policymakers will need to decide the future role, if any, that the government will play in housing finance. and they will need to decide how to best wean the gses away from government conservatorship. in the short term, however, i believe policymakers should at least consider policies that take into account the role the gses could play in hastening the healing of the housing market rather than focusing entirely on minimizing losses to the gses. in the end, breaking the current logjam created by large numbers of loans severely past due or in foreclosure and high levels of distressed sales should help reduce losses to the gses bis central bankers β speeches by breaking the downward cycle in prices. and, i think it is plausible that a faster recovery in the housing markets could speed, rather than slow, the end of gse conservatorship. in recent months, a group of staff at the federal reserve has been studying ways in which the housing market is hindering the economic recovery and possible remedies for those difficulties. this week we published a white paper that discusses issues and trade - offs to consider in developing policies that would facilitate recovery in the housing market. it contains discussions of a number of policies that i believe, if implemented effectively, could result in better economic performance. 4 for example, policies that increase credit availability for homeowners or investors seeking to purchase a home or to refinance an existing mortgage would allow more borrowers to access lower interest rates and thus improve the transmission of monetary policy to the economy. renewed attention to a broad menu of options to modify existing mortgages would provide aid to struggling homeowners and would help to reduce the flow of foreclosed homes into distressed inventory. when foreclosure cannot be avoided, incentives provided to homeowners that encourage short sales and deeds - in - lieu of foreclosure can reduce the time and costs of foreclosure and minimize negative effects on communities. in addition, expanding the options available for holders of foreclosed properties to dispose of their inventory responsibly could reduce the number of distressed sales and the effect of those sales on home prices. for example, in many housing markets the demand for rental housing is much stronger relative to supply than in the market for owner - occupied homes. reducing some of the barriers to converting | 1 |
speech governor lars rohde, suerf conference, new york 16 october 2019 check against delivery dear ladies and gentlemen, thank you for the invitation to share my view on technological change and digitalisation in a danish and international framework. slide 2 : the nordics are digital frontrunners denmark is a highly digitalised country. together with the other nordic countries and the netherlands, denmark is a digital frontrunner with top rankings on digital performance. and digitalisation is indeed widespread throughout danish society. danes are heavy users of digital solutions and both the public sector and the private sector provide a vast amount of digital services such as online banking and e - commerce. these services are not only used by the younger generations, but also by the elderly : four out of five danes in the age group of 75 to 89 used online banking last year. slide 3 : the public sector provides a vast amount of digital services how did denmark become this digital frontrunner? the answer is that this position has developed over decades and that the danish government has taken an active role in supporting the digital transformation of the society. the decision to create a civil registration system back in 1968 was a key element in this transformation. the national register contains basic personal information on all citizens who have a civil registration number. a similar system for companies was implemented in 1985. these registries allow for unique identification of all citizens and companies and they constitute the basis for all public and many private digital services. since 2001 denmark has had multi - year public strategies for digitalisation. today, most public services are available on an online portal for public services β borger. dk β ( " citizen. dk " ), and the tax authority's homepage β skat. dk β ( " tax. dk " ). to facilitate digital interactions with public authorities each dane has a personal e - id to access services securely β nemid β ( " easy - id " ), a mandatory bank account for transfers from authorities β page 1 of 5 nemkonto β ( " easy account " ), and a digital mailbox for letters and messages from the public sector β e - boks β ( " e - box " ). when the infrastructure was in place, many online self - services were made mandatory, and in 2014 it became mandatory for individuals and businesses to use digital post when communicating with public authorities. in fact, 80 per cent of all letters from the government, banks, pension firms, etc. are digital and | the dem / dkk rate has been converted to a eur / dkk rate before 1 january 1999. 1 euro = 1. 95583 d - mark. source : danmarks nationalbank. 19. april 2017 other economic agents take peg as given consumer price inflation pct., year - year - 2 denmark germany source : oecd. substantial policy action since 2015 interest rate spread, percentage points 1. 0 sale of fx 0. 8 0. 6 0. 4 0. 2 0. 0 - 0. 2 - 0. 4 - 0. 6 - 0. 8 - 1. 0 jan 14 purchase of fx apr 14 jul 14 oct 14 jan 15 apr 15 monetary policy spread jul 15 oct 15 jan 16 apr 16 jul 16 oct 16 jan 17 money market spread note : shaded quarters illustrate quarters where danmarks nationalbank intervened for more than dkk 20 bn. ( net ). money market spread is the spread between 1 month ois rates ( i. e. eonia - and cita - swaps ). monetary policy spread is the spread between danmark nationalbank β s cd rate and the ecb β s deposit rate. source : rio, thomson reuters datastream, danmarks nationalbank and own calculations. 19. april 2017 normalization of fx reserves 19. april 2017 no surge in the demand for cash kr. billion jan 12 jan 13 jan 14 value of large notes in circulation jan 15 jan 16 jan 17 linear trend note : large notes are dkk 500 and 1, 000 notes. source : danmarks nationalbank. so far, households have been shielded from negative deposit rates per cent p. a. 2, 0 1, 5 households 1, 0 investment and pension funds corporates 0, 5 0, 0 - 0, 5 - 1, 0 source : danmarks nationalbank, financial stability, 2nd half 2016. april 17 banks are adjusting business models towards more fee - based income kr. billion interest income now makes up less than half of total income net interest income net fee income administrative margins on mortgages source : data on systemically important banks from danish financial supervisory authority and own calculations. april 17 central government debt the currency split β danish funding rules domestic funding rule t - bills and bullet loans β’ issuance in dkk to cover the deficit and redemptions of domestic debt method : auctions supplemented with tap foreign funding rule dollar and euro loans β’ issuance in foreign currency to maintain an adequate foreign - exchange reserve method | 0.5 |
subir gokarn : financial development and deposit insurance β some linkages remarks by dr subir gokarn, deputy governor of the reserve bank of india and chairperson, deposit insurance and credit guarantee corporation ( dicgc ), at the 8th asian regional committee and international conference of international associations, goa, 18 january 2010. * * * introduction governor, reserve bank of india, dr. d. subbarao ; deputy governor, reserve bank of india, ms. usha thorat ; president, iadi and vice - chairman, fdic, mr. martin gruenberg ; chairman, arc and deputy governor, dicj, mr. mutsuo hatano ; ceo of the deposit insurance and credit guarantee corporation, mr. h. n. prasad ; distinguished participants ; let me add my own words of welcome to all the participants in this very important event. in his opening address, governor subbarao provided a historical perspective on the development of deposit insurance in india, highlighted its importance in sustaining confidence in the banking system as we dealt with the global financial crisis and laid out the challenges that it will have to deal with in the future. i would obviously not like to cover the same ground. also, i must admit to being a complete novice as far as deposit insurance is concerned, having only taken on the role of chairperson of deposit insurance and credit guarantee corporation ( dicgc ) in late november 2009, when i joined the reserve bank of india as deputy governor. consequently, i thought it would be more appropriate and useful for me to talk about a broad vision for financial sector development, which will then provide a framework within which to view the evolving role of deposit insurance. the recent crisis is clearly a dominant factor in any current discussion on financial sector development. while this is entirely understandable and legitimate, we must resist the temptation to view the future entirely through the lens of the crisis. crises will come and go, but the role that the financial sector as a whole plays in economic development and welfare will be fulfilled only if we allow it to find a healthy balance between multiple and sometimes potentially conflicting objectives. taken together, these objectives provide an enduring way to view financial sector development, which combines both traditional functions and incorporates new goals that are driven by both domestic and global aspirations and compulsions. a framework for financial development i will now lay out a framework for financial sector development, which encompasses five critical objectives. these five objectives are : efficiency, stability, transparency, inclusion and sustainability | ##ness of the economy has to be accelerated. it is essential. is it fair that some countries like portugal or ireland, with their own fiscal problems, could be called to participate in the solution for greece financing its debt? all the countries, without any exception, have to behave properly to have good management of their fiscal policy, good monitoring of their relative competitiveness, of their unit labour costs, of their structural reforms and overall competitive indicators. they all have to collectively exercise strong surveillance on the individual governments of the euro area, impose strong conditionality where needed and fully recognize that they are sharing a destiny in common. should the euro area and european union create an institutional framework, like a european monetary fund, to solve this kind of problem? firstly, the sgp is there precisely to organize peer surveillance of the sixteen members. the close monitoring of the policies pursued by each of the sixteen and the good functioning of this peer surveillance is absolutely essential. if we have a reinforced surveillance on the members of the euro area themselves, we will not have problems in the future. secondly, i think the task force presided over by mr van rompuy, according to a decision taken by the heads of state and government, will concentrate on how we could improve surveillance and β when necessary β the conditionality that the euro area will impose on each of its members, in line with the treaty. you think that this solution to greece is enough to calm down the financial markets? i already said what i have to say on that. was this financial crisis your most difficult task in the ecb? we have no β most difficult task β. we have to be permanently alert. as you know, the ecb has been very alert. before the crisis, we warned against the possibility of a market correction of great magnitude. we said that, i said that myself, in 2006 and at the beginning of 2007. we were the first central bank in the world, in august 2007, to assess that a period of financial turbulences was starting and to take appropriate decisions. that was, of course, a very difficult decision to take based upon this new turbulent market environment we had to cope with at that time. we had a lot of difficult decisions to take, like all other major central banks of the world, after the intensification of the crisis, which took place mid - september 2008, when we decided to embark on a series of non - conventional measures. we have to be alert, all of us, permanently | 0 |
export performance. structural improvements have played an important role in the adjustment of current account imbalances and, in fact, cyclical factors are estimated to account for less than half of the adjustment observed so far. 10 export growth has also been the engine of the positive gdp growth rates since the second quarter of 2013 in some crisis countries. with the return to positive growth rates last year, the upward trend in the unemployment rate came to an end in most euro area countries. in emu @ 10, ( 2008 ), β successes and challenges after ten years of economic and monetary union β. european economy, nr. 2 / 2008. see s. fahr, r. motto, m. rostagno, f. smets and o. tristani ( 2013 ), β a monetary policy strategy in good and bad times : lessons from the recent past, β economic policy, cepr & ces & msh, vol. 28 ( 74 ), pages 243 β 288, 04. see the box β to what extent has current account adjustment in the stressed euro area countries been cyclical or structural? β, monthly bulletin, ecb, january 2014, http : / / www. ecb. europa. eu / pub / pdf / mobu / mb201401en. pdf. bis central bankers β speeches portugal unemployment has started to decline. let me stress that this is not enough and unemployment rates, particularly among young people, remain unacceptably high in many crisis countries. however, the labour market reforms undertaken give us confidence that unemployment will start falling faster once the recovery picks up. it is, therefore, crucial to continue with the reform process in all euro area countries, including those unaffected by the crisis. undertaking reforms simultaneously can boost gdp more than in a situation where each country acts alone. 11 and importantly, a simultaneous approach will also help to make the reforms more socially acceptable. it will underscore the simple truth that in the euro area we are all in the same boat, and we are all heading in the same direction, across countries as well as within countries. see varga j., j. in β t veld ( 2013 ), β the growth impact of structural reforms β, quarterly report on the euro area, european commission vol. 12 / 4, page 17 β 27. bis central bankers β speeches | we also know that the challenges lying ahead for the euro area are still demanding. what do we need to do, over the next ten years and beyond, to consolidate the remarkable success of the euro and improve the performance of euro area economies? we, at the ecb and the eurosystem, must preserve the quality of our monetary policy. this will safeguard all the benefits expected of price stability in terms of low current and expected inflation and interest rates. to strengthen the β e β in emu, we need to focus on a sound economic management and we need to secure a broad base of acceptance for it. this entails : a rigorous implementation of the stability and growth pact ; the completion of the single market ; the implementation of the structural reforms envisaged in the lisbon agenda ; and a careful monitoring of national unit labour costs and competitiveness indicators. the achievements that i have described and the visible benefits of the euro support this sound economic management. these achievements and benefits help national governments to adapt and further liberalise their economies. thank you for your attention. selected references anderton, r., f. di mauro and f. moneta, β understanding the impact of the external dimension of the euro area : trade, capital flows and other macroeconomic linkages, β ecb occasional paper no 12, april 2004. asdrubali, f., b. sorensen and o. yosha, β channels of interstate risk sharing : united states 1963 - 1990 β, quarterly journal of economics, cxi, november 1996, pp. 1081 - 1110. baele, l., a. ferrando, p. hordahl, e. krylova and c. monnet, β measuring financial integration in the euro area β, ecb occasional paper no 14, april 2004. baldwin, r., β the euro β s trade effects, β ecb working paper no 594, 2006. benalal, n., j. l. diaz del hoyo, b. pierluigi and n. vidalis, β output growth differentials across the euro area countries : some stylised facts β, ecb occasional paper no 45, may 2006. blanchard, o., and f. giavazzi, β macroeconomic effects of regulation and deregulation in goods and labor markets β, quarterly journal of economics, 118 ( 3 ), august 2003, pp. 879907. cappiello, | 0.5 |
people it is our conviction that the number of zambians to have access to banking services will increase. we therefore encourage as many zambians as possible to use these facilities. to the residents of chilenje, i urge you to utilize the services offered by barclays bank, otherwise the bank may opt to close its branch due to lack of business and you will be left with no bank in your area. you must recognize that the era of keeping monies in mattresses is long gone. we recognize that barclays has obviously seen a window of opportunity in opening its branches in such localities. however, it is important to note that the level of incomes in such areas is not at the same levels as for those that obtain their services from high street locations. in this regard, we urge barclays and other banks opening their branches in these communities to design suitable products. the banks should structure the related costs such that they take into account the lower income status of their clients. i have in mind the withdrawal of small sums of money without necessarily charging for the withdrawals. the challenge of extending access to financial services to the remaining adult population still remains, and for this unbanked population cost is a major consideration. ladies and gentlemen, i am aware that the demand for banking services is high in chilenje and therefore barclays bank should consider moving to bigger premises. there are a number of longstanding neighbourhood businesses in this location. i can point at sir jack, janu plaza, karibu bakery and robert β s fish and vegies. there are also business entities which were formally parastatals located here. i also know that private entities that have a national presence such as zambeef plc and pama meats have established branches here. this is a reflection of the economic viability of chilenje township and barclays has done well to come here. ladies and gentlemen, as you are aware the zambian economy has taken a turn for the better over the last few years. we are fortunate that the rise in copper prices has created a greater interest to invest in the mines. we have also witnessed increased investment in other areas such as agriculture, tourism, construction and manufacturing. this has culminated in a 25. 6 % increase in non - traditional exports to us $ 845. 1 million by november 2007. this obviously gives a wider spread of lending opportunities for the banking sector. it is important to note that this growth in non - traditional exports is to a large extent associated with | plan, facilitated the establishment of a credit reference bureau which collects information on borrowers to be used by credit providers. furthermore, in order to increase competition in the financial sector the bank of zambia has registered a number of commercial banks and other financial institutions to operate in zambia. in 2009, the number of registered banks increased from 14 to 17. in addition, the bank of zambia is developing a framework to migrate from the use of monetary aggregates as the anchor of inflation expectations to the use of interest rates. inflation expectations are fundamental to the process of interest rate determination and low inflation expectations are entrenched not only by the implementation of appropriate monetary and fiscal policies at any given time, but also by past inflation developments. low inflation expectations were becoming entrenched in 2008 following two consecutive years of single digit inflation in 2006 and 2007. however, towards the end of 2008, the increase in food prices and the impact of the global financial crisis caused inflation to increase to a double digit figure of 16. 6 %. in spite of this, the prospects for low inflation, now look positive, creating an appropriate environment for interest rate reduction. mr president, as you may have noticed from the newspapers in the recent days, a number of banks have reduced their lending base rates though not as much as we would like to see. we hope that this is just a start, and that banks will continue adjusting their rates downwards consistent with developments in other macroeconomic indicators. distinguished members, allow me to comment on the statutory instrument regarding the us $ 5000 over the counter limit on deposits. these regulations are meant to encourage the use of the banking system in order to assist in curbing money laundering. doing away with this would deprive the central bank of a mechanism for detecting fraudulent activities and create a healthy environment for money to be laundered in our financial system. ladies and gentlemen, the bank of zambia recognises the importance of long term finance for growth. we are also aware of the important role that the development bank of zambia and others institutions that provide long term finance can play in this process. it is for this reason that the bank of zambia monitors the performance of these institutions to ensure that they are financially viable to be able to play this important role. rather than thinking of government recapitalising these institutions, we should think more in terms of developing the capital markets to enable these institutions raise resources for long term financing from the private sector. on the issue of the foreign exchange market, i wish to emphasis | 0.5 |
with its potential. against the background of this encouraging overall picture, we face two main areas of uncertainty at present. the first is the impact of the strong exchange rate for sterling. the strength of sterling in recent years has impacted on virtually all areas of the economy - agriculture and some service industries as much as manufacturing. but the effects have undoubtedly been felt most severely by manufacturing. the frustration felt by those who have built up efficient and competitive businesses, only to find their market position threatened by a rise in the exchange rate over which they have no control, is entirely understandable. in our judgments on interest rates, we consider it extremely important to take account of differences in the conditions that different sectors of the economy, and different regions of the country, may be facing. for that reason, our 12 agents, located around the country, keep closely in touch with local business and provide us with a continuous and very up - to - date feedback on local business conditions. visits like my own today provide valuable opportunities for mpc members to supplement at first hand the feedback we get from our agents. the message we get - that the rise in sterling has been, and is, causing severe strains, comes through loud and clear and we give that considerable weight in our judgments about interest rates. the difficulty we face is that, while some part of sterling β s rise in the past few years probably reflects underlying strengths in the uk economy - the sustained growth in activity in recent years and the more flexible and competitive structure of the economy - it is very likely that sterling at its present levels is unrealistically high, and that this is principally a reflection of the persistent weakness of the euro over the past year or so rather than factors directly related to sterling. to compound the difficulty, it is in fact very hard to see why the euro has remained relatively weak at a time when growth in the euro - area economies as a whole has recovered strongly. for the moment, in judging the appropriate level of interest rates, we take very carefully into account the weakness of the uk β s external sector, and the impact particularly on manufacturing, as an immediate factor off - setting in part the buoyancy of domestic demand. but we also have to take into account the possibility further ahead that, if the exchange rate moves back to more realistic levels, as we expect, the boost that could bring to external demand could only be accommodated, without strain on the supply capacity of the economy as a whole, if domestic demand has moderated | : combining the innovation of faster payments, direct debits and widespread use of online banking ( to give just three examples ) with a resilience record which β though by no means perfect β stands in contrast to some other parts of the financial system. so why the need for change? there is a one word answer to that, and that is : complexity. the uk has world - beating technologies. but too many sit in silos. to make a domestic retail payment, you can use physical cash ( drawn from a bank or a link atm ), a cheque, a credit or debit card, a real - time payment over fps, or a batch payment across bacs. wholesale payments may go through chaps or the embedded payment schemes of crest or lch. http : / / www. bankofengland. co. uk / publications / pages / speeches / 2015 / 799. aspx all speeches are available online at www. bankofengland. co. uk / publications / pages / speeches / default. aspx cross - border payments might use a correspondent bank, a direct link to an overseas rtgs system or cls. in fact, it β s easy to list 10 or 15 payments pathways without even trying. each system does a great job for its own customers. but each operates, by and large, in splendid isolation from one other, requiring different standards and languages, technologies, fees and governance frameworks. those frictions in turn create barriers to entry for new payments providers, and can also pose risks to system - wide resilience, making it hard ( sometimes impossible ) to reroute payments between systems in the event of outages. those characteristics are increasingly anomalous in a world in which payments users are demanding ever more seamless services β in real time, 24 / 7 β at lower cost, using the latest technology, providing rich information β and, perhaps most importantly of all, in ways that are secure against increasingly innovative forms of cyber attack. that is why it is timely to look afresh at the uk β s retail payments systems, as the psf has done. of the many recommendations in this report, three are of particular importance to us at the bank : - first, the consolidation of fps, bacs and the cheque and clearing company into a new integrated retail payments scheme should ensure a strong systemic risk manager, governance body and procurer of a new generation of retail payments infrastructure | 0.5 |
ben s bernanke : reflections on a year of crisis speech by mr ben s bernanke, chairman of the board of governors of the us federal reserve system, at the federal reserve bank of kansas city's annual economic symposium, jackson hole, wyoming, 21 august 2009. * * * by the standards of recent decades, the economic environment at the time of this symposium one year ago was quite challenging. a year after the onset of the current crisis in august 2007, financial markets remained stressed, the economy was slowing, and inflation β driven by a global commodity boom β had risen significantly. what we could not fully appreciate when we last gathered here was that the economic and policy environment was about to become vastly more difficult. in the weeks that followed, several systemically critical financial institutions would either fail or come close to failure, activity in some key financial markets would virtually cease, and the global economy would enter a deep recession. my remarks this morning will focus on the extraordinary financial and economic events of the past year, as well as on the policy responses both in the united states and abroad. one very clear lesson of the past year β no surprise, of course, to any student of economic history, but worth noting nonetheless β is that a full - blown financial crisis can exact an enormous toll in both human and economic terms. a second lesson β once again, familiar to economic historians β is that financial disruptions do not respect borders. the crisis has been global, with no major country having been immune. history is full of examples in which the policy responses to financial crises have been slow and inadequate, often resulting ultimately in greater economic damage and increased fiscal costs. in this episode, by contrast, policymakers in the united states and around the globe responded with speed and force to arrest a rapidly deteriorating and dangerous situation. looking forward, we must urgently address structural weaknesses in the financial system, in particular in the regulatory framework, to ensure that the enormous costs of the past two years will not be borne again. september - october 2008 : the crisis intensifies when we met last year, financial markets and the economy were continuing to suffer the effects of the ongoing crisis. we know now that the national bureau of economic research has determined december 2007 as the beginning of the recession. the u. s. unemployment rate had risen to 5 - 3 / 4 percent by july, about 1 percentage point above its level at the beginning of the crisis, and household spending was weakening. ongoing declines in residential construction | into dexia, a bank with assets of more than $ 700 billion, and the irish government guaranteed the deposits and most other liabilities of six large irish financial institutions. soon thereafter, the icelandic government, lacking the resources to rescue the three largest banks in that country, put them into receivership and requested assistance from the international monetary fund ( imf ) and from other nordic governments. in mid - october, the swiss authorities announced a rescue package for ubs, one of the world's largest banks, that consisted of a capital injection and a purchase of assets. 1 the growing pressures were not limited to banks with significant exposure to u. s. or u. k real estate or to securitized assets. for example, unsubstantiated rumors circulated in late september that some large swedish banks were having trouble rolling over wholesale deposits, and on october 13 the swedish government announced measures to guarantee bank debt and to inject capital into banks. 2 the rapidly worsening crisis soon spread beyond financial institutions into the money and capital markets more generally. as a result of losses on lehman's commercial paper, a prominent money market mutual fund announced on september 16 that it had " broken the buck " β that is, its net asset value had fallen below $ 1 per share. over the subsequent several weeks, investors withdrew more than $ 400 billion from so - called prime money funds. 3 conditions in short - term funding markets, including the interbank market and the commercial paper market, deteriorated sharply. equity prices fell precipitously, and credit risk spreads jumped. the crisis also began to affect countries that had thus far escaped its worst effects. notably, financial markets in emerging market economies were whipsawed as a flight from risk led capital inflows to those countries to swing abruptly to outflows. the policy response authorities in the united states and around the globe moved quickly to respond to this new phase of the crisis, although the details differed according to the character of financial systems. the financial system of the united states gives a much greater role to financial markets and to nonbank financial institutions than is the case in most other nations, which rely primarily on banks. 4 thus, in the united states, a wider variety of policy measures was needed than in some other nations. in the united states, the federal reserve established new liquidity facilities with the goal of restoring basic functioning in various critical markets. notably, on september 19, the fed announced the creation of a facility aimed at | 1 |
mr. tietmeyer β s address at the international frankfurt banking evening co - speaker β s address by the president of the deutsche bundesbank, prof. hans tietmeyer, following the lecture β achieving a credible currency for europe β held by dr. sirkka hamalainen, governor of the bank of finland at the international frankfurt banking evening on 5 / 5 / 98. i sirkka, first of all, thank you very much for having come and for your extremely interesting speech. you have spoken to us this evening with dual authority : on the one hand, as the governor of a highly successful national central bank and, on the other, as a prospective member of the ecb executive board. in the face of such concentrated authority in your address, there is hardly anything pertinent that i can add. i can only emphasise one of the core sentences of the speech you addressed to the ncb governors, and which is certainly true of the board members as well : β the interests of the entire euro area must always come first. β without any doubt, this rule is the crucial cornerstone of the ecb in achieving credibility. the topic of our gathering this evening is β achieving a credible currency for europe β. nominating sirkka hamalainen to the executive board of the ecb is, however, without any doubt an invaluable step on the way to a credible currency for europe. i am sure that you, sirkka, will be a jewel in the crown of the - hopefully - stable euro. by the way, in brussels a number of men were likewise earmarked for the executive board. but they are, of course, not so important - not, at least, this evening. sirkka, sincerest congratulations! we are all delighted that you are going to become a frankfurt central banker. i wish you, for our own sakes, every success. - to begin with, of course, on the way to your definitive appointment. - and particularly in your office here in frankfurt, from the summer onwards. [UNK] ii however, not everything that happened last weekend in brussels contributed to the necessary expectation that the euro will be a really supranational and depoliticised currency. i would like to make three remarks on the decisions which were taken in brussels last weekend. 1. the compromise reached in brussels over the weekend on filling the office of president of the european central bank is a decision taken by the political authorities which we take | note of and on which i do not want to make any further comments. 2. the suggestions made with regard to the nominations for the executive board of the ecb are to be viewed favourably overall. the persons involved are acknowledged experts on monetary and banking issues, and for the most part have many years of experience in the field of monetary policy. that certainly goes for professor dr. otmar issing, who is to be appointed for eight years. it is to be hoped that the appointment process will be completed very soon, and the european central bank thus established. 3. the european central bank must endeavour from the start to build up the necessary confidence in the sustained stability orientation of its policies, and must demonstrate its independence of political influences. as a member of the future ecb governing council, i shall strongly support any such policy. iii sirkka, frankfurt will become your new place of action. i wish that you will feel happy here in frankfurt. and i am sure that will be so provided that you are able to get to know frankfurt a bit. for if every one of the eleven national parliaments - like parts of the french national assembly - in future wanted to hold regular consultations with the members of the ecb executive board, you would not get to see very much of frankfurt, other than the airport. i hope that will not be the case. i also hope that you will like frankfurt. of course, i don β t suppose frankfurt can compete with helsinki in every respect. but in many ways it can. in terms of culture, too, frankfurt has a great deal to offer. after all, culture and banking go well together. it is no accident that the great finnish composer jean sibelius once said : β it is only among bankers that i have ever come across an appreciation of music ; it is very rare among artists, who prefer to talk about money. β [UNK] iv another reason why you may feel at home in frankfurt is that - in my opinion - there are a number of common features in the finnish and german mentalities. both national mentalities are inclined to speak their mind clearly and frankly. it is possible that both the finns and the germans do not always express themselves with that elegance and fluency that so distinguishes the representatives of those civilisations which were more influenced by rome. but finns and germans alike are conspicuous for a strong sense of realism, for clear - cut, if sometimes somewhat harsh, powers of judgement, and for a | 1 |
- 97 jan - 98 sources : statistics sweden and the riksbank the current crisis in asia was discussed chiefly in our risk scenarios. a small reduction in the growth of exports was made in the main forecast. but it was primarily a possible deepening of the crisis compared with the situation in december that, it was deemed, might have substantial effects on economic and price developments in sweden. thus the asian crisis was taken into account in our risk assessment. since then the crisis in asia has worsened, both in terms of its effects on the financial markets and its likely consequences for real economic growth. for sweden β s economy it means that the negative effects of the asian crisis probably will be somewhat more extensive and prolonged than we expected in december. all in all, the prospects for inflation from the demand side look a bit better than they did when the repo rate was last raised. another positive sign is that the wage agreements that have been concluded so far in 1998 indicate a rate of wage increases that is somewhat lower than in the main scenario described in december. however the recent weakening of the krona is a cause for concern. if it turns out to be permanent, it could affect inflation prospects. in the riksbank we are now finalising the next inflation report, in which we will present an inflation forecast reaching into the first quarter of the year 2000. there, factors such as the asian crisis, the wage negotiations and the exchange rate developments will be weighed and put into a larger context. the view of the inflation prospects that will result from this process will form the basis for future monetary policy. - 11 - inflation forecast december 1997 cpi and underlying inflation ( und1 ) 3, 5 3, 5 3, 0 3, 0 2, 5 2, 5 cp i 2, 0 2, 0 1, 5 1, 5 1, 0 1, 0 0, 5 0, 5 0, 0 0, 0 3, 5 3, 5 3, 0 3, 0 2, 5 und 1 2, 5 2, 0 2, 0 1, 5 1, 5 1, 0 1, 0 0, 5 0, 5 0, 0 0, 0 sources : statisti cs sweden and the riksbank | mr. heikensten answers eight questions on monetary policy in sweden speech by the deputy governor of the bank of sweden, mr. lars heikensten, at the economics association in umea on 19 / 2 / 98. introduction during the 1990s monetary policy has been the subject of intensive discussion. this is not surprising, given the serious crisis in the swedish economy at the beginning of the decade and the role that monetary policy played both then and as the crisis was building up. since that time, monetary policy has had an explicit role to safeguard independently the value of money β a role that is new in sweden in the post - war period. with a floating exchange rate, the decisions currently made by the riksbank on its instrumental rate are very real and important to the behaviour of households and businesses and to economic growth. the monetary policy discussion has evolved over time. questions and statements about monetary policy β s basic objective of price stability that were very frequent a couple of years ago are less so today. understanding of the riksbank β s actions seems to have increased. we are presently trying to evaluate this by asking the public how it views the riksbank β s work and by following the media and newsletters written by the market β s players. it is also possible to form an opinion based on the market β s reactions to changes in the instrumental rates as to whether the policy is understandable. in spite of the fact that knowledge and understanding of the riksbank β s policy have gradually increased, i believe that from time to time there is a need to explain the basis for the policy and some of the principles that guide it today. the purpose of today β s speech is just that. i will endeavour to answer seven of the questions that i have encountered most often in recent years at meetings and in editorials and commentaries and that seem to permeate the discussion of monetary policy continually. by way of conclusion i will comment on an eighth question. question 1 : why is low inflation good? the experiences of previous decades in sweden and a number of international examples show that high inflation is associated with economic costs. moreover significant costs ensue when one is compelled to gear down from high to low inflation β something that sooner or later always happens. it has been shown that high inflation is often associated with sharp fluctuations in the relative prices of goods. rapid and abrupt price changes create uncertainty about the future for all the actors in the economy. it simply becomes more difficult to make long | 1 |
speech delivered at graphic business / stanbic breakfast meeting by dr ernest addison governor, bank of ghana at at labadi beach hotel on tuesday, april 23, 2019 introduction 1. ladies and gentlemen, let me begin by thanking graphic business and stanbic bank for the opportunity to speak on the topic : " achieving sustainable exchange rate : our options β this topic is timely β coming at a time that we have successfully emerged out of a sudden bout of volatility in the exchange rate, which generated a lot of debate domestically and also externally. it is my expectation that my brief remarks and subsequently discussions will shape the narrative on currency and exchange rate management in the context of a small open commodity dependent economy that has adopted a flexible exchange rate regime to underpin the conduct of monetary policy. 2. the recent sharp movements in the exchange rate of the cedi generated considerable debate on the options that we have as a country to deal with the seasonal bouts of depreciation in a more sustainable way. before i jump into discussing the underlying causes of these sudden episodes of sharp currency depreciation, allow me to first put the key issues into context. 3. first and foremost, i think what we need to understand is that the exchange rate reflects a price. and, as is the case with all prices for goods and services in the economy, the exchange rate will change and respond to the dynamics of the economy and will always be subject to the dynamics of demand and supply. as a country, we have adopted a flexible exchange rate regime, which has served us well in the past and continues to do so under the bank β s inflation targeting monetary policy framework. 4. looking at the history, the flexible exchange rate regime has served ghana well, given the structural characteristics of the ghanaian economy. i am sure there are some schools of thought that harbour the idea of ghana pegging the cedi to one of the major trading currencies to achieve some stability. whilst this might sound appealing, empirical evidence, including analytical work by the imf shows that growth has been more robust in countries with flexible exchange rate regime than in countries with fixed exchange rate regimes. 5. as we all know, ghana β s economy is import dependent, hence the existence of persistent foreign exchange demand pressures by importers. in addition to these huge demand pressures, the seasonal repatriation of profits and dividends foreignowned companies reflects in significant outflow of resources out of the services and income accounts, exerting additional pressures on the | about 4 percent for more than half a century, as shown in the left - hand - side panel of chart 4. however, once we plot the growth rates of individual economies, the diversity in the nature of the region β s economic development becomes immediately apparent. the graph also reveals that there were shifts in the region β s β rising stars. β japan recorded double digit growth in the 1960s, but its growth rate became subdued thereafter. instead, the asian nies took over the position of very rapid growth economies, followed by china more recently. if we redraw the picture, not against time horizons but against income levels, as shown in the right - hand - side panel of chart 4, there emerges a pattern of development stages. growth rate tends to become higher once a country makes the transition from the low - income to the middle - income stage. the growth rate reaches its peak when an economy is at the middleincome stage. after that, it tends to become slower, especially once a country enters the high - income stage. ii. three traps for growth can asian countries sustain their rapid economic growth for the foreseeable future? if history is any guide, we could expect another rising star to emerge in asia. it is by no means guaranteed, however. even if it is the case, we cannot entirely count on one single rising star. the growth rate of relatively high - income asian economies needs also to be sustained at a reasonably high level if the prosperity of the regional economy as a whole is to be maintained. i believe there are three traps which we must avoid falling into if we are to sustain economic growth in asia. despite the heterogeneity which we have observed, these three traps are relevant to many countries in the region, albeit to varying degrees, depending on the circumstances. the first trap is the β middle - income trap. β 6 history shows that many economies have faced difficulties in advancing beyond the status of a middle - income economy once they have see http : / / data. worldbank. org / about / country - and - lending - groups. in my presentation, i loosely follow their definitions by using thresholds of 12, 000 u. s. dollars and 1, 000 u. s. dollars of per capita gdp. david n. weil, economic growth, third edition, pearson education limited, 2013. the darkness of north korea is noteworthy, as is often pointed out in the literature, including charles i. jones, β | 0 |
shocks, both at the macro and the micro level, crystallise into permanent institutional arrangements that put downward pressure on the effective retirement age and, hence, undermine future governments'capacity, if not to ward off the ageing crisis, then at least to soften its impact. if we do not want the famous lisbon objectives to become just a slightly offbeat alternative scenario in our projections, rather than realistic targets, then, clearly, more action is needed in these areas. all in all, it is essential that policy makers fully understand that the window of opportunity that we have now, will not last forever. we should be aware of the fact that we still have a lot of convincing to do. earlier on i have likened the ageing problem to an earthquake. contrary to a regular earthquake, however, we can predict almost exactly when and where it will hit us. in addition, the quake will not take the form of a big bang but will reach its full impact only very gradually : its disrupting ripples will be felt throughout the following decades. and although it is hard to give precise estimates of the amount of damage that it will do, this is the kind of earthquake that is certain to shake the very foundations of our modern welfare states. it is our task, as economic researchers, policy advisors and, ultimately, policy makers, to make sure that, by the time ageing really starts to kick in, these foundations can withstand the blow. i firmly believe that conferences like this one bringing together a host of distinguished researchers from both sides of the atlantic are a crucial step in reaching this objective. | co2 price at the socially optimal level, monetary policy would not have any additional role to play. and if authorities were to set the price too low, changing this price through monetary policy would be tantamount to correcting a policy failure, which is controversial. once again, unelected policymakers cannot legitimately make choices with first - order redistributive implications. as soon as one recognises that fighting climate change implies trade - offs, there is a very fine line between supporting policy and making policy. conceptually, one would need to change the nature of the trade - off, with more efficient instruments than those available to policymakers, to be on safer grounds. but this is unlikely to be the case for the reasons i just explained. finally, monetary policy faces a communication challenge when dealing with climate change. many people believe that central banks are just another kind of bank providing credit to the economy. but they are not. it is therefore crucial to avoid creating expectations that central banks can finance the energy transition. fiscal - monetary policy interactions another issue at the frontier of discussions around central bank mandates is the relationship between monetary and fiscal policies. i have already made some key points when discussing the role of the policy mix during the covid19 pandemic, but i β d like briefly to elaborate on a few more general considerations. since the 1990s, granting political independence to central banks, along with a well - defined mandate to achieve price stability, has been one of the most widespread and successful institutional reforms in the world. it brought macroeconomic stability that was sorely lacking during the 1980s. the core idea is simple and intuitive. to avoid inflationary monetary policy, it makes sense to keep the insatiable appetite of governments for spending well separated from a creditor with potentially infinitely - deep pockets and offering very generous funding terms ( zero interest ). it remains that even if they live separate lives, monetary and fiscal authorities are tied by the intertemporal budget constraint of the consolidated public sector. the question then becomes : who will ultimately assume responsibility for fulfilling that budget constraint? if monetary policy is to be credibly assigned to preserving price stability, then the treasury must assume the sole responsibility for sticking to the budget constraint. this is sometimes known as ensuring a regime of monetary dominance, and it explains why many governments ( in europe and elsewhere ) have committed to specific fiscal rules banning excessive deficits and debts. the opposite situation, in which the central bank is forced to | 0.5 |
zeti akhtar aziz : expanding asean - eu economic links - the role of the euro speech by dr zeti akhtar aziz, governor of the central bank of malaysia, at the euro conference aβ¬Εexpanding asean - eu economic links - the role of the euro ", kuala lumpur, 14 july 2005. * * * your excellency ambassador thierry rommel, head of the eu commission delegation in malaysia, your excellencies, distinguished guests, ladies and gentlemen, good morning. it is my great pleasure to welcome you to the " euro conference : expanding aseaneu economic links - - the role of the euro ". bank negara malaysia is indeed honoured to co - host this event and would like to especially thank the european commission for the opportunity. the purpose of this conference is to bring together recognised experts to discuss the important issues affecting economic, monetary and financial interests in asean and the eu. i believe that the exchange of ideas and views over the next two days would contribute towards an increased understanding of the developments and issues important to our respective regions. our agenda is for the further strengthening of the close asean - eu partnership that offers mutually reinforcing benefits to both regions. it is our hope that this conference would serve as a catalyst to promote greater appreciation of the potential for an expanded asean - eu economic relationship - a relationship in which trade and investment flows between our regions can be enhanced. the asean - eu partnership has developed steadily over time through a number of well - established forums. this has taken place in a global environment in which the world economies and financial systems are increasingly becoming more integrated. as a result, it can be expected that there is increased interdependence, events that take place in one part of the world will have implications on other parts of the world. this is likely to be more pronounced in the asean economies and financial systems, given their openness and their high degree of integration with the global economy and international financial system. as the asean and the eu continues to evolve as strategic partners, new opportunities can also be realized. an enhanced relationship will also contribute towards more effective management of the new challenges in the ever - changing global environment. indeed, this conference takes place at an important time when it becomes even more constructive and meaningful for our two regions to strengthen our associations, our inter - linkages and our relationships. learning from the experiences of the eu ladies and gentlemen, the unification of europe on many fronts is a major structural enhancement to | make judgements in situations that are not always well - defined. taken in this context, the work of the fspb serves as an important anchor for decisions and actions that will engender trust in the financial industry. in a fast moving world, a strong commitment to a professional code of conduct provides the assurance that the public seeks β that financial institutions and employees are held to and will consistently demonstrate high standards of professional and ethical conduct. i hope that the industry will continue to lend its strong support to the fspb β s work. following today β s launch of the professional code, the bank would urge financial institutions and professional bodies to reflect the standards set out in the code in the values and conduct that you demand of your staff, agents and members. this needs to move beyond symbolic gestures, to the diligent implementation of policies and programs that promote the desired culture. the bank is confident that the fspb will continue to play an important role in supporting these efforts β including through its work to identify implementation challenges, develop solutions and introduce improvements to reflect emerging issues. the financial industry has demonstrated leadership in so many areas β surely none can be as important as leadership in something as fundamental as professional and ethical conduct. on that note, let me once again commend and congratulate the fspb on this important, and certainly most relevant initiative. 3 / 3 bis central bankers'speeches | 0.5 |
##ommodative monetary policy settings, favourable labour market conditions and inflows of remittances and tourist earnings continue to boost consumer spending and investor sentiments. inflationary pressures in 2016 came largely from domestic supply side factors following the natural disasters. inflation going forward in the near term is expected to continue to be domestically driven with any major downside risks stemming from adverse weather conditions, but also any sharp increases in international oil and food prices. for now, year - end inflation is projected at around 2. 5 percent. with the modest performance of fiji β s external sector, foreign reserves levels remain adequate, currently at $ 1. 9 billion, which is sufficient to cover 5. 1 months of retained imports of goods and non - factor services. our financial system remains stable and continues to support the economy during this time of recovery. bank lending has been reported at sustainable levels after a period of aggressive growth in the last 5 years. non - performing loans as an indicator of the soundness of our financial system have been recorded at all - time lows. the performance of the insurance industry continues to be assessed as satisfactory even though the 2016 results of the general insurance sector will be significantly impacted by claims arising from the tc winston insured losses. notwithstanding the current stable assessment of our economy, the reserve bank will of course continue to closely monitor global and domestic developments and assess likely vulnerabilities that may negatively impact our growth and the stability of our financial system. closing in closing ladies and gentlemen, i take this opportunity to again acknowledge free bird institute limited for its strategic vision and perseverance towards achieving its listing aspirations. i congratulate mr taniguchi, the board and staff for reaching this milestone in the company β s journey in fiji and wish you well as a listed entity. ladies and gentlemen, i cannot leave you without making my usual regulatory statement to urge all potential investors to take the time to carefully peruse the offer document that has been prepared for this listing. please ensure to conduct your own analysis and do seek professional advice from licensed investment advisers or stockbrokers on the suitability of investing in the stock market as per your objectives. with that said, i now have much pleasure in officially declaring free bird institute limited as listed on the south pacific stock exchange. arigato gozaimasu! vinaka vakalevu! end. | current economic background β the rbf remains committed to its twin objectives β that is to maintain low inflation and an adequate level of foreign reserves. inflation has been high at the moment and reached 10. 4 percent last bis central bankers β speeches month. as we all know, the inflation outcome has been influenced by external and policy related factors β most of which are beyond the control of monetary policy. imported inflation alone accounts for more than 60 percent of our domestic inflation outcome. with the current demand side inflationary pressures weak at the moment, it is more appropriate that monetary policy remain accommodative to support some growth in the economy while at the same time vigilant on the potential second - round impact on inflation. inflation is forecast to subside to 7 percent by the end of this year and further to 4. 5 percent by the end of next year. b. on to core inflation β in principle monetary policy should only respond to persistent price movements. the reserve bank has two core inflation measures which are the trimmed mean and excluding food and energy items inflation, both are widely accepted and used in many central banks to exclude temporary price pressures. universally, it is hard to determine when that β temporary β impact will come to an end as there are a lot of factors that come into play at almost the same time. in fiji, the big increase in food inflation from june 2010 to june 2011 to 11. 3 percent was attributed to many factors. if we compare food inflation from june 2010 to december 2010, food prices only rose by around 2. 0 percent which can be regarded as quite stable. as such most of the increase in food inflation only came about this year on account of the vat rate change and the high food prices noted across the world during this period. by january 2012, we should see the impact of vat fall from the core inflation measure. as to the impact of high world food prices, as soon as prices of these food commodities normalise abroad, core inflation should return to normal levels. c. it was mentioned that fiji had high rates of inflation by the middle of this year even after accounting for the impact of higher electricity tariffs and the increase in vat which came into effect in november last year and january this year respectively. it was also mentioned that seychelles which despite having a larger devaluation managed to bring down inflation to the same rate as vanuatu. it is important to note that unlike seychelles, fiji β s major trading partners are australia and new zealand which are | 0.5 |
respect to these instruments include whether there should be a more coordinated european framework for their introduction. * * * communication borrower - based measures such as loan - to - value and debt - service - to - income, debt - to - income or loan - to - income ratios have been introduced in a number of european member states over recent years. prior to the financial crisis, these type of measures were deployed in mainly non - european countries ( including south korea, hong kong, singapore and others ) and there is empirical evidence regarding their potential effectiveness in reducing risks to financial stability. 2 the 1 / 5 bis central bankers'speeches evidence however is rarely clear cut and the impact of such measures can vary depending on, among other things, characteristics of national housing markets and the position in the financial cycle. whilst subject to intense debate, when we introduced the mortgage measures in 2015, the legacy of the crisis was still at the forefront of many people β s minds. this, to some degree, facilitated the subsequent broad societal understanding and acceptance of the measures. our two primary objectives when introducing these measures were, first, enhancing the resilience of households and banks to economic and financial shocks and, second, reducing in a structural way the pro - cyclicality that can be inherent in housing and credit markets by capping the amount of high ltv and lti mortgages allowed at any time. however, while we have emphasised in all our public communications that it is not our objective to target house prices, this has proven in fact to be a very difficult message to get across to the public. underlying much of the public discourse on the mortgage rules is the central issue of affordability. in this context, it has been challenging to explain ( i ) that house prices are determined by a complex interaction of supply and demand side factors, ( ii ) that although our measures may impact on prices β that is not their primary goal, and ( iii ) that housing market policy issues like taxes, building measures and the shortage of supply of housing for buyers and renters are outside of our remit. our view is that not only would it be extremely difficult to choose an appropriate target for house prices but also extremely difficult to hit this target. financial sector regulations cannot address these issues, which must instead be addressed by other targeted policies. 3 to banks, we have also had to carefully explain that these are limits, not targets. we continue to monitor their risk appetites in this regard. figure 1 shows the recent history | norman t l chan : focus in hong kong on treating customers fairly speech by mr norman t l chan, chief executive of the hong kong monetary authority, at the treat customers fairly charter launching ceremony, hong kong, 28 october 2013. * * * welcome to the treat customers fairly charter launching ceremony. i am pleased that representatives from 22 retail banks in hong kong gathered here today to sign the charter, pledging to implement the five high - level principles set out therein. 2. a customer - based, customer - oriented corporate culture is what we always applaud and hope for. this is true regardless of industry. however, not every industry or company is able to achieve this, particularly when they are under the pressure of increasing market competition and the need for profit - maximisation, it is not uncommon for some companies to adopt sales and marketing practices that may undermine consumers β interests. it has therefore led to the development of different consumer protection mechanisms in modern societies to address such issues, for instance, hong kong has established the consumer council in this context. nevertheless, the international community is increasingly concerned about the interests of financial consumers in recent years. in late 2011, the organisation for economic co - operation and development ( oecd ) has announced a set of high - level principles for protection of financial consumers. it is now in the process of developing effective approaches for implementing the principles with a view to promoting the principles to g20 members. 3. benchmarking against the oecd principles and the practices of some advanced economies, the hkma is of the view that hong kong has been doing quite well in protecting bank customers β interests. we also strive to make changes and improvements from time to time. yet, i believe there is a need and room for further improvements as to how banks deal with their customers. this is because bank customers are essentially entrusting most of their liquid assets or funds with banks that they trust. trust between banks and their customers is beyond that between general service providers and their customers. also, as compared to other financial institutions, it is indeed easier for banks to earn confidence and trust of their customers. in addition to bringing business opportunities and profit to banks, customers β confidence and trust in banks are also the cornerstone for banking and financial stability. 4. let me borrow a famous quote and put it simply that with β great trust β comes great responsibility. first, banks should ensure their prudential operation and risk management are in place to safeguard customer deposits. second | 0 |
, β monetary policy according to hank β, american economic review, vol. 108 ( 3 ), march, pp. 697 β 743. 2 gabaix, x., lasry, j. - m., lions, p. - l. and moll, b. ( 2016 ), β the dynamics of inequality β, econometrica, vol. 84, no 6, november, pp. 2071 β 2111. 3 / 3 bis central bankers'speeches | ##ive measures so that banks can recover by their own means in the event of a crisis? focusing solely on regulatory metrics may delay such corrective action. these metrics are important for assessing the need for corrective measures and for justifying their implementation. at the same time, however, they do not reflect a broad, forward - looking perspective, as the example of credit suisse shows. the crisis at credit suisse will be analysed, and the lessons drawn will be factored into the review of the tbtf regulations, among other things. the snb will contribute to this work. i now hand over to andrea maechler. implementation of monetary policy i would now like to look at developments on the money and foreign exchange markets since the last monetary policy assessment. secured short - term swiss franc money market rates remained close to the snb policy rate despite the tense situation on the financial markets, as can be seen in chart 2. we ensured this by deploying our monetary policy instruments. since mid - march, the liquidity supply in the swiss franc money market has been influenced by the exceptional measures taken to manage the credit suisse crisis. the snb provided ample liquidity to credit suisse in the form of interest - bearing loans, which led to an increase in sight deposits. due to outflows of customer deposits at credit suisse, some of this liquidity also reached other institutions in the financial system. this increased the supply of liquidity in the swiss franc money market. as thomas jordan has explained, it was important that the liquidity assistance to credit suisse did not influence our monetary policy stance. we therefore consistently continued with our regular monetary policy implementation in the swiss franc money market. this currently comprises tiered remuneration and the absorption of sight deposits by way of open market operations. to ensure that the secured short - term swiss franc money market rates do not fall and that they remain close to the snb policy rate despite the additional liquidity in the swiss franc money market, we have reduced the increased liquidity supply via open market operations. as you can see from chart 3, we have used snb bills and repo transactions with various maturities to accomplish this. not only our open market operations in the money market but also our foreign exchange transactions have an impact on sight deposits. since the last monetary policy assessment, the swiss franc has appreciated by around 2 % on a trade - weighted basis. in order | 0 |
##s or the adoption of protectionist measures. my suggestion for macroprudential policy is that the international community should develop β best practices β. whenever possible, central banks should be entrusted with their management, drawing a clear line with monetary policy actions, and they should assure that, bis central bankers β speeches at a minimum, macroprudential policies are transparent ; targeted to a specific market failure or externality ; and preferably be transitory. in sum, in the case of rapid capital inflows, emes β central banks should : pursue as a primary objective a low and stable rate of inflation, allowing market adjustments in interest and exchange rates, unless such adjustments could lead to an unacceptable equilibrium and threaten future financial stability ; and second, if such non - equilibrium adjustments are a possibility, use transparent, well targeted and transitory macroprudential measures. now the third, and not unrelated, challenge. the recent problems facing emes β central banks since may and june have not been related to capital inflows, but outflows. these have generated market responses that in some cases were more violent than those in the wake of the lehman brothers collapse, in terms of exchange rate volatility and increases in long term interest rate. a key point here is that by and large, markets have differentiated among emes β those with better fundamentals and fewer vulnerabilities have fared better. the main lessons for emes : β today it is a must to have a strong external position, characterized by a low current account deficit, substantial international reserves, long duration in the public debt, and if possible contingent international financing, as in the cases of mexico, colombia and poland with the imf flexible credit line ( fcl ). additionally, it is important to have a flexible exchange rate regime, in combination with a flexible and credible inflation targeting framework. β finally, there is also a premium for conservative fiscal policies and sustainable public debt levels and projections. even with these elements in place, as ump in ae are unwinded, capital outflows will follow, domestic interest rates will increase, and financial conditions could become very turbulent. from the emes point of view the only adequate response, is one that is comprehensive and consistent, involving fiscal, financial and monetary policies. central banks cannot deal with this kind of situation alone ( say, by raising interest rates and / or selling foreign exchange in the market ). to overburden central banks with the defense of | need regulation to cover credit risk. if they only back themselves in central bank reserves, which are inherently liquid, they don β t need liquidity facilities. ultimately, the specific requirements may well be different from those applicable to banks, but the outcome will be the same β that systemic stablecoins used as money will offer the same protection to coin holders as commercial bank money. conclusion the title of this speech is a cliche : everything that is old is new again. but i am going to end on a different cliche : the definition of insanity ( widely β and inaccurately β attributed to albert einstein ) is doing the same thing over and over again but expecting different results. as i mentioned earlier, stablecoins may be innovative in the technology they use, but the fundamental questions they pose are not new. we as central bankers and regulators need to look at them as what they propose to be β a new form of private money. this means that we will hold them to standards similar to those applicable to existing private money. it doesn β t matter what type of technology you β re using or the legal form of the firm. if a firm is offering private money on a systemic scale then it should be regulated as such. our core rules and requirements came through trial and error, often following financial crises. our work on a regulatory regime for stablecoins builds on this learning process β rather than starting at square one and expecting different results. i recognise that the themes here sound curmudgeonly. but this is not an anti - innovation message : quite the opposite. establishing a secure regulatory environment for new forms of digital money to operate within the uk will lay a foundation for sustainable innovation. as i said at the outset, if new forms of digital money can be made safe, they could potentially contribute to faster, cheaper and more efficient 4 / 5 bis central bankers'speeches payments with greater functionality. they could increase the resilience of payments. and they could even have long - term benefits for financial stability. but these opportunities can only be realised if new forms of digital money are safe β which means recognising and properly regulating the elements that are age - old. i am grateful to morgane fouche, matthew osborne, stephanie haffner, robert page and james pople - hoskins for their help in preparing these remarks. i am also grateful to antoine lallour, nicholas butt, david copple, shiv chowla, andrew hauser and | 0 |
major economic quantities such as inflation, unemployment, and the growth rate of gross domestic product ( gdp ) fluctuate around values that are considered β normal, β or β natural, β or β desired. β the fomc has chosen a 2 percent inflation objective as one of these desired values. the other values are not directly observed, nor can they be chosen by anyone. instead, these values result from myriad interactions throughout the economy. in the fomc β s quarterly summary of economic projections ( sep ), participants state their individual views on the longer - run - 4normal values for the growth rate of gdp, the unemployment rate, and the federal funds rate. these fundamental structural features of the economy are also known by more familiar names such as the β natural rate of unemployment β and β potential output growth. β the longer - run federal funds rate minus long - run inflation is the β neutral real interest rate. β at the fed and elsewhere, analysts talk about these values so often that they have acquired shorthand names. for example, u * ( pronounced β u star β ) is the natural rate of unemployment, r * ( β r star β ) is the neutral real rate of interest, and Ο * ( β pi star β ) is the inflation objective. according to the conventional thinking, policymakers should navigate by these stars. 3 in that sense, they are very much akin to celestial stars. for example, the famous taylor rule calls for setting the federal funds rate based on where inflation and unemployment stand in relation to the stars. 4 if inflation is higher than Ο *, raise the real federal funds rate relative to r *. the higher real interest rate will, through various channels, tend to moderate spending by businesses and households, which will reduce upward pressure on prices and wages as the economy cools off. in contrast, if the unemployment rate is above u *, lower the real federal funds rate relative to r *, which will stimulate spending and raise employment. navigating by the stars can sound straightforward. guiding policy by the stars in practice, however, has been quite challenging of late because our best assessments of the location of the stars have been changing significantly. in this talk, i will sidestep the issue of navigating by short - run versus long - run versions of the stars. the challenges that i will highlight are, in my view, made more difficult, and the case for a careful riskmanagement approach made stronger, by the need | commercial property market ; developments at eu regarding banking regulation / supervision ; update on matters relating to costs associated with motor and business insurance including the cbi publication β β review of motor damage claims handling β ; consumer protection issues ; update on preparations from brexit ; update on developments in the credit union sector. 2 according to the website daft. ie 3 see box c β leading indicators of new housing output β in quarterly bulletin 2018q2 4 the volume of cash transactions is calculated from the rolling annual total of bpfi mortgage drawdowns ( excluding one - offs / self - builds from the central bank monitoring template data ) and the total number of cso residential dwelling property transactions. the cso housing transactions are inclusive of all market and nonmarket activity by households and non - households. 5 the return on assets is an indicator of how profitable a credit union is relative to its total assets employed. it is calculated as net income divided by total assets. 6 / 6 bis central bankers'speeches | 0 |
##r and more sustainable economy. by making it easier for investors to seek out sustainable investment opportunities across europe, deep and liquid capital markets could help mobilise the funds needed to finance the transition to a low - carbon economy. it is not only the quantity and availability of private capital that matters for this transformation, but also its quality. ecb research shows, for instance, that equity finance seems to be more effective than debt finance in reallocating investment towards relatively greener sectors. equity investors, who tend to have a longer investment horizon and a greater appetite for high - risk high - return projects might be better placed to finance environmentally sustainable innovation than banks. by supporting the development of equity financing, the cmu could facilitate the funding and adoption of carbon - efficient technologies. but the positive feedback between cmu and sustainable finance works both ways. to the extent that the ongoing eu policy initiatives are successful in removing the current obstacles to the development of a cross - border market for sustainable financial products, these actions could also be instrumental in advancing growth in this segment of the capital markets. this, in turn, could support financial integration in the eu and strengthen europe β s role as a global hub for sustainable finance. conclusion developing private equity markets and supporting efforts towards a greener economy are very much on the minds of decision - makers, and we welcome the work of the various groups and forums that contribute to these debates. in particular, we look forward to the recommendations of the high level forum on cmu set up by the commission. we trust these will play an important role in shaping the commission β s new set of cmu measures for the benefit of the european citizens. [ 1 ] hartmann, p., heider, f., papaioannou, e. and lo duca, m. ( 2007 ), the role of financial markets and innovation in productivity and growth in europe, occasional paper series, no 72, ecb, september ; davis, j. ( 2015 ), capital markets and job creation in the 21st century, center for effective public management at brookings paper, december. [ 2 ] see rebranding capital markets union β a market finance action plan, report by the ceps - ecmi task force of june 2019. [ 3 ] see speech by luis de guindos, vice - president of the ecb, at the suerf / de nederlandsche bank conference β forging a new future between the uk and the eu β, amsterdam | rules of the game have to be continuously adapted. international institutions and fora are changing and adjusting. many initiatives have been taken. altogether this should help make the global economic and financial system more resilient. but we have also learned that it is never time for complacency. efforts to ensure global stability and prevent crises have to be made constantly by all of us without exception. in this context, i am confident that the euro area and the economies of the asia - pacific region will continue to work in close cooperation in the years ahead to ensure that these important goals are met. i thank you for your attention. | 0.5 |
jaime caruana : what next for basel? remarks by mr jaime caruana, governor of the bank of spain and chairman of the basel committee on banking supervision, at the seventh annual supervision conference of the british bankers association, london, 9 october 2003. * * * introduction mr. mullen, distinguished guests, and members of the british bankers association, it is an honour for me to address you this morning as the new chairman of the basel committee on banking supervision. this conference, the seventh to date, encourages a healthy exchange of ideas between bankers and supervisors on ways to promote safety and soundness in the banking sector. today β s agenda offers a timely focus on the development of regulatory policy on several levels β on a national level through the mission of the financial services authority, on a european level through the directives of the european union, and, of course, on a global level through the standards adopted by the basel committee. it seems appropriate to think about banking and supervision on national, regional and global levels. enhancements in telecommunications, continued expansion in trading relationships, and the increasing interdependence of markets make it difficult to view banking on a purely local or even domestic level. bankers are no strangers to the global economy, having underwritten letters of credit to exporters and merchants almost since the first trading vessels plied the rivers and seas. however, it seems fair to say that the pace of globalisation and innovation has accelerated dramatically in recent years. as banks enter new markets, create ever more complex products, and pursue customers near and far, the challenge for all of us is, first, to understand how our risk profiles are changing and, next, to find responsible ways to manage them. whether they compete on a national, regional, or global level, banks have developed countless new tools and processes that promote their competitiveness, strengthen their returns, and control their exposures to credit, market, operational, and other risks. in turn, supervisors must review periodically the tools and processes at our disposal to ensure that our regulations and practices accommodate changes in market trends, the introduction of innovative products and services, and advances in the art of risk management. the current efforts to reform the international guidelines on capital adequacy represent a critical review of the cornerstone of bank supervision. the members of the basel committee have devoted substantial resources to this reform because we believe that, when banks are adequately capitalised and well managed, they become more stable and better able to withstand periods of | authorities on the capacity to make use of these buffers and on the flexibility as to how they are subsequently rebuilt is essential. in this respect, the authorities have made it very clear that banks will have sufficient time to resume compliance with the capital requirements, and that the rebuilding process will not in any event begin until the main effects of the pandemic have been dispelled. in any event, the evidence available in the coming months on the effective use of these capital buffers, once the losses stemming from the covid - 19 crisis materialise, will be essential to allow conclusions to be drawn on the effective use of these buffers and to assess whether any additional measures may be needed. based on the experience obtained during this crisis, and on a medium - term horizon, the balance between structural and countercyclical capital buffers could also be analysed as a way of avoiding the difficulties i have mentioned, should they arise. thirdly, i also wish to refer to the treatment of dividends during the crisis. as you are all well aware, one of the recommendations of the european prudential supervisors, which has also been made in many other countries, is that banks should refrain from distributing dividends and be highly prudent when paying bonuses to their staff. this measure seeks to ensure that, in this highly uncertain setting, banks are able to build up sufficient funds to absorb losses. in general, all spanish banks that were legally able to suspend or defer dividends to be distributed out of 2019 income complied with these recommendations. this enabled them to increase in 2020 the capital buffers they had already built up before the onset of the pandemic. the positive impact of this measure supplements and has been reinforced by other decisions taken by the various economic authorities, which, as i have said, have released a large part of the macroprudential buffers and have mitigated the impact of the pandemic on banks β income statements. to date, the potentially negative side effects of these measures have been limited. although the cost of capital for banks rose substantially with the onset of the pandemic, following the implementation of the broad raft of measures introduced to mitigate its impact this increase has been fully corrected. in addition, the recommendation to limit dividend payouts does not appear to have had a significant effect, at least in most european banking systems. another question that hampers the use of capital buffers by banks is that, under the current regulations | 0.5 |
by way of setting up risk funds and developing rural insurance so as to incentivise financial institutions to support balanced development in urban and rural areas. further efforts should be made to improve the financial environment in rural - urban fringe, strengthen the financial law system, accelerate the program of creditworthy rural households, villages and towns and improve financial literacy of farmers. second, guide social funds to support agricultural development in an innovative manner. the pbc will support eligible agro - linked enterprises to get listed. efforts will be made to guide informal lending, standardize such practice by improving incentive, discipline and exit mechanisms so as to improve financial services to low and middle - income rural residents and impoverished population. third, set up an inter - ministerial cooperation mechanism. fiscal policies, taxation policies and rural financial policies should be coordinated effectively by setting up a market - based long - term agriculture supporting mechanism supported by the government. the agricultural development bank of china, abc, rccs, postal savings bank and other agro - linked financial institutions should have various focuses in their business when expanding agrolinked credit, in order to optimize the allocation of financial resources. we should conduct in - depth analysis on diversified needs of financial services in rural areas to develop an optimal profit pattern for agro - linked enterprises, have in place effective risk prevention measures, innovate financial products and services tailored for actual needs in rural areas, rationalize working process, train a professional team to provide financial support for agriculture which combines both direct and indirect financing, integrates the strengths of the banking, insurance and securities sectors and features active participation of private capital. i wish the forum a complete success. thank you! | ma delun : urban and rural integration in china address by mr ma delun, deputy governor of the people β s bank of china, at the 2010 capital financial forum, beijing, 16 april 2010. * * * respected executive vice mayor of the city of jilin, distinguished guests, ladies and gentlemen, good afternoon! it β s a pleasure to attend the beijing financial forum for 2010. this annual meeting has provided us with a platform to discuss theoretical and practical issues of common concerns. the discussion last year under the theme of cultural and creative industries and its financial support was very impressive. i β m also glad to see that the forum is in a larger scale and more innovative form this year, and the theme this year, urban and rural integration in the capital and its financial support, is a very pertinent one. agriculture lies at the foundation of china β s economy and the balanced development of urban and rural areas is the core in china β s modernization. deng xiaoping once pointed out that, coordinated urban - rural development should be on top of the agenda after china β s economic and social development reached a certain stage. it was put forward by the 16th congress of cpc central committee that balancing urban - rural social and economic development is an important strategy for building a well - off society. the 17th congress of cpc central committee decided that a long - term mechanism of industrial sector supporting agriculture and urban areas to form a new framework for balanced urban - rural economic and social development. what β s more, the no. 1 document of the cpc central committee this year has given high priority to balanced urban - rural development, stating it as the precondition for further consolidating the foundation for rural development. balanced urban - rural development need the support of the financing sector. as a macro financial regulator, the pbc attaches great importance to this task and has made strenuous efforts in advancing financial reform, improving financial services in rural areas and strengthening financial support to balanced urban - rural development according to the overall arrangements of the state council. first, deepen rural financial reform. efforts have been made to promote the shareholding reform of agricultural bank of china ( abc ), guide the agricultural development bank to raise funds from the market, steadily advance pilot projects of new rural financial institutions including micro credit companies, village banks and rural funding cooperatives to establish a multi - tiered rural financial service system. second, strengthen financial support for rural areas. the pbc will continue to conduct agriculture | 1 |
led to the formation of a steering group composed of representatives from relevant eu institutions, who play a key role in the integration process and implementation of sepa, alongside governors from the central banks of the region and the world bank. at the end, let me use this opportunity to thank our international and european partners for their continuous support, as well as to all the domestic stakeholders, as i have no doubts that we all fully understand the benefits of this project for spurring growth and supporting the overall wellbeing in the economy. i encourage each of you to take full advantage of the sessions, networking opportunities, and discussions ahead. it is through collaboration and exchange of diverse perspectives that we truly grow and make lasting impact. thank you. 1 " steady as we go : results of the 2023 cpmi cross - border payments monitoring survey ", cpmi brief no5, bis, june 2024. 2 refers to the following priorities : extension of operating hours, allowed access to supervised non - bank providers, implementing at least one cross border link, and processing or planning to introduce iso 20022 messages. 3 common regional market action plan, 2025 - 2028. 3 / 4 bis - central bankers'speeches 4 " communication from the commission to the european parliament, the council, the european economic and social committee and the committee of the regions new growth plan for the western balkans ", european commission, november 2023. 5 " driving economic integration through payments modernization in the western balkans ", world bank driving - economic - integration - through - payments - modernizationin - the - western - balkans. pdf 4 / 4 bis - central bankers'speeches | total transaction, significantly exceeding the global sustainable development goal target of 3 percent. by meeting this target, the economies could save approximately half a billion euros according to world bank calculations. " 5 furthermore, sepa membership will accelerate the digital transformation of our financial sector. by reducing reliance on cash transactions and promoting digital payment methods, it will support the development of a more modern, secure, resilient and inclusive financial ecosystem. recognizing the benefits of joining sepa, countries in the region have invested tremendous amount of time and resources, while being extensively supported by all stakeholders within the western balkans payments modernization project, especially the world bank. these efforts brought us all either already into sepa, or very close to a positive decision on joining it. related to this, let me elaborate more on our position. we submitted our application for sepa membership on 10th of july last year. this historic step was the culmination of years of dedicated work, legislative overhaul, inter - institutional collaboration, and support from international and european organizations. completion of the formal assessment of our application and our readiness to join sepa by the european payments council is expected soon. this will confirm our compliance with 2 / 4 bis - central bankers'speeches the european legal and regulatory requirements in critical areas, including payment services, anti - money laundering measures, free movement of capital, and data protection. these foundational elements ensure that our country is well prepared to meet sepa's technical and legal requirements. having said that, an effective accession will be possible only if domestic payment service providers prepare their systems to meet sepa's technical and operational requirements. therefore, while the benefits of sepa accession are clear, we must also acknowledge the challenges that lie ahead. compliance with sepa's regulatory and operational requirements demands investment in infrastructure, staff training, and system upgrades. the banking sector is expected to work diligently to ensure full readiness for integration with sepa payment systems by october 2025, determined as sepa first possible entrance date for payment service providers from the western balkan countries being sepa members. of course, the successful implementation of sepa adherence will require close cooperation between regulators, financial institutions, and all other relevant stakeholders. the national bank is committed to facilitating this transition. we will continue to provide guidance, technical support, and regulatory oversight to ensure a smooth and efficient integration process. additionally, we will work closely with the international partners that are genuinely committed to address any challenges. the strong commitment and support has recently | 1 |
ardian fullani : overview of albania β s latest economic and financial developments speech by mr ardian fullani, governor of the bank of albania, on the monetary policy decision - making of the bank of albania β s supervisory council, tirana, 25 july 2012. * * * today, on 25 july 2012, the supervisory council of the bank of albania reviewed and approved the quarterly monetary policy report. based on the analysis of albania β s latest economic and monetary developments, and following discussions on their performance outlook, the supervisory council of the bank of albania decided to decrease the key interest rate by 0. 25 percentage point, taking the one - week repurchase agreement rate to a new historical minimum of 4. 0 %. this decision reflects the supervisory council β s opinion that the further eased monetary conditions in economy are adequate to meet the inflation target in the medium run. simultaneously, the eased monetary conditions will provide a further incentive to the economic activity at home, by increasing the monetary stimulus to support the domestic demand. let me now proceed with an overview of the economic and monetary developments and key topics discussed at today β s meeting. * * * during the first half of 2012, the albanian economy continued to maintain the parameters of macroeconomic and financial stability, against an increasingly challenging global context. consumer price inflation, budget deficit and public debt indicators, balance of payments and financial situation of the banking system were stable or improving. in particular, the albanian financial sector remains well - capitalised, liquid and able to conduct its intermediation role. during this period, the albanian economy experienced some shocks on the supply side, with structural movements in the domestic financial markets, and a slowed domestic and foreign demand. these developments drove the fall in gdp in the first quarter of 2012 and made difficult the implementation of stabilising policies on the aggregate demand. the albanian economy is expected to record positive growth rates as tensions may be reduced in the second half of 2012. average annual inflation marked 1. 9 % in the second quarter of 2012, increasing by 0. 8 percentage point compared to the first quarter of 2012. the gradual rise in consumer prices has mainly reflected the increase in unprocessed food prices, whereas prices of processed foods and those of non - food consumer goods lowered their contribution to inflation during the second quarter of 2012. the other categories in consumer prices basket showed a serene performance, and were characterised by low inflation rates. within the macroeconomic context, consumer prices continue to reflect weak inflationary pressures, | both on the supply and demand sides. on the demand side, the presence of free capacities in using the production factors is reflected in the costs control in economy and in declining pressures on inflation. on the supply side, the slowdown of imported inflationary pressures, decrease in oil and basic materials prices, steady administered prices, low inflationary expectations and minimal second - round effects did not generate inflationary pressures. consumer price inflation remains at low rates and is expected to maintain the same rate in the period ahead. these bis central bankers β speeches estimations conditioned the retaining of the stimulating nature of monetary policy during the second quarter of 2012. the key rate stood at the lowest historical level, providing eased monetary conditions in order to meet our inflation target and support the albania β s economic activity. also, the bank of albania has continued to inject sufficient liquidity demanded by the banking system, against an expanded collateral base and at adequate maturity terms. according to recent data from instat, the albanian economy recorded an annual fall of 0. 2 % in the first quarter of 2012. industry contracted 19. 3 % y - o - y, mainly due to the significant decrease in electrical energy output. also, construction decreased its activity in real terms, by 17. 6 %, thus providing a negative contribution to the performance of the gross domestic product. by contrast, services contributed positively to the economic activity, pointing to an annual growth of 6. 0 %. agricultural sector grew 4. 5 %, y - o - y during this period, providing a positive contribution to the growth of the gross domestic product. estimations on the aggregate demand in the first quarter of 2012 suggest a continuing weak domestic demand. the consolidated fiscal policy determined the lack of fiscal stimulus in this period and a downturn in public sector β s demand for goods and services. private consumption remains slow, thus reflecting the prudent consumer β s behaviour and the increasing tendency for saving. private investments also remained low. given the free production capacity, albanian businesses found less room to increase their investments in machineries & equipment, and production, while the demand for resident buildings remains weak. at the same time, foreign demand was sluggish in the second quarter of 2012, owing to the problems in euro zone and in our main foreign trade partners. the weak foreign demand, and the problems in electrical energy production, imposed the slow increase of the albanian exports. data on economy for the second quarter of 2012 are incomplete. indirect data signal a weak recovery | 1 |
to french growth in 2015, or even 0. 4 % according to insee. this represents about 80, 000 additional jobs for the economy. we are therefore consistent in our objective, and ready to act using the right instruments. but we also remain vigilant as to the possible risks that our monetary policy could generate. today, there are no signs of a financial bubble, but we are ready to act, if necessary, by implementing macroprudential measures, in the framework notably of the haut conseil de stabilite financiere ( high council for financial stability β hcsf ) that you created via the banking act of 2013. for instance, at our eighth meeting held on 15 march 2016, we issued a warning about the office sector in the paris area. bis central bankers β speeches 2. monetary policy thus contributes greatly to our economy, but it can β t do everything. it cannot be the only game in town. it is vital that europe and france seize this opportunity now. in france, growth is expected to be both robust and inadequate : robust, as it should remain in 2016 at least at the 1. 2 percent level observed last year. but inadequate, as it will probably linger a little below the euro area average of 1. 4 β 1. 5 percent. for growth and employment, three essential actions are necessary : reforms in france ; private and public investment ; the coordination of economic policies in europe. first, in france, orderly and sustained reforms are needed to rebuild confidence. keeping our public deficit and our debt under control is a contributing factor : the good figures published on friday ( deficit reduced to 3. 5 % in 2015 ) are another reason to strictly respect our european commitments by bringing it below the 3 % limit in 2017. we must stick to the reforms that work, in particular the tax credit for competitiveness and investment ( cice ) and the responsibility and solidarity pact ( rsp ), and we need to go further still. the unemployed and youth cannot afford to wait. there are at least four reforms that are a priority, because our neighbours successfully implemented them and they are fully compatible with the european social model that we share : the large - scale development of apprenticeships ; simplifications, starting with labour law ; the decentralisation of social dialogue to the company level, i. e. as close as possible to the economic and human reality ; and lastly, the development of entrepreneurship. second, we need to mobilis | further this debate. bis central bankers β speeches i will finish with a few words about the banque de france itself. when you heard me in september, i presented my view of the three main tasks of the banque de france : monetary strategy, financial stability, economic service, via its branch network. with the staff of the banque de france, we firmly believe in these tasks and in their future, and that is why our ambition is to be an exemplary public service, even more efficient, more innovative, and more visible in france and europe. bis central bankers β speeches | 1 |
a bit since the start of this year, but there is little sign to date of a sustained improvement in construction activity. weakness in construction has been accompanied by declines in output of a range of manufactured products over the past year. 1 steel is one obvious example. mining activity in china has also been affected. indeed, a further decline in the output of unprofitable chinese mines would provide some support to commodity prices, and would benefit other producers, including in australia. the substantial appreciation of the renminbi over the past year ( 12 per cent in trade weighted terms ) may also have contributed somewhat to the weakness in the industrial sector bis central bankers β speeches although the weakness in china β s property and manufacturing sectors is clearly of concern to commodity exporters like australia, there are a number of countervailing forces supporting broader activity in china. β’ first, growth in the services sector has been resilient, and should continue to be assisted by a shift in demand toward services as incomes rise. β’ second, growth in household consumption has also been stable in recent quarters aided by the growth of new jobs. 2 of course, such outcomes cannot be taken for granted ; if the industrial weakness is sustained, it might eventually affect household incomes and spending. β’ third, chinese policymakers have responded to lower growth by easing monetary policy and approving additional infrastructure investment projects. they have scope to provide further support if needed, although they may be reticent to do too much if that compromises longer - term goals, such as placing the financial system on a more sustainable footing. there are two key implications of the slowing in china β s growth for australia. first, the substantial slowing in industrial production has contributed to a further decline in commodity prices over the course of this year. ( this is in addition to the contribution from the substantial increase in the supply of commodities, including from australia. ) we β ve detailed the effect of the decline in commodity prices on australia β s economy elsewhere. 3 i would just add that commodity prices remain relatively high. the bank β s index of commodity prices has fallen by about 50 per cent from its peak, but is still almost 80 per cent above early 2000 levels. clearly, conditions in the industrial sector in china, and asia more broadly, will have an important influence on the path of commodity prices over the near term. beyond that, the changing nature of china β s development implies that the potential for commodity prices to rise from here is somewhat limited. second, the | is another illustration of the importance of the terms of trade for economies focused on commodities. after experiencing exceptional growth over the last three years, partly driven by the good performance of cocoa prices, contrary to that of other commodities, activity appears to have slowed down, in the wake of the downturn in prices. the subject is also of major importance for central banks because the challenge here is to find how to implement appropriate counter - cyclical policies in the face of large - scale shocks that monetary policy cannot deal with either on its own or in the long run. in this spirit, i would like to share with you this morning some thoughts on two issues : how important are the terms of trade cycles for the economic and financial situation of the exporting poor countries and their neighbours? and how to mitigate shocks? 1 / 3 bis central bankers'speeches 1. how important are terms of trade shocks for poor and vulnerable countries? to illustrate my point, i will take the example of sub - saharan africa. the super cycle of commodity price growth has coincided with over a decade of strong economic growth in subsaharan africa. the degree of causality between these two developments is the subject of debate. before the cyclical downturn, a large majority of observers emphasised the endogenous nature of african growth and minimised, or even denied, the role of the terms of trade appreciation. however, the current terms of trade shock has led to a reversal of the perception of the african outlook. for oil - exporting countries, the twofold decline in prices between mid - 2014 and early 2016 resulted in large budget and external deficits, calling for a rapid adjustment, due to the weakness or lack of countercyclical leeway. the savings accumulated during the upswing in oil prices proved largely insufficient and the borrowing capacity of the countries concerned remains very limited, although some benefited from debt cancellations under the heavily indebted poor countries initiative. in poor and vulnerable countries where financial development is weak and sovereign indebtedness with the banking sector is predominant, the feedback effects between the deterioration in public accounts and rising debt, on the one hand, and liquidity, or even solvency of the banking system on the other, also foster the propagation and amplification of shocks. the current terms of trade shock thus highlights the excessive dependence of vulnerable and poor countries on commodities. 2. how to mitigate terms of trade shocks? on this subject, it seems essential to distinguish two types | 0 |
christian noyer : a new regulatory framework for a new financial system speech by mr christian noyer, governor of the bank of france, at a round table discussion at the university of paris - dauphine, paris, 11 december 2008. * * * ladies and gentlemen, it is a great pleasure for me to take part in this round table discussion. today, the prevailing view is β and justly so β that it is necessary to rethink financial regulation. there are two reasons for this : a ) financial markets and banks are, more or less strongly, confronted with problems of asymmetric information ; b ) operational inefficiencies may arise, leading, in some extreme cases, to the seizing up of certain market segments. needless to say that these imperfections are interconnected. in many respects, the financial crisis is the expression of these imperfections. three examples can be used as an illustration. the underestimation of risk and the mispricing of assets during the upswing of the financial cycle show that markets may generate excess investment in certain sectors of the economy ( e. g. the us real estate sector ). furthermore, it appears that financial innovation and the change in banks β economic models have resulted in a significant increase in information asymmetries and, more importantly, in lower incentives for economic agents to pay attention to these asymmetries. lastly, the fact that some market segments seized up during the crisis suggests that some infrastructures necessary for their functioning are lacking. to simplify, i believe that the logic underlying the current regulatory system consists in ensuring the financial stability of market segments, but without adopting an overall approach. however, the crisis has forced us to acknowledge that this fragmented approach to regulation does not necessarily ensure the stability of the entire financial system. during this crisis, the fact that financial institutions had considerably increased their use of leverage and that risk was concentrated among a relatively small number of banks was neither well assessed, nor well captured, nor prevented by regulation. in view of this failure and in order to mitigate the impact in terms of financial instability, government interventions were designed, not to stabilize the situation of any particular institution, but to prevent systemic risk from materialising. as a result, we now require macro - prudential regulation. this naturally leads us to address the issue of the scope of financial regulation. who should be regulated? the problem is not new ; it is also complex. like me, you will have noticed | safe to say that your career was very eventful in this respect. in the 1990 β s, when you were head of the research department at the banco de mexico, mexico went through the so called tequila - crisis, when it encountered difficulties in financing its large current account deficits. and in 2008, as mexico β s minister of finance, you helped to coordinate an international response to global financial crisis in the g20. 1 / 2 bis central bankers'speeches it was during this time that we first met and i was impressed by your strong push towards an international response to the crisis. it helped prevent the world from falling back into trade protectionism and an even deeper recession. and it established to g20 as the key body for international economic cooperation β not only on the field of financial market regulation. the common efforts of the g20 have demonstrated that multilateral cooperation does work β a message which is worth to be repeated these days when some countries do not get tired to doubt the meaning of multilateral agreements. dear agustin, at the high - point of the sovereign debt crisis in euro area, you offered the euro area to benefit from your huge experience. in a 2013 speech you draw lessons from mexico β s tequila crisis for the euro area1. two of your conclusions were that β an exchange - rate system [ or a common currency ] cannot be a substitute for policy discipline ". and you also pointed out that fiscal discipline needs to be maintained after the crisis. this is very close to our thinking here at the bundesbank. it also appeared to me that at that time you were tactfully trying to remind us in the euro area to make progress in crisis resolution. i am aware that many considered the sovereign debt crisis as a risk for the global economy. this is why i am happy to be able to state that matters have improved substantially since then. the euro area has turned from a drag to a driver of growth. in 2017, the euro area grew slightly faster than the average of the advanced economies. the greatest risk is now to assume that all problems are solved. shocks in specific region or specific sectors of the economy can still put the euro area to an endurance test β despite the progress that has been made in the past years. but at least the times where the sovereign debt crisis required the full attention of policy makers, regulators and bank - supervisors is behind us. we are now able to turn some of our attention to other important issues. one such issue is certainly the digital | 0 |
joachim wuermeling : prospects for european monetary union speech by prof joachim wuermeling, member of the executive board of the deutsche bundesbank, as part of the " finanzwelt europa " ; series of talks hosted by the landesbank hessen - thuringen and the representation of the state of hessen to the eu, brussels, 11 october 2017. * * * 1. introduction ladies and gentlemen this is the second time i have had the pleasure of visiting the representation of the state of hessen in brussels this year. in june, i spoke about current developments in the euro area at a lunchtime event dedicated to financial market policy. since then, a number of occurrences have affected all of us as european citizens, in our economic and political roles, and also at the bundesbank. the fact that the landesbank hessen - thuringen and the representation of the state of hessen to the eu are coming together to discuss europe as a financial community in its β finanzwelt europa β series of lectures highlights the important role that hesse plays in europe β s financial framework. i would therefore like to thank the organisers for giving me this opportunity to talk to you. the bundesbank operates in a policy field that is already communitised in the euro area : monetary policy. our bundesbank logo consists of yellow stars on a blue background, which shows how strongly the bundesbank considers itself part of the eurosystem. the eurosystem can only pursue sound monetary policy in a stable currency union. this is why the bundesbank is taking part in the current reform debate. the title of my speech contains a key term : β prospects ". i believe it is almost more important now than ever to talk about the prospects of the eu and the economic and monetary union. the word β prospects β has several layers of meaning. first, it can imply guidance β a compass or a roadmap. what should the eu look like in one, five or ten years β time? second, it generates clarity, hope β and ideally even enthusiasm. if the debate surrounding european policy is outlookbased instead of being limited to questions that are certainly important, but rather technical ; if the citizens of europe can see which direction we are heading, then it becomes clear what europe stands for and why it is worth standing up for europe. and third, prospects always point to the future. those who are forward - | earlier. however, we have been, and will continue to work closely with apra. we continuously update one another on our prudential regulations, we maintain a strong working relationship, and we also respect each other β s objectives as regulators aiming to protect our respective financial systems. conclusion with new zealand β s macroeconomic policy framework and strong financial sector soundness, investors can have long - term confidence in new zealand as an investor destination. the prospects of sustainable and productive growth are enhanced through predictable macroeconomic policy settings and avoidance of financial crises. economic and other shocks have constrained new zealand β s economic performance historically. although our macroeconomic stability has improved in recent decades, we remain vulnerable to external and domestic disturbances. overall debt levels remain high while the concentration and persistence of high - leverage within segments of the household and agricultural sectors questions the quality of banks β lending standards. the more enduring that low interest rates are, and the more successful they are in promoting borrowing and investment, the more they are likely to pose challenges to the reserve bank β s financial stability objectives. the reserve bank has a number of tools it applies to manage financial stability risks, and its lvr policies have a role in limiting the risks that could arise from increasing leverage through inadequate lending standards. more capital is a key part of building new zealand β s economic resilience for when severe shocks do occur. we are in the process of weighing up the costs and benefits of how much more and the type of capital that is appropriate for the desired level of resilience, and the timeframe to achieve it. decisions on the capital review are expected to be released in the first week of december. | 0 |
implementation of workable recovery and resolution plans, and the introduction of binding total loss absorbency capacity ( tlac ) requirements. bis central bankers β speeches uncertainties regarding optimal regulation are likely more important here than in the case of the real estate and mortgage markets, as the probability of a big bank failing and the macroeconomic cost of such a tail - risk event may be less clear or not β objectively β measurable ex ante. such fundamental uncertainties imply more substantial tensions with respect to the choice and design β size and scope β of further measures to contain the tbtf issue. going too far could theoretically entail a cost to society that may not be warranted from a cost - benefit perspective. not going far enough, however, creates the risk of ending up in a very costly crisis. let me conclude : sustainably improving the stability of the financial system is a difficult task. but it β s not an impossible dream. it is a fact that improving the regulatory framework entails a delicate trade - off between knowledge and prudence. there will always be risks about which knowledge will be lacking ; even worse, there may be risks we don β t know about ex ante. this speaks for the willingness, collectively, to accept the price of precaution. however, it is also a fact that we will be able to make tangible progress towards a sustainably more stable financial system only if this view is widely shared in society! the last couple of years of work in switzerland leads me to be cautiously optimistic. but this must not be misread as a reason to be complacent or give up midway. references group of experts on the further development of the financial market strategy ( 2014 ). final report. www. news. admin. ch / nsbsubscriber / message / attachments / 37610. pdf federal constitution, article 99. www. snb. ch / en / mmr / reference / bundesverfassung _ art _ 99 / source fsb ( 2014 ) : global shadow banking monitoring report 2014. www. financialstabilityboard. org / 2014 / 11 / global - shadow - banking - monitoring - report - 2014 / message concerning the revision of the national bank act ( in german ). www. snb. ch / de / mmr / reference / snb _ legal _ docum _ brbotschaft / source national bank act. www. admin. ch / opc / en | not seen for 15 years. this was a matter for concern, as there was a risk that such a level would alter households β inflation expectations, potentially leading to a sharp rise in nominal wages at year - end and resulting in a certain stickiness of inflation. however, these two elements behind the recent rise in inflation have since reversed. first, oil prices collapsed, falling below the usd 50 mark in mid - november after peaking at usd 145 in early july. the plummeting oil price can be explained both by a drop in global demand as a result of the economic slowdown we have just described, and by the unwinding of speculative positions. second, the swiss economy will soon be operating below potential, and we will see a renewed rise in unemployment. this situation will have a moderating effect on both price and wage - setting behaviour. thus, we are now forecasting β as the graph presentation will show in just a moment β that inflation will decline almost continuously throughout 2009. despite the interest rate cuts made since october and the cut announced today, inflation will remain low in 2010 and 2011. as of now, and for the current forecast horizon, upside and downside inflation risks have become symmetrical. monetary policy decision we have just explained the rationale behind our recent monetary policy : first, the global economic situation has worsened, which will hit the swiss economy as from this quarter, and in particular next year. by contrast, the inflation outlook has improved appreciably. this has increased the snb β s room for manoeuvre. finally, there is a risk that the financial crisis will cause a deterioration in financing conditions for the economy as a whole. these are the considerations that have prompted today β s decision to cut the three - month libor target range by another 50 basis points. given the expected deterioration in the swiss economy and the imponderables linked to the long and variable monetary policy transmission lags, a further rate cut appears appropriate. with this action we are reducing, to the extent possible, the risk of an even more pronounced economic downturn. inflation forecast chart how has our inflation forecast been revised? the dashed red curve on the chart represents the new forecast. it covers the period from the fourth quarter of 2008 to the third quarter of 2011, and maps the future development of inflation on the assumption that the three - month libor remains unchanged at 0. 5 % over the forecasting period. for purposes of comparison, the dash - dotted green curve | 0.5 |
optimal arrangement for the organisation of supervision at the national level. all organisational models β sectoral supervision, supervision by objectives, supervision in a single authority β can in principle work well or fail depending on circumstances. however, regardless of the model, it is important that there exists a very close and smooth interplay between the central banking and the supervisory function. an analysis of the institutional supervisory setting in place in eu member states shows that the majority of eu central banks have extensive supervisory responsibilities and confirms a tendency towards strengthening the role of central banks in supervisory activities. for instance, in germany and austria the key role of the central bank in conducting on - going prudential supervision of banks and on - site bank inspections, whose results are reported to the separate supervisory authority, has been recently strengthened. as the experience of the financial market correction is very likely to challenge some views that previously seemed to be fairly consensual, we can wonder whether it brings new elements also as regards this issue. in general, the experience of the eurosystem central banks during the market turmoil shows the importance for the central banks of the availability of full supervisory information for the discharge of their tasks. more specifically, all central banks felt necessary to deepen the dialogue between the central banking and the supervisory function for a better understanding of the market turmoil. [ conversely, in some member states the domestic central banking function provided the supervisory function with the necessary information concerning money and financial markets, banks β liquidity positions and the collateral provided by banks in open market operations. ] therefore the experience of the eurosystem central banks during the financial market turmoil clearly confirmed the existence in practice of relevant information - related synergies between the supervisory and the central banking functions. moreover, the experience made has highlighted the particular importance of a smooth interplay between the central banking and the supervisory functions in certain areas. first, in the area of monitoring and assessing risks to financial stability, central banks can benefit from extended access to supervisory information and intelligence to better understand risks and vulnerabilities for the financial system as a whole. at the same time, the experience made in some countries showed that a possible area for improvement concerns the modalities with which the outcome of the financial stability assessment may trigger concrete supervisory action. the bottom line here is that the supervisory authority should be able to take into consideration the results of the macro - prudential analysis made by the central banks in its supervisory activity. second, in the area of liquidity, there | is clearly room for a closer interplay between the two authorities. central banks would benefit from enhanced access to supervisory information and intelligence for its role of contributing to the orderly and smooth functioning of money markets. to that end for instance access to information on banks β liquidity contingency planning funds would be useful. at the same time, supervisors would benefit from information available at central banks stemming from their role in the money markets. in europe, an important step in this direction is the recent proposal of the commission to review the capital requirements directive. this directive includes a provision setting an obligation for the consolidating banking supervisor to alert interested central banks and communicate to them all necessary information, whenever an emergency situation arises which has the potential to jeopardise financial stability in any of the member states where the banking group is present through subsidiaries or systemically relevant branches. third, in the area of crisis management and resolution, the developments of the last few weeks showed the importance of close interaction between the two authorities, in particular when the provision of emergency liquidity assistance become necessary. in this field, i believe that an important step forward is represented by the mou on financial stability arrangements signed by the eu central banks, supervisors and ministries of finance in june 2008, which i already mentioned before. conclusion eu and national authorities are developing a number of policy measures to respond to the financial market turmoil. these efforts show the strong commitment of all eu and national authorities to take proper action in a timely fashion with a view to responding to the challenges posed by the present financial turmoil. every effort is also made to ensure that actions are coordinated without raising undue concerns from the perspectives of preserving the level playing field and competition among financial institutions. let me conclude by making a reference to two other initiatives aiming to further strengthening the eu institutional framework. first, the eu council decided last week to establish a mechanism ( the financial crisis cell ) comprising the presidency - in - office, the presidents of the commission, the ecb ( in conjunction with other ncbs ), the eurogroup and the governments of member states to ensure that information is provided in confidence and with timeliness to all members states and institutions. second with a view to improving the coordination of supervision at european level, the european council welcomed the setting up of a high level group by the commission. both initiatives are welcomed by the ecb which participates in the former initiative and will provide its contribution to the latter. | 1 |
. within its multilateral commitments, india has forcefully articulated its position which reflects the concerns of the developing countries. in tune with the worldwide spread of regional trading arrangements and our belief that such arrangements act as prelude to progressive multilateral trade liberalisation, india has entered into several preferential trade agreements. these reforms in the trade policy regime have unlocked entrepreneurial energies. india β s merchandise exports have been rising at a rate of over 20 per cent per annum, in us dollar terms, in recent years. as a result, the secular decline in india β s share in world exports from two per cent in 1950 to 0. 5 per cent in the 1980s has been halted. this share began rising in the 1990s and is currently at 0. 8 per cent. the export strategy envisages a doubling of india β s share in the world merchandise trade by 2008 - 09. services trade policy reforms undertaken since the 1990s have shed their traditional focus on merchandise trade and encompassed a wide range of tradable services, reflecting india β s competitive advantage in business services, technical and professional services. the exim policies of recent years have selected services for special focus. india accepted the obligations under article viii of the imf β s articles of agreement and instituted current account convertibility in 1994. besides, there has been a progressive liberalisation of the exchange control regime. foreign direct investment ( fdi ) has been permitted in a host of services in order to take advantage of modern technology, with some restrictions on financial services, taking into account the current stage of development and openness. further, increasing availability of speedier and cost - effective money transfer arrangements through the banking channels and post offices has resulted in significant increase in the use of formal channels for remittance transfers. exports of services have risen consistently by over 20 per cent per annum in recent years. within services exports, software and it - enabled services have been growing at an average rate of 46 per cent annually since the mid - 1990s. over the years, skill content of indian labour has been rising and the traditional markets of the middle east have given way to the us, europe and other industrialised countries. for the external sector, this natural advantage has translated into significant inflows in the form of remittances from indians working abroad. workers β remittances are nearly four per cent of india β s gdp now and have provided considerable and sustained support to india β s balance of payments. trade and current account a discussion on the recent trends | , in respect of their foreign exchange exposures and transactions are a dynamic component of management of capital account as well as financial supervision. reserve management the adequacy of foreign exchange reserves is a relevant consideration in the management of the capital account. first, adequacy has to be viewed not only in terms of trade needs but also other shortterm liabilities. second, it is not merely the long - term or short - term debt in terms of original maturity that is relevant for reserves, but the profile of external debt in terms of residual maturity. a traderelated debt which is in the nature of collateralised debt may be less severe on reserve requirements. third, any addition to portfolio flows may warrant comfort through some additions to reserves. in fact, there is merit in presuming that the flows are temporary till there is reason to judge them to be permanent. fourth, it is necessary to recognise that reserves provide cushion to manage real and external sector shocks like oil prices. fifth, there is usually an opportunity cost of maintaining foreign exchange reserves, but this must be weighed against the financial and non - financial costs associated with volatile and adverse exchange rate movements. finally, while the optimal level of reserves is difficult to quantify, attention to level of reserves as a means of self - insurance is essential. in the final analysis, the adequacy of reserves needs to be assessed in terms of a medium - term perspective taking into account the possible levels of the current account deficits, the composition of capital flows, the level of international confidence in the ability of the country β s payment position and pace and quality of growth. viewed from all these perspectives, the current level of reserves continues to be comfortable. the essence of portfolio management of reserves by the rbi is to ensure safety, liquidity and optimisation of returns. the reserve management strategies are periodically reviewed by the rbi in consultation with the government. in deploying reserves, attention is paid to the currency composition, duration and selection of instruments. while there is no set formula to meet all situations, the rbi applies sound portfolio management principles and risk management. exchange rate management a major success in external sector management has been the transition from an administered exchange rate regime to a more flexible, market - based system. under the new arrangements instituted in early 1993, the day - to - day movements in exchange rates are market determined. india β s current exchange rate policy focuses on management of volatility without a fixed target, while allowing | 1 |
for other european sovereigns. a challenging question is now being asked : over the last 50 years, financial markets have developed on the assumption that public debt was considered risk free. the certainty that debt would be paid in full strongly anchored market views. now that this certainty is questioned, debt sustainability may rest on a more fragile and volatile basis. no immediate consequences have been felt so far in the us debt market which remains the most liquid one and the ultimate benchmark for assessing risk. however, a pervasive uncertainty has been created, which might be responsible for the decline in confidence that has occurred over the last weeks. in europe, on the contrary, sovereign credit risk has had immediate and dramatic consequences. it is difficult to foresee how, in the longer run, markets will assess debt sustainability. bis central bankers β speeches but let me challenge some current analyses about debt sustainability in europe. β first competitiveness. in the uk, for instance, the effective real exchange rate has depreciated by 23 % over the last four years and its exports have grown by a healthy 15 %, year - to - year over the first semester of 2011. but italy, spain and greece have done better, with exports growing respectively by 16 %, 19 % and 37 % over the same period, with, of course, no internal exchange rate adjustment. linking competitiveness with exchange rate depreciation is therefore too simplistic. improving competitiveness can be achieved by proper domestic reforms with a lasting result. β second, the euro is the only major currency area with its external accounts in balance, which is a strong guarantee of long - term solvency. β third, the euro area β s aggregate budget deficit will stand at around 4. 1 % in 2011, less than half that of the uk or the us. the same holds true for public debt, which amounts to 85 % in the euro area while it will soon cross the 100 % mark in the us. many countries are improving their fundamentals. the primary deficit of spain for 2011 will be around 4. 7 %, half that of the us and the uk. italy will be one of the very few advanced economies to have a primary surplus, around 0. 5 %. the imf has recently acknowledged, and even praized, these efforts and commitments. in short, if good fundamentals are an absolute necessity, it is not a sufficient condition. now can we let liquidity spirals lock a country, just like a | denis beau : mastering ai in the financial sector - let us collectively rise the challenge! speech by mr denis beau, first deputy governor of the bank of france, at the paris financial centre event devoted to artificial intelligence, paris, 11 december 2024. * * * ladies and gentlemen, first of all, i would like to thank the organisers for their invitation to this paris financial centre event devoted to artificial intelligence ( ai ) : it gives me the opportunity to continue the dialogue that we at the banque de france and the acpr have been conducting with financial players on this important matter for the industry. i'll be brief on the observation : ai is one of the most powerful forces driving the current transformation of the financial sector. its adoption has accelerated with the advent of generative ai, which has made the opportunities in terms of productivity, customer interaction, compliance management, etc. more accessible - and visible to all. as supervisors, but also as users of these new technologies, every day we can see the speed and potential of this phenomenon. naturally, these technologies can give rise to many risks, for all financial system participants as well as for the stability of the system as a whole. it is essential that they are properly managed : the following round - table discussion will shed light on these risks and the operational challenges they present. i'll mention just one of them now, but not the least important : cyber risk. in my view, it is a good illustration of the complex issues we are facing. ai amplifies cyber risks, not least because it is used by attackers to increase their effectiveness ; ai also has its own specific vulnerabilities ( such as the risk of data poisoning ). conversely, ai can provide the antidote, and improve it security management, for example, by helping to detect suspicious behaviour or new threats. greater cooperation is needed in this area between data scientists and cybersecurity specialists, in order to unlock the full potential of ai for cybersecurity. i would now like to turn to the regulatory and supervisory aspects that a supervisor naturally thinks of when discussing the opportunities and risks of ai. the european union has been a pioneer in this field, with the ai act. this will mainly concern the financial sector for two use cases : creditworthiness assessment for granting credit to individuals, and risk assessment and pricing in health and life insurance. the acpr should be responsible for enforcing this regulation, as market surveillance authority. this new regulation, and | 0.5 |
claudia buch : how can we protect economies from financial crises? statement by prof claudia buch, deputy president of the deutsche bundesbank, for a panel debate at the rencontres economiques d'aix - en - provence " in search of new forms of prosperity ", aix - en - provence, 8 july 2017. * * * these remarks have been prepared for a panel debate at the rencontres economiques d β aixen - provence, july 7 - 9, 2017, session 19. i would like to thank steffen gunther, marcus john, katharina knoll, sophia list, frieder mokinski, jens reich, marc rennert, christoph weiΓermel, and melanie wulff for their most helpful contributions to an earlier draft. any errors are my own. financial crises are costly β output and financial wealth are lost, unemployment increases, and social gaps widen. the costs may be prolonged, and they may become chronic. the global financial crisis that began ten years ago with the liquidity squeeze on global financial markets in august 2007 is still casting long shadows. global debt levels remain elevated. debt levels of the non - financial sector relative to gdp stood at 220 % by the end of 2016 compared with 179 % a decade earlier ( bis 2017 ). 1 in the aftermath of the financial crisis, risks were shifted from the private to the public sector ( figure 1 ). in the euro area, government debt due to the support for financial institutions went up by β¬488 billion, or 4. 5 % of gdp, between 2007 and 2016 ( eurostat2017a ). today, in the euro area, government debt relative to gdpis about 24 percentage points higher than it was prior to the crisis ( eurostat 2017b ). the global financial crisis has had a significant impact on economic growth and unemployment. the estimated median loss varies between 4 % and 9 % ( ball 2014, mourougane 2017, ollivaud and turner 2014 ). such output losses have also had social consequences. in the euro area, the unemployment rate went up from 9. 2 % in 2005 to 11. 2 % in 2015 ( eurostat 2017c ). 1 / 8 bis central bankers'speeches answering the question of how economies can be protected from financial crisis is thus a key challenge for policymakers. complete β protection β against fluctuations on financial markets is not possible and would impair critical functions of markets in terms | any economic sectors unscathed. and it is safe to say that these upheavals will force market participants to reprice many assets. does the term " stranded assets " mean anything to you? to hit the 2 degrees celsius target, we will need to curb the amount of carbon dioxide we emit worldwide. at a rough estimate, our co2 2 / 7 bis central bankers'speeches emissions are probably not much more than 1, 000 gigatonnes away from exhausting our budget. however, the co2 content of the known fossil fuel reserves still in the ground is far higher β something like three times as much. what this means is that much of these reserves will need to be left untapped. and the problem is that many businesses β valuations depend to a significant degree on the future anticipated value of such fossil fuel reserves. but if those reserves are out of bounds, as it were, they are effectively worthless, making them " stranded assets ". the loss in the value of these assets puts the companies β very survival on the line. as a case in point, the market capitalisation of the major us coal businesses has contracted by roughly 60 % over the past five years, and by around 90 % over the past ten. and that was against the backdrop of the us equity market as a whole racing from one record to the next. and that β s just one example of many i could mention. depending on how quickly and unexpectedly the transition and the resulting repricing process take place, they may well have a huge bearing on the stability of entire sectors of the economy. so it will mainly become an issue whenever businesses and investors are unable to plan for the long term because they need to be in a position to respond to short - term policy impulses. this poses the risk of cliff effects, which can trigger disruptions and financial losses that then affect the financial system and its stability. 3 climate risks in the german banking system let β s now jump straight from theory to practice. to what extent would german banks and savings banks be affected by a shift to a lower - emission economy? at first glance, the amounts lent by german institutions to sectors emitting especially high levels of co2 appear insignificant : loans of β¬1 million or more granted by german banks to coal mining companies currently amount to no more than just under β¬1 billion in total. however, loans to coal mining companies can make up 1 - 2 % of individual institutions β issued loans of | 0.5 |
of vanuatu to incorporate financial inclusion in its tasks. by extending its role to include financial inclusion, the reserve bank of vanuatu aims to reinforce the bank β s function in promoting monetary stability and sound financial structure and to foster the financial conditions conductive to the orderly and balanced economic development of vanuatu, in line with the reserve bank of vanuatu act [ cap 125 ], part ii, section 3. a lot of ni - vanuatu does not have insurance. this is a sad reality after 32 years of independence. it is now important that insurance especially relating to micro - insurance becomes part of the financial inclusion strategy. i am sure that this topic will be discussed in our workshop and in the next few years i would like to see it integral part of our communities. ladies and gentlemen, the workshop theme β medium term strategy for financial inclusion in vanuatu β is timely. financial inclusion is essential to our efforts in fighting poverty and inequality and being innovative and thinking outside the box is key to achieving greater access. we see it in real life, we see it on tv, we hear it on the radio, and we read it in the newspapers. how people in the rural and outer islands struggle to make ends meet is a sad reality for us. dokowia sang a song about β class six β and the difficulty of finding a job and putting food on the table. hearing young people saying that their parent could not afford to pay for their education fees is difficult to accept. bis central bankers β speeches these are the gloomy realities of how some of our people live. whilst we sit in the comforts of our homes and within the precinct of this luxurious hotel, there are others in our communities that do not have that comfort and living standards that they should have. i am sure that we all have a role to play in financial inclusion and if we all make an effort to play that role well, we can make a difference in the lives of many of our people. after this meeting i would like to see concrete outcomes and i believe that with your experience and expertise it is possible. last but least, i take this opportunity to thank the government, sponsors, presenters and all the participants to this workshop and wish you all a fruitful discussion for the next two days. thank you tumas. merci beacoup. bis central bankers β speeches | for release on delivery 2 : 00 p. m. est november 16, 2020 the federal reserve β s new framework : context and consequences remarks by richard h. clarida vice chair board of governors of the federal reserve system at β the economy and monetary policy, β an event hosted by the hutchins center on fiscal and monetary policy at the brookings institution washington, d. c. ( via webcast ) november 16, 2020 on august 27, the federal open market committee ( fomc ) unanimously approved a revised statement on longer - run goals and monetary policy strategy that represents a robust evolution of its monetary policy framework. 1 the new framework has important implications for the way the fomc going forward will conduct monetary policy in support of its efforts to achieve its dual - mandate goals in a world of low neutral policy rates and persistent global disinflationary pressures. at the september 16 fomc meeting, the committee made material changes to its forward guidance for the future path of the federal funds rate to bring the guidance into line with the new policy framework and, in so doing, provided transparent outcome - based guidance linked to the macroeconomic conditions that must prevail before the committee expects to lift off from the effective lower bound ( elb ). in my remarks today, i would like to look ahead and offer my individual perspective on the consequences of our new framework for the conduct of monetary policy over the business cycle, and i also want to provide some context that connects key elements of our new framework to the literature on optimal monetary policy subject to an elb constraint that binds in economic downturns. let me say at the outset that when i am not quoting directly from the consensus statement and the september fomc statement, the views expressed are my own and do not necessarily express the views of other federal reserve board members or fomc participants. 2 the plan of my talk is as follows. i will first highlight and discuss the five elements of the new framework that define how the committee will seek to achieve its price - stability mandate over time and how, in september, it revised its forward guidance the statement is available on the board β s website at https : / / www. federalreserve. gov / monetarypolicy / review - of - monetary - policy - strategy - tools - andcommunications - statement - on - longer - run - goals - monetary - policy - strategy. htm. i would like to thank ellen meade and | 0 |
! 2 / 2 bis - central bankers'speeches | jean - claude trichet : hearing at the economic and monetary affairs committee of the european parliament introductory statement by mr jean - claude trichet, president of the european central bank, at a hearing at the economic and monetary affairs committee of the european parliament, brussels, 21 june 2010. * * * dear madam chair, dear honourable members, since our last meeting on 22 march, the euro area has faced one of the most challenging periods since the beginning of economic and monetary union. to address the unprecedented pressures in financial markets, public authorities in the european union, including the european central bank, have taken bold and courageous steps. die wichtigen entscheidungen, die in jungster zeit getroffen wurden, erfordern fundierte erklarungen und antworten auf fragen, die sicherlich auch in diesem hohen hause gestellt werden. daher begruΓe ich die moglichkeit zum austausch anlaΓlich der heutigen anhorung ganz besonders. je commencerai donc mon intervention par une evaluation de la situation economique. je reviendrai ensuite sur la decision annoncee le 10 mai dernier de proceder a des interventions sur les marches obligataires de la zone euro. dans une troisieme partie, je me pencherai sur les mecanismes de coordination economique de la zone euro et les changements que la situation actuelle appelle. i. economic and monetary developments since the previous hearing in march, incoming data have confirmed a continuing recovery in the euro area in the first half of 2010. according to the latest estimates, the economy grew by 0. 2 % quarter on quarter in the first three months of this year. looking ahead, our earlier expectations that the euro area economy would expand at a moderate rate this year and next have been confirmed. the latest projections by eurosystem staff are broadly in line with this assessment. in our view, the risks to this outlook are broadly balanced. nevertheless, the recovery is likely to remain uneven over time and across economies and sectors, in an environment of continued uncertainty and with tensions in some segments of the financial markets. the annual rate of inflation in the euro area stood at 1. 6 % in may, up slightly from 1. 5 % in april, mostly because of higher energy prices. we | 0 |
of support for the msme sector which must be applauded. clearly it is important that the level of backup as i indicated earlier must be managed well. sponsorship ladies and gentlemen, i would like to express my sincere gratitude to our sponsors for this evening β s microfinance awards : the pacific financial inclusion programme ; anz bank ; life insurance corporation of india ; westpac banking corporation ; bank south pacific ; bank of baroda ; and, hfc bank. thank you for your continuous support and partnership in helping us recognise and appreciate our up and coming fijian businesses. awards this year we have introduced one new award category, the young entrepreneur of the year. the microfinance awards categories are now : 1. individual micro - entrepreneur ; 2. partnership micro - entrepreneurs ; 3. young micro - entrepreneur ; and 4. microfinance service provider. the winners for the individual, partnership and young micro - entrepreneur categories will each receive a cash prize of $ 5, 000 while the three runners up will receive $ 3, 000, $ 2, 000 and $ 1, 000 respectively. the institution category winners will receive trophies and we also have some merit awards. process this year we have received a total of twenty - nine entries, predominantly from viti levu and a few from kadavu, labasa, lau and gau. bis central bankers β speeches assessments for the individual, partnership and youth categories were based on business growth, use of local resources and creativity, adequate book - keeping, sustainability and compliance with government regulations. the assessment for the institution category focused on outreach, delivery channels and use of innovative technology and client protection. congratulatory comments ladies and gentlemen, all finalists for the 3rd national microfinance awards were selected by a panel of 3 judges representing the pacific financial inclusion program, the national centre for small and medium enterprise development and the reserve bank. i would like to congratulate all the winners of tonight β s awards and trust that you will seize this opportunity and use the additional financial windfall to further grow your businesses. for those who did not quite make the top award in your category, i urge you to continue to strive hard. i have found that nothing comes easy in life. we must work for it. i certainly wish all of you the very best over the coming years. introduction of chief guest ladies and gentlemen, it is now my privilege and honour to introduce our chief guest this evening, the honourable faiyaz koya, our | the existing microfinance schemes and the demand for microfinance in 1996 with technical assistance from the un escap. based on the findings of the survey the reserve bank proposed to the government the need for setting up an agency within the government to drive the microfinance initiative. around the same time the reserve bank, in collaboration with the undp, organized a national conference on microfinance. the outcomes of this conference led to the government setting up a microfinance unit in 1999. the initial role of the microfinance unit was to conduct pilot - projects on the best methods and means for promoting micro - credit lending. by 2000 the national microfinance unit was fully operational. initially, the national microfinance unit acted as a wholesaler of micro loanable funds to fiji council of social services β microfinance unit and the aglow β s microfinance unit. however, in 2001, the national microfinance unit ventured into its own retail microfinance operations. it started lending to individuals rather than to groups. this eventually resulted in significant problems for the national microfinance unit and led government to review the effectiveness of the national microfinance unit. in a study conducted by the world bank in 2003 it noted that β the national microfinance unit neglected systemic issues in favour of a pre - occupation with short - term operational objectives β. this was a result of almost exclusive emphasis on microcredit and ignoring issues such as, savings, capacity building and the creation of an enabling environment. consequently, the individual lending programme of the national microfinance unit was discontinued. in 2004, the government merged the national microfinance unit with the national centre for small and medium enterprises ( ncsmed ). let me share with you some statistics of the ncsmed on microfinance. β’ β’ savings o the number of savings clients rose from around 12, 500 in 2004 to around 24, 000 by the first quarter of 2009, an increase of around 93 percent. o total savings is around f $ 1 million. lending o β’ loan repayments o β’ repayment of loans has improved from around 62 percent in 2000 to 95 percent in 2008. number of micro businesses o β’ total lending by the centre was around f $ 7 m at the end of march this year. in addition the centre provided capital grants of $ 7. 1 m. 200 new micro businesses by 2008 compared to 46 in 2004. training and capacity building o the centre plays a very critical | 0.5 |
christine lagarde : remarks on the euro area economy remarks by ms christine lagarde, president of the european central bank, at the β wirtschaftsgipfel β of welt / axel springer, berlin, 15 march 2022. * * * perhaps more than any other place, berlin embodies europe β s journey from division and war to peace and unity. the city was devastated by fighting in 1945. it was divided by the iron curtain until 1989. but now we see a vibrant city, attracting people from all over europe, living in peace. so it comes as a profound shock to be confronted with a new war in europe, less than 800 kilometres to the east of here. the scenes of dying soldiers and civilians are horrifying. millions of people have been displaced, many of them coming to germany, to berlin. this tragedy is a watershed for europe and it calls on all of us to revise our ambitions. and we, as the central bank of the euro area, will play our part too. on 10 march the ecb β s governing council expressed its full support to the people of ukraine. we will ensure smooth liquidity conditions and implement the sanctions decided by the eu and european governments. we will take whatever action is needed to fulfil our mandate to pursue price stability and to safeguard financial stability. at our meeting on 10 march we made a first assessment of the impact of the russia - ukraine war. we concluded that it would lower growth and raise inflation through higher energy and commodity prices, the disruption of international trade and weaker confidence. but if the baseline scenario of the staff projections materialises, the economy should still grow robustly in 2022 thanks to the declining impact of the pandemic and the prospect of solid domestic demand and strong labour markets. however, we also acknowledged that the uncertainty surrounding the outlook had increased significantly. the repercussions of the war on the economy will depend on how the conflict evolves, on the impact the current sanctions will have and on any further measures taken. we therefore looked at two alternative scenarios for the economic and financial ramifications of the war. in these scenarios, growth could be dampened significantly and inflation could be considerably higher in the near term. however, in all scenarios, inflation is still expected to decrease progressively and settle at levels around our two per cent inflation target in 2024. based on our updated assessment of the inflation outlook and taking into account the uncertain environment, we decided | to reduce the pace of our net asset purchases for the second quarter, while maintaining optionality to respond to changing circumstances. the calibration of net purchases for the third quarter will be data - dependent and reflect our evolving assessment of the outlook. if the incoming data support the expectation that the medium - term inflation outlook will not weaken even after the end of net purchases, we will conclude net purchases in the third quarter. but if the medium - term inflation outlook changes and if financing conditions become inconsistent with further progress towards our two per cent target, we stand ready to revise our schedule for net purchases in terms of size and / or duration. any adjustments to interest rates will take place some time after the end of our net purchases and will be gradual. the path for interest rates will continue to be determined by our forward guidance and by our strategic commitment to stabilise inflation at two per cent over the medium term. the events of the past few weeks have demonstrated europe β s strength and resolve in times of peril. we have agreed on an unprecedented set of sanctions that hit their target hard, but also 1 / 2 bis central bankers'speeches have material costs to ourselves. we have shown that we are prepared to pay the price necessary to uphold the universal values of peace, freedom and prosperity. these weeks have also demonstrated why many of the structural changes that were in progress before the war have now become a matter of urgency. de - carbonising the economy faster will help avert the worst climate scenarios, while lowering our dependence on outside sources of energy. the idea of strategic autonomy is no longer simply desirable β it is essential. the summit in versailles last week exemplified the united approach required to make europe stronger in all areas. some might have doubts as to whether europe can truly take this leap. we have seen false dawns before. but i believe that this time is different. many europeans have now become aware of their vulnerability and want to respond with strength and unity. and that is when change can happen. i am moved to think of the words inscribed on a remaining part of the berlin wall at the east side gallery : β many small people, who in many small places do many small things, can alter the face of the world β. 2 / 2 bis central bankers'speeches | 1 |
lawrence williams : leveraging central banks β it investments for strategic advantage opening remarks by mr lawrence williams, governor of the bank of guyana, at the conference of regional central banks β information systems specialists, bank of guyana, georgetown, 4 june 2012. * * * chairman deputy governor banking manager deputy programme manager, information and communication technology, caricom secretariat conference delegates directors and other staff members of the bank of guyana invitees i wish to join with the chairman in welcoming you to this opening session of the conference of regional central banks β information systems specialists. a warm welcome is extended to those of you visiting guyana and more so to those of you visiting for the first time. a special welcome is also extended to ms. jennifer britton who has taken time off her demanding schedule to present the conference keynote address. the bank of guyana deems it a privilege to be hosting the conference of regional central banks β information systems specialists for the second time in the history of the group. we are grateful for the fact that nine central banks accepted our invitation to participate in this conference. i thank you for graciously accepting our invitation. it is my fervent hope that the activities over the next five days will provide a good opportunity to engage in the sharing of ideas and experiences, as well as to gain new insights that would be beneficial to the wellbeing of your respective information technology functions in particular and, by extension, the institutions you represent. the theme of this conference β leveraging central banks β it investments for strategic advantage β is apt given the increasing reliance of central banks on information technology services to support their operations. information technology competes with other areas of the central bank β s activities for the allocation of scarce resources. it is only proper, therefore, that the investments made in the domain of information technology must be able to deliver a return that meets or exceeds that which would have been provided by the other alternative avenues to which those resources could have been applied. in the final analysis, the information technology function is required to contribute to the organisation achieving specific outcomes in pursuit of its mission in an ever - changing local, regional and international landscape by connecting personnel, business processes and data. i believe that these expectations are shared by all our central banks in the region. putting together an information technology services organisation can be a considerable undertaking that requires the investment of significant levels of financial resources to procure the right people, processes and technology. for this reason, from a management perspective, it is imperative that the investment gives | the organisation value through improved productivity and efficiency, enhanced customer experience, reduced costs, substantial risk mitigation, better compliance and business continuity. at the bank of guyana, we have made considerable investments in the area of information technology over the years and continue to do so. despite their cost magnitude, we persist bis central bankers β speeches with these investments because we believe that once properly leveraged they will enable the organisation to do more with less by : ( i ) increasing staff efficiency and productivity ; ( ii ) strengthening relationships with the organisation β s customers ; and ( iii ) fostering more effective collaboration with various business partners to quicken the speed at which data that is required for decision - making can be provided. in striving to achieve these goals, we are exposed to the likelihood of being affected by the major risks that are attendant with information technology use. consequently, the institution continues to allocate resources to : ( a ) make its information systems and the supporting technical infrastructure more reliable and resilient ; and ( b ) protect the integrity of the institution β s data assets. achievement of the foregoing objectives is heavily dependent on all information technologyrelated activities and investments being channelled in a manner that is consistent with the organisation β s goals and needs β the so called it / business alignment challenge that appears to be so elusive in many cases. here, from a management oversight perspective, one cannot overemphasise the necessity of embracing governance mechanisms that are fit for purpose. to remain relevant, the information technology function must continually evaluate and if necessary enhance its existing capability to ensure that it can meet the requirements of core business processes while being in tune with the current and envisaged directions of the organisation. as needs and roles change, the organisation must be able to customise its information environment and modify its processes in response. this practice forms a good base to pursue new information technology initiatives. allow me to share with you several prescriptive pointers which i am sure that you have heard several times before and are probably guided by these and similar practices in your respective central banks. notwithstanding, the familiarity, i believe that it is appropriate for me to repeat them at a forum such as this. during the course of this week, as you deliberate on how to ensure that your organisation β s information technology investments remain appropriate, i encourage you to be guided by the following pointers which are selfexplanatory : β’ understand the value of your organisation β s data and tie information | 1 |
critical importance to the future role of central banks and to their ability to maintain independence in formulating policy. i would like to explore these questions next in terms of two issues : the appropriate use of the federal safety net and the implications for monetary policy under a broadening mandate. safety net issues and moral hazard concerns the public policy actions directed toward bear stearns, primary dealers, and fannie mae and freddie mac have resulted in a significant expansion of the safety net and the federal reserve β s lending practices. now that more financial activities have gravitated outside of the banking system, more financial stability concerns seem destined to arise. our lending to support the takeover of bear stearns and to provide liquidity to primary dealers, for example, has taken the federal reserve well beyond its traditional approach of injecting discount window funds through the commercial banking system. this new financial framework, consequently, leaves us with several distinct choices. some, for instance, have suggested that we should extend more of a bank - like supervisory and regulatory framework over the major players in this broader financial marketplace in return for their having access to the discount window and other possible forms of public assistance. others, though, believe that such oversight and safety net responsibilities could lead to a range of problems and an even more fragile marketplace by compounding moral hazard problems and by reducing the role that market discipline could play in strengthening our financial markets and fostering innovation. in general, most recognize that we must think carefully about permanently extending the financial safety net and the federal reserve β s lending responsibilities. using the federal reserve β s resources to address breakdowns within a broader financial marketplace will necessarily benefit the assisted institutions, and the particular market segments or financial instruments associated with the problems. also it is important to keep in mind that many other market participants who have made more prudent decisions will be left at a disadvantage by having to compete without such special favors. for the federal reserve and other public authorities, such a role would thus involve a host of difficult decisions during a financial crisis and would potentially put the federal reserve in the position of having to pick the winners and losers from a broad range of financial institutions and investors. moreover, as the bear stearns experience shows, these decisions may have to be made in a hurry and with limited information in many cases, and any actions will likely raise questions about why some segments of the economy are protected while others are not. this is a difficult position to find ourselves in and its consequences must be carefully weighed before we | central banks, for instance, may have more to deal with than a financial crisis. in the current situation, we have experienced a severe financial shock coupled with a surge in global inflation. in the face of accelerating inflation, it is important that we not calibrate policy principally to deal with the financial crisis if it involves compromising to an unreasonable extent our ability to achieve our mandate for price stability. in the united states, core pce inflation has been above most definitions of price stability for the past four years and is poised to move even higher over the near term. the current stance of policy, while understandably calibrated for responding to the immediate financial crisis, will make it difficult to achieve our mandate for price stability over the longer term. finally, how can a central bank implement a financial stability mandate while maintaining the independence needed to actively pursue its other mandates? as i noted earlier, in the midst of a financial crisis, a central bank will likely be encouraged to take actions that are fiscal in nature or that directly affect the allocation of credit by targeting assistance or liquidity to specific institutions, markets or financial instruments. these actions necessarily affect expectations for similar actions in the future and bring forward political pressures that confirm such expectations for the future. in these circumstances, a central bank must be particularly aware of the difficult trade - offs between its financial stability and price stability mandate, especially where, like the united states, the central bank does not have a formal objective for price stability. concluding thoughts let me conclude by emphasizing the broader applicability of the issues that i have discussed today. although i have focused my remarks mainly on the federal reserve, i believe many of the issues raised by this period of financial stress have important implications for other central banks as financial market liberalization and development proceed around the world. maintaining financial stability in a changing financial system is a difficult task and, realistically, financial crises will occur in the future despite our best efforts to prevent them. addressing these issues requires a delicate balance between markets and policy intervention and requires recognition of the important macroeconomic implications for central banks. while there can be little doubt that central banks will continue to have responsibility for financial stability going forward, recent events raise important questions about how this mandate should be implemented. finally, for a market economy to work best, it must to the maximum extent possible find a balance between financial stability and a stable price environment and in doing so must be able to allow individual institutions to fail. the β too big to fail β | 1 |
shut it down to buy time, to delay the spread of the virus while building the country β s health capacity. amid this challenge, the domestic banking system can be harnessed to support economic recovery. specifically, they provide cash flow support to individual clients and micro, small and medium enterprises. banks are also our conduits in the accelerated promotion of digital banking and electronic payments transactions of our countrymen during the pandemic. on this note, our strategy of combatting the covid - 19 pandemic with the help of the banking system is focused on four critical areas. first, to provide sufficient liquidity to support government β s efforts of saving lives and livelihoods. second, to maintain the stability of the financial system. third, to ensure the continued delivery of financial services to the public. lastly, to shore up confidence and cushion economic activity. 2 / 4 bis central bankers'speeches in fact, the bsp has injected a total of p1. 5 trillion to the financial system, equivalent to about 7. 6 percent of gross domestic product ( gdp ), as part of its liquidity - easing measures to address the impact of covid - 19 pandemic. at this juncture, allow me to briefly discuss our various regulatory and operational relief measures to assist the bsp supervised financial institutions endure the health crisis as well as to support households and business firms. first, we provided bsfis with regulatory reliefs to enable them to grant equivalent financial relief to their borrowers in the form of more flexible and favorable lending terms, or restructure loan accounts. second, they were given incentives for lending to assist the micro, small and medium enterprises and large enterprises carry on with their business during the covid - 19 crisis, as well as hasten recovery and sustainability of their operations, during the post - crisis period. one of our more innovative incentives is that new loans to msmes, and certain large enterprises that were critically impacted by the pandemic but not part of a conglomerate will now be recognized as forms of alternative compliance with banks β reserve requirements, which i β ll discuss further in the next slide. third, is the promotion of continued access to financial services through key policies. this includes the relaxation of know - your - customer ( kyc ) requirements, temporary suspension of all fees and charges covering online banking transactions, licensing and fund transfers, operational relief for fx transactions and financial assistance in the form of loans, advances or other credit accommodations granted to bsfi | growth in domestic liquidity the development budget coordinating committee is looking at a real gdp growth rate of 5. 7 percent for 2006, with growth driven by services, industry, and agriculture which stands to benefit from better weather conditions. the main risk we see for domestic demand is high oil prices, which have already taken some of the buoyancy out of consumer spending last year rising oil prices also continue to be the key source of risk to inflation, although the strong peso and the easing of food prices should help balance inflationary risks. while inflation may range from 7. 5 to 8. 2 percent, we see a downward trajectory given expectations of an easing of oil prices from peak levels in 2005 and a short - lived impact of the revised vat on prices of goods and services. market interest rates are also expected to benefit from ample liquidity, improving fiscal performance, and better prospects for our sovereign credit rating at the same time, our external position is likely to continue to benefit from dollar inflows from remittances and investments with healthy inflows, the peso is likely to remain generally stable in the course of the year. challenges and strategies in the months ahead, the task for economic managers will be to strengthen the economy in the short term β¦. and to preserve the momentum for economic reforms that will sustain growth in the long term. at the bsp, our job will be to be more steadfast in fighting inflation and reforming the financial sector. in the area of banking supervision, our focus will be on reducing the stock of non - performing loans with the help of congress in extending the spv law ; enhancing the prudential regulatory environment of the banking system to align it with international standards and best practices ; strengthening corporate governance standards and market discipline mechanisms ; developing the domestic capital market further ; enhancing the payments system ; and improving the bsp β s supervision technology and capacity. in the pipeline are the issuances of the guidelines on the implementation of basel ii accord, and the new financial reporting package in line with the adoption of international accounting standards. while there will be initial friction costs related to the transition, these will strengthen the banking system for the long haul. to speed up the development and deepening of the domestic capital market, the bsp will continue to work with other government agencies and the private sector for the completion of critical market infrastructure to further enhance system integrity and overall market confidence and in response to the need to further enhance financial information critical to investor decisions | 0.5 |
bis central bankers'speeches commitment to complement government β s broader efforts to address the pandemic. bsp continues to have ample monetary policy space to deal with potential risks to liquidity and growth owing to the health crisis. we shall continue to provide support to the government while recognizing the crucial role of sustained and targeted fiscal interventions in reviving demand. moreover, let me assure you that when domestic developments warrant a recalibration or withdrawal of policy support, the bsp will ensure a smooth normalization of its time - bound measures. the bsp shall continue to adhere to disciplined and evidenced - based policymaking. in the face of this pandemic, we shall continue pursuing our mandate of promoting price and financial stability conducive to sustainable growth and employment. thank you very much. 4 / 4 bis central bankers'speeches | randal k quarles : parachute pants and central bank money speech by mr randal k quarles, vice chair for supervision of the board of governors of the federal reserve system, at the 113th annual utah bankers association convention, sun valley, idaho, 28 june 2021. * * * i have been reflecting recently, and in connection with this speech, on america β s centuries - long enthusiasm for novelty. in the main, it has served us and the world well, by making america the home of so many of the scientific and practical innovations that have transformed life in the 21st century from that of the 19th. but, especially when coupled with an equally american susceptibility to boosterism and the fear of missing out, it has also sometimes led to a mass suspension of our critical thinking and to occasionally impetuous, deluded crazes or fads. sometimes the consequences are in hindsight merely puzzling or embarrassing, like that year in the 1980s when millions of americans suddenly started wearing parachute pants. but the consequences can also be more serious. which brings us to my topic today : central bank digital currencies, or cbdcs. in recent months, public interest in a β digital dollar β has reached fever pitch. a wide range of experts and commenters have suggested that the federal reserve should issue β and in fact may need to issue β a cbdc. but before we get carried away with the novelty, i think we need to subject the promises of a cbdc to a careful critical analysis. in offering my views on this and other issues related to cbdcs, i am speaking for myself as a member of the board of governors, and not for the board itself or any other fed policymakers. and, indeed, you will all have seen chair powell β s recent announcement that we are preparing a comprehensive discussion paper on this issue that will be the first step in a thorough public process to conduct just this sort of critical analysis, which i do not want to prejudge. but i do want to give some sense of the issues i think we will need to grapple with in this process, how i will be thinking about them, and the high bar that i think any proposal to create a u. s. cbdc must clear. so, let β s begin with a basic question : what problem would a cbdc solve? to answer, we first need to define the term cbdc and assess the current state of the u. | 0 |
speeches potential for β crowding - in β private investment should also be encouraged. multiplier effects would provide additional lift to potential growth at no public cost, and would be the very evidence that public policy has served its function of aiding the private sector. current supply constraints are not limited to physical capital, but extend to human capital as well. in 20 years, thailand will be among the first asean countries to enter an aging - population phase, with share of senior citizens rising from 15 to 27 percent of total population. early symptoms have already been felt in some industries, whose capacity to produce and invest is stifled by the lack of qualified labour. tight labour market is also indicative of labour shortage at the lower end of the skill spectrum. market forces have failed to resolve these issues. education policy, tax incentives, minimum wage, and migration policy all have bearings on the labour market dynamics. the long - term growth implications of these policies should be incorporated into the policymakers β considerations. implementing a comprehensive set of economic policies to lift potential growth, while pursuing other public policy objectives, is not an easy task. it requires a close coordination among various policy authorities. it also takes immense skills to introduce the right sequencing of policies at the right time. these prerequisites must also be backstopped by strong policy credibility, the second area of priority. 2. maintaining macroeconomic policy credibility in its quest to provide public services, the policymakers must avoid being the source of harm. international experience is filled with cautionary tales of how a lack of policy discipline could lead the economy awry. over - bloated and inefficient government increases risks of unsustainable public finance, and can sow the seeds for political conflicts. lax monetary discipline is associated with hyperinflation and financial instability. maintaining macroeconomic policy credibility and discipline must be an integral part of economic reform in thailand. policy credence is not an independent choice, but is shaped by the overall institutional setup. institutions are the set of rules and norms that governs the incentives of economic agents and constrains their behaviours. political developments, strength of the legal system, property rights enforcement, quality of workforce, degree of corruption are but some aspects of the institutional environment. they all interact with the policymakers β ability to pursue their objectives credibly. institutions evolve via a mixture of history, will power and luck. a combination of factors at critical junctures can determine the path of institutional change | tarisa watanagase : asian banking β coping with risks and seizing opportunities luncheon talk by dr tarisa watanagase, governor of the bank of thailand, at the 27th asian pacific bankers council ( apbc ) general meeting and conference, bangkok, 31 october 2008. * * * chairman of asian pacific bankers council, distinguished speakers and guests, i would like to thank the asian pacific bankers council for inviting me to join this meeting today. with great uncertainty ahead, actions of each and everyone β banks, regulators, central bankers β can have significant impact at home and abroad. at this time, confidence and trust forged by candid and opened communication between key stakeholders is of paramount importance. therefore, this meeting offers an immense opportunity for us to foster this dialogue. just over a month ago, the global economic and financial market condition was at a much different place from today. since then, the magnitude of market adjustment, volatility, and contagion across markets, types of institutions, and countries have proven that risk diversification is easier said than done. this is especially as markets and institutions seem to correlate in a crisis as a result of risk - aversion and fear of counterparty risk. nevertheless, the positive factor that has emerged is that governments of major economies and financial centres are now addressing this with comprehensive package. the aims are chiefly to restore β main street β s β confidence by deposit guaranty ; to shore up β wall street β s β confidence with adequate liquidity ; and to mitigate counterparty risk through interbank guaranty. the rescue package also spans injecting capital into systemically important players, and neutralizing short - term market impact of valuation of toxic assets by underwriting those risks themselves. ladies and gentlemen, up to now, banks in asia have been less affected by the direct impact of the global financial turmoil. at this juncture, subprime - related losses have been lower in asia than elsewhere. the estimated write down and credit loss, as recoded by bloomberg on 28th october, is about 27 billion us dollars for asia, compared with 430 billion us dollars in the u. s. and 221 billion us dollars in europe. while this may be the case, the impact on regional capital markets, including the prices of bank stocks and widening credit spread, signals a much deeper concern. events in the recent weeks reflected market worries of the second round impact via expected slowdown in the global economy, trade, | 0.5 |
take this occasion to share with you the following observations : 1. appropriate laws and regulations are needed to foster a regulatory environment that is conducive to financial innovation. it is worthwhile to attempt new ideas as long as they would not contravene the requirements of existing laws and regulations. however, we must have a full understanding of the related risks. and, we must have an appropriate risk control system or measures to mitigate or eliminate the risks. apart from complying with necessary regulatory procedure, the new ideas must facilitate market development without impairing the rights of consumers. to this end, the qdii scheme for stock investment can serve as a classic example. the introduction and moderation of the qdii scheme as well as the gradual opening of the mainland capital market represent an important step towards financial system reformation. these measures are also financial innovation conducive to financial market development. based on this situation, we can expect more innovation in financial policies. in the near future, a wave of keenly anticipated innovations in financial institutions, products, service and cooperation will arise from innovated financial policies. 2. there should be ongoing observation of changes in market development, analysis of special needs of customers, segmentation of customers and markets, as well as the establishment of a system to trace the demand of market and customers. the regulators should proceed in tandem with the pace of market development and monitor changes and characteristics of consumer demands. as far as financial products are concerned, asset management and structural financing that are selling like hot cakes are good examples. 3. financial innovation should be adapted to time, place and people. this issue has been explored before with macao as an example. 4. maintain good communication between regulators and market participants. it is normal for regulators to receive tons of complaints and enquiries from consumers. as these letters are mostly pinpointing financial products and services, regulators would gain a better understanding or come up with a general idea on the types of services demanded by consumers during the course of handling these complaints and enquiries. 5. investors and consumers need education. it is desirable to initiate a two - pronged measure. based on the objectives of protecting the rights of the consumers and investors as well as facilitating the penetration of the financial market, the regulator can actively embark on financial consumption related education through various channels such as the media and topical exhibitions etc. on the other hand, the market participants are encouraged to launch more promotions that are infused with educational | , and such support services can be provided by the macao financial system. 11 ) in november 2010, the then premier of the state council, mr. wen jiabao, visited macao for the 3rd ministerial meeting of the β forum for economic cooperation between china and portuguese speaking countries β. he announced a series of policy measures to promote macao to be the platform for economic cooperation between the countries. he hoped that macao would perform β core function β in promoting rmb trade settlement in the process, which would further embody macao β s position as platform for economic cooperation between china and lusophone countries. 12 ) macao β s uniqueness and competitive edges support its development into a rmb settlement platform for commercial and trade activities between the mainland and bis central bankers β speeches portuguese speaking countries. at the moment, the division of labour between the two financial centres, shanghai and hong kong, is clear cut ; shanghai is the β onshore β rmb centre while hong kong is the leading β offshore β centre. it is envisaged that macao can strengthen its cooperation with shanghai and hong kong, exploring the opportunity arising from the orderly financial reform in the mainland. to cope with the need of the country, macao can serve as a platform for regional economic and trade cooperation, by which it can help create an accommodative environment conducive to external trade, overall economic development, financial reform and modernization of our country. under such positive interaction, we can promote jointly the process of the internationalization of the rmb. thank you! bis central bankers β speeches | 0.5 |
information technology act, outsourcing guidelines, fair practice codes, etc. are met for data security, data privacy and redress of grievances. further, sufficient safeguards in contracts with fintech and bigtech entities should also be ensured. therefore, as we take this journey of innovation forward, it must be recognised that the risks ultimately lie in the books of banks and nbfcs and hence the collaboration should be appropriately strategised. 23. sixth, lenders should never lose sight of their raison d β etre β the customer. as you are aware, under the integrated ombudsman scheme, and even under the earlier ombudsman schemes, only the complaints pending beyond 30 days with the regulated entities ( including banks ) are dealt with by the rbi ombudsman. thirty days is a very reasonable period for resolution of customer complaints. i would urge the banks to pay particular attention and take measures, as necessary, to revamp / strengthen their grievance redress mechanisms and minimise the escalation of grievances to the rbi ombudsman in the interest of the customers. banks should also ensure fair treatment of customers and avoid mis - selling through proper sensitisation of staff and direct selling agents. the product sold to the customer should be suitable and appropriate for his / her risk profile. conclusion 24. as we tread ahead on the growth path after the pandemic, india β s rightful place in the global economy will be built on a sound, stable and resilient financial system. banks and nbfcs, being the power engines of our economy, must undergo continual metamorphosis to accelerate this transformational journey. i wish to see the senior bankers here as the β change agents β in their respective institutions to catalyse this whole transformation. my best wishes for productive and meaningful deliberations ahead! thank you. stay well. namaskar! 1 the mahatma gandhi national rural employment guarantee act, 2005. 5 / 5 bis central bankers'speeches | tool in furthering the cause of a level playing field between countries and across institutions. ladies and gentlemen, let me conclude. looking back in history, we are a far cry now from where we were fifty years ago, when our predecessors introduced formal banking supervision in the netherlands. looking forward into the future, i am pretty sure that our successors will not be celebrating the centenary of the act on the supervision of credit systems, or even the centenary of insurance supervision 20 years from now. we will have entered a cross sectoral world long before then! and as to the topic they will be discussing, that could well depend on the turning we take on the crossroads that we are at now. thank you for your attention. i wish you all an interesting and entertaining conference. | 0 |
and the various steps underway to help promote and support its adoption. i will then discuss the global foreign exchange committee β s ( gfxc ) objectives, which include the ongoing evolution and maintenance of the code. finally, i will spend some time discussing particular areas where the market is evolving and where the gfxc is currently soliciting additional input, including on β last look. β development of the code and its principles the foreign exchange working group ( fxwg ), led by guy debelle of the reserve bank of australia, was established under the auspices of the bank for international settlements ( bis ) markets committee in july 2015. 2 it was tasked with facilitating the development of a single, global set of principles for the fx market and accompanying tools to promote adherence to those principles. i had the pleasure of leading the work stream to write the code, while chris salmon of the bank of england led the effort to create tools to promote adherence. the work of the fxwg was supported by the market participants group ( mpg ), led by david puth of cls, which included members from all corners of the fx industry. 1 / 6 bis central bankers'speeches as made clear in the foreword, the code is not regulation β it is a set of voluntary, global best practices. the development of successful best practices requires active engagement from a diverse spectrum of market participants, which we were fortunate to have throughout this effort. the fx global code is intended for all fx market participants engaged in the global wholesale market. this includes sell - side institutions, certain market infrastructures, and buyside institutions as well. the spectrum of buy side institutions active in fx is particularly complex and varied, encompassing hedge funds, high frequency trading firms, asset managers and corporates among others. the size and complexity of their fx market activities and the nature of those activities may differ significantly. hearing the viewpoints of many different institutions was critical to delivering a relevant code for this diverse landscape, recognizing that while the code applies to all, the details of precisely how it applies may differ. i found that the series of frank debates and discussions that we β market participants and central bankers alike β had over the past two years was an important process in itself, and not just a means to an end. the result was multiple drafts of the code and, ultimately, a product that more clearly articulated principles and defined terminology. the 55 principles within the global code focus on promoting transparency, fairness and mitigating risk across six | emerging markets and for monetary policy. three plenary sessions will address these themes and i will make a few introductory comments on each of them. the regulatory response to the financial crisis the global financial crisis has spurred a review of banking regulations. much of the discussions in international forums, such as the international monetary fund and the bank for international settlements, have centred round the appropriate regulatory responses to prevent a recurrence of unfettered lending by banks in future. achieving global consensus on these issues has not been easy, and while progress has been made, significant differences still remain. there is the risk that the crisis will result in excessive politicisation of regulatory issues in a quest to ensure that someone is seen to be responsible for the crisis. this has the potential to create a new moral hazard by giving the impression that with the agreement on basel iii, the system is safe. but the regulators do not run the institutions and there are no absolute guarantees of safety. nevertheless, if things do implode, it would be the regulator that would be deemed to be responsible. the possibility also exists that there has been too much of a focus on banks, rather than on the broader financial system. over - regulation of banks could not only reduce lending, but it could result in more disintermediation, thus preparing the ground for the next crisis. what the recent crisis has shown is the inventiveness of financial markets to come up with products or institutions that circumvent existing regulations. furthermore, there is the danger that the pendulum could swing too much in the direction of an excessively tight regulatory regime which could, in turn, stifle the recovery of the banks and their ability to lend, with adverse consequences for the broader economic recovery. south africa did not have a banking crisis, thanks to prudent management and appropriate regulation and supervision. nevertheless, the country has not been spared the fall - out of the crisis, nor is its regulatory environment immune to the changes that are being implemented at the global level. experience and implications of europe β s economic policy challenges : lessons for emerging - market economies the crisis was characterised by a sharp and relatively synchronised global downturn. the recovery, however, has been varied across countries and regions. the euro area has been particularly hard hit. its banking sector is still in recovery mode, and while there appears to be some stability currently, the sovereign debt issue that threatened the existence of the euro zone as a single currency area earlier in | 0 |
. under stress, firms will only see the fs increase under a ratings downgrade, thus completely setting aside any information contained in market spreads. such ratings downgrades may not occur immediately, leaving a window where policyholders may be less well protected. further, where ratings downgrade by a notch but remain within the same cqs, again the fs is unchanged. another way of looking at the question is to consider how much of the credit spread the fs strips out in percentage terms [ chart 11 ]. so, at year - end 2020 perhaps 70 % of the credit spread on such assets is removed for retained risks, with a much lower figure if spreads reached the levels seen in the global financial crisis. the insensitivity to market signals is a feature of the current fs construct, and is why for internal model firms we set an expectation in supervisory statement 8 / 18 : β solvency ii : internal models β modelling of the matching adjustment β 10, that when determining the fs in stress firms should not simply mechanistically recalculate the fs, but should determine a stressed fs that better reflects the risks retained. to be more forward looking, one alternative could be for an approach where the risk allowance reflects compensation for : expected losses ; uncertainty around expected losses ; and any further risks retained by investors. such an approach might place less weight on credit ratings, which particularly in the case of internal ratings present challenges around availability of data, and expertise in the business and risk illustrative bonds of 10 - 15 year term, duration c. 10 year at ye20 https : / / www. bankofengland. co. uk / - / media / boe / files / prudential - regulation / supervisory - statement / 2018 / ss818. pdf all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice teams. a framework that takes some signals from market prices could be more forward looking, for example, recognising the market pricing of climate risks, rather than a backwards view of the risks of failure. however, any alternative framework may bring in new risks, potentially in being over risk - sensitive ; or for example if provisions are linked to credit spreads, there may be incentives to value assets nearer the top end of the plausible range, understating the credit spread. while this is likely a smaller risk for traded corporate bonds, | of the response to failure of the pre - crisis capital framework ; and our intervention in risk - free benchmark rates is intended to avoid a co - ordination failure in which the most appropriate and robust benchmarks would not be adopted by the market. so while it is true to say that central banks β footprint in money markets is larger now than in the days prior to the crisis, this has been out of necessity rather than design. as a tribe, central bankers retain a strong belief in financial markets β ability to facilitate price discovery, allocate capital efficiently, and provide useful signals about the macro economy and financial stability. references duffie, d and krishnamurthy, a ( 2016 ), β passthrough efficiency in the fed β s new monetary policy setting β, preliminary version for presentation at the 2016 jackson hole symposium. fender, i and lewrick, u ( 2015 ), β calibrating the leverage ratio β, bis quarterly review, december, pages 43 β 58. grill, m, hannes lang, j and smith, j ( 2015 ), β the leverage ratio, risk - taking and bank stability β, preliminary version ; www. eba. europa. eu / documents / 10180 / 1018121 / grill, % 20 lang, % 20smith + - + the + leverage + ratio, % 20risk - taking + and + bank + stability + - + paper. pdf. haldane, a and madouros, v ( 2012 ), β the dog and the frisbee β, www. bankofengland. co. uk / archive / documents / historicpubs / speeches / 2012 / speech596. pdf. imf ( 2009 ), global financial stability report, april. laeven, l and valencia, f ( 2010 ), β resolution of banking crises : the good, the bad and the ugly β, imf working paper, 10 / 146. pozsar, z ( 2016 ), β money markets after qe and basel iii, β credit suisse june 2016. bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches | 0.5 |
mortgage market have focused on the confluence of several driving factors, including a loosening of us monetary policy at the beginning of the decade ; an easing of standards for mortgage lending, encouraged in part by a range of legislative and policy changes that aimed to make home ownership more accessible to households that had been historically underserved by mortgage lenders ; the rise of complex structured products, the overall riskiness of which proved to be difficult to properly monitor and assess ; fragmented and loose supervision of financial institutions which, among other things, kept us investment banks outside fed oversight ; and the inaccurate ratings of credit rating agencies. in the case of the philippines, the restructuring of our banking system in the aftermath of the asian financial crisis was achieved without the infusion of public funds. this helped avoid moral hazard issues mentioned earlier and actually promoted greater prudence in banking activities. and since most of our financial institutions were still in the process of strengthening their balance sheets when securitization began to be popular among investors abroad, their exposure to these structured products is relatively limited. thirdly, i cannot overemphasize the importance of a strong supervisory and regulatory framework. the fundamental rationale for banking regulation is to guard against moral hazard, as banks use and lend out funds sourced from deposits. in the philippines, the banking system has benefited from our continuous efforts to better monitor, mitigate, and manage risks. a package of banking reforms was implemented in the areas of risk management, corporate governance, capitalization, and information disclosure practices β such as rules to disclose detailed information on banks β restructured and nonperforming loans. going forward, our focus will be on further enhancing the regulatory and supervisory framework ; promoting market discipline in financial markets through enhanced reporting and disclosure requirements ; improving corporate governance through promotion of compliance with international accounting and financial reporting standards ; enhancing the implementation of risk - based supervision ; strengthening ties with other regulators ; continuing support for the development of a deep and efficient capital market, as well as the passage of necessary legislative reforms. globalization and financial liberalization much as the β great moderation β has highlighted the benefits of globalization, the recent global turmoil has also highlighted its challenges. there is no question that freer trade in financial products and services confers significant benefits β direct as well as collateral ones β to those countries that are prepared for it. these benefits come in the form of β among other things β portfolio diversification, greater access to foreign exchange, financial depth and technological transfers. at the same | amando m tetangco, jr : competitiveness, growth, and equity in a globalizing economy β a central banker β s view welcome remarks by mr amando m tetangco, jr, governor of the central bank of the philippines ( bangko sentral ng pilipinas ), at the 46th annual meeting of the philippine economic society, manila, 14 november 2008. * * * the distinguished officers and members of the philippine economic society led by dr. aldaba, fellow central bankers, our friends from the media, special guests, good morning. on behalf of the monetary board, i welcome all of you to the bangko sentral ng pilipinas, the venue of the 46th annual meeting of the philippine economic society ( pes ). to us, the annual meetings of the pes have always served as an invigorating collegial setting among professional economists in the philippines for the dissemination of research, incisive debate, and careful consideration of critical policy issues. this year β s meeting is being held in conjunction with the 11th international convention of the east asia economic association or the eaea. this marks the first time that our country is hosting eaea. it is therefore with keen anticipation that we look forward to the discussions ahead, especially in light of the timeliness of this year β s pes theme of β competitiveness, growth, and equity in a globalizing economy. β at the same time, eaea β s theme of β regional risk management in east asia β is particularly relevant given the present global financial crisis that is likely to be the deepest in decades. given the broad - ranging impact of the financial market turmoil, the scope of the conference papers addresses varied issues : this includes the need for complementary interventions in the areas of energy and infrastructure ; human capital investments ; governance ; competition policy ; and the need to integrate the poor into the mainstream of development. in other words, there would be much food for thought along these lines in subsequent discussions. on my part, i will focus on the conference theme from the point of view of a monetary policymaker. globalization and the great moderation ladies and gentlemen. prior to the current economic and financial turmoil, the world had experienced a prolonged period of above - trend growth. an important driving force behind this is globalization β as manifested by an unprecedented increase in the trade in goods and services around the world, coupled with an even greater expansion in the cross - border movement of capital flows. in fact | 1 |
blueprint for emu, the report of the delors committee. the maastricht treaty made the institutional reform obligatory for all eu central banks. many other countries outside the eu, and outside the european continent, have implemented similar institutional reforms. this proves that such a reform has been judged to serve the national interest in a wide variety of countries. the central banks of those countries have in most cases been successful in meeting their inflation targets, which has contributed to monetary stability worldwide. central bank independence and accountability alone are not a sufficient guarantee of the happy coexistence of price stability and sustainable growth. in addition, we need fiscal restraint to prevent a widening of public deficits so that they put upward pressure on real long - term interest rates and crowd out private spending. in the worst case, they could ultimately lead to the removal of central bank independence, with central banks being forced to rescue governments. that would signal the end of monetary and price stability. economic performance while inflation performance since the start of emu has been satisfactory β excluding recent months β we have no reason to be happy with growth performance. economic growth in the euro area since the launch of the euro has averaged 2. 1 %, compared with 2. 6 % growth in the united states and 2. 7 % on average in the three nonparticipating member states : denmark, sweden and the uk. labour productivity growth has been very modest, at 0. 8 %, which is only half the average productivity growth in the abovementioned benchmark countries. growth performance employment growth gdp growth productivity growth suomen pankki | finlands bank | bank of finland but we must admit that employment growth in the euro area has been impressive. since the launch of the euro, 16 million new jobs have been created in the area, compared with 13 million new jobs in the united states in the same period. unemployment has come down from a peak of 11 % in the mid - 1990s to 7 % today. this strong labour market performance tells us that labour market reforms β where such reforms have been introduced β have brought about the desired results. these reforms have contributed to a rise in employment among less - skilled workers, which partly explains the slow rate of labour productivity growth. despite the improvement, the situation on the labour market is far from satisfactory. employment rates are low compared with the us or, for example, the nordic countries. these observations could, however, be turned into a more positive story. a low employment ratio | economies themselves. similarly, the banking union will not directly limit the share of banks β assets tied to sovereign debt. placing strict limits to banks β sovereign holdings would rather be a separate regulatory matter and would warrant careful, longer - term deliberations. that said, the comprehensive assessment should enhance confidence in the european banking sector and add impetus to banks β efforts to improve their capital adequacy. in this respect, much has already been achieved in the run - up to the exercise. the improved confidence, in turn, promotes provision of healthy credit to the economy and thereby contributes to europe β s recovery prospects. β’ from a longer - term perspective, the banking union will help us prevent and at least mitigate potential distortions and their destabilizing effects on the european financial markets. the ssm will be a key element in addressing banking sector risks before they materialize and, like the ecb in the area of monetary policy, lend credibility to national banking supervision by conducting it with a supranational bis central bankers β speeches perspective. i argue that this is a fundamental change in the culture of how european supervision and resolution are conducted. we move from national efforts to prop up domestic banks to appropriate pan - european supervision, i. e. to a system where the structure of decision making matches the international character of the banks and markets. the change does not only include the improved supranational banking supervision, but also other elements. the ssm will be complemented by the bank recovery and resolution directive ( brrd ) and the single resolution mechanism ( srm ). the new legal framework will allow early intervention in troubled banks. it will also make possible the bail - in of banks β shareholders, and so creditors help to dissolve the expectation that banks β resolution costs would fall on the tax payers. this new resolution regime is backed up by the cross - border risk - sharing via the single resolution fund, which will be financed by the banking industry itself. all this will alleviate concentration of the ultimate liability for troubled banks on any single sovereign. as an important result, the arrangements could decouple the banking industry from the fiscal condition of the sovereigns concerned. why does all this matter for the central banks? financial stability and the central banks β key objective of price stability are obviously connected, both directly and indirectly through the real economy. but a stable financial system also fosters greater integration of the financial markets. and the more integrated the financial markets are in the | 0.5 |
curry. everyone in the theater would sing along, shout out the lines, and throw popcorn at the screen ; many would dress up like the characters. now, i didn't dress up - sorry to disappoint you - but no party was complete until all of us danced " the time warp " to the movie's famous song. 1 / 4 bis - central bankers'speeches as it happens, i still remember the steps, and i had intended to demonstrate the time warp for you, but that will not be possible today. instead, i will offer a few thoughts that i might have benefited from hearing when i was sitting in your chairs a mere 45 years ago. embracing change the years since my graduation have brought waves of fundamental change to the workplace and to society at large, much of it driven by technology. imagine a world with no internet, no email or texting, no personal computers or cell phones, no social media. some of you parents are no doubt thinking : i would be fine with that world! the pace of change will likely continue to be very fast. be alert to the ways your working life may change. think about how you can be prepared for those changes and to turn them to your advantage, and to society's advantage. the practice of law has been transformed over the years ; if you do choose the path of a practicing lawyer, i would think about what practicing law could look like in 10 or 20 years. in a world that will continue to evolve quickly and in unexpected ways, you will need to be agile. embracing change and taking risks can be an important part of your development as a professional and as a person. your formal education may end today, but you are not done learning. many of the important things you will need to know can only be learned through experience. and experience can be a hard but irreplaceable teacher. as an example, near the end of my second year here, it was time to select the next editor in chief of the georgetown law journal. i thought that there were plenty of colleagues who were better qualified, but who simply did not want the job. so, with much trepidation, i put my name in. i was secretly, but utterly, terrified that i might be chosen. and amazingly enough, i was. what now? it turned out that, as i feared, i was not well prepared for that responsibility. i had to keep people interested and motivated enough to work on the | yourselves among the luckiest in all our society to graduate from this institution, to have the support of loved ones through three grueling years, and the health and other good fortune not to get tripped up along the way. several years ago, one of my predecessors, ben bernanke, said, " those who are the luckiest... also have the greatest responsibility to work hard, to contribute to the betterment of the world, and to share their luck with others. " i cannot improve upon that. i thank you for having me. georgetown will always hold a special place in my heart. thank you again to dean treanor and all the faculty, and the hardiest of congratulations to the class of 2024. 4 / 4 bis - central bankers'speeches | 1 |
policy offered an opportunity to design the operational framework afresh, ensuring that best practice was adopted throughout the euro area. the resulting framework provides for a broad set of instruments and procedures to implement monetary policy. thus far, this framework has worked very effectively in clearly signalling the stance of monetary policy and containing the volatility of short - term market interest rates. at the heart of the framework is the so - called β corridor β for the overnight market interest rate, which is defined by the interest rates on the deposit and marginal lending facilities. with the help of the minimum reserve system, the behaviour of the market rate within this corridor is smoothed, without recourse to fine - tuning interventions by the authorities that might be prejudicial to the market orientation of the system. with these features, the ecb has a very simple but probably also one of the most modern operational frameworks in the world. concluding remarks earlier this month i participated in a celebration of the 150th anniversary of the nationale bank van belgie / banque nationale de belgique. today we celebrate the banque de france β s bicentenary. it would have been extremely foolish if the eurosystem had not exploited the accumulated wisdom and experience gained from the long and distinguished history of these institutions and those of the other ncbs. as i have argued today, both the eurosystem β s strategy and its operational framework have exploited this wisdom to the full, while recognising the new and different challenges faced by the single monetary policy in the euro area. let me therefore finish by again congratulating the bank on its bicentenary, by expressing my gratitude to all those who have dedicated their time and effort to the achievement of monetary union and, finally, by wishing the bank another 200 successful years - and more - as an important and vital component of the eurosystem. | christine lagarde : how can a united europe meet the challenges it faces today? opening remarks by ms christine lagarde, president of the european central bank, during a dinner on " uniting europe ", world economic forum, davos, 23 january 2020. * * * this year marks the 70th anniversary of the schuman declaration, which first put forward the idea of a single authority to govern the production of coal and steel in europe. robert schuman β s method for building europe was clear : β europe will not be made all at once β, he said, but β through concrete achievements which first create a de facto solidarity β. his idea was that, by taking deliberate policy steps to become interdependent β like sharing raw materials β european countries would become inseparable. and indeed they have. we have become both safer and richer. the formation of the single market gives every eu citizen average welfare gains of β¬840 each year1. today, schuman β s sequence is, in some ways, being reversed. interdependence is now being driven increasingly by a fast - changing global environment β and policymaking has to catch up. european countries have joint exposures to the climate, to the global economy, to multinational firms, to foreign powers. and now we need to work together to address them. so what does that mean practically? there are three key aspects. the first is demonstrating what is needed to make openness globally sustainable. the eu is the most advanced example of cross - border economic and political integration because it has invested in institutions to ensure fairness β a single court and a single set of rules. and when new forces have arisen with the potential to undermine openness β the threat of competitive devaluations or of financial spillovers β europe has not responded by raising barriers. rather it has sought β and is seeking β to fill the gaps in its economic and monetary union with institutional innovations like the banking union. at a time when trade tensions are rising even as global institutions are being weakened, these examples can provide useful lessons. the second aspect is leveraging the areas where the eu is powerful, namely the single market. the eu has become a leader in ensuring strict and fair competition laws which are enforced at arm β s length2. this is crucial at a time when winner - takes - all dynamics are increasing in many markets, which raises concerns about firms β political and market power. for example, in 2018 the average | 0.5 |
denominated in us dollars. however, eliminating exchange rate fluctuations, the share of the us dollar increased by just over 1 percentage point in the course of 1999 and then showed virtually no change up to march 2000. the use of a currency as an official reserve is one important factor in determining its international role. however, its use by the private sector as an investment and financing, a payment and vehicle currency is pivotal. the introduction of the euro accentuated the integration of european capital markets and the trend towards securitisation and the associated disintermediation of the banking sector. the euro also acted as a catalyst in diversifying european portfolios away from local - market - based to euro - based issues. developments in the international financial markets show that the euro quickly established itself for new issues. thus, in the first nine months following its introduction, the euro accounted for a large share of international bonds and notes issues and almost equalled the dollar : according to bis data, in 1999 : β’ net issues of bonds and notes in euro amounted to us $ 521. 2 bn ; β’ us $ 543. 9 bn of net bonds and notes issues were dominated in us $ ; β’ for the second quarter of 2000 the bis reports net issues of bonds and notes in euro equal to us $ 95. 8 bn ; β’ compared with a net issue in us - dollar equal to us $ 96. 1 bn. but the euro is still a young currency : according to the bis, by end of june 2000 stocks of all bonds and notes amounted to : β’ us $ 2, 615. 6 bn denominated in us $ ; β’ compared with us $ 1, 616. 0 bn denominated in euro ; β’ which means a share of the us $ of 47. 7 % compared to a share of the euro of 29. 7 %. that shows that adjustments in the portfolios of international investors or in official reserves of the public sector will take much longer as much bigger sums have to be moved and large - scale portfolio shifts would have implications for securities prices and exchange rates. it is also highly unlikely that the euro will displace the dollar as an investment and reserve currency in the foreseeable future because there is no public issuer in the euro area comparable to the us - treasury and because the european capital markets are still fragmented to some extent - despite monetary union. considering the first point, it has been suggested recently that national governments in the euro area should pool | andreas dombret : sitting it out is not an option β what does digitalisation mean for germany β s banking sector? opening speech by dr andreas dombret, member of the executive board of the deutsche bundesbank, at the bundesbank symposium on β banking supervision in dialogue β, frankfurt am main, 8 july 2015. * 1. * * introduction ladies and gentlemen welcome to the bundesbank β s 19th banking symposium. i β m delighted to see that we have a full house again and that you have come from all across germany to join us here in frankfurt. i β d like to extend a warm welcome to my executive board colleagues johannes beermann, joachim nagel and carl - ludwig thiele. ms buch and mr weidmann would also like to have been here today, but have prior engagements and send their best regards. 2. the banking sector in transition ladies and gentlemen, the computer on board america β s first lunar module weighed around 30 kg. it had the processing power of a pocket calculator, which you can now pick up anywhere for a couple of euro β unless of course you just use the calculator app on your mobile phone or tablet. around the time of the us moon landing, well over 40 years ago, the computer gradually started to become a part of life, both at work and, later, at home. then, almost 20 years later, the internet began to take off too. these days, it β s no longer just the manufacturing industry β under the umbrella of industry 4. 0 β but also banks and other financial service providers that are caught up in a new wave of digitalisation. the question we have to ask ourselves β you, as bankers, and my colleagues and i as bundesbankers β is what can our sector do to keep this wave of advancement from dragging us down and instead allow it to propel us forward into new territory? don β t get me wrong, the majority of banks started to set up sophisticated it infrastructures for their core banking business decades ago, with online banking now part of the standard package. however, the current wave of digitalisation is not only simplifying and speeding up individual processes, but also changing many of the rules of the game in banking business. what is the driving force behind this wave of digitalisation? it essentially consists of three elements which i will discuss in my speech today, namely technology, competition and customers. it goes without saying that the | 0.5 |
, exert their impact on albanian economy mainly due to high extend of currency substitution. rapid growth of lending activity is the most notable development among domestic factors. according to our figures over the last two years credit to economy has expanded by an equivalent of 10 - 12 gdp percentage points. at this rate it is expected to reach 18 - 20 percent of gdp at the end of current year. is worth mentioning that approximately 30 percent of the outstanding credit represents consumer credit, moreover 75 percent of the outstanding stock is loaned in foreign exchange currency. this represents a very important development and deserves scrupulous attention. our main concerns relate to inflationary pressures and non - performing loans that such credit expansion might generate. in the light of these developments bank of albania assessed that existing stance of monetary policy was not providing enough stimulus to curb aggregate demand. therefore in july 2006 bank of albania decided to shift the course of monetary policy by raising the base rate ( 7 days repo rate ) with 25 basis points. we are happy to observe that market is reacting following our decision. however based on our short term inflation forecasts and in presence of several risks, some of which i already explained above, bank of albania perceives that inflation pressures for the next 12 months remain elevated. currently we are cautiously evaluating the extend of market response and assessing whether further action is needed. simultaneously bank of albania is becoming increasingly concerned regarding the quality of loan portfolio. the accelerated pace of credit expansion, is posing challenges to both banks and to supervisory authority. the response to these challenges will aim at achieving macroeconomic stability, by means of a well capitalized banking system. with this goal in mind, the bank of albania, as the supervisory authority, has intensified the dialogue with the banks in order to find an adequate consensus for : setting realistic objectives of annual activity growth ; containing the credit expansion and maintain good credit portfolio quality ; strengthen the internal control and risk monitoring systems ; and monitor carefully the capital indicators. i would like to use this floor to emphasize that bank of albania will be very firm to follow strictly all requirements that derive from the law and regulatory framework. on our part, we will make the necessary modifications in the supervisory and regulatory framework that target the above mentioned issues with a realistic and flexible approach. the sole purpose of this conformist approach to supervisory rules, is to provide a cushion for avoiding potential future disturbances in the financial stability. finally i would like to strongly emphasize for all business community, households and all other economic agents that bank of albania | suggests that aggregate demand remains sluggish and economic growth below potential. economic activity has been mostly driven by the external demand and a higher fiscal stimulus, while the contribution of consumption and private investment remains low. the latter continue to suffer from the uncertain outlook, the lower increase in disposable income, the spare production capacities, and the relatively tight lending standards. these factors have been reflected in albanian households β increasing propensity to save and businesses β reluctance to invest. external demand and the favourable weather conditions increased albanian exports by about 34. 6 % in january. in light of the poor consumption and investment levels, which have reflected in the decline of imports by 8. 1 % during this period, this tendency has improved the external position of the albanian economy further. bis central bankers β speeches albania β s trade deficit shrank 32. 5 % in january. the developments in the external sector of the albanian economy reflected in improved foreign currency demand and supply ratios, contributing, in turn, to a stable exchange rate. the albanian government pursued an accommodating fiscal policy in the first two months of 2013, expressed in the increase of public expenditure and widening budget deficit. budget expenditure increased at an annualised rate of 1. 3 % in january and february. this increase was reflected in both current and capital expenditure. amidst the sluggish economy, budget revenues continued to contract, registering an annualised fall of 0. 8 % over the months under review. this performance of public expenditure and revenues increased the fiscal deficit by about 5. 1 %. reflecting upon the expected economic and financial developments, the bank of albania has been pursuing a stimulating monetary policy. through the constant key rate cuts and liquidity injections into the banking market, the bank of albania has aimed at ensuring more appropriate monetary conditions to meet its inflation target in the medium - term period. the financial market evidences low liquidity and inflation pressures, which, in turn, have enabled the pass - through of monetary easing into the money and primary market. interbank market rates soon reflected the last key interest rate cut and the yields on government debt securities continued to drop. the falling interest rates were mostly reflected in the deposit market rather than in the credit market, signalling a more conservative bank approach to lending and a savings - oriented real sector. monetary indicators have performed in line with the developments in the real economy and the monetary inflationary pressures remain low. money supply decelerated its growth rates further in january to 4. 9 % | 0.5 |
rules of trade. all of us need to support these efforts and to be vocal in resisting calls for protectionism. in addition, it is critical that we get on with the job of building an international monetary order for the 21st century. a more effective international monetary fund ( imf ) has a crucial role to play in this regard. this issue is extraordinarily important, and i spoke at length on this topic in a speech i gave last month in montreal. current economic developments in canada against that backdrop, what specific policies are needed to help the canadian economy adjust to global developments? while imbalances pose risks ahead, recent economic growth in the global economy has been quite strong, led by the united states and china. this growth has increased the world prices of oil and of many other commodities that we produce in canada. as a result, there has been a marked improvement in our terms of trade β that is, the ratio of the prices that we receive for our exports to the prices we pay for our imports. this improvement has helped to raise real incomes and stimulate domestic demand in canada. we have also been importantly affected by the sharp appreciation of the canadian dollar against the u. s. dollar over the past couple of years β an appreciation that has had a major impact in many sectors. the canadian economy has been adjusting to these economic forces. we have seen increased business investment spending in sectors that are benefiting from higher world prices. we are also seeing rising investment in sectors that are not very exposed to international trade, as such firms react to strong growth in domestic demand. and we've had very strong investment in housing. but in other sectors that are highly exposed to international trade, mainly goods - producing sectors, prices are either falling or rising very slowly. firms in these industries are feeling the pressure of the higher canadian dollar, and they are also facing increased competition from other regions of the world. the good news is that many canadian firms are making the necessary adjustments. investment spending is being directed towards increased specialization, higher productivity, and lower costs. since much of the productivity - enhancing machinery and equipment is priced in u. s. dollars, the stronger canadian dollar has made it easier for firms to make investments. a growing number of firms are looking to cut costs by importing more inputs, particularly from asia. other firms are phasing out production lines with low profit margins. through its monetary policy, the bank of canada is helping these adjustments by keeping inflation low, stable, | just as much about inflation falling below target as we do about inflation rising above it. this symmetric approach helps keep the canadian economy near its production potential, thus encouraging strong, sustained growth in output and employment. i'm not arguing that all countries should copy every detail of our inflation - targeting regime. but it is important that central banks follow policies that anchor inflation expectations and thus prevent a buildup of deflationary as well inflationary pressures. as i mentioned before, both canada and the united kingdom operate with a flexible exchange rate. much has been said recently about floating exchange rates in relation to certain asian economies β china in particular β and global imbalances. the policies of some asian economies to encourage export - led growth, including the fixing of their exchange rates to the u. s. dollar, have caused a buildup of large foreign exchange reserves, thus exacerbating global imbalances. it's important to point out that, in theory, there is nothing wrong with countries having fixed exchange rates. but in practice, there is a major problem. through " sterilization, " certain asian countries β including china β have been trying to offset the domestic price effects of their foreign exchange intervention. this is inhibiting economic adjustment. at the bank of canada, we have argued that it is very much in china's own economic interest to float its currency. by having a flexible currency, china could gear its own monetary policy to its own domestic considerations. if the external value of the renminbi were allowed to rise, the global purchasing power of chinese citizens would also rise. this, in turn, would help to spread the gains from integrating into the world trading order throughout chinese society and would allow that country to boost its consumption, thus helping to resolve global imbalances. floating exchange rates are not the whole answer to the problem of global imbalances, but they are an important part of the solution. as i just said, when countries offset the effects of intervention, they delay domestic economic adjustment. they also delay global adjustment. just as worrying, such intervention is provoking threats in certain political quarters of protectionist measures. such wrong - headed measures could choke off the growth of international trade that has led to rising incomes worldwide. and so it is very important that all countries work to protect and enhance the free flow of goods and services by pushing the doha round of trade talks to a successful conclusion, and by strengthening the world trade organization to ensure proper compliance with the | 1 |
##ence of the economic and monetary union ( emu ) implies also reinforcing our common institutional set - up so as to prevent and manage shocks. i thus welcome the european parliament β s role in such discussions and the renewed efforts by euro area leaders and ministers to tackle the issue, as reflected in, for instance, the recent eurogroup meeting. it is in this spirit that i look forward to the upcoming euro summit meeting on emu governance. thank you for your attention. i am at your disposal for questions. 1 excluding ireland, due to the country β s exceptionally high gdp growth in 2015 linked to specific activities of multinational enterprises. 2 using composite cost of borrowing indicators. 3 target stands for trans - european automated real - time gross settlement express transfer system. target2 is the second generation of target. 4 / 4 bis central bankers'speeches | francois villeroy de galhau : france β economic developments and reforms, where are we heading? speech by mr francois villeroy de galhau, governor of the bank of france, at the economic club of new york, new york city, 18 april 2018. * * * accompanying slides of this speech. ladies and gentlemen, i am very pleased and honoured to give this speech to the economic club of new york. the theme of my speech is β economic developments and reforms in france β. one year ago, you would probably not have suggested it. this shift tells something : france is currently going through exciting times and deserves a close scrutiny. [ slide 1 ]. before addressing the subtitle of my speech β where are we heading? β i would like to ask β where are we starting from? β as about everywhere among the advanced economies, france experienced a decline in its potential growth from 2 % in the 1990s to about 1. 3 % currently. potential growth could be higher, as in several other advanced countries. an increase would indeed be necessary to face the headwinds of high public debt, ageing and environmental transition, while safeguarding the european social model. if funded, this european social model is a long term economic asset, while bringing more education and more cohesion [ slide 2 ]. there are two other more specific challenges for france. the first one is a persistently high unemployment, which never fell below 7 % since 1983. the second one is high public expenditures, the highest among eu countries in 2016 ( as a share of gdp ). yet, france also enjoys major assets. first, a high investment rate, which has returned to its 2008 peak for private non - residential investment β close to the us level, indeed β and remains above the euro area average for public investment. it also has a wealth of fast - growing innovative firms according to deloitte. [ slide 3 ] second, a high level of hourly productivity, on a par with germany and the united states, but with a more dynamic working - age population than in the rest of europe, which will support potential growth in the medium term. [ slide 4 ] that β s where we are starting from. i would like to underline that we are enjoying a favourable momentum, which offers a window of opportunity for reform. this opportunity is indeed being seized to implement ambitious and consistent reforms, so yes, france is heading in the right direction and at a fast pace. [ slide 5 ] | 0 |
skill workers has also increased, because jobs that are intensive in certain manual tasks ( such as personal care services ) are not easily replaced by technology, while greater productivity in the rest of the economy and higher incomes translate into greater demand for such services. keynes, j. m. ( 1930 ), β economic possibilities for our grandchildren β, in essays in persuasion, new york : w. w. norton & co., reprinted in 1963. ibid, chapter ii. mokyr, j., vickers, c. and ziebarth, n. l. ( 2015 ), β the history of technological anxiety and the future of economic growth : is this time different? β, in journal of economic perspectives, 29 ( 3 ). autor, d. ( 2015 ), β why are there still so many jobs? β, journal of economic perspectives, 29 ( 3 ). mokyr, j., et al, op. cit. delong, b. ( 2017 ), β inclusive ai : technology and policy for a diverse urban future β, speech delivered at the citris and banatao institute. oecd employment outlook 2017, chapter 3, p. 121, figure 3. a1. 1. middle - skill occupations include jobs classified under the isco - 88 major groups 4, 7, and 8 ( clerks, craft and related trades workers, and plant and machine operators and assemblers ). globalisation reinforces this trend. stronger international competition favours the rise of β superstar β, winner - takes - all firms, thus improving the conditions of their workers ( not to mention their owners or managers ) over all others. at the same time, in many advanced economies delocalisation depresses the demand for intermediate - skill workers employed in the production of tradable goods. the implications in terms of income polarisation are not always obvious. one paper that will be presented here shows that the increase in labour demand at the opposite poles of the skill distribution has also generated endogenous supply responses, such as higher female labour market participation and a rise in immigration. 13 another paper shows that more innovative firms pay higher wages not only on average, but even to low - skilled workers. 14 however, while the long - run effect of technological change, based on historical evidence, is likely to be entirely beneficial, in the short run disruptions and displacements are to be expected, and many jobs will be at risk. policies | base and operations swiftly in order to consolidate the gains that have been achieved over the last 10 years. i thank you. | 0 |
action for achieving a series of concrete and measurable objectives. this means that upon conclusion of the project, having benefited from the technical assistance, the bank of albania will be able to discharge its institutional duties and responsibilities in the relevant fields more effectively and more efficiently. i believe the main factor of success for such technical cooperation programmes is closely related to having clear goals and objectives, set jointly with our european partners. twinning agreements are an important instrument for ensuring albania β s compliance with eu legislation. this agreement is reached in a convenient time, taking into account that only two bis central bankers β speeches months from now, a decision will be made by the council of the european union on the candidate status with regard to albania β s eu membership. the ultimate objective of this cooperation will go beyond the assistance ; it will contribute to achieving high levels of professionalism, independence and transparency. it will also contribute to promoting the monetary and financial stability in albania. moreover, the assistance will be an impetus to the country β s european integration, with special focus on compliance with criteria for legal and economic convergence with the european union. this underlines, once again, the role of european integration as a driver to economic and social modernisation in our countries. today β s agreement comes at a moment when the commitment of the european central bank to our region is focused not only on the field of technical cooperation, but also extends to the political one. in addition to the close monitoring of the economy of albania and other countries in our region, the european central bank plays an active role in the vienna initiative 2. 0, which aims at identifying and mitigating systemic risks in the countries where european banks operate. this initiative is experimenting a new coordinating mechanism between the european union and our region, bringing together representatives from parent banks, subsidiaries, home and host supervisory authorities, international financial institutions and the european commission. moreover, the european central bank is assuming a new supervisory role for 130 systemic banks in the euro area, some of which operate in albania or other countries of the region through their branches or subsidiaries. this role, which is expected to become functional in the field as of november this year, will be exercised in cooperation with national supervisory authorities and will have implications for albania and other countries of the region, given the presence of euro area - based banks in our banking sectors. with the establishment of the single supervisory mechanism, the european central bank will become the home supervisor for a number of banks operating in albania. in addition to improving the | quality of banking supervision, this mechanism has the potential to facilitate cooperation between home and host countries, hence fostering cooperation between the european central bank and central banks in the region on financial stability. dear participants, the common challenges that lie ahead of us are numerous and should be solved within a short period of time. on behalf of the bank of albania, i would like to assure you that we will continue to be in close contact with the european central bank and eurosystem central banks, furthering our existing open and sincere communication. approximation with best eu central bank standards and practices is a crucial process for a central bank not only for the effective discharge of the duties, but also for the efficient and stable functioning of the financial system, and benefit of the economy, overall. i am confident that the implementation of this project will be characterised by the cooperative spirit between the bank of albania and central banks in the region, on the one hand, and the european central bank and eurosystem, on the other. i would like to conclude with a heart - felt appreciation and gratitude for all the stakeholders having an active role in the launching of this project : β’ the european central bank for coordinating all the activities ; β’ member central banks for providing a large number of experts to assist us with the project implementation ; β’ delegation of the european union in tirana for funding it. bis central bankers β speeches we highly appreciate the commission β s assistance with regard to adopting the implementation of the european union legislation and are seriously committed to continuing with the successful cooperation, established with the delegation in the last twinning project. in this context, i would like to reiterate my message that the road to european union integration passes through regional integration. the financial system and central banks spearhead this process. we expect that public and private economic agents will determinedly follow this step we are taking. in my view, regional cooperation can and should serve as a forerunner to european integration. lastly, my special thanks and highest appreciation for mr. mersch for the fruitful cooperation between our institutions during his mandate as the governor of the central bank of luxembourg, and now as an executive board member of the european central bank and, above all, as a friend of ours. thank you for your attention! bis central bankers β speeches | 1 |
zeti akhtar aziz : expanding further understanding of islamic finance welcoming remarks by dr zeti akhtar aziz, governor of the central bank of malaysia, at the inceif's ( the global university in islamic finance ) public lecture by dr abbas mirakhor, the first holder of inceif chair of islamic finance, kuala lumpur, 29 january 2010. * * * it is my great pleasure to welcome you to the inceif's inaugural public lecture by dr abbas mirakhor, a distinguished scholar and the first holder of the inceif chair of islamic finance. the inceif public lecture series aims to provide a forum for promoting intellectual engagement to discuss the issues, developments and challenges in the area of islamic finance. the global financial crisis that has dominated the headlines across the world for more than two years has brought to the forefront the fundamental issues in the international financial system that need to be addressed. now, as the growth prospect resumes, the debate is focussed on the priorities and direction needed to reshape the post crisis world to ensure that the recovery will be sustainable. while islamic finance has demonstrated its resilience during this period, the industry is now entering into an environment that is fundamentally different in this post crisis era. the international financial reform agenda will result in new structures, standards and regulatory regimes for the global financial industry. greater financial inter - linkages and integration will also require greater cooperation and collaboration in the endeavour to preserve global financial stability. in this environment, the foundations for the sustainability for islamic finance as a competitive form of financial intermediation will need to continue to be strengthened. efforts are therefore being focussed on the further development of islamic financial markets, the financial infrastructure, research and development to support innovation, and enhancing the legal, regulatory and supervisory framework. in addition, the adoption of the relevant advances in technology and the development of human capital are also key to support the development of islamic finance. the ongoing efforts in these areas are aimed towards enhancing further the resilience of islamic finance which would in turn enhance its potential to contribute towards global financial stability and the prospects for global growth. indeed, the topic of the inceif's public lecture today, β paradigm change in shaping the future of islamic finance β is timely for us to deliberate and reflect on the issues confronting islamic finance moving forward. we are indeed honoured today to have dr abbas mirakhor. dr abbas joins inceif following a long and distinguished career as | the restructuring of non - performing loans ( npls ) of smes with on - going businesses. the sme facilities available at bank negara malaysia link will greatly increase the outreach capabilities of the sme special unit. ladies and gentlemen, as the financial system becomes more developed and sophisticated, there needs to be increased financial literacy. as part of our financial sector master plan, we have implemented a 10 - year programme to increase consumers'financial literacy. we are now in the third year of the programme. the effective participation by the public in the financial system needs to be an informed participation. there needs to be better understanding of the consumer's financial rights and responsibilities, the opportunities and the associated risks and costs. bank negara malaysia link through its exhibitions, interactive information kiosks and booklets, will serve as a channel to provide consumer financial education to the public. in this connection, bank negara malaysia link will provide information relating to conventional and islamic banking, insurance and takaful, smes, foreign exchange administration, central credit reference information system ( ccris ), biro maklumat cek, development financial institutions, and other financing related matters. bank negara malaysia link would also attend to public complaints on the above matters. as part of efforts to preserve the history on bank negara malaysia's role in nation building, bank negara malaysia link also includes a section on the bank's contribution in shaping the country's economy and financial sector since the 1950s. ladies and gentlemen, the establishment of bank negara malaysia link takes the central bank's public outreach programme to a higher level. by providing a centralised platform for the public to seek information and address financial issues, it is our hope that bank negara malaysia link will be instrumental in building bridges between consumers, including smes, the financial business community, consumer associations and policymakers. we believe in the importance of this outreach effort not only because the public has a right to an informed participation in their financial dealings, but also because it is also an important part of our collective and combined efforts that will determine the success of our endeavours. tuan - tuan dan puan - puan, akhir sekali, saya ingin mengucapkan berbanyak - banyak terima kasih kepada yang amat berhormat perdana menteri atas kesudian beliau melancarkan bank negara malaysia link. | 0.5 |
jointly grow the industry. by applying the same regulatory framework to both conventional and islamic financial institutions, singapore aims to encourage financial institutions here to grow their suite of products and services for the islamic finance industry. conclusion let me conclude. islamic finance has come a long way. as it embarks on its next phase of growth, the industry must overcome the challenges posed by slower growth and global deleveraging, and build scale and reach critical mass. this requires financial institutions, regulators, and international standard setting agencies to work closely together. forums like these are ideal platforms. i wish you fruitful discussions. thank you. bis central bankers β speeches | ravi menon : the next phase in islamic finance opening address by mr ravi menon, managing director of the monetary authority of singapore, at the 3rd annual world islamic banking conference : asia summit ( wibc asia 2011 ), singapore, 5 june 2012. * * * dr ahmad mohamed ali al - madani, president, islamic development bank, your excellencies, distinguished guests, ladies and gentlemen, good morning. and to all our foreign guests, a warm welcome to singapore. an increasingly difficult conjuncture we are meeting here for the 3rd annual world islamic banking conference asia summit, at a time of increasing stress in the global economy and financial system. β’ the effects of monetary stimulus, which had helped to support the economy and prevent a full - blown financial crisis, are now levelling off in both the eurozone and the us. β’ the labour market remains a significant drag on growth in the advanced economies. unemployment has hit new highs in the eurozone while employment and production numbers in the us are showing signs of weakness. β’ the story of a two - speed global economy is coming under strain, with demand weakening across emerging asia. the moderation in china β s economic growth appears to be somewhat sharper than expected. india is undergoing an even more pronounced and broad - based slowdown. but the key risk that has increased in recent months and poses the biggest threat to global economic prospects is the situation in europe. β’ greece is preparing for a historic election that may well decide its future in the eurozone. β’ spain is experiencing severe strains in its banking system against a backdrop of a sharp reduction in gdp, high unemployment, and a deteriorating real estate sector. β’ italy and spain are facing higher sovereign borrowing costs that threaten fiscal sustainability. to be fair, eurozone governments have been taking extraordinary measures to help stabilise the situation, reduce fiscal deficits, and restore growth. but they have reached a turning point where bolder, decisive actions will be needed to reverse the tide. the next few weeks and months will be critical. islamic finance : challenges to overcome let me turn now to the subject of our conference. islamic finance has shown remarkable resilience during the last five years β perhaps the most challenging economic environment in the post - war era. the industry has grown by an estimated 20 % annually in the last five years to reach us $ 1. 3 trillion in total assets in 2011. islamic banks have grown both in number and in scope. bis central bankers β speeches but the sustained | 1 |
by basel iii. second, the european banking authority estimates that, for eu banks, the final basel iii package will lead to an aggregate tier 1 capital shortfall of β¬34. 4 billion. is that a lot? in 2016, the largest banks in the euro area earned β¬50 billion β net, after taxes, and in a difficult environment. also, the capital shortfall refers to the end of the transition period, which is nine years away. most banks should be able to earn their way out of potential shortfalls. to sum up, basel iii preserves risk sensitivity in a sensible way. at the same time, banks will be able to handle its impact and, in the long run, they too will benefit from a more stable banking system. thank you for your attention. 3 / 3 bis central bankers'speeches | in which we need to work to ensure that the resolution regime is as good as we can get it concerns the whole area of safeguards. there is a natural tension between the desire for precision in defining the protection of property rights at a very detailed level and the need for flexibility in a regime that has to be able to react to the situations that come our way. we don β t get to choose the problems we face. i recognise that tension. i don β t have a radical plan for changing the current regime, but i recognise that we have to keep a very careful eye on striking the right balance between having the discretion to deal with problems and ensuring that banks and markets know as much as they can about what we would, and would not, do in a resolution. this is why the code and the liaison panel are important parts of the machinery. the third area in which more work is needed concerns information and advance planning. in recent years the bank has been forcefully arguing the importance of information gathering to the government and fsa. in my experience resolution work is like icebergs β i don β t mean that in the sense that banks are about to hit them. it is like icebergs in the sense that a vast amount of the work done is beneath the surface, hidden from view. because resolution is an invasive form of surgery, it requires a very large amount of information to be carried out safely. moreover, the planning work has to be done quietly, out of sight in order to avoid fuelling the failure of the bank, and it needs to start well in advance of the actual resolution weekend. as the authority responsible for resolution operations, the bank of england faces a tension. in the ideal world, we want to work closely with the management of the bank to plan a resolution, at a time when it remains a contingency option that management naturally wish to avoid. but we also have to avoid the sense that a bank is receiving the attention of the undertakers. a very important development here will be the production and maintenance of resolution plans, as part of the overall recovery and resolution plans, or living wills. i spoke on this subject last week, and the text is available on the bank of england website, so i am not going to labour the point today. but the general principle is that resolution is a very information hungry activity. to give an example, the fdic in the us has recently adopted a rule requiring deposit takers to provide detailed information on their derivatives | 0 |
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