text1
stringlengths 1
3.21k
| text2
stringlengths 1
3.21k
| label
float32 0
1
|
|---|---|---|
bank β s door.
|
, we would need to make such a change slowly but systematically. allowing maturing mortgage backed securities to roll off, the federal reserve β s balance sheet would shrink gradually, with relatively small consequences for financial markets. second, we should take the first early steps to normalize interest rate policy. this is not a call for high rates but a call for non - zero rates. in 2003 the fomc delayed our efforts to raise rates. in that period we reduced the federal funds rate to 1 percent and committed to keeping it there for a considerable period. this policy fostered conditions that let to rapid credit growth, financial imbalances and the eventual financial collapse from which we are still recovering. had we been more forceful in our action to renormalize policy then, it β s likely we might have suffered far less in 2008 through 2010. also, any effort to renormalize policy would include signaling a clear intention to remove the commitment to maintain the federal funds rate at 0 to ΒΌ percent β for an extended period β. as the public adjusts to this, we should then turn to determining the pace at which we return the funds rate to 1 percent. once there, we should pause, assess and determine what additional adjustment might be warranted. a 1 percent federal funds rate is extremely accommodative, but from that point we could better judge the workings of the interbank and lending markets and determine the order of policy actions that would support sustained long - term growth. other concerns regarding zero rates these are difficult times, no doubt, and it is tempting to think that zero interest rates can spark a quick recovery. however, we should not ignore the possible unintended consequences of such actions. zero rates distort market functioning, including the interbank money and credit markets ; zero rates lead to a search for yield and, ultimately, the mispricing of risk ; zero rates subsidize borrowers at the expense of savers. finally, it is important to note, that business contacts continue to tell me that interest rates are not the pressing issue. rather, they are concerned with uncertainties around our tax structure ; they are desperate to see this matter settled. they need time to work through the recent healthcare changes ; and they are quite uncertain about how our unsustainable fiscal policy will be addressed. they are insistent that as these matters are addressed, they will once again invest and hire. qe2 cannot offset the fundamental factors that continue to
| 0.5 |
benjamin e diokno : the importance of transaction accounts for employee closing remarks by mr benjamin e diokno, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the financial inclusion forum for the labor sector, manila, 18 november 2019. * * * director bacay and officials from the department of labor and employment ( dole ), leaders and convenors of the various tripartite industrial peace councils ( tipcs ), representatives of associations of informal workers and kasambahays, our partners from digital financial service providers, my colleagues from the bsp, dear friends from the labor and employment sector, ladies and gentlemen, a pleasant day to all of you. i trust that this morning β s presentations and discussions were informative and productive. to start, we gave everyone an overview of bsp β s financial inclusion agenda and digital payments initiatives to put in context our call to promote the use of transaction accounts for payments of salaries. our speakers from the financial service providers also shared practical and actionable ideas on how their products can meet the needs of both wage earners and their employers. i hope these presentations have not only armed you with knowledge, but also inspired you to help become our partners in financial inclusion, particularly through the use of transaction accounts for payment of wages and salaries. nonetheless, allow me to drive home a few more insights on financial inclusion and digital payments. digitalization is rapidly and significantly transforming the way we do things in so many aspects of our lives. we are now able to shop, book a vacation adventure, get a cab, sell goods, watch a movie, wherever and whenever, without having to leave the house and stepping into a physical store. the mobile phone has become such a powerful tool, an almost all - in - one instant access to any type of service one might need. based on the september 2019 global webindex report, there are more than 69 million internet users aged 16 β 64 years old in the philippines. of this number, 91 % searched online for a product and 62 % made an online purchase via a mobile phone. from the same study, 67 % of filipinos have an active social media account. the digital life is upon us, and we can harness this to make sure internet access and mobile phone ownership do not only lead to better social connections and convenient shopping, but also and more importantly, to greater ability for all filipinos to use welfare - enhancing financial
|
services. for the bsp, this starts with ensuring more filipinos have access to a transaction account β in particular, an account that they can use not only to save money, but also to directly send and receive funds to and from anyone ; in other words, an account that can be used for digital payments. this is why our financial inclusion and digital payments agenda necessarily go hand - in - hand. one is both an enabler and a requisite for the other. digital payments β that is, account to account fund transfers β make accounts a valuable and practical tool for anyone, even to those who say they do not have money to save. 1 / 3 bis central bankers'speeches a transaction account makes it easy, affordable, and convenient to pay bills, to send money to family wherever they are, pay government fees, and make online purchases. we do not have to take time off our weekends and free time just to fall in line to do these transactions. all we have to do is use our mobile phones. our vision is to have more market vendors, jeepney, and tricycle drivers accepting digital payments through qr code linked to transaction accounts. this means we do not have to always bring cash with us when we go to work or the market β thereby reducing risk of theft. for the market vendors and drivers, that means they do not have to handle cash which make them less vulnerable to counterfeits aside from theft. the benefit of using transaction accounts extends to the employers. when employers pay salaries directly to the account of their workers through pesonet, it can potentially lower administrative and overhead costs, and reduce risks associated with cash distributions during paydays. as people and businesses use digital payments, they are able to build a rich digital footprint that can be used by banks, fintechs and other lenders in evaluating and granting credit. this means people can have better and wider financing options. digital payments also underpin a whole range of innovative digital services requiring the instant transfer of funds between transactors. the use and popularity of apps like airbnb, grab and lalamove are made possible because of digital payments. clients use their account - linked digital wallet or credit card to pay the service providers - the drivers and the property and food stall owner β which helps build trust and reliability in the transactions in the app. these digital payment - supported apps are not only convenient for users but also gives wider access to business opportunities and markets to our micro entrepreneurs and high
| 1 |
fahad almubarak : brief review of financial developments in saudi arabia speech by his excellency dr fahad almubarak, governor of the saudi arabian monetary agency ( sama ), marking the seventh anniversary of blessed allegiance pledge to the custodian of the two holy mosques king abdullah bin abdulaziz, riyadh, 17 may 2012. * * * saudis celebrate on the 26th of jumada ii 1433h ( may 17, 2012 ) the seventh anniversary of the blessed allegiance pledge to the custodian of the two holy mosques king abdullah bin abdulaziz. the celebration is a true image of loyalty to the custodian of the two holy mosques, who is faithful to his nation β s interests. it is based on well - established bases, in the forefront of which are the tributes of our wise leadership such as the great keenness on the welfare of citizens and the enhancement of the development process. it is difficult to enumerate the achievements of the custodian of the two holy mosques in a few words, but, however, i will touch upon some of them. the custodian of the two holy mosques has taken a broad range of decisions and measures aiming at restructuring and regulating the economy, updating regulations and legislation to enhance the efficiency and competitiveness of the economy and support the optimal operation of production factors, apart from providing an advanced regulatory and administrative framework and an attractive environment for domestic and foreign investments to achieve diversity in the economic and productive environment in order to continue creating job opportunities for the sons and daughters of the kingdom. fortunately, oil prices have constantly improved, helping to accomplish many of the development objectives. as a result, the private sector during the period from 2005 up to the end of 2011 achieved a real annual growth rate averaging 5. 5 percent. the balance of payments ( bop ) recorded a surplus of rls 2. 5 trillion. the actual expenditure of the public finance stood at rls 3. 8 trillion, of which rls 1. 0 trillion were for capital expenditures. moreover, the ratio of public debt to gdp declined from 39. 2 percent in 2005 to 6. 3 percent in 2011. the banking sector recorded strong and constant growth during that period, surpassing significantly the repercussions of the global financial crisis, and total assets of banks rose by more than two fold. many development projects have been approved for enhancing and modernizing the infrastructure, including roads, airports, telecommunications, water & electricity
|
outcome of decades of evolution. and this reflects, and is consistent with, the long - term developments of central banks β mandates globally. it can be argued from a historical perspective that changes in these mandates follow common evolutionary paths which are often shaped by crises, such as the global one in 2007 / 2008. the financial stability focus that led to reassessing the importance of financial stability as a policy objective of central banks. before the 2007 / 2008 global crisis, central banks focused on price stability as their primary objective. the crisis triggered a change in the broad environment in which central banks operate 1 / 3 bis central bankers'speeches and thereby also necessitated a continued evolution of the role and governance of our institutions. concerns were raised regarding the ability of central banks to prevent and manage financial crises. this provoked a discussion of central banks β role in safeguarding financial stability. ultimately, there was recognition of the need to reconsider or adjust the central banks β responsibilities related to financial stability. a major policy response since the global crisis was the enhancement of macroprudential policy framework and the assignment of additional responsibilities to central banks in the fields of financial stability. then central banks developed tools for the practical implementation of the macroprudential framework. understanding the financial cycle the new policy framework and tools, however, can only be as good as the capability to β diagnose β when their application is needed. they have limited value, if any, for the purpose of safeguarding financial stability unless the macroprudential authority can detect the accumulation of cyclical systemic risk in the financial system. in other words, achieving the financial stability objective through macroprudential measures cannot be sustainable without understanding the financial cycle. that is why we have considered this to be a topical issue to devote our anniversary conference to. there is no single generally accepted theoretical basis, nor a dominant method, for measuring the financial cycle. thus the role of research becomes significant for policymaking. that is why today β s conference is conceived to bring together academic research and central bank practice. the conference structure reflects an understanding that the global financial cycle affects the euro area and its monetary policy, which in turn affects the financial cycle in europe beyond the euro area. therefore, the first session of the conference is on the current phase of the global financial cycle which is to a large extent driven by the us monetary policy. we recall from the 2007 / 2008 crisis how the financial disruptions originated and triggered a full - scale global crisis. the second
| 0 |
yves mersch : post - trade harmonisation and financial market integration in europe closing remarks by mr yves mersch, member of the executive board of the european central bank, at the conference β post - trade harmonisation and the integration of financial markets : a joint effort β, organised by the european central bank and the european commission, frankfurt am main, 19 march 2013. * * * ladies and gentlemen, we have come to the end of today β s very intense programme. i now have the pleasure of sharing with you some thoughts on the main messages that have emerged in the course of today. financial integration remains at the core of the european agenda. for the future of europe, it is important that the single market project is taken forward with the full determination of all of us, even in times of difficulty. as president mario draghi remarked this morning, β in times of severe economic challenges, it is particularly important that our commitment to achieve a truly single european market is reaffirmed β. from the eurosystem β s perspective, financial integration is of great importance. first, it is vital for the single monetary policy of the euro area : monetary policy is implemented through the financial system, which has to be as efficient as possible in order to guarantee a smooth and effective transmission of monetary policy impulses. a highly integrated financial system ensures that impulses diffuse homogeneously across the whole euro area. second, financial integration has implications for the stability of markets. integration results in increasing interconnections and cross - border activity. a higher level of integration will therefore be beneficial for our economy, enabling investors to find profitable investment opportunities whenever and wherever they arise. it will also enhance competition among financial intermediaries and among financial infrastructures and, as a consequence, reduce the costs of intermediation. however, highly interconnected systems could also be more prone to systemic risks. to avoid those risks, integration initiatives are being undertaken which place a very strong emphasis on the safety and resilience of financial markets and infrastructures. let me now turn to post - trade harmonisation, the central theme of this conference. the harmonisation of market practices, rules and standards in post - trading is a necessary component of financial integration. inefficiencies and barriers in clearing and settlement make market access difficult for investors and for issuers. the european securities market cannot be said to be fully integrated if post - trade arrangements are not harmonised, ensuring safety, full competition and the absence of barriers across
|
in europe. let me stress once more that the cause to which this process is contributing β the single market β is one of making europe stronger bis central bankers β speeches and more attractive for national as well as cross - border investment, thus activating and sustaining growth. to conclude, i wish to thank you all very much for your participation. particular thanks go to all speakers and panellists for making the discussions so lively and thought - provoking. finally, i would like to take this opportunity to thank all those, from both the european commission and the ecb, involved in preparing this very interesting conference. bis central bankers β speeches
| 1 |
a bank to ignore the cost of capital in managing its business, just as it would be irresponsible for a bank to ignore market preferences and forces when choosing its lines of business. increases to the cost of capital do not simply evaporate on a bank β s balance sheet, they are passed through to customers in various ways, including in the form of higher costs for financial services or in reduced availability of services available in the market. the cost of bank capital also influences where activities occur, either within the regulatory perimeter of the banking system or in non - bank entities and the broader shadowbanking system. when the cost of a bank engaging in an activity exceeds the cost of performing the same activity in a non - bank, that cost differential creates pressure that over time leads to a shift in these activities to non - bank providers. where does that leave us? achieving good policy requires acknowledging and balancing the benefits and costs of capital requirements, since it is one of the most important inputs policymakers can use to enhance the safety and efficiency of the banking system. relying simply on the β more is better β approach downplays or ignores these critically important tradeoffs. when policymakers consider changes to the capital framework, particularly increases of the magnitude contemplated in the proposal, we must carefully weigh the benefit of increased - 4safety from higher capital levels, with the direct costs to banks, and the downstream effects on consumers, businesses, and the broader economy. we must also consider the broader regulatory landscape and how changes to capital regulations may complement, overlap, or conflict with other regulatory requirements. and importantly, we must consider the broader implications for the structure of the u. s. financial system and for financial stability. while these considerations may caution us against capital increases of the magnitude contemplated in the proposal, i do see a potential path forward for capital reform. the path forward as i consider next steps, i am cautiously optimistic that policymakers can work toward a reasonable compromise, one that addresses two of the most critical shortcomings of the proposal : over - calibration and the lack of regulatory tailoring. public feedback has also assisted in identifying the aspects of the proposal that result in the most severe unintended consequences. in my mind, it will be necessary for policymakers to modify the proposal to mitigate these issues and concerns as we move forward. calibration first, i would like to address calibration. the costs of this proposal, if implemented in its current form,
|
business model. the period ahead is likely to provide a first material test of changing banking business models and the increased reliance on secured funding. although currently profitable and well capitalised, many banks will experience income and credit losses, which may trigger a re assessment by some of them of the suitability of the so - called originate - and - distribute business model. the current episode has also shown that the transfer of credit risk outside the banking sector may ultimately not be effective. this is related with reputational and other concerns, which induce banks to take credit risk back onto their balance sheets. sixth, with respect to our own crisis mitigation tools, a lesson that we can draw at this stage is that the operational framework of the eurosystem has proved able to cope with stressed market conditions. so far, the eurosystem has been able to manage the turmoil in an effective and flexible manner. two ingredients of its operational framework have been particularly important : the first is the clear separation between on one hand the ecb β s management of the aggregate liquidity conditions and on the other hand the setting of its monetary policy stance, which is signalled by the minimum bid rate in main refinancing operations. this separation has been extremely valuable under present circumstances. looking ahead, and in line with its previous communications and actions, the ecb will continue to steer very short term interbank rates close the minimum bid rate. the second ingredient is the eurosystem β s collateral framework. the broad list of eligible assets has ensured that a broad range of counterparties could access the credit operations of the eurosystem during the turmoil. this has helped counterparties to effectively mitigate funding liquidity risk when interbank markets stopped functioning properly. as a side effect, the acceptance of abs in the sizeable refinancing operations has allowed to address also asset refinancing needs of counterparties effectively. this has certainly contributed to a better functioning of the money market since counterparties know that they can turn to the eurosystem to refinance these assets. and finally the ongoing process of significant market correction which we experience since august should trigger a very deep and candid review in all the areas which have a substantial influence on the functioning of the global financial markets. this review process should concentrate on what could be done to promote financial stability and to diminish to the maximum extent possible the elements of procyclicality that may be inbuilt in a large number of fields.
| 0 |
pleasure every year to discover new talents and welcome renowned artists to frankfurt. i would like to pay tribute here to my predecessor, willem duisenberg, who was the initiator of our cultural days programme. i very much look forward to all of the 22 events that reflect the many facets of dutch culture. i am also particularly delighted that, for the first time in the history of the cultural days, the city of frankfurt has made it possible for us to hold an event at the frankfurter paulskirche and so, on 30 october, the brass and string ensemble of the royal concertgebouw orchestra will perform at this prestigious and venerable venue. we are extremely grateful to the city of frankfurt for this honour, all the more so as this concert will also be a charity event. 4. in your opinion, what defines europeans? was macht ihrer meinung nach den europaer aus? europeans share a common history, with extraordinary successes, enormous challenges over time and dramas. europeans have decided to share a common destiny β based on profound friendship, peace and prosperity β which has guided european integration for the past 60 years. we at the ecb are proud to be responsible for delivering price stability to our 330 million fellow citizens in the euro area and to contribute to the prosperity of the european union as a whole. faced with serious global challenges, we europeans can only succeed and progress if we are united, in line with the european ideal and its leitmotif of β unity in diversity β. raising awareness of the cultural diversity of the european union and fostering unity is what we aim to achieve through the cultural days of the ecb.
|
its monetary policy decisions solely on a mechanical reaction to an inflation forecast. one reason for this is that macroeconomic forecasts suffer from a number of practical shortcomings which mean that they cannot constitute the only input into policy decisions. for example, in practice the information from monetary aggregates is not incorporated into conventional macroeconometric forecasting models. however, monetary analysis is an important piece of information for assessing risks to price stability from a different perspective. as the ecb β s macroeconomic forecasts rely on structural macroeconomic models, they should be seen as forming part of the second pillar of the ecb β s strategy. these forecasts have to be cross - checked against the information from monetary aggregates for future price developments. this is the essence of the two pillar strategy. both pillars, from different perspectives, analyse economic developments in a way which contributes to forming a judgement about risks to price stability and thus inform well - designed forward - looking monetary policy decisions. when looking at forecasts, other aspects also need to be kept in mind. for example, the latest developments of key real economy variables cannot be fully integrated into macroeconomic forecasts in a timely manner. moreover, the assumptions on which the forecast is based - such as the assumed paths of oil prices or external demand - can change rapidly, causing the forecast to become quickly outdated. furthermore, it has to be kept in mind that the projections which could be published by the ecb are the products of a technical exercise which are based on the assumption that policy interest rates will not change over the forecast horizon. for this reason, they are not true forecasts about future developments but merely an input into the decision making process which is designed to inform the governing council about what to expect if interest rates are not changed for some time into the future. obviously, if the governing council identifies risks to price stability and acts on this basis by changing interest rates, the projections made by the forecast will not materialise. this is crucial to understand. the forecasts which will be published by the ecb are not predictors of the most likely outcome under all circumstances. rather they will be scenario exercises describing what would happen if interest rates did not change. for this reason the governing council will make sure that, when forecasts are published, inflation expectations should and will remain firmly focused on price stability. the publication of conditional inflation projections should not in any way influence the formation of inflation expectations. of course, the governing council will continue to look
| 0.5 |
ravi menon : bending the curve of nature loss keynote remarks by mr ravi menon, managing director of the monetary authority of singapore and chair of the network for greening the financial system, at the cop15 finance and biodiversity day, montreal, 14 december 2022. * * * ladies and gentlemen, i am honoured and delighted to be able to address you on this important occasion of cop15 of the convention on biological diversity. the world is getting painfully acquainted with the impending climate crisis. there are promising efforts at mitigating this crisis, though far from what is necessary to avert disaster. but the planet faces a second crisis β β nature and biodiversity loss. the nature crisis is no less threatening than the climate crisis. but it is much less appreciated and much less is being done to mitigate it. we assiduously measure and seek to grow our physical and human capital. we speak of the importance of social and political capital. but we fail to appreciate let alone measure natural capital β the world's stock of natural resources, comprising soils, air, water, plants, animals, and minerals. these are assets that sustain our food supplies, underpin our economy and society, and enable human life. we are collectively depleting our natural capital and degrading the ecosystems that support it. we are consuming more resources than the earth can produce in a year. at current rates of consumption, we use up 1. 6 earths'worth of resources. by 2050, our annual resource use will rise to 2 earths'worth. we are degrading the ecosystems that support this natural capital. the drivers of biodiversity loss have worsened. none of the 20 aichi biodiversity targets agreed at cop10 twelve years ago have been fully achieved β only six were partially achieved. the depreciation of natural capital will affect our standard of living and quality of life. over three - quarters of the world's food crops, worth almost 600 billion us dollars, rely on insect and animal pollination. the loss of pollinators like honeybees in europe and the americas directly threatens our food security. hidden supply chain dependencies on nature account for more than half of gross value added in industries that are foundational to the global economy, including consumer goods, real estate, and transportation. nature loss also poses a major threat to public health by worsening air and water pollution. the 2015 indonesian forest fires cost 151 million us dollars in immediate health impacts, while long - term costs remain
|
vast array of information we have at our disposal. of course, that includes the standard econometric toolkit. but we have also been increasingly relying on text analytics and machine learning. 1 / 3 bis - central bankers'speeches as a result, this conference is highly relevant for us at the federal reserve, and likely those at other central banks as well. more timely and accurate information and improved methodological techniques permit federal reserve staff to produce better estimates of the evolving economic outlook, which allows policymakers to make moreinformed decisions. it is reassuring to know that the use of these nontraditional data and techniques for academic research and for policy is no longer in its infancy. the breadth and depth of studies captured in the agenda display the material inroads of these data and methods into economic research. i am pleased to see colleagues and important contributors to this field on the conference program. jed kolko, julapa jagtiani, arthur turrell, and hal varian will discuss issues related to the opportunities and challenges for government and privatesector institutions in response to nontraditional data, machine learning, and artificial intelligence. similarly, an academic panel with jesus fernandez - villaverde, sydney ludvigson, stephen hansen, and chiara farronato will discuss how these data and methods have helped push the research frontier in subjects ranging from macroeconomic modeling to online markets. as i noted in recent remarks, there has been a surge in excitement and trepidation about generative ai. 3 the range of social effects from this new technology could be broad. jack clark, one of the co - founders of anthropic, will soon offer a keynote, and i am sure we are all looking forward to hearing his insights on the practical applications of this new ai technology and the potential use cases for economic research and policymaking. i am especially interested in seeing progress on " explainable ai, " which can bridge the divide between the technical sphere and users. i am looking forward to any discussions on this area. these generative ai tools could also have implications closer to home, as they may influence how we conduct central bank communications. there is a growing literature that uses natural language processing techniques to discern how communications by central bankers are perceived by the news media, and, in turn, how that influences financial markets. the presentations by christopher neely, clara vega, xin zhang, and xu zhang will discuss the state of the art on this subject, which
| 0 |
. this is also required in order to allow automatic stabilisers to work without exceeding the 3 % deficit ceiling in less prosperous times. e. communication policy of the eurosystem coming now to the last part of my statement, i should like to touch briefly upon some decisions related to the ecb β s communication policy that have been taken recently. as you might be aware, the ecb published, on 5 january 1999, a consolidated opening financial statement of the eurosystem, and subsequently, on 12 january, the first weekly financial statement, containing the assets and liabilities held by the ecb and the national central banks of the euro area vis - a - vis third parties. with a view to providing regular information, in particular on monetary policy operations and changes in foreign reserves, the ecb will continue to publish a weekly financial statement every tuesday, accompanied by an explanatory note, in all official eu languages. as already indicated, the ecb will release the first edition of its monthly bulletin tomorrow. it will contain an assessment of the current economic situation underlying the ecb β s monetary β 6 β policy decisions and also tables and charts covering a wide range of statistics relevant to monetary policy. in addition, the ecb will continue to release current monetary statistics on wire services. i should like to conclude by emphasising that these publications, together with the regular press conferences following the meetings of the governing council of the ecb and the numerous speeches given by the members of the executive board, demonstrate the importance which we attach to explaining the ecb β s monetary policy in a clear and transparent manner. * * *
|
upcoming legislative proposal. let me nevertheless highlight the main features that in my view such a mechanism should have. the single resolution mechanism would have a single resolution authority at its centre that would govern the resolution namely of significant banks, coordinate the application of resolution tools and reflect an organisational set - up similar to the ssm. it should have a comprehensive set of enforceable tools, powers and authority to resolve all banks in the ssm. in order for the single resolution mechanism to be perceived as credible, it should have sufficient funding. let me be very clear i am not talking about bailing - out banks with public money. resolution is about orderly resolving the situation of banks that have attained the point of non - viability and about doing it in a way that minimizes the involvement of public bis central bankers β speeches money. resolution is not about bailing - out banks it is about bailing - in shareholders and creditors and using a resolution fund based on banking sector contributions. resolution activity may require the temporary use of public money if the resolution fund would not have enough resources, for instance, to capitalize a bridge bank that will be sold later on to the private sector thus recovering the capital involved. in the us this is ensured by the existence of a treasury credit line that can be drawn upon by the fdic but that has to be later paid back. this implies then a third element of a complete banking union β the existence of a financial backstop that will also be involved in the direct recapitalisation of banks. finally, the fourth element of the banking union is the establishment of a common system of deposit protection. a first step in this direction will be the adoption of the legislative proposal on deposit guarantee schemes, providing a harmonised framework. this framework should ensure depositor confidence and the national deposit guarantee schemes, built on common eu standards, could interact with the srm. a european deposit guarantee scheme is therefore not essential in the short term. 2. rationale for a banking union we see the banking union as essential to sustain and strengthen the emu framework primarily because by establishing a european framework for supervision, it addresses the so - called β financial trilemma β. 1 the trilemma states that financial stability, financial integration and national financial supervision cannot really be made fully compatible. furthermore, the banking union is instrumental to help break the nexus between sovereigns and banks, which was a key feature in the present crisis. the process to build a banking union is the more far
| 0.5 |
nonbank intermediation requires a balancing of the resulting increase in socially beneficial credit, capital, or savings options against any associated increase in risks to the safety and stability of the financial system as a whole. the chief relevant factors to consider include the extent of reliance on maturity or liquidity transformation, the creation of cash equivalent assets, the use of leverage, and the degree of interconnection with the traditional banking sector. when growth in nonbank intermediation reflects a migration of traditional banking activities to less - regulated entities, a number of similar considerations are relevant to an evaluation of the costs and benefits of the migration and the potential need for a regulatory response. here, where the activity is probably quite bank - like, i am going to revert to the use of the term shadow bank. first, to what extent does the activity, as practiced by shadow banks, entail reliance on leverage or on maturity or liquidity transformation that could lead to a bank - like creditor run dynamic? bank regulation is primarily aimed at preventing the occurrence of such destabilizing runs or minimizing their ill effects, and so the need for bank - like regulation is greater in the presence of material run risk. second, are banks still informally or indirectly at risk despite the migration to nonbank entities? this could be the case if banks sponsor the shadow banks and implicitly or explicitly provide them with a liquidity backstop or credit support, and it would call for greater regulatory attention either to the shadow banks conducting the activity or to the banks β connection with those shadow banks. third, is the activity at issue primarily migrating out of the most systemic banks β global systemically important banking organizations ( gsibs ) β or smaller banks? migration of activity out of gsibs might on net be beneficial for financial stability because it would leave the gsibs less systemic, even if the activity migrates to less - regulated shadow banks, though i would caution that an especially careful analysis would be needed before reaching this conclusion. in this regard, i would note that one way to limit the growth of shadow banking that simply arbitrages bank regulation is to make sure that the regulated sector itself is not unnecessarily burdened. this aim lies behind our efforts to tailor banking regulation by reference to the risks posed to the economy and the financial system by banks of different sizes, scopes, and business activities. in addition, it suggests a couple of additional considerations for evaluating specific forms of
|
times, they were seen as comparable to demand deposits created by the traditional banking sector. thus, what we might refer to as the prototypical form of shadow banking presented the kind of risk associated with traditional banking prior to the creation of deposit insurance β that of destabilizing short - term creditor runs that lead to defaults and asset fire sales. bank sponsorship contributed to the illusion that the shadow banks β short - term liabilities were virtually as good as cash. large banks also relied on short - term wholesale funding provided by the shadow banking sector as a source of cheap financing. then, questions arose about the quality of the mortgage loans and other assets underlying the liabilities of sivs and asset - backed commercial paper conduits and, simultaneously, about the continued willingness and capacity of their sponsors to support them. suddenly, asset - backed commercial paper was no longer seen as a cash equivalent, and a run ensued. large investment banks also experienced dramatic runs on their short - term, secured wholesale funding. another powerful run occurred, this time on money market mutual funds, after lehman brothers β shadow banking activities caused it to fail and the reserve primary fund broke the buck. as noted earlier, some key elements of pre - crisis shadow banking such as sivs have vanished, and some key actors of that earlier period have been brought within the bounds of prudential regulation. today, the shadow banking sector is smaller and the traditional banking sector is more resilient. nonetheless, abundant global liquidity continues to seek out safe assets, and some financial market participants will continue to accept maturity and liquidity mismatches in order to earn incrementally higher yields. the risks associated with short - term wholesale funding in particular have more receded than disappeared. accordingly, the prototype of the precarious shadow banking model can generate new variants that should command regulatory attention. before returning to this issue, though, i want to speak more directly to why and how we should analyze the risks and benefits associated with specific forms of nonbank financial intermediation, rather than make regulatory decisions based upon the fact that a particular form of intermediation bears some resemblance to the borrowing or lending activities traditionally associated with commercial banks. analyzing nonbank intermediation switching from a focus on β shadow banking β to a consideration of the varieties of nonbank intermediation reinforces the importance of assessing specific risks rather than merely categorizing activities as either shadow banking or something else. in this way, the potential
| 1 |
##f until 2007, showing how global savings β investment imbalances have played a fundamental role that must not be neglected. 8 these imbalances were ultimately the symptom of the creation of excessive international liquidity by countries like the united states and of excessive savings by countries like china, and were associated with a reduction in the cost of capital and interest rates, in particular in the united states. this spurred an unsustainable boom in consumption as well as excessive risk - taking, both among consumers and financial institutions. these imbalances contributed to the large financial distortions and bubbles in global financial markets, which created the preconditions for today β s crisis. neglecting imbalances as a source of risk is not the best way to improve the crisis prevention arm of the imf. how can we expect the international monetary order to develop? and how can we strike a better balance between financing and adjustment? there is a risk that the forces favouring earlier and more effective adjustment of imbalances, and thus helping to avoid financing crises, have been weakened. in the current discussion on the reform of the international financial system, not many are suggesting that the imf should play a stronger role in preventing the accumulation of excessive external imbalances and in fostering more disciplined domestic policies. just to give an example, the decision on bilateral surveillance over members β policies, aimed at identifying fundamental exchange rate misalignments, has been modified to allow greater discretion in surveillance, especially exchange rates. this might look like a tactical choice, but i doubt that it will result in a tougher hand for the imf. while emerging and developing countries are requesting a stronger voice in the imf, they also seem to be suggesting that they would like this institution to be less intrusive, imposing less conditionality while at the same time providing more and cheaper financing. advanced economies seem to be supporting this view, having inundated the imf with funds, most of them available with very little conditionality or none at all. this might be appropriate in times of systemic crisis but cannot be sustainable in normal times. some thought should perhaps also be given to the need for a strategy to exit from cheap and unconditional imf financing. overall, most of the imf β s shareholders seem to favour making imf financing easier. the idea of enhancing the role of the sdr, or another world reserve currency, goes towards facilitating the financing needs of both deficit and surplus countries
|
a staff team from pdr, res and whd, approved by mark allen and michael deppler ( 29 june ). post adjustment even harsher. that is the experience of the gold standard, the last world currency. in sum, a new world monetary order β that is, a framework for payments between residents of different countries which ensures smooth trading in goods, services and financial assets β requires a mechanism to keep imbalances in check. key elements of such a mechanism include a prominent role for the imf in two essential areas : strong and effective surveillance in crisis prevention, and responsible lending, with appropriate limits and conditionality, to countries in need. this was the consensus prevailing until just before this crisis. there is a risk that the short - term objectives pursued to resolve the current crisis will change this consensus. a new monetary order must first and foremost aim to prevent crises, not to postpone them.
| 1 |
will be increased complexity in identifying the risks which will in turn complicate the process of risk management. the increasingly integrated and liberalised markets will also expose our porous economies to greater external influences and to contagion risks. a higher level of vigilance is thus required to allow for pre - emptive policy measures in a timely manner. this will require adequate levels of cooperation among the regional regulators in addressing potentially contagion systemic risks and ensuring regional financial stability. the deepening of co - operation between the nusantara's monetary and regulatory authorities is thus a key factor in the development of a robust integrated platform. enhanced cooperation will promote greater resilience and reduce regional vulnerability to external developments. there are now various regional mechanisms in place to undertake regional surveillance, to facilitate the exchange of information, to enter into greater engagement on issues affecting the region and in developing regional financial markets. in addition, frameworks for enhanced regional risk management, crisis management and resolution are also being put in place. with greater financial integration, the region will be able to leverage on the advantages of economies of scale, innovation and more importantly place greater reliance on the cumulative strengths that resides within the region including our financial resources, skills and knowledge. it will also better position the region to collectively address emerging issues and challenges faced by the region taking into consideration the region's socio - economic context. ladies and gentlemen : while islamic finance is gaining global interest and acceptance, the world's most populated muslim region in the world, the new nusantara offers opportunities for the accelerated expansion of islamic finance. the intrinsic nature of islamic financial structures encourages stability. islamic principles require that the financial transaction be supported by genuine economic transactions. to further reinforce this, the governing shariah principles also serve as a built - in self - regulatory mechanism that insulate islamic instrument issuers from unproductive, speculative and unethical elements and thereby contributes to the stability of the financial system. historically, capital financing and investment flows into the nusantara region have generally been sourced from the developed financial markets. while we may see continued growth in short term capital inflows from these traditional sources, the more competitive global environment provides no assurance of the sustainability of such longer term investment flows. meanwhile, our own south east asian region and that of north asia and the middle east countries continue to have high surplus savings seeking opportunities for investment and new asset - classes for greater risk diversification and improved returns on their investments. hundreds of years
|
have on the poorer economies. similarly, the disproportionate effect these developments are having on the poorer segments within a particular economy. this crisis thus brings to the forefront a number of issues concerning financial inclusion. firstly, while the crisis demands action with great urgency, the policy response to restore the functioning of the financial system and to get growth in the economy again, there also needs to be a continued commitment to the financial inclusion objective. this becomes all the more vital given the more adverse implications of the crisis on the poor segments in the economy. secondly, while the policies and regulation of financial inclusion are essential to ensure the soundness and sustainability of an inclusive financial system, of equal importance are the policies, instruments and framework to deal with distress in an inclusive financial system. this is to ensure that the strategies for resolution will provide a total solution that addresses the entire spectrum of the financial system, from that which is large and highly connected with systemic implications to that which is small and highly vulnerable. this includes measures relating to relief and support and the mechanisms for resolution to ensure the sustainability of an inclusive financial system even during unstable financial and economic conditions. in recognising the importance of financial inclusion, the united nations established the united nations advisory group on financial inclusion in 2006. the group advises the united nations and member states on issues relating to the advancement of the financial inclusion agenda on a global scale. since its establishment, many successes have been achieved. these include increasing the public awareness on the importance of financial inclusion, assisting governments in the design of regulatory systems that facilitate the creation of financial services for the poor, encouraging the of use of holistic measures to gauge the progress of financial inclusion, collecting and disseminating best practices, collaborating with the private sector to leverage on the talent and technology to further advance financial inclusion and to promote research that will galvanise new initiatives. in malaysia, financial inclusion is a high priority in our national agenda. since the establishment of the central bank, there has been a conscious policy to have an extensive commercial banking branch network across the country, to ensure the outreach, in particular, to cover the non - urban areas. malaysia now has 10. 2 branches for every 100, 000 individuals as opposed to the global median of 8. 4 branches for every 100, 000 individuals. in malaysia, more than 80 % of the population also have some form of savings account. this has also contributed to the financialisation of savings in the country. deposits as a percentage of
| 0 |
65 % of the funds sourced from non - hong kong investors, according to a recent sfc survey. it is, however, worth noting that the survey also showed that 74 % of the practitioners in the asset management field were engaged in the sales and marketing functions. while the figure has already trended downward from 81 % in 2008, it does reflect the fact that hong kong needs to further expand the other segments of the asset management β value added β chain, e. g. in structuring, research, investment and trading. to achieve this objective, the hkma β s outreach work in the last two to three years has taken a new focus on asset owners, such as pension funds and sovereign wealth funds. 11. since 2010, the market development team of the hkma attended hundreds of meetings with overseas asset managers and owners. i am pleased to report that these outreaching campaigns are generating positive results, with about one - third of the institutions that we have approached indicating a commitment to devote resources to hong kong. specifically, 67 institutions have expressed interest in pursuing a hong kong presence and 48 institutions are planning to expand their existing operations in hong kong. 12. there are several reasons why the hkma is uniquely well placed to undertake effective outreach programmes. first, the hkma is a banking supervisor and banks are the key players in the financial markets in hong kong. second, the hkma is also itself a major asset owner and manager, with over us $ 370 billion of exchange fund assets under management. this makes it easier for the hkma to make the right connections and speak the same language of the asset owners or managers overseas. thirdly, the hkma senior management is fortunate to have the support from a small but dedicated team of highly professional staff in the outreaching programmes. finally, the hkma is part of the government and it is easier for us to refer issues or problems to the relevant government bureaux or departments for consideration or actions. in this context, i would like to thank in bis central bankers β speeches particular the sfc and investhk, which have been working very closely with us to provide the much needed advice or help when overseas financial institutions are thinking of locating or relocating their operations to hong kong. concluding remarks 13. ladies and gentlemen, i would like to end my comments by saying this : competition amongst financial centres has always been fierce and will be even more so in the future. competition is quite like rowing a boat up a river, in which case
|
, capital flow volatility that could re - emerge as global investors react to news. if these risks are not managed well and result in unwarranted tight financial conditions, fragilities in eme financial markets could be exposed. in turn, these could negatively feedback to the real economies of emes. on the part of the bsp, although our series of monetary tightening actions in the past few months have been principally aimed at managing inflation expectations, these have also been put in place to help guide the domestic financial market to a smooth transition as monetary policy begins to normalize in the us. in the case of the domestic economy, the key challenges over the medium term are likely to relate mainly to addressing potential supply - side bottlenecks, bridging identified gaps in existing infrastructure, minimizing the impact of natural calamities, and promoting greater economic inclusion by, among other things, generating more employment. bis central bankers β speeches what can bring phl to the next level? our economy β s resilience has been supported by sound macroeconomic policy. even so, the reform agenda remains very much a work - in - progress. the challenge now lies in sustaining our good performance and consolidating our gains, even through difficult times. as i indicated at the top of my remarks, our main priority is to achieve sustained, stronger, durable, and more inclusive growth. this priority could be promoted by three i β s β infrastructure, inclusiveness and institutions. these three will be tackled in greater depth during the panel sessions throughout this morning. but allow me now to just quickly run through each one. the need for the first β i β β infrastructure β is straightforward. the philippines has serious need for more infrastructures. first, to deliver important services and facilities to the people. these include well - ordered affordable mobility within the urban areas, efficient transport / delivery of goods and services between our islands, and the provision of low - cost and reliable ( electric ) power to the whole archipelago. second, to enhance the attractiveness of the country as an investment destination by improving the local business climate and reducing the cost of doing business in the country. the philippines boasts of a highly skilled workforce. to be able to deploy more of this workforce into well - paying value - added jobs, we need to bring in more foreign direct investments that will build industry. with the performance of the fiscal authorities, the national government has been able to broaden its fiscal space. this
| 0 |
states and japan. by contrast, that share has since declined to about 13 %. the crisis not only exposed the imbalances existing within the euro area but also revealed the incomplete character of economic and monetary union ( emu ). the governance bis central bankers β speeches framework underpinning emu proved insufficient to create adequate incentives to address macroeconomic imbalances, foster sound public finances and prevent the propagation of shocks to the european financial system. in order to secure long - term stability in the euro area and ensure a durable rebalancing, some of the initial design flaws in the euro area β s governance structure need to be fixed permanently. this requires a concerted effort from governments to complete emu. in this regard, the β four presidents β ( of the european council, the european commission, the eurogroup and the ecb ) have identified four pillars on which to build a genuine emu and so a more stable and prosperous europe. these pillars are : a banking union with a single supervisor ; a fiscal union that can effectively prevent and correct unsustainable budgets ; an economic union that can guarantee sufficient competitiveness to sustain high employment ; and a political union that can deeply engage euro area citizens. progress is being made on all four pillars to build a genuine emu. however, the road towards a complete emu is still long. a firm commitment from governments is the best insurance that we are building the bridge to a more stable and prosperous euro area, one in which the rebalancing we observe today will be here to stay. there is evidence that rebalancing has also started in china. the current account surplus has narrowed markedly, from 10 % of gdp in 2007 to less than 3 % of gdp in 2011 ; foreign exchange reserve accumulation has slowed down significantly, with reserve holdings remaining roughly stable in the course of 2012 ; and, finally, there seem to be signs that the economy is gradually shifting from external sources of demand to domestic sources. a key question is how much of this rebalancing is due to cyclical factors, in particular slower growth in advanced economies. there have been concerns that china β s growth model remains overly reliant on investment at the expense of consumption, and that house price valuations are stretched. so in china, too, a permanent rebalancing hinges on the continuation of structural reforms, including : the continued expansion of social safety nets ; the reform of the banking sector ; the gradual liberalisation of the
|
peter praet : the β great rebalancing β of the euro area and the global economy keynote speech by mr peter praet, member of the executive board of the european central bank, at the hamburg summit β china meets europe β, hamburg, 30 november 2012. * * * i wish to thank maurizio michael habib and arnaud mehl for their contributions to this speech. many thanks for your kind invitation to speak at this summit on the future of china and europe in the global economy. the pre - crisis period is sometimes referred to as the β great moderation β, 1 and the onset of the crisis in 2007 and 2008 as the β great recession β. 2 today i β d like to provide an additional perspective and suggest that we may now be experiencing a β great rebalancing β. the period before the crisis was marked by the global build - up of large external and domestic imbalances. the united states had large current account deficits and china large surpluses, while there were serious macroeconomic imbalances across the euro area. however, the eruption of the global crisis about five years ago marked the start of a major rebalancing. demand patterns β both at the global level and within the euro area β have been undergoing a significant rebalancing process, which has admittedly been painful in some ways, but necessary from an overall perspective. a key question now is whether this process is cyclical or structural. today i will argue that part of the β great rebalancing β is structural, which is welcome. but another part is cyclical, meaning that it might fade out as soon as global economic growth turns a corner. so it β s a concern that if countries are not sufficiently committed to carrying out the necessary reforms, unsustainable imbalances might re - emerge which would then put the global recovery at risk. let me now focus, in turn, on signs of a β great rebalancing β in the united states, the euro area, and china, as well as on the role of macroeconomic policies in this process. let me start with the united states. before the collapse of lehman brothers in 2008, the large external deficits of the united states were a major source of concern. the us current account deficit reached 6 % of gdp in 2006, its highest level since 1945. such deficits reflected a wide array of factors, including a housing bubble, increasingly leveraged households
| 1 |
klaas knot : high debt and financial stress - implications for asian financial stability speech ( online ) by mr klaas knot, president of the netherlands bank and chair of financial stability board, at the asean + 3 economic cooperation and financial stability forum, kanazawa, 5 december 2023. * * * thank you for inviting me to speak today. i am sorry that i cannot be there in person with you, as i was unable to travel from the cop28 proceedings, where i am today, to kanazawa in time. nevertheless, i am grateful to be able to share a few words with you on a theme that aligns so closely with the mandate of the fsb : safeguarding growth and stability in a complex world. a resilient and stable financial system is indispensable to sustaining economic growth, particularly in the current environment. this is at the core of the fsb's mandate. as the global financial stability watchdog, the fsb is responsible for assessing vulnerabilities affecting the global financial system. in addition, the fsb identifies and reviews the regulatory and supervisory actions needed to address these vulnerabilities. so how do we go about that? to start with, our surveillance framework aims to proactively identify vulnerabilities and provides a global, cross - border, and crosssectoral perspective on existing vulnerabilities. this framework draws on the collective perspective of the broader fsb membership. but that perspective can only take us so far in understanding and responding to global vulnerabilities. indeed, the global issues of today require coordinated responses, but this does not necessarily mean one size fits all. regional perspectives matter. to gain a truly global perspective, it is important for us to incorporate the experience and intelligence of emerging market economies ( emes ) and also look beyond our g20 membership. our regional consultative groups are one way we do this. they provide us with a richer and more detailed regional perspective. one which we appreciate ever more during times like the present when financial and macroeconomic uncertainty are elevated. last week our regional consultative group for asia met in hong kong. members discussed global and regional financial market developments and their impact on asian economies. a key theme was rising government indebtedness and financial stability risks linked to the sovereign - bank nexus. i note that amro's financial stability report raises many of the themes discussed by our regional group, including elevated private and public nonfinancial
|
shocks. banks became mired in painful but necessary balance sheet repair efforts. as a result, they have been restrained in supporting economic recovery. banks β crucial role in the financial intermediation of the euro area explains why many monetary policy interventions during the crisis were aimed at repairing the bank lending channel. the ecb was confronted with a systemic liquidity squeeze, and had to accommodate the funding needs of the banking sector. as such, we averted a self - fulfilling solvency crisis and resulting monetary contraction. nevertheless, many euro area banks lost their willingness and ability to keep pumping credit into the real economy. this required further flexibility in our policy framework, such as targeted long - term refinancing operations and a negative interest policy. partly as a result of these extraordinary measures, the monetary transmission is working more smoothly. lending rates have eased, and the credit supply has picked up. to sum up, the crisis illustrates the importance of quickly restoring the banking system, both for the real economy and the effectiveness of monetary transmission. it has also exposed the limits and downsides of monetary instruments. central banks can provide liquidity support but cannot restore the solvency of banks. excessive reliance on central banks in fact delays the necessary adjustments. cheap funding may prop up non - viable banks for too long, while making them less and less resolvable. the significance of resolution for the monetary and banking unions is without question. in the euro area there are clear further constraints to resolving banking problems. unlike the us, there is no single fiscal policy that can dampen shocks across member states. and unlike the us, we do not yet have a single deposit insurance system that can provide confidence to all depositors, even if an idiosyncratic shock hits a particular member state. also, capital markets as alternative to bank intermediation are relatively underdeveloped compared to the us. hence, to ensure the stability and sustainability of the euro area, making banks resolvable is essential. as this session is about the road ahead for resolution, let me raise two specific issues for discussion. the first one concerns pressure on regulators to soften rules designed following the financial crisis. it is often said that financial regulation moves like a pendulum, swinging back and forth between opposite states. when a crisis occurs, there is a call for tighter rules, and the pendulum swings. over time, as memory fades, there is a push for deregulation and fewer rules. thus the pendulum swings back, possibly so
| 0.5 |
bank of uganda remarks by prof. emmanuel tumusiime - mutebile, governor, bank of uganda 23rd ordinary meeting of the east african community monetary affairs committee kigali serena hotel 30th july 2019 fellow governors the imf resident representative for uganda representatives of the eac secretariat ladies and gentlemen good afternoon, first, let me take this opportunity to thank governor, john rwangombwa ; management ; and staff of the national bank of rwanda for the warm hospitality and the excellent organizational arrangements. i am pleased to be here in kigali for this 23rd ordinary meeting of the east african community monetary affairs committee ( mac ). allow me to give you an overview of the economic prospects back home. uganda β s economy remains strong, with growth projected at 6. 3 percent in fy 2019 / 20, largely driven by the accommodative monetary policy stance and the ongoing public infrastructure investments. inflation over the last 5 years has averaged 4. 4 percent, which is well below the inflation target of the eac macroeconomic convergence criteria. private sector credit extension grew by 12. 6 percent in fy 2018 / 19 compared to 6. 8 percent in fy 2017 / 18 and nonperforming loans as a percentage of total loans have declined from a peak of 10. 5 percent in december 2016 to about 3. 8 percent in march 2019. governors, notwithstanding these achievements on the domestic scene, allow me to underscore the consequences of the fragile international economic environment for our economies. the medium to long - term prospects for the global economy remain very uncertain. just last week, the imf reduced its global growth outlook, already the lowest since the financial crisis to 3. 2 percent, and suggested that policy β missteps β on trade and brexit could derail page 1 of 3 a projected rebound. the hazy global economic outlook coupled with the continuing uncertainty in global financial markets and financial risks may lead exchange rate volatility with adverse consequences for investment and growth in our economies. as we deliberate, we need to be aware that these external vulnerabilities, emphasize more than ever, the need for the eac to build resilience by strengthening policy co - ordination and intra - regional trade, which i am happy to note, is picking - up. governors allow me to reiterate the significant progress made towards the operationalization of the eamu protocol. we have made strides on harmonization of : monetary policy frameworks, exchange rate policies,
|
emmanuel tumusiime - mutebile : closing remarks at the financial markets development stakeholders β workshop remarks by mr emmanuel tumusiime - mutebile, governor of the bank of uganda, at the cocktail of the stakeholders β workshop on developing the 5 - year financial markets development plan, kampala, 15 august 2007. * * * distinguished guests, ladies and gentlemen. i would like to thank you for taking part in the workshop to map out priority areas for uganda β s 5 - year financial markets development plan. the results of this workshop will go a long way in helping us to achieve an integrated financial market that is sound, stable and supportive in the efficient mobilisation and allocation of resources for economic growth and sustainable development. the bank of uganda has maintained prudent monetary policy which has resulted in a lot of developments in the economy including ensuring price stability, a vibrant and sound banking system. amongst other things, this has resulted into strong portfolio flows into this economy. emerging markets have become increasingly attractive to foreign investors and the only way to sustain this attractiveness is through deepening and widening the financial markets and managing the economy in a prudent manner through avoidance of policy reversals and maintaining transparency in economic management. the band of uganda shall continue to commit itself to consolidating the successes that have been achieved over time. you as stakeholders have a big role as practitioners and regulators to make your individual contributions in your various sectors towards attainment of the benchmarks that you have set for yourselves, while we provide the enabling environment. i would like to urge those of you who have been selected to represent the various sectors to the financial markets development committee to dedicate yourselves to the task ahead of you to enable us to come up with the 5 - year plan as soon as possible. this will enable us to find time to liaise with our sister central banks in the region that are also going through the same exercise in order to arrive at a harmonised and consolidated east african community regional 5 - year market development plan. finally, i would like to thank all the participants again for your deliberations and to single out gtz / sida for the technical assistance that they have provided to uganda over the years in forging ahead with financial sector development programmes. thank you for your participation and for listening to me.
| 0.5 |
program for independently assessing the effectiveness of internal controls on at least an annual basis. boards of directors and audit committees are responsible for ensuring that their organizations have effective internal controls that are adequate for the nature and scope of their businesses and are subject to an effective audit process. effective internal control is the responsibility of line management. line managers must determine the acceptable level of risk in their line of business and must assure themselves that they are getting an appropriate return for this risk and adequate capital is being maintained. supporting functions such as accounting, internal audit, risk management, credit review, compliance, and legal should independently monitor and test the control processes to ensure that they are effective. implementing management reports on internal controls comparable to those required under sarbanesoxley and fdicia 112 can also assist community bank boards of directors and audit committees in obtaining a better understanding of the controllable risks within the bank and the quality of the controls in place over those risks. sarbanes - oxley and fdcia 112 require an annual management assessment of internal control effectiveness and an attestation of management β s assessment and the effectiveness of controls by the bank β s external auditor. community bank management could perform periodic assessments of internal control effectiveness. another group of employees within the bank could perform an independent evaluation of management β s report. by independent, i do not necessarily mean an external auditor should be engaged to issue a report. in this sense, independent may mean that internal audit is brought in to perform something similar to an external auditor β s attestation. the details of such an approach need to be worked out. the important point is that the audit committee should have some reasonably independent assessment of management β s report. audit committee members could use these reports to set the audit plan for the next year, to track how risks have changed and are changing within the organization, and to facilitate discussion of which controls should be added. best practice 3 : adopt a framework for assessing operational risk over the past few years, the discussion of operational risk management has increased significantly in banking circles. in 2003, the basel committee released a paper, β sound practices for the management and supervision of operational risk. β 4 this paper sets forth a set of broad principles that should govern the management of operational risk at banks of all sizes. although operational risk is nothing new to community banks, the prospect of addressing this risk in a structured framework with measurable results is something new. the broad variety of products and services that banks provide, the evolution of
|
monetary policy is not on a pre - set path, and i will be closely monitoring the incoming data and their implications for the economic outlook. i will be looking for evidence that inflation is on a consistent and meaningful downward path as i consider whether further increases in the federal funds rate will be needed, and how long the federal funds rate will need to remain at a sufficiently restrictive level. i know that high inflation has been a hardship, especially for lower - and middle - income families, who spend the majority of their income on necessities. returning inflation to two percent will help american families focus on important decisions other than 1 / 3 bis - central bankers'speeches inflation. addressing high inflation will ensure that it is no longer a factor for spending and investment decisions and will help put the u. s. economy on a course of ongoing economic growth and rising standards of living. but i also know that higher interest rates have made it more difficult for many to get a loan, to buy a home or a car, and for businesses to invest and expand. i am interested to hear the ways in which inflation and higher interest rates are affecting the day - to - day lives of our participants today. i am also looking forward to learning about how the economy and the fed's policies are affecting lower - income workers and small businesses, the two subjects of today's fed listens event. over the past few years, for many, wage and salary increases have not kept up with inflation, and while that general pattern has improved recently, most workers still have not seen wage increases equal to price increases. for workers at the lower end of the wage spectrum, wage gains have been the strongest seen in decades. however, because necessities like groceries and gasoline make up a large share of their household expenses, lower - wage workers have been experiencing the effects of higher prices more acutely than others. we also know from history that a slower economy, with higher unemployment, tends to hit lower - income workers the hardest, so we must remain attuned to the fact that our efforts to reduce inflation have the potential to undermine wage gains and job security for lower - wage workers. should inflation remain at today's level, or increase again, lower - wage workers would continue to bear the brunt of these effects. small businesses are also more vulnerable in an economic slowdown than larger businesses, and i am watching carefully to see how they are dealing with both inflation and higher interest rates. despite high inflation and
| 0.5 |
was marked by further enquiry into monetary policy frameworks. the early 2000s saw our biggest policy shift, the adoption of the inflation - targeting framework. at the time, south africa was the 13th country to introduce this policy framework. the governor at the time, tito mboweni, was tasked with guiding the sarb through this uncharted territory. our inflation target, set by the minister of finance in consultation with the sarb, is between 3 % and 6 %. the adoption of inflation targeting saw a radical change in the way in which the sarb communicated with the public, focusing on transparency through communication, and ensuring that independence and accountability worked hand in hand. the flexibility of the inflation - targeting framework and its anchoring of public expectations about inflation assisted the country to weather the global financial crisis in 2008 and 2009. with the critical role of financial institutions in that crisis underscored, governor gill marcus helped expand the sarb β s mandate to explicitly include financial stability. in doing so, a financial stability committee was formed and resources expanded for its work. the early 2010s also saw cabinet approve the move towards the twin peaks model. the financial sector regulation act was signed into law on 21 august 2017, paving the way for the formation of the prudential authority. in april 2018, the prudential authority was officially launched, amalgamating the sarb β s bank supervision department, the insurance division of the financial services board and the supervisory team of the co - operative banks development agency. the sarb was born at a time when the world was exiting the devastating impact of the 1918 spanish flu pandemic. as we approached our centenary year, the world began grappling with the great flu pandemic of our time, the coronavirus disease 2019 ( covid - 19 ) pandemic. as covid19 cases began to rise, south africa, like many other countries, mandated forceful containment measures to abate the human cost associated with the virus. while these measures minimised the impact on human lives, they came at a great cost to the economy. south africa β s real gross domestic product contracted by a substantial 7. 0 % in 2020. this was the second - largest annual contraction since 1920, and about five times larger than the contraction following the global financial crisis in 2009. unemployment recorded its highest level since statistics south africa began measuring unemployment. both headline producer and consumer price inflation recorded historic annual average lows of 2. 5 % and
|
that takes account of long - delayed effects. a reliable system for forecasting future inflation therefore becomes an essential precondition for any monetary policy model based on inflation targeting. to what extent should inflation targeting be concerned with asset price inflation? it is well - known that the board of governors of the federal reserve system in the united states of america is always concerned about the dangers of financial and property asset price inflation, and of the risk of a β bursting bubble β. the experience of japan in the late 1980 β s can be quoted, where measured consumer price inflation never exceeded 4 per cent per annum, and yet excessive increases in bank credit extension and the money supply created unrealistic asset prices. eventually, when the bubble burst, the total japanese economy collapsed. 4. conclusion it is mainly for these reasons that many countries still prefer to stick to a more controllable intermediate target such as m3 or dce, rather than the more complex and difficult inflation targets. south africa β s expressed intentions to move towards inflation targeting therefore need careful preparation. the reserve bank is in the process of improving its techniques of forecasting inflation, and continues to analyse the changing relationships that are now emerging in the new situation between the various components of the monetary policy model. reference should, in conclusion, be made to a third alternative in addition to intermediate targets, such as the money supply and inflation targeting, that can also be considered by countries as an anchor for monetary policy, and that is explicit targeting of the exchange rate of the currency. countries such as argentina, hong kong and the people β s republic of china have opted for this alternative with a reasonable measure of success. there are, however, many reasons why this option is not regarded as appropriate for the present south african situation. suffice it to say that, in the macroeconomic monetary policy model used by the reserve bank, the exchange rate is included as an important element in the comprehensive model, but it comes out as a result of the policy process, and not as an independent objective.
| 0.5 |
that those who argue for the benefits of having a country open to global banking may have the better of the argument. we know, however, that whether foreign banks are a source of stability or fragility depends very much on the market, banking and supervisory environments that they find in the host country. there are conditions that must accompany, or better still, precede a country β s decision to participate in today β s global banking market. if the participation of foreign banking competitors, either directly or through inter - bank lending, comes with improvements in the underlying bank credit underwriting culture, the capability of bank supervisors, and the degree of transparency, then the benefits of foreign bank participation will eventually emerge. on the other hand, if foreign banks participate in a country in which neither the market transparency, nor domestic banks, nor bank supervisors are prepared to change, i believe that the participation of foreign banks, by itself, will not necessarily be beneficial and could prove to be negative. therefore, entry of foreign banks, either directly or as participants in the inter - bank lending market, without movement to better information, better supervision and better banking, provides access to credit, but not necessarily an increase in macro - stability. to argue the benefits of global banking in the abstract, removed from these required conditions, therefore seems to miss the true focus. lessons from the asian crises let me now turn to the broad - based lessons that the asian crisis teaches us. one of the most important contributing factors to the current financial crisis in many of the emerging asian nations was the weakness of their banking systems, as well as weakness of bank supervision within those countries. it seems clear now that, asian banks, as well as their government supervisors, violated some of the fundamental principles of banking and banking supervision. banks β managers had not developed adequate processes for underwriting loans and monitoring their continued performance, or of establishing sufficient and timely reserves to buffer expected loan losses. some of these problems stemmed from lending directed by governments, which led to expectations that the government would support such loans, if needed. but, the primary cause of these credit problems stemmed from banks β failure to deploy effective tools of credit risk analysis. the absence of credit risk analysis led to financial structures that were inherently fragile. banking supervisors in these countries proved ill - equipped to compensate for the fragility. poor allocation of credit undermined the prospects for sustained economic growth. some borrowers could not service their loans. as these domestic banks β loan portfolios deteriorated and their
|
mr. ferguson remarks on themes in international bank supervision remarks by mr. roger w. ferguson, jr., a member of the board of the governors of the us federal reserve system, before the international banking conference, federal financial institutions examination council, in arlington, virginia on 20 / 7 / 98. themes in international bank supervision the scope of my introductory remarks for your conference today is broad and touches on a number of topics, some of which will be more fully developed by other speakers later in this seminar. risks and benefits of a global banking system let me start by addressing the question of what value and what risks might arise from having a more global banking system such as the one developing currently. academic and popular literature is full of articles arguing both sides of the case. conceptually, global banking, by which i mean both direct entry and cross - border inter - bank lending, may influence macro - stability in both positive and harmful ways. those who see potential harm argue that trans - national banks stimulate capital flight, particularly in developing markets, and in stressful times may be a source of capital outflows and currency crises. second, some analysts argue that foreign banks may lack commitment to their host country and will flee, or withdraw credit, when faced with problems in local markets or in their home market. a third concern is that the participation of foreign banks may be associated with broader efforts at deregulation and may overwhelm domestic banking supervisors, creating a riskier environment. those on the other side of the debate argue that participation in global banking is a source of stability and improved banking practice. proponents of this view claim that foreign banks may directly bring new and better basic banking skills, more sophisticated management techniques, and products better suited to managing and spreading risk. through the benefits of competition, these commentators argue, local banking skills and services will be improved. in addition, some observers see indirect benefits from the participation of foreign banks. they argue that global banks, as either direct entrants or as inter - bank lenders, may accelerate the development of ancillary institutions, such as rating agencies, accounting and auditing firms, and credit bureaus, which acquire and process information. similarly, banks that participate in many national markets may improve information disclosure about the banks themselves as the foreign banks compete to gain market share by demonstrating their comparatively sound financial condition. finally, the proponents of this view argue that participation by cross - border banks may stimulate improvements in the supervisory and regulatory framework. i believe
| 1 |
the bank. the government has today announced the appointment of anthony habgood to lead the bank β s court of directors and the oversight committee. i welcome the appointment of someone of his depth and breadth of corporate experience. independent oversight by the committee he will chair can strengthen the bank β s legitimacy and effectiveness. the oversight committee has access to internal papers, is able to observe meetings of policy committees, and is responsible for reviewing all aspects of the conduct of the executive of the bank, including the delivery of policy, the design of and adherence to rigorous processes and procedures, and the monitoring of our transparency and openness. modelled on the independent evaluation office of the imf, we will create a unit to support this, with a director reporting to the chairman of the oversight committee. it is not just our governance but also our commitment to transparency and openness that must be further enhanced. transparency and openness are central not just to our legitimacy to perform these new tasks on behalf of the citizens of the united kingdom. they are also central to our effectiveness in performing them. just as governor king described in his mais lecture 9 years ago, openness about what policy is seeking to achieve can make it more effective. 21 in monetary policy, that helps to anchor inflation expectations and to support countercyclical movements in the policy setting. to that end, we have introduced forward guidance to reduce uncertainty about the way monetary policy will be set as the recovery gains pace. our inflation report has evolved in the past year to contain more information about the key judgements underlying our forecasts and to widen the set of economic indicators for which we publish forecasts to include the labour market, components of gdp, the world economy and household incomes and saving. it will evolve further, including using our new organisational structure to draw stronger distinctions between staff and mpc forecasts. we will also review the case for releasing transcripts of our policy meetings after some years, and report publicly to the oversight and treasury select committees on the outcome of that review. through our strategic plan, we will also increase the transparency of our work on financial stability. we will publish the results of regular bank stress tests. as with monetary policy, we also intend to publish more of the research and analysis underlying our policy choices. over see king ( 2005 ). bis central bankers β speeches time, the financial sector will be better placed to anticipate our responses and as with monetary policy, increased transparency will make us not just accountable, but
|
. this increase in transparency should help commentators and financial markets alike to assess the actions of the mpc and to predict its future decisions. as i have said on other occasions, the aim of the mpc is to pursue economic stability, not to spring surprises on an unsuspecting world. surprises may be good for newspapers, but not for most other businesses. so what were the issues facing the mpc two weeks ago? remember that the aim of the mpc is to hit an inflation target of 22. sometimes inflation will be above the target, sometimes below. but over a run of years the outturn should be as close to 22 as possible. it is central to our remit that deviations of inflation from the target are regarded symmetrically. inflation can be too low as well as too high. for over thirty years, central banks have not, until recently, had many opportunities to show that they understand this. i can assure you that the mpc does. when circumstances change, as they have over the past few months, then so will our policy. the recent turbulence in international financial markets brings a new set of problems and risks, over and above those that resulted from the asian crisis which started in the second half of last year. it is important to distinguish between the crisis of the so - called β tiger β economies in asia, which, although clearly impacting on world trade, was indeed largely restricted to asia, and the more recent financial contagion which has afflicted almost all emerging markets and affected the financial system of the industrialised world. there are three aspects of the world economy which are relevant to our own position. first, private capital flows to emerging markets have in many cases come to an abrupt halt. that will have consequences for trade balances and activity in both emerging markets and industrialised countries. second, falls in equity prices around the world have reduced household wealth. and third, the sudden increase in risk aversion in financial markets is changing the balance sheets of financial institutions and some fear that this may lead to a credit crunch. the reduction in capital flows to emerging markets started over a year ago when concerns about the foreign currency exposures of a number of countries led to withdrawals of funds and a liquidity crisis in asia. that liquidity problem was compounded by macroeconomic and structural problems which varied from country to country. but the net effect was that capital flows to emerging markets in asia fell from over $ 110 bn in 1996 to only
| 0.5 |
state, and i don β t think that i need to highlight the scope of the problem here. similarly, i think the effect on the economy of an energy shortage should be fairly straightforward : energy is one of the key inputs in any value - added production process. less energy availability will translate into lower output. the solutions to the energy problem will take time β unfortunately, there is no magic pill here. we will need to invest in infrastructure for hydro - electricity, natural gas transportation and transmission, and more efficient power plants. moreover, we will need to move to greater private sector participation in the energy sector. that means there will, once again, be a need for less, but more effective regulation β one that safeguards the rights of both producers and consumers, while ensuring adequate incentives for the exploitation of our natural resources the most important incentive here will be prices. unfortunately, a large part of our energy problems today can be traced to a mispricing of fuels. under - pricing any commodity will always lead to a shortage β that β s one of the fundamental axioms of economics. letting the market decide the price is one way of ensuring that future shortages are averted. but remember that markets do not have morals β and that β s why we will need regulation to make sure that those markets serve and protect the interests of all stakeholders. at this point, i would also like to touch very briefly upon the state bank β s efforts to accelerate economic growth. as you may know, any central bank β s primary policy tool is the discount rate β the basic interest rate which acts as an anchor for all other rates in the economy. unlike most central banks, and similar to the us federal reserve, the state bank has a dual mandate : it must tackle the issue of maintaining price stability, i. e. inflation, while also keeping an eye on economic growth. the preamble to the sbp act of 1956 defines that the institution has β to regulate the monetary and credit system of pakistan and to foster its growth in the best national interest with a view to securing monetary stability and fuller bis central bankers β speeches utilization of the country β s productive resources β. so at the state bank, we need to pay close attention to both monetary stability and fuller utilization of the country β s resources. that is a tough balance to strike in the best of times. the bank β s policy is to use any room available to cut interest rates in order to promote economic growth. after being in doubledig
|
##less banking providers achievements in the branchless banking services have already put pakistan at the global centre stage of financial inclusion and innovation. the world bank β s consultative group to assist the poor ( cgap ), in one of its studies has also recognized pakistan as one of the fastest growing branchless banking markets in the world, and a laboratory of innovation. we hope that with the entry of new players and scaling - up of the existing institutions the present growth momentum will build up strongly and progressively. before i close, i would like to emphasize on our broader goal i. e. to provide inclusive financial services to poor and low income groups. i firmly believe that microfinance and branchless banking are complementary to each other, and together they will bring the advantages of inclusiveness, convenience, ubiquity, and efficiency. pakistan offers best regulatory framework and industry infrastructure for microfinance, and i hope that our mfbs will take advantage of such a favorable market environment by investing in innovative technologies and products to grow their businesses and expand access to financial services in pakistan. once again, i would like to congratulate waseela microfinance bank limited and mobilink. i wish you every success, assure you of our support, and look forward to positive outcomes of this commercial launch and i hope today β s commercial launch of waseela and its branchless banking will go a long way in tackling financial exclusion in pakistan. thank you. bis central bankers β speeches
| 0.5 |
disturbing. indeed, once the immediacy of the crisis is behind us, it will not be surprising if we head for another round of destabilizing global imbalances. how do we manage global imbalances? it is argued that if the us fed had refused to supply the incipient demand for liquidity in the late 1990s and early 2000s, higher interest rates could have prevented the borrowing boom and the follow on widespread deterioration of financial standards and the subsequent melt down. but this also would have meant lower growth in the us and the rest of the world. the short point is that even as macroeconomic imbalances should not be allowed to proliferate, it is necessary to balance the need for global economic growth against the disruptions which follow the unwinding of such imbalances. resolving the problem of global imbalances does not mean eliminating them. as long as there is world trade, certain countries will have surpluses and certain others will run deficits. global imbalances have been, are, and will continue to be inevitable. so, to ask how we can eliminate global imbalances is clearly the wrong question. the right question is this : given that global imbalances are inevitable, how do we ensure that they do not build up to destabilizing levels? monetary & fiscal policy the second issue on questioning the questions relates to monetary and fiscal policy. unnerved by the scale and sweep of the crisis, governments and central banks around the world responded with an unprecedented show of policy force. the size and pace of monetary and fiscal expansion raised a paradoxical situation β even as governments and central banks coordinated and cooperated, many of their familiar conflicts got played out once again. central banks reduced policy rates ferociously, and in many advanced countries the rates are at or near zero. this is the standard tool of monetary policy whereby central banks expect to influence interest rates at the long end, and steer financial conditions and hence the entire economy by adjusting the short term rates. even in normal times, monetary policy transmission is lagged. in the crisis situation, because of the fear and uncertainty in the financial markets, it almost totally lost traction. central banks responded to this alarming impasse through a slew of measures variously described as quantitative and credit easing. it soon became clear that even as monetary policy became the first line of defence and central banks turned lenders of first resort, credit markets were in no mood to revive soon. so
|
the contrary, there will need to be increasing coordination between monetary and fiscal policies. central banks will have to take into account fiscal compulsions in their monetary stance while governments will need to commit to strict fiscal responsibility. to ask therefore how monetary and fiscal policies can go their separate ways is the wrong question. what is the right question? i submit the right question is : how can we coordinate fiscal and monetary policies to achieve the planned outcomes? inflation targetting i will now move to the third issue β inflation targetting. in the years leading to the crisis, central bankers had nearly declared victory. they had found the holy grail of stable growth, low inflation and low unemployment through a rule based monetary policy that targeted inflation rather than monetary aggregates. the much celebrated great moderation had delivered. the crisis at once hurt the central bankers β pride and shattered their confidence as the great moderation unravelled. monetary policy was found wanting in delivering financial stability. the undoing was the reluctance or failure of central banks to acknowledge increasing asset prices. the monetary stance of studied indifference to asset price inflation stemmed from the now notoriously famous greenspan orthodoxy which can be summarized as follows. first, asset price bubbles are hard to identify on a real time basis, and the fundamental factors that drive asset prices are not directly observable. second, monetary policy is too blunt an instrument to counteract asset price booms. and third, a central bank cannot presume to know more than the market. the surmise therefore was that the cost - benefit calculus of a more activist monetary stance of β leaning against the wind β was clearly negative. it is more cost effective for monetary policy to wait for the bubble to burst and clean up afterwards rather than prick the bubble in advance. the great unravelling has, however, shattered the intellectual consensus around both inflation targeting and the greenspan orthodoxy on asset price build up. the crisis has made two things clear. first, the policy of benign neglect of asset price build up has failed. second, price stability does not necessarily deliver financial stability. where do we in india stand on inflation targetting? over the last few years, there has been an animated debate in india on inflation targeting fuelled by two influential studies, one by percy mistry and the other by raghuram rajan. while mistry strongly urged that the gold standard for stabilizing monetary policy is a transparent, independent, inflation - targetting central bank, rajan held that reorienting
| 1 |
##fis can play a big role. green finance is also one of the topics of the conference tonight. the pbc has been proactively promoting green finance. by the end of june this year, the outstanding green loans in china had reached around rmb14 trillion, growing 26 percent year on year. by the end of september, the outstanding green bonds in china had exceeded rmb1. 1 trillion, increasing 35 percent year on year. based on international experience and the specific practices in china, we need to address the following four respects to better guide market capital to support green development. first, we should refine green classification criteria. the pbc led and finished the task of revising the green bond endorsed projects cataloguethis year. we are also planning to jointly issue the china - eu shared classification catalogue for green financewith relevant authorities of the eu to drive the cross - border flows of green capital. meanwhile, as the co - chair of g20 sustainable finance working group, the pbc will proactively promote the alignment of classification criteria of various countries by playing its role in the international organization. second, we should enhance the disclosure of climate change information. recently, the pbc has formulated and issued the guidance on environmental information disclosure for financial institutions based on international experience and common criteria to guide financial institutions in disclosing information like carbon emissions. third, we should manage the transition risks related to the climate. the pbc has been organizing climate risk stress tests. financial institutions should also proactively assess and manage relevant risks through environmental risk analysis. fourth, we should improve the pricing mechanism of carbon emissions. currently, the national carbon trading market in china has already been up and running. it gives full play to the role of the market, which is conducive to maximizing the incentives and constraints of carbon emission prices. financial institutions can actively carry out research in this regard. in addition, the pbc has been working on the launch of support instruments for carbon emission reduction which provide low - cost funds for qualified financial institutions to support the development of clean energy and enhance china β s overall energy supply capacity. 2 / 3 bis central bankers'speeches in the coming years, the pbc will continue to refine the policy framework for regulating china β s sifis and effectively maintain financial stability. we also expect that systemically important banks within and outside china can jointly establish climate - friendly visions and goals to drive more market capital to support green, low - carbon
|
xuan changneng : strengthening international macroeconomic policy dialogue and coordination to enhance global economic and financial resilience speech by mr xuan changneng, deputy governor of the people's bank of china, at the pboc home forum, annual conference of financial street forum 2023, beijing, 9 november 2023. * * * as the world economy is undergoing profound adjustments with slow and uneven growth, the impacts of ongoing squeeze in liquidity and geopolitical conflicts deserve close attention. it was clearly pointed out at the recent central financial work conference that " we should effectively advance the highlevel opening - up of the financial markets, ensure national financial and economic security, place equal emphasis on both'bringing in'and'going global ', steadily expand the institutional opening - up of the financial sector, and facilitate cross - border investment and financing, so as to attract more foreign financial institutions and longterm capital to invest and operate in china ". strengthening international dialogue on macroeconomic and financial policy will help promote policy coordination and joint cultivation of new growth drivers, enhance global economic and financial resilience, and achieve sustainable development and win - win cooperation. now, i would like to share my views in the following three aspects : i. ongoing recovery and improvement of the chinese economy since the beginning of 2023, with the effective implementation of macro adjustment policies, china's major economic indicators have witnessed stable development and shown a clear upward trend. positive factors and bright spots in the chinese economic performance are on the rise, and expectations are improving. the first three quarters saw a year - on - year gdp growth of 5. 2 percent. in q3, the gdp registered a year - on - year rise of 4. 9 percent and a month - on - month increase of 1. 3 percent, up 0. 8 percentage points, continuing the upward trend of recovery. industrial production has accelerated its recovery. in the first three quarters, the added value of industrial enterprises above a designated size ( ieds ) increased by 4 percent year on year, up 0. 2 percentage points compared with that in h1. specifically, the profits of ieds in q3 grew by 7. 7 percent year on year. the service industry has become a powerful driving force for economic rebound, with service demand being constantly released and market vitality on a steady rise. in q3, the added value of the service industry grew by 5. 2 percent year on year, driving economic growth
| 0.5 |
policy. while recent surveys indicate that inflation expectations remain relatively well anchored at levels consistent with the inflation target band in south africa, we cannot afford to become complacent, vigilance is required of a central bank at all times. while oil prices have received much of the attention, the prices of other commodities, most notably metals and minerals have been much stronger over the last year. last year saw a strong upward shift in the prices of both precious metals ( gold, and the platinum group ) and base metals ( all the others, but especially copper, aluminum, iron, zinc, nickel, tin, and refined products such as steel ). the price of base metals continued to increase more significantly in 2007 with copper, aluminum and zinc reaching 7, 11 and 3 - month highs respectively, while lead and nickel touched new all - time highs in april this year. commodities are increasingly being seen as a beneficial addition to traditional diversified investment portfolios. this is due to the fact that it has generally been uncorrelated to other asset classes while healthy growth in china and other developing economies, is expected to keep prices strong. in short, it would appear that commodities have become a much more sought after β new β asset class for many portfolio managers. this has led to robust commodity returns, but has also left commodities prey to herding behaviour, making them more volatile and in fact, more correlated with other asset classes. however, commodity price increases are somewhat of a double edged sword for south africa. on the export side, it contributes to increased exports and economic growth. on the other hand, rising commodity prices could offset the positive terms of trade effect and lead to an increase in import prices and hence domestic inflation. a further threat to the inflation outlook emanates from buoyant housing markets in many countries which have also served to fuel domestic demand. there have been significant increases in consumption expenditures as a result of increased wealth effects emanating from rising house prices. south africa is no exception. it is true that the low global interest rate environment has had much to do with these developments. however, the current tightening of monetary policy has given rise to concerns that a decline in residential investment could have wider adverse impacts on the rest of the economy. more specifically, problems related to the sub - prime mortgage market in the us have raised concerns about the probable adverse impacts of developments in the housing market on the rest of the us economy and on the rest of the world. while current indications are that
|
be ignored. we have to remain alert to the risks inherent in the international environment and retain the flexibility to react appropriately to global and domestic challenges. i thank you. are there any questions?
| 1 |
of oil and petroleum products. attainment of a single digit inflation has been government β s goal for a long time. it is, therefore, pleasing to note that, in april 2006, annual inflation declined to 9. 4 %, the lowest rate in the last 30 years. this inflation outturn has been largely due to the conduct of appropriately tight monetary policy aided by prudent fiscal policy and the continued relative stability of the kwacha. with the anticipated bumper harvest of maize coming on the market as the marketing season opens this month, maize prices are expected to fall and assist in keeping food inflation in check and overall inflation at a single digit level. the challenge will be to anchor inflation at these single digit levels throughout this year and beyond. in order to do this, continued implementation of appropriate monetary and fiscal policies as well as maintaining relative stability of the exchange rate would be vital plus increased production of goods and services. ladies and gentlemen, recently, the exchange rate market has been characterized by a general appreciation of the kwacha against major foreign currencies. this has been mainly due to increased supply of foreign exchange on the market relative to demand. the key factors underlying the increased foreign exchange supply include : ii. increased copper output and exports as well as record high prices. copper exports volume has in recent year registered sustained growth, increasing from 353, 000 metric tons in 2003 to 423, 000 metric tons in 2005. the price of copper rose to us $ 4572. 0 per tonne in december 2005 from us $ 3134. 79 per tonne in december 2004. by may 19, 2006, the price of copper had increased to us $ 8016. 29 per tonne, iii. increased non - traditional export earnings, from us $ 410 million in 2003 to us $ 476. 7 million in 2005, iv. improved economic confidence following the attainment of the enhanced hipc initiative completion point in april 2005, which resulted in reduced external debt service obligations, and ; v. increased foreign direct and portfolio investment, reflecting increased market confidence in the economy stemming from the greatly improved prospects for the copper sector, the cancellation of the bulk of zambia β s external debt, and the continued commitment to prudent fiscal and monetary policies. mr chairman, all these factors have accounted for the current strengthening of the kwacha. this has led to an outcry from some of our exporters of nontraditional commodities that they are losing external competitiveness and
|
is the importance of features such as sound macroeconomic policies, a strong commitment to free trade, a lightly - regulated competitive business environment and a well - educated and flexible labour force. however, some reasons are not ones that can be copied β for example, the benefits of being an english - speaking nation with close ties to the us business community through the irish - american diaspora. it is difficult to overstate the importance of education. indeed, many commentators see the decision to make second level education free in 1969 as key, since it produced a pool of well - educated workers by the mid - 1980s. this, however, needs to go hand - in - hand with openness to foreign investment β without this, educated workers will simply move to firms abroad rather than the firms moving to them. an active industrial policy can also help, as firms tend to cluster in industrial groups so as to achieve economies of scale in supplies etc. for example, ireland actively targeted major it firms in the 1980s and early 1990s, which has seen a cluster of such it firms just outside dublin. once some major firms set up operations, it was much easier to attract smaller firms in the same industry. this emphasis on openness to foreign investment allows me to pick up on the issue of national sovereignty that dr. eiein - sain mentioned. ireland adopted predominantly protectionist and inwardlooking policies in the first 35 years of the state β s existence. notwithstanding the small domestic market, the emphasis of development policy was on promoting domestic industry behind high tariff barriers. not surprisingly, these policies were not successful in delivering sustained economic growth and higher living standards. employment failed to increase and emigration rose to very high levels. the legacy of protectionist policies was a small and inefficient indigenous sector, which primarily served the domestic market. the failure of protectionism and over - reliance on agriculture were recognised in the late 1950s and, over the course of the following two decades, the economy was opened up to trade and investment. in particular, the focus shifted to attracting high - productivity export - oriented foreign industries, a policy which has been remarkably successful in generating economic growth and prosperity over the past 40 years. there have also been significant spin - offs in terms of servicing and supplying foreign firms, which has contributed to the development of the domestic services sector. our success in generating employment, however, has been a more recent development and reflects the fruits of the increased emphasis on education, a reduction in the labour market disin
| 0 |
zeti akhtar aziz : a milestone towards a more efficient and internationally integrated global islamic financial system speech by dr zeti akhtar aziz, governor of the central bank of malaysia, at the global launch of thomson reuters islamic finance gateway, kuala lumpur, 22 february 2010. * * * in this more challenging global economic and financial environment, islamic finance has remained dynamic with a steady pace of innovation and fast growing as its expansion gains further momentum. this has demonstrated not only its viability and resilience but also its ability to remain competitive. this decade has also seen the increased internationalisation of islamic finance as it extends it outreach to serve the global community. the accelerated development of the islamic financial markets and the supporting international islamic financial architecture as well as the trend towards greater liberalisation have increased the integration of islamic finance into the international financial system. today β s launch of the islamic finance gateway by thomson reuters is indeed a welcome development. the timely access to a broad range of key information on islamic finance including on the products terms, structures and shariah rulings will contribute to enhanced transparency in the islamic financial markets. as a platform that allows for price discovery, it will contribute towards the more efficient functioning of the various islamic financial markets across the world. it will also foster a greater international understanding of islamic financial practices in the various islamic financial markets. i have been informed that this gateway will also include in its content, the shariah resolutions database of the international shariah research academy ( isra ) following the signing of the memorandum of understanding between thomson reuters and isra that is scheduled today. isra was established in 2008 to provide a platform for greater engagement amongst practitioners, scholars, regulators, academicians in the area of shariah and to promote applied research contemporary issues in islamic finance. their efforts have contributed to the harmonisation of shariah interpretations and thus the standardisation of shariah applications and practices is islamic finance. isra has now become an important repository of knowledge for shariah views or fatwas. the reuters islamic finance gateway thus has the potential to become an important vehicle for worldwide dissemination of high quality information on islamic finance. in performing the function as an aggregator of information on islamic finance, the gateway will showcase the dynamic pulse of the global islamic financial services industry. this increased information flow across borders in real time will also reinforce the trend of the internationalisation of islamic finance. there is already an increasing level of foreign participation in the islamic financial markets resulting
|
in the increase of cross border flows in the international islamic financial system. the increased information flow would allow for the raising of funds in different jurisdictions and for the investor base to be broadened further. liberalisation has also brought greater foreign institutional presence in national jurisdictions resulting in diversity of players in the islamic financial systems. cumulatively, these developments have strengthened further the international financial linkages between different jurisdictions and have contributed towards the more efficient allocation of resources across borders. this recent global financial crisis has highlighted the risks associated with financial globalisation. equally important in the process of internationalisation is therefore the quality of this financial globalization in islamic finance. let me touch on two aspects of the financial globalisation of islamic finance. firstly, that islamic finance has been more inclusive in terms of its outreach to not only the participation from the developed world but also from the emerging world, particularly from asia and the middle - east. this leads to diversification and avoids risk arising from over concentration in particular jurisdiction. moreover, with the relatively better growth prospects in the emerging world, strengthening the economic and financial inter - linkages among the emerging world would mutually reinforce these prospects. the increasing role of islamic finance in bringing together different parts of the emerging world, and enhancing its links with the developed world would facilitate further this globalisation process. the second aspect relates to the current increased global engagement by the international community to drive the financial reform agenda. as part of this process, it is important for this engagement to be extended to the prudential standard setting entities for islamic finance as islamic finance becomes a growing component of the international financial system. while there needs to be recognition of the prudential standards that have been issued by the islamic financial services board, there also needs to be awareness by the international community of the implications of the new standards that is being introduced on the islamic financial system. this is important given the common interest of global financial stability. let me conclude by saying that today β s launch of the islamic finance gateway by thomson reuters marks another important milestone in the international development of islamic finance. such a comprehensive information and trading portal for foreign and domestic participation in the islamic financial system will contribute towards its efficiency and effectiveness as a form of financial intermediation. on this note, i wish to congratulate thomson reuters on the occasion of the official global launch of this islamic finance gateway.
| 1 |
. we should examine carefully the impact of these proposals on two areas, namely trade finance and sme finance. this is of particular significance for emerging economies. β’ across much of emerging asia, where capital markets are relatively undeveloped, banks are a major source of funding for trade and smes. β’ trade and smes are major engines of growth in many emerging market economies. let me start with trade financing. β’ being short - term and self - liquidating in nature, trade financing is probably one of the safer forms of bank lending. β’ but the proposal to move bank exposures completely to the revised standardised approach could result in imposing significantly higher capital requirements for trade finance, more punitive than justifiable by its historical losses. bis central bankers β speeches β’ while the availability and cost of trade finance have so far held up well in the face of basel iii implementation, the latest set of proposals could have the effect of discouraging banks from trade financing. β’ this is not what we need at a time when trade is growing more slowly than income in many parts of the world. second, sme financing. β’ i would say we are broadly on the right track. β’ while sme loans tend to be riskier on a standalone basis, as a portfolio the risks are more diversified than loans to larger corporates. β’ the basel committee recognises this and the current capital framework provides for preferential capital treatment for exposures to smes for banks using internal models. β’ and the basel committee has further proposed applying a lower risk weight for banks β sme exposures compared to unrated corporate exposures under the revised standardised approach. this will help alleviate the cost of sme financing. conclusion let me summarise my main points. we have made good progress in bank regulation since the crisis. β’ implementation has been generally good but some areas need more work and some jurisdictions need to close the gaps. β’ overall, the reforms have helped to make banks safer and more resilient. as we finalise the basel iii capital reforms, we must ensure that banks are not only safe but also serve their purpose of supporting the economy. β’ we should be mindful of the effects of low profitability on banks β ability and willingness to lend. β’ we should be mindful not to increase significantly the overall level of capital requirements on banks even as we finetune the detailed capital rules. β’ and we should be mindful not to unduly penalise lending to important segments of
|
fout! onbekende naam voor documenteigenschap. practices that we have found and we hope that it will help other supervisors to implement these best practices and hence β via the leverage that membership has β it will have an effect on banks and insurance undertakings all around the world. secondly, this work is spearheaded by the bank of england, the ngfs focuses on climate - related stress testing, developing reference climate policy scenarios for central banks and supervisors and giving guidance for central banks and supervisors on how to integrate climate risk analyses into macroeconomic and financial stability surveillance, seizing the macro financial impact of these risks. as climate - related risks are nonlinear, will to a large extend manifest themselves in the future and can therefore not be based on historical data, we need to develop forward looking risk management techniques. the third piece focuses on data gaps and disclosures. wrapping up, in the run up to cop26, i really want to applaud the cop26 for making the very explicit connection with the financial sector, given the crucial importance of managing financial risks. i want to offer that the ngfs stands ready to do all we can to contribute. second, i want to point out the great importance of any financial institution which is not already doing so, to incorporate in the dna of their financial risk management, the physical and transition risks related to climate change, and even broader to environmental change, biodiversity change, sdg - related change. any financial institution should make sure it has this long - term view and incorporate it into risk management. coming back to the pandemic. people are dying because of the pandemic. the planet is perishing because of unwise policies from us, the people. there is a public health crisis, but there is also a planet health crisis. the planet also needs intensive care. this is the time to apply the lessons drawn from our past mistakes. this is the time to turn the page, this is the time to invest once and for all in a truly sustainable economy. in these dark days of the pandemic, we must create an avenue of hope, we must switch on the light. let that light be green.
| 0 |
of the imf β s surveillance work. in institutional terms this change in focus is highlighted by the creation of a new capital markets division in the fund, which prepares a regular global financial stability report. that document, which has attracted too little international attention so far, is a brave attempt by the fund β s staff, reinforced by new recruits from the financial markets under gerd hausler, late of dresdner bank, to focus attention on potential sources of financial instability in institutions and markets. that means, at times, drawing attention to weaknesses in the banking and insurance systems even of g7 countries, which has hitherto been difficult territory for the imf. yet it is important for it to do so, not wholly because of the potential benefit for g7 countries themselves, but also to show that developed countries are taking the medicine which they now impose on others. this is because the second major change at the imf has been the rapid expansion of its work on financial regulation. the fund is now committed to preparing financial sector assessments ( fsaps ) of member countries, and indeed of some non - members too, such as the significant offshore financial centres. these assessments review the effectiveness of regulatory structures, financial regulation and adherence to internationally accepted financial sector core standards and codes. what is the rationale for this activity, which is now consuming a significant proportion of the fund β s resources? the asian crisis demonstrated that poorly regulated financial systems, particularly banking systems, could themselves be a cause of crisis, even where the macro - economic position might look relatively stable. in the case of countries like indonesia, korea and thailand it became clear after the event that their banks were heavily exposed to currency risk through unhedged dollar borrowings. furthermore, that the regulators in those countries had paid little attention to this mismatch, and indeed little attention to credit quality. in many cases banks were far too close to the companies to which they lent. there had been a rapid expansion of connected lending and little policing of large exposures, so banks were highly vulnerable to individual corporate collapses. that, in turn, precipitated the crisis in the banking system which turned an economic adjustment into a full blown systemic collapse. certainly, it will take some time for this imf assessment programme to bear fruit and it will be crucial to turn initial assessments into effective long - term mitigation and implementation strategies. this will require both political commitment and, where appropriate, technical assistance. but there are signs
|
. this has been the subject of some entertaining exchanges between warren buffett and alan greenspan, in the last couple of weeks. to simplify grotesquely, warren buffett believes that credit derivatives have generated new risks for the financial system ; alan greenspan believes they are one reason why there has not been more financial instability during a period when markets have been highly volatile. this is a difficult debate in which to take sides. my own view is that neither proposition is rigorously proven at this stage. so my cautious recommendation as a regulator is that we need to know more about how these derivatives are used, and where credit risk has ended up as a result. in particular, we need to know whether regulatory arbitrage is one of the causes β whether risk is migrating to sectors with inadequate capital requirements for this type of risk. that is a subject on which many fsf members agree that our knowledge base is inadequate. so far the international regulatory community has not been successful in getting a grip on the extent of the possible systemic problem. it is a gap which needs to be filled quickly. similarly, i am not sure we know enough about the hedge fund market. i chaired a working group on highly - leveraged institutions for the financial stability forum, which reported a couple of years ago. our conclusion then was that there needed to be better risk management by hedge fund counterparties, better risk management by highly - leveraged institutions themselves, enhanced public disclosure by those institutions, and some other related changes. i am not one of those who believes that hedge funds are inherently dangerous beasts in the financial jungle. indeed in many cases hedge funds have been useful in being prepared to take positions, sometimes counter - cyclical positions, which have helped stabilise markets. but the sector has grown dramatically, and as the long - term capital management problem showed, if leverage is uncontrolled, even one fund alone can be a destabilising factor. so while i do not believe that the case for direct regulation of hedge funds is made out, i do think we need more transparency, particularly about the extent of their leverage, and the recommendations to that effect in my earlier report have not been effectively implemented as yet. it is encouraging that under its new chairman the sec are holding a series of roundtables on the subject in new york. lastly, in this very brief review, i would identify significant gaps in the consolidated supervision of some large and diversified financial groups. banking supervisors have learned from bitter experience
| 1 |
also resulted in some countries requiring significant amounts of debt to bail them out of the crisis. this environment has ameliorated somewhat, but continues to simmer in the eurozone, where greece, notably, has gone through some major difficulties. the affected countries in many cases have been the traditional donor and investor countries. the knock on effect of these changes is that many corporations have scaled back on their corporate expansion bis central bankers β speeches plans, donor countries and donor organizations have also put in place austerity measures resulting in less donor funding globally. chairperson, i am sure you would agree that against this background, it becomes imperative to ensure that the financial sector is sound and can withstand shocks, whether from within or external, as well as to have the capacity and capital to support local ventures including large corporate expansion programs. we have seen moves aimed at ensuring stability of the financial sector in places such as nigeria and ghana, where the capital requirements for banks were raised in recent times. in zambia we have also introduced new capital requirements for commercial banks that have to be in place by the end of this year. i am happy to inform you that the bank of zambia is working with each commercial bank to ensure that this requirement is met in order to strengthen the banking industry in zambia. ladies and gentlemen, the bank of zambia has also embarked on some key projects that shall have a lasting and beneficial bearing on the zambian economy, such as the rebasing of the zambian currency as well as the branchless banking initiative. the currency rebasing shall be implemented effective 1 january 2013, and is expected to bring efficiency in the zambian currency as a medium of exchange and store of value. as you may be aware, the bank is re - introducing coins which will encourage the use of mechanisms such as pay phones, vending machines, car parking meters and other related technologies. mr. chairperson, according to the finscope zambia survey conducted in 2009 only 33, 7 % of zambian adults have access to financial services, leaving 66, 3 % financially excluded. this is despite the growth in the number of banks and indeed branches in zambia. it is obvious that at the current growth rate of the penetration of banking services, if this is left to traditional banks alone, it may mean that the majority of zambians will be financially excluded for a long time to come. ladies and gentlemen, given the above challenge, it is quite appropriate to conclude that the mobile payments industry provides zambia with a unique opportunity to
|
bandid nijathaworn : how strong are thai banks to weather the turmoil? keynote address by dr bandid nijathaworn, deputy governor of the bank of thailand, at the fitch thailand β s 2008 annual conference, 10 september 2008. * * * thank you, chairman. first, let me thank fitch thailand for the invitation to address this year β s conference as a keynote speaker. our topic this morning is β how strong are thai banks to weather the turmoil? β my answer is short and simple : thai banks are strong enough to weather the current global turmoil. the sector is also well positioned to support the economy. this is the message i gave six weeks ago when we had a press briefing at the bank of thailand. although conditions in the global economy and financial markets have changed somewhat since then, it is the same message of resiliency and strength that i want to echo to you this morning. i agree with the two previous speakers that global financial market conditions and growth prospects have further weakened especially in the past two months. in financial markets, we continue to see falling share price indices and increased spreads in a large number of us dollar products, including high - quality us corporate bonds, money market spreads, and bank credit default swaps. doubts about additional losses by banks in major economies also persist and this has made it more difficult for banks to raise capital. as a result, funding costs for households and businesses in the major economies have risen as banks continue to tighten credit standards, which is not positive for growth. on account of this, global growth prospects seem to have further weakened, while the decline in oil price have helped ease concerns about global inflation. future direction of the oil price, however, is still very much uncertain. the global economy and conditions in the global financial markets, therefore, have become more challenging, and they are likely to have important implications for emerging markets through the usual trade and financial channels. this is, therefore, an important area that we need to pay close attention to in the next few months. under the current global setting, a decline in oil price will be positive for emerging markets like thailand, and as a group, the growth prospect of emerging markets should remain satisfactory given their abilities to support domestic demand. but questions remain about individual economies on how resilient they would be in the face of such shocks, including the banking sector. in the thai case, our assessment is that the thai banking sector is strong enough to weather the current turmoil
| 0 |
customer β s rights need to be safeguarded to ensure there is no misselling or deficiency in services. eighth, rrbs and well functioning cooperatives can be supported by banks to increase outreach. sponsor banks have a specific responsibility in this regard and need to take ownership for their sponsored rrbs. unlike other parts of the financial system, the rrbs with nearly 14500 branches are concentrated in the regions that are relatively backward and populous but where the incremental prospect for business and banking penetration is high. hr, technology and processes and leadership issues need to be addressed if rrbs are to fulfill what is expected from them. last but not the least, the role of the state governments in facilitating financial inclusion is critical. land settlement rights, computerization of land records, and providing economic and social infrastructure with pro - active agricultural extension machinery will greatly help in using financial inclusion for sustainable development. also leveraging the use of it by collaborative efforts between banks and state governments can prove to be a win win situation. thank you.
|
fluid and i expect that we will look ahead as we look back. it's my privilege to be heading the rbi at such an historic moment. first of all, i want to say that the rbi has earned an enviable reputation for competence, for its professionalism and its integrity. we will of course be having events to commemorate the anniversary. but what i do want to do is to use the jubilee as an occasion to have rbi understand that they must make a difference and i want the people of india to understand that the rbi does something that's important in their daily lives. i want our staff to understand that they can make a difference. cb : looking back on the reserve bank's first 75 years, are there any lessons from history that the institution could usefully apply in the current circumstances? ds : i'm afraid i'm not a student of history but 75 years is a long time and there are certainly lessons from our experience. the central bank has performed the role of being an effective counterpoint to government which often has to concentrate on short - term objectives. on its part, the reserve bank has been able to take a medium - term view and what is prudent and optimal comes out of this synthesis. we should continue to do that. rbi has had a culture of gradualism, moving forward decisively but only after weighing carefully the pros and cons. it's like the crossing a river by feeling the stones metaphor. moving forward we need to understand that monetary policy is going to be more difficult because of the increasing forces of globalisation. as i mentioned earlier, we need to acquire greater proficiency in that. cb : where do you believe your views differ from those of your predecessor, y. v. reddy? where are there similarities? ds : dr reddy is an eminent economist who has served the rbi with dignity and distinction. he's a difficult act to follow. we are similar in that our aims are to keep the economy on a high - growth path with price stability and increasingly, financial stability. however, the difference between him and me will be the specific circumstances that we encounter when we try to deal with that mandate. dr. reddy has had to deal with two episodes of inflation, one demand driven and the other supply driven. he has also had to deal with a flood of capital flows. i have had a baptism by fire, taking over at a time of crisis, where i've had to act quickly.
| 0.5 |
jeremy c stein : liquidity regulation and central banking speech by mr jeremy c stein, member of the board of governors of the federal reserve system, at the β finding the right balance β 2013 credit markets symposium, sponsored by the federal reserve bank of richmond, charlotte, north carolina, 19 april 2013. * * * i β d like to talk today about one important element of the international regulatory reform agenda β namely, liquidity regulation. 1 liquidity regulation is a relatively new, post - crisis addition to the financial stability toolkit. key elements include the liquidity coverage ratio ( lcr ), which was recently finalized by the basel committee on banking supervision, and the net stable funding ratio, which is still a work in progress. in what follows, i will focus on the lcr. the stated goal of the lcr is straightforward, even if some aspects of its design are less so. in the words of the basel committee, β the objective of the lcr is to promote the short - term resilience of the liquidity risk profile of banks. it does this by ensuring that banks have an adequate stock of unencumbered high - quality liquid assets ( hqla ) that can be converted easily and immediately in private markets into cash to meet their liquidity needs for a 30 calendar day liquidity stress scenario. β 2 in other words, each bank is required to model its total outflows over 30 days in a liquidity stress event and then to hold hqla sufficient to accommodate those outflows. this requirement is implemented with a ratio test, where modeled outflows go in the denominator and the stock of hqla goes in the numerator ; when the ratio equals or exceeds 100 percent, the requirement is satisfied. the basel committee issued the first version of the lcr in december 2010. in january of this year, the committee issued a revised final version of the lcr, following an endorsement by its governing body, the group of governors and heads of supervision ( ghos ). the revision expands the range of assets that can count as hqla and also adjusts some of the assumptions that govern the modeling of net outflows in a stress scenario. in addition, the committee agreed in january to a gradual phase - in of the lcr, so that it only becomes fully effective on an international basis in january 2019. on the domestic front, the federal reserve expects that the u. s. banking agencies will issue a proposal later this
|
jean - claude trichet : the current state of the eu banking sector speech by mr jean - claude trichet, president of the european central bank, at the annual congress of german savings banks, frankfurt, 5 may 2004. * * * ladies and gentlemen, it is both a pleasure and an honour to be invited to speak here today at the annual congress of german savings banks. being in front of such a distinguished audience of representatives of the financial community, i would like to present some views on the current state of play in the european banking sector. i will in particular analyse the factors that have contributed to its resilience over recent years. since 2000, eu banks have been confronted by an extraordinary combination of adverse financial market shocks against the backdrop of a slow - down in the economy. some commentators have even been surprised by the few banking problems in the euro area during this period, given that earlier episodes of slow growth often went hand in hand with severe problems in the sector. for central banks and banking supervisors, the resilience of the eu banking sector is, of course, very good news. at the same time, it raises a number of questions. what is now so different compared with the stressful periods that banks experienced in the past and what factors have contributed to this resilience? a turbulent period for eu banks but before addressing these issues, let me start by briefly recalling how challenging the environment has actually been for eu banks over recent years. without a doubt, the most momentous technical and strategic challenge was the introduction of the single currency, now more than five years ago. the very smooth transition that followed the adoption of the euro almost makes us forget the uncertainties, and sometimes even concerns, expressed before 1999 about the structural implications the euro might have on the euro area banking sector. the second challenge faced by banks in recent years was that not long after the banking sector had begun to adjust to operating with a new currency - including all of the efforts that this entailed - an exceptional series of adverse events followed in quick succession. after an almost uninterrupted stock market boom since 1995, a severe stock market correction set in in march 2000 and investors faced three consecutive years of negative returns. investor confidence was also badly shaken by unprecedented episodes of serious corporate malfeasance. although most of the main abuses took place abroad, europe also had its fair share. over time, we have observed that banks have increasingly diversified into securities trading, investment banking and asset
| 0 |
daniel mminele : forecasts, errors and what we can learn from them keynote address by mr daniel mminele, deputy governor of the south african reserve bank, at the reuters economist of the year award, johannesburg, 5 august 2011. * 1. * * introduction good morning ladies and gentlemen. thank you to thomson reuters for inviting me to address you this morning and to celebrate with you your achievements in economic forecasting. may i take this opportunity to extend my sincere congratulations to the winner of this prestigious award to be handed out this morning, and also to congratulate all of the nominees present here today. i was very tempted to start off my remarks this morning by telling a little joke about economists, but decided against it, as i have been warned that an economist is someone who did not have enough personality to become an accountant. i promise to keep my remarks this morning quite brief. 2. economic forecasting tested during the crisis thomas kida1 noted, β... the amount of knowledge we have in a certain area will not help us predict what will happen if the events are inherently unpredictable. β the recent global financial crisis and recession has proved to be a humbling experience for economists, financial market participants, policy makers, regulators and many others that derive their income from economic forecasting, understanding the world economy and that which governs it. the crisis was not foreseen by most forecasters, although there was a minority who had been warning of a pending disaster for some time. the failure to forecast the β great recession β caused the queen of england herself to ask why it had not been foreseen. the turmoil of recent years has prompted critics to maintain that many economic models, and particularly macroeconomic models based on rational expectations, have been proven to be fundamentally flawed. much of the criticism directed towards forecasting and macroeconomic analysts has probably been misplaced. it has never been so much about economic models being wrong, as it is about understanding that all models are limited β by definition β and that models that limit certain types of relationships will eventually fail when those relationships in the real world change. in other words, the right criticism is to say that economic models constructed in particular ways need to be used and understood in similarly particular ways. a model that does not include household balance sheets and what drives them will not tell you if you will have a household debt crisis. by the same token, a model that says that future wage inflation will be a perfect function of expected
|
##ity situation, continues to increase financial intermediation in the economy. allow me now to elaborate on these issues. the primary objective of the bank of albania is to maintain consumer price stability, which in quantitative terms is expressed as the annual increase in prices in the 2 β 4 % range and targeting the midpoint of 3 %. the bank of albania has successfully achieved this objective. different surveys show that economic agents report stable expectations for a low inflation. this consistent profile of our monetary policy has proved particularly useful in the last few years. we have had greater flexibility to implement a prudent easing monetary policy that promotes investment and consumption at home. over a several - month period, the bank of albania has made a number of decisions for cutting the key interest rate in the economy, the one - week interest rate on repurchase agreements, to its record low of 4. 25 %. it is a pleasure bis central bankers β speeches to note that the degree of pass - through to the economy is satisfactory and in accordance with the time lags in the monetary transmission mechanism. during this easing cycle, the annual increase in the inflation rate has remained under control and lek β s exchange rate has been stable. as a result, foreign direct investment and other portfolio flows have been stable, financing the major part of economic agents β current demand for foreign currency. macroeconomic stability is not an exclusive task of the central bank β s activity, but it reflects broadly the sharing of the same principle and harmonization of actions with fiscal policy. financial system β s stability, and the banking sector β s stability in particular, is the second main pillar of our activity. i can state that, in the recent years, we have devoted most of our capacities to meeting this objective. the challenges have been numerous considering that banking activity reflects not only the stability of the institution itself, but also the overall economic conditions. however, in close cooperation with the banking industry, we have succeeded in taking some measures that have enhanced the banking system β s resilience. as a result, despite the slower credit growth rate and lower credit quality, the banking sector continues to generate profit and remains well capitalized and liquid. in march, capital adequacy ratio stood at 15. 9 %, while liquid assets accounted for almost one - third of total sector β s assets. the banking sector has expanded its activity driven mainly by the performance of public deposits, which continue to grow at buoyant rates. we are, however
| 0 |
##eil and fabio panetta, have proposed a two - tier remuneration system. [ 15 ] the basic idea is to set a limit on the amount of cbdc that consumers can hold at a non - negative interest rate. beyond this limit, lower interest rates could apply, thereby encouraging consumers to use private bank deposits as a store of value instead. yet, while curbing the risk of large - scale disintermediation, such limitations also lower the attractiveness of cbdc. central banks thus face a [UNK] trade - off when designing cbdc. on the one hand, it has to be attractive enough for consumers so that they accept it and can reap its beneο¬ts. on the other hand, if cbdc were too attractive, it could disrupt the existing ο¬nancial system. recently, a high level taskforce of the eurosystem published a report that investigates various scenarios of introducing a digital euro. [ 16 ] and later, fabio panetta will present you his take on the future of the european payments market. i have mentioned some important issues regarding cbdc that still require further analysis. a thorough understanding of the effects and trade - offs of cbdc is imperative for us before we can weigh up the arguments and draw ο¬rm conclusions. therefore, the eurosystem has not yet decided whether to introduce a digital euro or not. and even if we were to opt for cbdc, its careful introduction would be an immense logistical and technical endeavour and, therefore, would be bound to take time. 3 other innovative payment solutions in any case, consumers should not have to forgo innovative, fast and cost - [UNK] payment methods. in a market economy, their needs and wants must take centre stage. importantly, offering new payment solutions to the public and interacting with customers should primarily be the task of the private sector. yet, individual needs and wants differ, and that β s why there is a broad product spectrum of solutions extending from traditional means of payment to digital innovations. [ 17 ] when considering the future of payments, consumers β preferences are key for identifying gaps in this spectrum and closing them. https : / / www. bundesbank. de / en / press / speeches / shaping - the - future - challenges - in - the - european - payments - market - 851850 5 / 9 01 / 12 / 2020 shaping the future β challenges in the european payments market | deutsche bundesbank the invention of the modern credit card back in 1950 illustrates
|
1888 ), looking backward, 2000 - 1887, ο¬rst published by ticknor and company. 2. mersch, y. ( 2020 ), an ecb digital currency β a ο¬ight of fancy?, speech at the consensus 2020 virtual conference, 11 may 2020. 3. cΕure, b. ( 2020 ), cbdcs mean evolution, not revolution, op - ed, 20 october 2020. 4. allen, s., s. capkun, i. eyal, g. fanti, b. a. ford, j. grimmelmann, a. juels, k. kostiainen, s. meiklejohn, a. miller, e. prasad, k. wust and f. zhang ( 2020 ), design choices for central bank digital currency : policy and technical considerations, national bureau of economic research working paper, no 27634 ; auer, r., g. cornelli and j. frost ( 2020 ), rise of the central bank digital currencies : drivers, approaches and technologies, bis working paper, no 880 ; kiff, j. et al. ( 2020 ), a survey of research on retail central bank digital currency, international monetary fund, working paper, no 20 / 104. 5. bordo, m. and a. levin ( 2017 ), central bank digital currency and the future of monetary policy, national bureau of economic research, working paper, no 23711. 6. barrdear, j. and m. kumhof ( 2016 ), the macroeconomics of central bank issued digital currencies, bank of england, staff working paper, no 605. 7. engert, w. and b. s. c. fung ( 2017 ), central bank digital currency : motivations and implications, bank of canada, staff discussion paper, no 2017 - 16. 8. keister, t. and d. sanches ( 2019 ), should central banks issue digital currency? federal reserve bank of philadelphia, working paper, no 19 - 26. 9. bank of canada, european central bank, bank of japan, sveriges riksbank, swiss national bank, bank of england, board of governors federal reserve system and bank for international settlements ( 2020 ), central bank digital currencies : foundational principles and core features, report no 1 in a series of collaborations from a group of central banks https : / / www. bun
| 1 |
the consequences of the forecast and associated policy being wrong. for both producers and users of forecasts, it is also worth looking back at forecast errors - not to berate the forecasters, but rather to see what we can learn from those errors about the way the economy works. evidence on accuracy it has long been understood that economic forecasts are not all that good. most elements of the round - up that i gave five years ago3 still seem apposite. first, forecasts are better than a coin toss - that is, an economic forecast can more often than not be expected to outperform a random process or some very simple extrapolative rule - though often not by all that much. this is not true, however, for some financial variables, where the economics profession β s forecasting embarrassment is greatest. there is some evidence that, in australia, forecasts improved in the past decade. the table shows that the average absolute error of one - year - ahead forecasts for both gdp growth and cpi inflation in the age survey from 1994 to 2003 declined to just over half what it had been in the preceding 10 years. of course, that period has been one of much reduced volatility in the economy, a fact that has been jonathan kearns provided invaluable assistance in preparation for this speech. because of data revisions, the unemployment rate for may 1999 is today recorded at 7. 0 per cent. but this was originally published as 7. 5 per cent. stevens ( 1999 ). noted before. 4 so maybe it was just easier to make forecasts in that period, and the real test will come when the economy enters rougher waters. a crude way of assessing this would be to see whether a comparison of the age forecasts with those from a naive forecast rule - that the future value is the same as the current one - revealed an improvement. the second column gives the forecast errors for such a naive rule. the theil statistic in the final column shows the ratio of the two errors. β good β forecasts have a value less than unity - that is, the forecasters add value in the sense of lowering forecast errors compared with the naive rule. while the age panel β s performance improves a lot in the past decade, so does that of the naive forecast rule. the theil statistic suggests that the forecasters were adding some value in both periods, but with no major changes between the two. so we shouldn β t get too
|
going on for some time. the nber recession dating committee, for example, did not declare the march 2001 peak in the us economy until november that year. norman ( 2001 ). might be wrong has some value. we just need to keep in mind that numerical forecasts are not much more than opinion formed ( hopefully ) within a coherent and disciplined framework. they are not guarantees of performance, and should always be accompanied by a discussion of risks. that discussion is likely to be at least as useful as the point estimates themselves. use of models versus judgement let me turn now to some questions to do with the formation of forecasts. one of the perennial ones is the respective roles of formal models and subjective judgement. it seems to me obvious that we need both. any judgemental forecast embodies some notion of how the economy works, unless the numbers really are drawn from a dart board. most forecasters make some effort to ensure their forecasts for different variables are consistent with each other, and tell some sort of story that can be related to presumed behaviour. that is to say, they have a model of sorts, even if a fairly informal one. econometric models are a more formal way of representing the relationships in the historical data. it is usually helpful occasionally to confront the notions in our heads with the data to see if there is any validation for our prejudices. that said, formal models come, or should come, with various usage warnings. to begin with, there seems to be some evidence that simple models often are more useful than more complex ones, perhaps because they are more robust and so less likely to come unstuck due to structural change, etc. because their workings are more transparent, users may also be able to spot problems more easily when they start to break down. simplicity, of course, has to be traded off against the general principle that the economy has many complex interactions, which simple models can miss. but, in general, complex is not always better, especially for short - term forecasting. 7 second, some modelling techniques which are thought to be best practice for describing history may not be optimal for forecasting purposes. a case in point is the use of cointegration models, where the deviation from an estimated long - run equilibrium level can be a powerful factor affecting short - run forecasts of changes, as the model wants to move the dependent variable towards the supposed long - run equilibrium. but if there has been a level shift in the equilibrium relationship
| 1 |
is to adopted soon ), a lot of work is being undertaken to address the problems that surfaced during the last three years in this field. i will limit myself to two comments that both evolve around the simple idea that co - ordination is crucial on these questions : Β· financial services are increasingly delivered on a global scale. the regulation and oversight of financial markets can no longer ignore the reality that measures taken by any country may have consequences outside that jurisdiction. hence the necessity for a reinforced dialogue between regulators, central banks and market participants as a means for managing regulatory spill - overs or frictions that otherwise could occur in highly interdependent and increasingly integrated financial markets, and more generally addressing global financial stability issues. let me recall that structures such as the financial stability forum already play a widely recognised role in fostering these exchanges and promoting co - ordination. such a dialogue is all the more necessary between the us and european authorities, as they represent the main financial centres. in that regard, the recent initiatives undertaken by the eu authorities are welcome. this dialogue should be the beginning of a sustained and deepening process of mutual understanding, co operation and, above all, commitment on transatlantic regulatory equivalence. Β· second, let me say a word concerning the current move towards a uniform body of accounting standards and the implementation of international accounting standards ( ias ) for listed companies. such a move is expected to bring about greater transparency and comparability in financial reporting. however, it is crucial that all the impact of such a major reform be carefully identified and analysed. in fact, as a central banker and a banking supervisor i have already expressed concerns on the potential impact of some of the proposed standards ( namely ias 32 and 39 ) on the balance sheets of credit institutions : the rationale for an extensive fair value approach needs to be pondered against the principle of prudence and the risk of introducing artificial volatility in banks β earnings and equity. these risks clearly show that the debate here is not only a technical one, and that standard setting bodies need to engage in a continuous dialogue with all interested parties, among them central banks and banking regulators. in this context, the recent decisions by the european commission to re - examine this question is welcomed. more generally, any project of reform has to be precisely studied in order to take duly into account financial stability concerns and to prevent risks of hidden and counterproductive effects. * * * ladies and gentlemen, i will have only one concluding remark. financial stability should
|
. 3 however, it appears that macroprudential tools, although necessary, are not completely sufficient to address the whole range of financial stability concerns. it is my view that central banks should take financial stability into account while setting the course of monetary policy. there is a need to overcome the strict separation principle between monetary and macroprudential policies, and adopt a coordination principle. what does this mean in practice? let me first dispel two misunderstandings and say what it is not about. it does not mean that financial stability may become a monetary policy objective in itself. the aim here would be to identify vulnerabilities that represent a threat to the price stability objective, either directly or indirectly by impairing the effective transmission of monetary policy in the medium - long term. also, it does not imply a systematic ( mechanical ) reaction to financial stability indicators, and it is very different from the β leaning against the wind β strategy. in addition, financial stability, unlike price stability, is not easily summarised by one statistic ( inflation in the case of price stability ), so we therefore need in any case to look at a range of indicators. what i suggest instead is a slight evolution of the ecb strategy, to achieve a more β integrated β framework. to formalise this approach, one option worth considering could be to renovate and extend the present second pillar into a β financial and monetary β pillar, alongside the economic one. more specifically, let me mention a few examples of variables that could be monitored under this new pillar : indebtedness of firms and households ; bank balance sheet information, which is useful for assessing the functioning of the bank lending channel ( including in a forward - looking way ) ; indicators of excess risk tolerance and excess credit, which provide information on the risktaking channel ; stock and house prices, which provide information on the asset price channel. this list could be of course modified and completed. in fact, we already monitor many of these variables. the point of having a structured pillar is to formalise this analysis β including on proportionality of our measures β and ensure we have no blind spots. such considerations would help us optimise the monetary policy toolkit and fine tune it with the numerous tools that central banks have now at their disposal. to some extent, we have already crossed that bridge in adapting existing instruments in order to take financial stability considerations into account. in the case of the eurosystem, two examples come to mind
| 0.5 |
different in the western balkans region or elsewhere. the best contribution central bis central bankers β speeches banks can make is to remain focused on their mandate, and to fulfil that mandate in the context of a sound institutional framework that ensures their independence. in the specific case of the euro area, something more than good policies was needed to overcome the exceptional crisis that was posing challenges to the very foundations of economic and monetary union ( emu ). the authorities have responded to the related challenges by significantly strengthening the institutional architecture of emu. in the field of banking, this has led to a decision on the establishment of a banking union. it will be centred around two main pillars, a single supervisory mechanism ( ssm ) and a single resolution mechanism ( srm ). it will contribute to the stability of the euro area financial system, help to overcome financial fragmentation and, therefore, also facilitate the conduct of monetary policy. now that political agreement has been reached, we are currently in the implementation phase. for the ecb, this means preparing for the operational start of the ssm in november 2014. to this end, we are currently undertaking a comprehensive assessment of euro area banks β balance sheets. this exercise will be instrumental in restoring confidence in the euro area β s financial system and will thereby support a revival of bank lending. it will thus also have implications for the western balkans. moreover, given the prominent role of euro area banks in the banking sector of this region, the establishment of the ssm will further intensify our institutional relations. for a substantial proportion of the foreign - owned banks operating in the western balkans, the ecb will become the home supervisor. in addition to enhancing financial stability in the euro area, and thus the home region of parent banks with subsidiaries in the western balkans, the ssm has the potential to facilitate home - host country cooperation in banking supervision. host supervisors in the region will have only one counterpart as home supervisor for a large part of their banking sector, instead of several, as is currently the case. in order to reap the benefits of this simplification, appropriate mechanisms for cooperation between the ssm and local authorities will need to be developed. let me conclude by saying that, as i have highlighted earlier, we not only have a number of policy challenges in common, but also share a common future. with the programme of technical cooperation that we are launching today, and for which we will be signing the first interim report adopted by its programme steering committee,
|
yves mersch : launching the ecb - coordinated technical cooperation with central banks of the western balkans introductory remarks by mr yves mersch, member of the executive board of the european central bank, at the press conference on the opening of cooperation programme in western balkans, tirana, 17 april 2014. * * * dear governors, your excellencies, ladies and gentlemen, it is a pleasure for me to be in tirana today to launch the ecb - coordinated technical cooperation programme with central banks of the western balkan region. let me first thank governor fullani for his warm hospitality. i am pleased that governor fullani, governor hamza and vice governor bajrami could all join me for this occasion today. this is the seventh ecb - coordinated programme for the benefit of central banks of eu candidate countries and potential candidates from the western balkans. i think this underscores the commitment of my central bank colleagues in the region to the process of european integration and to the further development of their institutions along the path towards european central banking standards. the current programme has again received funding from the european commission, through the instrument for pre - accession assistance. i would like to express my gratitude to the european commission, represented here by mr rumbold, for the continuous support of these activities. the programme is also a re - affirmation of the strong commitment of the ecb and the entire central banking community in the eu to their counterparts in the western balkan region. since 2007, the ecb, in partnership with the national central banks of the eurosystem and the european system of central banks ( escb ), has conducted one regional and five bilateral technical cooperation programmes. the programme that we are launching today will be implemented with the support of experts from 11 central banks in the eu, namely those of bulgaria, the czech republic, germany, france, italy, malta, the netherlands, austria, portugal, slovenia and slovakia. the number of partner national central banks in this programme is a clear indication that our institutions have not become inward - looking, despite the major challenges faced over the past few years. i would like to use this opportunity to thank the experts from all central banks for their dedication and commitment in taking on this additional assignment. the purpose of the programme is to prepare the central banks of the region for membership of the escb, once their respective countries join the eu. we are starting the programme here in tirana today. over the next six months, the experts from our side will conduct an
| 1 |
bank of uganda remarks by louis kasekende ( phd. ), deputy governor, bank of uganda β¦ β¦ β¦ β¦ β¦ β¦ β¦ β¦ β¦. at the networking dinner for saints, peter & paul katale catholic sub - parish, lweza parish theme : β the church, business and the economy β β¦ β¦ β¦ β¦ β¦ β¦ β¦ β¦ β¦. june 22, 2017 at hotel africana, kampala his eminence cardinal emmanuel wamala, all clergy present, all captains of industry and businesses present, ladies and gentlemen, good evening! i am greatly honored to be chosen as a key note speaker at such a gathering of men and women that have superintended many successful businesses and enterprises. i want to make a few remarks this evening on the topic of our attitudes towards doing business and how they affect our ability to take advantage of the opportunities within our economy. i know that many of you own or manage businesses ; so i hope that you will find something of interest in what i have to say. the theme of this dinner is β the church, business and the economy β. most of us here are christians and we take our faith seriously and try to live our lives in line with the teachings of the church. i thus would like to argue that, unlike what our history has taught us, it is possible to run a successful enterprise while living true to the teachings of our faiths. let us recall the periods when an economy has distortions such as high unemployment, high inflation, low growth rates, and episodes of scarcity of goods or services. in such circumstances like the recent global financial crisis, the first group to be blamed by the public are the business people and it is rare that the public will step back to evaluate the distortions in public policy as a plausible source of their predicament. may i also remind you that human behaviour has an element of greed, most times, where maximising profits irrespective of means and processes, tends to be the driving force for most businesses. combining the economic distortions and greed has often implied, rather unfortunately, that religion and business are in conflict. our history as a country is littered with many of these bad practises where business is synonymous with such tag labels as β bamulaze ekibuga β, β bamutomeza β ; and has been labelled as unworthy of people with values. yet this is far from the truth. business is a calling and religious beliefs can support rather
|
to ensure sustainability and survival beyond the life or tenure of the initial vision bearer. there is a paucity of enterprises in uganda that transcend generations. for example, do any of the giants of the past like sanyu tissue ; suleiman serwanga β s bus company or kizito block factory exist today? therefore, i would like to implore all of you to put ethics at the heart of your work ; establish credible governance structures and systems for your firms ; and treat all of your employees, customers and suppliers in the same way as you would hope to be treated yourself. this after all, is the teaching of books of mathew 7 : 12 and luke 6 : 31. having underscored the importance of ethics ; i need also to emphasize the need for our working lives, to be guided by the best professional practises of our chosen vocations. if we work in the business sector, business decisions must be guided by objective, commercial criteria if our businesses are to be successful. for those of us who have the privilege of managing a business or an institution, the best way we can contribute to our society is by ensuring that our business or institution is managed well, so that it is successful and serves the interests of our community and provides employment for the people of this country. i think that we have to accept the reality that many of the problems of the business sector in uganda can be traced to weaknesses in the way in which firms are managed. bringing our religious values to bear in our personal and professional lives coupled with adherence to commercial principles should be potent tools in addressing business failure. your eminence and distinguished guests ; we however live in a multi - faith and multi - ethnic society. successful businesses cannot afford to discriminate between people of different religious faiths in their dealings with customers, suppliers and employees. while the teachings of our faiths are essential guides for our inter - personal relations and values, we cannot allow sectarianism to influence the way in which we make business decisions. i will conclude with these words of wisdom from pope francis ; β business is a vocation, and a noble vocation, provided that those engaged in it see themselves challenged by a greater meaning in life ; this will enable them truly to serve the common good by striving to increase the goods of this world and to make them more accessible to all. β thank you for listening.
| 1 |
intensified. on their part, to promote integrity of the markets, fimmda and pdai need to establish a comprehensive code of conduct and best practices in securities transactions and also have a mechanism to enforce such codes. the rbi can play a supportive role here β. there has been a recent review ( december 2004 ) of the recommendations of the advisory groups constituted by the standing committee on international financial standards and codes published in january 2005 rbi bulletin. an extract from this β report on the progress and agenda ahead β is useful, though, as the disclaimer says, it is an assessment by the professional staff of the rbi and not necessarily the view of the reserve bank : β the proposal to accord legal status as an sro to fimmda has been examined in detail by rbi and was not found feasible at present. however, fimmda has established a code of conduct and undertaken related responsibilities appropriate to an industrial body. according self - regulatory status to pdai is a non - issue since all pdai members are also members of fimmda β. there are several concepts which are addressed in the reports cited, in particular, ` industry body β ; ` self regulatory organisation β and ` legal status as sro β. there is considerable merit in debating these concepts and their relevance to fimmda, keeping in view the way forward that is being contemplated in the conference today. self - regulation has a long history of working effectively. some of the earliest signs of self - regulation were evident in the utterance of the hippocratic oath by the medical professionals at the time of their graduation. almost a thousand years ago, maghribi traders had probably one of the first self - regulatory schemes based on market incentives for regulating their trade. the maghribi were jewish traders who lived in the abbasasid caliphate ( centered in baghdad ) until the first half of the tenth century, when they emigrated to north africa. they operated through business associates to handle some of their business dealings abroad. merchants could never be sure that agents actually handed over the entire proceeds of business done abroad on their behalf. courts were generally unable to verify agents β claims and actions or track down an agent who absconded with the merchant β s money. the maghribi traders solved the problem by organizing themselves into a coalition that served as a grapevine for information on honest and dishonest agents. any agents who treated a member unfairly could never hope to do business again with other members. in europe, in
|
the eleventh and twelfth centuries, as more and more rural folk moved to towns and cities, a new class of merchants emerged to meet the demands of the growing urban population. it was during this period that the basic concepts and institutions of modern western mercantile law ( lex mercatoria ) were formed. the self - regulation has evolved significantly since then and linkages with regulatory authorities, often on a sound legal basis, were established mainly in the financial sector. self - regulation generally imposes lower cost than official regulation whenever a shift is feasible. sros possess the flexibility to adapt to regulatory requirements of rapidly changing business environment. they provide an intimate knowledge of the markets and products. self - regulation, typically involving a unique combination of private interests with government or regulatory oversight over them, is an effective and efficient form of regulation for the complex, dynamic and ever - changing financial services industry. the role of selfregulation and, indeed, its very existence, differs from country to country, across market sectors and across the developed and emerging markets. in its most complete form, self - regulation encompasses the authority to create, amend, implement and enforce rules of conduct with respect to the entities subject to the sro β s jurisdiction, and to resolve disputes through arbitration or other means. the advantages of self - regulation are very clear, especially in terms of minimising the cost of regulation as well as cost of compliance of regulation in the financial sector, while improving the quality of regulation. however, there are a number of issues particularly in the financial sector which are often cited. for instance, there is a well - known observation about the β regulatory capture β, that is, the regulated entities, in the organised form, have a tendency to capture the regulator to protect their own interests. it is also argued that the sros protect the interests of the members if they are in conflict with interests of the system. in this regard, i find that the model for effective regulation, brought out in the report of the sro consultative committee of the international organization of securities commissions in may 2000, is useful. perhaps these issues will also be addressed in this conference as part of the way forward. let me again thank the organisers for giving me this opportunity and wish the conference all success.
| 1 |
economy. into this changed landscape ron kalifa published his independent fintech strategic review earlier this year. 4 the bank welcomes this report, which provides a timely opportunity for us to reflect on our role and how ron β s recommendations fit with our work to support safe innovation. so how do we see our role in the fintech landscape? at its most basic, i would say that private - sector innovation relies on public - sector foundations. alongside other uk authorities and international bodies, the bank is proud to provide the infrastructure on which private sector innovation can flourish β whether that is β hard infrastructure β, when the bank, or public sector, provides core parts of the system directly, as with our real - time gross settlements ( rtgs ) service ; or β soft infrastructure β, meaning the regulation, laws, rules, and standards set by the public sector on which private companies rely. the bank stands ready to provide the right type of infrastructure depending on the situation. sometimes the bank will need to be in the lead, sometimes it will work as part of a coalition of public organisations. https : / / www. bankofengland. co. uk / - / media / boe / files / speech / 2019 / embracing - fintech - speech - by - dave - ramsden. pdf https : / / www. bankofengland. co. uk / - / media / boe / files / report / 2019 / response - to - the - future - of - financereport. pdf? la = en & hash = 34d2fa7879cbf3a1296a0be8dcfa5976e6e26cf0 https : / / www. bankofengland. co. uk / speech / 2020 / dave - ramsden - speech - public - lecture - for - university - of - nottingham https : / / www. gov. uk / government / publications / the - kalifa - review - of - uk - fintech all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice sometimes we β ll work in collaboration with the private sector, and sometimes our role will be to act more as a β critical friend β. and sometimes, as with rtgs, that will mean timely upgrades to critical technology, while at other times it can mean working right at the cutting edge, as with our work on central bank digital cu
|
on how to respond at the time, once we have the facts as best as we can gather them. however, we still think there is more that can be done to think through how firms would go about gathering initial loss information, what information their boards are likely to need to see to inform their response, and some of the practical challenges which might arise for firms. capital and model drift given the challenging market conditions i have referred to earlier, and the uncertainties i have just discussed, it is all the more important that firms hold adequate and appropriate capital against the risks they face. as you will also be well aware, your and our work in the run up to january this year included significant work on internal models, and it would be unsurprising if there was not some collective sigh of relief within the industry after january given the work involved to get to that point. but we all know that running an internal model is not just a one - off task, and there is a need for firms to continue to refine the models in the light of experience and as new data becomes available. as regulators, we need to be alive to the risk that when firms select the areas where change is required, and as internal models are updated, there is not some inherent bias towards changes which reduce the firm β s capital requirement, at the expense of areas of the model which might be insufficient. we are publishing today our supervisory statement on changes to internal models, setting out our expectations in respect of firms applying for bis central bankers β speeches approval for a major change to their approved internal models or an extension of scope to an approved internal model ( e. g. to cover new business units or risks ). in may 2016, the pra consulted on its proposed approach to monitoring β model drift β for firms with an internal model, where model drift is defined as the risk that the capital level generated by an internal model moves gradually over time. even acting in good faith, business pressures may create the risk that model changes generating lower capital requirements are favoured over time, and therefore that solvency standards might deteriorate. the pra β s proposed approach includes monitoring the internal model scr against a number of objective measures such as premium levels, technical provisions, mcr and the standard formula scr. none are perfect but all are independent of the internal model, and therefore can help provide us with a different view on the evolution of risk exposures and a safeguard against model drift. all risk measures have their
| 0.5 |
responding to leaps in payments : from unbundling to stablecoins christina segal - knowles1 executive director financial market infrastructure directorate westminster business forum thursday 22 january 2020 i would like to thank holly snaith, michaela costello, rachel james and josh sadler for their assistance with preparing this speech. all speeches are available online at www. bankofengland. co. uk / news / speeches good morning. i would like to thank the westminster business forum for inviting me to speak at today β s seminar on β payments policy and regulation - infrastructure, innovation and end - user priorities β. i β d like to start today by telling two short ( and seemingly unrelated ) stories. the first is the story of perhaps the first giant leap forward in payments β the introduction of paper money. paper money was invented in china as early as the tenth century. merchants seeking to avoid carrying around heavy iron coins began issuing ious written on mulberry bark. the state eventually took over β outlawing private ious and banning counterfeit β and the first state - backed currency was born. when marco polo arrived in the mid thirteenth century, he was so amazed by this invention that he devoted an entire chapter of the marvels of the world to kublai khan β s tree bark money. but, the first big leap forward in payments ultimately ended in a leap backwards. by the mid - fifteenth century, china had eliminated paper money entirely. the state had issued too much money and counterfeit was rife. ultimately, mismanagement of the new invention resulted in what was perhaps the world β s first hyperinflation. china didn β t adopt paper money again for several hundred years. although paper money eventually made a comeback, it took generations. the second story i would like to tell is a bit more mundane : the story of my breakfast. on the way to this conference, i stopped to get a coffee and paid for it by tapping my phone against an ipad. of the other people in line in the busy coffee shop, not a single one paid in cash β everyone was tapping cards or phones. the story of my breakfast won β t be a surprise to most of you β indeed card payments have become the norm in many parts of the uk. the proportion of uk payments made with cash has fallen from 60 % in 2008 to 28 % just ten years later. this of course has implications for financial inclusion, which i won β t cover today as i don β t have time to
|
pursuit of price stability was appropriate ; this flexibility was usually incorporated explicitly into central bank mandates in one way or another. 6. asset markets were thought to be efficient at distributing and pricing risk and financial innovations were normally welfare enhancing. while asset prices might be subject to bouts of β exuberance β on the part of investors, there was little that monetary policy could do about them. the best monetary policy could was to limit the fallout when sentiment turned. 7. systemic financial crises were seen only in history books and emerging markets ; they were unlikely to happen in advanced economies with their developed and wellregulated financial markets. moreover, price stability and financial stability were natural bedfellows, the successful achievement of one facilitating the attainment of the other. of course, agreement with each and every element of this consensus was not universal. the european central bank, for instance, continued to place great value on the usefulness of a monetary pillar. and, as discussed below, there were some who believed that central banks should also use their constrained discretion to lean against incipient asset - price bubbles and credit growth. but the set of beliefs above were, we believe, held sufficiently widely in policymaking and academic circles to be described as a consensus. in the rest of this paper, we re - visit some aspects of this consensus in the light of the crisis. it is not possible to cover all the elements of the consensus, though we shall offer some more wide - ranging observations at the end. in particular, we focus on : whether the experience with unorthodox policies during the crisis has changed our view of the appropriate policy instruments in normal times ; whether the target rate of inflation should be increased or a shift to price - level targeting is warranted ; and what the experience of the crisis has taught us about how monetary policy should respond to credit / asset - price booms. 1 as a precursor to some of these themes already figured in the contributions to the conference held here eleven years ago. that discussion, however, we ask whether monetary policy decisions contributed materially to the crisis. 2. monetary policy and the crisis it is worth stressing at the outset that a multitude of factors, both microeconomic and macroeconomic, played into the crisis. a non - exhaustive list of microeconomic factors includes : the incentive to shift loans off banks β balance sheets to avoid capital requirements ; the reduced incentive for care in the origination of loans, when those loans are then securitised ;
| 0.5 |
changeover with the end of the changeover period on 28 february 2002 the euro became the sole legal tender in all euro area countries with effect from 1 march 2002. both in terms of acceptance by consumers and the achievement of logistical targets, the introduction of the euro banknotes and coins has surpassed all expectations. here and there some minor mishaps have occurred, but this is quite normal for such a huge and complex undertaking. in any case, with the support of european citizens, who have accepted their new money both rapidly and enthusiastically, these minor difficulties have been overcome. european citizens have clearly chosen to be actors and not merely spectators in the euro changeover. according to the latest eurobarometer of the european commission, over 80 % of euro area citizens see the euro changeover as having been successful, and almost 70 % declare themselves happy that the euro has become their new currency. but what were the logistical factors which contributed to the success of the euro cash changeover? first, measures were taken to ensure an early return of national banknotes and coins. one example which i would mention in this context are the campaigns which aimed at encouraging people to pay any surplus banknotes and coins into their bank accounts well before the end of 2001. overall, the number of legacy currency banknotes in circulation fell by almost one - third during the course of 2001. by the end of the cash changeover period, some eur 38 billion β or a little over 10 % of the original amount of legacy currency banknotes β was still in circulation. second, the pre - distribution or " frontloading " of the " critical mass " of euro banknotes and coins made a crucial contribution to ensuring a smooth changeover in all euro area countries. a four - month lead time was required in order to ensure that sufficient euro banknotes and coins were available within banks and other target groups on 1 january 2002. this pre - distribution was a key factor in the successful attainment of one of the primary goals of the changeover process, namely to ensure that the bulk of cash transactions in euro could be effected within a fortnight of the new currency's introduction. all in all, more than 6 billion euro banknotes were distributed by the central banks of the euro area prior to " β¬ - day ". nearly 38 billion euro coins were frontloaded in parallel. to put these figures into perspective, four - fifths of euro banknotes and almost all euro coins were frontloaded during this period. third,
|
are a drag on banks β profits and they keep the banks from lending to the economy. the issue needs to be resolved, but it cannot be resolved overnight. getting rid of npls takes time and effort. in march we published guidance for banks on how to deal with npls, and our supervisors are monitoring closely the strategies banks devise and the progress they make. still, resolving npls as quickly as possible requires the right structures. and here, governments could help by improving the legal and judicial systems. the price of npls depends largely on whether these systems are effective and efficient. the fourth item on my list is risk management. and in a broad sense that also covers internal models. after all, banks use these models to calculate risk weights for their assets, which then serve as the starting point for determining the right amount of capital. i think that risk sensitivity should be central to calculating capital requirements. but i also see that internal models have become very complex. and that makes them prone to error or even manipulation. 1 / 2 bis central bankers'speeches against that backdrop, we have launched a major project ; the targeted review of internal models, or trim, as we call it. with trim, we want to achieve two things. first, we want to harmonise the supervisory treatment of internal models and ensure a level playing field. second, we want to ensure that the results of internal models are conservative and driven by actual risks, and not by modelling choices. this will strengthen trust in the banks β calculation of risk and, ultimately, in the adequacy of capital buffers. thank you for your attention. 2 / 2 bis central bankers'speeches
| 0.5 |
supply side that constrain the sme β s access to finance and other banking products and services. on the demand side, these issues can be tackled through a more systematic documentation and disclosure of information by smes and better business planning. on the supply side, bankers β reluctance to lend to smes can be addressed through innovative credit assessment tools and techniques like credit scoring and better capacity building efforts for the financial service providers. among various stakeholders that have to play their role for sme development, i think, state bank of pakistan and commercial banks both need to play a proactive role in improving access to finance for smes. as far as sbp is concerned, it has taken a number of important initiatives for improving access to credit for sme sector. these measures include a provision of specialized prudential regulations ( prs ) for smes, refinance schemes for smes, credit guarantee scheme for small and rural enterprises and cluster development surveys. further, sbp has been assisting banks through a holistic ifc technical assistance and capacity building initiative encompassing areas of strategy formulation, product bis central bankers β speeches development, risk management and hr development etc. for sme lending. presently, bank alfalah ltd. is being supported for capacity building to boost sme banking, while many other mid - tier banks are being considered for similar ifc technical assistance. ifc is in direct dialogue with a number of banks. we hope that this project will revitalize sme lending by participating financial institutions and will be a prototype for other financial institutions which could see financing to smes as profitable business ventures. aside from the boost sme provides to employment and overall growth to the economy, it also provides diversification to a bank β s balance sheet and in turn a stable revenue stream to support long term shareholder value. given the huge potential for this sector, i encourage all the commercial banks to review their sme strategies and assume a greater role in sme lending. ultimately it has to be the private sector which has to take the lead role in lending to the sme sector given their critical positioning and greater capacity in terms of their outreach and availability of funds. as i earlier mentioned, the actual statistics for lending to smes have not been encouraging in recent years. banks β credit to smes has declined over the last 4 years from rs 437 billion in 2007 to rs 248 billion in june, 2012. although, this decline can be partly attributed to adverse economic conditions during the period and
|
kazi abdul muktadir : financial inclusion, consumer awareness and protection keynote address by mr kazi abdul muktadir, deputy governor of the state bank of pakistan, at 4th the conference on financial services and consumers, karachi, 31 january 2013. * * * mr. kaukab iqbal, chairman, consumers association of pakistan, distinguished speakers, ladies and gentlemen β assalam o allaikum wa rahmatullah! first of all, i would like to thank the consumers association of pakistan ( cpa ) for inviting me to address this forum on the increasingly important issue of financial inclusion and consumer awareness and protection. i congratulate the organizers for holding this pertinent event which has gained special prominence in the aftermath of global financial crisis. i sincerely hope that the today β s proceedings would give further impetus to our efforts in promoting an inclusive and responsible financial sector in the country, thereby enhancing the financial sector β s stability and viability in the long - run. ladies and gentlemen! the importance of financial services in the development of any economy cannot be overemphasized as it promotes entrepreneurship, generates employment, fosters innovation, reduces poverty levels and enhances social equality. therefore, sbp, as part of its financial sector development strategy is actively promoting financial inclusion. financial inclusion refers to the process of promoting affordable, timely and adequate access to a wide range of regulated financial products and services and broadening their use by all segments of society through the implementation of tailored and innovative approaches including financial awareness and education with a view to promote financial well - being as well as economic and social inclusion. to add further emphasis and urgency to the issue of financial inclusion, i would like to share that financial sector in pakistan remains restricted in its outreach as the majority of population remains either excluded or informally served. this limited access is reflected in the total number of bank accounts, presently around 32 million, and the total number of borrowers, which is only 5. 7 million. this high level of financial exclusion is largely attributed to two major factors. firstly, on the supply side, there is lack of appropriate product offering by financial service providers primarily influenced by their typical hesitance towards the informal and low income segments of the population and lack of geographic presence. secondly, on the demand side, there is lack of public awareness about availability of financial services and products. sbp is cognizant of high financial exclusion in the country and is fully committed to tackling the associated challenges
| 0.5 |
s capital is amortised. bis central bankers β speeches the path pursued by the sector as a whole β to contain financial and operating expenses while combining diversification with the harnessing of competitive advantages and moderating dividend pay - outs and remuneration β is an appropriate one for adjusting to the new competitive, regulatory and supervisory environment within the framework of the ssm. turning to what are essentially institutional matters, several challenges remain. i would like to indicate three of these. first, to conclude the reform of the spanish banking sector, it is necessary to complete the adaptation of savings banks to the new arrangements stipulated in law 26 / 2013 of 27 december 2013 on savings banks and bank foundations. this law is a fundamental step for ensuring that all credit institutions are managed independently and professionally so that the governance problems which contributed to destabilising part of our financial system are diffused once and for all. in practical terms, this year should see the completion of the transformation of virtually all of the savings banks β those still existing as such β into ordinary foundations or bank foundations. for this purpose, and as it is legally conferred to do, the banco de espana is drafting a circular. this circular will regulate the core aspects of the functioning of bank foundations in order to safeguard the healthy and prudent exercise of the dividend and voting rights corresponding to them as the shareholders of credit institutions, thereby ensuring the professional management of such credit institutions. the circular will specify aspects such as : ( i ) the content of the protocol governing bank foundations β management of their ownership interest in the credit institution ; ( ii ) the financial plan, which will envisage how they must meet the possible capital needs of the institution in which they have an ownership interest ; and ( iii ) the requirements which the reserve fund must fulfil as regards its funding, target volume and possible uses ; all the foregoing in cases where, given the percentage of ownership they hold in the credit institutions, these requirements must be met. similarly, the circular will determine the circumstances in which bank foundations will be compelled to diversify their investments and, if appropriate, to relinquish control of the credit institutions which they own through the corresponding divestment. i trust that the period for public consultation of the circular will open shortly. second, the new european framework of resolution is already prompting, in most national jurisdictions, reflection on the institutional architecture of bank resolution. in the past, resolution agreements have required close collaboration between the various authorities
|
. according to preliminary data of the serbian statistical office, gdp growth in the first quarter this year equalled 2. 3 % y - o - y. excluding the seasonal effect, quarterly gdp growth equalled 0. 9 %, meaning that economic activity has upheld the upward trajectory for 18 consecutive months. though growth in external demand slowed down as of mid - 2018, according to our estimate, the achieved gdp growth is attributable to domestic factors. a key contribution to growth came from fixed investments, which posted an s - a growth of 7. 4 % in the first quarter β namely, private investment by 8. 0 %, and government by 4. 7 %. serbia β s economy has become more attractive to investors mainly owing to the improved business climate and favourable financial conditions, while the implementation of infrastructure projects has also accelerated. in regard to this, we should note the increased profitability of the economy, which ended the previous year with a net profit of rsd 500 bn. this is an important source of investment and indicates that investment in our economy pays off. our growth forecast for this year has been retained at 3. 5 %, and we expect it to pick up to around 4 % in the coming years, with growth resting on firm grounds, primarily owing to the preserved macroeconomic stability. chart 7 contributions to y - o - y gdp grow th rate β expenditure side ( in pp ) chart 8 fixed investment ( s - a, in pp. ) - 3 - 2 - 6 - 4 - 9 - 6 - 12 2009 2011 2011 2012 2013 2014 2015 2016 2017 2018 net exports government consumption and investment private sector investment household consumption gdp ( in % ) sources : sors and nbs calculation. * nbs estimate for q1 2019. Ρ1 - 8 - 10 2019 * government investment private investment fixed investment ( in % ) sources : sors and nbs calculation * nbs estimate for q1 2019. growth sustainability is also confirmed by the greater integration of our economy in the global economic flows β both trade and capital, since fdi inflows are on the rise. although affected by the slack in external demand and steel quotas, the export of goods recorded a 7. 9 % y - o - y increase in q1 2019, owing to the expansion of supply on account of earlier investments and accelerated sale of the surplus of agricultural commodities carried over from 2018. on the other hand, the expansion of output and investment boosted the import of equipment and intermediate
| 0 |
quality of service delivery of financial services, increase access to financial services by developing a rural finance policy and strategy and lastly delivering effective financial education. notwithstanding the work done through the fsdp, the financial sector in zambia still faces a number of major challenges. access to financial services among the adult population is at 37. 3 %, the cost of accessing financial services is still high, the quality of financial service bis central bankers β speeches delivery can do with some improvement and financial literacy remains low and presents an important factor in explaining the low level of financial inclusion that we see in the country today. the fsdp, honourable ministers, therefore, remains work in progress. i would like, however, to mention some milestones which have been achieved under this programme in order to underscore its potential as a tool for transforming for the better, zambia β s financial sector landscape. under the fsdp, we have witnessed the establishment of the credit reference bureau which is beginning to play an increasingly important role in helping financial institutions better manage credit risk, which in turn, should feed into less expensive credit. a draft rural finance policy and strategy aimed at improving finance to rural areas has also been completed and awaits implementation. another important exercise accomplished has been the law review exercise which has reviewed all existing legislation in the financial sector with the view to modernise, harmonise them and ensure that the different legislations speak to each other rather conflict each other. consequently, we will be submitting to government amendments to various laws, including those in banking, insurance and the capital market. another significant accomplishment under the fsdp has been work done so far in formulating a national strategy for financial education. this initiative grew out of the recognition of the fact that financial institutions and certain ngos that were engaged in promoting various financial education activities and programme were operating in isolation. what was clearly missing was a coherent and well - co - ordinated strategy among these organisations for delivering an effective education to enhance financial literacy and inclusion. consequently the fsdp identified the need to develop a coordinated approach to financial education as a meaningful way of bringing progress to this process. it therefore, started its intervention by commissioning a stock taking study of financial education efforts taking place in zambia in order to establish its true status. dfid provided financial support in the form of technical assistance which enabled the fsdp to recruit finmark trust to carry out the study. subsequently, a report was produced and presented to various stakeholders in november last
|
standardised securitisation you are discussing are tangible examples of how eu legislation can broaden financing opportunities for eu companies, foster cross - border investment and ultimately have a positive impact on the eu investment outlook. at national level, reforms to improve business framework conditions and reduce regulatory and administrative bottlenecks also need to be further pursued. it is the whole institutional framework that helps to transform financial resources into productive investments, which, in turn, increase productivity and, ultimately, create jobs. inefficient public procurement, taxation systems, judicial systems and insolvency frameworks, identified in some countries, need to be fully addressed. country - specific recommendations can be a powerful tool to identify and address barriers to investment in individual countries. moreover, those countries where public finances allow, should undertake public investment in areas conducive to growth. regarding other countries, let me mention that long - term investment benefits from stability - oriented macroeconomic policies. finally, investors need certainty regarding the economic and institutional environment in which they will operate. this is also one of the reasons why, almost one year ago, the five presidents β report set out a plan for strengthening europe β s economic and monetary union ( emu ). conclusions allow me to conclude. looking ahead, we expect the economic recovery to proceed at a moderate but steady pace. nevertheless, for this recovery to be consolidated, our efforts should now concentrate on strong policy action to improve the business environment, favour investment and raise productivity. delivering on these objectives will not only create the conditions for inflation to accelerate its return to levels below, but close to, 2 %. it will also make a major contribution to improving the standard of living of the people of europe. citizens and markets need to be sure about our capacity to take on the common challenges we face. our focus should be on making our common home, europe, stronger. thank you for your attention. i am now at your disposal for questions. bis central bankers β speeches
| 0 |
##s that may embed opaque, concentrated climate - related risks. sudden realizations of climate - related risks could cause rapid shifts in investor sentiment and shocks to asset prices, including to real estate prices in specific geographic locations. 15 federal, state, and local authorities are implementing policies to support transparency in climate - related risk associated with real estate to allow property owners, lenders, and investors to make better - informed investment decisions. updated flood maps, coastal resilience programs, and managed retreat from flood - prone areas can see, for example, christopher flavelle ( 2019 ), β as wildfires get worse, insurers pull back from riskiest areas, β new york times, august 20 ; and matt sheehan ( 2020 ), β renre could pull back in florida if rates stay low, says ceo, β reinsurance news, february 7. the federal housing finance authority recently issued a request for input on natural disaster risk to the housing finance system ; see federal housing finance agency ( 2021 ), β fhfa issues rfi on climate and natural disaster risk management at the regulated entities, β news release, january 19, https : / / www. fhfa. gov / media / publicaffairs / pages / fhfa - issues - rfi - on - climate - and - natural - disasterrisk - management - at - the - regulated - entities. aspx. - 8reduce the extent of hidden climate risks. while such transparency is vital, financial system vulnerabilities could arise even in transparent markets β for example, through aggregate common exposures to climate risk. finally, climate - related physical risks are increasing financial burdens on local, state, and federal finances. increasing physical damage to localities necessitates higher expenditures to repair damage from extreme weather and fire events and to build resilience to growing climate threats. pullbacks in insurance coverage, the need to relocate or bolster infrastructure, and increased provision of service in the wake of disasters increase burdens on state, local, and federal finances. these rising burdens could place strains on municipal financing markets over time, particularly in areas of geographically concentrated climate risks, and create some risk of a cascade effect if a shock causes investors to pull back from similar exposures. new approaches and new tools we are building the requisite institutional capacity and knowledge to deepen our understanding of these risks and vulnerabilities. the new fscc is a systemwide committee
|
5. 7 percent, from 6 percent in november and a peak of 6. 6 percent in september. over the past three months, core cpi inflation has run at an annualized rate of 3. 1 percent, a noticeable drop from earlier in 2022. another encouraging sign is that higher inflation was less concentrated - the share of categories of different goods and services with inflation over 3 percent has declined in the past several months, from almost three fourths in early 2022 to less than one half in december. that's good news because it indicates that broader inflationary pressure across the economy is easing. now, here's why i am cautious about these latest results and why i am not ready yet to substantially alter my outlook for inflation. month - over - month core cpi inflation actually ticked up in december from november and is pretty much where it was in october and where it was in march when we began raising interest rates. although inflation measured over 12 months has been falling, december's reading is still close to where it was a year ago. core inflation was 6 percent year over year ( yoy ) in january 2022 and was 5. 7 percent yoy last month. thus, it basically moved sideways all year. so, while it is possible to take a month or three months of data and paint a rosy picture, i caution against doing so. the shorter the trend, the larger the grain of salt when swallowing a story about the future. back in 2021, we saw three consecutive months of relatively low readings of core inflation before it jumped back up. we do not want to be head - faked. i will be looking for the recent improvement in headline and core inflation to continue. wages, as i indicated earlier, are another stream of data that i will be watching for evidence of continued progress to help ease overall inflation. though recent hourly earnings data are a positive development, i need to see more evidence of wage moderation to sustainable levels. the federal reserve bank of atlanta's wage growth tracker has been running higher lately and has moderated less. the employment cost index for december won't be out until the end of this month. over time, we need to see wages grow more in line with productivity growth plus 2 percentage points, consistent with the fomc's inflation target. those are reasons that i am cautious about the recent good news, but it is good news. we have made progress. six months ago, when inflation was escalating and
| 0.5 |
consumption and strong investment in the economy. cumulative data for the first 4 months, showed an average growth in new lending by banks of above 60 percent over the last 5 years. in fact, this masks much higher 3 - digit growth rates in both consumption and investment related lending especially to the wholesale & retail, private individuals, real estate and building and construction sectors. aggregate demand in fiji, as noted in the recent trends in the various partial indicators for consumption and investment, remain positive. on the consumption side, vehicle registrations continued to exhibit strength through the march quarter. improved incomes from low taxes, government financial support and remittance inflows from fijians abroad continue to boost consumer spending. prospects for consumption growth also remain encouraging. the latest rbf retail sales survey showed positive sentiments by retailers for higher sales expected in 2016. this is supported by the number of newly registered members with the fiji national provident fund and the number of job advertisements which have continued to grow. in terms of investment and in line with the strong construction activity expected this year, domestic cement sales are recording double digit growth. investment imports are forecast to bis central bankers β speeches pick up as the domestic economy strengthens and the reconstruction efforts post - cyclones continue. the timely implementation of both public and private sector projects is critical to raising our investment levels and strengthening the platform for further growth. foreign direct investment totaled just over $ 700 million in 2015 and is anticipated to rise further this year. in the first four months to april new project registrations with investment fiji from abroad have risen 194 percent in value terms, the bulk being in the tourism and services sectors. in regard to investment, i must admit that in the past fiji had been hit with concerns on the ease of doing business here. a lot of this was to do with excess red tape and the multiple approvals required from multiple authorities, which inevitably took time. while we haven β t qute got there yet, it is pleasing to note the recent efforts by government and the relevant authorities to address the issues and turn this around. ladies and gentlemen, the strength and soundness of our financial institutions and markets is an important ingredient for growth in the economy. as such, our reserve bank policies continue to aim at further developing the financial sector to ensure the effective intermediation of funds towards growing priority sectors while maintaining financial stability. the latest quarterly assessment by the reserve bank showed the overall condition of banks trading in fiji remains satisfactory as capital and liquidity positions along with earnings and
|
and climate change which, apart from damaging infrastructure and basic utilities and eroding years of development in a few hours, can significantly affect domestic production, exports and our services and tourism sector. nevertheless, a notable upside risk to our growth outlook is the still relatively low international fuel prices which have resulted in windfall gains for fiji through lower import costs and lower total gross trade as share of gdp = 80 % ( average for 2012 β 14 ) bis central bankers β speeches inflation. this is particularly pertinent when you consider mineral fuels make up almost 30 percent of our total imports bill. recent developments in the fiji economy ladies and gentlemen, despite the sizeable devastation from the category 5 tropical cyclone ( tc ) winston packing winds in excess of 300 kmph in february and the floods associated with tc zena in april, i am pleased to say that the fiji economy is still poised to grow this year, by 2. 4 percent, our seventh straight year of growth ( something which we have not enjoyed since the early 1970 β s ). this growth reflects robust activity in our tourism - related industries, including the transport, wholesale, retail, accommodation & food services industries, which were relatively unscathed by tc winston. moreover, this growth also assumes a strong expansion in the construction sector due to post cyclone reconstruction activity, which will also boost retail activity. however, on the downside, a significant decline is expected in agricultural output this year, particularly for sugar, which had earlier also been impacted by el - nino drought conditions. furthermore, the extreme devastation to many household dwellings and livelihoods especially in the maritime areas, damage to schools and health facilities, water supply and power supply disruptions which to date have not been fully restored, have exacerbated the situation. nevertheless, ladies and gentlemen, the quick response and immediate and tremendous assistance by our development partners β including australia and new zealand, the business community and family members and friends of fiji both locally and abroad, are making a tremendous difference in helping our people get back on their feet through inflows of grantsin - aid and kind. government efforts were nothing short of swift in facilitating access to the worst affected areas and also in implementing measures to assist financially stricken businesses and households. some of these initiatives include the β help for homes β and β adopt a school β campaigns. we know that the many military and civilian personnel from your countries who came in immediately after tc winston played a huge role in turning the lives of many of our people around
| 1 |
encik abdul rasheed ghaffour : sustainable development of affordable housing keynote address by mr encik abdul rasheed ghaffour, deputy governor of the central bank of malaysia ( bank negara malaysia ), at the dialogue on β sustainable development of affordable housing β, kuala lumpur, 4 july 2017. * * * i am sure many of us here can still remember when we set out to buy our first house, which may be between 20 to 30 years ago. back then, a typical terrace house or a 3 - bedroom apartment came at a price tag of between rm200, 000 to rm300, 000. the monthly repayment would be around rm1, 200 to rm1, 600. it was a big commitment. but it was manageable ; it made financial sense, and it was affordable. that was many years ago. those who are starting out today face much higher barriers to buying a house. the numbers speak for themselves. lets take a widely used measure β the median multiple, for example. under this measure, a house is considered affordable if the median house price is less than three times the median annual household income. for malaysia, this ratio has consistently been above four since more than 10 years ago. in our major cities, the ratio can be as high as ten. even if we look at other measures, the broad conclusion remains : housing in malaysia is becoming less affordable. this dialogue on β sustainable development of affordable housing β is therefore very timely. confucius once famously said that the strength of a nation derives from the integrity of the home. this underscores an important truth. housing is not just about putting a roof over our heads, nor is it only a personal or financial issue. assuring housing stability helps ensure that households can meet other basic needs and establish roots that build stronger communities. the challenges facing affordable housing are also complex and call for multiple stakeholders to work together to find solutions that will deliver desirable outcomes over the long term. it therefore has much broader socio - economic dimensions that concerns all of us. it is firstly crucial to frame the issue of affordable housing correctly. fundamentally, the issue is one of a large and growing mismatch between demand and supply, owing to significant changes in our housing markets and demographic shifts. prior to 2012, investor purchases of multiple homes increased very sharply, crowding out first - time homebuyers and pushing up prices of homes across the board in preferred locations. at its peak,
|
strong house price inflation as we can see from the chart, inflation - adjusted house prices have fluctuated over the past 150 years. house prices reached a preliminary peak in 1899, the year before the housing market crash in kristiania ( the name of oslo at the time ), falling thereafter, especially during and after the two world wars. if you had bought a home just before the kristiania crash, it would have taken more than 80 years for you to recoup your investment. and after the fall in house prices at the end of the 1980s, 12 years passed before prices returned to 1987 levels. following the banking crisis at the beginning of the 1990s, house prices took off and in real terms are now more than twice as high as before the housing bubble burst at the end of the 1980s. a home purchase has been for many years an exceptionally good investment. thanks to rapid house price inflation, many of us have accumulated considerable wealth β at least on paper. chart 6 : how much housing can an average wage buy? in the most of the past century, norwegians experienced a substantial rise in prosperity. larger and cheaper housing was a significant contributor. this meant an ordinary wage could by more housing space, even though the real price of housing also rose sharply. but since the beginning of the 1990s, the average house has become more expensive also relative to income. or to put it another way, an average wage can buy less than half as many square metres today than it could in 1991. chart 7 : higher debt β lower interest burden since our living conditions are generally not more cramped than before, you might think that we have to spend more of our income on financing our homes. but this is not the case. although we hold record - high levels of debt, our interest burden is not heavier now than it was 30 years ago. interest rates have fallen. since income has risen markedly at the same time, principal payments on large loans have also been manageable. norwegian households have responded by taking out increasingly larger mortgages to finance increasingly more expensive housing. this would not have been possible without access to cheap credit. low interest rates have made it possible to maintain housing quality, even though house prices have crept steadily upwards. moreover, lower interest rates, longer repayment periods and the introduction of interest - only periods have made it possible to borrow more without squeezing liquidity. this has also enabled prospective homebuyers to submit a bid higher than they normally would have done, with increasingly
| 0 |
##th anniversary this year, its role and work remain absolutely critical in the current complex global environment. the fund's multilateral and bilateral surveillance function remains as important as ever in protecting member countries from crises, and the upcoming comprehensive surveillance review will help establish the most relevant priorities for years to come. we welcome the recent decisions to strengthen the imf's lending toolkit as part of the review of charges and the surcharges policy and the review of the poverty reduction and growth trust facilities and financing. we support the imf's position at the centre of the global financial safety net, with a strong core mandate, and we highly value its unique role in bridge - building and facilitating global cooperation to tackle common challenges. we welcome the fact that sub - saharan africa will shortly occupy the newly created seat on the imf's executive board, which will significantly contribute to improving the overall balance of regional representation. we continue to witness an increase in economic losses and financial risks stemming from extreme physical climate hazards, including record - breaking heatwaves in asia, devastating floods and wildfires in the americas and central and eastern europe, and more frequent tropical storms in the caribbean and south asia. adaptation measures to shield our lives and economies from the impact of climate change, alongside ambitious policies to put the climate transition on track, are more relevant than ever. we support international progress on transition planning, enabling corporations, financial institutions and governments to set up credible net - zero roadmaps in a systematic way. furthermore, it is essential to further develop more systematic and comprehensive approaches to assess the impact of escalating nature - related economic and financial risks on price and financial stability, including integrated climate and nature risk analyses. 4 / 4 bis - central bankers'speeches
|
somewhat in the fourth quarter of 2010, the improved outlook for economic growth in 2011 could boost the confidence level of consumers in south africa. in the corporate sector, the increase in profitability, as reflected by the gross operating surplus, and the increase in the annual growth rate of credit extended to the sector, are possible indications of a recovery in business confidence. in the property market, property price indicators have been declining over the past year, despite lower interest rates and rising real income. job losses, which negatively affect consumers β ability to take up new credit, might have had an impact on prospective homeowners β ability to purchase a residence. recent developments enhancing the robustness of the financial regulatory environment in south africa include reviewing the prudential framework for foreign investment by private and public pension funds, reviewing the framework for cross - border direct investment in south africa, the release of the final draft of amendments to regulation 28 of the pension funds act, and reviewing the securities services act as part of a process to consolidate several financial services acts. i have briefly highlighted the key issues raised in the financial stability review. more detailed analyses are available in the publication itself, and will be highlighted by the authors β presentations. i trust that you will find these interesting, stimulating and relevant to the current environment and invite you to provide comment as part of the important process of ongoing debate on financial stability. thank you bis central bankers β speeches
| 0 |
jacqueline loh : managing risks in an uncertain world keynote address by ms jacqueline loh, deputy managing director of the monetary authority of singapore, at the 13th singapore international reinsurance conference, singapore, 3 november 2015. * * * opening distinguished guests, ladies and gentlemen, good morning. it is my pleasure to join you today at the 13th singapore international reinsurance conference. i believe the theme of this year β s conference, β managing risks in an uncertain world β, is one which will resonate with many of you, as insurers, reinsurers and brokers alike navigate the crosscurrents in the reinsurance industry, in search of profitable growth and better returns. in keeping with the conference theme, i would like to share a few observations on how the singapore insurance industry can capitalise on the opportunities created by new risks, new client segments, and new markets in asia. too much capital finding too little risks those of you who attended the recent monte carlo rendezvous would have discussed extensively the challenging conditions in the current reinsurance market, which some have warned would be the β new reality β, or the β new normal β. we have seen how structural responses β winning market share from competitors, and bulking up through acquisition of rivals β are largely built on a zero sum game. this becomes a problem when the pie is not growing, as could be the case if the industry does not innovate and create uncontested space. indeed, the combination of sluggish economic growth globally and continuous expansion of alternative capital have led to too much insurance capital finding too little risks. these include traditional risks like property and casualty risks. at the same time, the insurance sector is struggling to find solutions for new and emerging risks. this confluence of structural changes across demand, intermediation and the supply side of the insurance value chain is an unprecedented phenomenon. but the outlook is not for all grey skies ahead. the challenges also present a unique set of profitable growth prospects for the industry, particularly here in asia. asia β s changing risk landscape the asian risk landscape is changing rapidly, with demand for insurance services projected to grow especially quickly in emerging asia as incomes rise, life expectancy increases, and asians become more aware of catastrophic risks. asia currently accounts for 28 % of the global insurance market, and premiums in the region are expected to double by 2020, with more than us $ 1. 3 trillion generated. so why is excess capacity not being deployed in asia which
|
we are proud to be home to aon β s analytics and innovation centre and metlife β s recently launched lumenlab. to be unveiled later this year in singapore are aia β s edge lab, aviva β s digital garage and axa β s data innovation lab. this dynamic mix of insurance brokers, life insurers and composite insurers bear testament to the vibrant and conducive innovation ecosystem here, supported by a strong fintech community of start - ups and research institutes. besides improving the efficiency of the insurance sector, i am heartened that they are actively exploring opportunities brought about by new technologies. this is an important step towards unlocking untapped insurance solutions and markets, and will go a long way in managing risks in this uncertain environment. to reinforce this fintech ecosystem and as part of our broader efforts to modernise the insurance marketplace, we are supporting the establishment of an electronic reinsurance trading platform to enhance the efficiency of trading risks electronically. new risk management and insurance major as the industry seeks out profitable growth and new horizons, it is critical that the right talent and skills are available to support this. in the face of new and emerging risks, as insurance roles evolve and become more complex, different and deeper skillsets will be essential. skillsets will also need to be widened as technology and financial services converge. to this end, i am glad to announce that the nanyang technological university will be launching the risk management and insurance major next year. bis central bankers β speeches beginning in august 2016, this new insurance major will be structured as a major specialisation under the ntu business degree. it is expected to produce 50 new graduates every year starting from 2018, providing a strong and sustainable talent pipeline to support industry growth. alongside a robust curriculum, the students will get to build up their research, analytical and modelling capabilities, through working on research projects like the nat cat dax and cyber risk test - bed. conclusion insurance will continue to increase its relevance in an uncertain world. in these times of new risks, capital and technology, it is not sufficient to rely on a red ocean strategy. we need to open new horizons, and open them together. mas will be a partner of the singapore insurance industry as you forge a blue ocean strategy, manage risks and capitalise on the opportunities in the new reality. thank you, and i wish all of you a successful conference and a productive time at the sirc and in singapore. bis central bankers β speeches
| 1 |
to remain healthy, while re - payment difficulties would continue to ease. not surprisingly in this context, there is a broad consensus among forecasters on a scenario of rapid economic growth in france, with inflation remaining within the definition of price stability for the two years ahead. so far, the consensus forecast predicts that real gdp could increase by some 3. 4 % in 2000 and by 3. 0 % in 2001, while consumer prices will grow by 1. 2 % in both years, although more recent forecasts indicate that prices could rise more rapidly. it is also widely expected that growth will be sustained by both domestic and external demand and will result in continued employment growth and further reductions in unemployment. this is a bright picture and we should wish that it all comes true, not only in 2000 and 2001, but also beyond. but, although this scenario for the coming years is a likely one, it is important to bear in mind that it is subject to uncertainties. some of them, like the event of an unexpected external shock, cannot be eliminated. but others fall within national responsibility. proper economic policies and / or an adequate consensus among economic agents can in some cases be key factors in ensuring that crucial pending issues are faced in a way compatible with sustained and non - inflationary growth. among the pending issues for the future of the french economy, the implementation and financing of the 35 - hour working week is certainly an important one. but other uncertainties also call for attention. i would like to stress the importance of maintaining the credibility of fiscal consolidation. in this regard, avoiding any relaxation of the fiscal stance, as well as reducing the risk of any deficit slippage in the event of an unexpected growth slowdown are certainly key elements. moreover, with a view to external competitiveness, an explicit commitment on the part of the social partners to maintain wage developments in line with productivity increases is an important factor. more generally, france faces the same fundamental challenge as the other european economies. it can be summarised in the following short question : β how can one develop an internal dynamic for sustainable long - term growth? β this is a crucial challenge if one wants to significantly reduce unemployment. and, at the same time, in an increasingly integrated world economy, one wishes the euro area economy not to be too vulnerable to every external slowdown. by committing themselves to fostering low inflation and sounder public finances, public authorities, both french and european, have been working for years to develop the necessary
|
background environment for such a domestic dynamic. the relative resilience of the french economy, despite the recent temporary slowdown, could be a sign of a successful policy mix in this regard. earlier in my speech i spoke about the β new economy β, an appealing expression which is also being used more and more when referring to the good performance of the french economy in the recent past. however, for its true emergence, two important elements are required. first is the commitment to maintain an environment with moderate developments in production costs and to pursue sound public finances. second is the need to continue and step - up the process of structural reforms. that is the only way to foster employability of the labour force and to encourage entrepreneurship, leading to appropriate choices in terms of product specialisation and ultimately, high economic growth coupled with macroeconomic stability.
| 1 |
mohamed s fofana : bank of sierra leone charity trust fund keynote address by mr mohamed s fofana, deputy governor of the bank of sierra leone, at the scholarship award ceremony of the bank of sierra leone charity trust fund, freetown, 25 january 2008. * * * mr chairman members of the board of trustees of the bank of sierra leone charity trust fund board of directors and management of the bank of sierra leone officials of the ministry of education heads of commercial banks and other financial institutions members of the fourth estate distinguished guests, including the awardees students and pupils it is my honour and privilege to warmly welcome you all to the scholarship award ceremony of the bank of sierra leone charity trust fund. the idea of a charity trust fund was conceived by the bank of sierra leone in the wake of the devastation caused by the decade old civil conflict in every sector of our society, the education sector, being key. we were convinced that the future for a better sierra leone and a decisive turnaround in the state of the economy, lie largely in education taking its rightful place in the development plan. as the nation β s central bank, we have a pivotal role to play in the development aspirations of the country. that is why as a corporate body, we have recognised our responsibility in the discharge of our duties to honour our corporate social responsibility. we are therefore doing all in our power to compliment the efforts of the government and other well meaning partners to help foster economic and social development. to this end, our corporate social responsibility is focused on providing a stimulus that will help promote excellence in every aspect of our development, but more so in education. by supporting the education sector, our aim is to achieve the following : β’ contribute towards the development of the human resource base required to drive economic activities in the country. in this regard, our objective is to open doors leading to abounding opportunities for future generations in our own small way. we hope that by providing for those who have the ability to achieve academic excellence but cannot do so for lack of financial support, we can help restore the academic prowess for which sierra leone was known in the continent. we would therefore assure everyone, not only those in secondary schools, but also institutions and individuals who have the talent and the commitment to demonstrate outstanding performance, that you will get our attention and support, if you are deserving. mr chairman, distinguished guests, ladies and gentlemen, it is only recently that the bank of sierra leone has taken up the responsibility of helping in
|
its outreach depth to a greater number of small businesses in and around freetown. only five months after the commencement of operations at its head office, the bank requested and was given permission to open a branch in kissy on 14th december, 2007. and we are delighted to note that another branch will soon be opened in lumley β the west end of freetown. the challenge after lumley is for procredit to extend its activities in other areas of the country, which may be more deserving for their services. by our estimates so far, procredit has already made some mark in the domestic banking industry and is poised to do more. as at end january, 2008, the bank β s credit portfolio amounted to about le8. 0 billion ; this was disbursed to 1, 440 customers. deposit base during the same period stood at about le3. 0 billion, with an impressive record of 5, 600 deposit accounts. what is important here is that many of these customers are first - time account holders who might have found it difficult to open accounts with the traditional commercial banks. loan recovery has also recorded a formidable and impressive rate. we therefore commend the management and staff for this ground - breaking performance. microfinance activities now include products such as micro credit, micro insurance, mobile banking, etc, which are designed to increase the product portfolio and provide customers with a variety of products that are easily accessible. we believe that with the increased efforts to further institutionalise microfinance activities in the country, we will soon see a wider variety of microfinance products for small scale producers. madam chair, i believe this is a befitting occasion to discuss what we, at the bank of sierra leone, are doing to foster an efficient, sound and stable financial sector, including microfinance. the bank of sierra leone, in collaboration with mitaf, is drafting guidelines for the regulation and supervision of deposit - taking microfinance institutions. development in this area is far advanced. the bank of sierra leone has also recognised the need to bring the legal framework for regulating the banking sector consistent with international best practice. hence, in consultations with our international partners, ( adb, imf, world bank, etc ), the bank of sierra leone is undertaking a comprehensive review of the banking act 2000, and the anti - money laundering act 2005 in order to align them with international best practices and to address some of the weaknesses which have been identified while
| 0.5 |
abdul rasheed ghaffour : keynote address - launch of tun ismail ali centre of excellence in monetary and financial economics keynote address by mr abdul rasheed ghaffour, governor of the central bank of malaysia ( bank negara malaysia ), at the preliminary launch of the tun ismail ali centre of excellence ( tia coe ) in monetary and financial economics, hosted by the asia school of business, kuala lumpur, 20 january 2025. * * * assalamualaikum warahmatullahi wabarakatuh and a very good afternoon to our distinguished guests, tan sri dato'sri dr. zeti akhtar aziz, former governor of bank negara malaysia, professor helene ray, professor of economics at the london business school and other honoured guests, welcome. it is with great pleasure and a deep sense of gratitude that i stand before you today at the launch of tun ismail ali centre of excellence in monetary and financial economics, here at the asia school of business ( asb ). previously known as tun ismail ali chair ( tiac ), the initiative has thrived under the auspice of universiti malaya over the last 20 years. since its establishment in 2000, the success of the tun ismail ali chair in fostering innovative research and academic contributions are a testament of tun ismail ali's legacy. for this, we are deeply grateful to universiti malaya for their unwavering support and invaluable partnership, which has laid a strong foundation for tun ismail ali chair. allow me to begin by expressing my deepest gratitude to tan sri dato'sri dr. zeti akhtar aziz. the initiative we are celebrating today is a reflection of her commitment to fostering excellence within our local academics communities, whose dedication has paved the way for this endeavour. the tun ismail ali chair owes its success to her strong aspiration to shape outstanding scholars in the field of monetary and financial economics. we also owe a great debt of gratitude for her instrumental role in the establishment of the asia school of business. tan sri zeti's efforts and commitment have been pivotal in establishing asb as a leading institution for higher learning and research in the asean region. we are truly honoured to continue her legacy here at asb. i am also honoured to welcome our distinguished keynote speaker, professor helene rey, who is the professor of economics at the london business school. we are privileged to have a prestigious scholar of her caliber with us today despite her demanding
|
note that some of the discussions will cover the takaful perspective. this will include discussions on the impact of shariah requirements, as well as sessions on financial management and business continuity management for takaful business. in closing, let us remind ourselves again that risk management is a corporate culture and everyone plays a role in the process. your roles are critical in ensuring that the key risks, both present and foreseeable, are identified and effectively mitigated. with concerted efforts from all parties, an effective risk management process will enable companies to minimise financial losses, and optimize business practices, in order to respond to the changing business environment. i am very confident that this conference will be a great platform to catalyze open discussions among market players on the key issues relating to risk management. it will also provide good opportunities for business networking. on this note, it is my pleasure to declare open the international risks and risk management conference for insurance sector 2010.
| 0.5 |
is also very much a public sector - private sector partnership. in that regard, we are being supported in this work by a group of market participants, chaired by david puth of cls. the group contains people from all around the world on both the buy side, including corporates, and the sell side, along with trading platforms and non - bank participants, drawing from the various fxcs and beyond. hence all parts of the market are being involved in the drafting of the code to make sure all perspectives are heard and appropriately reflected. these principles are available at : http : / / www. rba. gov. au / afxc / about - us / pdf / global - preamble. pdf. < http : / / www. bis. org / press / p150511. htm > < http : / / www. bis. org / about / factmktc / fxwg. htm > bis central bankers β speeches the work in drafting the text of the code is well and truly underway. there are two aspects to this. first is harmonisation of the existing regional codes. there is a lot of good material in them and there is no point in reinventing the wheel there. the second part of the work addresses those aspects of the foreign exchange market not adequately covered in the existing codes. we need to fill those gaps ; for instance, in providing more detail around various aspects of order - handling and execution. we are also addressing mark - up and last look. we are aiming to provide language around what it means to participate in the market as principal rather than agent. in these areas we intend to describe what is good practice as well as what is not good practice. while the content of these regional codes is pretty good, it is very evident that they were often ignored, wilfully or otherwise. hence the critical need to come up with mechanisms to achieve greater attention and adherence to the global code. we will have more to say on this later as our work in this area proceeds. at this stage, it is worth reiterating a point i made at an fx week conference in sydney earlier this year in the context of the fx benchmark work : 9 β if these recommendations were not acted on, authorities could conclude that a regulatory response was necessary to generate the desired improvement in market structure and conduct. β mark carney made a similar point in his mansion house speech in june, 10 as did simon potter in july. 11 i
|
york city, 14 july 2015. available at < https : / / www. newyorkfed. org / newsevents / speeches / 2015 / pot150714 >. bis central bankers β speeches conclusion as market participants, regardless of which side of the market you are on, it is important that you are aware of the changes that have occurred, and are still underway, in the foreign exchange market. if you are on the sell side, i am sure that you are well aware of these changes and hopefully, i have provided you with some of the background and motivation for them. in terms of benchmarks, there is a fuller articulation of this in the fsb benchmark report. if you are in the asset management business, you may not have paid so much attention to the details of the fx aspect of your business. but it is important that you also understand the context for the changes that are occurring. some practices and services that you were accustomed to in the past, or maybe were unaware of, may no longer be available, and you cannot expect your counterparty to provide them. the motivation for the changes to the foreign exchange benchmarks is to reduce the incentive and opportunity for improper behaviour by market participants around benchmark fixes. the implementation of the recommendations in the fsb benchmark report, together with the enhanced scrutiny externally and within organisations on fixing transactions, appears to have moved the market in a favourable direction. as we develop the single code of conduct for the fx market, the intention is that the market will move further to a more favourable and desirable location and allow participants to have much greater confidence that the market is functioning appropriately. we need this to occur, as it very much in all our interests to have a well - functioning foreign exchange market. as roberto said earlier, we central banks care as much about this as anyone. as it is in all our interests for trust to be restored to the fx market, i very much trust that you, as market participants, will work with us constructively in this important endeavour. bis central bankers β speeches
| 1 |
to the rescue. of course this has significant imbalances for the new zealand outlook. demand from western countries is gradually improving, but still not very encouraging. the sad us housing story is bad for our wood exports, the uk fiscal retrenchment is hurting our uk tourist numbers and the fragile japanese recovery restrains our food exports. our own internal rebalancing is progressing, but very slowly. substantial fiscal stimulus helped cushion the economy over the past few years. the fiscal deficit will need to be closed and private demand take over public sector support. moreover, it appears that some of the fiscal deficit is structural and unwinding this support will subtract from growth for a number of years, with our housing market remaining weak, consumption impaired, balance sheets fragile and businesses remaining cautious. private demand is still impaired. what is yet to come however at the same time the strong growth in east asia and australia emerging markets has been very beneficial. these markets were much less affected by the financial crisis, have themselves enjoyed strong export prices, and are now being buoyed by growing domestic demand. russia, brazil, energy exporters, south africa and the southern american countries are also in this group. they are developing a much stronger geopolitical voice for the g - 20. the chinese and india stories exemplify this β not by any means a simple picture, but here are two economies with continued strong export demand, government building of infrastructure, and evolving domestic demand. these economies have strong connections to regional growth that will benefit new zealand indirectly over and above our direct trade exposure. other medium term implications look particularly interesting for new zealand. post - war evidence shows that as emerging markets develop significant middle classes, there is a commensurate increase in demand for protein, increasingly animal - based. that has been the pattern across a number of countries with different cultures in different geographies. many of these countries are limited in expanding their own food production, by lack of suitable land, lack of water, increasing climatic volatility, and high oil prices. a recent nomura report 2 argues that real food prices will need to rise significantly. new zealand is not a huge food producer ( not being among the top half dozen producers of any of the world β s key food product groups ). however our food exports ( as a % of gdp ) top the world, and we are the best placed in competitive terms in nomura β s food vulnerability index. food trade is volatile in
|
- site analysis of banks β performance but also in extensive on - site inspections to assess the soundness of banks now, allow me to share a few notes on the developments of supervision and regulation in mauritius. this year marks the 50th anniversary of the bank of mauritius. the enactment of the banking act 1971 together with attributes in the bank of mauritius act 1966 laid down the basic legal framework governing the operations of banks in the domestic financial system. the subsequent promulgation of the banking act 1988 set the basis for the development of a reputable offshore banking sector in mauritius. in this context, emphasis was laid on the supervisory responsibilities vested upon the bank, providing for mandatory trilateral meetings to be held with banks and their external auditors. after a few sporadic changes over the years, these two acts were completely overhauled and replaced with two pieces of legislations in november 2004, namely the bank of mauritius act 2004 and the banking act 2004. the independence of the bank of mauritius was reinforced, together with an added responsibility of ensuring the stability and soundness of the financial system of mauritius. the banking act 2004 eliminated the separation between domestic and offshore banking activities and provided for a single banking licence to cover both activities. in 2016, the functions of the bank were broadened with the added responsibility of regulating and supervising the locally incorporated, ultimate and immediate financial holding companies of banks and non - bank deposit taking institutions licensed by the bank. alive to the fact that the bank of mauritius act and the banking act still fall short of meeting the international standards for bank resolution and crisis management, the bank sought assistance from the international monetary fund to strengthen the legal frameworks in these areas. in the same vein, the bank opted for a review the bank of mauritius act 2004 and the banking act 2004 in line with international best practices imposed not only by the basel committee of banking supervision ( bcbs ) but also the financial stability board ( fsb ), the international association of deposit insurers ( iadi ), the organisation for economic co - operation and development ( oecd ) and the financial action task force ( fatf ). here, allow me to extend our deepest thanks to mr ravi mohan, who was instrumental in this endeavour and supported us throughout. we also have a couple of bills in the pipeline, notably, the deposit insurance scheme bill and the national payment systems bill, both of which aim at strengthening the stability and soundness of the financial sector. the bank of mauritius has already adopted the macro - pr
| 0 |
continued quantitative easing in most other advanced economies and the divergent monetary policy in emerging and developing economies. from a medium - to - long term perspective, all these trends could have a positive effect. still, they also have short - term consequences, which pose significant downward risks for the global economy. it is highly likely that the chinese rebalancing will in the short term lead to slower economic growth, which could spill over to other economies via the well known trade, financial and confidence channels. in particular, the early evidence indicates that the chinese slowdown is having stronger than expected effects on lower imports and lower commodity prices. in addition, such downward effects could be magnified by the possible accompanying turbulences in global foreign exchange and other financial markets. second, the falling oil and commodity prices ( and the expected persistence of low prices ) could have negative effects on exports and economic growth in commodity - exporting emerging economies. this could also be reflected in further currency depreciations in these economies, which might in turn magnify corporate balance - sheet weaknesses, thus reinforcing negative growth feedbacks. finally, divergent monetary policy moves between the us and most other economies that contribute to us dollar appreciation may have negative bis central bankers β speeches effects, with higher borrowing costs for dollar - denominated borrowing by emerging market companies and sovereigns. geopolitical tensions regarding ukraine and the middle east also imply continuous uncertainty, which increases borrowing costs and makes investment decisions more difficult. related to this, the refugee crisis represents an additional political and systemic challenge in our countries. this applies particularly to fiscal costs and possible political instability arising from refugee accommodation and integration, which might affect macroeconomic policy and wider european political and economic integration projects. given the trade and financial linkages of this region with the european economy, it is of interest to also shed some light on the europe β s growth prospects. it is encouraging that the economic recovery is expected to proceed in the monetary union, at a growth rate of slightly below 2 %. it is to be supported by the ecb β s monetary policy measures, by the earlier progress made with fiscal consolidation and structural reforms, and low oil prices as well. however, similar to the global outlook, the economic recovery in the euro area is moderate and downside risks prevail. they pertain to the global uncertainties that were mentioned previously, as well as to broader geopolitical risks. it seems that the possibility of prolonged slow growth is high, and
|
dimitar bogov : challenges of bolstering growth rates and ensuring their sustainability opening statement by mr dimitar bogov, governor of the national bank of the republic of macedonia, to the bank for international settlements working party on monetary policy in central and eastern europe, skopje, 11 β 12 february 2016. * * * dear colleagues, dear guests, it is my honour to welcome you for the annual meeting of the bis working party on monetary policy in central and eastern europe, hosted by the national bank of the republic of macedonia. i look forward to discussions on the key issues the policymakers are currently facing. many of the economies in our region have strong trade and financial linkages with the rest of the world. therefore, a natural starting point would be to assess how conducive the global environment is for our key goal of bolstering growth rates and ensuring their sustainability. unfortunately, almost a decade after the acute stage of the crisis, it seems that the global environment is still fragile. although the world economy is recovering, growth rates do not seem to be strong enough, and what is even more problematic, this β low growth mode β might be here to stay. the frequent downward revisions of global growth prospects indicate that uncertainty is weighing on growth. global growth rates are staggering slightly above 3 %, on average, and the medium - term prospects do not seem to differ much. growth is also uneven, with the short - term prospects more favourable for the group of the advanced economies, and paler for the emerging and developing world. the risks in the latter group, which accounts for almost 60 % of the global gdp and has contributed with more than 80 % of the global growth since 2008, seem to be large and strong enough to constrain the growth of the world as a whole. it is not only the relatively slow global recovery that is worrisome. the fact that downside risks to the baseline growth scenario are prevalent, accentuates the uncertainty and fragility of the growth outlook. what are the main risks that should be pinpointed? first, there is the economic transformation and rebalancing in china, which is moving away from the previous model of export - and investment - led growth based on manufacturing towards a larger reliance on private consumption and services. second, we are observing a large fall in oil and commodity prices, often reflecting concerns over the subdued global demand. third, there is the gradual normalisation of fed policy rates as opposed to the
| 1 |
on november 26 and 27, 2012. now, let me introduce our first keynote speaker, professor andrew k. rose from university of california, berkeley. andrew k. rose is the b. t. rocca jr. professor of international business in the economic analysis and policy group, haas school of business at the university of california, berkeley. he serves as associate dean for academic affairs, and chair of the faculty. he is also a research associate of the nber ( national bureau of economic research, based in cambridge, ma ), and a research fellow of the cepr ( centre for economic policy research, london ). professor rose has published numerous articles in refereed economics journals, including the american economic review, the quarterly journal of economics, the review of economic studies, and the journal of finance. rose is interested in the theory and practice of economic policy, and his research addresses issues in international trade, finance, and macroeconomics. bis central bankers β speeches
|
olli rehn : eurozone - monetary policy and strategy review speech by mr olli rehn, governor of the bank of finland, at the citi virtual macro forum, 14 october 2020. * * * ladies and gentlemen, it is a great pleasure to speak at the citi 2020 virtual macro forum today. in my opening remarks, let me focus on two topics. first, i will give you a snapshot of the ecb β s monetary policy at the current juncture and, second, i will focus on the ecb β s strategy review that is now underway. according to the ecb β s recent forecast, the eurozone economy will contract by 8 % this year. next year it will rebound to 5 % growth, which will level off to 3 % in 2022. as a consequence, economic activity is foreseen to return to pre - pandemic levels only towards the end of 2022. the covid - 19 crisis has dampened inflationary pressures worldwide. hicp inflation in the eurozone dropped into negative territory in august, with consumer prices declining by 0. 2 % yearon - year. this is mainly due to temporary factors, but the elevated level of economic slack, weak energy inflation and the recent appreciation of the euro will continue to act as headwinds. thus, our baseline projections forecast headline inflation to rise only gradually, i. e. to 1. 0 % in 2021 and to 1. 3 % in 2022. the ecb β s monetary policy is now very accommodative, and so is fiscal policy in the euro area. importantly, monetary policy and fiscal policy now work hand - in - hand and reinforce each other. europe β s recovery fund β next generation eu β will support the recovery, investment and reforms towards the necessary green and digital transformation. the ecb has used a number of instruments to ease financial conditions, thus securing access to finance for households and businesses. these include the pandemic securities purchase programme ( pepp ), targeted longer - term refinancing operations ( tltros ), and securing dollar liquidity for european banks through swap lines with the us federal reserve. through its forward guidance, the governing council has stated that it is ready to do whatever it takes, within its mandate, to maintain price stability and support economic activity across europe in these tough times. ecb president christine lagarde has called it, for good reason, a safety net that will be
| 0.5 |
potential shutdown in the availability of credit, which would have made the current economic crisis even more severe. although functioning in financial markets has improved since march, the federal reserve has indicated that it will continue to increase asset holdings to sustain smooth market functioning, thereby fostering effective transmission of monetary policy to broader financial conditions. 9 in addition to stabilizing financial markets, the federal reserve has instituted a number of programs to support the flow of credit to households, businesses, and state and local governments. these actions will enable them to continue to do their work, both now and when normal life resumes. 10 taken together, these programs have helped restore the functioning of financial markets, foster favorable financial conditions, and support the continued flow of credit to businesses and households. conclusion i'll conclude with this : this pandemic and this recession form a pivotal moment for the federal reserve. we are seeing signs that the economy has started to recover. still, the economic outlook remains highly uncertain and it's going to take considerable time to restore the economy to its full potential. but rest assured, we are committed to using our full range of tools to support the economy and bring about a full and robust recovery. 1 covid - 19 dashboard by the center for systems science and engineering at johns hopkins university, accessed june 29, 2020. 2 the impact on lower - wage workers is analyzed in cajner, tomaz, l. d. crane, r. a. decker, j. grigsby, a. hamins - puertolas, e. hurst, c. kurz, and a yildirmaz., 2020. β the u. s. labor market during the beginning of the pandemic recession. β becker friedman institute, university of chicago, working paper, no. 2020 β 58 ( june ). 3 u. s. census bureau and department of housing and urban development, monthly new residential construction, may 2020, june 17, 2020. 4 an example at the new york fed is the bi - weekly publication of the weekly economic index. 5 empire state manufacturing survey, federal reserve bank of new york, june 2020 ; business leaders survey, federal reserve bank of new york, june 2020. the data on small business revenue come from womply, a software - as - a - service provider focused on customer relationship management. 6 see board of governors of the federal reserve system, federal reserve issues fomc statement, march 3, 2020 ; and board
|
built around savings accounts will sooner or later reach its limits. it becomes apparent that investors can benefit from diversifying their savings through greater capital market exposure β i assume that the savings banks are advising their customers accordingly. and as for monetary policy, you can take my word that the bundesbank, as a member of the eurosystem, will push for interest rate hikes and an exit from the non - standard monetary policy measures as soon as the objective of price stability makes this necessary. but that point in time is still some way off. in fact, we will have to get used to the idea that low interest rates will be with us for a while yet, or, to use the ecb governing council β s exact words, for an β extended period of time β. what β s more, the extensive government bond - buying programme will be kicking off shortly, putting more pressure on the german yield curve β that will present quite a challenge for domestic institutions engaged in maturity transformation. so the big question facing savings banks and other credit institutions right now is how they can overcome the challenge posed by low interest rates, and how they intend to go about it. i would urge you to take a sober view of the interest rate situation β not with a sense of anxiety, just realistically. it β s obvious that net interest income will generally continue to diminish β the bundesbank β s analyses and projections point quite clearly in that direction, and all of you here today know that just as well as i do, if not better. while it is true that the vast majority of savings banks are comfortably capitalised and their internal capital adequacy is sound, some of them have aligned their business strategies with the prospect of interest rates climbing again relatively quickly. so i would urge you not to think purely in terms of where you stand right now, which for many of you may still appear comfortable. a strategy can β t be to live off ever - diminishing resources β even if the savings banks β resources can see them through a spell of low interest rates. so i would reiterate my urgent appeal to you β consider your earnings situation realistically, from a dynamic angle. because there β s barely any prospect of interest rates picking up again in the medium term. so the question is this β how can savings banks and other credit institutions generate a sustained flow of stable earnings under these circumstances as well? there β s no straightforward answer to that question. the answer is most
| 0 |
kyrylo shevchenko : national bank of ukraine press briefing monetary policy statement speech by mr kyrylo shevchenko, governor of the national bank of ukraine, at a press briefing on monetary policy, 21 july 2022. * * * dear colleagues, i would like to inform you that the board of the national bank of ukraine has decided to keep the key policy rate at 25 % per annum. the decision to raise the key policy rate taken in june will continue to push up market rates. improved attractiveness of hryvnia assets, coupled with the change in the official exchange rate, will dampen demand on the fx market. this will allow maintaining sufficient international reserves and ensuring macrofinancial stability in ukraine. how have prices changed since the onset of the war? inflation has been accelerating but is under control. in june, the pace of growth in consumer prices was 21. 5 % yoy. the consequences of the war are the main reason for the rise in inflation. they include a disruption of supply chains, a decrease in supply of some goods, higher business expenses, physical destruction of production facilities and infrastructure, and temporary occupation of some territories of ukraine. persistently high global energy prices and record - high inflation in trading partner countries also fueled price pressures in ukraine. on the other hand, administrative measures of the nbu and the government β namely, fixing the hryvnia exchange rate and natural gas and heating tariffs β restrained inflation. how will prices behave going forward? inflation pressures will persist in late 2022 : consumer prices will grow by more than 30 % yoy. the consequences of the war and high global prices, especially energy prices, will remain the main factors. under such conditions, the nbu will conduct tight monetary policy. it will allow maintaining inflation expectations, raising interest in hryvnia assets, and reducing pressures on international reserves. these measures will support financial stability and partially lower inflationary pressures. the nbu's baseline scenario contains a number of assumptions, including the assumptions that in 2023 logistics will recover, businesses will face lower risks, and 1 / 4 bis - central bankers'speeches harvests will increase gradually. such developments will help improve inflation expectations and reduce inflationary pressure by partially overcoming the adverse effects of the war that restrain the recovery of supply. a decline in global inflation and the nbu's tight monetary policy will additionally foster disinflation. at the same time, persistently high energy prices will limit di
|
with a monthly limit of uah 50, 000 and without the right for early termination. this will reduce the demand for cash foreign currency. 3 / 4 bis - central bankers'speeches second, today the nbu has introduced additional measures to minimize the use of international reserves on things that are not a top priority in wartime. more specifically : individuals will still be allowed to withdraw abroad the equivalent of uah 50, 000 from their hryvnia payment card accounts per month. however, the monthly limit on abroad fx cash withdrawals from hryvnia card accounts has been replaced with a weekly one : the equivalent of up to uah 12, 500 per seven calendar days. the monthly limit on card - based p2p transfers from ukraine abroad, using hryvnia cards issued by ukrainian banks, has been reduced to the equivalent of uah 30, 000 per month from uah 100, 000. a monthly limit of uah 100, 000 ( in the equivalent ) has been set on hryvnia cardbased payments outside of ukraine from all of a customer's hryvnia accounts opened with a bank. most ukrainians staying abroad will not be affected by these restrictions. third, the nbu has changed the algorithm for calculating the banks'open fx position limits to reduce potential demand for foreign currency. the new requirement will come into force on 1 august 2022. all of the restrictions imposed since the beginning of the war are temporary measures. that said, today they are one of the wall of the country's " financial fortress. " it is keeping the economy afloat in wartime, and will contribute to the economy's more rapid recovery after the war. thank you for your attention! 4 / 4 bis - central bankers'speeches
| 1 |
electronic payment methods that we generically call digital currency or e - money. e - money can be defined broadly as monetary value stored electronically, on a phone or a card, or in the cloud. it β s a digital alternative to cash, and it β s a stored value that is not linked to a bank account. there are two types of e - money that i want to talk about today. the first type is denominated in a national currency, and it represents a claim on the issuer. in canada, there are a number of examples. there are paypal balances, and there are stored - value cards that use the visa or mastercard networks. 2 these types of e - money store value and can be used to buy a lot of things. the safety of this type of money really depends on the credibility of a trusted third party. this is because you β re trusting visa or paypal to safeguard your balance and to validate and authenticate your transactions. the second type of e - money is cryptocurrency β such as bitcoin. this type of e - money is not denominated in any national currency and so has its own unit of account. it is also completely decentralized and does not represent a claim on the issuer. this is the there was a gradual phase out of commercially - issued bank notes that lasted over a decade. rich discussions of this period are available in powell ( 2005 ) and bordo and redish ( 1986 ). gift cards and store - specific cards are not considered e - money because they are not accepted by businesses other than those that issued them. bis central bankers β speeches revolutionary part of cryptocurrencies β transactions can be validated without a trusted third party. the way they achieve this is by using cryptography to ensure that each transaction is valid and secure. trusted third parties are needed for other functions, however. you may want help to keep track of your virtual wallet and these currencies are not redeemable for national currencies. people generally trade them through an online exchange at the market rate. bitcoin was introduced in 2009. five years later, there are more than 500 other cryptocurrencies β ripple and litecoin and i could go on. 3 even though only a few of them ever really do any trading, they continue to develop and innovate. e - money still a wallflower in canada e - money is still a
|
as well as cowrie shells, cocoa beans, gold and, eventually, bank notes and coins. none of these objects, except for the gold and cocoa beans, has any meaningful inherent value. they are money because people accept them as money. for this to happen, money must do three things. first, money must serve as a medium of exchange : you pay tuition ; you receive an education in exchange. the alternative is bartering, but that is complicated and inefficient. second, money must serve as a store of value. when you work during the summer you need to be confident that every dollar you earn is still going to be worth a dollar when it comes time to pay your tuition. finally, money must serve as a unit of account, which you need in order to compare prices β like comparing the value of the new blackberry with other mobile devices on the market. the form of money we know best is bank notes. they were issued primarily by commercial banks in canada and the united states before those countries created central banks in the early 20th century. these privately - issued bank notes ultimately failed to provide what the economy needed and so central banks were given this responsibility. the bank of canada has been issuing bank notes since 1935. 1 the cash you have in your wallets perfectly meets the three criteria of money. it is accepted almost everywhere, there β s very little counterfeiting, and the issuer β the central bank β won β t go bankrupt. we also target inflation, which means that the internal value of money is predictable. since we started issuing bank notes, there has been a parade of non - cash options introduced to our payments system. they β ve been driven by technology and consumer demand for efficient ways to pay for things. in the 1970s, credit cards were leading edge β around the same time that pink floyd and led zeppelin dominated the music scene. in the 1990s, debit cards were the new big hit. the next leap in innovation was e - transfers and online banking services. payments are even quicker now with contactless credit and debit cards. last month, apple pay became the latest player in this game. so we β ve come a long way since cocoa beans. yet all these payment innovations can be used only if you have a bank account. the vast majority of canadians have access to banking services, but that β s not the case in many developing countries. that β s part of the reason why non - banks are coming up with innovative
| 1 |
and a term premium. the expectations component reflects the average of current and future expected short - term rates over the maturity of the bond. if the pure expectations hypothesis of the term structure were to hold, this would be all that mattered in terms of explaining movements in long - term rates. but broad empirical evidence suggests that the pure expectations hypothesis fails to hold true in practice, and that there is indeed a time - varying premium that investors require in order to hold a 1 / 6 bis central bankers'speeches long - term bond instead of simply rolling over a series of short - term bonds. 4 monetary policy β and there we are increasingly certain β cannot only influence the expectations component, but also the term premium. three examples demonstrate this more clearly. first, by changing our key policy rates, we can directly impact the short end of the curve β the footing of the expectations component. in normal times, medium to long - term rates would adjust to the extent that market participants would see a change in policy rates as the beginning of an incremental series of changes. but with short - term policy rates approaching levels closer to zero during the early phases of the most recent easing cycle, this channel had become less effective. markets β in the belief that rates could not enter negative territory β stopped short of pricing in the degree of accommodation they would normally have expected in the face of downside risks to our price stability mandate. our decision in june 2014 to introduce negative deposit facility rates restored our ability to steer market expectations and thereby also medium to long - term rates. indeed, by signalling to the market that policy rates could go below zero, we ultimately succeeded in shifting downwards the entire distribution of future expected short - term rates, thereby providing important additional accommodation. 5 second, and related, by communicating about where we see the economy heading, and by clarifying our β reaction function β β that is, by providing forward guidance β we can directly influence expectations regarding future short - term rates. forward guidance has served us well and has contributed to keeping the short to medium end of the yield curve well anchored at times when external shocks were threatening to unduly tighten financial conditions. i will come back to this in a minute. but to the extent that forward guidance reduced uncertainty about the future path of interest rates, it has not only affected the expectations component but also the term premium. yet, the main channel through which we β and other major central banks β have recently exerted measurable downward pressure on the term premium,
|
main objectives of this series of conferences is to discuss the main lessons for public policies arising from developments in the international banking and financial sector. the continuation of the market turmoil does not allow me to talk to you with the benefit of detachment and the comfort of an ex - post assessment. however, i should like to take advantage of the occasion to share with you some considerations on the ecb β s response to the market turmoil drawing on the experience of the past year. i am very grateful to cornelia holthausen for her valuable contributions. 2. the separation between monetary policy formulation and its implementation central bankers have, naturally, eyed the developments of the past year of financial turmoil β and, particularly, their recent intensification β with great concern, as they have the potential to influence adversely the ability of central banks to steer monetary policy rates, affect the transmission mechanism of monetary policy and, more generally, may pose a threat to financial stability. once the credit concerns that had built up in the sub - prime mortgage market segment started to affect interest rates and traded volumes in the euro area money market, the ecb responded to these highly unusual market events by timely and forcefully adjusting its liquidity policy. i will not deal with the specificities of the ecb β s liquidity management over the past year β this will be carried out by the ecb staff in tomorrow β s session on β the experience with crisis management β β but i would like to stress one fundamental principle underlying our response to the turmoil : β the separation principle β. this principle relates to the dichotomy between the ecb β s monetary policy and its liquidity policy or, in other words, between the formulation and implementation of monetary policy. during the turmoil, the separation principle proved to be very effective. supported by the flexibility of its operational framework, the ecb was able to react in a flexible and quick manner to a changing market environment, and it allowed the steering of interest rates close to the policy rate by means of temporary quantity adjustments, albeit without increasing the aggregate supply of euro liquidity to the banking sector. the main objective of the ecb β s immediate and lasting responses to tensions in the money market was to keep under to control the very short - term interest rates as the first step in the transmission of monetary policy. broadly speaking, the ecb β s liquidity policy response consisted of three elements : first, it changed the timing of the liquidity provision within the maintenance period ( the so -
| 0.5 |
denis beau : the future of money - regulatory and policy issues related to the introduction of cbdcs opening remarks by mr denis beau, first deputy governor of the bank of france, at the european law institute webinar, 3 june 2024. * * * ladies and gentlemen, good evening, first of all, i thank the european law institute for inviting me to this panel discussion on the future of money. i am very pleased to share with you a few thoughts on the challenges which have emerged in the field of money and the associated payments systems, as i see them from my central bank and supervisor standpoint, and on the policies we develop given our monetary and financial stability mandates, to help address them. on those topics, within the 5 minutes i have, i would like to make 4 quick points : the first one is on the changes which are taking place in our payment system and the wider financial system, driven by the advancing digitalisation of financial services. at this stage, a lot of attention is focused on the use of distributed ledger technologies ( dlt ), in relation to the speculative crypto market and decentralised finance ( defi ). however, behind the hype, there is a more discrete and more transformative trend underway : the tokenisation of finance. however tokenisation is not a single innovation per se but rather a new ecosystem that is building up, which has spawned new activities and services, which first appeared in the payments sector before spreading to the wider financial sphere. the development of this ecosystem is still in an early stage. nevertheless, it could lead to far - reaching changes in the way our financial system operates, by fostering the emergence of new players, that bridge the gap between it and finance, new investment and settlement assets in tokenized form, and new type of financial infrastructures, decentralized, based on dlt, particularly blockchains. my second point is about the opportunities and risks created by those transformations, for market participants and the payment system as a whole. here i would like to stress first that this impact is likely to be two sided. to illustrate this for the functioning of the payment system, it is important to recognize that the positive impact those transformations may have in terms of improved transparency, better cost effectiveness and ( 24 / 7 ) availability could come at the price of more fragmented processes. this is particularly relevant if blockchains are non interoperable and unable to interact smoothly with existing central clearing, settlement and payment
|
systems. it could also come at the cost of an excessive reliance on non - european entities, which raises competition, strategic autonomy and data protection concerns. second, this two sided impact creates specific challenges for an institution like the banque de france, given its mandate, a major one being the preservation of the critical role played by cebm in anchoring the stability of our payment and of our financial system more broadly. in that context, we see our task as being to help mitigate the risks brought by the transformations underway, while ensuring that benefits of those transformations are 1 / 3 bis - central bankers'speeches harnessed. to deliver on that task, we intend to use and we have actually started to use two policy instruments as levers, on the basis of two convictions. the two levers are our influence in the development of regulations for payment services and systems and the adaptation of our central bank money services. the two convictions are : first, innovation can bring sustainable benefits for the payment system only if it benefits from the confidence of its users, which requires a regulatory framework that does not stifle innovation but that is sufficiently demanding to ensure the protection of the stakeholders and the stability of the system. second, there is a public interest in keeping central bank money at the heart of the settlement processes between financial intermediaries as it is the safest settlement asset and hence the most appropriate to ensure financial stability. my third point is about the use of our first policy lever, the contribution to the development of regulations. in this field we have in the recent past contributed to the trail blazed in france in crypto assets with the adoption in may 2019 of the pacte law, which introduced the legal status of digital asset services provider, or dasp. europe's lawmakers have drawn heavily on the french framework, with the adoption of mica regulation, a specific regulatory framework covering the issuance of cryptoassets and stablecoins and the provision of related services. looking forward, while mica represents a vital regulatory step forward, it will need to be built on in the coming years. for example, it only partially tackles the concentration of crypto - asset service activities within crypto - conglomerates. the challenge here is to ensure that investors are protected, through rules covering notably the segregation of customer funds, rules of conduct and management of intermediary risks, for example by requiring activities to be separated. by virtue of its decentralised nature, the defi ecosystem likewise raises
| 1 |
whether the new rules for the financial system will be internationally compatible or bring about an uneven level playing field, leading to regulatory arbitrage. at the end of the day, it is the globally consistent implementation and transposition of the adopted key reforms into national law that counts. while heterogeneous national structures make it imperative to maintain a certain degree of flexibility when reforming financial regulation, we must ensure that individual countries do not game the system to the benefit of their own financial institutions. financial centres, when vying for a good position among themselves, must under no circumstances be permitted to engage in activities at the expense of financial stability, not least given the ever closer interconnectedness in the global financial system. individual countries should not seek advantages by watering down, or by reluctantly implementing internationally agreed reforms. to avoid such beggar - thy - neighbour policies, transparency, peer pressure and a close monitoring of progress in implementing agreed standards and measures will be essential. 5. conclusion ladies and gentlemen, to sum up : a number of crucial reform measures designed to secure financial stability have already been approved or are under way. yet important tasks still lie ahead. above all, we need β’ to find a solution for the sifi problem ; β’ to ensure that all financial institutions can be resolved without dragging down the whole system ; and β’ to identify the shadow banking system and expose it to supervision. in doing all this, we must strike the right balance between paying sufficient attention to peculiarities of national financial systems and ensuring an international level playing field. thank you for your attention! bis central bankers β speeches
|
while progress on a national level has been remarkable in many countries, obstacles to effective cross - border resolution remain. thus, one of our main tasks in the coming months will be to establish and ensure mutual compatibility between different national restructuring and resolution mechanisms. yet we should bear in mind that an orderly resolution of financial institutions which are truly active on a global level may be possible only to a certain degree. at the european level at least, the proposed european commission legislation, which is due before this summer, looks to represent a major step forward. 3. 3 let β s not overlook the shadow banking system the third regulatory challenge i want to address is the necessity to extend our reform efforts beyond the banking system. the stricter rules imposed on banks via basel iii and the rules for sifis entail the realistic danger that activities will be shifted to less regulated areas. therefore, it is imperative for us to better illuminate the fringes of the financial system. in other words, we must closely monitor and regulate what is commonly referred to as the shadow banking system. whether a market participant is classified as belonging to the shadow banking system should depend not so much on its institutional type but on its activities. at the behest of the g20, the fsb is currently exploring ways and means of monitoring and regulating the shadow banking system. it has recently defined the term shadow banking as β credit intermediation involving entities and activities outside the regular banking system β. 2 this rather broad definition involves non - banks such as special purpose vehicles and money market funds, but also hedge funds. the fsb will present a set of recommendations to the g20 in autumn of this year. what is already obvious today is the need to significantly enhance transparency by imposing appropriate registration requirements as well as reporting obligations on all parts of the financial system. yet better monitoring will not be enough. to reduce systemic risk, better regulation of the shadow banking system will be necessary too. this could be done either directly, by regulating the activities and actors of the shadow banking system themselves. or indirectly, by regulating banks β interactions with the shadow banking system. need for international cooperation let me close by emphasising once more the urgent need for international cooperation. more than 4 years after the outbreak of the crisis, we are now at a crossroads. our cooperation in see fsb, shadow banking : scoping the issues, a background note of the financial stability board, 12 april 2011. bis central bankers β speeches the coming months will decide
| 1 |
the ndrc signed an mou to better support mainland cross - border financing activities and promote the development of hong kong's bond market. these are encouraging developments that reaffirm the 1 / 3 bis - central bankers'speeches authorities'continued support for mainland issuers to tap the international market for cross - border financing. clearly hong kong and many of you here are well positioned to seize the flows that come as the market turns. speaking of cross - border opportunities, hong kong is an important gateway for international investments in the onshore bond market. bond connect, for example, accounted for two - thirds of foreign investors'total turnover in the onshore china interbank bond market in 2023. meanwhile, we are making good progress in helping bond holders to better manage their risks and liquidity. the swap connect launched last year complements the bond connect by facilitating global investors'management of interest rate risks arising from their allocation to mainland bonds. the hkma is also in discussion with mainland authorities in enhancing cross - border connectivity in the repo market. in january this year, the hkma and the people's bank of china jointly announced the further opening up of the onshore repo market to all foreign institutional investors that already have access to the onshore bond market, including bond connect investors. the market consultation ended last month and we will support the pboc's work in taking forward this important initiative. a month ago the hkma started accepting certain onshore rmb bonds as eligible collateral for our rmb liquidity facility. these new measures will facilitate international investors'diverse use of their mainland bond holdings and provide them with more liquidity management tools, thereby enhancing the depth and breadth of their participation in the mainland bond market. the second development, or more accurately, longer term trend, is the continued shift towards green and sustainable finance. indeed the icma report has covered this in length, and for good reasons. asia's transition to a sustainable development is critical to the global climate agenda given the region's share of global carbon emission. yet the transition is challenging given that many asian economies lack the requisite financial resources. encouragingly, the asia bond market is shaping up to meet this challenge. last year, more than 20 % of the region's international bond issuances were in green and sustainable format, considerably higher than the global average of around 10 %. hong kong is playing its part. in recent years, over one - third of asia '
|
allows an individual to make informed and effective decisions with all of their financial resources β is an important life - skill in our diverse capacities as students, employees, consumers, savers and investors etc. in short, it is important for all responsible economic citizens to have. β so why not start now and start young? start young on financial fitness... it will be fun and worth it! if we plant the financial literacy seed now, we will watch as our children and students grow and bloom into responsible economic citizens. as parents, teachers and educators, we can do this by sharing and talking directly with our children about money matters, teaching them of the things to improve their money management skills, and be role models for them. to the winners of the 2014 be money wi $ e poster competition, i offer my heartfelt congratulations! you have done a magnificent job with these posters β your entries were chosen out of 550 entries submitted to us! i only pray that you will exercise some financial literacy with your cash prizes received today!! i would also like to acknowledge the principals and teachers for encouraging your students to participate in the competition and for incorporating financial literacy in your lessons. with the bis central bankers β speeches rewards that your individual schools will receive today i hope you are now ever more convinced that financial literacy is worth it and that it pay $ off! at this point i would like to acknowledge meilan meredith and her team at business system limited for the wonderful partnership in the poster competition and kindly donating prizes and trophies for our winners today. your partnership is greatly appreciated and we look forward to another opportunity to work with you in the future. and lastly, a big faamalo to the financial system development team for coordinating this year β s poster competition. i wish you all, a very blessed weekend. soifua ma ia manuia. bis central bankers β speeches
| 0 |
to turn to another aspect of the way we conduct monetary policy in this country. as i said at the outset, the bank is constantly searching for ways to enhance the effectiveness of monetary policy. over the past couple of years, we have been looking at how other major central banks go about announcing changes in official interest rates, and we have been assessing whether our current arrangements could be improved. we have noted that most foreign central banks announce their decisions on interest rates only on certain dates that are set well in advance. in the united states, this has been the practice for some time. and now it is also the case in the other major economies ( japan, the euro zone and the united kingdom ) as well as in a number of smaller industrial countries ( eg sweden, australia and new zealand ). after carefully considering all the relevant issues, we have concluded that pre - set dates for announcing interest rate actions would improve the implementation and effectiveness of canadian monetary policy. we have decided that eight specified dates per year would be appropriate in the canadian context. the scheduling of these eight dates would be based on the timing of the flows of economic information that the bank relies on to gauge the economic situation in canada, to make projections, and to assess the need for monetary policy action. each of these eight dates would be separated from us policy action dates by a week or more. in preparing to move to this new system, we will be consulting interested parties on the most appropriate day of the week and time of day for announcing interest rate changes. the way we see it, this new approach has several advantages over the existing arrangements, advantages that should contribute to a more effective monetary policy. i would like to briefly highlight some of these benefits. to begin with, the new arrangements should reduce uncertainty in financial markets about the timing of policy actions. under the current system, the bank can move interest rates on any business day ( monday to friday ), at 9 am because market participants are not sure exactly which day a change in interest rates may be announced, trading can slow in the early morning, for several days, when there is an expectation that the bank may move. removing this uncertainty should improve market efficiency and liquidity. we also believe that the new system will help to focus public attention more closely on economic trends here in canada, and on the appropriate monetary policy response based on those critical trends. let me explain. on each of the eight pre - set dates for interest rate action, the bank would issue a press
|
at fair value with market value gains and losses recognized in the capital account through other comprehensive income ; β’ assets held to maturity and managed for yield and return of principal over time shown at amortized cost with a reserve reflecting life - of - loan or through - the - cycle potential credit losses ; and β’ for business combinations, identical accounting treatment for acquired assets and similarly managed assets on the acquirer's balance sheet. regulatory changes in terms of regulatory changes, our current regulatory capital framework needs to be revised to ensure that banking organizations have a level of capital sufficient to facilitate lending, while also ensuring safe and sound operation throughout the economic cycle. work is underway to develop an approach that would allow banks to retain more capital in good economic times and to allow this excess or buffer to be reduced as the economic cycle worsens. the goal is to have a level of capital that is sufficient to support lending, while maintaining safety and soundness. the challenge is to develop an appropriate target for this excess amount and to identify the right economic trigger for determining when this excess should be reduced. this is a delicate balance. in addition, the elements that we consider to be tier 1 capital in our current framework need to be revised. since our framework starts with components of equity capital as measured under generally accepted accounting principles ( gaap ), we are carefully evaluating every element of regulatory capital that is treated differently in regulatory capital than in gaap. for example, gaap equity includes accumulated other comprehensive income ( aoci ) and the current regulatory framework neutralizes the impact of certain items in aoci such as unrealized holding gains and losses on available - for - sale debt securities. and finally we are coordinating capital standard setting with our counterparts in other countries. to the extent that gaap and accounting standards in those countries are different, our capital definitions may also differ. impact on securitization finally, i'd like to offer a quick word of caution on accounting for off - balance - sheet items and the future of securitization markets. our financial system has become dependent upon securitization as an important intermediation tool. during the crisis, securitization markets ground to a halt. the federal reserve's term asset - backed securities loan facility ( talf ) has helped restart activity in some markets, such as securities backed by auto loans or credit card receivables. but the cmbs market is still very weak and the market for newly issued, private - label rmbs
| 0 |
andrew gracie : lac and mrel β from design to implementation speech by mr andrew gracie, executive director of resolution of the bank of england, at the bba loss absorbing capacity forum, london, 23 july 2015. * * * thanks for the opportunity to speak. in many ways, resolution is the last major piece of the financial reform agenda and ensuring banks have sufficient loss - absorbing capacity is central to that. rules in this area remain to be finalised, but the components are coming into place. the binding requirement for european resolution authorities is, from early next year, to begin setting a minimum requirement of own funds and eligible liabilities ( mrel ) for all eu banks in line with the bank recovery and resolution directive ( brrd ) requirements and european banking authority ( eba ) regulatory technical standards ( rts ). you will have seen that the rts have recently been published in an β eba final β version. this will be a binding eu regulation once formally adopted by the commission. for european g - sibs, mrel requirements will need to be set consistently with the fsb β s total loss - absorbing capacity ( tlac ) standard. consultation responses on this are being considered alongside the results of the impact assessment. the standard will be finalised by the time of the g20 summit in november. so no definitive statements today, but i want to address some recurrent issues, including some points that have cropped up in the fsb and eba consultations. i want to talk about three big themes : β’ mrel and tlac : how far are they the same or different? β’ the relationship between the regulation of banks β liability structures via tlac and mrel and resolution planning. β’ and why, if we are preparing firm specific resolution plans, have a tlac standard at all? starting with mrel and tlac, much has been made of the differences between them. let me set these out in turn : β’ tlac sets a global standard for g - sibs 1 while mrel is for all eu banks and investment firms. β’ tlac describes a pillar 1 minimum requirement, while mrel is set by the resolution authority, bank by bank on the basis of a resolution plan. β’ the tlac requirement is set in terms of risk weighted assets ( rwas ) and leverage while mrel is formally set in relation to total liabilities and own funds. β’ the fsb consultation specifies the quantum and
|
need to consider how to go from mrel in current liability structures to an mrel that ultimately meets the brrd objectives. the rts allows transitional mrel to be set until 2020. work needs to be done to clean up existing liability structures to make them consistent with requirements. this is firm level work which will be addressed as part of the resolution planning process. let me give you some examples of what i have in mind. β’ my first is structured notes. some respondents to the fsb consultation suggested the blanket exclusion of structured notes from tlac should be relaxed. we are reflecting on that. but the current situation is that in many cases structured notes have been issued to meet the needs of often quite small pockets of investors. the result is that some firms have many thousands or even tens of thousands of notes outstanding each with different structures and embedded derivatives. trying to value all these instruments and bail them in would be a barrier to making resolution work. and as such will need to be addressed as part of the resolution planning process for a particular firm. β’ my second example is non - equity capital instruments issued out of operating companies. as i described earlier, spe strategies are built around putting only the top company in a group into resolution and avoiding legal risk and the potential dislocation of systemic functions by keeping operating subsidiaries outside resolution. but there is a tension with this strategy where banks want to count nonequity capital instruments issued out of subsidiaries as tlac or mrel. the instruments may meet the other requirements to qualify β minimum maturity, subordination etc β but if the only way that they can bear loss is by putting the subsidiary into resolution there is a question of compatibility with the resolution strategy. as part of brrd we have in the eu a statutory power at the point of nonviability ( ponv ) to write - down regulatory capital instruments. but the same is not true outside europe. as part of the resolution planning process we will need to identify these cases and how to address them. incidentally one advantage of this ponv write - down power is that in resolution we can ensure the order of depletion of liabilities follows the creditor hierarchy. that is, losses are first absorbed by regulatory capital instruments in the operating company where they occur. if the losses are sufficient to wipe out the capital, then the operating company is recapped by write - down or conversion of any other internal tlac. this pushes losses up into the parent
| 1 |
and we are doing our bit to achieve that by running today β s symposium. what is more, i can well imagine instances where climate - related risks are also raised at supervisory meetings with credit institutions. i am a firm advocate of the idea that supervisors and central banks themselves should strive to perform a special function as a role model and catalyst. this means, for example, helping to forge a deeper understanding of how the mechanisms behind the risks work. it was for this reason that the " network for greening the financial system " was established only a short time ago. this network will serve as a platform for a group of central banks and banking supervisors from around the world to exchange views on climate risks for the financial sector, regulatory issues and green bonds, to name but three topics. whatever supervisors strive to achieve, i believe it is particularly important for us to establish a consistent taxonomy and uniform definitions as the basis for credible standard setting in the area of green finance. klaas knot will tell you more about this in just a few moments. so we're not coy about playing our part as supervisors in the decarbonisation of banks β balance sheets. yet there are other demands being placed on banking supervisors and regulators which i am keeping a very close eye on, because i consider them to be dangerous. in the debate surrounding the implementation of the paris climate targets, some have suggested using the prudential framework to actively steer financial flows away from emissions - heavy sectors to more environmentally friendly ones. more specifically, there have been demands recently for banking regulation to include special rules that tip the regulatory scales against environmentally unfriendly " brown " investments or in favour of " green " financial assets on banks β balance sheets β via capital requirements, for instance. this has been dubbed the " green supporting factor ". 5 / 7 bis central bankers'speeches however, sustainability in the sense of environmental friendliness does not necessarily go hand in hand with reduced risk β i already mentioned innovation risks earlier on in my speech today. and that is also why capital requirements should be calculated on the basis of just a single factor β the riskiness of the exposures in question. financial market regulation in general and banking supervision in particular need to be focused on their core tasks and remain geared to risk. watering down the regulatory mandate would create conflicts of interest and ultimately lead to risks to financial stability β and surely that cannot be what we want. the european commission today unveils its action plan on sustainable finance.
|
from the perspective of banking supervision. that is the risk which climate change and the transformation of the economy might present for the financial sector β and the matter of how far financial institutions will need to adapt to shield themselves from that risk. and last but not least, we as central bankers and supervisors need to face up to the question of the role we are able to, and intend to, play in transitioning to a green financial system. these three topics β the risks facing the financial industry, the opportunities for the financial industry, and the role of supervisors β are the subject of my speech here today. 2 the risk perspective : what are we talking about, exactly? let's begin by taking the risk perspective. mention climate change and the first thing most people think about is natural catastrophes : storms, heatwaves, droughts, floods and hurricanes. you might remember that last year β s atlantic hurricane season was one of the worst on record. catastrophes on that scale mainly inflict widespread human suffering, of course, but they also present economic risks, or " physical risks ", as they are known. and those risks can affect every one of us : individuals, government budgets, insurers, and other financial institutions. we are already seeing the costs materialising on the balance sheets of non - life insurers and reinsurers today. they add up to more than us $ 200 billion for the 2017 hurricane season. that is why these costs usually make the headlines. but natural catastrophes can have a direct impact on banks and savings banks as well if the assets they finance β be they real estate, production facilities or tradables β are affected. indirectly, this might disrupt value creation and delivery chains, having a knock - on effect on customers. and there is nothing to say that weather and climate - related losses of this kind will still be insurable if climate change continues to dramatically increase the likelihood of natural catastrophes and the expected amount of losses. but we need to think one step further. besides the direct impact of climate change, there are yet more risks which we need to bear in mind, because the shift towards a lower - emission, " greener " economy is itself a source of potential risks, which go under the somewhat unwieldy name of " transition risks ". the background to this is as follows. to make this transition, potentially disruptive technological advances and far - reaching changes in climate policy are called for. these developments will leave hardly
| 1 |
mario draghi : ecb press conference - introductory statement introductory statement by mr mario draghi, president of the european central bank, and mr vitor constancio, vice - president of the european central bank, frankfurt am main, 25 january 2018. * * * ladies and gentlemen, first of all let me wish you a happy new year. the vice - president and i are very pleased to welcome you to our press conference. we will now report on the outcome of today β s meeting of the governing council, which was also attended by the commission vicepresident, mr dombrovskis. based on our regular economic and monetary analyses, we decided to keep the key ecb interest rates unchanged. we continue to expect them to remain at their present levels for an extended period of time, and well past the horizon of our net asset purchases. regarding non - standard monetary policy measures, we confirm that our net asset purchases, at the new monthly pace of β¬30 billion, are intended to run until the end of september 2018, or beyond, if necessary, and in any case until the governing council sees a sustained adjustment in the path of inflation consistent with its inflation aim. if the outlook becomes less favourable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation, we stand ready to increase the asset purchase programme ( app ) in terms of size and / or duration. the eurosystem will reinvest the principal payments from maturing securities purchased under the app for an extended period of time after the end of its net asset purchases, and in any case for as long as necessary. this will contribute both to favourable liquidity conditions and to an appropriate monetary policy stance. incoming information confirms a robust pace of economic expansion, which accelerated more than expected in the second half of 2017. the strong cyclical momentum, the ongoing reduction of economic slack and increasing capacity utilisation strengthen further our confidence that inflation will converge towards our inflation aim of below, but close to, 2 %. at the same time, domestic price pressures remain muted overall and have yet to show convincing signs of a sustained upward trend. against this background, the recent volatility in the exchange rate represents a source of uncertainty which requires monitoring with regard to its possible implications for the medium - term outlook for price stability. overall, an ample degree of monetary stimulus remains necessary for underlying inflation pressures to continue to build up and support headline inflation developments over the medium term. this continued
|
the collective actions of governments, policymakers and economic and financial agents, including those of us in this room today. in my remarks this morning, i will discuss the role of financial integration as both a key enabler and an outcome of the aec. i will talk about where we are in this process and some of the priorities for policy frameworks as well as for the management of risks by financial institutions as we move forward. this, i hope, will provide useful inputs for your deliberation and discussion in this conference. the case for greater financial integration asean is home to more than 600 million people and if considered as a single entity, would represent the sixth largest economy in the world with a combined gdp of usd2. 5 trillion. according to the oecd, the region is projected to sustain an average annual growth of 5. 6 % bis central bankers β speeches over the next four years and is expected to be the fourth largest trading bloc by 2050. concurrently, the standards of living among the general populace will continue to improve. household purchasing power has risen significantly over the last decade, transforming the region into a thriving hub of consumer demand. the size of asean β s consuming class is expected to double from 81 million to 163 million by 2030. by 2020, asia is estimated to account for more than half of the total global middle class population, with asean representing more than usd2 trillion of additional consumption within the region. also, as the sources of economic growth become increasingly domestic - based, this enables many economies to diversify their sources of growth. an important development is the significant increase in intra - regional trade. these developments augur well for the region and would expand domestic demand and further fuel greater intra - regional trade among asean member countries. the promise of higher living standards and employment is also drawing large numbers of people from the countryside to cities. today, just over a third of asean β s population are living in urban areas. this is expected to rise to 45 % by 2030. integrating national financial systems within the region is key to unlocking asean β s enormous economic growth potential. as a critical component of the aec, financial integration will significantly enhance the efficiency and effectiveness of intermediation and allocation of resources. this is crucial as the region pursues greater economic prosperity that is both inclusive and sustainable. by allowing the region β s financial resources to move more freely across borders, financial integration will open up new opportunities for businesses and trade, enhancing further financial link
| 0 |
now under way. with their due diligence complementing the tail - risk reduction envisaged from pcar2011, it is not unreasonable to suppose that such investors will see sufficient franchise value in the continuing banks to convince them that attractive investment opportunities exist. i look forward to welcoming new owners of ireland β s downsized and cleaned - up banks. reducing the risks of an underperforming economy also calls for sustained energy and commitment on a number of other dimensions. i have already alluded to the adjustments that have been needed in the other two fundamental pillars of the recovery, fiscal balance and cost competitiveness. both got badly out of kilter in, or as a result of, the boom years, in ways that i don β t need to rehearse today. as a professional deformation, i tend to talk a lot about banking, but i don β t want to fall into the trap of having you believe that the fiscal crisis is all about meeting the banks β losses. to be sure, the fiscal crisis has been brought on by the bank - driven boom and bust. but i hope it is some comfort to be reminded that only something of the order of one - eighth of the fiscal adjustment over the coming years is attributable to the additional debt servicing costs resulting from the additional borrowing to fill the banking hole ; the remainder is to claw the budget back to where it would have been if the structure of tax and the level of spending had not veered out of what could be sustained during the bank - driven property boom. the current impact of the banking losses on the economy is not so much via the net longterm taxpayer cost, but comes mainly as a result of the accumulation of debt. the jump in debt associated with these losses is of the same order of magnitude as the rest of the borrowing 2009 β 10 ( fig. 4 ). either of these components would have been unproblematic, together they make the markets and the rating agencies nervous. the fiscal adjustment could possibly have been delayed by a year or two had it not been for the banking losses ; now it cannot wait. there have been misgivings about the scale of the fiscal adjustment and the withdrawal of aggregate demand that it will entail. before the eu - imf programme was agreed, it was clear that a less rapid adjustment was infeasible given the rapidly diminishing appetite of the market for additional irish government bonds. now that the programme is in place, the
|
patrick honohan : banking union challenges opening statement by mr patrick honohan, governor of the central bank of ireland, to the joint oireachtas committee on eu affairs, dublin, 30 april 2013. * * * we thank the committee for the invitation to appear before it and contribute to its important work on the future of economic and monetary union. important because of the scale of the challenge to restore stability and create sustainable growth and jobs. important also because of the role of the committee in ensuring democratic participation and accountability on eu issues. the euro area has been battered by the fall - out from the great financial crisis that broke out in 2007. when the flood of financial globalisation receded, it exposed interrelated banking and fiscal and competitiveness weaknesses in many euro area countries. cross - border banking claims threatened to transmit weakness from stressed countries such as greece, portugal and ireland, to banks elsewhere in the monetary union. high indebtedness of some countries no longer seemed as easily supportable as had previously appeared. and even stronger countries experienced sizable banking losses. accelerated balance sheet repair associated with aggregate macroeconomic demand weakness has meant that recovery has been slow and tentative. this combination of pressures β primarily related to banking and wider financial sectors, as well as to macroeconomic and fiscal imbalances and divergences in competitiveness, has represented a significant challenge to the cohesion of the union. both borrowers and lenders became apprehensive and protective of their interests. at certain moments in 2011 β 12, the combination of problems seemed to market participants to threaten the very sustainability of the institutional arrangements supporting the common currency. while such fears have been allayed by the credibility of subsequent action, most notably the announcement of the outright monetary transactions ( omt ) programme of the ecb, the wider need to rebuild trust and strengthen the institutional architecture of the system is evident and confirmed in a general recognition that progress needs to be made on four dimensions, banking, fiscal, economic, and political, as adumbrated in the report of the four presidents ( of the european council, the european commission, the eurogroup and the ecb ) last june. i think it will be most appropriate for me to focus my remarks today chiefly on the banking pillar, i. e. banking union. we need banking union to transform the financial system from a source of risk and instability to a source of growth and support to the real economy. we have in fact made considerable progress in recent
| 0.5 |
washington, d. c. see l. d. papademos and j. stark ( 2010 ), enhancing monetary analysis, ecb, in particular chapter 7, β cross - checking and the flow of funds β. actually, before the crisis we wrote a paper on the use of financial accounts and other statistics for the analysis of financial stability. see r. de bonis, g. grande, s. magri, l. f. signorini and m. stacchini ( 2005 ), β financial stability : an overview of bank of italy statistics β, irving fisher committee bulletin, 23, october. for an example see duca, j. and j. muellbauer ( 2014 ), β tobin lives : integrating evolving credit market architecture into flow of funds based macro - models β, in a flow - of - funds perspective on the financial crisis, vol. ii, palgrave macmillan, basingstoke. we also draw from muellbauer j. ( 2016 ), macroeconomics and consumption : why central bank models failed and how to repair them, vox. eu, 21 december. here at the bank of italy financial accounts have been used rather intensively in research over the years. an incomplete list of articles and books based on italian financial accounts includes around 100 works by bank of italy authors alone. research has covered, among other things, the structure of the italian financial system, household wealth, firms β financial structure ; convergence of financial systems, and macro financial imbalances. a 2012 collection of essays on the evolution of financial systems is one example. we regularly comment on financial accounts statistics in the annual report, the economic bulletin and the financial stability report. let me now turn briefly to purely statistical issues. as i mentioned, the bank of italy has regularly published the country β s financial accounts ( stocks and flows ) since the 1960s ; yearly stocks have been reconstructed for the main institutional sectors as far back as 1950. below is the first statistical manual we published in 1969. we implemented the sec79 standards ( and showed quarterly figures for the first time ) in the early 1990s, the esa95 standards in 2002 ( during my time in statistics ), and the esa2010 standards in 2016. over the years countless methodological improvements have been made to coverage and estimation methods. many people here will be familiar with the multiple challenges of using diverse sources, often designed for non - statistical purposes and lacking common methodological standards, to obtain
|
bank of italy conference on β how financial systems work : evidence from financial accounts β opening remarks : luigi federico signorini, bank of italy, deputy governor thursday, 30 november 2017 it is a pleasure to welcome you to the banca d β italia for this workshop. as a former head of the statistical directorate i am particularly happy to see such a distinguished list of speakers and guests on this occasion. i would like to thank all those who contributed, from other institutions, from academia, and from inside the bank. financial accounts have a long history and we take some pride in having worked on them almost from the beginning. as many in this room will know, the first model accounts were developed by morris a. copeland for the us. 1 the picture above, which has a nice vintage feel to it, summarises his idea of the economy as a money circuit, showing the connections between the institutional sectors. in 1955 the federal reserve published its first version of the annual flow of funds. italy β s first financial accounts appeared about ten years later, in the annual report of the banca d β italia for the year 1964. we were among the first countries for which financial accounts became available. of course, the pioneering work at the fed was an inspiration, but there had been some significant preparatory work here as well. since the 1940s paolo baffi, who was to become governor many years later ( 1975 - 79 ), had been working on reconstructing copeland m. ( 1952 ), a study of moneyflows in the united states, nber, new york. here we draw from de bonis r. and a. gigliobianco ( 2012 ), β the origins of financial accounts in the united states and italy : copeland, baffi and the institutions β, in de bonis r. and a. pozzolo ( eds. ), the financial systems of industrial countries. evidence from financial accounts, springer. the financial statements of the institutional sectors. he was influenced by giorgio mortara, an eminent statistician and his teacher, and by wesley mitchell, whose work on business cycles he had translated. 2 they used to tell a story here at the bank of italy about how baffi visited the federal reserve board in the mid - 1950s, as head of research, to discuss the construction of financial accounts. proof that this was no myth was recently discovered in our historical archives in the form of several letters ( one is pictured below ) exchanged between william mcchesney
| 1 |
imagine a successful exit from the forthcoming tough european and franco - german - negotiations : the southern european countries - including france - accept domestic rules for fiscal discipline ; the northern countries including germany - accept a european fiscal capacity. fortunately, here we are not starting from scratch : a major step forward has been made thanks to the " next generation eu " ( ngeu ) programme, which was designed as a means of emerging from the economic crisis caused by the covid - 19 pandemic with a dual objective of recovery and long - term strategic investment. at the moment, our priority is of course to ensure the complete success of the ngeu programme, and even to adjust it to the consequences of the ukrainian shock. but it would be wise to think in two directions for the future : we should not aim to turn one - off into recurrent, but into an available instrument. not a new annual budget, but the capacity of a tool β at hand β that could be activated in the event of shocks, including asymmetric ones, page 7 of 9 affecting the eu : we would avoid the spectre of a " european transfer union " so feared in germany, in favour of a capacity that could benefit all. in terms of objectives, our first economic need is that of economic stabilisation, and therefore of an instrument to be activated at the low point of the cycle. but political consensus could probably only be reached around strategic investments in climate transition, innovation or defence. for the moment, europe is betting, as ngeu has done, on a form of constructive ambiguity between these two goals : it seems advisable, as we move forward, to better clarify the way in which they are articulated. being based on a common debt, this instrument would also make it possible, should it be activated, to raise the quantity of safe european assets available on financial markets, and thus to reinforce the capital markets union and the international role of the euro. 3. focusing the debate on the quality of public spending one essential point often remains the blind spot in our budgetary debate : the quality and efficiency of public spending. i am aware of the risk of appearing to give too easy or theoretical lessons on these subjects i am a great believer in our public service, and i am affected by the current crisis it is going through. so many public services in france are suffering from the dissatisfaction of both their players - the civil servants - and their users - the citizens. pointing systematically to a lack of resources and
|
while, in the meantime, enhancing the role and status of the sdr. there are good arguments to create international instruments providing a reliable store of value. there are also conceptual and political difficulties. a choice would have to be made as to the true nature of the β super reserve currency β. would it be a basket of existing monies such as the sdr today? or would it be a new β fiat β currency? more fundamentally, a new reserve currency would, in fact, grant a collective guarantee against exchange risk. this guarantee would benefit surplus countries and would be given by deficit countries. when the substitution account was discussed more than 25 years ago, it became clear, at the time that it would have to be part of a package encompassing explicit, binding and symmetric rules on balance of payment adjustments. most likely, the same questions would be raised again today and the creation of a new reserve currency would have to be part of a broader framework. that may take time, as our chinese colleagues are fond of reminding us when we discuss those issues. in the meantime, financial development in emerging economies can go a long way towards expanding the range of safe and liquid financial assets available to domestic and international investors. capital markets in local currencies have developed significantly over the last decade as fiscal positions in emerging countries have dramatically improved. there seems to be considerable scope for regional financial and monetary arrangements to prosper in the future. those huge pools of savings currently available can be intermediated locally instead of going through financial systems located in advanced economies. regional financial markets would have to complemented and underpinned by monetary arrangements. asian countries are working on and implementing progressively such schemes through the chiang mai initiative. we, in europe, monitor closely those evolutions as well as the progressive emergence of the rmb as an international currency. as you know, we have a long and successful history of economic, financial and monetary integration. we have learned a lot and, still recently, gone through many crises and difficulties. nevertheless the euro, which did not exist fifteen years ago, stands today as one of two major world currencies. we certainly don β t pretend our own experience should constitute a model or an example to be followed. i have, however, one certainty : a strong and permanently renewed spirit of cooperation has allowed us to overcome many obstacles and to reap many benefits in terms of prosperity and stability. in a world full of opportunities, but also increasingly complex, this may be an inspiration for all
| 0.5 |
alan greenspan : the growing need for skills in the 21st century remarks by mr alan greenspan, chairman of the board of governors of the us federal reserve system, before the us department of labor 21st century workforce summit, held in washington, dc on 20 june 2001. * * * i am pleased to have the opportunity to be part of today β s 21st century workforce summit and appreciate the hospitality of secretary chao and the department of labor. the past decade or so has been marked by a remarkable surge in technological innovation and business efficiency. this period of rapid innovation has brought with it enormous opportunities to enhance living standards for a large majority of americans. our ability to take full advantage of these opportunities depends crucially on how well we as a nation can integrate these new technologies into our society. in my remarks today, i would like to offer some perspective on the challenges created by the interaction of new technologies with the skills of the american workforce, and how the educational system has in the past and can in the future respond to these challenges. the process of innovation is, of course, never ending. over the past 100 years, for example, the rate of increase of the gross domestic product of the united states, adjusted for price change, has averaged around 3 percent per year. yet only a fraction of that increase represents growth in the tonnage of physical materials β particularly oil, coal, wood, raw chemicals β and increases in the amount of manual labor employed in the production process. the remainder represents new value - adding insights into how to rearrange physical materials and labor inputs to better serve human needs β in short, the conceptual content of the gdp. the inexorably rising share of the nation β s output that is conceptual appears to have accelerated following world war ii with the insights that led to the development of the transistor, microprocessor, laser, and fiber optic technologies. by the 1990s, these and other critical innovations had fostered an enormous new capacity to capture, analyze, and disseminate information and had begun to alter significantly how we do business and create economic value, often in ways that were not foreseeable even a decade ago. indeed, it is the proliferation of information technology throughout the economy that makes the current period so special. the types of skills needed to interact with the new methods of adding value associated with this diffusion of information technologies are complex. one obviously needs a core of highly skilled workers to push the frontier of technology forward and to make the newer
|
conference in chicago, we have been hearing a range of perspectives not only from academic experts, but also from representatives of consumer, labor, community, business, and other groups. we are drawing on these insights as we assess how best to achieve and maintain maximum employment and price stability. in july, we began discussing topics associated with the review at regularly scheduled fomc meetings. we will continue reporting on our discussions in the minutes of fomc meetings and will share our conclusions with the public when we complete the review later this year. 5 thank you very much for your time and attention. i look forward to the conversation and the question - and - answer session to follow. 1 these remarks represent my own views, which do not necessarily represent those of the federal reserve board or the federal open market committee. i am grateful to brian doyle of the federal reserve board staff for his assistance in preparing this text. 2 the most recent summary of economic projections is an addendum to the minutes of the december 2019 fomc meeting. see board of governors of the federal reserve system ( 2020 ), β minutes of the federal open market committee, december 10 β 11, 2019, β press release, january 3. 3 see the statement regarding monetary policy implementation and balance sheet normalization, which is available on the board β s website at www. federalreserve. gov / newsevents / pressreleases / monetary20190130c. htm. also see the balance sheet normalization principles and plans, available on the board β s website at www. federalreserve. gov / newsevents / pressreleases / monetary20190320c. htm. 4 see the statement regarding monetary policy implementation, which can be found on the board β s website at www. federalreserve. gov / newsevents / pressreleases / monetary20191011a. htm. 5 information about the review and the events associated with it is available on the board β s website at www. federalreserve. gov / monetarypolicy / review - of - monetary - policy - strategy - tools - and - communications. htm. 2 / 2 bis central bankers'speeches
| 0 |
union β s future institutional shape, the foundations for a lasting solution should be in place. 3. closing remarks let me now return to japan, our host country. 25 years have passed since the bundesbank opened its representative office in tokyo. since then, it has successfully helped improve our understanding of the japanese economy. many of the developments which our office reported proved to be of importance for our own policies. let me mention the lessons from the build - up, bursting and clean - up of the japanese financial bubble and, in particular, the bank of japan β s experience in the fields of financial stability and unconventional monetary policy. another example is the lehman collapse in september of 2008. both the bundesbank β s office in tokyo and the bank of japan β s office in frankfurt provided an efficient channel for a vital bilateral flow of information. germany stood side by side with japan in the difficult times following the tragic events of 11 march, 2011. we are pleased to learn that the japanese economy is on a path to recovery. against this background i am particularly happy that the anniversary of our representative office coincides with the inauguration of our new premises. moreover, within these enlarged premises, we will set up a trading office which will begin operating this month. my colleague joachim nagel will now give you more information in this regard. bis central bankers β speeches
|
martin redrado : the central bank of argentina passed the test article by mr martin redrado, governor of the central bank of argentina, published in clarin newspaper on 5 august 2007. * * * this time, the epicenter was not latin america, southeast asia or southern africa. the financial turbulence of the past few days comes from the developed world β more specifically, the united states. real estate prices, which have been falling for more than twelve months now, have begun to affect the quality of the assets in the mortgage market. in particular, banks and mutual funds trading mortgages in the subprime market have passed on increased risk to the system. this has led to a massive sale off in most of the higher - yield asset classes, including emerging market securities, to cover losses in the markets of origin. against this turbulent backdrop, which leads to a new risk assessment and tighter credit, argentina has shown that it has the necessary exchange rate and monetary tools to provide its population with a horizon of solvency and predictability. in this context, the central bank of argentina is like a chess player playing simultaneous games, since monetary policy cannot have an erratic or spasmodic behavior. instead, each β move β must be in line with the global strategy applied in multiple chessboards, that is, preserving the value of currency, the stability and depth of the financial system, and the equilibrium in the monetary market. from this perspective, special attention should be given to the downstream effect of each β move, β since often, β sacrificing a pawn β may seem costly in the short - term, but healthy and consistent with the main goals of the framework in place from a strategic point of view. action taken β encompassing a set of financial and banking regulations and direct intervention in the monetary, foreign exchange and financial asset markets β should not be interpreted in isolation. instead, it responds to a preventive and consistent strategy developed in the past few years to ensure the necessary β artillery β to prevent frights in times of international financial turbulence. prudential foreign reserve accumulation is an example that speaks for itself. as with every insurance policy, it represents an β abstract β benefit while it is not used, but a β concrete β one in financial stress situations : the $ 44 billion in the central bank β s coffers were enough to discourage speculation that might have increased uncertainty. if this is coupled with the positive inflow of dollars coming from the external surplus, the potential
| 0 |
. see balassa, 1964, and samuelson, 1964. see rodriguez - palenzuela, camba - mendez and garcia, 2003. see ecb, 2003a and 2003b. complementary perspectives : an economic and a monetary analysis. these have become known as the two pillars of the ecb β s strategy. the economic analysis focuses mainly on the assessment of current economic and financial developments from the perspective of the interplay between supply and demand in the goods, services and factor markets. in this respect, the macroeconomic projections serve to structure and synthesise a large amount of economic data. nevertheless, these cannot be regarded as an all - encompassing tool for the conduct of monetary policy. i will elaborate on this issue in a moment. the monetary analysis serves as a means of cross - checking, from a medium to long - term perspective, the short to medium - term indications arising from the economic analysis. in october 1998 the governing council assigned a prominent role to money in recognition of the fact that, in the medium to long run, monetary growth and inflation are closely related. this provides the governing council with key information at time horizons stretching beyond those usually adopted for the construction of central bank inflation projections. the prominent role assigned to money in the ecb β s strategy is signalled by the announcement of a reference value for monetary growth. however, the monetary analysis seeks to provide a comprehensive survey of the liquidity situation, thereby going far beyond an assessment of monetary growth in relation to the reference value. in 1998 the ecb also discussed a strategy of direct inflation targeting as a particularly relevant option. in its strategy review the governing council again looked closely at the arguments. in the last two decades many countries have moved to a stability - oriented monetary policy framework. as a result, central banks have made a credible commitment to targeting low and stable inflation rates. in this context, a number of central banks have chosen a strategy of inflation targeting. essentially, this encompasses the following : ( 1 ) price stability as the primary objective ; ( 2 ) the public announcement of an inflation rate to be maintained over a more or less precisely defined time horizon ; ( 3 ) transparency of the monetary policy strategy through appropriate communication with the markets and the public on monetary policy decisions ; and ( 4 ) greater accountability on the part of the central bank as regards the fulfilment of its mandate. in retrospect, the policies pursued within this framework have been a great success in terms of achieving price stability.
|
concerning risks to the outlook, there have been extremely high uncertainties for japan's economy, including the following : developments in overseas economic activity and prices ; developments in the situation surrounding ukraine and in commodity prices ; and the course of covid - 19 at home and abroad and its impact. in this situation, it is necessary to pay due attention to developments in financial and foreign exchange markets and their impact on japan's economic activity and prices. meanwhile, japan's financial system has maintained stability on the whole. although attention is warranted on, for example, the impact of the tightening of global financial conditions, the financial system is likely to remain highly robust on the whole, mainly because financial institutions have sufficient capital bases. regarding financial risks from a longer - term perspective, while there is a possibility that prolonged downward pressure on financial institutions'profits may lead to a gradual pullback in financial intermediation, the vulnerability of the financial system could increase, mainly due to the search for yield behavior. although these risks are judged as not significant at this point, it is necessary to pay close attention to future developments. ii. conduct of monetary policy next, i will explain the bank's conduct of monetary policy. japan's economy is on its way to recovery from a downturn caused by covid - 19 and uncertainties for the economy have been extremely high. on the price front, the year - onyear rate of increase in the cpi is projected to decelerate to a level below 2 percent from fiscal 2023. given such developments in economic activity and prices, the bank will continue with monetary easing, aiming to firmly support japan's economy and thereby achieve the price stability target of 2 percent in a sustainable and stable manner, accompanied by wage increases. thank you. 2 / 2 bis - central bankers'speeches
| 0 |
urjit r patel : encouraging young enterprising skills in india speech by dr urjit r patel, deputy governor of the reserve bank of india, at the business standard best b - school project awards, welingkar institute of management development and research, mumbai, 12 january 2015. * * * i am honoured to be part of the business standard best b - school project awards to be presented today for recognising the bright young talent of business schools in india. i understand that this is the 7th edition of the award, and 158 colleges have participated from across the country with a wide range of projects. this conveys the high esteem that the award is held in, its popularity among b - school graduates, and the impact it has made over the years in recognising and honouring young professional talent. the teams are evaluated on the basis of the rigour of their work, innovative approaches, structure of the content and the meaningful solutions they provide for diverse business, social and organisational challenges. the function symbolises β out of box β thinking and the entailed enterprising skills of the β young india β. it epitomises a tribe of budding professionals who are not risk - averse and have β fire in the belly β to take a leapfrog into the future. frankly, i am deeply envious of the young students that i see in front of me. they have the dreams, desire and the capability to create new business models and modern enterprises, which india critically needs at this juncture. there are several notable inter - locking drivers that have been recently initiated or reinforced with vigour, which will complement our budding graduates β innate talent. β’ an emphasis on entrepreneurship for solutions. to absorb a labour force that increases by about one million per month requires many more entrepreneurs, tens of thousands, if not hundreds of thousands, more. β’ the national objective to make india a global manufacturing hub and a substantive part of international supply chains. the β make in india β vision / strategy is apposite and provides a much needed β focal point β to inculcate durable competitiveness in key sectors of our economy. β’ the stress on improving india β s ranking in the β ease of doing business index β. this provides a measurable gauge to determine how we progress. the repeated commitment and associated ground - level changes already taking place towards deepening β policy - driven β governance ( and less government ) is mission critical in this context.
|
y v reddy : evolving role of the reserve bank of india β recent developments speech by dr y v reddy, governor of the reserve bank of india, on the occasion of the foundation day of the institute of development studies, jaipur, 30 june 2007. dr. reddy is thankful to mr. kanagasabapathy, adviser - in - charge ( retd. ), reserve bank of india, for his valuable advice. * * * respected professor vyas, distinguished participants, ladies and gentlemen, i am indeed thankful to the institute of development studies and professor vyas for providing me this opportunity to share my thoughts with you today on the β evolving role of the reserve bank of india : recent developments β. my association with professor vyas has been long, but it became closer since november 2000, when he was appointed as a director on the central board of the reserve bank of india. professor vyas was also the chairman of the β advisory committee on flow of credit to agriculture and related activities from the banking system β, which was constituted by the reserve bank of india ( rbi ) in december 2003. many of the recommendations of the committee have since been implemented with good results. professor vyas is easily among the most eminent agricultural economists of the world and had been associated with the food and agriculture organisation of the united nations, where he made a significant contribution. as a person, he is extremely soft spoken and very scholarly, but his scholarship and erudition sit very lightly on his shoulders. humility is a trait which comes very naturally to him. it is my pleasure and honour to be here at his invitation. the institute of development studies, set up in 1981 at the initiative of a group of academic scholars and the government of rajasthan, has had the benefit of professor vyas β leadership. the institute aims to contribute to the understanding of the development processes broadly defined, besides providing a forum for better understanding of the issues involved in resolving the problems unique to the state of rajasthan. given the track record of the institute, i am confident that it will continue to make a meaningful contribution to the development process of the indian economy in general and of rajasthan in particular β especially those of bypassed sections. i. evolving role of rbi the reserve bank, established through the reserve bank of india act, 1934 commenced its operations in 1935. it draws its powers and responsibilities through other legislations also such as the banking regulation act, 1949. the rbi has over the years been responding to changing economic circumstances and these
| 0.5 |
bank of uganda remarks by prof. emmanuel tumusiime - mutebile, governor, bank of uganda at the breakfast organised by the institute of corporate governance uganda theme : β governance as a core pillar for economic development β at sheraton hotel. november 25, 2016 institute of corporate governance of uganda : corporate governance breakfast with the theme β governance as a core pillar for economic development β president, institute of corporate governance uganda ( icgu ) the executive of the icgu governing council our host, pwc ladies and gentlemen, good morning i would like to begin by thanking the institute of corporate governance of uganda for inviting the governor to give a key note speech at this breakfast and to commend the institute for the excellent work that it is doing to promote good corporate governance in uganda. the theme of this breakfast is corporate governance as a core pillar for economic development. the link between corporate governance and economic development is probably not intuitively obvious so i will offer you my own perspective on how corporate governance can contribute to development. a key driving force of sustainable development is the harnessing of positive externalities to private sector activities and the minimising of negative externalities. positive externalities occur when social rates of return to investment exceed the purely private rates of return. examples of positive externalities include the spillovers of benefits which occur when firms train workers, invest in research and development and adopt new technologies which generate β learning by doing β benefits. examples of negative externalities include pollution or collusive or abusive manipulation of markets. given that investable resources are scarce, long term development requires that social rates of return are high. hence rapid economic development is more likely to be realised in a society which can enable the private sector to generate high private rates of return to investment while at the same time yielding positive externalities so that social rates of return are even higher. conversely, economic development will be held back if private sector activities create negative externalities, thus depressing social rates of return to investment. why should corporate governance have any impact on positive or negative externalities of private investment? in any firm there is an inherent tension and potential conflict of interest between what are often termed the β insiders β of firms β dominant shareholders and senior managers β and the β outsiders β who include small shareholders, the creditors of the firm, its employees and customers and the general public. the insiders are those who have actual control over the form, but without effective restraints insiders may abuse their control over the firm
|
k c chakrabarty : transforming credit information into action β issues and challenges keynote address by dr k c chakrabarty, deputy governor of the reserve bank of india, at the sixth annual credit information conference, organized by cibil β credit information bureau ( india ) ltd β, mumbai, 20 march 2014. * * * assistance provided by shri rajesh jai kanth and ms. jayanthi n. in preparation of this address is gratefully acknowledged. 1. shri m. v. nair, chairman, cibil ; shri r. v. verma, cmd, national housing bank ; shri m. v. tanksale, chief executive, indian banks β association ; shri rajiv sabharwal, executive director, icici bank ; shri arun thukral, managing director, cibil ; shri satish pillai, chief operating officer, cibil ; delegates to the conference ; friends from the media fraternity ; ladies and gentlemen! it is a pleasure for me to be present here this morning to deliver the keynote address at the sixth annual credit information conference organized by cibil. it is heartening to note that cibil has completed 10 years of successful operations of its consumer bureau in india. while i congratulate the entire team of cibil on this occasion, i must also sound a word of caution amidst the euphoria that this occasion brings in. it is a time for cibil and indeed for all the credit information companies in the country to introspect and reflect on what the industry has achieved over the last decade and whither to from here? the spurt in the stressed assets in the banking system has put a spotlight on the effectiveness of the credit information companies in the country. with huge increase in the data / information availability, could they have sounded a timely warning about the impending deterioration in the quality of assets in the banking system? 2. as the pioneer of the credit information services in the country and as the most dominant player in the industry, cibil has a very critical role in how industry responds to the current challenges and adapts itself to remain relevant. in the financial services industry, the dominant player has to be much more resilient, much more responsive and much more restrained than others. these are the qualities you must develop. cibil has a tremendous responsibility, a responsibility to not only propagate the usage of credit information by the lenders but, at the same time, of ensuring that the consumers see merits in
| 0 |
holding companies, β notice of proposed rulemaking ( docket no. r - 1523 ), federal register, vol. 80 ( november 30 ), pp. 74931 β 32. the gsib has to satisfy both constraints. tlac encompasses both equity capital and eligible long - term debt. see board of governors of the federal reserve system ( 2016 ), β federal reserve board proposes rule to support u. s. financial stability by enhancing the resolvability of very large and complex financial firms, β press release, may 3. see board of governors of the federal reserve system and federal deposit insurance corporation ( 2016 ), β agencies announce determinations and provide feedback on resolution plans of eight systemically important, domestic banking institutions, β joint press release, april 13. bis central bankers β speeches the agencies found that five of the gsibs β plans fell short of the dodd - frank act β s standard and required those firms to fix the deficiencies in their plans by october of this year or potentially face more stringent prudential requirements. the agencies also identified lesssevere shortcomings in the plans of all eight gsibs, which the gsibs are expected to address in their next round of resolution plan submissions, due in july 2017. the deficiencies and shortcomings identified by the agencies touched on most of the categories i have just listed, especially liquidity, governance mechanisms, operational capabilities, and legal entity rationalization. i want to end by briefly addressing several criticisms that have been made of the dodd - frank act β s orderly liquidation authority and the board β s tlac proposal. one criticism is that there is no need for the backup orderly liquidation authority because the bankruptcy code provides an adequate framework for the resolution of any financial company. as title ii of the doddfrank act recognizes, however, the bankruptcy code may not be adequate to minimize the systemic impact of the resolution of a systemically important financial firm. the bankruptcy code does not direct the judge to take financial stability into account in making decisions, and it does not provide other important stabilizing features of the orderly liquidation authority, such as government liquidity support and stay - and - transfer treatment for qualified financial contracts. a related line of criticism holds that the orderly liquidation authority enshrines β too big to fail β and provides for taxpayer bailouts of systemically important firms through the orderly liquidation fund. however, under the board β s proposed tlac rule, a
|
failed gsib would be recapitalized by its private - sector long - term creditors ( whose debt claims would be converted into equity ), not by the government. the orderly liquidation fund would be used only to provide liquidity support, not to inject capital, and in the unlikely event that the fund does incur losses, the dodd - frank act provides that these losses would be covered by assessments on major financial companies and would not be passed on to taxpayers. i also note that credit rating agencies have recognized public - sector efforts to end the too - big - to - fail phenomenon. the rating agencies no longer assume that the u. s. government will take extraordinary actions to prevent the failure of systemically important u. s. financial firms. finally, one criticism that has been leveled at our tlac proposal is that imposing long - term debt requirements on gsibs will lead those firms to increase their leverage and thereby raise their probability of failure, and that they should instead be required to hold higher levels of equity capital. i agree that equity capital plays a key role in preventing financial firm failures, and we have raised equity capital requirements for banking organizations β especially gsibs β substantially since the crisis. but to protect financial stability, we must reduce not only the probability that a gsib will fail, but also the damage that its failure could do if it were to occur. at the point of failure, a banking firm β s equity capital is likely to be zero or negative, so to improve gsib resolvability, our proposal requires gsibs to have a thick tranche of goneconcern loss - absorbing capacity to ensure that resolution authorities will have the necessary raw material to manufacture fresh equity and recapitalize and stabilize the firm. 7 that is the role played by the proposal β s long - term debt requirements. and we expect that firms would generally come into compliance with the proposed requirements by replacing existing ineligible liabilities with eligible long - term debt rather than by increasing their leverage. at any rate, even if a firm were to come into compliance in part by increasing the size of its balance sheet, it would remain subject to our robust equity capital requirements and leverage limits, which are designed to ensure a very low probability of failure. finally, the existence of a thick see board of governors ( 2015 ), β total loss - absorbing capacity, long - term debt, and clean holding company requirements, β in note 5. under the proposal, a u
| 1 |
##s goal - wise scores on the 16 sdgs for each state and uts. overall state and ut scores are generated from goal - wise scores to measure aggregate performance of the subnational unit based on its performance across the 16 sdgs. this index was launched in december 2018. for the year 2020 - 21, kerala came first on the index whereas tamil nadu and himachal pradesh shared the second place. niti aayog, in collaboration with united nations, is also fostering competition among states and uts by ranking them on global developmental goals. as our states compete for a place in the sun, they will nurture business growth, put in place the best physical and social infrastructure and provide us with improved basic amenities, clean energy, and better health and societal outcomes. along with foreign investment bringing in new technologies and ideas, we are moving into a national ethos of wider consumer choices and a better standard of living. decarbonisation climate change is manifesting itself at an alarming scale and pace globally. extreme weather events are becoming more frequent and intense, inflicting increasing damage on human lives and the environment, globally and in india. the intensifying concern now is that climate change is heavily influenced by human activity. in fact, the period from the mid20th century has been defined as the " anthropocene " epoch, marking a significant impact on earth's climate due to the increased use of fossil fuels. india and other developing economies are highly vulnerable to climate change due to their limited capabilities in climate science and technology and insufficient funding for adaptation and mitigation. the relative costs of transitioning to a greener path are higher for them than for the advanced economies ; undertaking the transition can even push them several places down the development ladder. from the developing world, india has emerged as a leading voice on global climate action that is mindful of climate equity and justice considerations. india has taken numerous policy initiatives in this direction. in 2015, india submitted its nationally determined commitments ( ndcs ) to the united nations framework convention on climate change ( unfccc ) with targets up to 2030. at cop26 in 2021 15, india updated its ndcs, which now represent the framework for its transition to cleaner energy for the period from 2021 to 2030. it has committed to the five - fold strategy of panchamrit, which include raising its non - fossil - fuels - based energy capacity to 500 gw by 2030 ; raising
|
in life 2, there is a tide in the affairs of nations which, taken at the flood, leads on to fortune. india is poised on the crest of a tide in its history that will take it to its full potential in securing its aspirational goals for the future of its citizens and in its role in global affairs, albeit amidst several challenges. it is in that context and spirit that i thought i will spend some time envisioning the dawn of india β s age. demographics according to the united nations 3, india has become the most populous country in the world this year, attesting to the flowering of the demographic dividend that set in from 2018. there is a paradigm shift in our thinking on the subject. once considered a drag on development in the tradition of thomas malthus4, our large population is now regarded as an asset and an opportunity in a world in which many countries are confronting aging and even population decline. by contrast, our population is young β the median age is 28 years. every sixth working age ( 15 - 64 years ) person in the world is an indian. the potential for boosting saving and investment that this entails considerably enhances india β s emergence as the world β s economic powerhouse of the future. in fact, this momentous development 2 william shakespeare, julius caesar. https : / / www. un. org / development / desa / dpad / publication / un - desa - policy - brief - no - 153 - india - overtakeschina - as - the - worlds - most - populouscountry / # : ~ : text = in % 20april % 202023 % 2c % 20india's % 20population, to % 20grow % 20for % 20several % 20decades β the power of population is so superior to the power of the earth to produce subsistence for man, that premature death must in some shape or other visit the human race. β thomas malthus, 1798. an essay on the principle of population. chapter vii, p. 61. has been termed as β shifting the world β s centre of gravity β 5 because it could be heralding a tectonic change in india β s role in the global order. moreover, india β s population is expected to keep growing for the next four decades, peaking at under 1. 7 billion in 2063. more than a sixth of the increase of the world β s working age population between
| 1 |
ewart s williams : preparing enhanced insurance regulations for trinidad and tobago speaking notes by mr ewart s williams, governor of the central bank of trinidad and tobago, for the β public consultation of the draft insurance bill & accompanying regulations β, port - of - spain, 10 december 2009. * * * introduction good morning ladies and gentlemen. my role is to make a few introductory remarks to get the main discussion going. obviously we all would like this to be a serious working session and not an opportunity for speechmaking. let me start by saying how delighted i am to be with you this morning as today β s public consultation which marks the final phase of a process that started roughly five years ago. as you would recall the regulation of the insurance sector was transferred from the office of the supervisor of insurance in the ministry of finance, to the central bank in 2004. the process of preparing a new insurance act has been a collaborative approach between the central bank and a stakeholders β committee, comprising members of attic, the brokers association and other industry consultants. this collaborative approach bears testimony to the firm commitment of the central bank to ensuring that the legislation for the sector strikes the right balance between international best practices and local market conditions and circumstances. prior to april 2004, the central bank had oversight of 6 commercial banks and 15 non - banks. after the shift in regulatory authority, the bank took on responsibility for 51 insurance companies, and 256 registered pension plans. this was a major undertaking and necessitated a significant increase in staffing and infrastructural requirements, including training. the insurance sector, as you know, is a major contributor to the domestic economy. it accounts for close to $ 40 billion, second only to the $ 88 billion for commercial banks. the sector is a major repository for private savings and by covering risks and unexpected developments ; it facilitates private and public sector activity. in short, the industry is one of enormous economic and social value and critical to our developmental efforts. the legislation that underpins insurance activity in trinidad and tobago is grossly outdated. the basic act dates back to 1966 and was modified in 1980. as all of you know better than i, the insurance industry of today bears little resemblance to that of 1966 or even 1980. as i am sure you know, inadequate financial regulation or regulatory failure has been widely cited as one of the factors behind the international financial crisis of 2008 β 2009. as a consequence of this global financial crisis comprehensive reforms are underway to address the weaknesses which were exposed
|
this requirement serves several of the purposes discussed earlier. a buffer of high - quality liquid assets is a form of self - insurance against liquidity risk that allows banks to meet short - term needs in the event of creditor runs. because holding the buffer is likely to be somewhat costly, the lcr should also encourage banks to reduce use of very short - term wholesale funding that increases buffer requirements. the buffer will also provide central banks and other national authorities time to assess the financial condition of a firm encountering liquidity difficulties and to determine the extent to which these difficulties are a function of essentially firmspecific factors or a harbinger of market - wide funding stress. a revised version of the nsfr has recently been released by the basel committee. 12 it complements the lcr by looking beyond a 30 - day period to achieve a stable funding profile for firms more generally. in this regard, it is important to recall that the deterioration of funding markets began well before the financial crisis reached its acute stages. in the summer of 2007, responding to signs of trouble in the subprime mortgage markets, creditors reduced the maturities of funding they were willing to provide to financial intermediaries that had been creating and holding securities backed by subprime β and eventually other β mortgages. 13 this process left those intermediaries in increasingly fragile funding positions, and by the time lehman brothers collapsed in september 2008, the system was primed for a devastating run. given the possibility of this type of sustained erosion of firm funding structures over an extended period, simply requiring firms to hold a liquidity buffer against 30 - day outflows, as required by the lcr, would be insufficient. while there is thus a need for a longer - term structural standard such as the nsfr, the conceptual challenges in crafting it were greater than in designing the lcr. simply extending the lcr to one - year β that is, requiring firms to hold enough liquidity to survive a one - year funding market freeze β seemed the kind of excessive self - insurance that would lead to undesirably reduced maturity transformation and financial intermediation. so a different set of standards needed to be developed, which themselves occasioned considerable discussion about the effects and incentives they would create. also, one could argue that the nsfr should have aimed for a more complete term structure in order to protect against maturity mismatches within and beyond the one - year mark, and to create stronger incentives for firms
| 0 |
well be associated with higher market interest rates, unless domestic saving rebounds. near - term outlook going forward, the members of the federal reserve board and presidents of the federal reserve banks believe there are mechanisms in place that should help to slow the growth of spending to a pace more consistent with that of potential output growth. consumption growth should slow some, if, as seems most likely, outsized gains in share values are not repeated. in that event, businesses may trim their capital spending plans, a tendency that would be reinforced by the higher level of market interest rates that borrowers now face. but with large unexploited long - term profit opportunities stemming from still - burgeoning innovations and falling prices of many capital goods, the typical cyclical retrenchment could be muted. working to offset somewhat this anticipated slowing of the growth of domestic demand, our export markets can be expected to be more buoyant because of the revival in growth in many of our important trading partners. after considering the various forces at work in the near term, most of the federal reserve governors and bank presidents expect the growth rate of real gdp to be between 3Β½ and 3ΒΎ % over the four quarters of 1999 and 2Β½ to 3 % in 2000. the unemployment rate is expected to remain in the range of the past eighteen months. inflation, as measured by the four - quarter percent change in the consumer price index, is expected to be 2ΒΌ to 2Β½ % over the four quarters of this year. cpi increases thus far in 1999 have been greater than the average in 1998, but the governors and bank presidents do not anticipate a further pickup in inflation going forward. an abatement of the recent run - up in energy prices would contribute to such a pattern, but policymakers β forecasts also reflect their determination to hold the line on inflation, through policy actions if necessary. the central tendency of their cpi inflation forecasts for 2000 is 2 to 2Β½ %. pre - emptive policymaking in its deliberations this year, the fomc has had to wrestle with the issue of what policy setting has the capacity to sustain this remarkable expansion, now in its ninth year. for monetary policy to foster maximum sustainable economic growth, it is useful to pre - empt forces of imbalance before they threaten economic stability. but this may not always be possible β the future at times can be too opaque to penetrate. when we can be pre - emptive, we should be,
|
banks operating under hierarchical mandates typically set their inflation objective in terms of a forecast or as a medium - term objective, allowing a gradual return to their objective if inflation deviates from it. in addition, the different regimes appear to have converged over time. it is harder to tell the difference between what lars svensson refers to as flexible - inflation - targeting and dual - mandate regimes. so the question with respect to the mandate remains : does it affect the policy outcomes and macroeconomic performance among the countries represented on the first panel? assuming there is no long - run trade - off between inflation and unemployment and assuming that the economy gravitates to full employment in the long run, central banks will achieve full employment and price stability in the long run under either mandate. but the nature of the mandate could affect their choice of where their policies might put them on the trade - off between output variability and inflation variability. does the dual mandate make the fed more responsive to downward demand shocks? does the hierarchical mandate permit canada, great britain and the euro area to more tightly control inflation over the shorter run? or do practices among these central banks differ less than it might appear from a strict reading of their mandates? by the way, i only have time to ask the interesting questions, not to answer them. that will be the panel's job, i hope. instrument independence each of the central banks represented on the panel has instrument independence. the motivation for granting such independence is to insulate the central bank from political interference, especially interference motivated by the pressure of elections to deliver short - term gains irrespective of longerterm costs. the purpose of this insulation is not to allow the central bank to pursue whatever policy it prefers β indeed, as i just noted, governments invariably define the broad goals for the central bank β but instead to provide a credible commitment of the government, through its central bank, to achieve those goals, especially price stability. central bank independence is in part the result of formal institutional arrangements typically incorporated in the legislation defining and creating the central bank. the most important requirement is that the central bank is the final authority on monetary policy decisions. that is, monetary policy decisions should not be subject to the veto of the executive or legislative branches of government. this is further protected if other institutions of the government β typically the treasury department or the ministry of finance β are not represented on the monetary policy committee. a lesser protection would be to allow such representation, but only in a non -
| 0.5 |
thomas m hoenig : the financial foundation for main street speech by mr thomas m hoenig, president of the federal reserve bank of kansas city, at the capital markets summit : β getting main street back to work β, us chamber of commerce center for capital markets competitiveness, washington dc, 24 march 2010. * * * the views expressed by the author do not necessarily reflect those of the federal reserve system, its governors, officers or representatives. history tells us that for a country to succeed and endure economically it must adhere to a simple set of principles. no matter the market β s complexity, these principles anchor both its financial system and overall economy. and the most fundamental of these principles is a commitment to maintaining the integrity of the institutions within the system. this commitment provides a culture of sound business ethics, a confidence in the rule of law, the reliability of contracts, and a culture of fair play on a level field. how the individual firms compete on this field is up to them. there is almost always a diversity of firms within a highly competitive and appropriately regulated commercial system. some firms are large, many are small and all are dynamic. those who relax, resist change, or cheat know that such lapses result in failure, which is determined by the market. if we stray from our core principles of fairness or ignore the rule of law, we distort the playing field and inevitably cultivate a crisis. when the markets are no longer competitive, firms become a monopoly or an oligopoly and it matters more who you know than what you know. then, the economy loses its ability to innovate and succeed. when the market perceives an unfair advantage of some over others, the very foundation of the economic system is compromised. in these instances, for example, bonuses will far exceed the economic value provided, because the bonus is what we economists call an economic rent. it is not earned, it is only received. the protected will act as if they are protected, they will retain their status independent of performance, and the public will suffer. i like to say, β if you give someone a monopoly, they will act like a monopolist every time. β i open with these comments because our nation today is reacting to a financial crisis and an interruption in the flow of capital. it is also now in the process of addressing its causes in an effort to prevent its recurrence. while calling for action myself, i have been uneasy with what i have
|
a possible legal change to facilitate the greater use of technology, and the changing patterns of payment instrument use over the past few decades that we hope to document through some new surveys. clearly, these changes will continue and even accelerate, driven by the evolution in technology and, more fundamentally, by the evolution of ideas. our greatest challenge may be to sort through the promises of the future and find practical ways to improve the present. again, thank you for inviting me to speak here with you today. i look forward to continuing to talk with banks and their representatives about banking issues.
| 0 |
to adjust their business models to the environment. banks should not use monetary policy as an excuse not to make the necessary effort to change their business models and become more profitable. the central bank of central banks, the bank for international settlements ( bis ), also warns that central bankers are repeating the mistakes of the start of this century when loose monetary policy contributed to a credit and housing boom which then collapsed and gave rise to the financial crisis. 5 / 6 bis central bankers'speeches it β s the bis β s duty to issue warnings, and we take its advice seriously. today, we monitor risks in the financial system in much more detail than before the crisis, as shown for example by our biannual financial stability review. second, we now have new tools under european law β particularly macroprudential instruments. and third, banks are much less leveraged today, thanks to the new regulatory constraints. history teaches us that, always and everywhere, asset price bubbles were accompanied by high leverage. that is not the case now, because banks β balance sheets are smaller. that reduces the amount of risk in the financial system. where we need to be particularly vigilant is with regard to market - based finance, also known as shadow banking. we need to gather the right information and we may need new instruments to make sure that the next big crisis does not come from the shadow banking system. 6 / 6 bis central bankers'speeches
|
slight upward shift to the profile for hicp inflation in 2006, largely reflecting the assumption of higher oil prices. in the view of the governing council, risks to the outlook for price developments remain on the upside and include further increases in oil prices, a stronger pass - through of past oil price rises into consumer prices than currently anticipated, additional increases in administered prices and indirect taxes, and β more fundamentally β stronger than expected wage developments due to second - round effects of past oil price increases. turning to the monetary analysis, the governing council again had a thorough discussion of underlying developments in money and credit. in a context of already ample liquidity and very strong monetary and credit growth, the annual growth rate of loans to the private sector has increased further in recent months to reach double - digit levels. credit growth has also been broadly based across sectors. borrowing by households β especially for house purchase β and by non - financial corporations has been growing very strongly. at the same time, monetary growth has risen further over the past few months, with the annual growth rate of m3 standing at 8. 8 % in april. the rapid rate of monetary growth continues to be driven mainly by the expansion of its most liquid components. thus, the latest developments confirm that the stimulative impact of the low level of interest rates remains the dominant factor behind the current high trend rate of monetary expansion, which signals inflationary risks over the medium to longer term. the further acceleration of monetary and credit growth in this environment of already ample liquidity points to increased upside risks to price stability at longer horizons. monetary developments, therefore, require careful monitoring, in particular in the light of strong dynamics in housing markets. to sum up, annual inflation rates are projected to remain elevated in 2006 and 2007, with risks to this outlook on the upside. given the strength of monetary and credit growth and the ample liquidity situation, a cross - check of the outcome of the economic analysis with that of the monetary analysis confirms that upside risks to price stability over the medium term prevail. a further adjustment of interest rates was therefore warranted. by acting in a timely fashion, the governing council is helping to keep medium and long - term inflation expectations in line with price stability, thereby making an ongoing contribution to sustainable economic growth and job creation. overall, our monetary policy remains accommodative and the governing council will continue to monitor closely all developments to ensure that risks to price stability do not materialise. with regard to fiscal policies,
| 0.5 |
##que payment, which means greater privacy protection. for those payees who have more than one account, he can also enjoy the flexibility of deciding which account to deposit an e - cheque into. vi. corporates and institutions which issue a huge volume of paper cheques can save substantial sums on printing, processing and mailing those cheques. in hong kong, listed companies process over 2 million physical cheques each year for dividend payments. both paper consumption and mailing costs can be reduced substantially each year if shareholders agree switchinig to e - cheques to receive these payments. looking forward 4. the e - cheque is only at the beginning of its development. the hkma will continue to explore ways of expanding its application in two areas, namely : bis central bankers β speeches i. cross - border transactions β we will explore with the guangzhou and shenzhen branches of the people β s bank of china, and the monetary authority of macao with a view to promoting the use and clearing of cross - border e - cheques. ii. development of e - commerce β we will explore with the banking industry the use of echeques in supporting e - commerce portals. while offering an additional option of payment for online shoppers, e - cheques can also increase the efficiency of ecommerce operations. acknowledgments 5. the launch of the e - cheque reflects the continuous effort of banks in hong kong to provide a wide range of payment services. it also signifies the hkma β s commitment in promoting the efficiency and modernisation of hong kong's financial infrastructure. besides, the smooth development and launch of the e - cheque has benefited immensely from the great support of relevant government departments. i. firstly, amendments to the electronic transactions ordinance were finalised by the office of the government chief information officer in early 2015, giving electronic cheques the same legal status as physical cheques. the pay e - cheque portal was also launched on 7 december, which allows the public to make payments of government bills and fees with e - cheques. ii. the inland revenue department became the first government department to participate in the pay e - cheque portal, providing a convenient and easy option for paying tax demand notes, business registration fees, and stamp duties as well as purchasing tax reserve certificates. iii. lastly, the treasury has also actively helped promote the acceptance by other government departments of e - cheques in paying general demand notes. 6. i would like
|
we have already begun this process in order to implement the regulation of new technologies rationally, protecting the markets from risks. at the beginning of this speech i mentioned the strategic objectives of the bank of russia. these are our key priorities. you may have noticed that the tasks we set ourselves four years ago and those for the year 2016, which i have been speaking about today, as well as challenges of the future, are all, of course, related to each other. we consider it to be very important to respect the principles of continuity, consistency and predictability. we will no doubt be responding with flexibility to any given situation. the situation is volatile, there is a lot of uncertainty in the world. we will have to react in accordance with the challenges presented to us. but the consistency of our policy, i think, is very important. the preservation of trust is vital to development, as well as to financial markets. this is a key category β trust in the financial market and trust in monetary policy have been the most influential factors in terms of economic growth. we view our policy as part of an overall economic policy aimed at creating conditions for sustainable long - term economic growth in our country. thank you very much! 3 / 3 bis central bankers'speeches
| 0 |
provide the framework for continued economic progress well into the new millennium.
|
into the global industrial division of labour, which effectively expanded global supply, and enhanced the production efficiency. it helped to tame the global inflation and boost economic growth. the second period was between 2008 and 2017. after the global financial crisis, the world economy featured " three lows and one high ", namely, low growth rate, low inflation, low interest rate, and high debt level. when the global demand was dampened, china took the initiative to vigorously boost domestic demand. the efforts helped spur the world economy and avoid its deflation. during the decade, china's contribution to the world economic growth was stable at around 30 percent. the third period was after the outbreak of the covid - 19. due to supply shocks and potent demand side stimulus, the global inflation once surged and stayed elevated. while china's supply chain system remained stable, it helped to fill the global supply gap, presenting china's sustained contribution to bringing down inflation and achieving economic balance in the world. the chinese economy has also undergone profound restructuring and balancing processes. in recent years, with the deepening of supply - side structural reforms, the acceleration in the establishment of a new development paradigm, and the adoption of other strategic measures, china has made continued efforts to shift its economic growth model from the traditional focus on high - speed growth to an innovation - driven, quality - 3 / 6 bis - central bankers'speeches and efficiency - oriented mode. as a result, the quality and efficiency of supply have been improving while the value added of high - tech manufacturing has accounted for an expanding share. with the contribution from consumption continuously on the rise, consumption, investment, and net exports made up 56 percent, 42 percent, and 2 percent of china's gdp in 2023, respectively, as compared with the corresponding data of 49 percent, 47 percent, and 4 percent in 2010. to promote high - quality economic development and sustainable growth, we need to strike the right balance in economic operation from the following three perspectives. first, we need to strike the right balance between the pace and quality of economic growth. given the vast size of the chinese economy, we need to keep economic growth at a reasonable rate in order to boost employment and people's income. as the transformation of the economic development model and economic restructuring will likely affect economic growth in the short term, we need to strike the right balance, put effort into fostering the new drivers of economic growth, and firmly support stable economic growth so as to
| 0 |
the uk and the eu27 will be after brexit. against this background, it was positive that in december of last year the eu27 and the uk reached broad agreement on the three fundamental divorce issues. 2 after this preliminary settlement, we can now talk about the future model of cooperation and integration. this has improved the chances of reaching a reasonable settlement before the march 2019 deadline. the plan is to have a political declaration on what the future partnership will look like by october this year ; at the same time negotiation parties should have a draft withdrawal treaty ready. but we should make no mistake : in light of the fact that the goals of the uk government are yet 1 / 5 bis central bankers'speeches unclear to me and in light of the not fully unified positions within whitehall, such an agreement is anything but a sure thing. first of all, we have to keep in mind that substantial progress has yet to be made on the details of the three separation issues i have just mentioned. second, a sufficient transition period is not assured at the moment, either. and finally, even the no deal scenario remains possible in light of the fundamental differences between the negotiation blocs. so what are the implications? what they have been since the beginning : the private sector and authorities have to prepare for a no deal scenario starting march 2019. i will come back to what this means for the financial sector. but, let β s remain at once realistic and optimistic. there is still at least a 50 percent chance of avoiding a β no deal β scenario. so let β s think about what this would mean for financial services. would they be part of an overall deal? and if yes, what would that deal look like? like with the overall negotiation, for financial services we have also seen a steady decline in expectations of how deep the integration will be after brexit. it quickly fell from remaining part of the single market and passporting to the approach of equivalence in supervisory regimes, on the basis of which access could have been granted. the next step down the stairway of expectations was mutual recognition, at least in selected areas β or alignment and mutual recognition, as uk finance has proposed. 3 yet i am sceptical as to whether such a mutual recognition framework is actually possible. moreover, a future agreement may very well be quite limited β for example, to the exchange of goods. labour migration is likely to be excluded ; at least, this has been mentioned as a red line for the uk government. and
|
reach a consensus on a detailed legal text by march, this would still only be a preliminary part of the greater deal. both sides would still have to reach an overall divorce deal, roughly by october of this year. if this endeavour fails or if parliaments don β t subsequently ratify the deal, the transition period would be off the table, too. put bluntly : a deal on the transition phase hinges on an agreement on the overall future relationship β if the uk and the eu can reach a deal on the end state of the future partnership, i am confident it will be easier to find a suitable solution for the transition phase. the point is : even if one is cautiously optimistic that a transition phase can be agreed upon β which i continue to be β it still wouldn β t give businesses the certainty they crave. just this 3 / 5 bis central bankers'speeches monday, mario draghi has underlined in the european parliament that political uncertainty will remain for quite some time to come. the transition phase is not a safety net. 5. acknowledging realities : timely preparation is key this is why i see no alternative to timely preparation. this holds for all businesses affected, and it holds for the financial sector in particular. financial institutions should not fall prey to a false sense of certainty that, come what may, there will be an agreement and that they will have sufficient time left to adapt to the new framework. the economic consequences of insufficient preparation in the event of a hard brexit would far exceed the costs of proper preparation. looking at banks, proper preparation includes establishing at least basic entities in the other economic area β that is, the eu27 or the uk β in order to continue doing business there. the concept of a β basic entity β is not easy to define. from our side, i can repeat that we will certainly not accept empty shells or β letterbox companies β where the business effectively continues to be run from london. for critical functions such as management, controlling and compliance, qualified personnel need to be present at the eu entity at all times. we expect any branch or subsidiary to retain chief responsibility for its business. that is our general approach. when it comes to the details, things get much more complicated very quickly β as has been demonstrated by our experience with the applications of banks for licenses in the context of brexit. it is not enough to make a decision about what business to move and to submit a ten - page application for a banking license to the supervisor.
| 1 |
ΓΈystein olsen : economic perspectives annual address by mr ΓΈystein olsen, governor of the norges bank ( central bank of norway ), to the supervisory council of norges bank and invited guests, oslo, 14 february 2014. * * * accompanying charts can be found at the end of the speech. introduction this year is the bicentenary of the signing of the constitution of norway. two hundred years ago, norway was a poor country on the periphery of a europe that was then the world β s economic centre of gravity. thomas robert malthus, one of the foremost experts of his time in the field of demography, toured norway in 1799. in his travel diary, malthus describes an agricultural society where most people lived a simple life subsisting on a diet of whatever they were able to harvest. wealthy norwegians, on the other hand, complained about how expensive it was to maintain a respectable lifestyle when everything had to be imported. 1 the napoleonic wars brought harsh economic realities. blockades, epidemics and crop failures took their toll on the population. large parts of southern norway experienced severe famine in 1809 and again in 1813. population numbers fell. the timber trade and shipping industry showed a marked contraction. chart 1 : inflation in norway king fredrik vi financed public expenditure by printing money. combined with goods shortages, the result was hyperinflation and failing confidence in the monetary system. the level of prices rose more than twentyfold in the period from 1806 to 18132, and in 1813 the currency was devalued by almost 90 percent. the first national assembly at eidsvoll was attended by representatives of a nation in deprivation. for the 112 sworn representatives, popularly known as the men of eidsvoll, who took their places as the constituent assembly in spring 1814, the atmosphere was nonetheless full of hope for freedom and a better future. several of them had spent time abroad and had been influenced by the enlightenment philosophers and by the american and french revolutions. the norwegian constitution was inspired by the thoughts and ideas they brought home with them. absolute monarchy under the danish king was to be replaced by the sovereignty of the people and the separation of powers. institutions with clearly distinguished roles would prevent the arbitrary use of power and foster confidence. this evening we are gathered in one such institution. in the discussion at eidsvoll, christian magnus falsen, a key member of the constituent assembly, said that no state can exist without a well functioning monetary system. another prominent
|
svein gjedrem : developments in the nordic financial industry a central banker β s perspective address by mr svein gjedrem, governor of the norges bank, at the nordic financial services conference, held in stockholm, on 18 september 2000. * 1. * * introduction what is the future of the nordic financial services industry? who are the winners in the consolidation process? what is the potential of e - business and the internet? this is just a sample of the important and challenging questions that will be discussed at this conference. fortunately, it is the task of my fellow speakers - and not mine - to try to answer them. given their background as significant market participants, i am sure that they will provide us with some valuable insights. today, most central banks follow structural developments in the financial sector from the sidelines. this has not always been the case. the post - war period was characterised by heavy regulation. the domestic authorities controlled market prices, financial flows and the structure of the financial sector. there was little foreign influence. gradually, markets were deregulated and became more internationally integrated. the central banks β main instrument is now the setting of interest rates. the main objectives of central banks have stayed the same : monetary and financial stability. although deregulation is now completed in the industrialised countries, its full impact on the financial structure remains to be seen. in addition, technological developments, internationalisation and increased focus on shareholder value are creating pressures for structural change. together, these forces are reducing the cost of providing traditional financial services and are paving the way for new ways to channel savings and manage risks. structural developments in the financial sector can be important for monetary and financial stability. central bankers thus follow developments with great interest. today i will examine some aspects of the changes taking place and their potential consequences for monetary and financial stability. let me run through the structure of my speech. first, i β d like to touch upon some characteristics of the nordic economies as a background to the financial sector issues i will discuss later. second, i will define the two stability terms that i have just introduced. third, i will discuss the growing importance of securities markets. i will then reflect upon cross - border integration in the banking sector and consequences of the internet. finally, i will take a quick look at what challenges structural changes may pose to the authorities, and then conclude. 2. some characteristics of the nordic economies the economies of the four largest nordic countries have some well - known
| 0.5 |
case of financial paper the issuer must submit to auditing ; small and medium - sized firms must have a sponsor ( bank, asset management company, investment firm ) who is required to report the issue β s rating. for example, in january this year ireland β s national pensions reserve fund announced the creation of new funds for investment in small domestic firms amounting to β¬ 850 million. see u. albertazzi, g. eramo, l. gambacorta and c. salleo, β securitization is not that evil after all β, banca d β italia, temi di discussione, no. 741 and bis working paper, no. 341 ( 2011 ). bis central bankers β speeches there is considerable scope for institutional investors to expand their investments in private bonds, securitized loans and credit funds. listed bonds of non - financial companies account for a very small share of the total portfolio of open - end investment funds, and the proportion of unlisted securities is well below regulatory limits ; immediately accessible resources are estimated to amount to between β¬6 billion and β¬10 billion ; much larger amounts would be available with a liquid market for securities. moreover, large - scale investments may also be made by insurance companies, pension funds and closed - end funds. without a sufficient supply of securities of italian firms, many institutional investors could well turn to foreign markets. 3. mutual banks italy β s 394 mutual banks and 3 mutual - bank central credit institutions account for 10 per cent of loans to households and firms, a bigger share than the third largest italian banking group. this role of mutual banks is even more important in the case of small firms, accounting for almost 20 per cent of total lending. the mutual banks had greatly expanded their activity prior to the recession. from 1995 to 2008 their market share of lending rose by nearly 9 percentage points for small firms, 5 points for large firms and 3 points for households. as emphasized on previous occasions, 14 underlying this expansion are knowledge of the local markets, experience in assessing the creditworthiness of small borrowers, and an ability to meet customers β needs promptly and efficiently. mutual banks stabilized the supply of loans even during the 2008 β 09 recession : their sound capital base and stable funding enabled them to provide financial support to the small and medium - sized firms subjected to rationing by the large banks. more recently, the unfavourable economic situation and financial market tensions have altered this scenario. the mutual banks are now
|
to establish the new groups. the participating banks must begin to operate in harmony, under the guidance of the parent company, well before the groups have been formally established. the asset quality review will need to be thoroughly updated to take account of the necessary value adjustments and write - downs already entered in this year β s balance sheets. the bank of italy is committed to strengthening the other banks under its direct supervision in order to increase their efficiency and productivity, promote the supply of innovative services for households and firms, and diversify their sources of income. for their part, banks are being called on to undertake wide - ranging action, including mergers to facilitate investment, economies of scale and, where necessary, access to capital markets. a first step towards greater integration could be recourse to consortiums to provide services and the pooling of data for internal models to compute capital requirements. in line with other countries, a more decisive step would be to introduce institutional protection schemes ( ips ), which do not remove the autonomy of individual banks but give rise to mutual support agreements that can be activated in the event of capital or liquidity needs. expenses, income and structural changes in the banking industry the significant progress made in overcoming the grave difficulties of some banks and the gradual improvement in balance sheet conditions throughout the banking industry are undoubtedly positive developments. several factors, however, are altering the context in which banks operate : changes in demand for financial services, technological progress and the digital revolution, and the regulatory reforms introduced in the wake of the financial crisis. the profitability of european banks has diminished considerably over the last ten years. the global financial crisis first hit the large merchant banks, who earn much of their income on the capital market. the recession and sovereign debt crises then took their toll on the balance sheets of banks whose core business is lending. italy β s banking sector suffered a particularly sharp fall in profits ; the return on capital, which was about 10 per cent in the middle of the previous decade, has been virtually nil for the last five years, exceptional factors aside. at the same time, the profits of italian banks have been eroded by heavier losses on loans and a drop in income. because of corporate crises in particular, from 2008 to 2016 write - downs on loans absorbed 80 per cent of operating profit. interest income is now one third lower in relation to total assets than in the middle of the last decade ; other income has also diminished. as the economic recovery gains strength, the outlook for the banking industry
| 0.5 |
historical eras, as perhaps the current one is, marked by social and political crisis β this is to the detriment of everyone. and it is of no use for researchers to rebel against the mounting obscurantism by proudly reiterating the established rules. society as a whole might trust them even less as a result. in other words, making discoveries, innovating, and developing theories and techniques will not suffice. to keep or regain the public β s trust the findings of research must be explained to those outside the field, humbly and patiently and without the haughtiness sometimes displayed by those who are proud of their hard - won knowledge. technical jargon must be meticulously translated into plain, everyday language, trying to reduce as much as possible the inevitable loss of accuracy that any translation of this kind implies. the day after the meeting between the presidents of the united states and of russia, which took place on 16 july 2018, the french political scientist dominique moisi gave an interview to corriere della sera, which the journalist summarized in the headline : β more than diplomacy, this is marketing β. corriere della sera, 17 july 2018. eichengreen, barry, 2017, the populist temptation, oxford university press, oxford. viale, riccardo, β politics versus science β terrible examples from our past β, corriere della sera, 9 august 2018. in short, we must popularize. but we must do so without ever losing touch with rigorous reasoning and cold, hard facts. at the same time, we must aim for simplicity and clarity in our explanations, no matter how complex the issues at hand. the popularization of economics but what does this mean in practice? let me give you an example of an inaccurate and misleading myth about the italian economy, which would benefit greatly from a fair account of the facts, that is, from good popularization. according to this myth, the italian economy could be prosperous and happy if only europe, out of teutonic foolishness, and the market, out of occasional political antipathy, did not impose a financial straitjacket on it. in this oversimplified narrative, there are grains of truth and mountains of lies. the issues are much more entangled and complicated, and it is up to those who have spent a long time studying these problems to make this clearly understood. for now, let β s clarify one thing : the main problem with the
|
the bank of england β s fintech accelerator : what have we done and what have we learned? remarks given by andrew hauser, executive director, banking, payments and financial resilience at a meeting for fintech contacts of the bank of england β s agency for the south east and east anglia at the offices of mills & reeve, cambridge 6 october 2017 i am grateful to sharmista appaya and the financial accelerator team for their help and assistance in preparing these remarks. all speeches are available online at www. bankofengland. co. uk / speeches introduction it is a pleasure to be with you here in cambridge to talk about the bank of england β s work on financial technology ( β fintech β ) β and to hear from you about the latest developments in your businesses. it is sometimes said that the uk β s thriving technology sector is all about london. but nothing could be further from the truth. forty - four of the uk β s 100 fastest - growing technology firms are based elsewhere in the country. and some of the most exciting of all are right here in cambridge β and speak regularly to our excellent local bank of england agency team, phil eckersley, tim pike and alex golledge. in fact, i have first - hand knowledge of cambridge β s long and proud history of hi - tech innovation, having grown up only a short distance from here, at the height of the 1980s personal computer boom centred around acorn and sinclair. as a somewhat nerdy child, i attended an inspirational maths and computing club at homerton college where we learned, amongst other things, how to do recursive coding using a robot turtle. we purloined one of the earliest local area networks for our ramshackle school computer shed. and i had a holiday job at the cambridge science park β right at the start of its astonishing growth story. i recall one particularly memorable experience working on a robot designed to extract the meat from shellfish : let β s just say the results were messy! fintech and the bank of england nearly three decades on, my current role in charge of the bank β s banking and payments infrastructure gives me a bird β s eye view of how technology is transforming financial services. from the very visible application of the latest mobile technology in retail banking, to the much less visible but just as important application of cloud computing, cryptographic techniques and ultra - high speed processors to the wholesale and back office functions that keep the financial markets running.
| 0 |
and would validate and authorise internal models, approve capital and liquidity allocations, decide about on - site inspections. in short, the lead supervisor would have full supervisory responsibility. the role of host supervisors would be as advisers in a college of supervisors. however, host supervisors would have no formal power. also, when it comes to financial stability and crisis management, the lead supervisor would only have a national mandate. thus, there would still be a need for cross - border regulatory cooperation. the second alternative, which is put forward by the two authors, is to give the home supervisor the role of lead supervisor with an eu mandate. the lead supervisor would work as in the efr model, with the difference that the lead supervisor is given a β european mandate to ensure that the interests of all depositors / countries are taken into account β. in this model there is a decision - making agency of european financial supervisors at the centre, which is delegating the task of supervision to each respective home supervisor. regarding financial stability issues, the home country central bank would also be involved, acting on behalf of the european system of central banks ( escb ). the third alternative is both the most obvious and the most radical and would be to create a european financial supervisor ( for example put forth by breuer ). this simply means having one authority acting with full supervisory powers over branches and subsidiaries of cross - border european banks. the system could be tiered ( like in the us ) in the sense that the eu supervisor would only be responsible for banks and banking groups with significant cross - border operations, while purely domestic banks could remain the responsibility of the national supervisors. oosterloo and schoenmaker ( 2004 ), β a lead supervisor model for europe β, the financial regulator, vol. 9. 3, 34 - 42. a european financial supervisor all three of these alternatives, even the first one, are considerably more far - reaching than what is currently under construction. i do not think many authorities find the first alternative with a lead supervisor very appealing. it addresses the problem only from the cross - border bank β s perspective of minimising the regulatory burden. this is important but does not solve the underlying conflicts of interest between the home and the host countries. in short, it is a model which will only work in normal times when the weather is nice, if even then. the second alternative β the lead supervisor with an eu mandate β seems nice in theory and
|
maurice o'connell : the euro changeover in the irish context statement by mr maurice o'connell, governor of the central bank of ireland, to the irish parliamentary joint committee on finance and the public service, in dublin on 18 july 2001. * * * chairman we are now less than six months away from the launch of euro banknotes and coin, three years after the introduction of the euro as a currency. the period of transition has been very long but this has been unavoidable because of the complex production and distribution process that is required. the st euro will at last become a fully fledged currency on 1 january. for the first time the public in general will be able to relate to it as their own currency. this should have a very positive impact in terms of gaining acceptance of the new currency. the changeover is a big undertaking for all countries of the euro area. the individual national central banks have worked closely together through the european system of central banks. there has been regular monitoring of production to ensure uniform quality of banknotes across the euro area. the overall production requirement for launch of the new currency is 15 billion banknotes and 50 billion coins. these figures are so large as to be almost incomprehensible. each national central bank is charged with the responsibility of meeting requirements in its own country. in our case this means that we will provide more than 200 million banknotes and more than 1, 000 million coins. members of this committee will be familiar already with the banknote and coin denominations and the conversion rate against the irish pound. may i remind you that the smallest coin ( one cent ) will have a value of less than a penny and the largest banknote ( 500 euro ) will have a value close to Β£400. traditionally the demand for high value banknotes in this country has been quite small. the central bank of ireland has three main functions in relation to the changeover : Β· it must provide sufficient quantities of the new currency to meet the launch requirement and ongoing demand Β· it must provide sufficient quantities of irish currency right up to the end of this year and meet the peak christmas demand Β· it must withdraw the old currency after 1 january in an orderly manner. st the central bank is on course in the production of new banknotes and coin. frontloading of coin to bank branches and major retailers will begin in september and frontloading of banknotes will begin in november. contracts for distribution are being negotiated. for security reasons i would not wish to go into
| 0 |
as to stimulate activities in other sectors of the economy, too. governments and social partners have started initiatives to enable labour markets to function more efficiently. the remarkable performance in employment growth in the past few years also reflects an increasing proportion in part - time employment and points to some improvements in labour market flexibility. further improvements in labour markets can be supported from many sides. the social partners will play a key role by adhering further to a path of moderate wage increases, in line with price stability, and taking into account both productivity developments and the need to reduce the level of unemployment further. the benefits of such behaviour have already been seen. moreover, there is a broad consensus that the larger part of the still high level of unemployment is of a structural nature ; this challenge needs to be addressed continuously by policies which remove structural rigidities from the labour markets and which diminish adverse incentives provided by tax, benefit and pension systems. ongoing structural reform will be particularly important with regard to the changing character of jobs in an economy which needs to be open to rapid advances in new technologies and globalisation. the governing council feels that the first 22 months of monetary union have been very successful. it is determined to continue addressing the challenges related to monetary policy and is confident that other policy areas will play their part in the overall policy framework of the community and the euro area.
|
sabine lautenschlager : european banking supervision - towards a common culture statement by ms sabine lautenschlager, member of the executive board of the european central bank and vice - chair of the supervisory board of the european central bank, at the eurofi financial forum 2018, vienna, 6 september 2018. * * * since 2014, we have made huge steps towards establishing a truly european system of banking supervision and embracing a common supervisory culture. does this mean nothing more needs to be done? not quite. for a fully - fledged common culture you need to have three things : first, you need a truly unified legal basis. you simply cannot build a comprehensive common supervisory culture if you have to apply a different set of rules in each of the 19 countries. just think how we need to treat fit and proper assessments differently from one country to the next. second, you need harmonised administrative practices. and here, we have made good progress in the last four years β wherever the legislator granted us scope. we established practices for all the major areas of supervision, such as the srep, the treatment of npls, stress tests, the icaap, the ilaap, and so on. third, you need time and cooperation. after all, staff from 19 countries and 26 authorities have to be persuaded to leave their cultural comfort zone and align how they think, assess and act. i measure how far we have come by the frequency with which banks ask about changes in supervisory actions. in other words : how often do banks complain about changes in the way they are being supervised? they complain a great deal, i can tell you. and we keep pushing forward. let me give you just a few examples : we strive to increase the number of cross - border on - site missions, with even more on - site supervisors working on banks outside their home country. the success of this initiative will largely depend on the number of on - site supervisors the national authorities are willing to send. we have established a rotation scheme for members of our joint supervisory teams. this too will help to spread a common culture. at the same time, it helps to avoid supervisory capture. we foster exchange between supervisors from across the euro area. we bring them together in many different working groups to devise training manuals and supervisory guidance. but the ecb cannot create a common supervisory culture by itself. the national authorities can and should contribute, too. i understand, of course, that it is difficult to let
| 0.5 |
promote access to financing for smes, can make an important contribution in this field. in any case, it is also necessary to study ways to tackle directly the asymmetric information problems faced by these firms. this in turn requires enhancing the quality and quantity of information available on both the credit track record and the financial situation of companies. in this regard, it is worth mentioning a new regulation recently approved in spain that obliges banks, under certain conditions, to pre - announce three months in advance should they decide not to roll over existing credit lines or loans at maturity. also, in those cases banks are obliged to provide relevant information on the credit profile of their customers whose loans are not rolled over. the banco de espana, in response to the mandate conferred to it under this new regulation, is currently working on a circular, which will specify the relevant information to be bis central bankers β speeches provided to the smes in these circumstances, together with a methodology to produce a standardised report on the sme credit assessment. other actions that could also help mitigate the possible frictions in the credit market during crisis periods include those facilitating debt restructuring by improving the bankruptcy legislation. these measures, if well - designed, could help to smooth the reallocation of resources from non - viable firms to viable and productive firms. spain has recently introduced various reforms to improve the effectiveness of bankruptcy procedures, though it is still too early to appreciate in full what additional reforms are needed to further improve those procedures. at the european level, i also welcome the action plan on building a capital markets union recently approved by the european commission. this project envisages some measures to overcome information barriers that could inhibit sme lending. that includes, following the spanish example, the strengthening of the feedback given by banks declining sme applications and the promotion of systems facilitating the availability for investors of comprehensive information on smes. moreover, the action plan also foresees actions to reactivate securitisations markets. let me stress the importance of this specific set of measures. for smaller firms, for which direct access to markets is not feasible due to problems of scale, bank credit will remain the predominant financing source. therefore, an adequate availability of funds for smes requires banks to have sufficient means and capacity to properly conduct their intermediation activity. in that regard, the development of the securitisation markets seems a promising avenue to facilitate credit risk management by banks and, therefore, to support lending. indeed, securi
|
to better support the needs of users, for example enhanced liquidity management. and we will also look to extend opening hours. strengthened end - to - end risk management : a more robust system with greater oversight and governance from the bank of england has been introduced since the operation of chaps was brought in - house in november 2017. the bank now has responsibility for system - wide risk management, including relationships with participants, and clearer lines of responsibility and integrated governance will help to reduce further the risks in the high - value payment system ( hvps ). today i will cover three key areas : β’ firstly, how we want to expand access to rtgs to enhance financial stability and promote competition ; bank of england, a blueprint for a new rtgs service for the united kingdom, https : / / www. bankofengland. co. uk / paper / 2017 / ablueprint - for - a - new - rtgs - service - for - the - uk all speeches are available online at www. bankofengland. co. uk / speeches β’ secondly, how we are examining ways of supporting settlement across innovative payment technologies ; and β’ finally how iso 20022 implementation will support innovation, harmonisation and resilience. improving access the bank wants to see the next generation of rtgs support greater competition and innovation within the payments industry. expanding access to the service also has the benefit of providing greater financial stability by reducing operational reliance on a small number of banks and lowering the credit exposures between direct and indirect participants. we have therefore changed the access criteria to enable non - bank payment service providers ( psps ) to join. earlier this year transferwise was the first non - bank to gain direct access to rtgs, followed soon after by ipagoo. going forward we also want to make the onboarding process smoother and more efficient. for instance, we intend to introduce automated testing, which will reduce the burden and manual effort required by both new and existing participants when someone joins rtgs. and we will introduce simulators to help onboarders better familiarise themselves with rtgs and the full functionality it offers before going live. innovative payment technologies the uk is a world - leader in financial services technology and innovation. we have a fintech industry which employs over 60, 000 people. this success is not limited to london ; centres of excellence exist across the country including manchester, leeds, edinburgh and cambridge ( where sir dave ramsden is today chairing a fin
| 0 |
said this, i would like to focus on the potential competition between currencies. the position as a key currency is not easily threatened. inertia here plays a large role. in such a situation, the economy of the key currency is easily tempted to focus its economic policy on domestic considerations. in today β s globalized economy, this could lead to undesirable ripple effects on the rest of the world, through the fluctuations of the external value of the key currency. if we have two competing currencies, and the role of the key currency is contestable, competition between them could lead to more attention to the external value of key currencies. this should have a positive effect on the stability of the global financial system. 2. the role of the yen and its challenges in this context, what kind of role can or should the yen perform? i am a firm believer in the potential of the japanese economy. therefore, i believe that the yen can and should play a larger role in the global market. looking back, japanese prices have been stable for a long time. in addition, i can count a few more strengths : one of the largest pool of savings in the world ; strategic location in asia - the center of global growth ; and state - of - the - art it technology. these strengths must be funneled into the strengthening of the whole japanese economy through appropriate economic policies. this, in turn, would assure the place of the yen in the global economy. what are such policies? the answer boils down to two factors : one is to support the private sector to realize a vibrant economy and the other is to build efficient and liquid financial markets. in other words, policies must support structural reforms. reforms not only in the private sector but also in the public sector are important. from the central bank β s point of view, it is our responsibility to contribute to the sustainable growth of the economy through the maintenance of price stability. we must also enhance credibility through transparent formulation of policies. the central bank also has a role to play in invigorating financial markets. we are redoubling our efforts as a key player in the market and as a provider of market infrastructure. considering the deepening economic relations between japan and the rest of asia, asia should benefit if the use of the yen could be facilitated. the yen could become a viable alternative in both fund management and fund raising. asia β s strong demand for capital and japan β s vast pool of
|
often the case that the shortage of relevant human resources has constrained the expansion of businesses. with the ongoing efforts toward digitalization, the shortage of human resources for information technology is a pressing issue. in order to respond boldly to the major changes, firms have made efforts not only to improve workers'skills through in - house training but also to acquire new skills through the exchange of human resources with other industries. it is important for firms to further step up efforts that they already have made to improve their workers'skills in order to adapt to structural changes. capital input : capital stock accumulation through business fixed investment the next issue is capital input. one of the reasons for prolonged low growth after a major crisis is that the accumulation of the necessary capital stock is hampered. that is, in the aftermath of a crisis in which corporate profits deteriorate, economic uncertainties increase, and the funding environment worsens, business fixed investment will be constrained excessively, and firms'continuing cautious stance will lead to prolonged stagnation in capital accumulation. let us look at the past business fixed investment stance of firms in japan ( chart 11 ). following the bursting of the bubble economy, they remained reluctant to make fixed investment for a long period under prolonged deflation. however, as i mentioned at this meeting last year, firms surely had become more active with their fixed investment in recent years, mainly on the back of high levels of profits. during this situation, early this year, we were hit by the shock of covid - 19. it is true that the high levels of savings that remained on hand even after making active investment have mitigated the impact of the shock. however, the important thing is that being excessively cautious with investment based on this experience will negatively affect future competitiveness. i think that firms are well aware of this point. many are saying that, despite the shock, they will continue to make necessary investment, given that they significantly constrained fixed investment after the gfc and subsequently lost their competitiveness. when looking ahead to the post - covid - 19 era as well, i think it is important not to interrupt the positive trend seen before the outbreak, which was to invest aggressively for the future. technological progress : continued investment for growth technological progress is also important ( chart 12 ). there are many examples like the gfc where, in the aftermath of a crisis, technological progress stagnated and productivity growth in the economy as a whole remained weak accordingly. one of the reasons is the
| 0 |
example and advice as colleagues. but there is more to the story than successful leadership. the success of our institution is really the result of the way all of us carry out our responsibilities. we approach every issue through a rigorous evaluation of the facts, theory, empirical analysis and relevant research. we consider a range of external and internal views ; our unique institutional structure, with a board of governors in washington and 12 reserve banks around the country, ensures that we will have a diversity of perspectives at all times. we explain our actions to the public. we listen to feedback and give serious consideration to the possibility that we might be getting something wrong. there is great value in having thoughtful, well - informed critics. while the challenges we face are always evolving, the fed β s approach will remain the same. today, the global economy is recovering strongly for the first time in a decade. we are in the process of gradually normalizing both interest rate policy and our balance sheet with a view to extending the recovery and sustaining the pursuit of our objectives. we will also preserve the essential gains in financial regulation while seeking to ensure that our policies are as efficient as possible. we will remain alert to any developing risks to financial stability. 1 / 2 bis central bankers'speeches i am deeply grateful for the opportunity to lead the fed as we face these evolving challenges. i believe that the way we approach our work, the strong values we hold, and the dedication to public service i see throughout the federal reserve have been the keys to our success. as chairman, i will uphold these values and do my very best to further our pursuit of something we all seek β an economy that works for all americans. 1 on monday, february 5, 2018, jerome powell officially took the oath of office as chairman of the board of governors of the federal reserve system ( for more information, see the board β s press release available at www. federalreserve. gov / newsevents / pressreleases / other20180205a. htm ). this february 13 event is a ceremonial swearing - in. 2 / 2 bis central bankers'speeches
|
, the largest productivity gains were not realized in the high - tech sector or from the it investments itself but from the widespread use of information and communication technologies in traditional sectors like wholesale trade, financial intermediation and construction. the new technologies led to a complete reorganization of the value chain thereby enhancing total factor productivity, albeit with a lag. one cannot entirely exclude that this leverage effect will simply occur with a lag in europe. after all, productivity growth is one of the least well understood phenomena in economics. while i do not want to exclude a productivity lag effect in favour of europe, i suspect the story is a more complicated and a more challenging one. structural conditions must be in place in europe to allow maximum flexibility so that the full potential of the new technologies can be unleashed throughout the real economy. conclusions the question of why the eu recovery is so slow implies a cyclical answer. the european track record of the last ten years, however, strongly suggests that there is a crucial structural dimension to the problem of weak european growth. the real challenge for the eu is to boost productivity growth and augment its potential growth rate. in the words of mervyn king : β raising productivity growth is the key to improving the prosperity of future generations. β 4 it is therefore not particularly meaningful to analyze the growth weakness in europe in purely cyclical terms. in other words, expanding fiscal and monetary policy will be no panacea to europe β s growth challenge. longer - term fiscal consolidation is imperative in light of a rapidly aging european population. on the monetary side, there is no indication that policy is too restrictive in light of real interest rates at or near zero for the eurozone. indeed, based on a standard taylor rule framework, the ecb β s monetary policy stance is equally or in the recent past even more expansionary than that of the federal reserve. at any rate, neither fiscal nor monetary policy can ultimately address structural impediments to higher growth dynamics in the euro area. in an effort to augment the eu β s growth potential, the focus must therefore be on breaking down labour market rigidities for additional labour input on the one hand and on accompanying policy measures to increase productivity on the other hand. despite the subdued nature of the current growth outlook which is adversely affected by a strong euro and rising oil prices, there are some promising signs that structural change is under way. both the gradual dismantling of the 35 hour week in france and the shift to part -
| 0 |
those qualifications, here are a few thoughts on four important issues : β’ the role of balance sheet problems in creating vulnerability to crisis, β’ the challenge in designing an appropriate exchange rate regime and monetary policy framework for emerging market economies, β’ the conditions for dealing with progressively greater openness to capital flows, and β’ the role of policy reforms and financial assistance in crisis resolution. currency mismatches and balance sheet problems in general, the crises were the consequence of fundamental economic problems, often manifested in the buildup of substantial balance sheet problems, with excessive short - term borrowing in foreign currency by the sovereign, the banking system, or both. in asia, the accumulation of short - term debt was concentrated in the banking system. banks borrowed dollars and yen on a large scale and then lent those funds to corporations that earned their revenues in domestic currency. this created a mismatch between the currency denomisnation of the banks β liabilities and their assets. and this mismatch created an acute vulnerability to exchange rate risk. the rapid increase in foreign currency exposure was encouraged by fixed exchange rate regimes, since these created the illusion of protection from exchange rate risk. it was encouraged by tax incentives that favored short - term foreign currency borrowing through offshore banking centers. it was fed by the selective liberalization of capital controls on foreign borrowing, while limitations on equity inflows were left in place. it was exacerbated by classic moral hazard β the result of past government interventions to limit corporate and bank failures. and it was made worse by poor disclosure, which masked the scale of the increase in external liabilities and the deterioration in the level of official reserves. the scale of the buildup of foreign currency debt was fundamental to the dynamics of the crises. once confidence weakened, and fixed exchange rate commitments became unsustainable, the economies experienced a sharp reversal in capital flows as both residents and nonresidents sought to limit their exposure to domestic institutions and assets. this broad flight from domestic assets created conditions similar to a classic bank run. the exchange rate decline magnified concern about potential losses in the corporate sector and banking system, which led to a further shift in assets out of the country, which exacerbated the exchange rate decline. these balance sheet vulnerabilities led to a vicious cycle in which the exchange rate and financial weaknesses reinforced each other. as economies slipped toward the edge of the cliff, policymakers were left with alarmingly few options to try to contain the crisis and mit
|
john c williams : the longer - run framework - a look ahead remarks ( via videoconference ) by mr john c williams, president and chief executive officer of the federal reserve bank of new york, at the hoover institution monetary policy virtual series : the road ahead for central banks, 7 october 2020. * * * it β s great to be back in california participating once again in a hoover institution monetary policy event, even if only virtually. these conferences have provided an excellent opportunity for academic experts, policymakers, and practitioners to share research and perspectives on critically important issues. john taylor is both a friend and a mentor, so it β s a particular pleasure to be sharing this online platform with him today. this summer, the federal open market committee ( fomc ) completed its review of the fed β s monetary policy framework. this culminated in august with the issuance of a new statement on longer - run goals and monetary policy strategy. 1 the fomc put this strategy into practice in its september policy statement, explicitly tying its policy actions and intentions to the new framework. 2 the new policy framework represents a substantial evolution of the fomc β s thinking and approach since the committee published its first framework statement in 2012. today, i β m going to talk about what these changes mean for policy as the economy recovers from the effects of the pandemic. but what i β m really looking forward to is our conversation around these important issues, so i β ll keep my opening remarks brief. before i go any further, i need to give the standard fed disclaimer that the views i express today are mine alone and do not necessarily reflect those of the fomc or others in the federal reserve system. our dual mandate goals while our monetary policy approach has shifted, our fundamental goals have not. the fed has two goals set by congress : maximum employment and price stability. these β dual mandate β goals remain on an equal footing, and our commitment to delivering on both has not changed. in addition, our assessment that a 2 percent long - run inflation rate is most consistent with achieving both of our dual mandate goals is unaltered. what has evolved is how we think about best achieving them. like all institutions, the federal reserve must be responsive to changing circumstances and adapt to new realities. since 2012, we have learned a great deal about the behavior of the economy, employment, and inflation β both in the short and longer run β and these lessons have informed our approach to
| 0.5 |
##mediating between those with surplus resources ( depositors ) and those in need of resources ( investors ). in view of the foregoing, effective and efficient supervision is crucial to limit the risk of loss to depositors, henceforth maintaining public confidence in the financial system. in response to the liberalised environment, there has been a proliferation of linkages between institutions operating in various segments of the financial sector and a growing number of financial mergers and acquisitions, thus creating, in the process, huge financial conglomerates. for instance, banks and insurance companies are searching for growth through the diversification of their activities in such a way that they can no longer be considered as homogeneous institutions falling within the scope of one economic sector and one supervisory system! these conglomerates aim to exploit the synergies that exist among banking, insurance and investment. this market evolution towards huge financial conglomerates, with integrated product development is slowly blurring the traditional boundaries between banks and non - bank financial institutions, on the one hand, and the supervision of these institutions, on the other. in spite of these trends in the international financial markets, regrettably, supervisory systems, in our sub - region, are mainly structured along the traditional boundaries demarcating banks, insurance companies, investment and micro - finance institutions. these integration changes represent major challenges to the supervisors of the different sectors, especially as the financial institutions become more complex in their structures and operations. notwithstanding the foregoing, the sluggish growth of our economies in the sub - region has also created a difficult operating environment for financial institutions, especially banks. as a result, this has contributed to the mushrooming of non - bank financial institutions, such as, micro - finance. it is a fact that the financial sector in our sub - region is dominated by commercial banks, which have continued to service only a small section of the population. the majority of the people are denied access, largely, due to numerous reasons, including perceived risks, high costs involved in dealing in small transactions and the inability to provide marketable collateral for loans. it is against this background that financial sector supervision should also be directed at financial institutions that pose the greatest risks, such as, non - bank financial institutions. in this regard, the adoption of the risk - based approach allows the supervisor to devote more supervisory effort to those areas that have a high - risk profile. this therefore, entails that supervisory authorities should shift their focus from the traditional capital, assets, management, earnings, liquidity
|
caleb m fundanga : supervision of non - bank financial institutions speech by dr caleb m fundanga, governor of the bank of zambia, at the opening ceremony of a mefmi / acbf / imf - east afritac regional workshop on β supervision of non - bank financial institutions β, lusaka, 14 february 2005. * * * β’ the executive director, mefmi, dr. maruping β’ the executive director, africa capacity building foundation β’ representative from the imf β’ distinguished workshop participants β’ ladies and gentlemen on behalf of the macroeconomic and financial management institute for eastern and southern africa ( mefmi ), the african capacity building foundation ( acbf ) and the east african technical assistance centre ( afritac ), i wish to welcome you all to this important workshop and to the beautiful city of lusaka. may i also welcome our distinguished resource persons and thank them for accepting our invitations. i hope their participation will enrich the deliberations of this workshop as well as enhance the knowledge of the participants. having perused through your programme, i noticed that you have a tight schedule. however, i urge all of you to find time in your busy schedule to visit some interesting places that the city of lusaka has to offer, including shopping malls, museums, cultural villages, to mention but a few. allow me also to thank the executive director of mefmi, dr. maruping, for having invited me to officiate at this regional workshop on β supervision of non - bank financial institutions β. i am reliably informed that this workshop is organised by mefmi, in conjunction with the imf through the east afritac and the acbf. the workshop is indeed timely as it is aimed at building sustainable capacity for effective financial sector supervision at a time when our region is beset with a lot of non - bank financial institutions that are financially constrained. i, therefore, wish to commend these organisations for their collaborative efforts and hope that the cooperation exhibited by these institutions through the sponsorship of this workshop will not just end here, but will also grow from strength to strength. ladies and gentlemen the liberalisation and continued reforms of the financial sectors in our countries has brought interesting challenges to supervisors and regulators, alike. of particular importance, are the reforms currently taking place in the areas of regulation and supervision of financial institutions. as you are well aware, in a liberalised environment financial institutions play a critical role in the allocation of resources through inter
| 1 |
to many of these medium to small banks exiting from the banking system. this downward trend reached its lowest point with the placement of saambou bank into curatorship in february 2002 and the subsequent integration of boe bank into nedbank. from the last quarter of 1999 to the end of march 2003, some 22 banks exited the south african banking system. it can be said, however, that this phenomenon was due more to a consolidation of the broader banking sector than a failure of the medium to small banking sector. currently, small local banks constitute 3. 1 per cent of the total banking sector assets, in comparison to 21. 7 per cent in 1994. as a result of the political isolation of south africa in the mid - 1980 β s, international banks terminated their operations in south africa. immediately prior to the advent of the democratically elected government in 1994, few international banks were doing banking business in south africa. amendments to the banks act in 1994, however, allowed not only representative offices and subsidiaries of international banks to be established in south africa, but also branches of international banks. following the opening of south africa β s financial system in 1994, international participation in the local banking industry increased significantly, from 3 per cent in 1994 to 9. 5 per cent of total banking sector assets by the end of october 2004. 1 / 7 3. periods of change in the banking sector following south africa β s re - entry into international financial markets in 1994, locally registered banks have increasingly been expanding their operations into other countries. at the same time, international banks have been expanding their operations into south africa. besides adding further depth and sophistication to the south african market, these foreign banks began to tap into the south african labour market. consequently, the arrival of these predominantly resourceful and experienced banks posed formidable challenges to local banks. in a quest to survive and excel, south african banks had to devise means to adapt to the new terrain. as a result of the increased competition, lending margins have been placed under greater pressure, and several banks have had to expand their businesses and enter markets with slightly higher credit - risk profiles. currently, the major banks offer a wide range of services to both individual and corporate customers. one - stop relationship banking, with an emphasis on universal banking, instead of isolated services, has gained in importance during the past few years. nevertheless, several banks, especially small local and foreign banks continue to service niche markets, where they hold some form of competitive advantage.
|
at this stage warrant a reassessment of the current monetary policy stance. as in the past, the ecb β s monetary policy will be forward - looking and geared towards a medium - term horizon. it will not respond to short run fluctuations. sustained adjustment in the path of inflation to levels below, but close to 2 % over the medium term still requires very favourable financing conditions, which remain predicated on a very accommodative monetary policy stance. we still need to build sufficient confidence that inflation will indeed converge to this aim over a medium - term horizon and will remain there even in less supportive monetary policy conditions. monetary policy can support the absorption of economic slack, but it cannot strengthen potential growth. the current track record of the euro area economy is encouraging when judged against the subpar performance in the post - crisis years. but it is insufficient when judged against the long - term challenges the euro area is facing due to the debt loads inherited from the crisis and the implicit liabilities created by its ageing societies. so while short - term risks to the economy have somewhat abated in recent times, growth - enhancing structural policies remain warranted to tackle persisting longer - term vulnerabilities. 1 / 1 bis central bankers'speeches
| 0 |
opening ceremony of asian financial cooperation association ( afca ) keynote speech by dr. veerathai santiprabhob, governor of the bank of thailand beijing, july 24, 2017 vice president mr. ma kai, vice premier of china mr. guo shuqing, chairman of the china banking regulatory commission ( cbrc ) mr. chen yuan, vice chairman of the chinese people's political consultative conference mr. jin liqun, president of the asian infrastructure investment bank ( aiib ) mr. norman chan, chief executive of the hong kong monetary authority ( hkma ) mr. tian guoli, chairman of afca excellencies, executives of financial institutions, ladies and gentlemen. a very good afternoon to you all, today β s opening ceremony of the asian financial cooperation association ( afca ) is a very auspicious occasion, and i am honoured to be a part of this historical event. i would like to congratulate the chinese government for successfully establishing afca β a new forum, which i am certain, will play a significant role in enhancing financial connectivity and cooperation within asia. i would therefore like to take this opportunity to share with you my thoughts on how we can further enhance financial connectivity to ensure sustained shared benefits β as stated in afca β s mission1. ladies and gentlemen, people have long been connected by trade along the ancient silk road dating back more than 2, 000 years ago. today in modern times, many trade and investment agreements between china and other asian countries have promoted close economic ties in the region. thanks to the chinese leadership, the spirit of connectivity and cooperation is further enhanced through the one belt one road initiative. the asian infrastructure investment bank ( aiib ) is an added funding impetus to ensure that there will be physical infrastructure connectivity, laying the strong foundation for shared economic prosperity. china β s growing economic ties with thailand and asean have become stronger in many aspects. china has been the largest trading partner of thailand since 2013. thanks to the china - asean fta, china has been asean β s largest trading partner since 20092, while asean has been the third - largest trading partner of china since 20113. china has been one of thailand β s top foreign investors for the past nine years4. and in terms of tourism, almost afca follows the philosophy of openness and inclusiveness as well as the mission of β connectivity, cooperation, joint governance, and shared benefits β asean secretariat : asean trade balance ( in us $ million
|
situations, especially liquidity provision and the supportive legal framework. these four pillars, in my view, are the key minimums for implementing an effective financial - stability orientation policy. thank you.
| 0.5 |
industries with limited alternatives that policy interventions to increase resilience can be justified. the european union has devised its open strategic autonomy framework for precisely this purpose. it can pinpoint fragilities and allow for targeted support. yet there is some obvious friction between the " open " and the " autonomy " parts of this strategy. striking the right balance between these two aspects will inevitably spark debate, and possibly even disagreement. on the one hand, there is still much to be done in terms of making supply chains resilient. a recent bundesbank survey among german firms highlights the limited scope for reducing critical inputs from china. almost half of manufacturers report that their production hinges on intermediate products from china. eighty percent of them claim it would be at least difficult to replace these inputs. 7 on the other hand, we should remind ourselves of the undisputable benefits of globalisation. retreating from established trade patterns on a broad scale comes at a huge cost, as brexit showed, much to everyone's great discomfort. i won't dwell on its consequences. but that episode does illustrate that withdrawing from international cooperation comes with a substantial price tag and should thus be considered with the greatest care. 4 / 6 bis - central bankers'speeches in some cases, this price tag may be justified by other, more pressing objectives : for example, there cannot be normal trade with countries that flagrantly violate the international order by waging wars of aggression or fostering terrorism. as elected representatives, politicians may decide to restrict trade for the greater good. but these cases are exceptions that prove the rule. normally, there is good reason to continue maintaining an open, rules - based trading system. this also requires the world trade organization to be able to adapt its rulebook to new problems. nowadays, this commitment to an open and rules - based system seems to have slipped down the agenda for many governments. i hope it has become clear that i consider this open, rules - based system to be very important. 6 relevance for monetary policy now you may be asking yourselves : does all this matter for central banks? and what role can monetary policy play here? to the first question, i would say yes, this all matters a great deal for central banks. from a theoretical perspective, there are a number of reasons why the international division of labour could dampen inflation : for example through cheaper imports, greater competition, or lower input costs. the empirical evidence, however, is rather ambiguous. what we have
|
##liant the country was on russian energy imports was a kind of wake - up call. an extreme case is a situation where virtually all imports are concentrated on a single supplier. for example, china is estimated to control 90 % of the rare earths refining capacity. 4 i did not pick china as an example by chance. china is considered the most critical choke point in global value chains across a broad range of industries, both as a dominant supplier and as a dominant buyer. 5 how to address supply chain resilience 3 / 6 bis - central bankers'speeches if we want to carry on reaping the benefits of international trade, this is an issue we need to address. that won't be easy. for one thing, we have to distinguish between short - term interruptions and permanent dependencies. while disruptions caused by the pandemic were painful, it was precisely because of those global value chains that firms were able to adjust to the big shifts in demand experienced afterwards. bundesbank researchers found that the deeply interlocked value chains helped a great deal in rapidly adjusting to these new demands. 5 think of it equipment required for remote work. but also test kits, face masks and other personal protective equipment were needed all of a sudden. that in turn supported the recovery. as a by - product of the troubles experienced, firms have now updated their risk assessments. they have started reconfiguring their production networks to scale back their reliance on certain suppliers. that is a complicated task, and in many cases, " more robust " may also mean " more expensive ". 6 but it is essentially this market - driven approach that will ensure greater resilience. it allows a delicate balance to be struck. supply chains will be diversified and realigned where necessary. at the same time, market forces will prevent firms from becoming too isolated. there are limits to this line of action, unfortunately. commodity and energy imports may be hard to diversify, quite simply because these natural resources are far from evenly spread across the globe. some other critical industries producing intermediate inputs are highly concentrated as well. in these cases, the transitional costs of reconfiguring supply chains may be extremely high. consider the semiconductor industry, where setting up a single new production line may be a multi - billion euro endeavour. at the same time, being excessively reliant on a single source country is often problematic from a geopolitical point of view. it is for these strategic
| 1 |
the economy cannot prosper. as the first line of the banking and finance oath says : β trust is the foundation of my profession β. 1 i encourage everybody in the finance sector to read this oath regularly and to live by it. australia's banks have a strong record of being worthy of the trust that is placed in them to repay deposits. the last bank failure in australia that resulted in a loss to depositors was almost 90 years ago, back in 1931, and it was a very small bank and depositors lost only a small fraction of their deposits. 2 this is a positive record that few countries can match. this strength was apparent during the financial crisis a decade ago and has served australia well. the australian 1 / 11 bis central bankers'speeches banks are strongly capitalised and have considerable liquidity buffers. on the whole, they have also managed credit risk effectively, reporting few problem loans by global standards. this means that we can have a high level of trust in the ability of australia's banks to repay depositors. indeed, our strong and stable banking system is one of the australian economy's strengths. it is in other areas, though, where trust has been strained. it is clear that the behaviours highlighted by the royal commission have dented the community's trust in parts of our financial sector. the case studies used by the commission have put the spotlight on three important issues : 1. the inadequate way in which banks have dealt with conflict of interest issues ; 2. the way that poorly designed incentive systems can distort behaviour β promoting a sales culture at the expense of a service culture, and promoting the short term at the expense of the long term ; and 3. the fact that the consequences for not doing the right thing have, in some cases, been too light. strengthening trust in our financial institutions requires all three issues to be addressed. central to this task is creating a strong culture of service within australia's financial institutions. too often our financial institutions prioritised sales over service. correcting this starts with the system of internal reward established by the board and management. the vast bulk of the people who work for australia's financial institutions do want to do the right thing, and they do want to serve their customers as best they can. but, like everybody else, they respond to the incentives they face. if they are rewarded on sales or short - term objectives, it should not come as a great surprise that that's what they
|
the prospects must be for a relatively quick rebound of activity.
| 0.5 |
the growing concern about the effects of climate change, but it may also reflect a lower underlying risk. in any event, this change in attitude by investors should also serve as a catalyst for change towards more sustainable activities. taxonomy i should, however, also mention a general problem that may be holding these markets back. although the establishment of various green principles, such as the gbp, facilitated the launch of the green bond market, the lack of a commonly accepted taxonomy4 could be hampering its subsequent development. a shared taxonomy is essential to be able to make a coherent analysis of the green / brown bond yield spread. it is also important for the supervisor, as it permits aggregate risk and default analysis, consistent stress testing and the development of macroeconomic models, all of which are required to assess medium and long - term effects on the economy. lastly, a common taxonomy is needed to provide clear and consistent information to investors and the general public, as will be required of all listed companies in the future spanish legislation on environmental transition. in this setting, the european commission β s action plan, presented in march 2018, is crucial. the plan includes three sustainable finance regulations, including one on the creation of a β common taxonomy β. i trust this regulation will be approved shortly, in accordance with the objectives set by the new european commission, and that this taxonomy will finally provide us with a common definition of what may be considered β environmental β or β sustainable β. the role of supervisors β external initiatives as supervisors, we clearly have responsibility for urging on these changes. we need to be proactive ; in particular, we need to enter into a dialogue with banks to analyse how they are incorporating environmental risk. at the banco de espana we are intent on pressing ahead with this dialogue. let me mention just a few examples of recent steps taken. to assess the level of preparation for environmental risk, we conducted a survey among the 12 banks directly supervised by the ssm and several other smaller banks. subsequently we discussed the survey findings with the participating banks, conveying to them the importance of this issue and the supervisory expectations. according to the survey findings, many banks that were already explicitly considering environmental risk have included it in their social responsibility areas. almost all have a team dedicated exclusively to sustainable finance and some also indicate that they have established specific committees, reporting in some cases to the area general manager or corporate secretary and in others directly to the board of directors. in general, the green bond principles are updated once
|
, the board has been seeking to balance the benefits of stimulatory monetary policy with the medium - term risks associated with high and rising levels of household debt. the current low level of interest rates is helping the australian economy. it is supporting employment growth and a return of inflation to around its average level. encouragingly, growth in the number of australians with jobs has picked up over recent months and the unemployment rate has come down a bit. the investment outlook has also brightened. inflation has troughed and it is likely to increase gradually over the next couple of years. these are positive developments. even so, it will be some time before we are at what could be considered full employment in australia and before underlying inflation is at the mid - point of the medium - term target range. this means that stimulatory monetary policy continues to be appropriate. the board has been conscious that attempting to achieve faster progress on unemployment and inflation through yet lower interest rates would have added to the risks in household balance sheets. lower rates would have encouraged faster growth in household borrowing and added to the medium - term risks facing the economy. our judgement has been that it was not in the public 1 / 4 bis central bankers'speeches interest to encourage an already highly indebted household sector to borrow even more. more borrowing might have helped today, but it could come at a future cost. so the board has been prepared to be patient and has not sought to overly engineer or fine - tune things. in our view, the balance we have struck is appropriate and it is likely that the economy will pick up from here as the drag from declining mining investment comes to an end. our central scenario is for growth of around 3 per cent over the next couple of years and for the unemployment rate to move lower gradually. in striking the appropriate balance in our policy setting, we have paid close attention to trends in household borrowing, given the already high levels of debt. over the past four years, household borrowing has increased at an average rate of 6Β½ per cent, while household income has increased at an average rate of just 3Β½ per cent. given this, the rba has worked closely with apra to ensure that lending practices remain sound. rightly, apra has had a strong focus on loan serviceability calculations. in some cases, loans were being made where the borrower had only the slimmest of spare income. apra has also introduced restrictions on growth of investor loans and restrictions on interest - only lending
| 0 |
escalated before giving final verdict to the complainant. only in cases where the customer remained unsatisfied with the resolution should she need to approach the bo. a continuous rise in the number of complaints to the bo is perhaps a pointer to the fact that the institution of ibo has not been very effective or has not been empowered enough by the management. it would be appropriate for the banks to invest in an efficient technology platform which doesn β t merely aggregates and tracks the complaints but also undertakes a root cause analysis of various complaints received, thereby enabling proactive preventive action. tthe pccos and ibo could collaborate in identifying areas where the frontline staff needed clearer operational instructions and provide them training / handholding. this is extremely important in a scenario where pace of staff attrition / staff rotation have risen significantly. the banks could also contemplate investing in a technology - aided faq platform which the frontline staff could consult 2 / 5 bis central bankers'speeches for addressing customers β queries rather than misinforming them. i wonder whether time has come to prescribe some mandatory qualifications for the pccos also in line with that for the cfos / ctos. that said, rbi would be conducting an assessment of the efficacy of the ibos during the supervisory visits and would expect the bank management to bring more synergy into the working of the pccos and the ibos for a speedier and efficient grievance redressal. c. electronic banking β security issues technology is being increasingly used in delivery of banking services in recent years. however, it has also brought in associated risks of security as is evident in few high profile cyber - incidents in the recent past. there have been several incidents of theft of personal information, fraudulent use of atms, net banking frauds, atm / debit card incidents or cases of unauthorized access to bank servers. hence, there is an immediate need for plugging all the gaps and vulnerabilities in tech - enabled service delivery. with greater thrust on digital banking especially in the wake of withdrawal of legal tender status of specified bank notes and consequent increase in complaints relating to unauthorised / fraudulent transactions, a need for having a comprehensive policy to limit the liability of customers cannot be over - emphasized. rbi had come out with a draft circular on β customer protection β limiting liability of customers in unauthorised electronic banking transactions β earlier and based on feedback received from the concerned stakeholders, final guidelines
|
s s mundra : customer service in banks - time to raise the bar! keynote address by mr s s mundra, deputy governor of the reserve bank of india, at the annual conference of principal code compliance officers, organized by the banking codes and standards board of india, mumbai, 30 may 2017. * * * shri a. c. mahajan, chairman, banking codes and standards board of india ( bcsbi ) ; shri anand aras, ceo, bcsbi ; colleagues from the banking industry ; representatives from the media ; ladies and gentlemen! at the outset, i would like to thank bcsbi for inviting me for this annual conference of the principal code compliance officers ( pccos ) in the banks. 2. during the past 12 years of its existence, bcsbi has played a pivotal role in enhancing awareness about customer service in banks. the code of bank β s commitment to customers and the code of bank β s commitment to micro and small enterprises developed by bcsbi set out common minimum standards for customer service in banks. 3. monitoring of compliance to the codes by member banks is one of the mandates of bcsbi which is fulfilled through visits to a representative sample of branches by authorized representatives of bcsbi. bcsbi, thus, helps the banks by providing an independent review and feedback on their adherence in practice, to the self - prescribed standards. from 2013, bcsbi has been rating banks on code compliance based on the inputs from branch visits and customers feedback. this rating indicates level of implementation of important provisions of these codes at the first customer touch point in the bank. a release now of these ratings in public domain is intended to increase transparency, generate public awareness and also instill a sense of competition among the member banks for achieving a higher level of customer service. a perusal of the ratings, however, does not exhibit any significant improvement in consumer service rating of banks. only 12 of the 46 banks rated by bcsbi received β high β rating in terms of performance while 24 were above average and 10 remained as β average β performers. in fact, the position has marginally worsened since 2015 survey. 4. despite outlining of minimum standards for customer service through codification of banks β commitments to customers, we observe that the number of complaints received by the offices of banking ombudsmen continues to rise. for the first time since its inception in 1995, the number of complaints to bos exceeded one lakh last year.
| 1 |
mario draghi : economic growth outlook, regulatory measures and the situation of italian banks speech by mr mario draghi, governor of the bank of italy and chairman of the financial stability board, at the 17th associazione italiana analisti finanziari β associazione italiana operatori mercati dei capitali ( the financial market association of italy ) ( aiaf - assiom forex ) congress, verona, 26 february 2011. * * * the economy the world economic recovery is continuing, albeit amidst many uncertainties. global output grew by 5 per cent on average in 2010 ; the previous year it had fallen by almost one percentage point. it is commonly believed that the expansion will continue at almost the same pace as last year. in the united states, gdp growth accelerated to almost 3 per cent at the end of 2010 ; the increase in consumption became more robust. growth at similar rates is expected for the current year. for the emerging economies, the growth estimate is on the order of an average of 7 per cent this year and next. in the euro area the german economy is providing the strongest impetus for growth, thanks to sharp increases in exports and investment in machinery and equipment. in italy growth is running at around 1 per cent. the expansion of output is concentrated at exporters, particularly large firms, with outlets in the emerging economies. domestic demand remains weak, especially consumption, which is affected more severely than in other euroarea economies by uncertain employment prospects and the protracted stagnation of households β real incomes. the improvement in the world macroeconomic situation and the overcoming of the financial disorder engendered by the crisis are nevertheless accompanied by old and new weaknesses. sharply divergent growth rates can easily accentuate the volatility of exchange rates and interest rates, jeopardizing the recovery. the interconnections between economies make the system vulnerable even to local shocks. the human dimension and the still uncertain outcome of the popular uprising in libya are of concern to the international community. the immediate impact of potential problems for energy supplies from northern africa may be mitigated by the abundant unused capacity of the other producer countries, but the dramatic events we are witnessing may undermine investment in the oil industry in the area and raise energy prices, with repercussions for world growth. for the italian economy, other things being equal, a 20 per cent rise in oil prices would shave half a percentage point off growth over three years. economic policies economic policies have less
|
. independence is not a new concept to the ecb. neither is accountability. we are proud of our independence, and in the context of supervision, the ecb needs to be safeguarded from external interests and national bias. with the activation of article 127 / 6, the provisions of the treaty are extended to the new supervisory task. these include independence in the preparation of supervisory assessments. in addition, the ecb as supervisor will enjoy operational independence, as foreseen by the core principles of the basel committee on banking supervision with which it will be compliant. it is essential that independence extends to all members of the supervisory board. such independence in the assessment is crucial for the credibility of the supervisory system. at the same time, it is equally crucial that these strong supervisory powers should be matched with very strong arrangements for accountability. let me assure you that we are eager to comply with the highest standards of democratic accountability at all levels, that is vis - a - vis both european institutions and national institutions. complete range of supervisory instruments the third principle is that the single supervisor should possess a complete set of supervisory instruments. all banks established in participating member states would in principle fall within the remit of the single supervisor. this is important to ensure a level playing field. it will also prevent fragmentation in the financial system, which is precisely what we are aiming to repair. one lesson of the financial crisis is that not only large cross - border banking conglomerates have the capacity to destabilise the financial system. due to interlinkages and mechanisms of contagion, even smaller institutions may turn out to be systemically important. such banks have a strong presence in europe : in almost half of the euro area countries, more than 60 % of the total bank assets are held by smaller banks. taking the euro area as a whole, approximately 30 % of the total bank assets are held by smaller banks1. these are significant amounts. to preserve financial stability, the supervisory board would be able to assert control over all banks in participating countries. let me say something more on how such a system could operate. the european supervisor will work as a decentralised system with the supervisory board at the centre. the supervisory board will itself be predominantly composed of top representatives of the national supervisory authorities ; hence the working method and decision - making will be collective, based on a collegial approach and will directly benefit from the skills and experience of the national supervisors. they will be prime actors in the framework, not passive
| 0 |
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.