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while the medium - term orientation of our monetary policy strategy allows us to β look through β such price developments if they are temporary in nature, there were two reasons why we feared this would not be the case. first, while the fluctuations in inflation in the second half of the year were clearly being driven by supply factors, there were strong signs that the trend was being driven by weak aggregate demand. this was visible both at the macro level in a still wide output gap and a declining rate of core inflation ; and at the micro level in subdued negotiated wages and low pricing power among firms. in other words, we were not facing merely a downward shock to prices, but also a downward shock to inflation dynamics β a sustained adverse development. second, because of this weak underlying trend in inflation, there was a higher risk that the oil price fall could feed into second round effects. indeed, several factors suggested that the situation was more worrying than past episodes of oil - induced disinflation, particularly the most recent case in 2009 following the collapse of lehman brothers. our analysis showed that the persistence of low inflation across a range of statistical metrics was higher than in 2009. inflation expectations had also become, at all horizons, less well anchored to our objective and more sensitive to that low realised inflation, whereas in 2009 they hardly moved at all. and measures of core inflation had become less sticky, implying a higher risk that this low realised and expected inflation would become entrenched in wage setting behaviour ( chart 6 ). also relevant was the fact that this loosening of inflation expectations occurred while policy rates were already at the effective lower bound. at the lower bound a fall in inflation expectations implies a rise in real interest rates, so this development risked generating a contractionary effect that would offset, at least in part, the benefits of the fall in oil prices. moreover, given high debt levels in parts of the euro area, this would be amplified if second round effects set in and real debt burdens increased, as borrowers tend to have higher propensities to consume and invest than lenders. it was in this context that we moved into the third contingency by engaging into outright asset purchases. this began in september 2014 with our announcement that we would purchase asset - backed securities and covered bonds. and it was then scaled up in january 2015 with the addition of public sector securities to our purchase programme. these asset purchases work in two main ways. first, they have a signalling effect, which contributes to
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for the real economy. credit impulse is an important indicator to reflect changes in the financial cycle, including the direction of marginal changes in the cycle. measured by the marginal change in the ratio of newly added credit to gross domestic product ( gdp ), china's credit impulse has turned positive and upward since 2023, indicating that the credit is playing an increasingly important role in supporting the economy. since the beginning of 2023, the forecasts for china's economic growth have been revised upward in general. the international monetary fund ( imf ) revised its forecast for china's economic growth this year from 4. 4 percent to 5. 2 percent. and just two days ago, the world bank raised its forecast from 4. 3 percent to 5. 6 percent. the competitive real interest rate of rmb assets is conducive to the value preservation of the rmb held by china's trade and investment partners. measured by the difference between the yield on 2 - year government bonds and the core consumer price index ( cpi ), china's real interest rate is around 1. 7 percent, which is similar to that in the united states after a sharp hike, and is significantly higher than that of developed economies such as germany and japan. amidst the worldwide elevated inflation, the value of rmb bonds as a portfolio diversifier is highlighted. since 2022, both the government bonds and equities have experienced an obvious decline in developed countries, representing a shift from negative correlation to positive, so the benefits of bonds as a portfolio diversifier for equities have decreased sharply. as for emerging markets, their bonds are always highly correlated with global equities, as they are risky assets. in contrast, chinese bonds maintains a negative correlation with the global equities, hence a better diversifier. 2 / 3 bis - central bankers'speeches since 2023, our foreign exchange market has been generally stable. cross - border capital flows have maintained a basic equilibrium, compared with a relatively high surplus at the beginning of the year. foreign exchange reserves have witnessed steady growth, and the rmb exchange rate has remained basically stable at an adaptive and equilibrium level. since mid - april, affected by various internal and external factors, especially the strengthening of the us dollar index due to the us debt ceiling issue, the rising risk aversion driven by small and medium - sized bank risks, and the heightened expectations for fed rate hikes, and considering that the foundation for the economic recovery in
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mr roth remarks on the euro and swiss franc : two sister currencies? speech by mr jean - pierre roth, vice - chairman of the governing board of the swiss national bank, at the swiss business association annual general meeting, singapore, 24 february 2000. * * * for more than a year now, the euro has been a reality. it has crowned a decade long process of monetary integration in europe. the introduction of a common currency in eleven closely related, but independent countries is an unique experiment. it is still too early to assess all the far - reaching implications of this monetary revolution. therefore, the thoughts and remarks i am going to express today can only be intermediate and provisional. 1. consequences of the euro for the swiss economy switzerland is not part of the monetary union. it is nonetheless deeply integrated in its european environment through its geographic situation and its strong historical, cultural and economic links with europe. over 50 % of our exports go to countries of the euro - zone, while 70 % of our imports come from there. but, besides that, switzerland has strong traditional links overseas, too. the us, canada and japan account for 10 % of our imports and 15 % of our exports while emerging markets represent 4 % and 10 % respectively. although concentrated on europe, our foreign trade is geographically more diversified worldwide than that of other small open european economies such as austria, the netherlands or belgium. for the first time in its history, switzerland is surrounded by countries all sharing the same currency. even without being a member of the union, it is affected by this new monetary situation. de facto, our trade with europe is already taking place in one currency only - the euro - because the parities of the former national currencies have been definitively locked. that means that our foreign trade is less diversified by currencies than earlier and that fluctuations of the sf / euro exchange rate have an even stronger impact on the swiss economy than the former sf / dm or sf / ff exchange rates. at the same time, a common monetary policy for europe is likely to lead - over time - to a stronger synchronization of business activity in the emu member states. this, in turn, means that the impact of the european business cycle on the swiss economy will become more even and thus also stronger. more than ever, switzerland β s economic destiny will be linked to that of europe. today, switzerland benefits already from the technical simplification induced by the substitution of ten
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##oni green limited as a consequence of its prolonged organizational restructuring. with the recent heavy rainfall and flooding in some parts of trinidad, we expect further increases in food crop prices. looking ahead, higher public spending through the expansionary 2014 / 2015 budget is already adding to elevated liquidity levels ( currently nearly $ 8 billion ) and may further push up core inflationary pressures. third, the non - energy sector has delivered fairly respectable growth for 14 consecutive quarters to september 2014 and the near - term outlook is for continued steady performance in non - energy output. this suggests the non - energy sector is developing enough resilience to withstand a gradual increase in interest rates. in addition, growth is strengthening in the united states, and this augurs for caricom countries which are the major market for our non - energy exports. apart from increases to the repo rate, central bank has been very active over the past year managing excess liquidity. the main source of this liquidity arises from financing government β s net domestic budget deficit. for the year - to - date, net domestic fiscal injections added over $ 11 billion into the system, while the maturity of two central government bonds previously issued for liquidity absorption purposes, also returned approximately $ 1. 5 billion into the system. in order to effectively manage liquidity levels, the bank utilized several tools at its disposal. given the increased limits under the treasury bills and notes acts, over the period january β october 2014 the central bank intensified its use of open market operations and withdrew $ 10. 7 billion from the banking system. of this amount, $ 7 Β½ billion in open market securities were issued to sterilize or lock away the liquidity arising from an extraordinary, one - off purchase of us $ 1. 175 billion in foreign exchange from a bank. in addition, central bank rolled over three commercial banks β fixed deposits totalling $ 4. 5 billion and facilitated the issue of a $ 1 billion liquidity sterilization treasury bond in june 2014. further, central bank sales of foreign exchange to authorized dealers indirectly removed $ 9. 1 billion from the system over the review period. bis central bankers β speeches the bank plans to re - open the un - issued portion ( $ 440 million ) of the $ 1 billion liquidity treasury bond issued in august 2013 as well as use other liquidity absorption measures to rein in excess liquidity in coming months. short - term prospects i would like to turn now to the outlook for 2015. we are facing
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gender equality has many facets, and i have touched upon several. generally speaking, there are three things which, for me, are inseparably linked to this issue : first, equality doesn β t only mean rights. for every right there is an obligation. therefore, having the same rights means having the same obligations. it β s not just about cherry - picking, if i can put it like that. women who demand complete gender equality must also be ready to take on responsibility. second, gender equality doesn β t only concern a career - minded elite. it concerns everyone. so it β s not just about female quotas for supervisory boards and executive boards. it β s not just about gender - neutral phrasing in legal texts. all that is of relatively little benefit to most women. for the majority it must mean more flexible working hours, respectful treatment, appropriate pay, better child care β just to mention a few things. third, equality ultimately concerns one thing : freedom. every individual should live exactly how she or he wants to. that also means we have to be tolerant of different lifestyles. we have to be tolerant of women ( and men ) who see being at home with the family as a calling ; we have to be tolerant of women who see a career as a calling ; and we have to be tolerant of women who claim both for themselves : family and career. and tolerance isn β t the whole story : women with different lifestyles should display solidarity. they should never let themselves make comments like β she β s only a housewife β or β she neglected her children for her career β. despite all this, there β s one point we should put on record : basically it β s a good sign for us in germany that, when it comes to gender equality, the discussion is usually, though not always, about careers. it means that in other areas we have evidently come a long way. to realise that, it β s enough just to look at other countries β in africa, for instance. there are areas where women live in terrible conditions β adolf lette would still be a progressive reformer there 2 / 3 bis central bankers'speeches today. we must therefore not only look beyond our personal horizons but also beyond our national horizons. from a global perspective, the issue of gender equality has quite a different meaning. nevertheless, gender equality is also making progress at a global level. for instance, the world economic forum β s global gender gap report covers the
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also have a distributive function β the third part of musgrave β s taxonomy. i see this as an appropriate role for a euro area fiscal union to play. we have witnessed several examples in recent years of multinationals arbitraging tax systems to pay less than their fair share to society. we have also witnessed the possibility for cross - border tax evasion from wealthy individuals. a more cooperative approach to tax policy could counteract this and would be in the interest of all countries. it would also be a timely reminder to citizens of how the union can defend their interests. it goes without saying, however, that there is too much diversity on the wider questions of distribution for these to be answered at the european level in the medium term. to sum up : a functioning banking union reduces the need for the stabilisation function of a fiscal union, but not to zero. greater efforts should be invested in the allocation function. conclusion ladies and gentlemen, i have laid out what i see as a realistic medium - term vision for the euro area, which combines the twin needs : cooperation and diversity. european commission ( 2012 ), β taxation of cross - border dividends within the eu β. s. bond et al ( 2000 ), β corporate tax harmonisation in europe : a guide to the debate β, institute for fiscal studies. bis central bankers β speeches but for the euro area to prosper, we also need a third concept : responsibility. as we are all in the same boat, every country has a responsibility to pull its weight. diversity is welcome but it cannot become a shield against change. having lived here for two years, i would not be as pessimistic as barry eichengreen, who in a recent commentary wrote : β and the biggest problem is yet to come, namely an italy that is unable to grow, incapable of reforming, and burdened with what increasingly looks like an unsustainable debt. β 7 indeed, the euro area cannot prosper if its third largest economy has a potential growth rate of zero. italy has to grow, and this will not happen by waiting for the cycle to turn. the challenges for italy are long - term and the solution is structural. we need only look at the trends to see this : its real growth rate was 5 % in the 1950s, 4 % in the 1960s, 3 % in the 1970s, 2 % in the 1980s, 1 % in the 1990s, and 0 % in the
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has risen by around 3ΒΌ per cent per year. https : / / www. rba. gov. au / speeches / 2018 / sp - ag - 2018 - 08 - 23. html 3 / 7 23 / 08 / 2018 the reserve bank's government banking business | speeches | rba table : transactions and employment average annual growth since 2004 / 05 ( % ) rba's transactional banking volumes 3. 2 banking sector payment volumes 5. 3 real gdp 2. 8 rba banking staff 0. 1 banking and finance sector employment total employment source : rba, abs another factor is the bank's preparedness to contract and partner with third parties to provide specific payment services. in most instances, the bank has done this to take advantage of a vendor's broader customer base. in other words, we have tapped economies of scale where, because of our customers'relatively low transaction volumes, it would not have been cost effective for us to provide a service using only our own resources. in these instances, too, our customers have generally preferred to deal with the reserve bank as a single provider of a bundle of payment services sourced from different providers rather than deal separately with each provider. payment card acquiring services, for which costs are typically quite large, are an example of this. of course, a key factor, which, incidentally, has also underpinned our productivity, has been the application of payments technologies. to give just a few examples : online gateways have allowed the bank to offer a virtual shopfront for receiving payments to the government without the cost of a physical branch network ; increased network connectivity has meant that we can lodge the government's overseas pension payments directly into automated clearing houses in other countries rather than issue foreign currency cheques or money orders ; and greater processing capacity and system resilience means that we can now process certain government payments with a tolerance of no more than 20 minutes of system downtime per year. not surprisingly, we now invest more in technology. the share of information technology in the total cost of the bank's transactional banking business is now around 50 per cent compared with 25 per cent around 15 years ago. of course, developments in payments technology are ongoing. i would like to focus on three in particular because of their near - term potential for business banking customers : the new payments platform, known simply as npp ; open banking ; and digital identity, which is still on the drawing board. all have benefits for business banking customers
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has certainly allowed the reserve bank to compete for the government's transactional banking business, delivering value for money services while, at the same time, allowing the bank to perform its traditional role of banker to the government. there will, of course, be more developments and further advances. the npp, open banking, and digital identity are just three examples of technology supporting the provision of services while being a potential source of competition and innovation. it is the bank's intention to continue providing its government banking customers with the services it needs, to make new products and services available where they offer a benefit to our business customers, and to do so in a way that is secure, reliable and provides value for money. endnotes [ * ] my thanks to stephanie connors ( rba ) and victoria richardson ( australian payments network ) for their contribution to this speech. the reserve bank's authority to provide banking services is set out in the. the act empowers the bank to act as banker to the commonwealth insofar as the commonwealth requires the bank to do so. the term β agencies β refers to corporate and non - corporate commonwealth entities as defined under the the term is used here for ease of expression. however, only non - corporate commonwealth entities, which includes most government departments, are subject to the sweep arrangements. the review was commissioned by the treasurer in mid - 2017. the final report β which included 50 recommendations β was delivered to the government in early 2018. see australian treasury ( 2018 ), β review into open banking in australia β, final report, february. data sourced from australian payments network fraud statistics ( 2018 ),. available at < https : / / www. auspaynet. com. au / resources / fraud - statistics / july - 2016 - june - 2017 >. figures updated as at april 2018. reserve bank act governance performance and accountability act ( 2013 ). public payment fraud statistics jul 16 β jun 17 Β© reserve bank of australia, 2001 β 2018. all rights reserved. https : / / www. rba. gov. au / speeches / 2018 / sp - ag - 2018 - 08 - 23. html 7 / 7
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in particular, the technical assumptions for short - term interest rates are taken from market expectations as at mid - february. moreover, it should be noted that the projections are based on the assumptions that the recent dynamism in commodity prices will diminish over the projection horizon, in line with futures prices, and that pressure from labour costs and profit margins will be limited. in the view of the governing council, the risks to the outlook for inflation over the medium term are on the upside. these risks include further rises in oil and agricultural prices, continuing the strong upward trend observed in recent months. furthermore, they include the possibility that stronger than currently expected wage growth may emerge, taking into account high capacity utilisation and tight labour market conditions. moreover, the pricing power of firms, notably in market segments with low competition, could be stronger than expected. increases in administered prices and indirect taxes beyond those foreseen thus far also pose upside risks to the inflation outlook. at this juncture, it is imperative that all parties concerned meet their responsibilities and that second - round effects on price - setting, on the one hand, and on wages, on the other hand, stemming from current inflation rates be avoided. in the view of the governing council, this is of key importance in order to preserve price stability in the medium term and thereby the purchasing power of all euro area citizens. the governing council is monitoring wage negotiations in the euro area with particular attention. in this context, the governing council is concerned about the existence of schemes in which nominal wages are indexed to consumer prices. such schemes involve the risk of upward shocks in inflation leading to a wage - price spiral, which would be detrimental to employment and competitiveness in the countries concerned. the governing council therefore calls for such schemes to be avoided. the monetary analysis confirms the prevailing upside risks to price stability at medium to longer - term horizons. annual m3 growth remained very vigorous at 11. 5 % in january, supported by the continued strong growth of mfi loans to the private sector. a number of temporary factors suggest that m3 growth currently overstates the pace of the underlying monetary expansion. the relatively flat yield curve in particular has made holding monetary assets more attractive. however, even after taking such effects into account, a broad - based assessment of the latest data confirms that the underlying rate of money and credit growth remains strong. the growth of household borrowing has moderated over recent months, reflecting the impact of higher key ecb interest rates since december 2005
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operation of automatic stabilisers and contribute to the smooth functioning of economic and monetary union. structural reforms would not only be beneficial for employment and potential growth, but would also help to reduce inflationary pressures. enhancing competition, especially in services and network industries, is essential at this juncture to support price stability and enhance productivity growth. similarly, administered prices, indirect taxes, minimum wage legislation and public sector wage - setting should not add to inflationary pressures in the economy. we are now at your disposal for questions.
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economic efficiency and on price developments. it increases the strains on the monetary policy and, in a monetary union, there may be significant adverse spillover effects on other euro area countries. an institutional framework that guarantees sound government finances is an important contribution to macroeconomic stability and is conducive to sustained output growth and employment. it also helps to underpin the monetary policy. the implementation of the stability and growth pact provides sufficient scope in the medium term for a stabilising role for fiscal policy in monetary union. while, on the one hand, an unbalanced fiscal position creates difficulties for the economy concerned, if the government debt level is reduced to a reasonable level and fiscal deficits are close to zero or in surplus, this creates room for manoeuvre in economic downturns for fiscal policy to act as an automatic stabiliser. but this should then also apply if the ecomony grows rapidly or inflation is relatively high. windfalls occurring in such cases should then lead to lower deficits. of course, in making this remark i am not addressing one country in particular. fortunately, however, the dutch language gives me the opportunity to say : β if the shoe fits, wear it β. concluding remarks to summarise, national differences in growth and inflation observed in the euro area in the recent past do not appear to be unusual either in a longer - term perspective, nor compared with that which has been seen in the united states. looking into the future, it is of course difficult to predict how these differences may evolve. the experience of the united states suggests that they will not disappear completely. the further development of the single market is likely to lead to some sources of divergence becoming less significant, while others may become more important. divergences across countries will be monitored closely by the ecb but, given that monetary policy is geared towards maintaining price stability in the euro area as a whole, this means that other economic policies are required in circumstances where country or regional developments differ significantly, or over too long a period of time, from area - wide developments. in particular, this means that wage developments, backed by structural reform in labour and product markets, have a significant role to play while fiscal policy, within the framework of the stability and growth pact, must also make a significant contribution.
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have predicted some years ago. in 1999 the average rate of consumer price increases in the euro area as a whole was among the lowest recorded since the second world war and, at 1. 1 %, remained fully consistent with price stability. at the same time, monetary union does not mean perfect identity of economic conditions in all parts of the euro area. the experience of all larger currency areas shows that some differences in regional price developments and also in regional output growth may exist. as differences in national or regional developments cannot be addressed by the eurosystem, they require, whenever necessary, country - specific responses. this means, in particular, responsible national wage settlements and appropriate national fiscal policies aimed at counteracting specific national problems. in addition, reforms addressing rigidities in labour and product markets and aiming at enhancing labour and capital mobility are the tools to ensure that market mechanisms will play an increasingly important role in limiting the scope for divergent developments in the euro area. the single monetary policy offers a great opportunity to maintain price stability in the euro area and to create the conditions needed for sustained economic growth. currently, the prospects for strong economic growth in the euro area are very favourable - indeed, more favourable than they have been for many years. economic activity in the euro area strengthened markedly in the second half of 1999 and this upswing is expected to continue through 2000 and beyond. available forecasts point to real gdp growth of slightly over 3 % in 2000 and 2001, reflecting both the favourable external environment and strong domestic demand. in line with this positive outlook, employment is expected to increase further and unemployment to come down in this context. at this juncture, it remains, indeed, important that the expected improvements in economic conditions and labour market prospects are not jeopardised by inappropriate wage settlements. in fact, wage moderation, combined with structural reforms in the labour markets, would help both to contain inflation in the euro area and to lead to further progress with employment creation. the contribution of monetary policy to strong and sustained economic growth is to ensure that price stability in the euro area will be maintained in the years to come. the governing council has, over recent months, raised ecb interest rates in three steps, in total by 1 percentage point, as a response to signals from both pillars of the eurosystem β s monetary policy strategy that upward risks to price stability were increasing. since the last meeting of the governing council, which was held on 16 march 2000, the main new data released relate to
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surrounded by a symmetrical interval. previously, the ecb β s target was for inflation to be below 2 per cent. it was at the ecb governing council β s evaluation of its monetary policy strategy in may this year that the target of keeping inflation close to 2 per cent was specified. with this, the ecb has become more precise in its definition. compared with the riksbank, the difference in target level is small and should not make any great difference in practice. the most significant difference in target definition is that the ecb β s target relates to inflation for the euro area as a whole, while the riksbank β s target applies of course to sweden only. the ecb β s policy implies therefore that the rate of inflation in individual member states can be both higher and lower than 2 per cent without constituting neglect of the ecb β s target. this is also the case in reality, as shown clearly by the inflation outcomes that have been measured. the same applies to sweden but on a smaller scale ; inflation can be different in norrbotten and skane. when formulating monetary policy, the ecb attaches special importance to monetary aggregate and credit variables. a reference value for the annual increase in the monetary aggregate has been set, currently amounting to 4. 5 per cent. in general, however, the interest rate adjustments implemented by the ecb have not been justified on the basis of developments in the monetary aggregate. this has been clear on several occasions in recent years, when the refi rate has been lowered in spite of the fact that the rate of increase in the monetary aggregate clearly exceeded the reference value. the evaluation of the strategy in may also resulted in measures of the monetary aggregate being given a role primarily as indicators of future inflation. naturally, the riksbank also follows monetary aggregate and credit variables, even if we have not assigned them special significance when assessing inflation. therefore, the formulation of policy nowadays is also quite similar in this respect as well. finally, allow me to point out that despite the similarities in the formulation of policy, it can not be ruled out that price and wage increases in sweden may sometimes be both too high and too low. the main reason is that the ecb β s policy is targeted at average price increases in the euro area as a whole. partly as a result of this, there is reason to discuss both the role of fiscal policy and the functioning of the labour market in the event of an introduction of the
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later. participation in erm2 one important question that would become relevant during the preparatory phase is how best to ensure exchange rate stability against the euro within the scope of the exchange rate mechanism erm2, the successor to the erm system. in this regard, there may be reason to say something about history. the riksbank has previously, mainly over the years 1995 - 1997, considered the issue of erm participation and the possibilities for combining this with the inflation target policy that has been conducted for a number of years. during that time, the riksbank was legally responsible for the exchange rate regime, and the reasons therefore for considering erm participation were quite simply to prevent the regime of floating exchange rates from constituting a formal obstacle to swedish participation in monetary union, in the event this was to become a possibility. when the government then decided that there was insufficient popular support for swedish participation in monetary union, the question of changing the exchange rate regime was dropped. in connection with the riksbank being made formally independent in 1999, new legislation on exchange rate policy was also introduced. nowadays, it is the government that decides upon the issue of our exchange rate regime, although the riksbank determines how it is to be implemented. in other words, it is the government that would decide whether and when the krona should join the exchange rate mechanism erm2. following that, the ministry of finance and the riksbank would decide what rate between the krona and euro we assess to be consistent with a stable development of the economy. there are very good reasons to agree upon a common line of action. this is why we are holding discussions already among toplevel officials about an appropriate line of reasoning, the results produced by different estimation methods, etc. if we do not reach agreement, it is likely to be difficult to hold effective discussions with our european partners. a decision on participation in erm2 and on the central rate and fluctuation bands at which the krona should join would be taken through common accord of the finance ministers in the euro area member states, the ecb, the central bank governors and finance ministers of the applicant country and the other erm2 countries, i. e. denmark at present. in practice, a decision would be preceded by contacts between representatives of the ministry of finance and the riksbank as well as with our colleagues in a number of euro area member states and denmark. the first official step in the negotiations would be taken within
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mr. tietmeyer asks whether the euro can assume the role of a major international currency speech given by the president of the deutsche bundesbank, prof. hans tietmeyer, at a luncheon at the american express company in paris on 28 / 10 / 97. i. the β american express company β is not only a financial institution, but also a brandname familiar throughout the world. the β american express credit card β and β american express travellers β cheque β are acknowledged in most countries as safe and convenient means of payment, which facilitate not just travel. for decades past, therefore, β american express β has been a symbol of increasing globalisation. there are not many other enterprises that can claim that. today, however, i do not want to talk about payment instruments. even so, my reference to the travellers β cheque takes us straight to our topic : alongside the β greenback β, the travellers β cheque is likewise a symbol of the dollar β s status as the absolute number one among the currencies of the world. ii. a currency which serves at the same time as a unit of account, a medium of exchange and a store of value - - for private investors and public monetary authorities alike - - is known as an international key currency. what are the pre - requisites that a national payment medium needs, in order to assume these functions? monetary history teaches us that the international role of a currency may often develop spontaneously with the country β s political and economic significance. hence it is not surprising that, besides gold, the pound sterling played the overriding role in the international monetary system for many decades. a well - functioning banking system and efficient capital markets had evolved in the united kingdom at an early date. the industrial revolution began in great britain, and helped the british economy to gain an edge over all other countries. the role of sterling was primarily based on the uk β s position as a great power, in both economic and political terms. what is more, over a period of two centuries sterling did not depreciate against other currencies. once the significance of sterling started to decline, the dollar took the stage as the principal international currency. this was due not only to the us β rise to the status of a world power. another important factor was that, for a long period, the dollar was far less exposed to inflationary pressures than other currencies. by virtue of the bretton woods system, the us dollar
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became the official key currency in 1944. it served national central banks as a benchmark currency, an intervention currency and a reserve currency alike. following the collapse of the bretton woods system, and given the domestic stability problems in the united states, the dollar forfeited that formal function. even so, it retained a leading role. as before, the united states remains the world β s leading industrial and trading nation. that is why dollars are so highly acceptable worldwide. moreover, the magnitude of the us financial market ensures a wide variety of investment options. the decontrol of exchange rates, the increasing freedom of capital movements and diverging stability records are the reason why other currencies, such as the deutsche mark, have been able to establish themselves alongside the dollar - - albeit on a far more modest scale. after all, currencies, too, compete to an increasing extent for the favour of the international transactor. besides economic significance, a dynamic economy and a sufficiently large economic area ( duly integrated in world trade ), it is primarily monetary conditions that must be met. an international key currency must be able to exhibit a successful stability record over a lengthy period. while the markets may forgive short - lived slips, long - term failures are penalised. the markets β memory often stretches back a surprisingly long way. they heed the faintest signs that a currency β s stability may be at risk. it is that which makes the credibility that the responsible monetary authority enjoys all the more important. it has transpired that such credibility increases with the degree of independence from government instructions. if a central bank has to serve two masters, namely monetary stability and the promotion of economic activity, it usually comes to grief in both areas. then its credibility is compromised for a long while. iii. the introduction of the euro marks a watershed, not only for the monetary situation in europe but also for the global monetary system. little more than a year before its planned introduction, the world β s financial markets are now wondering : will the new currency be strong or weak? can it become a serious alternative to the dollar as a reserve, investment and transaction currency? in europe, great economic and political hopes are being pinned on the euro. the old continent is to be strengthened as a global economic power, european integration is to be fostered. it is hoped that it will be possible to cope more effectively with the challenges posed by globalisation. moreover, many people are hoping that the euro will constitute
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quarter or so, we could expect to see income outflows as these profits are distributed to foreign owners, all other things being equal. this is likely to increase the net income deficit in coming quarters, but not contribute to gross capital inflows to the mining sector, in contrast to previous periods of high profitability, when profits were reinvested to fund increased investment spending. concluding remarks to conclude, the main purpose of my speech today has been to highlight some trends in capital flows that have taken place over the past few years. by and large these trends have, on the surface, continued the patterns of previous years, but disaggregating a little further reveals some noteworthy trends. firstly, sizeable capital inflows have continued to fund mining investment, in particular large lng projects. whereas these ( notional ) flows during the mining investment boom mostly reflected reinvested earnings, much of the more recent flows have been ( actual ) transfers from offshore affiliates. as these lng projects transition into the production and export phase, we would expect to see these inflows moderate. moreover, some of these profits are likely to be paid out to offshore owners as dividends rather than reinvested. secondly, there has been continued appetite from foreign investors for australian government debt, but this needs to be measured carefully given the increased participation of foreign investors in the domestic repo market. the third development has been the continuation of little net capital flows either to or from the banking sector, but, within that, a notable change in the composition of the investor base, particularly for short - term debt. 1 see belkar r, l cockerell and c kent ( 2007 ), β current account deficits : the australian debate β, rba research discussion paper no 2007 β 02. 2 see debelle g ( 2014 ), β capital flows and the australian dollar β, address to the financial services institute of australia, 20 may. 3 see rba ( 2011 ), β box b : the mining sector and the external accounts β, statement on monetary policy, november, pp 42 β 44. 4 i have discussed this previously. see debelle g ( 2013 ), β funding the resources investment boom β, address to the melbourne institute public economic forum, canberra, 16 april. 5 the fall in commodity prices led to lower mining sector profits ( after dividends ). for a more detailed discussion, see bergmann m ( 2016 ), β the rise in dividend
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the level of holdings continuing to rise over the past couple of years. flows into government bonds have nonetheless moderated, and have not kept pace with the increase in net issuance. at face value, the headline statistics show that the foreign ownership share of government bonds has declined by around 20 percentage points since its peak in 2012. however, the extent of the decline is overstated. part of this decline is a reflection of foreigners becoming considerably more active in the management of their government bond holdings, rather than a decreased appetite to hold australian government bonds. in particular, part of the decline in the foreign ownership share reflects an increase in collateralised lending of australian government securities ( ags ) to australian repo dealers. 6 such lending activity β which grew particularly strongly over 2013 β 14 β is captured in the statistics as a sale of ags by a foreigner to their domestic counterparty. this is despite economic ownership remaining with the foreign lender ( who has the obligation to buy back similar securities at some stage in the future ). adjusting the level of foreign ownership to account for this collateralised lending shows that the decline in the foreign ownership share of ags has been around 5 percentage points smaller ( graph 2 ). 4 / 9 bis central bankers'speeches banking sector the aggregate pattern of capital flows to the banking sector has not changed materially since i last spoke on this topic. since 2014 β and indeed over the period since the financial crisis β there have been minimal net capital flows to or from the banking sector. following the shift away from offshore wholesale debt towards domestic deposits that took place in the wake of the global financial crisis, the funding composition of banks has remained relatively stable. but notwithstanding this stability, recently there have been two noteworthy developments relating to short - term debt, both stemming from regulatory reforms. firstly, over the past year or so, australian banks have reduced their short - term debt issuance in preparation for the introduction of the net stable funding ratio ( nsfr ) next year ( graph 3 ). the nsfr provides an incentive for banks to shift to sources of funding considered to be more stable and away from sources such as short - term wholesale liabilities. 5 / 9 bis central bankers'speeches secondly, the composition of australian banks β short - term offshore funding has also changed following the implementation of us money market fund ( mmf ) reforms by the securities and exchange commission in october 2016. as a result of these reforms, the value of assets under management of prime mmfs ( those
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ons and other measures. to illustrate the difference this has made, in 2014 the correlation between srep scores and pillar 2 capital requirements was 26 % in the euro area. in 2016, it was 76 %. european supervision has therefore resulted in a substantial strengthening of shock - absorbing capacity within the sector. the total capital ratio of banks supervised by the ecb has increased by more than 170 basis points since early 2015. the quality of capital has gone up as well : the high - loss absorbing component β cet1 β now makes up the largest share of total capital of euro area banks. 1 / 4 bis central bankers'speeches specific weaknesses are also now being addressed in their entirety across the euro area. currently the most important issue here is tackling non - performing loans ( npls ). we all know the damage that persistently high levels of npls can do to banks β health and credit growth. internal ecb analysis shows that, over recent years, banks with high stocks of npls have consistently lent less than banks with better credit quality, therefore providing less support to firms and households. and though npl levels have been coming down for significant institutions β from around 7. 5 % in early 2015 to 5. 5 % now β the problem is not yet solved. many banks still lack the ability to absorb large losses, as their ratio of bad loans to capital and provisions remains high. we therefore need a joint effort by banks, supervisors, regulators and national authorities to address this issue in an orderly manner, first and foremost by creating an environment where npls can be effectively managed and efficiently disposed of. importantly, the development of european supervision has not only reduced the risk of individual banks failing. it has also β as we hoped β had some success in reducing the importance of location in perceptions of bank risk, because single, rigorous supervision is an essential precondition for the other pillars of the banking union that more decisively sever the banksovereign nexus. indeed, looking at the largest banks for which we have data available, the correlation between bank credit default swaps and those of sovereigns is now considerably weaker than at the height of the euro area crisis. still, there is no room for complacency, since these improvements are likely to have been driven, in part, by the improved economic situation. it is therefore crucial that further reforms to de - link banks from sovereigns do not lose steam, notably completing the other pillars of banking union. the benefits
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lawrence williams : an evolving financial services landscape in the caribbean welcome remarks by mr lawrence williams, governor of the bank of guyana, at the 30th annual conference of the caribbean group of banking supervisors, hosted by the bank of guyana, georgetown, 24 may 2012. * * * chairman, caribbean group of banking supervisors, mr. ramnarine lal hon. minister of finance, dr. ashni singh, m. p. hon. minister within the ministry of finance, bishop juan edghill, m. p. deputy governor bank of guyana, dr. gobind ganga banking manager, mr. leslie glen conference delegates special invitees members of the media it is indeed an honour for the bank of guyana to host the 30th annual conference of the caribbean group of banking supervisors under the theme β regional supervisory imperatives in an evolving financial services landscape β. i wish to welcome all of the visiting delegates to our shores. i acknowledge the presence of the delegates from thirteen of the sixteen cgbs membership. though our region is small, we are geographically dispersed and travelling to some territories can be a bit of a challenge. i am therefore pleased at the representation and sincerely hope that your stay will be pleasant and memorable. i am also delighted to welcome to our shores and the conference the secretary general of asba, mr. rudy araujo, the chief representative of the bis office of the americas, mr. gregor heinrick, the senior international adviser of the comptroller of the currency, mr. lester miller and advisor on economic crimes in the us treasury department, mr. thomas noller. i have no doubt that your considerable experiences will add value to this conference. it is also fitting that i welcome the hon. minister of finance, dr. ashni singh and the hon. minister within the ministry of finance, bishop juan edghill. the importance of this conference is underscored by the fact that both ministers enthusiastically agreed to adjust their work schedules to be present at this opening ceremony with dr. singh consenting to deliver the feature address. delegates and invitees can expect a very insightful presentation by the minister. ladies and gentlemen, the theme of the conference refers to the evolving financial landscape which is quite evident in many tangible forms though not always easily manageable. as a matter of fact, the changing financial landscape has brought challenges almost every step of the way. it is a testimony to the quality of our regional banking supervisors and the support and nurturing provided by the caribbean group
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raises fears relating to immigration and cultural impacts. what then can be done to improve readiness for labor mobility thereby strengthening asean citizenship? for the benefit of further exploration, i would like to propose that we consider a threepronged strategy as part of a sustainable solution to this problem : first, we should try to reduce short and long - term obstacles to labor mobility. it is critical to recognize that greater labor mobility brings greater competition for local professionals. this means that, in the medium and longer term, the β brain drain β is usually offset by remittances and a β reverse brain drain β, which brings wealth, skills, experience, and their business and social networks back home. therefore, actions are needed to further enhance the free flow of labor through increased use of mutual recognition of professional qualifications. forging university and regional professional networks will surely be supportive of this endeavor. visa, work permits, and regulatory requirements on foreign employment are all important issues that need to be quickly addressed to ensure that the investment environment is competitive. over the longer term, i also see it as very crucial that we address obstacles to integration at the root cause, which is the weak integration mindset. this integration mindset means that we need to assess the benefits and costs of integration more deeply and strategize how they fit with the overall economic development plans of individual asean member countries. there are dangers in allowing such an important assessment to remain vague. my concern is that many key stakeholders of asean integration still view the aec with cynicism ; that life will go on, with few changes to the status quo. and this complacency is very dangerous because we may wake up and find that we are already too late to catch the rising wave of asean. distinguished participants, the second part of this three - pronged strategy deals with human capital development to meet global competencies. my personal opinion as a ceo in the financial industry is that we need people or our human resources in the next decade to be assertive, flexible, analytical and quantitative, technology competent, as well as having strong leadership, people skills, foreign language proficiency, and cultural awareness. ceos in other industries can add more qualifications to this list according to what they need to satisfy future business bis central bankers β speeches solutions. moreover, to promote mobility, our local talent competency should also aim for a better fit with regional and global competency. in the case of thailand, broad statistical profile points to above 50 percent share of education
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non - tariff barriers, including subsidies, restrictions, and sensitive industry classification. and as of 1 january 2010, asean - 6 applied zero tariffs to 99 percent of goods, while the clmv countries plan to achieve the same goal by 2015. a unified trading region will facilitate development of production networks, bridge fragmented trade opportunities, and allow asean to become central to global supply chains. this model is supportive of asia β s new growth model of a regional production hub and increasing intraregional trade. moreover, it is a key development strategy for asean to ride with rising asia as part of an even bigger economic hub of asean + 3 and asean + 6. the + 3 include china, japan, and korea, with the + 6 expanding to cover india, australia, and new zealand. in addition to trade liberalization in goods, liberalization in services will also spur competition. this in turn would lead to lower prices and increased quality of services, as well as better transfer of know - how from outside and within the region, in areas such as business bis central bankers β speeches organization and management, and risk management capacity through foreign participation in financial services, for example. but, since services liberalization can involve short term adjustment costs, its progress has been subject to domestic regulations as a country β s institutional and regulatory environment needs to be strengthened before and during liberalization in order to reap eventual benefits. a single market and production base for asean cannot be complete without the free flow of skilled labor. it is also complementary to other freedoms, such as freedom of capital flows ( particularly fdi ) and services, and together they have important implications for productivity growth and investment. indeed, it is logical to expect that asean integrated business organizations would be more effectively run by regional than local managers. this is because regional managers have incentives to optimize the economies of scale and scope through the use of regional factors of production to achieve competitiveness. moreover, regional managers are likely to promote more regional - oriented investment, which means outward investment, direct as well as portfolio, from one local economy into other local economies within and outside asean. ladies and gentlemen, turning to the dimension of readiness, asean labor mobility pertains only to skilled labor at present. various country specific regulations continue to prevent completely free labor mobility. while greater mobility should yield substantial economic benefits especially for integration objectives, opponents of labor mobility tend to highlight the short term potential threats, particularly the β brain - drain β away from home countries. mobility also
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the transition report, which primarily focuses on digitalization. this does not come as a surprise knowing that digitalization has been significantly boosted during the pandemics, bringing a number of benefits to the societies, including support for faster transition and income convergence. despite the efforts, income gap of the western balkan economies in comparison with the eu still remains wide - regional income is only about 38 % of the european income. this largely correlates with the level of productivity in the region that significantly lags behind the eu productivity. and, the increase in productivity can be achieved only by structural and institutional reforms, including digitalization that can lead to more efficient allocation of resources. thank you. 3 / 3 bis - central bankers'speeches
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anita angelovska bezhoska : opening and closing address presentation of the ebrd transition report 2021 - 22 opening and closing address by ms anita angelovska bezhoska, governor of the national bank of the republic of north macedonia, at the presentation of the ebrd transition report 2021 - 22, skopje, 24 march 2022. * * * opening address dear colleagues, ladies and gentlemen, at the beginning let me thank you for the kind invitation to address you at the launch of the latest transition report that analyses and measures the progress of transition economies on their way towards higher income levels. it is indeed my privilege. for us, in the transition world, the report has always been an important guideline, both with respect to advices on how to address the deep - seated structural issues, but on cutting edge maters as well. in the current context, it even gets more prominence by providing valuable insights in the extent to which the unprecedented shock have derailed policymakers from structural agenda, which is a key precondition for faster transition. similar to most of the countries in the world, the emergence of the pandemic has hit macedonian economy severely. although it caught us on a strong footing with solid economic fundamentals and absence of any significant disequilibria, the economic activity plunged by 6 % - which has not been observed in the last two decades. despite the rebound during last year, not all economic losses were recovered. the economy is still below the pre β pandemic level, and even more importantly, the growth outlook is under new threat in the midstream of the recent upheavals in ukraine. subsequent shocks and the need to respond in crisis management mode increase the risk of distancing from structural policies that provide impetus to a faster transition and more productive growth. however, growth decomposition exercise reveals that even before the health crisis, the growth of the macedonian economy, similar to the growth of other cesee transition economies, was not predominantly driven by innovative and efficient sources. the average growth in the decade preceding the pandemics gravitated around 2. 5 %, somewhat above the cesee average, with the contribution of total factor productivity ( tfp ), as a measure of economic efficiency and innovation, being relatively marginal. although two thirds of growth dynamic was capital driven, the impact of the ict capital was rather small. labour had also positive contribution to the growth, but it was predominantly due to labour quantity, and
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with our pledge to maintain favorable financing conditions. for instance, a rise in nominal rates due to better growth and inflation prospects may not cause immediate worries. in contrast, rising interest rates due to for example dysfunctioning markets warrants a corresponding policy intervention. β’ the recent increase in yields was largely driven by benign factors. taken at face value, the rise in inflation expectations is a welcome development. yet the sizeable and persistent rise in euro area yields due to a faster economic recovery in the us could prematurely tighten financing conditions for the euro area economy, which is inconsistent with countering the downward impact of the pandemic on the projected path of inflation. this has led to the decision by the governing council to frontload some of its purchases under pepp until the improved growth outlook for the euro area itself would stand on firmer ground. chart 5 shows that the upward pressure on the real rate component has been neutralized. β’ that being said, however, it is important to note that we stand ready to adjust our monthly purchases in either direction, if required, to maintain favourable financing conditions. international spillovers and the ecb β s monetary policy β 4 chart 5 : decomposition of the 10 - year ois rate into inflation and real rate 0, 4 0, 3 0, 2 0, 1 - 0, 1 - 0, 2 dec - 20 jan - 21 inflation component feb - 21 real rate component mar - 21 10 year ois swap note : graph shows the cumulative change since 1 december 2020 ( in percentage change ). the real rate is calculated by subtracting the inflation - linked swap rate from the nominal ois rate of the same maturity. daily data. last observation : 2603 - 2021. international spillovers and the ecb β s monetary policy β 5
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, electricity and gas for our economy. they keep our economy going. and so, to increase the resilience of the european payment system, for whatever the future holds, we will likely need the digital euro β as a digital pan - european means of payment, supporting europe β s strategic autonomy in payments. this being said, a digital public currency will not crowd - out private initiatives. on the contrary, it will rather support β crowding - in β β as it will pave the way for, and co - exist with, private solutions of european origin. and so, it is encouraging that private parties are now also stepping up their game in developing pan - european retail payments solutions. third, the digital euro meets society's demand for public money. today, there is a clear downward trend in the use of cash to make payments β as you can see on the next slide. Β© dnb & shutterstock in the netherlands, only one in every five transactions at a point of sale is made in cash. there is an overall decline in paying with cash. and this means that the role of public money in our economy is declining. to a certain degree, this is worrisome. and although there is no reason to think cash will fully disappear in the foreseeable future ; although the european commission, on the same day it proposed the draft digital euro legislation, also proposed a legislation on the legal tender status of euro cash ; the diminishing use of public money could pose a problem, because public money serves an important goal. it safeguards trust in our currency, alongside cash. it safeguards accessibility β all over the euro area, alongside cash. it safeguards inclusivity β for everyone, alongside cash. and let β s not forget that there is still a demand for cash β from the less digitally savvy consumers, to people who use it for budgeting purposes, to the elderly, and young people too. after the β why? β comes the question of β how? β. and, as with many major innovations, there are challenges. let me share two with you. Β© dnb & shutterstock for starters, there are concerns about the impact of cbdcs on financial stability and on the banking system. let me assure you that a digital euro would not upend the healthy equilibrium that has existed for decades between bank deposits and central bank money, between private money and public money. how do we ensure financial stability? the digital euro would
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the current year looks set to be well above our target rate of 2 % once again. in the most recent projection, eurosystem staff expected an annual average of 2. 7 %. based on this reading, inflation will not reach its target until 2025. an easing of monetary policy can only be contemplated once it is sufficiently certain that the target will be reached. that is why, at its last meeting, the ecb governing council once again left key interest rates unchanged and made it clear that it was still too early to cut interest rates. what is now important is to closely monitor economic and financial developments in the euro area and draw the right conclusions. the exchange of expertise between central banks is an important basis for this. indeed, it is one of the reasons we are in close contact with each other. regular dialogue increases mutual understanding and allows us to move closer to our common objective of safeguarding price stability. this good cooperation is based in no small part on direct personal contacts. 3 bundesbank representative in riga that is why the bundesbank has taken the step of now also seconding a representative, in the person of mr nikola marcinko, to the german embassy in riga, the largest city in the baltic region. he will report on developments in latvia, estonia and lithuania concerning economic and fiscal policy and financial stability. in addition, he will also foster the bundesbank's trust - based relationships with the central banks of the baltic states and will strengthen its contacts with national authorities and financial institutions on the ground. this network will complement and deepen the relationships we already enjoy with the central banks. i am delighted that, in nikola marcinko, we have found such a fitting representative for our work in riga. having completed his studies in engineering science and gathered his first professional experience in the private sector, mr marcinko enrolled in the bundesbank's trainee programme, where he gained an excellent overview of central banking. he then deepened his knowledge of the work in the eurosystem, for example during his time in the division for " policy issues relating to monetary policy implementation ". 4 concluding remarks ladies and gentlemen, the german comedian heinz erhardt, who was born in riga, once said : pessimists are people who look to the future wearing sunglasses. in light of current geopolitical tensions, demographic developments in europe and global climate change, the future may indeed appear a little dim. however, i'm not the pessimist
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since april should be positive, on net, for the canadian economy. these higher prices help boost profits of canadian oil producers and improve our terms of trade β the price we receive for our exports relative to the price we pay for our imports. that said, given the uncertainties the oil sector faces, the prospect of substantial increases in investment are not likely to be as high as in past cycles. we also noted in our discussions that housing resale activity remained soft into the second quarter, as the housing market continues to adjust to new mortgage guidelines and higher borrowing rates. with other measures of activity in the housing sector more generally holding up, we are still expecting resale activity to pick up over the second quarter. more data from a range of sources in the coming weeks will help further inform our understanding of this adjustment process. as i discussed earlier, the labour market continues to improve and wages are rising at rates closer to what would be expected in an economy operating at potential. together with sustained high levels of consumer confidence, this should continue to support housing construction and consumption growth more generally. finally, governing council still sees elevated trade policy uncertainty as a factor restraining business investment. we expect business investment to increase, but not by as much as it could without this uncertainty. that said, business sentiment and investment intentions remain positive, suggesting that firms are getting on with business and adjusting to this more volatile environment. as such, the greater - than - expected increase in imports of machinery and equipment in the first three months of the year bodes well for business investment growth. this is encouraging because it is consistent with our broader narrative of a rising contribution coming from investment and exports, and it is important to the evolution of economic capacity. - 7a final point before i conclude. uncertainty is everywhere and can come from many sources. regardless of the source, it β s important to note that households and businesses continue to make economic decisions as they plan for the future. and so does the bank of canada in setting monetary policy. monetary policy decisions are always made with an imperfect picture of the future, and they must be forward looking, always with our mandate β the inflation target β in mind. conclusion allow me to conclude. yesterday, we decided that the current policy stance remains appropriate. overall, developments since april further reinforce governing council β s view that higher interest rates will be warranted to keep inflation near target. governing council will take a gradual approach to policy adjustments, guided by incoming data. in particular, the bank will
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sufficient to prevent most types of financial crime. in the us, notwithstanding the most updated legislation and the most efficient regulation, madoff and stanford happened. international experience, as well as experience here at home, suggests that strengthening corporate governance is critical to combating financial crime. a corporate environment in which there is an effective system of controls and where management is accountable to their boards and boards accountable to their shareholders is one in which financial fraud and other financial crimes will be less likely to flourish. good corporate governance serves as an early warning system to corporate and financial abuse. the fact that many of our firms are not listed, and are private or family partnerships does not remove the need for good governance. every financial institution operating in trinidad and tobago will extol the virtues of good governance, even when their actual operations may indicate otherwise. it is time that good governance ceases to be the background noise and becomes the main music. checks and balances are needed to rein in excesses, including financial crime and these controls must be exercised at all levels, at the level of the board, the management and very importantly, at the level of the external auditor. a few words about money laundering β¦ i fully agree with the important focus it has been given in this forum because i am convinced that we, in trinidad and tobago, need to take our anti - money laundering efforts up several notches. the reality is that as the advanced countries tighten their anti - money laundering regimes, criminals could be expected to target small countries like ours, which have less - robust defenses. to our credit, we have embarked on a comprehensive program to upgrade our financial infrastructure in general and our anti - money laundering regime in particular. we have a new financial institutions act ; we are close to introducing new legislation for the insurance and the credit union sectors and we have brought in money remitters under the central bank β s purview. in the last few months, we have brought our aml / cft regime closer in line with international requirements. our immediate challenge is to ensure that there is effective enforcement of the existing measures and to broaden the regulatory perimeter for aml / cft to non - financial businesses and professions such as lawyers, accountants and real estate agencies. you are going to hear all you need to know about financial crime and anti - money laundering during the course of this very impressively - designed forum. make full use of the knowledge that you will acquire and on your return to your work - place share what
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ewart s williams : governance, regulation and financial crime prevention opening remarks by mr ewart s williams, governor of the central bank of trinidad and tobago, at the 2010 regional forum β governance, regulation and financial crime prevention β, port - of - spain, 9 august 2010. * * * i would like to thank the sponsors, the international governance and risk institute for inviting me to provide some opening remarks to what should be a most stimulating forum, given the impressive array of presenters. your seminar theme is about β financial crime prevention β and while many of your sessions would be on money laundering and terrorist financing, i am pleased to see that the forum will cover other areas of financial crime. i would like to make some brief comments on some aspects of corporate financial crime which appear to be on the increase in trinidad and tobago. i will also say something about anti - money laundering efforts here in trinidad and tobago. for convenience, financial crime is defined to cover any non - violent crime resulting in financial loss. this definition will easily cover fraud on the public, credit card fraud, improper self - dealing, stock market manipulation and other breaches of fiduciary trust. money laundering is clearly an important category of financial crime. obviously, i will look at the issue from my vantage point as regulator. the recent massive destruction of financial wealth in the us and europe ( most notably enron and worldcom but there were others ) raised the profile of corporate financial crime. in the last two years or so, we have been introduced by madoff and stanford. what all of these have in common is a breach of fiduciary trust whereby depositors or investors were bilked of considerable sums by unscrupulous operators who were reckless with other peoples β money, driven by greed and self - dealing. in recent years, we in the caribbean have had our own high profile examples of financial crime, of various levels of sophistication. some of you may remember the β fantasy tours β a pyramid scheme which collected more than tt $ 100 million in a year before its inevitable collapse. a similar scheme in jamaica, plus, is estimated to have raked in between us $ 100 - 500 million. there was one in grenada reported to have cost investors an estimated us $ 30 million. it is worth noting that both in trinidad and tobago and jamaica, it was not only the lowerincome or the financially naive that were caught in the net. in fact, several people, who considered themselves
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conduct sound economic policies and accumulate adequate reserves. this leads to the paradoxical situation that unconventional measures applied in a crisis might lower the incentive to maintain preventive measures during normal times. in turn this increases the likelihood that unconventional measures will be needed again in the future, i. e. crisis resolution might tradeoff with crisis prevention. these moral hazard considerations are a well - known problem whenever insurance is provided in a context of asymmetric information. their negative effects can be mitigated to a certain extent. for instance, appropriate pricing of foreign currency liquidity provision can limit its function to that of an emergency backstop facility which is costly for banks to use. additionally, the framework has to be in line with global economic objectives, such as price stability, balanced growth and efficient international allocation of resources. β’ policies that preserve price stability in the long term should also ensure stability of the financial system. however, in short term these two objectives might appear to conflict. even when liquidity in domestic currency is provided to another country, it might find its way back to the domestic economy and contribute to inflationary pressure, if not sterilised. β’ a buildup of national reserves might itself contribute to systemic instability. a reserve framework requires stability of the reserve currency in order to act as a global store of value and an anchor for price stability. however, the triffin - dilemma notes that the accumulation of reserves implies persistent current account deficits of the reserve - issuing country. this potentially creates instability and fuels global imbalances. moreover, such a reserve system aggravates interdependence between the reserve accumulating countries and the reserve - issuing country. for instance, the us treasury market relies largely on demand from emerging market central banks. this dependence is likely to increase as the federal reserve phases out its asset purchase program, reducing us demand. β’ this is connected to potential negative side effects of reserve accumulation or intervention in foreign exchange markets. in consequence, it can distort exchange rates and prices of other assets and might be difficult if not impossible to disentangle from its benefits. β’ finally, an acceptable solution from the country perspective might not appear desirable from the global perspective. for instance, excessive accumulation of foreign exchange reserves might distort international capital allocation. this leads me to the general conclusion that there are many practical obstacles to a first - best solution for foreign exchange reserve provisioning. ultimately, i will conclude with some considerations on the challenges facing the global framework for
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proposals in this domain. one important objective is to re - align incentives in the financial sector from an excessive focus on short - term profits towards more β socially useful β activities that include reducing systemic risk and encouraging the creation of long - term wealth. finally, i will comment on some β new ideas β that may contribute to this aim. 1. the policy response to the crisis in the financial crisis, monetary authorities intervened to address liquidity issues and government authorities intervened to address solvency concerns. these complementary roles were clearly established long ago. however, it is generally agreed that the recent crisis somewhat blurred this distinction in practice. as a central banker, i will begin by reviewing the response of the monetary authorities. 1. 1 central bank policy response the financial crisis initially appeared in august 2007 as a sudden shortage of liquidity in the money market. traditionally, central banks monitor the functioning of this market very carefully, because it is here that monetary policy is implemented through regular refinancing operations. this is why the eurosystem was the first to respond with massive liquidity injections. the decline of asset prices reduced the value of complex structured finance products, which were widely disseminated across the banking sector. it suddenly became difficult to find a buyer for these instruments. as trading volumes collapsed, it also became difficult to value these assets accurately because prices were no longer observed on the market. uncertainty increased dramatically and banks began to view each other with suspicion as they realised that individual exposures were not transparent. as the inter - bank market dried up, banks found themselves hoarding cash to rebuild their liquidity buffers. this induced them to tighten credit standards, posing the risk that they might cut back loans to firms and households, transmitting the financial crisis to the real economy. in mid - september 2008 the collapse of a major financial player set off a global financial panic. given the severe downturn in the euro area economy and receding inflationary pressures, the governing council of the european central bank responded by rapidly lowering interest rates to 1 %, a historical low for the euro area countries in the post - war period. in addition to standard monetary policy measures, the eurosystem introduced a policy of β enhanced credit support β intended to limit the role of liquidity in the propagation of the crisis, to maintain the transmission of interest rate decisions, and to enhance the flow of credit to the real economy. these extraordinary measures lead to a doubling of the central bank balance sheet in the euro area and an
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itself and deployed to increase secondary market activities, in particular proprietary trading. over the last few years the crisis has heightened appreciation of the benefits of a more stringent regulatory regime. and much has been done to remedy the shortcomings of financial systems. at the international level, under the political impulse of the g - 20, the financial stability board and the basel committee on banking supervision introduced substantial regulatory changes to reduce the frequency of financial crises and increase the resilience of economic systems. improvements have been introduced in many areas such as bank capital and liquidity, otc market infrastructure, and compensation policies in finance ; importantly, new macro - prudential authorities have been established in many countries. but the regulatory overhaul has not yet been completed. several issues are still being actively discussed, such as the role of rating agencies and accounting standards. although new regulations on systemically important financial institutions have recently been approved, the β too - big - to - fail β issue is still a major concern. it would be foolish to pretend that defaults can be avoided, so we need to be prepared for their occurrence. the ongoing work on resolution regimes is a promising approach in this regard. rules alone are not enough, however. allow me to mention a few scattered areas from which progress should be expected : β one element that is essential for guaranteeing systemic stability is the method of measuring risk - weighted assets ( rwa ), the denominator of capital adequacy ratios. rwa measures have recently attracted increasing attention from market analysts, banks and supervisory authorities. it has been argued that the methodologies for computing rwa may not be comparable across institutions and, especially, across jurisdictions, and that they should more properly reflect risk in order to avoid ultimately jeopardising financial stability. these problems highlight the relevance of supervisory practices in determining banks β capital requirements ( for example, in validating internal banks β models for calculating risk weights ). here, rigorous microprudential supervision is essential. we really need to work out a single rulebook, to move with determination towards taking joint responsibility and using peer reviews as much as possible in our supervisory activity. the watchword can only be : β more and better supervision β. β furthermore, in today β s globalised world, it is crucial to make sure that countries cooperate and agree on the appropriate stringency of financial regulation. countries should not compete by relaxing rules in order to attract financial intermediaries, as this may generate negative externalities
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enabling investors to transfer resources efficiently across time, space and states of the world. but this idea relied on the presumption that the world is basically stationary ( and substantially linear ), that the future is pretty much like the past, that we can extrapolate from relatively small samples, and that there is a single β data generating process β that we can identify and understand. ( we must admit that all this is not limited to finance but also applies more broadly to macroeconomics, econometric modelling and forecasting. ) the real world is different, though ; for many years the big investment banks were able to sustain returns much higher than what was justified by economic growth, but the day of reckoning was bound to come. in a way, innovation, based on the presumption of stationarity, sows the seeds of the non - stationarity that eventually undermines that very presumption. β complexity was also used, somewhat perversely, as part of the case for a sort of benign neglect on the part of regulators. the big financial players argued successfully that financial innovation was too complex and too opaque for the regulators to get their heads around it. indeed, they said, to safeguard the international financial system from systemic risk, the main priority was promoting an β industry - led β effort to improve internal risk management and related systems. this, in a nutshell, was the view espoused by the group of thirty report following the outbreak of the asian crisis ( β global institutions, national supervision and systemic risk β, group of thirty, 1997. see also the article by john heimann, and comments therein, in the special issue of the banca nazionale del lavoro quarterly review on β globalization and stable markets β, march 1998 ). but this thesis was often accompanied by the argument to the effect that β you, regulators and supervisors, will always be behind financial innovation ; it would be better to allow us, the big financial international players, to self - regulate ; we are grownups, we can take care of ourselves β. and, after all, β if someone makes mistakes, some will gain what others lose ; why can β t we be left alone to play this zero - sum game of ours? β accepting this argument was a critical mistake. the regulators did not, in fact, have either the right incentives or the ability to acquire the necessary information, for two reasons. first, the big financial players are global
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ben s bernanke : semiannual monetary policy report to the congress testimony by mr ben s bernanke, chairman of the board of governors of the federal reserve system, before the committee on banking, housing, and urban affairs, us senate, washington dc, 1 march 2011. * * * chairman johnson, ranking member shelby, and other members of the committee, i am pleased to present the federal reserve β s semiannual monetary policy report to the congress. i will begin with a discussion of economic conditions and the outlook before turning to monetary policy. the economic outlook following the stabilization of economic activity in mid - 2009, the u. s. economy is now in its seventh quarter of growth ; last quarter, for the first time in this expansion, our nation β s real gross domestic product ( gdp ) matched its pre - crisis peak. nevertheless, job growth remains relatively weak and the unemployment rate is still high. in its early stages, the economic recovery was largely attributable to the stabilization of the financial system, the effects of expansionary monetary and fiscal policies, and a strong boost to production from businesses rebuilding their depleted inventories. economic growth slowed significantly in the spring and early summer of 2010, as the impetus from inventory building and fiscal stimulus diminished and as europe β s debt problems roiled global financial markets. more recently, however, we have seen increased evidence that a self - sustaining recovery in consumer and business spending may be taking hold. notably, real consumer spending has grown at a solid pace since last fall, and business investment in new equipment and software has continued to expand. stronger demand, both domestic and foreign, has supported steady gains in u. s. manufacturing output. the combination of rising household and business confidence, accommodative monetary policy, and improving credit conditions seems likely to lead to a somewhat more rapid pace of economic recovery in 2011 than we saw last year. the most recent economic projections by federal reserve board members and reserve bank presidents, prepared in conjunction with the federal open market committee ( fomc ) meeting in late january, are for real gdp to increase 3 - 1 / 2 to 4 percent in 2011, about one - half percentage point higher than our projections made in november. 1 private forecasters β projections for 2011 are broadly consistent with those of the fomc participants and have also moved up in recent months. 2 while indicators of spending and production have been encouraging on balance, the job market has improved only slowly. following the
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work during the past three years can accurately claim to have been made worse off by international competition. job loss in particular causes significant hardships for affected workers. for example, an analysis by henry farber ( 2003 ), using bls data on workers displaced for any reason, suggests that only about two - thirds of displaced workers found re - employment within three years, with some settling for part - time work. even when successful in finding full - time work, displaced workers experience on average a decline in earnings on the new job of about 8 percent. focusing on workers displaced by trade in particular, kletzer ( 2001 ) found that job losers in industries facing high levels of import competition were slightly less likely to be re - employed and experienced greater earnings losses, at about 13 percent on average, than workers displaced from industries facing less import competition. what can be done to help workers who lose their jobs because of competition from imports? attempts to restrict trade through the imposition of tariffs, quotas, or other trade barriers are not a good solution. such actions may temporarily slow job loss in affected industries. but they do so by imposing on the overall economy costs that typically are many times greater than the benefits. in the short run, the costs of trade barriers include higher prices for consumers and higher costs ( and thus reduced competitiveness ) for u. s. firms. trade barriers typically provoke retaliation from trading partners as well, with potentially large costs for exporters. and history shows that in the longer run, economic isolationism and retreat from international competition lead to bloated, inefficient industries, lower productivity, and lower living standards. the better policy approach is two - pronged. first, at the macro level, policy should be directed at helping to ensure that jobs become available for those who have been displaced. in particular, over time, appropriate monetary policies can help the economy achieve maximum employment with low inflation, irrespective of the trade situation. the nation β s trade policies, rather than attempting to restrict trade, should be used to push for even more trade. by opening markets abroad, trade policy provides greater opportunities for u. s. firms and workers. the second piece of a constructive policy toward trade is to help displaced workers train for and find new work. some steps in this direction have been taken. currently, the government β s principal program for helping workers displaced by trade is the trade adjustment assistance program, or taa. the congress has recently extended the
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. 11 covid - 19 has accelerated this trend. half of the banks we surveyed reported an increase in the importance of ai as a result of the pandemic. 12 the adoption of ai is already bearing fruit in a number of areas within the financial sector with a very wide range of use cases. for example, some banks are increasingly using ai techniques, such as natural language processing, to identify contractual obligations where libor is involved. we ourselves have recently deployed an ai tool that can support pra supervisory judgement with efficient analysis and extraction of unstructured firm intelligence. https : / / www. bankofengland. co. uk / speech / 2021 / april / gareth - ramsay - webinar - hosted - by - the - edm - council https : / / www. bankofengland. co. uk / paper / 2020 / open - data - for - sme - finance https : / / www. bankofengland. co. uk / news / 2021 / february / data - collection - transformation - plan https : / / www. gov. uk / government / publications / cdei - ai - barometer https : / / www. bankofengland. co. uk / quarterly - bulletin / 2020 / 2020 - q4 / the - impact - of - covid - on - machine - learning - and - data - science - in - ukbanking all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice but the rapid pace of adoption also means this is a pivotal moment for the uk to consider how best to support firms β safe adoption of ai and what that means for the relevant regulatory frameworks. to inform our decisions about regulatory frameworks we β ve been engaging with fintech firms, other financial services firms and authorities, in particular through the ai public - private forum ( aippf ). this year - long initiative, cochaired with the fca, brings together a diverse group of experts to discuss the key issues related to data, model risk management and governance. 13 this includes examining how existing policy frameworks affect and encompass ai, and what the appropriate level of any future potential policy should be. so far, the aippf has explored the key data - related issues, such as : 1. the use of β alternative data β ; 2. how to adapt existing data quality standards to an ai context ; 3. fair
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uk / news / 2021 / april / boe - publishes - policy - for - omnibus - accounts - in - rtgs https : / / www. bankofengland. co. uk / news / 2021 / april / bank - of - england - statement - on - central - bank - digital - currency all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice that means things like the legal entity identifier ( lei ), a global standard designed to uniquely identify any legally distinct entity that engages in financial transactions, whose adoption the bank is supporting. and it means standards that enable the efficient transfer of data between multiple parties like iso20022, which we are implementing alongside our rtgs renewal programme. as gareth ramsay, our chief data officer put it in a recent speech, standards like these are β a key part of the soft infrastructure of the digital age β. 8 they are foundational for unlocking many of the benefits of data for both the public and private sector. such standards could help support the idea of an open data platform for sme finance that the bank has helped to champion. by bringing together a global identity standard and a safe, secure and permissioned method of sharing information, an open platform could harness novel data sources and advanced analytics to provide smes with more choice and better access to productive finance. the bank set out some ideas on the design of such an open platform for smes last year. 9 data collection is also integral to the work that the bank itself does in pursuit of its wider mission. without the data we collect, we cannot identify risks, design good policy, and take action in a timely and targeted fashion. that β s why delivering β common data standards β, rules and methods that consistently label and describe financial data, are a priority long term reform for us. reflecting that priority the bank are setting up a joint transformation programme with the financial conduct authority ( fca ) and industry. and sam woods, the deputy governor for prudential regulation, and nikhil rathi, ceo of the fca, recently published a letter to firms providing an update on this work, and asking firms to work with us in partnership to deliver common data standards and other crucial reforms. 10 ai and aippf yet another rapidly - developing area is the adoption of ai in finance. we know that finance is one of the sectors that has seen widespread adoption of ai in recent years
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caleb m fundanga : the new k10, 000 banknote in zambia opening remarks by dr caleb m fundanga, governor of the bank of zambia, at the official launch of the new k10, 000 banknote, bank of zambia, lusaka, 16 june 2008. * * * β’ members of the press β’ official from commercial banks present β’ ladies and gentlemen i wish to welcome you all to the bank of zambia. the objective of this press briefing is to announce the introduction of the new k10, 000 banknote in our economy. the new k10, 000 banknote will be put into circulation as early as this week. by showing you the new k10, 000 banknote first, we expect that you will, in turn, help us to inform the public about this new banknote. in order for us to help you understand the new k10, 000 banknote, we have produced posters and will make a short power point presentation. the posters are showing the main public recognition and security features of the new k10, 000 banknote. let me from the outset inform you that although we are calling it a new k10, 000 banknote, most of the features on the banknote are still the same as those on the current k10, 000 banknotes. the differences can best be detected by comparing this new k10, 000 banknote with the current k10, 000 banknotes in circulation. ladies and gentlemen the new features on the k10, 000 banknote are as follows : on the front of the banknote β there is a new bright silver demetallised holographic lead representing a fish eagle. this has replaced the old hologram of the head of a fish eagle. on the back of the banknote β the area around the value numeral, k10, 000 in the right top corner, is printed with a special ink which shifts colour from copper to green when angle of view is changed. these are the two changes that have been made to the k10, 000 banknote. all other features are basically the same. the reason for the introduction of these two features is mainly to enhance the security of the banknote. the bank of zambia would further like to inform the public that the new k10, 000 banknote and the current circulating k10, 000 banknotes shall circulate side by side. the new and current banknotes will therefore all be legal tender. the current k10, 000 banknotes will
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be replaced by the new k10, 000 banknote once they reach the end of their lifespan through soiling and / or mutilation. therefore, i urge you to take a closer look at the new k10, 000 banknote in order to inform the public correctly. i thank you.
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financial pressures. about 4 percent of debt balances currently are 90 + days past due in albany, which is twice the 2 percent delinquency rate in 2005. although this is less than half of the rate in new york state or the nation, this doubling of delinquencies in the albany area still troubles me as a sign of heightened distress for many families here. stepping back from the current challenges, the capital region possesses a number of fundamental strengths. these strengths show through in some key ways : albany is growing. the recent census shows that the population in the region expanded by 5. 5 percent over the past decade, more than double the statewide average. saratoga county saw an especially strong gain of nearly 10 percent. incomes in the region are high. albany is the state β s most affluent area outside the new york city metropolitan region. median household income was roughly $ 57, 000 in 2009, moderately above the statewide median and well above the nation β s. not surprisingly, then, the poverty rate is lower than the u. s. average β 11 percent versus 14 percent nationally. your residents are highly educated. educational attainment β a critically important driver of economic activity β is also well above the national average. a third of adults who live in the albany area hold college degrees. one of albany β s key strengths is its higher education industry. the colleges and universities in the capital region help stabilize the local economy during downturns and recoveries. indeed, the private education sector continually added jobs before, during, and after the quarterly report on household debt and credit, august 2011. bis central bankers β speeches great recession, both nationally and locally. for example, the university at albany has taken a lead role in shaping the next generation of financial professionals and regulators through its pioneering curriculums. from my perspective at the fed, a particularly important and timely example is the university β s innovative national science foundation - supported program for instruction and research in financial market regulation. research conducted by the new york fed has shown that colleges and universities can help build the skills and education of their region β s workforce, which is critical to an area β s ultimate economic success. 4 they do this in two ways. most directly, colleges and universities support an educated workforce by producing new college graduates, some of whom will stay and work in the area. the university at albany clearly plays this role in the capital area. perhaps equally important in terms of promoting local economic growth, colleges and universities can play a
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william c dudley : the national and regional economic outlook remarks by mr william c dudley, president and chief executive officer of the federal reserve bank of new york, at the university at albany, albany, new york, 18 november 2011. * * * good morning. i am pleased to be at the university at albany. it is always a pleasure to speak with students and faculty because of the intellectual leadership role you play in your communities. i also welcome the addition of business leaders to this gathering because you shape the economic landscape in the region. so, i thank you all for coming today and helping make this such a rich audience. over the past 20 months, i have been engaged in a series of outreach meetings all across my federal reserve district. i consider these visits just as important as my trips to washington, d. c., to help formulate monetary policy or to switzerland to shape international bank regulation. the understanding of issues and concerns that i gain today will help ensure that my policy decisions reflect the public interest in the broadest sense. each visit within the region helps me deepen relationships with the people i represent. as you may know, the new york fed β s district includes all of new york state ; 12 counties in northern new jersey ; fairfield county, connecticut ; puerto rico ; and the u. s. virgin islands. in august, i met with community leaders, businesses and elected officials in newark, patterson and jersey city. earlier this year i went to brooklyn, the bronx, queens and puerto rico, while last year i visited several upstate cities. my trip started yesterday with a policy speech to the west point cadets and was followed by a colloquium with their economics faculty. so, this visit to the upper hudson valley brings me in contact with some of our country β s future leaders β you and the cadets who will lead our country in very important, if different, ways. i will also have a chance to see more of what makes albany so distinct from both downstate and upstate new york. of course, i may have a leg up on this because i was born and raised close by, in western massachusetts! the greater albany area is home to 900, 000 people β roughly the size of three average cities in the united states. you and your fellow residents tend to be highly educated and be employed as public servants. these factors are all part of what makes albany feel special. today, i want to talk with you first about the fed β what we do and why
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salute the department of education for being our active partner in bringing financial education to millions of our schoolchildren. we also acknowledge the banks who help our youth develop the habit of saving and give lessons on personal finance to teachers and parents. so far, we have made significant strides in the development of the philippine microfinance sector that has liberated millions of entrepreneurial filipinos from poverty and transformed them into net savers in banks. in fact, our latest data indicate that for the first time consolidated bank deposits of microentrepreneurs at over p8 billion have now exceeded their total bank loans. i also thank all the industry groups, all companies β big and small, our partners from both public and private sectors for your support in bangko sentral β s advocacies that promote coin recirculation and clean banknotes, as well as protection against counterfeit money and financial scams. once again, ladies and gentlemen, we at the bangko sentral ng pilipinas thank and congratulate all of you for being our active partners in the pursuit of our mandate and in making lives better through better policies and programs. together, let us steer the economy toward balanced, sustained and inclusive growth. maraming salamat sa inyong lahat! mabuhay ang ating mahal na bansang pilipinas! bis central bankers β speeches
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not based on a false sense of security. but we are motivated to always raise the bar of professional excellence and business integrity for banks. we have the determination and passion to excel in our current craft, of pursuing excellence and constantly improving our work so that we could deliver the best financial services to the filipino consumer and our country. moving mountains that i used mt. everest in an analogy to illustrate our present and on - going journey together is perhaps ambitious enough β¦ and while i have built parallelisms between the two endeavours, i dare say that in our industry the mountains are not static. banking is not unmoving like the formidable everest. there is no final peak to overcome. the bangko sentral celebrated its twenty - fourth ( 24 ) anniversary last week. i have been a central banker for the last thirty - six ( 36 ) years. baiphil marked its seventy - sixth ( 76th ) year this june. as veterans in this field, we know that in banking and in central banking, the process of scaling new heights is an active and continuing endeavour. friends : banking products, financial services and needs, technology and consumer preferences are always levelling up. we have to keep pace. we do this with training and education. we do this with updated and relevant regulations. we do this with partnership as we are confronted with an evolving market landscape of international standards and prudential regulations. our shared strategy necessitates taking a more holistic view of these developments. we do this too by strengthening corporate governance standards and risk management practices. we at the bsp have raised the bar of prudential standards to promote resilience in the banking system and market discipline for risk - taking activities. because of growing regional financial integration and the entry of foreign banks, competition pressures have increased. new sophisticated players such as financial technology solution providers have entered the market. this is a good thing as these bring about a notable and gradual unbundling of the traditional value chain in the philippines and intimately links banks closer to customers. while fintech provides interconnectivity, convenience, and efficiency in delivery of financial 3 / 4 bis central bankers'speeches products and services, we must also be vigilant as it also ushers in cyber - security concerns. in this regard, the bsp has been laying the groundwork on promoting cyber - security and related regulation on technology. but there is still much to be done. ladies and gentlemen, we know from science that the mountains
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shaktikanta das : what forces could drive the recovery? address by mr shaktikanta das, governor of the reserve bank of india, at the ficci β s national executive committee meeting, 16 september 2020 * * * 1. thank you for this opportunity to interact with eminent business leaders of india and distinguished members of the ficci. i wish to thank the organisers for hosting this event, undeterred by this still unfolding pandemic that, on a daily basis, tests our resilience and capacity to save lives, households, businesses and the economy. 2. the end - august press release of the national statistics office ( nso ) was a telling reflection of the ravages of covid - 19. nevertheless, high frequency indicators of agricultural activity, the purchasing managing index ( pmi ) for manufacturing and private estimates for unemployment point to some stabilisation of economic activity in q2, while contractions in several sectors are also easing. the recovery is, however, not yet fully entrenched and moreover, in some sectors, upticks in june and july appear to be levelling off. by all indications, the recovery is likely to be gradual as efforts towards reopening of the economy are confronted with rising infections. 3. the global economy is estimated to have suffered the sharpest contraction in living memory in april - june 2020 on a seasonally adjusted quarter - on - quarter basis. world merchandise trade is estimated to have registered a steep year - on - year decline of more than 18 per cent in q2 of 2020, according to the goods trade barometer of the world trade organisation ( w to ). high frequency indicators point to a trough in global economic activity in april - june quarter and a subsequent recovery is underway in several economies, such as the usa, uk, euro - area and russia. the global manufacturing and services pmis rose to 51. 8 and 51. 9, respectively, in august from 50. 6 for both in july. yet, infections remain stubbornly high in the americas and are increasing again in many european and asian countries, causing some of them to renew containment measures. 4. on the back of large policy stimulus and indications of the hesitant economic recovery, global financial markets have turned upbeat. equity markets in both advanced and emerging market economies have bounced back, scaling new peaks after the β covid crash β in februarymarch. bond yields have hardened in advanced economies on improvement in risk appetite, fuel
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expected outcomes, we note that this should not be interpreted as, nor convey the message that, the fund β s recommendations are always correct or that member countries β authorities always take a defensive attitude. we believe deeply in a policy dialogue process that could be beneficial to both parts. at the end, successful policies are those implemented by economic authorities that feel them their own and are capable to create the political framework for their execution. we also support a more systematic focus of the fund β s surveillance on regional developments by detecting regional trends and fostering dialogue with region - wide institutions such as eclac. along these lines, we appreciate the fund β s regional outlook report, whose last issue was simultaneously launched in mexico city and santiago in early november. as a central bank fully committed to an inflation - targeting framework, we place substantial weight on making continuous efforts in strengthening transparency. in this direction, we think that the fund β s communication strategy would be more effective if analysis goes beyond the mere publication of reports, making it an integral part of the public debate on policies and economic reforms. considering the importance of communications, we believe that enhancing the fund β s outreach activities both at global and regional level will strengthen the effectiveness of the fund β s monitoring and surveillance. the risks the world economy faces in the medium term - associated to an abrupt resolution of global imbalances, a commodity price downturn, a slowdown of global growth, or an abrupt shift in risk perception and valuation by global investors - require that the agenda on international financial architecture be focused more on preventing, rather than resolving crises ex post. as countries are progressively more integrated into a more global financial system, new challenges emerge for economic authorities. the increased mobility of international capital flows - beyond their potential benefits - entails the risks of sudden and unexpected reversal of capital flows that could be further worsened by the contagion associated to the financial market reaction. also, in the current market - driven international environment, characterized by increasing access of emerging economies to private funding, and by a more complex international financial system, externalities, market failures and perverse incentive effects are still in place and impede private financial flows to become a permanent and stable source of financing. therefore, strengthening countries β resilience is not only about developing and improving appropriate and consistent policies and institutions, but also about providing countries with access to emergency liquidity and the possibility to obtain short - term liquidity by private financial instruments. the fund should therefore play a leading role in facilitating
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the adequacy of capital and the recognition of npls. we challenged progress every step of the way, going to the outer edge of our remit to do so β challenging the organisational structure and resource capacity, challenging skills and experience, challenging governance and oversight, policies and procedures, workout strategies and execution ability. we challenged the implementation of the plans, challenged credit management and impairment recognition, challenged provision coverage and collateral valuations, challenged short - term vs sustainable resolutions. and we continue to challenge the irish banks today. and while it is slower than i would like, this approach is working. this has been achieved through better cohort by cohort borrower engagement strategies, working out and sustainably restructuring loans, and some portfolio sales. importantly, legislation has been passed to enable borrower protections to travel with loans that have sold outside of the banking system. 4 / 7 bis central bankers'speeches accounting write - offs have not yet featured to the extent warranted. npls in ireland have reduced for fourteen consecutive quarters. it represents a 58 % reduction from peak, a decrease of over β¬50bn. in some ways, this graph understates the progress, because the npl ratio has been materially reduced at the same time as there has been a very sizeable deleveraging in the system β loan books ( both good and bad ) in aggregate are much reduced. but there remains much more to be done, primarily now on long past due mortgage arrears, which remain a blight for distressed borrowers, banks, and the system as a whole. the reason i am recalling recent irish history, is that, in many respects the journey we took in ireland is now being followed at a european level. asset quality and balance sheet strength has always been a priority for the ssm, as evidenced by the comprehensive assessment in 2014. when it took on supervisory responsibility for europe β s banks, the npl outlook was diverse across the euro area. while certain countries β banking sectors had, and still have, low npl ratios, it was recognised that even those countries where banks were not struggling with asset quality, may be affected by spillovers. 5 through the comprehensive assessment, the ssm took early action to gain assurance that problem loans were recognised and that the system as a whole had sufficient capital to manage the problem, both under a base and stress scenario, in the same way as it had been done in ireland in 2010 / 2011. yet npls have remained
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##ptible improvements in activity and job creation because many of the measures taken are structural and will take some time to work fully through. the growth outlook for the coming quarters is still not favourable, as shown by the forecasts released by different organisations in the past few weeks, which point to a fresh contraction of activity in 2013. however, the adjustment undertaken is essential in laying the groundwork for a new phase of economic growth which will allow a substantial and lasting reduction in the unemployment rate. the resumption of growth of the spanish economy will depend above all on our perseverance in pushing through the reforms. as i mentioned in my address to the spanish parliamentary budget committee, and as i believe bears repeating here, economic policy has to continue striving towards two main goals : promoting competitiveness and growth, and restoring the sustainability of public finances. i will focus particularly on this second stage of the adjustment. fiscal consolidation in the present circumstances, ensuring the credibility of the process of fiscal consolidation is a priority. after the heavy slippage in the deficit in 2011, it is crucial to dispel doubts as to the capacity to control the upward path of public debt. credibility is the main alleviating factor to mitigate the contractionary impact, in the short run, of the necessary adjustment measures. for the consolidation to be credible, the expenditure - reducing and revenue - enhancing measures have to be well - designed and consistent with our chosen path ; in addition, experience indicates that to prevent slippage, it is advisable to work with a highly conservative projection of public revenue. when forecasting revenue, underestimates are more acceptable than overestimates. also, adequate early warning tools are required to detect in advance any possible deviations and to make, where necessary, the required corrections in time. the budgetary stability law provides an appropriate tool for controlling expenditure. in the area of credibility, it is highly advisable to define a multi - year bis central bankers β speeches budgetary time horizon which offers certainty to agents and, moreover, to deploy fiscal measures which combine actions with a short - term impact and others acting on the sustainability of public finances in the medium term, impinging, among others, on those expenditure items most affected by population ageing. regional government finances let me begin my analysis of the 2013 state budget by looking at regional government finances. spain is today a country characterised by strongly decentralised public expenditure. on 2011 figures, central government accounted for 22
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kiyohiko g nishimura : macro - prudential lessons from the financial crises β a practitioner β s view speech by mr kiyohiko g nishimura, deputy governor of the bank of japan, at the asian development bank institute ( adbi ) β central bank of malaysia ( bank negara malaysia / bnm ) conference on macroeconomic and financial stability in asian emerging markets, kuala lumpur, 4 august 2010. * * * i would like to express my sincere gratitude to the hosts for inviting me to the adbi β bank negara malaysia conference, and especially to this timely session : macroeconomic frameworks to support financial stability. in this presentation, i will touch on the issues of financial stability and central bank policies, based on two episodes of financial crisis : one dating from 20 years ago in japan, and the other from two years ago in the united states. i first present one β stylized account β from a macro - prudential perspective of the buildup in financial imbalances that led eventually to the financial crisis in the late 1980s in japan. then, i illustrate the startling similarities between the recent us subprime - triggered experience and that of japan in the 1980s. examining these two crises, i will draw four implications for macro - prudential policy which are likely to be universally relevant, particularly in emerging economies. the message is simple and straightforward : beware. so - called macro - prudential measures may not always be sufficient. this leads to the final topic, the role of monetary policy during the buildup of financial imbalances, a role which i would argue is, in a word, crucial. i will explain why in the course of this presentation. 1. financial imbalances in 1980s japan : a stylized account i first present one β stylized account β from a macro - prudential perspective of the buildup to financial imbalances in japan in the late 1980s. 1 this account is intended to be rather descriptive and schematic in the way that macro - prudential issues are highlighted. it is admittedly simplistic, but i believe this is a good starting point for discussion. deregulation - induced β financial innovations β and financial anomalies a number of β financial innovations β introduced as a result of deregulation appear to have played a role in the late 1980s bubble in japan. under the designation of financial liberalization, deregulation sparked the arrival of new products such as cps and large
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employees or fewer. outstanding loans for medium - sized enterprises are calculated by excluding those for small enterprises and large enterprises from total outstanding loans. figures are deflated by gdp deflators. total borrowings in 1975 in real terms = 100. source : economic statistics monthly, bank of japan and national accounts, cabinet office. chart 5 bank lending to real estate - related sectors note : all banks, excluding member banks of the second association of regional banks. real estate - related sectors include real estate, construction, and non - bank financial. total outstanding loans used for calculations are outstanding loans and discounts to domestic corporate borrowers, excluding overdrafts. outstanding loans to the non - bank financial industry are the sum of those to the other financial industry and the lease industry. figures are deflated by gdp deflators. total lendings in 1975 in real terms = 100. source : economic statistics monthly, bank of japan and national accounts, cabinet office. chart 6 ratio of examining officers at the headquarters by bank - type and year source : figure 1 in fukao, k., k. g. nishimura, q. - y. sui and m. tomiyama, β japanese banks β monitoring activities and the performance of borrower firms : 1981 β 1996, β international economics and economic policy, 2 ( 2005 ), 337 β 362. overlooked signs of excessive optimism around this time, there were signs of excessive optimism among investors, especially in property markets. chart 7 illustrates the price - to - rent ratio in residential property markets in tokyo, 4 based on hedonic price and rent price indexes of condominiums, and taking due account of vast differences in quality. ( rents here are market - determined new - contract rents, not institutionally rigid continuing - contract rents. 5 ) this ratio surged from around 23 in 1986, which in retrospect looked like the long run average, to around 40 in one year, suggesting substantial overheating in property markets. after a short pause, the price - to - rent ratio shot up to a peak of around 50 in the fall of 1990 ( even after the collapse of the stock markets ). however, it should be noted here that this quality - adjusted price - to - rent ratio has only recently become available. in the late 1980s, only appraisal price indexes for residential and commercial lands were available, with a substantial lag of half a year. there were no reliable rent data. thus
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david dodge : policies for changing times remarks by mr david dodge, governor of the bank of canada, to the mexican business coordinating council, mexico city, 17 february 2004. * * * good morning. i am glad to have the opportunity to meet with business leaders in mexico today. i am also glad to have this opportunity to meet with our colleagues at the banco de mexico. our two central banks have had a long and fruitful relationship, one that includes swap facilities, joint research, and close consultations. i believe that public servants and business leaders in canada and mexico have a great deal in common and much to learn from one another. indeed, in many ways, canada and mexico are partners. we share common issues and challenges. we both share borders with the united states, the most important export market for each of us. both canada and mexico have recently faced setbacks in cross - border trade with the united states. these stem not only from weaker u. s. domestic demand, but also from specific trade problems and from border - crossing delays associated with tighter security. we have both been affected by the slowdown in the world economy and by global economic imbalances - although the impact of these factors appears to have been somewhat less in canada than in mexico over the past three years. and we are both working on the structural adjustments that are necessary to weather shocks and to thrive in a changing environment. today, i want to focus my remarks on canada β s adjustment to global economic changes. i will talk about our efforts to adjust to longer - term economic forces and about our challenges in this regard. and i will talk about some of the lessons that we have all learned during the past couple of decades. policy - makers in both canada and mexico have drawn on these lessons to improve our macroeconomic policy frameworks, and thus to better manage and adjust to change. i will conclude with some thoughts about how canada and mexico can continue to adjust to the economic changes that face us in the future. the most important lesson that we have all learned is that structural adjustments are key in adapting to change, and that macroeconomic policies have a role to play in making those adjustments with a minimum of economic and social disruption. past adjustments canada has experienced two periods in recent decades when significant economic adjustment was required. the first was during the 1970s, when we were hit by a rapid slowdown in productivity growth and by the effects of the oil crisis. policy - makers in canada used macroeconomic and microeconomic
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our economic policies and reduced the risk premium on canadian bonds demanded by investors. canada β s economy, like that of mexico and many others, also underwent structural adjustments in the 1990s, in both the public and private sectors. these adjustments were enormously helpful, because they made the canadian economy more flexible. governments moved to reduce distortions in the economy by eliminating many industrial subsidies, reducing personal income taxes, and reforming the unemployment insurance system. at the same time, enterprises responded to the challenges of trade liberalization by improving the quality of their products and marketing them aggressively to new north american customers. these adjustments were not easy. but they did leave canada β s economy in a better position to handle economic shocks and, therefore, to grow on a sustained basis. canada β s floating exchange rate helped facilitate these structural adjustments. the depreciating canadian dollar in the late 1990s encouraged foreign demand, which helped to compensate for reduced demand from the government sector. it also helped by sending signals to businesses about the kinds of adjustments that were needed. in sum, a sound macroeconomic policy framework, appropriate structural adjustments, and a floating exchange rate all did their part to help canada β s economy adjust to the changing circumstances of the 1990s. while these adjustments were difficult, the payoff came quickly. by the end of the decade, canadians were beginning to see higher real incomes. international forces so that β s a quick backward look. let β s now consider the ongoing international forces at work in our economies. both canada and mexico are going to need to increase productivity in the face of fierce competition from china and other lower - cost countries. indeed, it is clear that all countries are going to have to find ways to become more competitive. in canada, we have an opportunity in the next few years to again realize solid, steady productivity gains, thanks to past investments in information and communications technology. of course, technology alone is not enough to guarantee higher productivity. to actually realize productivity gains, enterprises must make the necessary investments and organizational changes. and they must train their staff to use technology to its best advantage. other forces in the world economy bear watching. these include significant imbalances in global current - and capital - account flows. and new players, particularly in asia, are becoming increasingly powerful in the global economy. as i β ve mentioned, that increases the competitive pressure facing our manufacturers. but it also means new, fast - growing sources of demand, and new opportunities. adjustments in the future in the face
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, as the sense of urgency imposed by the crisis has vanished. on the global financial reform front, for instance, progress has slowed down in several respects. this has generated frustration and led to country - specific regulatory initiatives. these initiatives should not create market distortions, harm global and european financial integration or lead to regulatory arbitrage. progress on the front of global economic policy - making has also slowed down. the g20 β s effectiveness is now being questioned. being larger than the g7, it is also more heterogeneous in terms of values and represented interests. therefore, reaching an agreement at the negotiation table is more challenging. also, the g20 might appear distant to citizens, which is not helpful for legitimacy, as the latter is intrinsically linked to local proximity. finally, not all countries are at the table. an entire continent like africa is only represented by one country, namely south africa. despite its limitations, the g20 remains essential for global economic cooperation insofar as there is no obvious alternative. returning only to the g7 or the g8 is not an option. at the same time, it was premature to conclude that the former formats are dead with the rise of the g20. the conclusions of this week β s g8 summit in northern - ireland on fighting tax evasion and on world trade for example showed that the smaller formats can stimulate important momentum for the g20 and other fora like the wto. where do we stand on the european front? an essential lesson from the crisis is that the economic and monetary union is an incomplete project. the β four presidents β report outlined the necessary steps to move towards a genuine monetary union, which i strongly support. first, we need to complete with great urgency the banking union. we need a clear and transparent assessment of the conditions of the banking system ( β asset review β ) before the single supervisory mechanism takes over. we also need a strong commitment towards an effective single resolution mechanism ( srm ) which is an indispensable element of the banking union and a necessary complement to the ssm. the srm would allow for a smooth winding down of banks, especially those with large cross - border activities. it needs to entail both a strong single resolution authority ( sra ) as well as a single resolution fund ( srf ). the latter should be financed with ex - ante risk based levies on the banking sector. these arrangements would enhance the credibility of the system and ultimately
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for commodities. the latter shift has also been encouraged by regulation : many european countries allow such insurance to count as regulatory capital under the basel iii rules. bis central bankers β speeches implications so far, i have given you a thumbnail sketch of the changing trends in the financing of commodities markets. but why do these developments matter for the world economy, and particularly for canada? here, i would like briefly to highlight three sets of issues. first, there may be implications for the pricing of commodities. as i have stressed, the broad trends in commodity prices is determined by the fundamentals of supply and demand β notably the long - term growth in demand from asian emerging - market economies. but the functioning of the markets in which commodities are traded has the potential to influence pricing in several ways. the flows of financing for commodity trading activities can affect the liquidity and efficiency of these markets and thus the extent to which prices reflect those fundamentals. as well, the financialization of commodities has the potential to affect the degree of short - term volatility of the markets. although it is too early to assess the implications of the recent changes in financing patterns i have been describing, these developments bear watching. a second set of issues pertains to systemic risk. in particular, the large trading houses, together with the physical trading operations of some large investment banks, are playing an increasingly prominent role in a number of commodity markets. this raises the possibility that some of these institutions are becoming systemically important. just as the 2008 financial crisis revealed the need to assess the systemic importance of institutions that play a central role in particular financial markets, we should be asking the same questions about institutions that are interconnected with various commodity markets. here, i have two general questions in mind : could the failure of one of the large trading houses cause serious disruption in the commodities markets in which it played a market - making role? and, could the losses that a trading house incurs through the positions it has taken in commodities have significant knock - on effects on the financial system? we are far from having answers to those questions, but they need to be addressed. third, commodities trading can potentially be an important link between the financial system and the real economy. with the financialization of commodities, financial system stress has the potential to affect commodities markets. commodities markets, in turn, have an important influence on the economic outlook of a commodity - rich country such as canada. moreover, movements in commodity prices may pose risks to the financial
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_ _, β revisiting the philosophy behind central bank policy, β speech at the economic club of new york, april 22, 2010a ( available at http : / / www. boj. or. jp / en / type / press / koen07 / ko1004e. htm ). _ _ _ _ _ _ _ _, β future of central banks and central banking, β opening speech at 2010 international conference hosted by the institute for monetary and economic studies, bank of japan, may 26, 2010b ( available at http : / / www. boj. or. jp / en / type / press / koen07 / ko1005a. htm ). ugai, hiroshi, β effects of the quantitative easing policy : a survey of empirical analyses, β monetary and economic studies, institute for monetary and economic studies, bank of japan, 25 ( 1 ), 2007, pp. 1 β 48.
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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, 14 december 2017. * * * introductory statement ladies and gentlemen, the vice - president and i are very pleased to welcome you to our press conference. we will now report on the outcome of today β s meeting of the governing council, which was also attended by the president of the eurogroup, mr dijsselbloem, and by the commission vice - president, 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 from january 2018 we intend to continue to make net asset purchases under the asset purchase programme ( app ), at a monthly pace of β¬30 billion, 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 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. our monetary policy decisions have preserved the very favourable financing conditions that are still needed for a sustained return of inflation rates towards levels that are below, but close to, 2 %. the incoming information, including our new staff projections, indicates a strong pace of economic expansion and a significant improvement in the growth outlook. the strong cyclical momentum and the significant reduction of economic slack give grounds for greater confidence that inflation will converge towards our inflation aim. at the same time, domestic price pressures remain muted overall and have yet to show convincing signs of a sustained upward trend. an ample degree of monetary stimulus therefore remains necessary for underlying inflation pressures to continue to build up and support headline inflation developments over the medium term. this continued monetary
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mobile money accounts. β once approval is obtained, mobile money is treated as a financial institutions business regulated under the fia. in 2013, the bou issued mobile money guidelines which stipulate the approval process for the mobile money services, as well as the roles and responsibilities of all parties involved. they address interoperability, system standards, competition, aml / cft, and supervision. they also stipulate the safeguards to protect customers among which are : bis central bankers β speeches β transactions must be real time and only carried out when the mobile money system is up and running, and must be authenticated by customers β pin numbers. the customer must receive confirmation of execution of the transactions. in case of sending mobile money, the sender must be able to verify the recipient β s name before completing the transaction. β the customer obtains a copy of terms and conditions of the service at the time of registration and must be given a minimum of thirty days β notice before any changes. β an agent must clearly display the identity and a dedicated telephone contact of the mobile money operator, the unique identification number of the agent, charges, notice that no charges are levied at the agent location, and a notice that the agent does not carry out transactions on behalf of customers β complaints handling and consumer recourse mechanisms. mobile money supervision bou has the powers to supervise the mobile money services. however, the mobile money operator has the duty to supervise its agents to ensure that agents conduct the business in accordance with the mobile money guidelines. periodic reports regarding the performance of the mobile money services are submitted to the bou. the bou developed a compliance matrix to assess the level of compliance and is developing supervision procedures for the mobile money services. collaboration with ucc the mobile money platforms ride on mobile networks and this called for regulatory collaboration with the telecom regulator, the uganda communications commission ( ucc ). first of all ucc has to allow telecos to provide mobile money as a value added service. secondly, ucc is responsible for ensuring network availability ( network system uptime ), which is necessary for mobile money services to run. ucc has also to ensure that there is no unfair competition, i. e. that telecos do not lock out, nor unfairly charge other mobile money service providers who wish to use their networks. as is standard practice, regulators enter into memorandum of understanding ( mous ) to mainly exchange regulatory information and also provide for other regulatory issues in
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which they can collaborate. bou and ucc are discussing the essentials to be included in the mou. future developments we envisage that mobile money will become an integral part of the national payment system. the bank of uganda act is being amended to include powers of the central bank to regulate and supervise the payment systems, and a national payment systems legislation is being developed whereby payment service providers will be licensed by the central bank. once this legislation is enacted, payment service providers will be directly licensed as payment operators. bis central bankers β speeches
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ewald nowotny : european integration in a global economic setting β cesee, china and russia opening remarks by prof dr ewald nowotny, governor of the central bank of the republic of austria, at the conference on european economic integration ( ceei ) 2011 : β european integration in a global economic setting β cesee, china and russia β, vienna, 21 november 2011. * * * good morning, ladies and gentlemen, it is a great pleasure for me to welcome you to the conference on european economic integration 2011 on β european integration in a global economic setting β cesee, china and russia β. a particularly warm welcome goes to governor erkki liikanen from suomen pankki β finlands bank and to all the representatives of the finnish central bank who have joined us here in vienna for the conference. moreover, i am pleased to welcome, for the first time, all our viewers at suomen pankki who are watching a live webcast of the ceei on screen in helsinki. in the history of the ceei, this is a very special year. while there has been international cooperation in organizing the ceei in the past, for example with the ecb or the imf, this is the first ceei we have jointly organized with a eurosystem ncb β the finnish central bank. moreover, this is the first time we have extended the conference topic to include new economic areas β china and russia. of course, there are several very good reasons both for this cooperation and for broadening the conference topic. some of you may know that the oenb focuses its economic analysis and research on central, eastern and southeastern europe ( cesee ), mainly because of austria β s strong historical and economic links to the region. similarly, suomen pankki β or more specifically the bofit, the bank of finland institute for transition economies β has a regional research focus, namely on russia and china, thus covering two of the most interesting and promising emerging markets of the world. given this year β s conference topic, it was therefore only logical to invite our finnish friends to organize the ceei 2011 with us β and we were very pleased that they accepted our invitation and supported us with their valuable expertise. for two decades, this conference series has been devoted to spreading and deepening the knowledge of european economic integration with a particular emphasis on cesee economies in transition. yet we decided to expand our focus this time. of course, you might
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a key term in this discussion : foreign direct investment ( fdi ). particularly in cesee and in china, increasing openness to fdi has contributed largely to growth performance. many empirical analyses have provided evidence on the relationship between fdi and growth. however, not only the fact that capital inflows take place, but in particular the way this capital is put to use plays a major role in achieving sustainable convergence. 4 direct fdi linkages between cesee, china and russia are very small in terms of volume. 5 our business panel discussion in the late afternoon will give us an opportunity to examine fdi from a practitioner β s perspective. at this point, let me draw a first conclusion. the relocation of production sites, catching - up in technology - intensive production and dynamic export growth in general are challenges to any economy. at the same time, they can be seen as opportunities to adapt institutional settings to promote sustainable, growth - enhancing development in the home markets. in this sense, the emergence of china and russia as global economic players offers clear opportunities. china and russia can become attractive target markets for exports β from cesee as well as from other regions. not only is china expanding its role as a supplier of goods, but both china and russia increasingly demand final products from abroad. although the eu - 15 remain the major trading partner for cesee, the region should make active use of china β s and russia β s growing demand for imported goods β particularly in the light of the recent economic and financial crisis. russia β s forthcoming accession to the wto will open new possibilities to strengthen the linkages in the real economy via fdi and trade and to foster financial linkages as well. so far, the financial ties between russia and cesee have been closer than those between china and cesee. chinese banks have started to invest in cesee only recently. moreover, china β s increasing investment in several sectors in europe proves that the financial linkages between these two economic areas will gain importance in the future. see e. g. firdmuc, j. and m. reiner ( 2011 ). fdi, trade and growth in cesee countries. in : focus on european economic integration q1 / 2011. oenb. china β s stock of fdi in cesee is very small and has been decreasing since 2000. bis central bankers β speeches in this context, i may add that only two weeks ago the oenb and the people β s bank
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recall the experience with services of direct sales agents, employed by banks, which in some cases, generated resentment among the customers. an element of sensitivity and sensibility has to underscore the behavior of such agents when banks outsource credit card operations etc. with emphasis on ensuring appropriate behavior by personnel involved in debt collection and ensuring employment of fair and prudent processes. coercive actions, in the wake of increasing customer awareness can throw open gates of litigation on such grounds as negligence, mental agony or hurt, defamation, invasion of privacy and trespassing, with all their obvious and extended legal connotations. when one talks of redressing customer grievances and complaints, an obvious reference to the banking ombudsman scheme is but inevitable. the scheme operates on the principles of mediation and arbitration resulting in awards. in order that such schemes function unhindered and for the common cause of scores of aggrieved customers, it is imperative that banks implement awards passed by ombudsmen in right earnest. rbi attaches a lot of importance to this function and compliance by banks in this area is monitored through rbi β s supervisory processes and appropriate regulatory disclosures diligently. thus, serving the bis central bankers β speeches customer satisfactorily is at once, an art, an inexact science as also a mandatory obligation governed by regulatory dictate and institutional arrangements to ensure compliance. to conclude, customer service deserves an outlook that puts a check on targets sought to be achieved by customer service executives by way of a rigor of compliance with extant rules and regulations. profit seeking is the basic ethos that governs any business entity but the same cannot and must not override the genuine demands and requirements of customers. i am sure, the employees being honored today have set an example in not just customer service alone but also for adhering to the compliance diktat. i wish them all success in their career and also congratulate axis bank on their endeavour to enhance the awareness on customer service. thank you. bis central bankers β speeches
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the one lakh mark has already been crossed in the current year ( july 2016 to may 2017 ). our analysis has shown that percentage of complaints on non - adherence of bcsbi code β clause 8 ( 1 ) ( s ) and 8 ( 2 ) ( d ) of bos over a six year period from 2010 β 11 to 2015 β 16 has increased from 24 % to 34 %. a survey conducted by bcsbi suggests that the increase could be on account of disconnect in application and understanding of codes among frontline staff of the member banks. perhaps, engagement of the top management with implementation of codes in their respective banks has also declined. i urge pccos to take effective steps for creating greater awareness and understanding amongst the frontline bank staff by ensuring buy - in from the top management. 5. in my address today, i intend to focus on few important measures which bcsbi, the pccos and the banks can initiate to further the cause of customer service in the sector. a. updation of codes : i am aware that bcsbi has been periodically updating the codes of banks β commitments by factoring in the relevant regulatory guidelines, developments in the banking sector and evolving customer expectations. i am glad to learn that the code of banks β commitment to customers is currently under review. as you are all aware, in 2014 rbi had released the β charter of customer rights β declaring five basic rights of bank customers as broad, overarching principles for protection of bank customers. all banks have since reportedly adopted / incorporated the model β customer rights policy β based on the charter formulated jointly 1 / 5 bis central bankers'speeches by iba and bcsbi. i am sure that the committee reviewing the code of banks β commitments to their customers would be guided by the spirit of the principles listed out in the β charter of customer rights β. on its part, reserve bank will be monitoring aberrations / non - adherence to the charter during supervisory process. specifically, i would urge the committee to factor in following recent developments in the sector and weave them into the codes appropriately while reviewing the same : ( i ) new branch authorization policy : use of banking correspondents business correspondent ( bc ) model has been a major facilitator for financial inclusion especially in unbanked / under - banked areas. recent rbi circular on β rationalization of branch authorization policy β recognizes bcs as an important pillar for delivery of banking services in under - banked areas of
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nout wellink : a new regulatory landscape remarks by mr nout wellink, president of the netherlands bank and chairman of the basel committee on banking supervision, at the 16th international conference of banking supervisors, singapore, 22 september 2010. * * * introduction and background good morning and welcome to the 2010 international conference of banking supervisors. i will start by thanking our host β the monetary authority of singapore. i would like to thank in particular mas managing director heng swee keat and his deputy, teo swee lian, and the staff of mas for doing a marvellous job of organising and hosting this icbs. it has been two short years since we last met in brussels at the 2008 icbs. in my opening remarks at that conference, i used the occurrence of storms and the need to build strong dikes as metaphors for the financial crisis and the need for a strong supervisory response. this morning i will reflect on our response to the recent financial storm, which is designed to protect against future crises. consider the extraordinary financial landscape around the time of the last icbs. in september 2008 alone : lehman brothers declared bankruptcy, the other large us investment banks converted to bank holding companies, fannie mae and freddie mac were nationalised, aig was brought back from the brink of collapse, fortis, the financial conglomerate, was broken up and sold, iceland β s largest commercial bank β and subsequently the banking system β collapsed, and many countries had to step in to provide massive support to their banks. this was the height of the crisis. since then, the financial and banking system have been stabilised and we are on the road to recovery. but this has come at a high cost : many government budgets have been stretched due to massive amounts of official sector support. there was a fundamental spillover from the financial crisis to the real economy. this resulted in lost wealth and a loss of jobs. it is not yet over and risks remain. while painful and costly, the crisis has nonetheless presented an opportunity to put in place longer term reforms that are needed to make banks and the financial system more resilient to future periods of stress. the basel committee has been at the core of this reform agenda, which was crystallised at the g20 leaders summit last year in pittsburgh. last year we also expanded our membership by doubling in size to 27 jurisdictions. we have benefited immensely from this broadened membership, both in terms of wisdom and legitimacy. this morning i would like to
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the mechanisms operate that permit the central bank to determine the value of money β what is known as the transmission mechanism. for the most part, however, there is little knowledge of these very complicated mechanisms. the rapid development in the financial markets means moreover that the conditions for monetary policy are continually changing. it is therefore natural for the rules of action and strategies that govern monetary policy to be discussed and evaluated. i am going to begin by giving a short review of how the transmission mechanism is usually described and to discuss the changes that have taken place. against this background, i will then briefly describe how the riksbank conducts its monetary policy. what is the role of money? the quantity theory describes in a simple way how inflation is determined. in this theory, the price level is determined by the quantity of money in the economy. production is determined over a somewhat longer period by access to labour and by the development of productivity ; monetary policy does not affect production in the long term. it is intuitively easy to understand that at a given level of production the price level will increase if the quantity of money increases and vice versa if the quantity of money decreases. in an economy where only banknotes and coins serve as means of payment, the central bank can control inflation by determining the quantity of banknotes. this is conditional on the central bank knowing how much is required at a given price level in order for a particular quantity of goods to be produced and circulated - the speed or velocity of circulation must be known in order for a money quantity target to be used to control price movements. developments in the financial markets in general and of the payment system in particular have, however, led to a reduction in the importance of banknotes and coins as a means of payment, i. e. money. an increasing proportion of payment flows takes place by transfers between accounts and the ability of the central bank to influence the quantity of money in the economy is largely only through its ability to affect the demand for money by the general public. the quantity of money required by the general public depends on its demand for transaction funds for the purchase of goods, services and financial assets, which in turn is affected by the interest rates encountered by the general public. for instance, lower interest rates increase demand for money when businesses'demand for capital goods and households'demand for consumption increases. thus, demand for goods and services are both sensitive to interest rates and largely reflect one another. by controlling the interest rate, the central bank thus affects both the
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aznan bin abdul aziz : banking and esg revolution β going beyond aspirations closing remarks by mr aznan bin abdul aziz, assistant governor of the central bank of malaysia ( bank negara malaysia ), at the aicb - abm 2nd malaysian banking conference, kuala lumpur, 27 june 2023. * * * y bhg tan sri azman hashim, chairman of the asian institute of chartered bankers ; y bhg dato khairussaleh ramli, chairman of the association of banks malaysia, vice chairman of aicb and group president and ceo of maybank group ; esteemed guests, ladies and gentlemen assalamualaikum and salam sejahtera it's past 5 pm. and i have the unenviable job of keeping you from leaving after a highly productive and packed day. it is simply incomplete to adjourn without the regulator relaying its thoughts and expectations. i understand that the day started with a focus on where we, as a country, are in the climate journey. we know that 2050 is the year β the earliest point by which malaysia aspires to reach net zero ghg emissions. many significant policies are now either in place or are due to be finalised soon to get us to 2050. these include key frameworks and roadmaps for malaysia to transition such as the long - term low emissions development strategy ( lt - leds ), nationally determined contributions roadmap ( ndc roadmap ) and national energy transition roadmap ( netr ). these policies will enable yourselves and your clients to better align your transition plans. for the international community, these policies provide a clear signal on the country's seriousness about 2050, despite contributing only 0. 7 % of global ghg emissions. along the transition journey, there are risks to manage, and opportunities to be seized. technology is key. so is finance. your actions and responses are critical. the partnership between you and your clients is critical. your clients would need the " how " in terms of new forms of financial instruments β transition finance, adaptation finance and blended finance to name a few. for the smes, this goes beyond financing. for instance, they need the " how " in terms of where and how to begin greening their operations, tools to help them understand, measure and track their own emissions profiles. i am delighted and encouraged to see the malaysian ecosystem and accompanying tools continue to mature. the progress thus far is
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commendable. but, we must not forget the long road ahead and work still to be done to achieve 2050 in an orderly and just manner. the bank's experience in engaging with multiple stakeholders offers some insights as to the additional elements needed to further propel our transition. allow me to share these insights to cap off our discourse today β that is c for communication, a for alignment, and p for proactivity. 1 / 2 bis - central bankers'speeches communication. the economy's transition doesn't just happen in high powered boardrooms and government offices. it happens in the everyday decisions made by households and small business owners. 97. 4 % of all businesses in malaysia are smes, contributing 37. 4 % of gdp. our engagements reveal that these significant contributors often have low levels of knowledge on sustainability. communication is thus key. banks and industry leaders, those seated in this room, have the responsibility to communicate and create the awareness and acceptance of your clients on the importance, risks and opportunities related to the impacts of climate change. alignment. 2050 is the goal for malaysia. but, it is not one that can be achieved if we each march to the beat of our own drums. our collective effort is key if we are to achieve a just and orderly transition. aside from alignment between institutions, even more critical is the need for alignment within institutions. climate objectives decided at the board and management level must be cascaded to the frontlines and across branches to ensure that clients have the support needed regardless of where they are situated. in combination, this alignment will ensure that efforts by each institution are complementary and achieve the maximum impact. proactiveness. the sixth assessment report by the intergovernmental panel on climate change states irrevocably that the window of opportunity to reach the paris agreement goal of limiting global warming to 1. 5 degrees celsius above pre - industrial levels is rapidly closing. decisions of today already have a profound impact on tomorrow's future. financial institutions must be proactive in ensuring that your own institutions and your clients are prepared in the face of a changing climate and economy. financial institutions must both be innovative in developing relevant and effective financing solutions, and facilitate innovation by supporting green technologies or nature - based solutions that may be the key to unlocking a green future for malaysia. adequately addressing the needs of your clients requires addressing the needs of the future industries that your clients will be operating in. the bank is working actively to enhance
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as of the financial system and the economy as a whole. this summer, ecb banking supervision ran a climate stress test that showed that many banks still have their work cut out for them when it comes to managing climate risks. 4 ngfs climate scenarios that stress test was based on a set of scenarios developed by the network for greening the financial system ( ngfs ). the ngfs is a network of more than 120 central banks and supervisors that aims to support sustainable transformation. the ngfs scenarios help quantify the economic impacts of different emission and policy pathways. the most recent update considered physical risks for the first time and took an improved look at regional and sectoral factors. the ngfs is continuing to upgrade the scenarios and their practical usability aβ¬ β also with a view to transition plans. the ngfs is working out how transition plans relate to supervisors'roles and mandates and how they could become part of the supervisory toolkit. 5 conclusion many aspects of transition plans are still up for discussion. the same is true for the role of supervisors when it comes to checking these plans. events like this are good opportunities to consider such fundamental questions. so let us discuss ways forward and find common ground internationally. the goal is clear : to define ambitions and to turn these ambitions into actions. 2 / 2 bis - central bankers'speeches
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sabine mauderer : turning ambition into action - the importance of transition plans for the green transition speech by dr sabine mauderer, member of the executive board of the deutsche bundesbank, at the un climate change conference cop 27, german pavilion, sharm el - sheikh, 9 november 2022. * * * 1 introduction ladies and gentlemen, we have come a long way since the " earth summit " in rio de janeiro 30 years ago. and yet, to limit global warming to 1. 5 degrees, we will have to step up climate action and scale up climate finance. driving forward the green transition will require substantial public - sector and private - sector engagement and financing. let me briefly touch upon three aspects : 1. transition plans 2. scenario analyses and stress tests 3. the role of central banks and supervisors. 2 transition plans financial market actors play a key role in scaling up climate finance. to make informed investment decisions, they need reliable, comparable and forward - looking data. solid and credible transition plans that lay out how financial institutions and corporates plan to achieve their climate ambitions give investors a better idea if a company or a project is worth investing in. the united kingdom has been a pioneer when it comes to transition plans. as from next year, companies listed in the uk must put forward transition plans. in the eu, mandatory disclosure of transition plans could become part of the upcoming corporate sustainability reporting directive. however, there are lots of moving parts with regard to transition plans. open questions include : what types of risks should be addressed, for example, physical or transition climate risks? should the risks related to the loss of biodiversity also be considered? which corporates should have to publish transition plans? big corporates, all listed companies or only certain industries? last but not least : who will check these transition plans, and against which standards? 3 scenario analayses 1 / 2 bis - central bankers'speeches while much about transition plans is still up in the air, more experience is available with regard to scenario analyses. scenario analyses can be a valuable strategic planning tool for companies because they can simulate the outcomes of different sets of factors. this feature can make scenario analyses an important part of transition plans. they allow the resilience of transition plans to be assessed under a variety of scenarios. scenario analyses are also a valuable source of information for central banks and supervisors and can feed into stress testing exercises. this enables central banks and supervisors to gauge the risk exposure of individual institutions as well
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for their achievements at the national level. emphasis upon knowledge sharing and awareness building on the nexus between social enterprise and social impact can make a significant contribution towards promoting a more effective and efficient process to encourage social enterprises across sri lanka. today, you are gathered here to deliberate on current trends, challenges and opportunities in building a social enterprise ecosystem and to help social enterprises and smes to scale up and create social impact, under the timely theme of β think social - produce social - buy social β. i believe this conference would be an effective pathway, particularly for emerging and prospective entrepreneurs to explore new markets for social goods and services and also an opportunity to share knowledge on successful social ventures at both local and global levels. you are all aware that maintaining a stable macroeconomic environment through economic and price stability and financial system stability are the core objectives of the central bank. promoting regional development is one of the agency functions of the central bank. promoting social enterprises is therefore, associated with the broader objectives of the central bank. in that context, the central bank, on behalf of the government, has a mandate for targeted lending to the microfinance, sme and agriculture sectors, as well as youth and women. in implementing this mandate, the central bank has been facilitating and implementing refinance schemes, interest subsidy schemes and credit guarantee schemes targeting the msmes. in addition, the central bank has embarked upon developing a national financial inclusion strategy ( nfis ), to introduce an evidence - based, prioritized, better resourced, and more comprehensive approach to expanding access to financial services. this would be an essential policy tool that will coordinate and implement cross - cutting actions and reforms, to increase financial inclusion in the country. with this national level strategy, it is expected to bring - in under - served segments of the society to the formal financial sector. further, the central bank has been conducting awareness programs on financial literacy and financial management as well as capacity building programs covering entrepreneurship and skills development for the needy segments of the population, with special focus on youth and grass root level entrepreneurs. furthermore, the central bank is attaching priority to improving payments and settlement systems and encouraging the use of electronic and mobile payment systems, with the objective of increasing financial inclusion through reducing transaction costs with the advance of technology. in addition, through the sme national policy framework, the government has also set out the policy direction, the challenges to be addressed and the intervention strategies to be pursued to achieve regional balance and resource efficiency in developing
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to the conclusion of my speech. at the outset, i mentioned that our country faced several difficulties during 2018 which threatened macroeconomic stability. however, in retrospect, i can record that the central bank and the government decisively intervened and implemented several policy measures to mitigate the impact of such challenges and uncertainties. it is evident that these measures have helped us to withstand certain shocks that we faced and to ensure broader stability of the economy in spite of some sectoral imbalances. nevertheless, we do acknowledge that several challenges and threats still prevail and there is a plethora of impending risks that may exert further pressures on overall macroeconomic and financial system stability. we believe that preemptive and effective policy measures would help us to mitigate those challenges and guide our economy and the financial sector in the right direction and ultimately achieve the price, economic and financial system stability to create a conducive enabling environment to improve the living standards of our people. we stand ready to pursue policies and introduce any course corrections if they become necessary in today β s volatile and uncertain world. before i conclude, it is my solemn duty and responsibility to convey my deep sense of gratitude and appreciation to several individuals and parties who constantly supported the efforts of the central bank. first and foremost, i am extremely grateful to his excellency the president and the honourable prime minister for their leadership and guidance. i would also like to thank honourable minister of finance for his support, especially to strengthen the independence of the central bank while ensuring the close coordination between the ministry and the central bank. further, i owe a special debt of gratitude for the ample support and fruitful discussions and inputs from the members of the monetary board of the central bank. my sincere appreciation goes to secretaries to the treasury who served as ex - officio members of the monetary board during 2018. i am also grateful to mrs. manohari ramanathan, mr. chrisantha perera and mr. nihal fonseka whose unstinting support, as members of the monetary board, was extremely invaluable and substantive. i am also grateful to senior deputy governor dr. nandalal weerasinghe, and the deputy governors, mr. k d ranasinghe, mr. s r attygalle and mr. h a karunaratne. their support and contribution in terms of highly professional advice and excellent technical expertise helped me to effectively discharge the duties as the ceo of this iconic institution
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to rise to the challenge, and to act as check - and - balance on public policy. in closing, we are at an important turning point where we face paradigm shift. this is one of the realignment of relationship between the market, regulators, and society. in crisis countries, the balance of the relationship between the financial industry and the society shifts because the cost of financial crisis is born by the society. in emerging asia, public policy including financial regulation comes under pressure from social demand for financial access as well as consumer protection. these naturally accompany the take - off in growth as a result of economic and financial liberalization. both banks and regulators need a proactive strategy to deal with social and political environment that will shift banking environment and regulatory paradigm. thus, the strategy for banks going forward must also include proactive governance and accountability framework that seeks to restore trust in market mechanism, and improve the social and political environment in which they operate. failing to recognize the powerful social forces will result in less than optimal regulations. similarly, the strategy for successful global regulatory reform is to assure an inclusive process, to garner commitment and credibility for the reform. in concluding, the key strategy for dealing with this paradigm shift of known - unknown is based on 3 cs. coordination to deal with our interconnected financial stability. commitment forged by inclusive global reform process. and, communal responsibility, or governance, that can regain trust of society in market mechanism, so that we can rebuild market discipline as a key governance and pillar of the financial system. these are our best bis central bankers β speeches hope for striking the right balance between risk and return, growth and stability, and regulation and market discipline at a time of known - unknown. thank you for your attention. bis central bankers β speeches
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normalization strategy does matter, similar to the analysis of spillovers from see brainard ( 2015a ). a number of recent studies have considered financial spillovers to emes, including rey ( 2014 ) and bowman, londono, and sapriza ( 2015 ). the analysis of hofmann, shim, and shin ( 2016 ) suggests that emes may be hurt more if their banks or nonfinancial corporations have relatively large dollar liabilities, as the larger dollar appreciation associated with the policy rate tool would precipitate greater eme balance sheet deterioration in this case. in this simple example, in which the two countries are hit by identical shocks, the offset in spillovers between the two economies will be complete. if one country faces a larger aggregate demand shock than the other, then the situation becomes more like the one - country case we examined before, the policy adjustments lead to spillovers of different magnitudes, and the offset will be partial. - 9the single core country, presumably magnified by the larger combined global weight of the two economies. now let β s turn to the case in which the two central banks choose to rely on different policy tools. 10 in this case, one country responds to the positive shock by hiking its policy rate to reduce output to its initial level, while the second country responds by shrinking its balance sheet. the country that relies on the policy rate to make the adjustment experiences an appreciation in the exchange rate, a deterioration in net exports and some expansion of domestic demand, while the country that chooses to rely solely on the balance sheet for tightening experiences a depreciation of its exchange rate and an increase in net exports. thus, while both countries achieve their domestic stabilization objectives, whether the requisite policy tightening occurs through increases in policy rates or reductions in the balance sheet matters for the composition of demand, the external balance, and the exchange rate. i highlighted at the outset the commitment adopted by many leading nations to set monetary policy to achieve domestic objectives such that the exchange rate would not be a primary consideration in the setting of monetary policy. in the case that balancesheet and conventional monetary policies have equivalent effects on both domestic spending and the exchange rate, this common principle is straightforward. but if the cross - border spillovers of reductions in the balance sheet and increases in the policy rate are not equivalent, the sequencing of policy rate and balance sheet normalization could have important implications for the exchange rate and external balance. this simulation is shown in
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institution basis is important, but it is not enough. the risk to the financial system is greater than the average risk to individual firms. managing this risk requires new system - wide tools, and here, too, there has been considerable progress. the counter - cyclical capital buffer included in basel iii is a giant step forward. the bank of canada played a leading role in the development of the buffer, which bis central bankers β speeches provides for additional capital to be built up during periods of excessive credit growth in anticipation of a future economic downturn. the reform agenda is now moving beyond the core. this means taking into account the considerable importance of shadow banking or market - based financing. the credit intermediation activities of banks are closely regulated and supervised, and are backstopped with deposit insurance and central bank liquidity. in contrast, market - based financing is less regulated and does not have access to public liquidity support. but it is big, and the crisis highlighted the systemic vulnerabilities market - based financing can pose. for both these reasons the international agenda is now turning to the perimeter of regulation and market - based financing. it will be essential that reforms strike an effective balance between the benefits of market - based financing in terms of competition, diversification and innovation, and the risks related to regulatory arbitrage and systemic vulnerabilities. the role of central banks this leads to the role of central banks in mitigating systemic risks. as i said at the outset, a key role for central banks is to use their panoramic view of the financial system to identify system - wide vulnerabilities. central banks are well placed to recognize risks and prioritize them within a framework that maps potential weaknesses and traces the chain of cause and effect throughout the system. but to do this effectively, we need to raise our game. we need a deeper understanding of the links between financial intermediation, money and credit flows, the balance sheets of households and businesses, and the range of available policy instruments. and this understanding needs to be combined with better detection of emerging financial imbalances. this requires engagement with the private sector and building multidisciplinary teams that bring together economists, financial experts, accountants and lawyers, among others. and it is not enough to simply draw up long lists of vulnerabilities. risks need to be assessed and ranked, providing a clear sense of priority. since the outset of the crisis, the bank of canada has intensified its
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- makers to think about. the very fact that new macroprudential tools are being employed will have an impact on the transmission of monetary policy. using these tools will change the behaviour of both the economy and the financial sector. monetary policy - makers will have to understand these effects. moreover, new trade - offs may arise. consider a situation where excess credit growth requires the counter - cyclical capital buffer to be activated at a time when inflation is already well contained. since the tightening of such a broad - based macroprudential tool could be expected to put downward pressure on inflation, monetary policy can either accommodate this restraint and let inflation return to target over a longer horizon, or it could lower the policy interest rate and risk undermining the effectiveness of the counter - cyclical capital buffer. finally, even the best - designed regulatory and supervisory framework will have limitations. and there could be circumstances in which monetary policy should play a complementary role in support of financial stability. this is more likely to occur in situations where an imbalance is broad - based or is being fuelled by a low interest rate environment. we know that monetary policy has a far - reaching influence on financial markets and on the leverage of financial institutions. this wide - scale impact makes it inappropriate for dealing with sector - specific imbalances, but potentially valuable in addressing imbalances that have spread to multiple sectors of the economy. needless to say, clarifying the role that monetary policy should play in supporting financial stability is an important issue to be considered in the renewal of the inflation - targeting framework. thank you for your attention. i look forward to the discussion and your questions. bis central bankers β speeches
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hold an additional capital buffer ( g - sib buffer ) of 2 %. in addition, it will soon be clear which banks will be subject to stronger requirements in the future, as the bundesanstalt fur finanzdienstleistungsaufsicht ( bafin, the german federal financial supervisory authority ) will shortly decide which banks will be counted as other systemically important institutions ( o - siis ). moreover, bafin has for the first time set the countercyclical capital buffer. this has been 0 % since the beginning of the month. the buffer will now be reviewed every quarter. the governing council of the ecb can demand a higher buffer. at the moment, however, we agree with bafin β s judgement. these examples of implementation in germany bring me to the second part of my speech β the situation in the german banking market. relatively solid situation of german banks is no reason for complacency the german banking sector is, in absolute terms, the largest in the monetary union alongside the french one. in 2014 the total assets of german banks amounted to almost β¬6. 8 trillion ( β¬6, 750 billion ). that corresponds to roughly 250 % of germany β s gross domestic product ( gdp ) and 28 % of the total assets in the monetary union. in germany there is also a comparatively large number of banks. if we leave out the branches of foreign banks in germany, there are around 1, 700 credit institutions. that constitutes one - third of the total number of banks in the monetary union. 2 in view of the size of the german banking sector alone, it plays an important role for the ecb, which is responsible for the whole euro area. the german banking sector is not just relatively large, it also heterogeneous. small and medium - sized banks β less significant institutions ( lsis ) β which include the sparkassen ( savings banks ), account for around 35 % of the total balance sheet of the german banking ecb ( 2015 ), report on financial structures, october. bis central bankers β speeches sector. whereas in other euro area countries the systemically relevant banks, which are directly supervised by the ecb, contribute around 80 % - 85 % of the total assets in the respective member state, this contribution is only around 65 % in germany. you yourselves are, of course, the experts on the position of small and medium - sized banks. a survey carried out by the bundesbank
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to adjust to changing economic and financial market conditions. in the european experience, examples of tension and changing conditions were the episodes of us dollar misalignment in the 1980s and 1990s and the asymmetric shock caused by german reunification in the early 1990s. in the ems / erm, flexibility was ensured through fluctuation bands around central exchange rates, which were either narrow ( + / - 2. 25 % ) or wide ( + / - 6 % ) depending on the degree of convergence of the countries concerned. the system became even more flexible when a + / - 15 % fluctuation band was introduced following the crises in 1992 and 1993. the possibility of adjusting central rates through " realignments " to be agreed by the ministers and governors of the participating member states added to the resilience of the system. second, arrangements for regular consultations among all parties to the system were used, including mechanisms for monitoring economic, monetary and financial developments and for assessing policy responses. in europe, peer reviews of domestic policies became increasingly demanding over time. as a result, the provision of mutual financial assistance was increasingly subordinated to compliance with the policy recommendations made in such reviews or in the context of " realignments ". third, the operational framework made it possible to achieve exchange rate and monetary cooperation among countries with different levels of economic development. nominal convergence proved to be consistent with real convergence, as the countries engaged in the catching - up process were committed to implementing the necessary structural reforms in addition to macroeconomic stabilisation measures and their economic weight was small compared with that of the so - called " core " countries. 4. conclusions a few conclusions of direct relevance to our asian partners may be drawn. as experience with the implementation of the asean and apec arrangements shows, asian countries are developing their own way of strengthening regional integration. this is the right avenue to follow. indeed, asian countries will succeed only if they set realistic objectives in line with their own regional conditions and the corresponding level of political commitment. this is what europeans have done over the last 50 years. at the same time, the european experience could serve as a reference point for assessing the policy requirements and operational aspects of a process of regional integration, possibly including exchange rate and monetary policy co - operation. finally, the european experience shows that a process of regional integration can and should be without prejudice to the broader process of globalisation or to multilateral co - operation within the current institutional framework of the international monetary and financial
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presented is useful to you in your work. community development professionals in our audience may get ideas on how they might deliver their services more effectively. policymakers may look more closely at how workers are affected by their decisions. and researchers may be inspired to begin new lines of inquiry that will shed further light on these important topics. our work at the federal reserve will certainly be enhanced through our continuing exploration of these issues. thank you for taking the time to join us today. 1 the views expressed are my own and not necessarily those of other federal reserve board members or federal open market committee participants. return to text 2 for statistics on education and job effects, see board of governors of the federal reserve system ( 2021 ), report on the economic well - being of u. s. households in 2020 ( washington : board of governors, may ). for more information on students β learning losses, see emma dorn, bryan hancock, jimmy sarakatsannis, and ellen viruleg ( 2020 ), β covid - 19 and learning loss β disparities grow and students need help, β mckinsey & company, december 8, www. mckinsey. com / industries / public - and - social - sector / our - insights / covid - 19 - andlearning - loss - disparities - grow - and - students - need - help. return to text 3 specifically, 46 percent of workers with at least a bachelor β s degree worked entirely from home. nineteen percent of workers with some college, and 10 percent with a high school degree or less, worked entirely from home. see board of governors, report on the economic well - being of u. s. households, in note 2. return to text 4 for statistics on education and job effects, see board of governors, report on the economic well - being of u. s. households, in note 2. for a survey on the effect of the pandemic, see christopher rauh ( 2021 ), β covid inequality project, β webpage, sites. google. com / view / covidinequality. for a working paper on the covid - 19 labor market in the united kingdom and germany, see eliza forsythe ( 2021 ), β current research, β webpage. return to text 5 for the unemployment rates of black and hispanic workers, see u. s. bureau of labor statistics ( 2021 ), β civilian labor force participation rate, β july 2. return to text
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many people have entered the stock market in a short time is not entirely a good thing. besides the losses they may incur and thereby run into financial difficulties, there is a risk of the stock market functioning less well because prices bolt from more fundamental levels. an example of this is the it bubble in recent years. the ease with which firms attract capital in an over - valued market leads to misinvestment which, if it becomes too prevalent, can be harmful for society in general when the economy and the stock market both turn downwards. the behaviour of inexperienced investors is thus a general economic issue. the american study argues that firms, banks and analysts had incentives to talk inexperienced people into investing in new enterprises on grounds that were not entirely sound. many new technology companies were not generating a profit and had to rely instead on paying for wages and equipment by issuing shares. for this to be feasible, stock markets need to be high. in this sense there were incentives for managements to trim reports and statements about their firm β s future profits. at the same time, analysts and investment banks, with potential earnings from launching share issues, lacked incentives to take a critical look at these reports and statements. inexperienced investors did not get the assistance and support they needed. as a sign of this, the paper mentioned that in summer 2000 professional analysts were summoned to washington for a congressional hearing on their market recommendations. the results showed that in the period before the nasdaq index fell as much as 60 per cent, less than 1 per cent of the recommendations had been to sell. the media subscribed to the exuberant mood with reports of rapidly rising share prices and the notion that quick money could be earned in the so - called new economy became the conventional wisdom. in retrospect we know that while share prices for it and other new companies did rise rapidly for a number of years, they could also fall very quickly. could there be a better illustration of a financial market bubble? here i want to call for studies like those in the united states to throw more light on whether and, if so, to what extent there were also similar tendencies in sweden. for the time being we shall have to make do with occasional observations and more anecdotal information. there is little doubt about the swedish stock market also being feverish in the late 1990s, with many inexperienced newcomers. as far as i know, a good many companies were operating at a loss and issued shares. neither did i detect a massive
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to go beyond simple compliance with minimum standards and perform for themselves a comprehensive assessment of whether they have sufficient capital to support their risks. in addition, supervisors should be in a position to provide constructive feedback to bank management on these internal assessments, or " economic capital ", based on their knowledge of industry practices at a range of institutions. finally, pillar iii seeks to complement these activities with market discipline by requiring banks publicly to disclose key measures related to their risk and capital positions. the concept of these three mutually reinforcing pillars has been key to the basel ii effort. pillar i : minimum regulatory capital requirements the minimum capital requirements for credit risk under the a - irb approach are built around the same concepts that underlie all modern portfolio - based methods for systematically measuring credit risk. the first, and perhaps most important, input to this approach is an estimate of the likelihood or probability that a borrower will default. second, lenders need a sense of the size of the loss in the event of a default because they are often able to recover something from a defaulted borrower's assets or from collateral or a guarantee. third, the lender, who often has an undrawn credit line or loan commitment to a borrower, needs to estimate what the amount borrowed is likely to be at the time a default occurs. these key inputs - probability of default ( pd ), loss given default ( lgd ), and exposure at default ( ead ) - are the building blocks of the a - irb approach to estimating capital requirements. many banks are currently working to improve their ability to estimate these quantities, using a wide variety of techniques from expert judgment methodologies to quantitative statistical models. a - irb permits banks to use any or all of these, requiring only that the procedure for estimating these three key parameters be based on empirical information, that it be rigorous, that it be reproducible by third parties, that the process be subject to strong internal controls, and that the results be shown to measure risk accurately. the supervisor must, in fact, validate the estimation procedures and the controls that support them before a bank can use a - irb. as part of the validation process, a bank must demonstrate that these risk measures are in fact used in credit - granting decisions, as well as for other management purposes such as reserving and pricing. the intention is for the supervisor and the manager to focus on the same issues. these estimated risk variables are inputs to regulatory
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diversification and / or limited alternative funding sources, the market continues to force most banks to carry capital positions considerably in excess of regulatory minimums under basel i. for these reasons, u. s. supervisors do not believe the benefits would exceed the costs of requiring most banks to shift to basel ii. however, for the small number of large, complex, internationally active banking organizations, basel i has serious shortcomings, which are becoming more evident with time. developing a replacement to supply to these banking organizations is imperative. first, basel i is too simplistic to adequately address the activities of our most complex banking institutions. basel i categorizes each bank's assets into one of only four categories, each of which represents a certain risk class. each risk class has its own risk weight that is multiplied by 8 percent to get the minimum capital charge : zero for most sovereign debt, 20 percent of 8 percent for most intra - bank exposures and for agency securities, 50 percent of 8 percent for residential mortgages, and 100 percent of 8 percent for all other exposures. these " all other " credits include essentially all corporate and consumer loans, meaning that the whole spectrum of credit quality over which banks do much of their lending - from aaa to the most speculative credits - receives the same regulatory capital charge. the lack of differentiation among the degrees of risk means that the resultant capital ratios are too often uninformative and might well provide misleading information for banks with risky or problem credits or, for that matter, with portfolios dominated by very safe loans. moreover, the limited number of risk classes not only limits the value of the capital requirement but also creates a regulatory loophole that creates incentives for banks to game the system by capital arbitrage. capital arbitrage, in this case, is the avoidance of certain minimum capital charges through sale or securitization of those assets for which the capital requirement that the market would impose is less than the regulatory capital charge. clearly, the market believes that the 4 percent capital charge on most residential mortgages ( 50 percent of 8 percent ) and the 8 percent on most credit cards ( 100 percent of 8 percent ) is higher than the real risk, facilitating the securitization and sale of a large volume of such loans to other holders. this behavior is perfectly understandable, even desirable in an economic efficiency sense. but it means that banks that engage in such arbitrage retain the higher - risk assets for which the regulatory capital
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a european payment solution that can be used across the entire euro area and that runs on a european infrastructure. added to that, we are seeing new players enter the payments market with innovative business models and convenient applications for users. bigtech firms are leveraging their existing digital platforms with international customer bases to expand into new markets. however, these payment solutions are typically run on non - european payment infrastructures. in addition, they often form a fairly closed ecosystem. this brings us to the legitimate question of whether we want to be heavily, or even solely, dependent on 2 / 5 bis - central bankers'speeches a few international players when it comes to an infrastructure as critical as our payment system. the rising geopolitical tensions in recent years have ultimately highlighted the risks that such a dependency can entail. in order to strengthen europe's resilience and independence in payments, it is essential that we start developing our own solutions β made in europe. as ecb president christine lagarde once so aptly put it : ( - ) the best insurance against a more uncertain world is building more resilience at home. with a digital euro, we would have a payment solution in the form of public money for retail payments across the entire euro area β and we would have that under european governance. second, we have been seeing a growing trend towards cashless payments in europe for many years now. this trend has recently accelerated in response to the covid - 19 pandemic. in germany, for instance, the share of cash transactions in consumers'daily payments has fallen to 58 percent, down from 74 percent in 2017. 1 at the same time, ecommerce is booming. cash is currently the only form of central bank money available to non - banks, including the general public. it is public money. all other means of payment for euro area citizens are provided by commercial issuers. public money is a cornerstone of our financial system. it does not only define the unit of account. in combination with regulation, it also ensures that a euro is ( literally ) equivalent to a euro, no matter who issued the means of payment. a digital euro would preserve access to secure central bank money for everyone in the digital world. the third motivation is that a digital euro could promote competition and innovation in european payments. for instance, intermediaries could have the option of offering innovative payment solutions based on cbdc. by providing a programmable and secure digital infrastructure, cbdcs open up a
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benjamin e diokno : launch of the first digital financial inclusion awards speech by mr benjamin e diokno, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the launch of the first digital financial inclusion awards, manila, 13 march 2022. * * * citi philippines ceo, mr. aftab ahmed ; officers from the microfinance council of the philippines, inc. ( mcpi ) headed by mr. eduardo c. jimenez ; colleagues in the bsp ; fellow financial inclusion advocates ; and friends from the media : good afternoon. it is my pleasure to be with you today to celebrate another milestone with the launch of the first digital financial inclusion awards or dfia. the inaugural dfia marks a new chapter in the enduring partnership of citi philippines, mcpi, and bsp, which began in 2002 with the citi microentrepreneurship awards or cma. apart from building on the successful run of the cma, the dfia coincides with the launch of the new national strategy for financial inclusion or nsfi 2022 β 2028, which focuses on advancing inclusive digital finance and the financing access of micro, small, and medium enterprises or msmes. the dfia is also a timely awards program that reflects the experiences, insights, and lessons learned from the covid - 19 pandemic and conveys our commitment to ensure that every filipino β every microentrepreneur β has the means to flourish in the new, digital economy. for the bsp β s part, we remain steadfast in spearheading digitalization efforts and programs supporting msmes and the microfinance sector, which serve as financial lifelines for our microentrepreneurs. our initiatives include bringing digital payments closer to the people by promoting its use in the most common transaction points for most filipinos β the community markets and local transportation services such as tricycles. as such, we continue to actively support the implementation of philsys, our national digital id system. with its e - kyc functionality, philsys will streamline and enhance the onboarding capability of mfis, making it less costly for both the financial institution and the consumer. we also continue to facilitate capacity building and technical assistance for digitalization initiatives of the microfinance sector. there are also efforts to promote responsible use of alternative data to benefit msmes and unbanked individuals with little
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##udential perspective in financial regulation to curb excessive risk on certain sectors. guidelines have been issued for the implementation of macro - prudential policy measures such as caps on loan to value ratio, debt2 / 4 bis central bankers'speeches to - income ratio, higher provisioning and capital requirements for certain sectors. the macroprudential rules have been reviewed from time to time in the light of variations in the vulnerabilities of the system. one among the essential aspects of supervision that are crucial for macro - level monitoring is the efficient exchange of information between supervisors, both at home and abroad. such an exchange provides an essential supervisory tool to support the supervision of banking groups. in this respect, the bank has signed memoranda of understanding ( mous ) with several domestic and foreign regulatory authorities. the banking act 2004 allows the bank to share information with any other central bank, under conditions of confidentiality. we are mindful, at the bank, that exchange of information is crucial with regulators of countries where our banking groups hold a regional presence. the bank has, in this context, held three supervisory colleges since 2013 with its host regulators. in mauritius, a memorandum of understanding ( mou ) was drawn since december 2002 between the two supervisory authorities, namely the bank of mauritius and the financial services commission, on information sharing. over the years, the cooperation and coordination of these two institutions have been enhanced through the setup of a joint coordination committee ( jcc ) and several working groups to coordinate supervisory work on common supervisory areas. the jcc typically meets every two months and reviews areas of interest. in addition, as the first deputy governor of the bank, i have been appointed vice - chairman of the fsc since june 2017. this appointment makes the cooperation between the two institutions more efficient and focused. as part of its reform strategy to reinforce the domestic banking sector, the bank also initiated changes to the corporate structure adopted by the two largest banking groups in mauritius. the separation of banking activities from non - banking activities limits the risk of contagion from nonbanking business to the bank, and allows management to focus on their core business of banking. in line with basel iii requirements, these banks are made to hold higher capital requirements. five domestic banks have been identified as being domestic systemically important banks, and since 1 january 2016, these banks have been required to hold, in a phased manner over a four - year period, an additional capital requirement ranging from 1 to 2. 5 per
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thus, the major aim for financial regulation and supervision is to foster the effective functioning of the financial system in order to enhance the ability to absorb shocks and maintain financial stability. financial instability arises as a result of shocks hitting the financial system, which impede with the payment system and, ultimately, affect the smooth running of business and trade. regulators and supervisors across the globe are charged with managing the health of banks and other financial institutions and preserving the stability of the financial system for two basic reasons : consumer protection and maintain financial stability. accordingly, the ultimate objective of any regulator is to ensure that the banking sector attends to its traditional role of a shock absorber to the financial system. the banking sector has to work towards mitigating any risk between the financial sector and the real economy. let me remind you that banks are also the channels through which the central bank transmits monetary policy to the economy. on this count, the central bank is definitely concerned with bank soundness for the effective transmission of monetary policy. in addition, thanks to its role as lender of last resort, the central bank is also compelled to have complete information on the financial soundness of 1 / 4 bis central bankers'speeches any bank that might call for emergency liquidity assistance. the route towards a framework for bank supervision and regulation can be traced back towards the end of 19741, when the then committee of banking regulations and supervisory practices was established by the central bank governors of the group of ten countries in the aftermath of serious disturbances in international currency and banking markets ( notably the failure of bankhaus herstatt in west germany ). the committee, headquartered at the bank for international settlements in basel, was established to improve the quality of banking supervision worldwide, and to serve as a forum for regular cooperation between its member countries on banking supervisory matters. starting with the basel concordat, first issued in 1975 and revised several times since, the committee has established a series of international standards for bank regulation, most notably its landmark publications of the accords on capital adequacy which are commonly known as basel i, basel ii and, most recently, basel iii.. it is surely not my intention to walk you through these various developments. in 1997, the basel committee issued the basel core principles for effective banking supervision, which have since been revised from time to time. these bcps are the very gospel of effective banking supervision as they provide the lifelines for a sound banking sector. bank supervisors naturally have to engage not only in off
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while the economic outlook is to be examined in the outlook for economic activity and prices that will be published after the next monetary policy meeting on october 28, compared with the outlook presented in the bank β s july interim assessment, the economic growth rate is likely to be somewhat lower than expected. during this fiscal year, the slow recovery pace is likely to continue mainly due to the slowdown in overseas economies and the expected decline following the last - minute increase in demand ahead of the expiration of subsidies for energy efficient cars. the fact that the recent appreciation of the yen is deteriorating business sentiment is also a big factor in putting downward pressure on economic activity. in the recently - released september tankan ( short - term economic survey of enterprises in japan ), business conditions d. i. has substantially improved, compared with three months ago, but the d. i. is forecasted to deteriorate considerably in three months ahead, suggesting that firms have come to be cautious due partly to the appreciation of the yen. however, when looking from a somewhat longer perspective, japan β s economy is expected to return to the moderate recovery path as emerging economies with high growth potential will complete the current mild adjustment phase. while there are various risks associated with such outlook, we need to keep an eye on developments in overseas economies, mainly the u. s. economy. an important risk factor unique to japan would be developments in car sales in the future, and i think that there is considerable uncertainty associated with the sales. from august through early september, the last - minute increase in demand ahead of the expiration of the subsidies for purchases of energy efficient cars was extremely large, which might suggest that consumers have become sensitive to prices. while it is expected that car sales will plunge for some time following the expiration of the subsidies, what pace the sales will subsequently recover will be critical since that would gauge the strength of japan β s potential demand. moreover, the automobile industry has a wide range of supporting industries and its developments affect business conditions of many small - and medium - firms, and thus, from such a viewpoint, the developments warrant close attention. as for prices, the year - on - year decline in the cpi ( excluding fresh food ) has been slowing. however, the possibility that weaker - than - expected economic activity will affect price developments requires vigilance. moreover, there is a risk that the yen β s appreciation will lower consumer prices not only through worsening economic activity but also through changes in import prices.
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prices ; hence, restructuring measures were necessary to address inherent risks in the financial institutions, which were coming from : bis central bankers β speeches β’ high leverage ; β’ falling asset quality ; β’ funding constraints ; β’ insufficient capitalization ; β’ fragmentation and conflicts of interest in supervision ; such measures were associated with public intervention in the financial system ( mostly banks ), increasing further the linkage between β banks and sovereigns β and creating more β moral hazard β. at this point, a financial regulatory reform was necessary at international level, to address such risks. under the guidance of the g20, broader and more comprehensive regulatory reforms were designed, with a special contribution by basel committee, the financial stability board, imf / wb group and many other. such reforms were aiming to : β’ strengthen the resilience of the financial system ; β’ avoid future similar crisis ; in more details, such reforms included : β’ improving the surveillance superstructure of the financial system, through : β establishing institutions with macro - prudential powers to monitor, assess and address systemic risk ( in eu β esrb, ecb ; in us β fsoc ; in uk β fpc ; etc. ) ; β reducing fragmentation and possible conflicts of interest in supervision, and achieve supervision consistency : notably in eu through the β banking union / single supervisory mechanism β : ecb β eba β esrb ; in uk β boe β pra β fpc ; β new directives to ensure timing and effective restructuring of banking business ( brrd ) ; β better design and use of tools to assess resilience of financial institutions to risks, like stress - testing ( in eu β eba / ecb ) ; β’ improving the financial system infrastructure, through : β better protecting the β core β banking activity from other activities like β proprietary investment β through new rules and proposals ( in us β the β volcker β rule ; in uk β proposals of the β vickers β commission ; in eu β proposals in β liikanen β report ) ; β improving clearing and settlement of securities transactions and streamlining financial reporting ; β improving deposit guarantee schemes β’ improving in banks under β basel iii β : β the quantity and quality of the capital ; β the funding structure β their risk management requirements and capabilities ; to summarize, the legacy of previous financial excesses and the following crisis, is a changing financial landscape ultimately determined by international financial regulatory reform, local financial market characteristics and the crisis impact itself. bis central bankers β speeches following
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brian p sack : managing the federal reserve β s balance sheet remarks by mr brian p sack, executive vice president of the markets group of the federal reserve bank of new york, at the 2010 chartered financial analyst ( cfa ) institute fixed income management conference, newport beach, california, 4 october 2010. * * * it is a pleasure to be here today to discuss the management of the federal reserve β s balance sheet. the federal reserve currently holds more than $ 2 trillion of securities in its portfolio, making it a key participant in u. s. fixed - income markets. moreover, the portfolio is managed in a manner that differs from any other market participant, as the federal open market committee ( fomc ) has adjusted the size and composition of the portfolio with the intention of achieving its monetary policy objectives of full employment and price stability. thus, it is important for market participants to understand the balance sheet decisions of the fomc and the implementation of those decisions to fully assess the implications for fixedincome markets. the evolution of the balance sheet going forward will depend on how the economic outlook unfolds. the current forecasts of fomc members show the economy moving in the right direction, with a sustained recovery in gdp, a gradual reduction in the unemployment rate over time, and an increase in inflation towards the level that fomc members see as desirable over the intermediate term. however, the anticipated recovery is relatively tepid and thus delivers only slow progress toward meeting the federal reserve β s dual mandate. indeed, according to their most recently published forecasts, most fomc members expect the unemployment rate to remain above 8. 25 percent through 2011 and the inflation rate to remain below its mandate - consistent level through 2012. in addition, the economy remains vulnerable to downside surprises that could take both output and inflation further away from the fomc β s objectives. the sluggish outlook for the economy and the risks that surround that outlook have raised the possibility of further monetary policy accommodation. the most recent fomc statement indicated that the committee β is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate. β the fomc has several policy tools that it could use to achieve more accommodative financial conditions, as chairman bernanke discussed in his speech at the jackson hole symposium in august. my remarks today will focus on one of those options β changing the size of the federal
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for the u. s. economy is reasonably good, there is considerable work to do over the longer term to improve our nation β s productive capacity and foster an environment in which the gains are spread more evenly. monetary policy is limited in what it can do to address these broader structural issues. however, monetary policy will do its part to ensure the macroeconomic and financial stability that can help in achieving progress in these areas. moreover, even with respect to macroeconomic stability, monetary policy could use an assist from fiscal policy. it is important that monetary policy and fiscal policy work together and not at cross purposes to be able to bolster the economy when it needs support. thank you for your kind attention. i would be happy to take a few questions. 1 see new york city β s return from the brink, remarks at the lotos club, october 19, 2016. 2 raj chetty, nathaniel hendren, patrick kline and emmanuel saez. β where is the land of opportunity? the geography of intergenerational mobility in the united states. β quarterly journal of economics, vol. 129, no. 4, 2014. 6 / 6 bis central bankers'speeches
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singapore and the chinese companies who choose singapore as their financing location will enjoy the harvest of good fortune in time to come. with that, i would like to extend my heartiest congratulations once again to the singapore exchange for its representative office opening in beijing. i encourage the exchange to play its role well in serving the specific needs of the chinese companies with the ambition to grow regionally and in doing so, contribute to the strengthening partnership between the china and singapore. have a great evening, thank you.
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responses, not just market responses, may reinforce this pull - back, by restricting the flow of capital and liquidity outside home markets. not only will this ring - fencing of national systems weaken international banking and trade, it may introduce new risks to financial stability when global banks are not able to deploy liquidity from one part of the banking group to other parts in need. better international co - ordination in the implementation of rules is therefore needed to ensure that they serve their intended national objectives without weakening the global system as a whole and introducing new vulnerabilities. a sound financial system anchored by a core of strong local banks just as we derive lessons from troubled banking systems, it is worth looking too at those that have not run into problems. it is notable that among the jurisdictions with systemically important financial centres, canada, australia, hong kong, and singapore have held up well during the global financial crisis. a little remarkably, the top ten banks in bloomberg β s latest annual ranking of the world β s strongest banks included four canadian banks, the three singapore local banks and two hong kong banks. there is no room for complacency β the financial crisis has shown how volatile financial markets can be and the speed with which contagion can spread. banks have to be constantly vigilant against the build up of risks and maintain strong buffers against contingencies. but let β s look at these four banking systems for a moment, β canada, australia, hong kong and singapore. they share two characteristics in common. ( i ) they are anchored by a handful of banks with a significant share of the domestic market. ( ii ) these β anchor β banks are closely supervised and regulated. several economies, including some in emerging countries, which had completely opened up their banking systems and left themselves without local anchors, have now found themselves to be vulnerable. banking systems need strong anchor players, who are well regulated and diligently supervised, and are able to take the long - view, enabling their interests to be closely aligned with that of the economy. in a crisis too, strong anchor banks may be needed to acquire distressed financial institutions whose failure could otherwise have a systemic impact. but having anchors with a substantial share of the domestic market is not sufficient to ensure resilience. without adequate competition, they will earn what the economists call oligopolistic rent, rather than serve the needs of an economy by innovating and introducing efficient services. anchor banks have to be competitive. this is
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banks'combined exposures exceeded $ 50 billion. 1 money market mutual funds and others that held aig's roughly $ 20 billion of commercial paper would also have taken losses. in addition, aig's insurance subsidiaries had substantial derivatives exposures to aig - fp that could have weakened them in the event of the parent company's failure. moreover, as the lehman case clearly demonstrates, focusing on the direct effects of a default on aig's counterparties understates the risks to the financial system as a whole. once begun, a financial crisis can spread unpredictably. for example, lehman's default on its commercial paper caused a prominent money market mutual fund to " break the buck " and in addition, many of these same banks had borrowed securities from aig's securities lending program for which they had given aig cash as collateral. upon an aig bankruptcy, the banks would have taken possession of the securities instead of receiving back their cash, exposing them to possible losses on those securities. suspend withdrawals, which in turn ignited a general run on prime money market mutual funds, with resulting severe stresses in the commercial paper market. as i mentioned, aig had about $ 20 billion in commercial paper outstanding, so its failure would have exacerbated the problems of the money market mutual funds. another worrisome possibility was that uncertainties about the safety of insurance products could have led to a run on the broader insurance industry by policyholders and creditors. moreover, it was well known in the market that many major financial institutions had large exposures to aig. its failure would likely have led financial market participants to pull back even more from commercial and investment banks, and those institutions perceived as weaker would have faced escalating pressure. recall that these events took place before the passage of the emergency economic stabilization act, which provided funds that the treasury used to help stem a global banking panic in october. consequently, it is unlikely that the failure of additional major firms could have been prevented in the wake of the failure of aig. at best, the consequences of aig's failure would have been a significant intensification of an already severe financial crisis and a further worsening of global economic conditions. conceivably, its failure could have resulted in a 1930s - style global financial and economic meltdown, with catastrophic implications for production, income, and jobs. the decision by the federal reserve on september 16, 2008, with the full
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agency had had such tools on september 16, they could have been used to put aig into conservatorship or receivership, unwind it slowly, protect policyholders, and impose haircuts on creditors and counterparties as appropriate. that outcome would have been far preferable to the situation we find ourselves in now. second, the aig situation highlights the need for strong, effective consolidated supervision of all systemically important financial firms. aig built up its concentrated exposure to the subprime mortgage market largely out of the sight of its functional regulators. more - effective supervision might have identified and blocked the extraordinarily reckless risk - taking at aig - fp. these two changes could measurably reduce the likelihood of future episodes of systemic risk like the one we faced at aig.
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the impact of climate change on aggregated economic variables will not necessarily be substantial in the next few years, the situation for individual businesses might be different. norwegian firms will have to be prepared for the introduction of new climate mitigation measures and new, more environmentally friendly technology. public attitudes and consumer demand patterns are also changing. many of norges bank β s regional network contacts report that they are being affected by the increased focus on climate and sustainability. 2 statutory emission limits and customer demands are steering investment and production methods in a greener direction. a number of retail trade contacts reported that sales are declining because customers are increasingly focused on sustainability. the trend towards lower meat consumption has, on the other hand, given a boost to aquaculture and fish farming. chart : carbon pricing in norway a number of industries are likely to have to comply with a stricter climate policy, particularly industries with low or zero carbon prices today. stricter climate policy requirements may also speed up the introduction of new technologies. some firms will have to undergo major changes, while others may gain competitive advantages. electricity production in norway is largely environmentally friendly and could be more so. the transition to a low - carbon economy may therefore provide opportunities for the norwegian business sector. on the other hand, our large oil and gas sector may expose the norwegian economy to transition risk. this was an issue that then governor of norges bank hermod skanland addressed as early as in 1989 : β many accounts could be given of how they [ international climate agreements ] will affect prices and quantities in our production of oil and gas, β said skanland, and he went on : β but we cannot pretend that they will not be influenced by a climate policy we are pursuing ourselves. at the very least, they will increase uncertainty, and in sum, i believe, in a negative direction β. 3 today, 30 years later, much of norway β s oil wealth has been converted into financial wealth. petroleum revenues have been transferred to the government pension fund global ( gpfg ) since 1996. petroleum revenue spending over the central government budget has been in line with the so - called fiscal rule since 2001. chart : from oil in the ground to financial wealth the dark blue bars in this chart are the present value of government petroleum revenues at different dates, while the light blue bars show the value of the gpfg. the norwegian government has used this model to convert north sea oil and gas wealth into a 3 / 7 bis central bankers
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ΓΈystein olsen : oil and the norwegian economy β the challenges ahead speech by mr ΓΈystein olsen, governor of the norges bank ( central bank of norway ), at a lunch hosted by danske bank markets, new york city, 27 march 2015. * * * accompanying slides can be found on the norges bank β s website : slides ( pdf ). it β s a great pleasure to be in new york city again and an honour to be invited to give a lunch presentation here today. as norges bank, a week ago, published its latest monetary policy report, the economic outlook and the considerations behind the interest rate decision naturally warrant some attention in my speech today. first, however, i would like to give some background information on the economic policy framework in norway, focusing on the sovereign wealth fund β the government pension fund global β the fiscal rule and norges bank β s foreign exchange transfers to the fund. norway is a small, open, natural resource - rich economy. about a quarter of our gdp is related to oil and gas extraction, and a large share of our petroleum production is exported. the oil and gas industry has played a vital role for the strong growth in our economy over the past 40 years. when the first oil was brought to the surface in 1971, gdp per capita in norway was lower than the average for a western economy. the picture has reversed since then. we have gradually caught up to the wealthiest nations. measured by gdp per capita, norway now ranks close to the top. even if we disregard the oil sector β s contribution to growth for a moment, norway β s mainland economy has shown relatively robust developments. the ripple effects from activities on the continental shelf to the wider economy have been wide - ranging. a growing number of firms have targeted the oil industry. a state - of - the - art oil service industry has emerged. for many firms, the contracts on the norwegian continental shelf have been a springboard to new export markets. although norway β s oil age began 40 years ago, the past 15 years stand out. from the end of the 1990s to 2013, the price of north sea oil rose from about usd 10 to over usd 100 per barrel. high oil prices and a profitable petroleum production industry have been accompanied by record - high oil investment in recent years. increased spending of petroleum revenues over the fiscal budget has provided a growth impetus to domestic demand. employment has remained high and unemployment low for many years, even when the financial crisis hit
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sabine lautenschlager : interview with deutschlandfunk interview 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, with deutschlandfunk, conducted by mr klemens kindermann and broadcast on 30 december 2018. * * * ms lautenschlager, the euro is now 20 years old. on 1 january 1999 it became legal tender for 11 out of 15 eu member states, initially in electronic form and then as cash as of 2002. germany has participated from the outset, alongside countries such as france and italy. has the euro been a success? yes, the euro has definitely been a success, and indeed a success on an economic level. many people merely associate the euro with being able to travel more easily to other countries without having to exchange german marks for french francs or spanish pesetas, but it has most especially had economic benefits for our business enterprises and our firms. we are now truly an export - driven country. trade within the euro area has increased and, thanks to the single currency, firms find it much easier to estimate the value of the payments owed to them. they do not run any exchange rate risk. but the euro has also been a success in political terms. we should not forget that the eu, and therefore the euro, has also been immensely important in preserving the peace that we have enjoyed in the euro area, in the eu, for the past 70 years. and since we are stronger together, and as part of the eu and the euro area are able to play a greater role in the global arena, also on the political front, we can do more to ensure peace for the political environment. so, in my view, the euro is a huge success. according to a survey, even now around a third of german people still mentally convert german euro prices to german mark, at least for larger purchases. can you understand that some germans are still pining for the d - mark? i β m not so sure that this mental conversion really is a sign that people are missing the d - mark. especially for the older ones among us, it is simply a better way of estimating the value. some people also do it out of habit. so i don β t think that germans really want to have the d - mark back. i β ve heard that more than 80 % of the german population have a very positive view of the
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##on woods system finally broke down in 1973, total foreign reserves of all countries amounted to about 2Β½ per cent of annual global gdp. west germany β s reserves were about 7 per cent of west german gdp. today, total reserves in the world amount to the equivalent of about 15 per cent of global gdp, up from 10 per cent only five years ago. china β s reserves are close to 50 per cent of chinese gdp. many other asian countries have equivalent ratios around 30 per cent or more ; while, in latin america, foreign exchange reserve holdings are typically in the 10 β 15 per cent range. 10 there are numerous reasons behind this build up. the very high levels of energy prices in recent years have pushed up the reserves of oil producers, and this accumulation may have some logic as they seek to spread over a long period the income gains accruing from a finite resource. the reserves of many asian countries have risen to much higher levels after the 1997 crisis, as a form of insurance against capital flow reversal. indeed the imf advised this after the crisis, advice that has been taken to heart perhaps a little more than the fund intended. one can understand the desire for self - insurance, and particularly as those asian countries that had imf programs in the late 1990s felt the conditions for mutual insurance β through the imf β were very onerous. but the self - insurance provided by large holdings of reserves is costly, especially in the low interest rate environment we see in the major countries. trillions of dollars and euros held on behalf of the citizens of countries across asia ( and elsewhere ) are earning meagre returns and subject to increasing sovereign risk. this cost of selfinsurance is therefore becoming increasingly apparent, a trend that will surely continue as, inevitably, asian productivity levels continue to increase relative to the western countries and their real exchange rates rise. large centres of high saving with portfolios that are overweight in foreign assets whose return is low and whose value is highly likely to go down, measured in the currencies of the holders, amounts to something of a problem. attempts by those holders to exit this position quickly would be, to say the least, highly disruptive. they know that and that is why they do not attempt it, though there is a degree of diversification under way. to paraphrase the old line, if i owe you a few billion, i may have a problem. if i owe you a trillion or two, you may have a problem
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financial entities simultaneously. the recent cyberattack on the third - party provider ion cleared derivatives shows how an attack on one software provider may cascade onto their clients. in this specific case, the disruptions to the trading and clearing of financial derivatives remained limited, but we cannot ignore scenarios where the attacks could have propagated quickly, disrupting the financial system. this case signalled the need for financial entities to review their third - party providers, the providers of these third - parties, their cyber resilience levels and the systemic impact that may ensue from a cyberattack on any of these providers. in particular, it is vital to assess critical service dependencies on third - party products and services which could be disrupted or even terminated as a result of a cyberattack. mitigating measures need to be put in place. against this background, the g7 recently updated its fundamental elements for third - party cyber risk management in the financial sector [ 6 ]. in addition, the ecrb set up a working group in 2022 to support third - party cyber risk management. we must have a cyber resilience mindset at all times. the question we must ask is not if a cyberattack will happen, but whether we are ready to respond when it happens. over the past year, the ecrb has worked on a conceptual model for how the financial infrastructure ecosystem could manage such a crisis if it occurred. it has also developed protocols and networks aimed at supporting a collective, consistent and comprehensive response to a cyber crisis by stakeholders. ransomware the proliferation of ransomware is one of the most significant challenges currently facing financial entities. not only may ransomware attacks result in financial loss, they may also severely disrupt operations. even after a ransom is paid, there is no guarantee the decryption key will actually work or that the stolen data will not be publicly disclosed or further misused to extort victims β customers, for example. ransomware attacks are growing more sophisticated and damaging, which in turn may enable ransomware threat actors to obtain even more resources. 2022 was one of the most active years for ransomware activity. [ 7 ] however, it was also the first year that the majority of victims of ransomware attacks decided not to pay up [ 8 ], which indicates that the approach towards ransomware attacks is changing. authorities globally are stepping up their efforts to counter ransomware. for instance, the g7 issued fundamental principles on ransomware resilience in
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[ 15 ] this opens up new possibilities for malicious individuals to use ai to launch cyberattacks. although ai development firms try to install safeguards to prevent its unethical use, they can be circumvented. the risks from ai need to be clearly understood and addressed through regulation and oversight. by exchanging information among its members and organising roundtables and training, the ecrb is in a strong position to raise awareness of risks at an early stage and accumulate knowledge of these types of threats. for its part, the european commission has proposed a regulation on artificial intelligence that aims to address some of the key risks associated with ai. chart 1 cyber threat landscape for financial market infrastructures in europe note : threats are arranged in descending order of estimated severity. conclusion as we realised some years ago, cyber threats are here to stay. many highly - adaptable threat actors exist who will systematically try to exploit any weakness or vulnerability for illegal purposes. existing threats are becoming more dangerous and new threats are on the horizon. we therefore need to adapt our operational and cyber resilience frameworks constantly at the individual level as well as collectively through strict regulation, enforcement and prosecution. future cooperation between public and private institutions will also be crucial. the ecrb can make a decisive contribution to this effort in relation to the financial system. 1. see forbes ( 2022 ), β the pandemic β s lasting effects : are cyber attacks one of them? β, 20 july. 2. see european central bank ( 2020 ), β cyber information and intelligence sharing initiative ( ciisi - eu ). cyber information and intelligence sharing : a practical example β. 3. see european central bank ( 2022 ), β key takeaways from the ecrb roundtable on red teaming ( tibereu ) β. 4. see financial times ( 2023 ), β the financial system is alarmingly vulnerable to cyber attack β, 6 february. 5. see reuters ( 2023 ), β russian β hacktivists β briefly knock german websites offline β, 25 january. 6. see β g7 fundamental elements for third - party cyber risk management in the financial sector β, october 2022. 7. see techcrunch ( 2022 ), β ransomware is a global problem that needs a global solution β, november. 8. see security week ( 2023 ), β ransomware revenue plunged in 2022 as more victims refuse to pay up β, january. 9
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trend, while the risks of a slowdown are being observed in europe and emerging economies. however, as the interaction among economies worldwide strengthens, there is a high possibility that the currently steady u. s. economy will be affected by the slowdown in the european and emerging economies ( chart 5 ). in some other parts of the world, geopolitical risks have been mounting recently, and a spread of the virus infection in west africa is considered as a new risk factor. b. developments in global financial markets global financial markets had been tied up in a goldilocks situation until summer 2014, in which investors had been searching for yields under low volatility conditions. as the outlook for the world economy became cautious, however, a temporary heightening of investors β risk aversion and an overall increase in market volatility were observed in early autumn. international commodity prices declined, as mentioned earlier, and long - term interest rates fell in reflection of flight to quality. such risk aversion has waned recently, and stock prices are firm globally, but international commodity prices remain weak. it is difficult to judge whether these market movements are simply in reaction to the overheating seen until this summer or else imply a spread of the cautious views, such as the recent argument regarding secular stagnation. interaction between markets during such movements is also hard to explain. however, one factor behind them seems to be the temporary unwinding of excessive optimism, in light of monetary tightening scheduled to be conducted by the federal reserve, and the continued effects of the unwinding in the international commodity markets. another factor seems to be that market participants, particularly in the international commodity markets, are aware of the risk that the slowdown in the european and emerging economies could spread to the u. s. economy, which is leading the world economic growth at present. let me add a few more things about the unwinding that i have just mentioned. market volatility is on the rise, and it seems that the progress in international financial regulatory reforms has had an effect on it ( chart 6 ) : with the implementation of the reforms, it is likely that major market makers β risk - taking activities have been restricted, leading to a decline in the market β s risk - absorbing capacity and the overall liquidity. such issues had been generally kept below the surface, while the central banks of major countries had supplied ample liquidity to support the market. however, market participants have become aware of these
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yoshihisa morimoto : economic activity and prices in japan and monetary policy speech by mr yoshihisa morimoto, member of the policy board of the bank of japan, at a meeting with business leaders, nagasaki, 23 june 2011. * i. * * the current situation of and outlook for the world economy the bank of japan released its latest outlook for economic activity and prices ( hereafter the outlook report ) on april 29. the report presents the scenario for japan β s economy considered to be the most likely by the bank. the bank projects that the economy will return to a moderate recovery path in the second half of fiscal 2011. although supply - side constraints β due to the damage to production facilities and the disruption of supply chains for parts and components caused by the great east japan earthquake in march β as well as constraints on electric power supply are expected to weigh down the economy for a while, these downward pressures are expected to gradually ease, paving the way for a moderate recovery in production. of course, this recovery in production will not be long - lived unless it is accompanied by a rise in sales. a key element in this scenario of a return to a moderate recovery, therefore, is the expectation that exports will increase based on an improvement in overseas economies. consequently, before talking about the domestic economy, let me take a closer look at the world economy. following the recovery from the lehman shock in the autumn of 2008, growth in the world economy temporarily slowed in the summer of 2010. from the end of autumn, economic growth then regained momentum, driven by strong growth in emerging and commodityexporting economies. at present, the pace has slowed somewhat due partly to the effects of soaring crude oil prices. as for the outlook, a number of issues require careful attention, but basically it is expected that β fueled by rapid growth in emerging and commodity - exporting economies β the pace of global growth will soon pick up again and the global economy will continue to expand. the international monetary fund ( imf ) in its world economic outlook released in april 2011 forecasts that the global economy will grow by around 4. 5 percent in both 2011 and 2012. a. advanced economies looking at developments in the global economy in greater detail, it is useful to focus on advanced economies and on emerging and commodity - exporting economies separately. let me start by considering advanced economies. in the united states, from the autumn of 2010 onward, various stimulus measures, such as monetary easing by the federal
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##fold. first, i believe that you should encourage honest disclosure from government entities on their degree of preparedness and the general outline of contingency plans that they are making. also, regulators should use the weight of regulatory control to encourage regulated entities to engage in voluntary self - disclosure. if you represent the media, you have a special obligation to engage in balanced and accurate reportage, not attempting to hide important facts, but not seeking the most sensational coverage. a broad synthesis that captures facts, not drama, is probably most useful. finally, all of us as members of the public have an obligation to listen to the most responsible voices. we should recall that in times of uncertainty, many views are expressed ; only the most factually accurate deserve our attention.
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necessary analytical framework for thinking about monetary policy. and i venture to say that it matters to policy outcomes what frameworks policymakers use : whether it is, say, the quantity theory of money, the monetarist explanation of inflation, the linear versus non - linear phillips curve, or animal spirits and inflation expectations β just to name a few. my own view, as i implied, is that the natural rate has to be at the heart of modern monetary policy analysis. in recent years, some have argued that r * has risen. spurring this rise, it is argued, are the increase in investment needs due to the green energy transition, and also artificial intelligence and growing defence spending. on the other hand, population ageing and the deterioration in the global division of labour caused by geopolitics could weaken the dynamics of the economy and productivity growth, and thus also negatively affect the pace of investment. this would contribute to keeping real interest rates down. so, the trajectory of r * remains unclear for now β that's why we need to continue and dig deeper. slide 6. hours worked and persons in employment another focus of analysis should be the labour market, not least since it is closely linked to the apparent slowdown in productivity growth. in recent years, euro area employment growth has been robust, and the unemployment rate is at a historical low of 6. 4 %. however, the number of hours worked has increased at a significantly lower rate than the number of people in employment. this means that the euro area labour market β when measured as hours worked β has not developed particularly favourably, and correspondingly, productivity growth looks somewhat better when measured per hour. 4 / 5 bis - central bankers'speeches we also need to gain a better understanding of how demographics affect the labour force participation rate and the development of the labour force in the future. during the past few years, we have seen large and exceptional shocks originating from the labour market. in addition to the sharp decrease in average hours that led to an increase in the demand for labour, immigration has increased labour supply and helped to constrain wage pressure. taking these shocks into account makes the developments in the labour market of the past few years look much less mysterious than is often claimed. understanding what happens in the labour market is crucial for understanding wage and inflation dynamics in the future. currently wage increases in the euro area are driven by both compensation for past inflation surprises and still relatively strong labour demand ( from the services sector ).
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tender in denmark until 31 may 2025 and that it's held by many honest danish citizens. we must ensure for their sake that the recall is well organised and that it's being conducted in a good way. i'm therefore very pleased with the statement from finance denmark that you will take good care of your customers, while also complying with the anti - money laundering rules. i would like to acknowledge that. i would also like to thank you for the good and constructive collaboration i've had with the financial sector during my initial period of just under a year as danmarks nationalbank governor. 5 / 6 bis - central bankers'speeches we have many important tasks ahead of us. i look forward to working with all of you. thank you for your attention. 6 / 6 bis - central bankers'speeches
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european central bank has hiked its policy rate from minus 0. 5 per cent to 4 per cent since last summer. experience shows that it takes some time before higher interest rates are fully reflected in activity in society. and then some more time before the dampened demand affects inflation. therefore, the interest rate increases haven't yet been fully passed through to activity in denmark. but the banks and those who borrow money are affected by the higher interest rates. the interest rate policy pursued by the ecb β and which we implement in denmark under our fixed exchange rate policy β has suited the danish economy well. developments in recent years have illustrated how the fixed exchange rate policy contributes to stability in denmark : even when the economic waters around us are slightly rougher to navigate in. although the interest rate increases have been significant, most of us in this room remember when interest rates were even higher. this gives rise to the question : when are interest rates high? and when are they high enough? this is a very good question with which scholars in many countries are grappling at the moment. i don't have the answer. but our opinion is that higher interest rates will β sooner or later β get in - flation under control. at the same time, it's important that fiscal policy doesn't counteract the effect of higher interest rates. 2 / 6 bis - central bankers'speeches monetary policy works through, among other measures, the interest rates that customers encounter in the banks. and our analyses show that interest rate changes in the banks have occurred faster in denmark than in the euro area. the difference between the lending rate and the money market interest rate β that is the lending margin β has decreased during the past years. this reflects competition between the institutions to lend money. at the same time, we're seeing remarkably low impairment charges and losses. conversely, banks have had less need to attract deposits because depos - its have been growing over several years. the large customer funding surplus reduces the banks'incentive to raise their deposit rates. we can see that households β including those with large deposits β have so far only sought alternatives such as time deposits and bonds to a lim - ited extent. i believe it's important to remember that deposit rates are set in the mar - ket and that transparency and competition between the financial institu - tions are key elements in keeping prices in check. and that leads me to your advisory task. you are well experienced in
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is likely to have much less impact. wholesale funding guarantee has now expired. term auction facility relates largely to the acceptance of residential - mortgagebacked securities. with the termination of these special programmes, the reserve bank does not feel it needs quite as much risk - based capital on its own balance sheet, and consequently has returned $ 45 million to the crown. 4. the world is on two different recovery paths a feature of this recession is that we are seeing quite different troughs and recoveries in two regions of the world, as shown in the figure. in the β east β, defined as emerging market economies and commodity exporters, the cycle has been more shallow, and a very strong β v - shaped β recovery is underway. of most relevance to us, china and australia are both in this group, but also other asian economies, and oil exporters and commodity exporters from latin america, southern africa, south - east asia and australasia. in the β west β, an icelandic - style cloud of despondency still settles over the old northern economies with large financial sectors and high production costs. in the us, eurozone, and particularly uk and japan the cyclical trough was historically deep, and the recovery looks slow and fragile. the difference in these two zones shows up clearly in the figure. the eastern region lost 2. 5 per cent growth through the crisis, but is now back on to a pre - crisis growth trend, and has clearly passed pre - crisis income levels. the western region lost a lot more income through the period β around 4. 5 per cent and is struggling to resume its ( much lower ) precrisis growth trend, and has not yet made up for lost income. the economic recovery is involving some degree of global rebalancing. the huge current account deficits of the west and surpluses of the east have been partly reduced as a result of a rebalancing of consumption and savings. the broader economic and geopolitical implications of rebalancing are only now starting to be seen in the g20 and in bilateral negotiations. 5. our own recovery is externally - driven new zealand has been considerably helped during this recovery period by a strong china and emerging market growth in consumption, a strong minerals - driven australia, and some other market and climatic factors. we saw a commodities boom in the pre - crisis year, but few people expected to see it repeated immediately post - crisis. most would be aware that world dairy
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the reserve bank's refinance rates ( april 1997 ). the subsequent introduction of fixed rate repo ( december 1997 ) helped in creating an informal corridor in the money market, with the repo rate as floor and the bank rate as the ceiling. the use of these two instruments in conjunction with omo enabled rbi to keep the call rate within this informal corridor for most of the time. subsequently, the introduction of liquidity adjustment facility ( laf ) from june 2000 enabled the modulation of liquidity conditions on a daily basis and also short term interest rates through the laf window, while signaling the stance of policy through changes in the bank rate. gains from reform it has been possible to reduce the statutory preemption on the banking system. the cash reserve ratio ( crr ), which was the primary instrument of monetary policy, has been brought down from 15. 0 per cent in march 1991 to 5. 5 per cent by december 2001. the medium - term objective is to bring down the crr to its statutory minimum level of 3. 0 per cent within a short period of time. similarly, statutory liquidity ratio ( slr ) has been brought down from 38. 5 per cent to its statutory minimum of 25. 0 per cent by october 1997. it has also been possible to deregulate and rationalise the interest rate structure. except savings deposit, all other interest rate restrictions have been done away with and banks have been given full operational flexibility in determining their deposit and lending rates barring some restrictions on export credit and small borrowings. the commercial lending rates for prime borrowers of banks has fallen from a high of about 16. 5 per cent in march 1991 to around 10. 0 per cent by december 2001. in terms of monetary policy signals, while the bank rate was dormant and seldom used in 1991, it has been made operationally effective from 1997 and continues to remain the principal signaling instrument. the bank rate has been brought down from 12. 0 per cent in april 1997 to 6. 5 per cent by december 2001. it is envisaged that the laf rate would operate around the bank rate, with a flexible corridor, as more active operative instrument for day - to - day liquidity management and steering shortterm interest rates. a contrasting feature in the positions between 1991 and 2001 is india β s foreign exchange reserves. the monetary and credit policy for 1991 - 92 was formulated against the background of a difficult foreign exchange situation. over the period,
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than half a century since its inception, the scheme has evolved in line with the development agenda for the country. the lead bank scheme relies on a coordinated approach at all levels amongst banks, financial institutions and the government machinery for effective delivery of banking services to all sections of the economy. this co - ordinated approach has yielded significant results in terms of expanding banking access and improvement in the flow of priority sector credit. 1 / 5 bis - central bankers'speeches more recently it has also led to the expansion of digital payments with slbcs taking the lead role in the objective of making every district in the country digitally enabled. i am happy to note that 354 districts are now digitally enabled. ten states including karnataka and six union territories have achieved 100 per cent coverage of districts under this initiative. indeed, the lead bank scheme can be a powerful tool to bring about transformative change. as ldms, ddms and ldos, you are the very pillars on which this scheme rests, playing a crucial role in driving financial inclusion at grassroots level. your efforts in extending banking services and credit access to underserved regions would undoubtedly bring immense satisfaction to all involved. having served as the convenor for the slbc in telangana, i can personally attest to the deep fulfilment that comes from making a tangible difference in people's lives through the lbs fora. a common question we face is, are we doing enough? how much more remains to be done? in 2021, the reserve bank introduced the financial inclusion index ( fi - index ), which tracks progress across 97 indicators in three key dimensions : ( i ) access ( ii ) usage ( iii ) quality. the index which was at 53. 9 in march 2021 now stands at 64. 2 for march 2024 as a testimony to the efforts that has been put in by all of you. india has made significant strides in enhancing'access'to banking and financial services, reaching even the most remote areas. however, there is still considerable ground to cover in deepening financial inclusion. this requires greater focus on promoting'usage'and improving the'quality'of services. in both these critical areas, the role of lead district managers from the banks and district development managers from nabard is indispensable. in this context, i would like to outline a few key expectations. know your district well firstly, it is imperative that you cultivate a deep understanding of your respective districts - so, you should truly'know your
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set exemplary standards, and become pioneers in developmental activities, ensuring continued progress of your districts and the state of karnataka. as you may be aware, the reserve bank of india is celebrating 90 years of its foundation this year. looking ahead to the next decade, our journey towards rbi @ 100, we have formulated strategies aimed at positioning the reserve bank as a model central bank of the global south. one of our key objectives is to deepen financial inclusion by enhancing the accessibility, availability, and quality of financial services for all segments of society. i urge each of you to actively support us in realizing this vision by contributing to inclusive growth, ensuring that no one is left behind in accessing essential financial services, and fostering economic empowerment at the grassroots level. i would like to leave you with a quote from rashtrakavi kuvempu ( an extract from his epic work " malegaalli madumagau " ) : illi yaaroo mukhyaralla no one is precious here yaroo amukhyaralla no one is unimportant here illi ellakkoo ide artha everything has significance here yavudoo alla vyartha nothing is useless 4 / 5 bis - central bankers'speeches! neerellevoo theertha! all the water is holy! in the context of today's gathering, it would mean : all groups of people are equally important and should be financially included ; every effort taken for financial inclusion is meaningful and nothing goes wasted. with this i would like to end with my best wishes to each one of you. thank you! 1 jaitly, s., thangallapally, l. s., & microsave. ( 2022 ). decoding government support to women entrepreneurs in india. in niti aayog, www. microsave. net [ report ]. https : / / www. niti. gov. in / sites / default / files / 2023 - 03 / decoding - government - support - towomen - entrepreneurs - in - india. pdf ( last accessed on september 16, 2024 ) 5 / 5 bis - central bankers'speeches
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k c chakrabarty : developing the humanware to improve customer service address by dr k c chakrabarty, deputy governor of the reserve bank of india, at the launch of the course β customer service & banking codes and standards β, at the indian institute of banking & finance ( iibf ), mumbai, 12 november 2010. * * * assistance provided by shri d g kale in preparation of this address is gratefully acknowledged. 1. mrs udeshi, chairperson, banking codes and standards board of india ( bcsbi ), shri o. p. bhatt, president, indian institute of banking and finance ( iibf ) and chairman, iba, shri b. m. mittal, ceo, bcsbi, shri bhaskaran, ceo, iibf, distinguished guests, ladies and gentlemen. it gives me great pleasure to be here to launch the certificate course on β customer service and banking codes and standards β that has been designed by iibf in association with bcsbi. iibf has played a pivotal role in developing the professional skills of bankers, and in tune with times, it is also a leading organization in providing training, consultancy and counselling to the business correspondents, recovery and marketing agents of banks. 2. the iibf was set up in 1928 as indian institute of bankers ( iib ) with a mission to β develop professionally qualified and competent bankers and finance professionals primarily through a process of education, training, examination, consultancy / counselling and continuing professional development programmes β. the mission statement of the iibf and the timing of the launch of the new certificate course in customer service go hand in hand. i must compliment and congratulate shri bhatt and shri bhaskaran and his team for conceptualising, designing and developing this particular course. i am also happy to note that bcsbi was closely involved in designing this course. as you are aware, the banking ombudsman scheme, which has been in existence for some time now, does not look into systemic issues with a view to enforcing a prescribed quality of service. it was in this context that the bcsbi was set up as an autonomous body to monitor and ensure that the banking codes and standards voluntarily adopted by the banks are adhered to in their true spirit. the codes represent the minimum standards of service which a customer can expect from a bank including transparency in services, prohibition of unsolicited marketing and compensation for delays or
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losses incurred by a customer. two separate codes, one catering to customers and the other to msmes have been brought out. while the codes are intended to instil confidence in the customers when dealing with banks, the ultimate objective in following these codes is to forge a long - lasting and harmonious customer - banker relationship which will stand the test of time. it is indeed very appropriate that iibf is launching a course in association with bcsbi on the subject. 3. let me first begin by asking why, as a regulator, am i here today? the reason is two - fold. the reserve bank of india, as you know, dons many hats which many other central banks do not. one of its many roles is developmental in nature, i. e. nurturing and promoting institutions that have gone on to play a key role in our financial system. it is coincidental that the rbi has had a role in development of all the three institutions whose representatives are present here on the dais. these institutions are gems among the institutions promoted / sponsored by rbi. the other reason has to do with a question which i am often asked and which is, β why, as a regulator, are you concerned about customer service? why is it not left to the market forces and competition to take care of? β. the answer to this lies in the fact that in any service industry where market forces and competition play out freely, it may well have been the case, but banking is a highly regulated service industry with very stiff entry norms and customer service cannot entirely be left to the market forces and, hence, the regulator has a role. in fact, as per the banking regulation act, 1949, banking business has to be carried out in the public interest and, as a corollary, wherever customers interest are involved, regulator has an obligation towards the customers. customer service in banking and finance industry has certain special features that need to be very carefully understood and appreciated by all concerned. as such the free market mechanics of competition may not be easily replicated here in terms of a choice for the customer to switch on or switch off a relationship merely on the basis of pricing. further, globally the trend is towards treating the customers fairly ( tcf ) which is becoming an integral part of the regulatory and supervisory manual. those who are following international developments will be aware that regulations on tcf will become more and more stringent in the days to come. 4. customer service is a challenging issue
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external driving forces guiding our country toward the european family. 3. bank of albania albania had its first central bank institution in 1913. it was founded as an outcome of the agreement of the ismail qemali government with some representatives of an austrianhungarian bank group and of the banca commerciale italiana. the institution did not live long due to the outbreak of the first world war and it was not before the year 1925 that the bank β s activity started under the name of the national bank of albania. during the years 1944 - 1992, it was named state bank of albania, which at that time exercised both the functions of a central bank and those of a commercial one and only after 1992 the two - tier system is established and bank of albania starts performing the functions of a modern central bank. based on a parliamentary law it has the attribute of the monetary and supervisory authority of the country. the primary objective of the bank of albania is to achieve and maintain price stability. it seems that this way bank of albania has solved the dilemma of choosing the key objective of monetary policy in favor of price stability will contribute to sustainable growth and to generate equilibrium in the labor market over long term period. from the historic prospective, since the early stages of transition we adopted a monetary targeting regime. the choice was made believing in the friedman β s postulate that inflation is wherever and always a monetary phenomenon. direct control on money growth, credit growth and interest rates were the operational tools of monetary policy aiming at the control of money supply, which served as the intermediate objective. a free floating regime of exchange rate was chosen to match the monetary targets. other forms of exchange rate regimes were never discussed due to lack of adequate foreign exchange reserves and therefore the incapability to support a fixed rate of domestic currency. in addition the floating regime was chosen as an automatic stabilizer of the fast growing current deficits. therefore the choice between different alternatives of stabilization program was conditioned ( and easy ). in general this regime has resulted successful and still continues to be the operating framework of the monetary policy. i believe that its success was conditioned by low financial intermediation and under developed financial markets. the presumed stable relationship between money and transactions and permitted for confident monetary programming based on the fisher β s equation of exchange. however, as the efficiency and speed of financial intermediation increased and financial innovation set in motion, this policy setup become obsolete. bank of albania moved away from direct control on money in favor of indirect control of money
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muhammad bin ibrahim : perspectives and issues in navigating the development of the malaysian financial market remarks by mr muhammad bin ibrahim, governor of the central bank of malaysia ( bank negara malaysia ), at the asean risk conference 2017 β perspectives and issues in navigating the development of the malaysian financial market β, kuala lumpur, 24 may 2017. * * * thank you ladies and gentlemen. two years ago, i spoke at this very conference on asean integration. two years on, i am pleased to share that we have achieved substantial progress on this front. among others, the asean banking integration framework and the bilateral frameworks to settle trade in local currencies are two significant milestones for financial integration. today, i intend to speak on a few issues relating to asean integration and outline the latest developments and challenges in the domestic financial market. for decades, globalisation has been the cornerstone of global economic development. globalisation was a way to bring the countries of the world together to gradually flatten the intercountry disparities in income, wealth and overall standard of living, in hope that the motivation for war and conflict among countries would gradually reduce as disparities narrowed. globalisation expanded trade and the free flow of capital, allowing countries to reap the benefits of comparative advantage while facilitating the growth of new sources of income and the transfer of knowledge and technologies. truth be told, globalisation bore fruits that lead to greater economic growth, prosperity and wealth. however, in the dogmatic pursuit of inter - country convergence, intra - country disparities have become increasingly apparent. as nations across the globe were brought closer together, citizens within each nation were pulled further apart, separated by the rising inequality, the declining share of labour income versus capital, and the displacement of workers. the unfettered market openness by advanced economies had caused unintended consequences that have ignited the rise to populism, inward - looking tendencies and potentially protectionist policies. if left to run its course, this will be a setback to global prosperity. in asean, we are no stranger to this perspective. our own experience is highly relevant. we learnt from the asian financial crisis, that pushing countries to adopt policies when readiness is suspect is a design for failure. without the necessary preconditions of sound institutional frameworks, adequate safeguards and capacity and robust domestic financial markets, premature financial liberalisation will expose the economy to waves of destabilising short - term speculative flows. when these
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measures such as merger if they are not likely to survive on their own from a medium - to long - term perspective. as previously mentioned, although the number of financial institutions has already decreased substantially, further integration should not be ruled out if necessary. the government recently announced it would consider merger promotion measures and i hope they will be implemented expeditiously. thorough preparation is also needed to avoid credibility in the financial system being substantially eroded or system stability questioned in the process of disposing of npls. the idea that appropriate measures, including the injection of public funds, might be necessary in such a case is what i have repeatedly advocated. at the same time, the bank, together with government measures such as capital injection, is ready to discharge its responsibility as lender of last resort in providing liquidity when deemed necessary to maintain financial system stability. introduction of fixed asset impairment accounting my bottom line thinking is as i have explained so far, and now i would like to consider challenges for financial institution management from different viewpoints such as the accounting system, which is a financial system infrastructure, and also strengthening the profitability of financial institutions. the precise amount of npls has always been a matter of debate, and thus various improvements have been made such as clarification of the definition of npls and also the recognition process centering on the introduction of self - assessment. however, for financial institutions to precisely grasp detailed conditions of borrowers, it is imperative that balance sheets correctly reflect their financial conditions. the improvement of accounting rules is quite an important task in order to pursue dialogue between financial institutions and borrowing firms. although japan β s accounting rules recently underwent substantial change because of, for example, the introduction of mark - to - market accounting for financial products, there still remain challenges, especially the introduction of fixed asset impairment accounting. when the profitability of fixed assets is lower than anticipated, fixed asset impairment accounting rules require firms to recognize differences from initial plans as losses, thereby aiming at narrowing divergence between balance sheets and the actual business conditions of firms. the business accounting council released an exposure draft this april and fixed asset impairment accounting rules are scheduled to be introduced from fiscal 2005. the introduction of the new accounting rules will impact corporate management, but in view of their significance i hope for their early introduction following thorough discussion. it goes without saying that such accounting principles are also applied to financial institutions. because of balance sheet regulations, especially capital adequacy requirements, accounting rules have extremely important meaning for financial
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council on economic and fiscal policy 2. to foster such new developments and ensure that they bear fruit, it is important not only to promote deregulation decisively, but also for private firms to take advantage of new business chances utilizing their management resources to the extent possible. now, let me move to another important issue, that is, the financial system problem. recent developments and challenges facing the financial system current assessment of the financial system the blanket guarantee for time and savings deposits was terminated in april this year and will be totally terminated for all deposits from april 2003. simply put, the world will shift from perfect protection of depositors with the public sector shouldering the burden to self - responsibility in principle, and, in this sense, fiscal 2002 will be a turning point for japan β s financial system. it is ten years since the first bankruptcy of a financial institution was resolved by deposit insurance in april 1992. six years have passed since the framework of government guarantee was introduced to the deposit insurance system, and four years have passed since a framework to cover losses was established by the government. in the meantime, deposits with failed financial institutions have been fully protected. in addition, various arrangements have been devised for the sake of financial system stability such as the injection of public funds to financial institutions and establishment of safety nets with respect to securities and insurance companies. the development of such arrangements has, of course, been closely related to various problems associated with the bursting of the bubble and many financial institutions being forced to fail. in fact, the number of financial institutions - banks, shinkin banks, and credit cooperatives - has decreased by more than 30 % from about 1, 000 ten years ago to less than 700 at present, partly reflecting the progress of integration such as mergers. in our estimation, the amount of npls to be disposed of by financial institutions, that is the sum of write - offs and loan - loss provisioning, has reached more than 80 trillion yen over the past ten years. this figure suggests that financial institutions have disposed of a substantial amount, more than 17 % of the loans they held ten years ago. stated differently, with the npl problem unresolved, japan β s financial system has significantly contracted in terms of the number of players and volume of assets. however, despite the painful experience of the past ten years, we have yet to restore credibility in our financial system that still receives harsh criticism from both home and abroad. financial statements for fiscal 2001 in fact, all major banks went
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addressing romanians who are studying or have studied in the west, i cannot help but make the parallel with the revolutionaries of 1848, who engineered the rapid transformation of the romanian society and created the modern state almost from scratch. of course, that does not mean you are expected to build a new romanian state as they did, but you can certainly act as a similar vector of change in the romanian society, be it in social values, politics, economy or culture. therefore, no pressure β¦ now, some of you must surely be wondering what a central banker like me and it have in common. i could hardly be described as an it expert, but i am following developments in the sector, not only because they matter in the global economy ( explaining a good deal of the productivity wedge between the us and eu starting in the mid - nineties, for instance ), but also because the it & c sector is increasingly relevant for the romanian economy β its share in gdp is now nearing that of construction and its contribution has become instrumental in building a surplus on the 1 / 4 bis central bankers'speeches international trade in services. solid technical skills, good command of foreign languages and certain versatility are assets that continue to attract investment in this sector in romania. although infrastructure quality, in general, is not a strongpoint for romania, communication infrastructure is β we are enjoying some of the best speed for broadband internet connection in the eu if not in the world, not to mention that access is comparatively much cheaper. the evolution of the it sector is part of a wider process of sectoral shifts in the domestic economy, visible across several emerging markets : the services sector gaining ground to the detriment of agriculture and industry, whose roles have been diminishing. likewise, industry has also shown structural shifts, i. e. the lower share of energy and labour - intensive sectors in favour of increasingly technology - intensive industries. with the risk of touching on a delicate topic these days, given the location of this conference, i have to mention that eu membership has played a major role in romania β s development. and i am not saying that only because i was the head of the government that started the eu accession talks back in 2000. across the years, there were a lot of discussions with regard to romania β s readiness for eu accession. even romano prodi, the head of the european commission at the time, warned me on several occasions that we were not ready for accession, not only from an economic and social point
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about future developments, and growing debt service due to higher interest rates, ( ii ) the close link between the banking sector and the government sector, and ( iii ) the polarization of credit institutions by size. the slowdown in lending, which started in the second semester of 2022, was also due to the rise in financing costs amid the tightening of both monetary policy stance and 2 / 3 bis - central bankers'speeches credit standards. in the second quarter of 2022, banks tightened credit standards for loans to non - financial corporations and to households, and were expected to continue to do so in the third quarter of 2022. the prolonged energy crisis, the heightened geopolitical tensions and the mounting uncertainty about the economic outlook prompted banks to reassess the level of risk. in respect with challenges raised by climate change and energy efficiency, as of may 2022, the nbr started collecting information on green loans from banks. the data shows that, between may and september 2022, companies took out green loans totalling 976 million lei ( 0. 56 percent of the corporate loan portfolio ). the composition of these green loans was dominated by credit for green buildings ( 42 percent ), followed by loans for electricity and heating and cooling systems ( 24 percent ) and those for energy efficiency ( 13 percent ). last but not least, a word on economic growth. for 2022, the annual real gdp growth is estimated to reach about 5 percent, which is lower than the one recorded in 2021. for the past year, growth was driven by the substantial advance during the first part of last year. in 2023 domestic economic activity is projected to lose significant momentum, due to certain substantial adverse influences, as previously mentioned. a favourable contribution to economic growth is expected to come, particularly over the medium term, from european funds, including the next generation eu programme. with these in mind, i now invite vice - president pavlova to take the floor. afterwards, i wish you all fruitful discussions, stemming from the eib investment survey findings. thank you. 3 / 3 bis - central bankers'speeches
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risks. in that spirit, the federal reserve is also in the process of developing an enhanced quantitative surveillance program for large bank holding companies. supervisory information will be combined with firm - level, market - based indicators and aggregate economic data to provide a more complete picture of the risks facing these institutions and the broader financial system. making use of the federal reserve β s unparalleled breadth of expertise, this program will apply a multidisciplinary approach that involves economists, specialists in particular financial markets, payments systems experts, and other professionals, as well as bank supervisors. the recent crisis has also underscored the extent to which direct involvement in the oversight of banks and bank holding companies contributes to the federal reserve β s effectiveness in carrying out its responsibilities as a central bank, including the making of monetary policy and the management of the discount window. most important, as the crisis has once again demonstrated, the federal reserve β s ability to identify and address diverse and hard - topredict threats to financial stability depends critically on the information, expertise, and powers that it has by virtue of being both a bank supervisor and a central bank. the federal reserve continues to demonstrate its commitment to strengthening consumer protections in the financial services arena. since the time of the previous monetary policy for further information, see board of governors of the federal reserve system ( 2009 ), " federal reserve issues proposed guidance on incentive compensation β, press release, october 22. report in july, the federal reserve has proposed a comprehensive overhaul of the regulations governing consumer mortgage transactions, and we are collaborating with the department of housing and urban development to assess how we might further increase transparency in the mortgage process. 8 we have issued rules implementing enhanced consumer protections for credit card accounts and private student loans as well as new rules to ensure that consumers have meaningful opportunities to avoid overdraft fees. 9 in addition, the federal reserve has implemented an expanded consumer compliance supervision program for nonbank subsidiaries of bank holding companies and foreign banking organizations. 10 more generally, the federal reserve is committed to doing all that can be done to ensure that our economy is never again devastated by a financial collapse. we look forward to working with the congress to develop effective and comprehensive reform of the financial regulatory framework. for further information, see board of governors of the federal reserve system ( 2009 ), " federal reserve proposes significant changes to regulation z ( truth in lending ) intended to improve the disclosures consumers receive in connection with closed - end mortgages and home - equity lines of
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it is necessary to restore the flexibility and adaptability of japan β s economy and unlock its potential, and thereby raise firms β and households β growth expectations. in my view, now is the β window of opportunity β toward overcoming deflation. there is a prospect that the u. s. and the chinese economies, which have substantial effects on japan β s economy, will return to the recovery path. against such a backdrop, as i mentioned earlier, the possibility of japan β s economy, which has been stagnant since last year, to return to the moderate recovery path toward the middle of the year has been increasing. also, in our outlook for economic activity and prices, the possibility for the year - on - year rate of change in the cpi excluding volatile food to reach 1 percent in 2014 has gradually come in sight. under such changes, if the inflation rate actually rises, people β s inflation expectations are also likely to increase. we should not miss this β window of opportunity. β based on such line of thinking, the bank has further enhanced its past line of policy of β setting a goal at 1 percent for the time being β and set 2 percent as the β price stability target. β under the target, the bank will pursue monetary easing aggressively and aim to achieve the target at the earliest possible time. with regard to such monetary policy conduct of the bank, we have sometimes been asked whether the bank has adopted the so - called β inflation targeting. β in that regard, looking at the monetary policy conduct of other countries which have actually adopted β inflation targeting, β for example, the united kingdom, the bank of england conducts flexible monetary policy which takes into account not only developments in prices but also those in other areas, including the real economy and asset prices. the bank β s decision this time of β price stability target β is the same as the one many central banks are currently adopting, and it is generally called β flexible inflation targeting. β within such monetary policy framework the bank intends to make as decisive policy responses as ever while steadily examining the situation of economic activity and prices. introduction of β open - ended asset purchasing method β next, how to pursue aggressive monetary easing. in particular, let me explain the newly introduced β open - ended asset purchasing program. β the bank will pursue aggressive monetary easing, aiming to achieve the β price stability target, β through a virtually zero interest rate policy and purchases of financial assets, as long as the bank judges it appropriate to continue with each policy
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rundheersing bheenick : ensuring the financial stability of the banking system in mauritius address by mr rundheersing bheenick, governor of the bank of mauritius, on the occasion of the grant of a new banking licence to barclays bank mauritius limited, port louis, 23 may 2013. * * * i am delighted to welcome you all at the bank this afternoon. a special word of welcome to his excellency mr nicholas howard leake, the british high commissioner. we are very pleased to have you all with us on this occasion. today is an important day in the history of barclays in our country. after almost a century of operation in mauritius, barclays bank plc, mauritius branch is converting into a whollyowned subsidiary to be henceforth known as barclays bank mauritius limited. early this week, the president of the republic, acting on the advice of our prime minister, dr the hon navinchandra ramgoolam, frcp gcsk, appointed me to a new term as governor of the central bank. i am reminded that in august 2008, i revoked the banking licence of the nowdefunct first city bank and the equally - defunct south east asian bank to issue a new licence to their successors who are still thriving here which makes this a concatenation of four 3 β s. it is thus on the 3rd day of my 3rd three - year term as governor that i am proceeding to announce the revocation1 of the 3rd banking licence, and i believe the barclays people are actually rejoicing at this revocation! so are we at the bank of mauritius. a century ago, the central bank did not even exist β we are younger than barclays mauritius by almost two generations. today, as regulator and regulatee, we have a strong bond of partnership. we are placing this partnership on even firmer foundations by extending the legal arsenal available to the bank of mauritius and deploying it to such good effect in the barclays case. let me explain. nearly six years have passed since the global financial crisis unfolded. central bankers, commercial bankers, financial commentators, academics and other finance professionals have been on the case ever since, busily drawing lessons from this prolonged crisis. countless international fora have examined the appropriate policy frameworks to deal with issues identified as having exacerbated the crisis such as structures that were too complex and banks that were too - big - to - fail or too - connected - to -
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fail. an international agreement on a cross - border resolution mechanism for internationally - active banks is not likely to be reached in the near future. we are waiting with bated breath for more rapid progress with the banking union at the level of the european union. we cannot wait for all the lessons to be learned and new institutions to be forged, before we, as regulator, reflect on how these lessons can be applied to our own banking system. our problem is somewhat smaller, and certainly less intractable β provided we have an open mind about it. someone has said : β more powerful than the will to win is the courage to begin. β in the case of barclays, we have amply demonstrated the courage to begin the process of restructuring. our banking sector is made up of 21 banks, of which five operate as branches of foreign banks. of these, we consider a few to be domestic systemically important banks ( dsibs ), in view of their size and complex structures. the global crisis highlighted two sources of vulnerability that the bank needs to address to ensure the stability of the domestic financial system. the first is the need to protect affiliates of cross - border banks operating in technically, it is a surrender of licence under section 11 ( 7 ) of the banking act 2004. bis central bankers β speeches our jurisdiction from any potential problem affecting their parents in their home country. the second vulnerability stems from the fact that the failure of a dsib could not only impair the provision of key financial services but also have knock - on effects on other parts of the domestic economy. these issues have been exercising my mind for quite some time. this is why i have been encouraging branches of foreign banks operating in mauritius to convert into locally - incorporated subsidiaries, and urging our dsibs to reduce the complexity of their structures by resorting to what is now labelled as β ring - fencing. β we have been setting the stage for some time. that is where barclays enters the scene, in pursuit of its β one africa strategy β. it is seeking to align the legal structure of its mauritius branch business with the rest of barclays africa entities. barclays sought our approval to become a wholly - owned subsidiary of barclays bank plc. barclays was the first of the targeted banks to do so. just as it had also been the first to set up a local advisory board for its branch operation in february 2012, well before we enshrined this in the revised guideline on corporate governance in
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jean - claude trichet : the euro @ 10 β achievements and responsibilities remarks by mr jean - claude trichet, president of the european central bank, at the ceremony of the european parliament to mark the 10th anniversary of the euro, strasbourg, 13 january 2009. * * * mr president, honourable members of the european parliament, it is an immense honour and a great pleasure for me to take part in this celebration of one of europe β s most momentous achievements, the euro. one of europe β s founding fathers β jean monnet β once said : β when an idea meets the needs of the time, it ceases to belong to its creators and becomes more powerful than those responsible for it β. and he added : β there is no such thing as premature ideas, there are only ripe times that one should wait for β. for decades, the single european currency was merely an idea shared by a few people. many others said that it could not be done, or that it was bound to fail. today, the single currency is a reality for 329 million citizens. the creation of the euro will one day be seen as a decisive step on the long path towards an β ever closer union β among the people of europe. since the introduction of the euro, fellow europeans have enjoyed a level of price stability which previously had been achieved in only a few of the euro area countries. this price stability is a direct benefit to all citizens. it protects incomes and savings, and it helps to bring down borrowing costs, thus promoting investment, job creation and prosperity over the medium and long term. the single currency has been a factor of dynamism for the european economy. it has enhanced price transparency, increased trade, and promoted economic and financial integration within the euro area and with the rest of the world. in recent months we have seen another benefit of the euro : the financial crisis is demonstrating that in turbulent financial waters it is better to be on a large, solid and steady ship rather than on a small vessel. would europe have been able to act as swiftly, decisively and coherently if we did not have the single currency uniting us? would we have been able to protect many separate national currencies from the fallout of the financial crisis? i believe that we can be proud of the reaction of european authorities, parliaments, governments and central banks. together we have shown that europe is capable of taking decisions, even in the most difficult circumstances. we owe the historic success of the euro to
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. remember that lockdowns are a non - economic shock that affects productive and unproductive firms indiscriminately. policies that protect viable businesses until activity can return to normal will help our productive capacity, not harm it. the right policy mix is essential. fiscal policy has to remain at the centre of the stabilisation effort β the draft budgetary plans suggest that fiscal support next year will be significant and broadly similar to this year, and the next generation eu package should become operational without delay. supervisory authorities are working to ensure that banks can continue to support the recovery by readying them for a potential deterioration in asset quality. 10 and structural policies have to be stepped up so that policy support can accompany the wide - ranging changes that the pandemic will bring, such as an accelerating spread of digitalisation and a renewed focus on climate issues. 11 the outlook for monetary policy so what is the role of monetary policy in this response? it is clear that downside risks to the economy have increased. the impact of the pandemic is now likely to continue to weigh on economic activity well into 2021. moreover, demand weakness and economic slack are weighing on inflation, which is expected to remain in negative territory for longer than previously thought. this is partially due to temporary factors, but the fall in measures of underlying inflation also appears to be connected to the weakening of activity. and developments in the exchange rate may have a negative impact on the path of inflation. continued policy support is therefore necessary to achieve our inflation aim. but we should also consider how best to provide that support. the unusual nature of the recession and the unsteadiness of the recovery make assessing the inflation path harder than in normal times. shifts in consumption baskets caused by supply - side restrictions are creating significant noise in the inflation data. 12 and the stop - start nature of the recovery means the short - term path of inflation is surrounded by considerable uncertainty. in these conditions, it is vital that monetary policy underpins inflation dynamics by supporting demand and preventing second - round effects, where the negative pandemic shock to inflation feeds into wage and price - setting and becomes persistent. to that end, the best contribution monetary policy can make is to ensure favourable financing conditions for the whole economy. 4 / 6 bis central bankers'speeches two considerations are important here. first, while fiscal policy is active in supporting the economy, monetary policy has to minimise any β crowding - out β effects that might create negative spillovers for
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- central bankers'speeches safe, secure, and efficient payment system, we are pushing for digital payments. this includes the use of innovative digital payment rails, such as instapay, pesonet, and qr ph. building on these payment systems, we have also rolled out bills pay ph, which you can use to pay your bills, palengqr which you can use to pay your market vendors, and egov pay which you can use, if you are a taxpayer here, to pay the government. these programs have helped us surpass our goal of digitalizing at least half of total retail payments. as of end - december 2023, 52 percent of these payments were done digitally. working with the bank for international settlements, we are trying to connect our fast payment system with those of our asean ( association of southeast asian nations ) neighbors as well as india, saudi arabia, and other countries with fast payment systems. this platform is called project nexus. once this is in place in two years, this platform will make cross - border retail transactions more secure, more efficient, and less costly. meanwhile, we are painfully aware that our geography makes us especially vulnerable to climate change. just last week, we witnessed typhoon carina that made this vulnerability all too evident. hence, we have issued guidelines for the management of risks related to environmental, social, and governance issues. at the same time, we have developed a taxonomy for banks for sustainable finance. this will allow banks to tag each of their activities as environmentally or socially sustainable. economic fragmentation let me now turn to you, the consular corps for help. we need your help for one increasingly important concern - that of economic fragmentation. for decades after world war ii, increasing globalization was the norm. most governments believed in its benefits, and thus, most wanted to be part of it. but for almost two decades now, globalization has been losing ground to global fragmentation. in recent years, fragmentation has been fueled by the global financial crisis, trade wars, trade disruptions caused by the russia - ukraine conflict. as we all know, global trade is now on its back foot. according to the world bank, the average annual number of new trade agreements in the 2020s is less than half of that of the 2000s. in contrast, the number of new trade - restricting measures in 2022 and 2023 has tripled relative to 2019. this has led to a slowdown in the growth of trade. it appeared from 2020 to
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2024 [ that ] it is poised to have the slowest growth in global trade of any fiveyear period since the 1990s. the trade disruptions have caused the kind of supply shocks across the world that have led to the highest global inflation rates in decades. 2 / 3 bis - central bankers'speeches in the case of the philippines, our inflation rate rose to 8. 7 percent in january 2023. to tame this inflation, central banks around the world, including the bsp, have had to raise interest rates. we hope that diplomatic channels can help prevent further economic fragmentation and maybe even repair the existing one. let me close by restating the obvious. the consular corps of the philippines is an important partner in building economic bridges that connect the philippines to the nations that you represent. we need to continue to build bridges for both trade and finance. together, let us continue to nurture our bond of friendship. let us keep the bayanihan spirit alive as we move towards a more resilient and inclusive philippine and international financial system. thank you very much. maraming salamat po. 3 / 3 bis - central bankers'speeches
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versus 6. 9 % according to imf direction of trade statistics data. notice that in order to account for competition faced by euro area companies in foreign markets from exporters based in third countries the weight of the renminbi in the euro effective exchange rate departs from the direct bilateral export linkages. in the case of china, the β double β export weight amounts to 16 % compared to a direct export weight of 7 %, over the period 2010 β 12 ( see ecb economic bulletin 6, 2015 ). bis central bankers β speeches financial assets held by euro area residents. 19 and finally, a slowdown in china β s domestic demand lowers global commodity prices, which acts as a stimulus to commodity importers like the euro area. 20 having said that, the ecb is carefully monitoring events in emerging economies, as their effect on the rest of the world might turn out to be larger if mutuallyreinforcing neighbourhood effects materialise. 21 coping with monetary policy spillovers to cut a long story short, the global economy has become more vulnerable than ever before to very large real and financial spillovers. global factors drive asset prices and cross - border flows. and in some cases, the ability of domestic monetary policy to achieve its mandate might be more limited than we used to think, in particular in emerging economies. what measures should be taken to manage the risks associated with the rise in global financial integration while not forsaking its benefits? one influential view in policy circles, close to being the conventional wisdom until some time ago, is that β putting your own house in order β is the main and best line of defence against external influences. another view, that is rapidly gaining ground, surmises instead that global problems also require global solutions. the first view seems to find some support in the fact that while recent bouts of financial market volatility typically occurred in response to global shocks, not all economies were affected to the same extent. this is consistent with evidence suggesting that global push factors explain capital surges in general but domestic pull factors determine in which country they end up. 22 unfortunately, the debate about precisely which fundamentals mitigate economies β vulnerability to abrupt capital flows episodes is not settled. some studies find that emerging economies with better institutions were less affected by unconventional monetary policy measures in advanced economies, for example. other evidence suggests that countries that had allowed their current accounts to run into large deficits and their exchange rates to substantively appreciate displayed larger capital flow volatility during
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labour market, which will underpin consumer spending. however, activity levels will be dampened as the policy tightening and adverse credit supply conditions increasingly feed through to the real economy. the expected gradual withdrawal of fiscal support is also likely to weigh on economic growth in the coming quarters. the labour market has so far remained resilient despite the slowing economy but shows signs of losing momentum. the unemployment rate remained at its historical low of 6. 4 per cent in july. while employment grew by 0. 2 per cent in the second quarter, the latest survey data on employment growth came close to stalling. this indicates that employers have become more reluctant to hire in the face of deteriorating demand and gloomier prospects for the year ahead. in addition, strong labour demand has begun to moderate, with indicators of job vacancy rates edging down in recent months. these developments are reflected in significant downward revisions for output growth in the september staff projections : annual average output growth is now projected at 0. 7 2 / 6 bis - central bankers'speeches per cent in 2023, 1. 0 per cent in 2024 and 1. 5 per cent in 2025. in terms of the quarterly profile, most of the markdown in activity is for 2023, with carry - over effects from this year accounting for much of the downward revision to the 2024 growth outlook. the risks to economic growth are tilted to the downside. economic growth could be slower if the effects of monetary policy are more forceful than expected or if the world economy weakens owing, for instance, to a further slowdown in china. that said, growth could be higher than projected if the strong labour market, rising real incomes and receding uncertainty mean that people and businesses become more confident and spend more. monetary policy transmission turning to our monetary policy, we have raised our policy rate by a cumulative 450 basis points over the last ten governing council meetings. the reimbursements of the third series of our targeted longer - term refinancing operations ( tltro iii ) that have taken place so far and the slowdown and subsequent discontinuation of reinvestments under the asset purchase programme ( app ) have reduced our balance sheet by β¬1. 6 trillion and β¬109 billion respectively. by pushing up term premia and draining liquidity from the banking system, these ancillary policies are also contributing to the tightening in financing conditions, even if rate increases are the primary tool for adjusting our monetary policy stance.
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aspects, will be able to open up a series of medium to longer term opportunities to export to other countries. as such, securing a suitable financial solution to upgrade and upscale production to meet the demand and requirements, would be an important prerequisite for businesses. recognising these key success factors, recent announcement by government to introduce the halal industry strategic development programme, or β be - halal β β under the national halal council secretariat to drive the growth of the halal industry is timely. under β be - halal β, participants will be developed further through programmes run by experts in various fields to enable them to be more innovative and progressive as they face various global challenges and ultimately contribute to the nation β s halal industry. islamic finance has become part of the mainstream with offerings of competitive financial solutions malaysia has an islamic financial system that operates alongside the conventional system. our unique experience with a dual financial system has been effective on many fronts β effective in 1 / 3 bis central bankers'speeches bringing segments of the society to access the services of the formal financial system ; effective in enabling and facilitating businesses, especially the small and medium - sized entrepreneurs, to expand their businesses ; and effective in steering development of the country. we have a comprehensive islamic financial system comprising the core components of banking, takaful and capital markets. the islamic finance system have matured and are as competitive with the conventional system, thus providing better choices and options. a robust financial infrastructure is also in place to support development of this system, alongside a responsive regulatory and supervisory framework whilst achieving the high standards of best practice in corporate governance and in financial transparency and disclosure. the islamic financial system consistently reinforces its position as a viable and effective means of intermediation that contributes to the overall economic development. today, islamic banking accounts for 33 percent of malaysia β s total banking assets while takaful market share stands at 11 percent for family takaful and 10. 1 percent for general takaful. the islamic financial system continues to grow β at a pace faster than the conventional system. as at end - june 2019, financing outstanding of islamic banks expanded at 8. 6 percent compared to 2. 1 percent for the conventional. meanwhile, new general takaful contributions grew at 16. 4 percent compared to 6. 2 percent for the insurance premium. however, new family takaful contributions grew at 10 percent, slightly lower to life insurance premium of 15. 4 percent. this brings me to the point
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is a shared responsibility, across the major regions of the world. several reasons have been cited as constraints to the process of adjustment. this include the relative lack of strength in domestic demand outside the us ; the large gap between saving and investment in major regions of the world ; and the fragmented structure of global capital intermediation that hinders surplus regions from financing productive investments within their region. it is important to recognise the important role that asia can have in contributing to rebalancing global growth and in so doing contribute towards global adjustment of the imbalances. in terms of economic growth, the region has consistently recorded performance that is, one - and - a - half times higher than the global average. on demographics, asia is home to more than half of the world's population, with a young and growing workforce, and expanding middle - class in a number of countries. robust domestic consumption and rising investment have therefore become important sources of growth. this has been supported by the rising income and increased productivity and the expansion of intra - regional trade. the increasing importance of intra - regional trade, which accounts for more than 50 % of asia's total trade, makes the region the next most integrated region after the european union in trade. this has positioned asia as the largest and fast - growing market in the world. in addition, the asian region has also embarked on measures to spur its economic openness by forging free trade agreements, which would contribute to increasing the capacity of the region and the potential of the region, in addition to improving prospects for contributing towards the rebalancing of global growth and the global adjustment process. combined with the region's traditionally high degree of economic openness with a total trade averaging 95 % of gdp in the region, it reflects asia's potential to be a self - sustaining and mutually reinforcing the region's growth. the greater degree of economic flexibility in the region in responding to shocks and the dynamic global conditions is a further feature that contributes towards strengthening the region's potential. while private consumption's contribution to domestic demand is becoming increasingly more significant in the region a renewed expansion in investment is also needed to create a more sustainable growth path. significant initiatives are already underway to increase the contribution of private investment and secure new areas of growth. these include improving the investment climate and reducing the cost of doing business. efforts would also continue to be on - going on the priorities in the region as countries have the potential to further expand the role of
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and what about the transmission mechanism of monetary policy? we have identified a number of channels and effects, but how much do we really know about their relative importance in the kind of fluid world in which we live β in that β slice β of a constantly evolving constellation that we happen to inhabit at any given moment, with balance sheets, market structures, institutions, behaviour patterns shifting all the time. how much of the accumulated analytical research could possibly provide ground solid enough to allow reasonable assessment of the likely consequences of alternative policy choices? analytical work is advancing impressively on all fronts, but at the same time the world has gone into a mode of continuous change. thus there is probably less and less of theory that one could responsibly commit monetary policy to. fortunately, as we take on board all these vagaries, at the same time we seem to be getting rid of some inconvenient ballast that perhaps looked a little bit too conspiratory for comfort, namely the notion that unanticipated policy may reduce real disturbances. what a relief. unanticipated policy is not an enormously credible possibility in the kind of world into which we have been moving. ambiguity is a poor policy to sell ; it assumes an uninformed public and an uninformed professional market. fortunately, we do not have that. all clearly specified monetary policy decision rules, like the popular taylor rule along with all its variants, depend on reasonably solid knowledge about key inputs, one being the output gap, or equilibriu real interest rates, etc. my lay impression is that not much of that is available with the kind of probability that one would look for in public policy discussions. this means that the credibility of monetary policy cannot be based on a central bank locking itself in by means of a specific irrevocable commitment. the possibility of such locking in of the central bank features prominently in analytical debate outside the central banking community, but it is probably an illusion, a will - o β - the - wisp? ( currency board regimes being a separate regime altogether, and i do not think we are generally looking for last resort regimes. ) all this is not a problem for the ecb in particular. it is a reality for all central banks operating in market economies. this will be clear to those who have read bob woodward β s recent account of monetary policy making in the us in the 90 β s. i suggest that it be read with professor mankiw
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this change in the environment rather slowly, often reluctantly. not least for this reason, the relatively recent prominence of credibility, transparency and accountability in research agendas has been such an important development. it had to emerge as a major issue in the wake of the changed environment, and in the light of some painful regime failures in the early 90 β s. the greater emphasis on price stability and the independence that in a great number of countries was thought to be necessary for a central bank β s credibility and effectiveness certainly were an important elements in promoting interest in accountability and transparency. i would not say that this globalized situation is a more difficult environment to cope with for a central bank, but it is certainly different. it is a healthier situation in many repects. the very existence of market anticipations and real time reactions is a powerful force tending to weed out what one might call β rhetorical and political window dressing β from policy making. the real time flow of information by itself brings a kind of inevitable de facto transparence and at least a measure of accountability. it is easy for the market to see and to assess economic policy in general and monetary policy in particular. this is a healthy development ; after all, all interest and exchange rate policy impact households and companies in major way. also the macroeconomic behaviour of economies changes, although in subtle and less easily identifiable ways. some say that productivity growth has shifted the phillips curve inward, in the us and perhaps in some other economies, possibly for a lengthy period, meaning that higher productivity growth would coincide with β or could be made to coincide with - a widespread expectation of solid price stability continuing, allowing lower unemployment without fuelling inflation. β this would be an extremely attractive prospect. but we really cannot judge whether, in what social and political circumstances, and where, this is at all likely. and where all would seem to turn out nicely, prudently we would have to assume that at some stage the constellation would turn around and real wage demands would catch up with productivity growth. what we do know is that every assumption about productivity growth, for the next few years at the very least, will be uncertain, to say the least. this means that some of the standard pillars of policy debate, like output gaps and nairu β s, are eluding us. they may remain useful conceptually but are nevertheless neither quantifiable nor a priori stable enough to be useful when it comes to deciding responsibly on policy.
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mr meyer considers the role of exchange rate policy, macroeconomic policy, banking supervision and regulation remarks by mr laurence h meyer, a member of the board of governors of the us federal reserve system, at the ninth annual hyman p minsky conference on financial structure at the jerome levy economics institute, bard college, annandale - on - the - hudson, new york on 22 april 1999. structure, instability, and the world economy : reflections on the economics of hyman p minksy this paper has its origin in a request by don brash, governor of the reserve bank of new zealand, to present a central banker β s perspective on the asian crisis to a group of southeast asian central bankers. so the central banker β s perspective remains an organizing theme. central banks have two core missions : the pursuit of monetary policy to achieve broad macroeconomic objectives and the maintenance of financial stability, including the management of financial crises. the latter mission is closely connected to regulation and supervision of the banking system, so i include this within the central banker β s perspective, as well as broader issues related to systemic risk in the financial sector. central banks also often have or share with finance ministries control over exchange rate policy, including the choice of an exchange rate regime and the management of that regime. so, today, i consider the role of exchange rate policy, macroeconomic policy, and bank supervision and regulation in the crises and suggest some lessons in each case. as i was writing the paper, it became clear that my interpretation of the sources of, and appropriate policy responses to the crises among the asian emerging economies, drew heavily upon the work of hy minsky. perhaps that should not be surprising since hy and i were colleagues for more than two decades at washington university. but the truth is, in many respects, hy and i came from different worlds. my highly traditional background in economic theory was in rather stark contrast to hy β s self - proclaimed war on neoclassical economics. while it is true that i never lost my commitment to traditional models β not a surprise to those who still hear me talk about the critical importance of the nairu framework to understanding inflation dynamics β i have often found words coming out of my mouth that reflect the distinct and powerful influence that hy has had on my thinking. the truth is, there are few who have influenced my thinking about economics more than hy. indeed, he had so much to offer that if i only accepted a small dose, it was
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##y β s β financial instability hypothesis. β in the case of the asian emerging economies, there was evidence of speculative excesses in financial and real estate markets in some of the countries. there was, in addition, an extraordinary taking - on of risk in the form of enormous leverage in the non - financial sector and in the financing of longer - term domestic investment projects with shorter - term foreign denominated borrowing. the failure to respect risks was not only evident in financial markets and financing practices, but also in the investment decisions themselves. these risks were compounded by poor risk management and inadequate bank supervision and regulation. it should be noted, however, that not all the countries were affected by all of these vulnerabilities or to the same degree. financial sector vulnerabilities often increase during a cyclical upswing, as minsky emphasized so often, setting the stage for the subsequent downturn. but in the case of the asian developing economies, there was also a systemic source of these vulnerabilities : weaknesses in corporate governance and moral hazard associated with implicit or explicit government guarantees. the result was incentives for excessive risk taking. to understand the dimension and spread of the crisis among asian developing economies, we also have to take account of the vulnerability generated by fixed exchange rates in the hyman p. minsky, β can β it β happen again, β in dean carson, ed., banking and monetary studies, homewood, illinois : richard d. irwin, 1963. presence of volatile international capital flows, the role of market psychology, and the role of contagion effects. financial sector weaknesses, pegged exchange rate regimes and volatile capital flows combined to yield a highly combustible mixture that, with the spark of adverse shocks, resulted in the igniting of currency and debt crises, including the collapse of banking systems throughout the region. the result was both a particularly sharp economic downturn and significant obstacles to recovery, specifically the joint problem of restructuring of the banking systems and resolving the excessive debt in the nonfinancial corporate sectors. the dramatic declines in currency and equity markets in this case were also affected by the sharp swing in market psychology. in part due to a lack of transparency, markets had a hard time sorting out what the fundamentals dictated in terms of exchange rates and equity prices. that made the markets very sensitive to factors that affected confidence in the policies followed by the countries. this meant that prompt and decisive policy action in advance of imf programs was very
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stronger but not enough to reduce an elevated unemployment rate. and we have seen indications of a slowdown in china and other large emes. perhaps the most striking thing about this is the degree of co - movement in gdp growth rates across economies. in reaction to the deteriorating outlook, we have seen a stream of policy actions, mostly by central banks as many fiscal authorities have felt constrained by excessive debt, deficits or both ( at least in the western hemisphere ). last november, the ecb announced three - year term repos, in unlimited scale. and more recently details of their proposed outright monetary transactions ( omts ). in the united states there is to be more quantitative easing ( qe ), including open - ended purchases of rmbs. in japan, just last week we saw a large expansion of their asset purchase programme. in the united kingdom we have been undertaking extra qe since october 2011 and earlier this summer we activated for the first time our new contingent facility of six month repos against a broad range of collateral β what we call the extended collateral term repo facility or ectrs. that was intended to act as a backstop should the risks in europe deepen and crystallise. usage has declined sharply since the first two operations suggesting that the degree of stress is not that great at the moment. more recently the bank and hm treasury jointly launched the funding for lending scheme ( the fls ) β of which more later. the full list of policy actions is much, much longer of course. the length of that list reflects the seriousness of the economic situation and the constrained ability of fiscal authorities. in the world of central banking, unconventional policies are the new normal. at least for now. financial markets have not just been suffering from external shocks. a series of home - made disasters have also rocked the sector. the ubs β rogue trader β, the losses at jp morgan β s chief investment office, libor manipulation at barclays ( with others under investigation ) and the mis - selling of ppi. these scandals have not so far been institution - threatening, but coming on top of the financial and macroeconomic crisis to date, they have helped to suck confidence from the financial sector just when it might otherwise have been recovering. chart 3 shows a β heat map β of markets generated by colleagues in the financial stability area of the bank. this chart uses indicators such as issuance amounts and bid - ask spreads to monitor market conditions. red indicates a non - functioning
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second, on an ongoing basis, the committee should provide explicit communication about how its chosen actions are indeed consistent with its pre - announced resolution of the inflation - unemployment trade - off. here, i believe that the use of metrics like the mandate dashboard provides a useful form of discipline β both on our own actions and on the public β s understanding of those actions. bis central bankers β speeches in a speech he gave last may, chairman bernanke stated, β transparency regarding monetary policy β¦ not only helps make central banks more accountable, it also increases the effectiveness of policy. β 3 i agree completely with this sentiment. and i see my two recommended future steps β clearer communication about trade - offs and the explicit use of metrics like the mandate dashboard β as promoting exactly the kind of transparency that chairman bernanke was describing. thank you for listening. i look forward to taking your questions. see chairman bernanke β s may 25, 2010, speech, β central bank independence, transparency, and accountability. β bis central bankers β speeches
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. apple. pay, β register, april 3, 2017, www. theregister. co. uk / 2017 / 04 / 03 / banking _ group _ denied _ access _ to _ iphones _ nfc _ chips _ for _ altapplepay / see, e. g., chance miller, apple maps now used 3x as often as google maps on ios, serving 5b requests per week, 9to5mac, december 7, 2015, https : / / 9to5mac. com / 2015 / 12 / 07 / apple - maps - usage - numbers /. for example, small business lender kabbage, inc. has entered agreements with large banks, where kabbage licenses its data analysis - heavy customer acquisition platform to banking partners who then go on to originate, fund, and service the underlying loans. see, e. g., kabbage inc., β kabbage and santander uk partner to accelerate smb growth, β press release, april 3, 2016, www. kabbage. com / blog / kabbage - santander - uk - partner - accelerate - smbgrowth /. - 13 - regulatory developments as regulators, we have a responsibility to ensure that the institutions subject to our supervision are operated safely and soundly and that they comply with applicable statutes and regulations. more broadly, we have a strong interest in permitting socially beneficial innovations to flourish, while ensuring the risks that they may present are appropriately managed, consistent with the legal requirements. we do not want to unnecessarily restrict innovations that can benefit consumers and small businesses through expanded access to financial services or greater efficiency, convenience, and reduced transaction costs. nor do we want to drive these activities away from regulated banks and toward less governed spaces in the financial system. regulators in the united kingdom and continental europe have recently outlined new approaches to facilitate connectivity in financial services, while attempting to mitigate the associated risks. in august 2016, the uk competition & markets authority ( cma ) released a package of mandates aimed at increasing competition for consumer and small business current accounts ( akin to u. s. checking accounts ). 27 this year nine of the country β s largest banks were required to create open apis to share nonsensitive, non - consumer - specific information, like pricing, fees, terms, and conditions as well as branch and automated teller machine locations. 28 uk competition & markets authority, β cma paves the
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to. wants to use a different api to monitor the history of a consumer β s physical locations over the previous week. and in some cases, the competitive interests of google and a third - party app developer may diverge over time, such that the original terms of access are no longer acceptable. 16 the fact that it is possible and indeed relatively common for the api provider - - the platform - - to require specific controls and protections over the use of that api raises complicated issues when imported to the banking world. as banks have considered how to facilitate connectivity, the considerations include not only technical issues and the associated investment, but also the important legal questions associated with operating in a highly regulated sector. the banks β terms of access may be determined in third - party service provider agreements that may offer different degrees of access. these may affect not only what types of protections and vetting are appropriate for different types of access over consumers β funds and data held at a bank in order to enable the bank to fulfill its obligations for data security and other consumer protections, but also the competitive position of the bank relative to third - party developers. there is a second broad type of approach in which many banks have entered into agreements with specialized companies that essentially act as middlemen, frequently described as β data aggregators. β these banks may lack the budgets and expertise to create their own open apis or may not see that as a key element in their business strategies. data aggregators collect consumer financial account data from banks, on the one hand, and then provide access to that data to fintech developers, on the other hand. 17 data aggregators organize the data they collect the financial times reported that uber will invest half a billion dollars into developing its own mapping software as it continues its push into driverless cars, thereby reducing its reliance on google maps. leslie hook, β uber to pour $ 500m into global mapping project, β financial times, july 31, 2016, www. ft. com / cms / s / 0 % 2fe0dfa45e5522 - 11e6 - befd - 2fc0c26b3c60. html? ft _ site = falcon & desktop = true # axzz4g0m5oyu8. for example, one major data aggregator reports that about 70 percent of the data it collects from over 15, 000 sources is collected via β structured feeds β under contractual agreements with financial institutions. see envestnet, inc.,
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s conference based on events very much on the minds of central bankers : " global supply shocks, trade frictions, and inflation. " global and sectoral supply shocks over the past few years have had significant effects on trade, economic activity, and inflation, and they figured prominently in monetary policymaking. the effects of these shocks have varied across different economies, but a common theme is elevated inflation. the current economic environment has raised several policy questions that the papers presented here attempt to answer. these are questions that policymakers, including those of here today, must grapple with, even when the answers are far from apparent. academic research provides insights into these questions and possible answers, ways to analyze the data, and the foundations for testing theories with economic models. 1 / 2 bis - central bankers'speeches the papers presented here today and tomorrow are ideal examples of the kind of work that can help policymakers do their jobs better, and can facilitate sharing knowledge around the world. we have sessions on inflation, of course, and supply chain disruptions, and optimal monetary policy, and the important topic of uncertainty, which central bankers to some extent always face. before we get to those presentations, and what i hope will be vigorous discussions, let me recognize several people who made this event possible. assisting governor makhlouf at the cbi in organizing this conference has been daragh clancy. daragh and robert kelly at the cbi worked with a subset of ijcb editors to review the papers, but let me mention all of those editors, including klaus adam, tobias adrian, huberto ennis, refet gurkaynak, oscar jorda, keith kuester, elena loutskina, robin lumsdaine, fernanda nechio, and steven ongena. this conference and the day - to - day smooth running of the journal couldn't be accomplished without the editorial team at the bis and the board of governors as well as kommaly dias and grace chuan from my staff. and, finally, a big thank you to my adviser jane ihrig, who does so much for me and who worked very, very hard to oversee the process at ijcb for this past year. and with that, i will step away from the microphone and put the spotlight where it should be, on the scholars presenting their work today. thank you, and i believe daragh has a few words to get us started. 2 / 2 bis - central bankers
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excess in the demand for funds. as a consequence, market interest rates are already moving in the direction of containing the excess of demand in financial markets and therefore in product markets as well. for example, bbb corporate bond rates adjusted for inflation expectations have risen by more than 1 percentage point during the past two years. however, to date, rising business earnings expectations and declining compensation for risk have more than offset the effects of this increase, propelling equity prices and the wealth effect higher. should this process continue, however, with the assistance of a monetary policy vigilant against emerging macroeconomic imbalances, real long - term rates will at some point be high enough to finally balance demand with supply at the economy β s potential in both the financial and product markets. other things equal, this condition will involve equity discount factors high enough to bring the rise in asset values into line with that of household incomes, thereby stemming the impetus to consumption relative to income that has come from rising wealth. this does not necessarily imply a decline in asset values - although that, of course, can happen at any time for any number of reasons but rather that these values will increase no faster than household incomes. because there are limits to the amount of goods and services that can be supplied from increasing net imports and by drawing on a limited pool of persons willing to work, it necessarily follows that consumption cannot keep rising faster than income. moreover, outsized increases in wealth cannot persist indefinitely either. for so long as the levels of consumption and investment are sensitive to asset values, equity values increasing at a pace faster than income, other things equal, will induce a rise in overall demand in excess of potential supply. but that situation cannot persist without limit because the supply safety valves are themselves limited. with foreign economies strengthening and labor markets already tight, how the current wealth effect is finally contained will determine whether the extraordinary expansion that it has helped foster can slow to a sustainable pace, without destabilizing the economy in the process. technological change continues apace on a broader front, there are few signs to date of slowing in the pace of innovation and the spread of our newer technologies that, as i have indicated in previous testimonies, have been at the root of our extraordinary productivity improvement. indeed, some analysts conjecture that we still may be in the earlier stages of the rapid adoption of new technologies and not yet in sight of the stage when this wave of innovation will crest. with so few examples in our history, there is
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marzunisham omar : opening address - 25th apg typologies workshop 2024 opening address by mr marzunisham omar, deputy governor of the central bank of malaysia ( bank negara malaysia ), at the 25th apg typologies workshop 2024, kuala lumpur, 11 november 2024. * * * selamat datang and selamat pagi. this means welcome and good morning in the malay language. it is a great honour to welcome all of you to the 25th apg typologies workshop. to our foreign guests, welcome to kuala lumpur and welcome to bank negara malaysia. hosting this for the fourth time, i have always found this workshop beneficial to stay ahead of evolving trends in money laundering, terrorism financing and proliferation financing ( ml / tf / pf ). with the new round of mutual evaluations ( me ) on the horizon, workshops such as this have become even more important, enabling us to come together to discuss and learn from each other on emerging financial crime typologies. ladies and gentlemen, all of us share a common vision to preserve the integrity of our financial system. financial crimes are like an endemic that could ravage a country. one, it evolves quickly, requiring adaptive strategies to monitor and respond to the symptoms. two, it spreads quickly, and needs to be detected earlier and stopped, or it will create havoc. three, it requires a precise and comprehensive approach to effectively combat it. today, i will offer three characteristics of a robust approach to combating financial crimes, namely : 1. " a " - - adapting our strategies ; 2. " p " - - partnering across all stakeholders ; and 3. " g " - - growing our capabilities ; or, in short, apg. before i elaborate, allow me to briefly comment regarding the abuse of legal persons and cyber - enabled fraud. recent high - profile corruption and ml scandals, such as those exposed by the panama and pandora papers, have shed light on the sophisticated misuse of corporate structures. criminals exploit these complex setups to conceal true ownership, thus evading detection and oversight. meanwhile, the digitalisation trend has also heightened the effect of cyber - enabled fraud. the global anti - scam alliance reported that at least 25 % of the global population has been affected by fraud, that is one in four people, with global losses from scams 1 / 4 bis - central bankers'speeches accounting for 1.
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this, medium - term nominal interest rates will be lower. in addition, rational forwardlooking agents recognise that this will generate above - target inflation in the future, which lowers expected real interest rates over the whole period, further stimulating demand and inflation from today. this works perfectly in the textbook. yet even theoreticians, and practitioners alike, including our governing council, soon realised that turning theory into practice raised additional issues. let me discuss three. 1. the time horizon of forward guidance in theory, a small commitment reaching into the distant future is enough β through the power of rational expectations on all the expected real interest rates β to have a powerful impact today. this stretches credibility in two senses : first is it a realistic description of the way the world and expectations work? even michael woodford has been working on models of limited planning horizon that mitigate its power. the second way in which time stretches credibility is whether long - dated commitments are believable. 2. defining dates or states it was recognised long ago that so - called β open ended β ( or β delphic β ) forward guidance was not 1 / 5 bis central bankers'speeches very effective and there was a shift towards more conditional β odyssean β guidance, which is β calendar - based β and / or β state - contingent β. but β calendar - based β or β state - contingent β forward guidance pose other challenges which are quite evident in the current policy debate. β calendarbased β is very clear and easy for markets to understand ( β i β ll meet you at 8pm β v β i β ll meet you half an hour after i leave home β ). but it β s the commitment that is the most hostage to fortune because large shocks can occur in the interim. β state - contingent β is less risky in this respect because it adjusts according to evolutions in the economy. state - contingency gives us flexibility on timing, but experience tells is sometimes less clear and hence less powerful for markets. the ecb β s current forward guidance on interest rates states that they will remain at their current level until three state - contingent criteria are met, but with one calendar element due to sequencing. i will come back to them in my second part. for comparison, in the united states, the fed has currently two calendar - based forms of guidance : it will β soon be appropriate to raise the target range β for the federal funds rate and β bringing them to an end in
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and it is unprecedented. i am sure i have left you in no doubt as to its urgency. so the benefits of us working together to share experience and build practical guidance are monumental. we have now reached the point that we need to move. move from bold statements to boring but crucial details. from sweeping visionary speeches to the nuts and bolts of the technical eng ine rooms of central banking and prudential supervision. when we β re knee deep in the weeds with these details, we could easily be distracted from our ultimate destination. we can easily become preoccupied by the bushes we cut away, the path we β re finding, the progress we make. but we should never take our eyes off our ultimate destination. it β s not a question of being satisfied with taking a few steps forward. no. we need to actually get to where we want to go. getting to paris. on time. that β s where we wan t to be. this means a lot of work from you. the hard core technical part has started. the part where the economists and econometrists deliver. although you may be experts in the economy rather than ecology, your expertise is equally valuable in both fields. i assure you. yet climate change is not the only challenge we face. the world will need fresh water. a decline in biodiversity could limit the operations of businesses in a specific region. these risks too, could affect financial institutions. i am pleased to see that these other environmental risks are also appearing on our radar. fout! onbekende naam voor documenteigenschap. the next step we need to take, and soon, is to dedicate more resources to environmental risks and how they have impact on our work. a lot still needs to be done. i hope today will inspire you to be bold, think freely, stimulate each other, embrace competition and expand our horizons. because next year, when we gather again, i hope we will be making the same swift progress. i hope we will be able to show how we have put these six recommendations into practice. and i hope we will have explored new territories with new members. because with your help, the seeds that were planted here in paris will grow even further and flourish. because there is no limit to what countless hands, what humanity, can achieve. when working together, with a commonly held belief in a shared objective.
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on other issues. any self - regulatory nature of the sepa council shall be complemented by regulation and / or competition to find out the most efficient solutions to integrate the market. in any case, the notion of self - regulation versus regulation shall be seen as a dynamic phenomenon which may change over time. i admit that finding the right combination of self - regulation and regulation always represents a challenge, but the in addition to the eu27, sepa comprises iceland, liechtenstein, monaco, norway, and switzerland. sepa makes use of iso standards, such as iban and iso20022. iso20022 is the standard used for t2s and plays an important role for the future developments in target2. bis central bankers β speeches benefits of market - driven solutions for retail payments in europe are apparent. in addition, it is important that self - regulation is guided by the search for europe - wide solutions, thereby preventing any recourse to national and fragmented market structures. fragmentation of retail payment markets can lead to inefficient market structures and higher costs to participants and society as a whole. measuring the true underlying costs of retail payments is not trivial. some pioneering national central banks have already looked into this issue at domestic level. european cross - country comparisons are so far uncharted territory. it is only recently that the ecb has shown in a study7, 8 that the social costs of retail payment instruments, including cash and non - cash payments, are substantial. they amount to almost 1 % of gdp in europe. the study also makes clear that considerable differences exist within europe. in facilitating the debate among participants in the payment chain, the ecb study seeks to provide an important tool for further benchmarking and efficiency analysis. another important dimension is trust in the safety of retail payment instruments. in this sense, the protection of individuals β payments data becomes more and more sensitive and important. data breaches can have effects as devastating as environmental disasters9 and undermine overall confidence and faith in a currency and retail payment instruments. therefore, payments data have to be handled with utmost care. it should be protected from misuse, while at the same time recognising the need for open and fair competition in the payments field. let me also point out the issue of financial inclusion. it is interesting to note that in the eu not everybody has a bank account. for example, one - quarter of italians and one - third of hungarians do not have a bank account. according to
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achieve β quality economic growth β deserves attention, as it is vital for china to maintain sustainable growth, and will have significant implications for all of asia. it should be noted that these three changes are not mutually exclusive, but rather intertwined. the shift from β factory asia β ( as a manufacturing base ) to β consumer asia β ( as a consumption center ) is expected to change the nature of the supply chain, stimulate new demand in asia, and foster new industries. 3. realizing the asian century : how to avoid the middle income trap looking ahead 30 to 40 years, we may well expect asian economies to be even more prosperous. the asian development bank, where i was president until this spring, published a report titled asia 2050 : realizing the asian century in 2011. the report forecasts that bis central bankers β speeches asia β s gdp would comprise half of global gdp by 2050, which is about double the current share, on the condition that asian economies maintain their momentum. however, the rise of asia is by no means preordained. the path will not be easy and requires more than just doing more of the same. the report warns of another future if the region cannot tackle its daunting policy, institutional, and governance challenges in a timely manner. in this pessimistic scenario, the region could fall into a middle income trap and become stuck with low growth rates. the concept of the middle income trap originally pertained to resource - rich countries in latin america and africa that became middle - income economies by extracting and exporting their resources, but did not climb higher to become developed economies. asian economies have risen from being low - income to middle - income, not just by depending on natural resources, but by utilizing their human resources in the form of abundant labor to manufacture and export goods. but the question is whether high and sustainable economic growth can be maintained after passing the lewisian turning point, where surplus labor from the agricultural sector is absorbed into the industrial sector and upward pressure is exerted on industrial sector wages. there are only four asian economies, other than japan, that have joined the league of developed countries with per capita gross national income of more than 10, 000 usd since world war ii : south korea, taiwan, hong kong, and singapore, often dubbed the four asian tigers. this shows how much more difficult it is for a middle - income economy to become a developed economy than for a low - income economy to become a middle - income economy.
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nina stoyanova : the future of money speech by ms nina stoyanova, deputy governor and head of the banking department of the bulgarian national bank, at the manager magazine fourth banking and finance forum β the future of money β, sofia, 20 october 2021. * * * thank you for inviting me to open today β s fourth banking and finance forum on the topic ofthe future of money. new technologies are changing the financial sector today and leading to the offering of increasingly diverse and convenient payment products in a highly competitive environment. the policies of the european commission, the european central bank and national regulators are aimed at catalysing this process, to exploit more fully the potential offered by technology and to achieve cheaper, safer and more accessible payment solutions. the dynamics of the processes in europe is also fully valid for our country. data on payments processed by payment systems in our country show a significant growth. for the first six months of 2021, the value of payments made through the bnb - operated real - time gross settlement system in bgn ( rings ) increased by 30 % compared to the first half of 2020, while for the same period the value of payments in euro through the national component system of the large - value payment system in euro β target2 - bnb increased by 65. 7 %. i would like to touch briefly on some of the recent technological developments in the field of payment services in the european union and in our country. security of payments the rapid development of e - commerce in recent years and the increased use of electronic channels to initiate payments pose new challenges related to ensuring the security and customers β data. as of september 2019, it has become mandatory in europe to implement strong customer authentication. this means that when an electronic payment is initiated, at least two independent elements from different categories β knowledge, possession and inherence β must be used in the process. in the case of remote payment transactions, e. g. via internet, an additional requirement is introduced to perform so - called dynamic linking β linking the code for each transaction to a specific amount and a specific payee. these requirements are implemented by the payment service providers in our country. for the practical implementation of these regulatory requirements, new technologies are again coming to the rescue. recently, biometric authentication has shown great potential by providing verification of elements characterising the user : fingerprint, iris scanning, facial recognition, etc. many payment service providers in bulgaria have already introduced similar customer identification methods using mobile banking applications. apart
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met with the committee, though commodity prices are lower. looking ahead, forecasters expect a bit less growth in the global economy this year than they did a few months ago. expectations for australia β s trading partner group itself are for growth to be a bit below average, little changed from six months ago. inflationary pressures globally look quite subdued. global interest rates will still be very low, even if short - term rates move up a bit further in the united states. for australia, the adjustment we have been experiencing for a couple of years now will most likely continue. the terms of trade are still falling. the fall in mining investment spending will continue for at least one more year, though it is probably having its most significant effect on the rate of growth now. other areas of demand are expected to add to growth. the net effect of all this is likely to be continuing expansion at a moderate pace. one key question will be whether the recent financial turbulence itself will have a material negative effect on aggregate demand β in australia or abroad. i don β t expect that we will be able to answer that question for a little while yet. another question is what the recent unexpected strength in the labour market means for the outlook. if it turns out that the strength is just temporary, then the outlook is still for moderate growth, but no near - term acceleration. if, on the other hand, recent trends were to continue, the income gains coming from higher employment may start to feed into stronger demand growth, which would probably lead in due course to higher levels of investment. alternatively, if demand growth were to be in areas that require relatively little capital to support the labour employed, then the apparent weakness in capital spending outside mining could be of less concern anyway. as usual, there are many questions regarding both our current circumstances and the outlook. at its recent meetings, the reserve bank board has kept the stance of policy unchanged, with the cash rate at 2. 0 per cent. we will be examining new information over the months ahead as we try to discern the answers to these and other questions. with inflation unlikely to cause a problem by being too high over the next year or two, the statement after the recent meeting indicated that the board retains the flexibility to ease further, should that be helpful. bis central bankers β speeches
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glenn stevens : summary of economic developments during 2015 and outlook for australia opening statement by mr glenn stevens, governor of the reserve bank of australia, to the house of representatives standing committee on economics, sydney, 12 february 2016. * * * chair members of the committee since the committee β s previous meeting in september, we have continued to see evidence that economic activity outside the resources sector has been gradually improving. the pattern observed six months ago whereby business surveys were suggesting improving conditions by and large continued through to the end of the year. inevitably, this expansion is not uniform across the country or across industries. areas that led the growth dynamic a few years ago are on the trailing edge now. conversely, some that were subdued for a few years are among those leading growth today. but few, if any, expansions are completely even, either geographically or by industry. given the nature of the economic events through which we have been living, moreover, it is not surprising that there are differences. the good thing is that there are strong areas to counteract the weak ones. the available information suggests that real gdp is expanding at pace a bit lower than what we used to think of as normal. our estimate is that growth over the four quarters of 2015 was about 2Β½ per cent. this continued expansion has occurred in the face of a very large contraction in capital spending in the mining sector, restrained public final spending and the reduction in national income coming from the declining terms of trade. it has been helped by easy monetary policy and the lower exchange rate. notwithstanding below - average gdp growth, the demand for labour increased at an above average pace in 2015. the number of people employed, as measured, increased by well over 2 per cent, participation in the labour force picked up and the rate of unemployment declined, to be below 6 per cent. that is a noticeably better outcome than we expected a year ago. this poses the obvious question of how, with apparently still somewhat below - trend gdp growth, the rate of unemployment has fallen. and whether the pattern will continue. of course, it may be that the labour force data overstate the strength. alternatively they may be telling us something not yet apparent in the gdp estimates. more data may shed light on this question over time. part of the reconciliation appears to be that growth has been concentrated somewhat in labour - intensive areas, like certain household and business services. another part of the reconciliation probably lies in the very modest pace of growth of labour costs. at any given rate
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benoit cΕure : interview with bloomberg tv interview with mr benoit cΕure, member of the executive board of the european central bank, and bloomberg tv, conducted by by ms francine lacqua on 25 january 2019. * * * benoit cΕure, the ecb executive board member, joins us right here in davos. thank you so much, mr cΕure, for joining us. good morning. you flew in after the news conference in frankfurt yesterday. overall we heard president draghi talk about these risks to the downside, but how would you explain it in your words? why did we not foresee this? we did foresee it, actually. the tone of our discussion yesterday was acknowledging that there is quite a lot of uncertainty around, that a lot of the uncertainty is political, has political sources and, first and foremost, global trade which is a politically - engineered uncertainty. we knew that growth would have to slow down because it started from very high points back in 2017 β 18. but the slowdown has surprised us. we have been surprised. we have to be very careful to monitor the data and that β s what we β re doing now. we are analysing the data, trying to understand what β s going on, and in particular what we have to understand is the persistence of this shock to eurozone growth. i would say : today the jury β s still out. when you talk about a shock to eurozone growth, how much of it is actually trade and how much of it is actually internal slowdown? a lot of it is trade. a lot of it comes from the outside. the governing council has said for months that most of the downside risks come from the outside. until yesterday we had said risks were balanced or they were moving to the downside. now, we say they have moved to the downside because these risks to global trade have materialised. what about brexit? first, the ecb is not part of the negotiations. i very much hope that it will yield results and that we can find a solution. but it β s not for us to discuss. what i would say is that there are substantial risks to real growth in the united kingdom, but also as a knock - on effect on the eurozone. so we are not complacent about it, but the financial sector is now pretty well prepared for a no - deal brexit, if that were to happen,
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that β s for banks to prepare for themselves. 2 / 3 bis central bankers'speeches but if they repay, that would tighten financial conditions? well, that β s part of many business decisions that banks are taking. our job is to look at the outcome in terms of financial conditions and to see if it β s proper in terms of the monetary conditions that we want to see. so it β s one issue. but it β s only one argument among many others. are you talking to the banks to have an idea of what they β ll do so that you can prepare yourself also for the balance sheet? yes, we are, of course. and we are talking to our supervisory colleagues because that β s what they do : talk to banks. benoit cΕure, how much does the personality of the president actually influence the decision of the governing council? well, that β s an interesting question. the governing council is a collegial body ; the president has to be in a position to filter information out of the diversity of the governing council and to build consensus, which the presidents so far have been able to do and have done very well. it is important to be in a position to build consensus. how can you see the dynamics of the council changing once president draghi leaves? i don β t see the dynamic of the council changing very much. we have a diversity of individuals and that β s why we have a governing council. it β s right because we need to filter out the diversity of views in europe. that β s what the governing council is there for. benoit cΕure, you said that you will continue to work for europe and you don β t exclude any possibility. if you were offered the top job β president of the ecb β would you accept? yes, who wouldn β t? but it β s really not for me to decide, it β s not for me to reflect on. i want to continue to be useful. there are many opportunities. i have a job at the ecb until the end of the year, so it β s really not for me to have that discussion. benoit cΕure, thank you so much for joining us right here at of course davos, world economic forum 2019. 3 / 3 bis central bankers'speeches
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responsibility for the outcome to the commission. yet at the same time the commission has limited powers in this domain. with effective european institutions, however, it is possible to make a more direct link between decisions and responsibility. precisely because those institutions are invested with defined powers, citizens can hold them accountable against their mandate. and in fact, strengthening these channels of democratic participation is vital for the euro area today. it is exactly the impression that there is too little accountability in europe that populist parties often exploit. in sum, my conclusion is that there must be a quantum leap in institutional convergence. we need to move from a system of rules and guidelines for national economic policy making, to a system of further sovereignty sharing within common institutions. and as part of this process we need to strengthen the democratic accountability of europe towards its citizens, which would automatically deepen our political union. let me however be clear : in the absence of institutions, rules act as a crucial anchor for confidence. so there is no question that the rules can be ignored because institutions would be better. on the contrary, they have to be fully respected so that we can make such a transition in the future. we have to build trust today by showing that what we agree to, we honour. and then we take the next steps forward as credible partners for each other. conclusion let me conclude. bis central bankers β speeches the euro area has advanced a long way as a monetary union. we began with a single market, a single currency and a single monetary policy. we now have a single supervisor and resolution authority. and soon we will have a single capital market. but we have not yet advanced far enough to put all questions about our future to bed. we need to remove those lingering doubts that resurface whenever a shock hits. and to do so we have to accelerate both our economic and institutional convergence. our monetary policy is helping to make this possible by creating an improving cyclical environment. but it is now up to governments to seize on this opportunity and make those improvements permanent. thank you for your attention. bis central bankers β speeches
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only be said to exist [ β¦ ] if and as long as free performance competition and free price formation are the motor and means of steering the economy. β 10 in sum, there is evidence of stronger economic integration among the euro area countries. evidence of the completion of the single market looks promising, especially the rise in intra - euro area trade and integration in the money market. business cycles have become more synchronised. this is an encouragement to continue to work actively to enhance integration, notably in the provision of services, in labour mobility and in the integration in some segments of the financial markets. a lot of homework remains to be done in the euro area. border labour mobility within an enlarged eu β, ecb occasional paper no 52, 2006. see also β action plan for skills and mobility β, european commission, 2002. the decline in inflation differentials has been impressive. at the beginning of the 1990s, the difference in inflation rates across the euro area countries was on average around 6 percentage points ( standard deviation measured in unweighted terms ). last year, the inflation differential was only 0. 7 percentage point. moreover, the current degree of inflation dispersion among the euro area countries is practically the same as that seen in the united states. as to real gdp growth rates across the euro area countries, the difference has been fluctuating around a level of 2 percentage points over the past few decades, with no apparent upward or downward trend. since 1999, however, it has declined from 2. 8 percentage points in that year to close to 1. 5 percentage points last year. again, the growth dispersion within the euro area is virtually the same as across the eight us regions defined by the us bureau of economic analysis. on output growth differentials see the article entitled β output growth differentials in the euro area : sources and implications β, in the april 2007 issue of the ecb β s monthly bulletin, and n. benalal, j. l. diaz del hoyo, b. pierluigi and n. vidalis, β output growth differentials across the euro area countries : some stylised facts β, ecb occasional paper no 45, 2006. on inflation differentials, see the article entitled β monetary policy and inflation differentials in a heterogeneous currency area β, in the may 2005 issue of the ecb β s monthly bulletin. see d. giannone and l. reichlin ( 2006 ), β
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rafael buenaventura : exports performance in the philippines welcome remarks by mr rafael buenaventura, governor of bangko sentral ng pilipinas ( central bank of the philippines ), at the exporters β forum, manila, 25 october 2004. * * * ladies and gentlemen, good morning : once again, i welcome you to this gathering of exporters and policymakers, which we have been doing since 2002 to discuss issues and concerns of common interest. i am glad to see familiar faces around. i also extend a special welcome to the new attendees for finding the time to join us today. let me also congratulate you for working hard to keep exports performance one of the few bright spots in our macroeconomy. i hope that we can go beyond the 13. 7 percent growth we had in august for the rest of the year. i am sure that this is possible given that the outsourcing of manufacturing of electronics and motor vehicle parts from other regions continues to benefit the asia pacific region, including the philippines. garments, which posted a double - digit growth in august, the first time since march of 2003, hopefully, will continue to pick up ahead of the holiday season. meanwhile, the improving world price of agro - based products bodes well particularly for the coconut oil industry. these are signs of good times ahead. overall, we expect a full year growth of 10 percent in 2004 and 2005. mr. guinigundo will discuss the details later and we will take this opportunity to validate with you our forecasts. being with the industry, your expertise in reading where the market is leading to is a major input to our projections. while export growth for next year looks promising, we all believe that there is more to be done to catch up with our asian neighbors who are making major inroads into the world market. we have been discussing the problems besetting the export sector - high power cost, poor infrastructure, security concerns, labor unrest - and i know the growing impatience in some of you on the seemingly slow progress in addressing them. however, you must also recognize that the government has been doing its best given its limited resources. this is the reason why we invited officials from other departments - department of energy, department of labor, department of finance, department of trade and industry, the board of investments, the philippine economic zone authority and the philippine national police, among others - to hear your concerns as well as share with you the various reforms currently
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jwala rambarran : prospects for caribbean economies and opportunities for the financial services sector β the catalytic potential of diaspora bonds remarks by mr jwala rambarran, governor of the central bank of trinidad and tobago, at the annual meeting of the caribbean association of banks ( cab ), montego bay, jamaica, 15 november 2012. * * * at the outset, i thank the caribbean association of banks ( cab ), formerly the caribbean association of indigenous banks, for inviting me to speak at its first conference under the cab name and brand, and to deliver the keynote address on the relevant sub - theme β prospects for caribbean economies and opportunities for the financial services sector. β over almost four decades, cab ( through its previous incarnation ) has played an important role in sensitizing caribbean leaders to regional and global financial policies that are likely to impact our banking and financial services industry. indeed, i commend cab for spearheading the effort to alert caribbean policymakers to the implications of the foreign account tax compliance act ( fatca ), an issue that revolves around tax transparency and the fight against cross - border tax evasion, and has the potential to affect every caribbean person or entity with any interest in u. s. financial assets. at a time when closer partnership across the region β s financial sector is becoming even more relevant, i look forward to cab remaining a strong, respected voice and advocate for financial institutions in the caribbean. ladies and gentlemen, the caribbean is gradually recovering from a deep recession caused by the global economic crisis, which originated in the united states some five years ago and has since spread to the euro zone. given the caribbean β s close trading and investment ties to north america and europe, the region experienced sharp contractions in key sectors such as tourism, energy and alumina, a virtual sudden stop of foreign direct investment, and weaker flow of remittances. some caribbean countries have approached the international monetary fund ( imf ) for financial support to weather the crisis. others have delayed or resisted the implementation of harsh austerity measures, preferring to rely mainly on fiscal stimulus to kick start growth, which, in turn, is elevating the risk of debt distress. the twin constraints of low growth and high debt are weighing on economic prospects for the caribbean, and the state of affairs in the eastern caribbean is not too encouraging. so, this morning, i want to talk about three things : β’ first, some of the key risks and challenges to global growth
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our innovation office hours, we learned that a wide range of partnership models are emerging, with varying benefits and challenges. some banks are engaged in customer - oriented partnerships, where a bank selects a fintech partner to improve the customer experience, develop new products or services, or acquire new customers. in one case, a bank partnered with a fintech company to centralize each customer β s financial data and provide personal financial management tools. other banks are engaging fintech partners to automate or improve the efficiency and effectiveness of compliance and regulatory processes, which is often referred to as β regtech. β for example, a fintech partner automating the bank secrecy act / anti - money - laundering process may be able to provide notable cost savings and enhance compliance, while freeing up resources for other areas. we have also seen instances where a bank offers its financial services to a fintech partner that, in turn, offers financial products or services to its customers. in this type of relationship, a bank plays an important part in the delivery of products and services. the list goes on. my point is there is great possibility and a wide variety of options for engagement. and everyone, from the banks to customers to the regulators, needs to be thinking about these changes and their implications. with the emergence of additional core - service providers, we are also seeing more opportunities for community banks to access the technology infrastructure they need to improve basic banking activities. these basic banking activities include tasks like reconciling transactions to the general ledger or simply offering expanded digital services. furthermore, there are new opportunities for integration of cloud - based platforms and apis. community banks should take advantage of the new technologies that make sense for their business and the communities they serve. still, even as community banks prepare for the future, there is the very real challenge of finding partners and knowing how to navigate the regulatory environment once an institution has identified a potential partnership arrangement. we certainly understand this concern. from the fintech perspective, one provider noted the challenges they face during the onboarding process with financial institutions, including struggles to navigate siloed compliance and risk - management functions. participants in the fed β s innovation office hours told us that they would benefit from the fed broadly sharing information on the current landscape of such partnerships, on a range of practices, and on relevant guidance for banks to consider. in response, early next year we plan to publish a white paper that documents examples of community bank partnerships with fintech companies and outlines effective practices
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is a necessary constraint β the main key to success, however, is a smart business model that is built to last. ladies and gentlemen, the β new normal β is forcing institutions to rethink their business models and management approaches. it is a setting in which the cake is continuing to shrink. logically, cake recipes and their preparation look set to become all the more challenging β but saying that, i firmly believe that the cakes of tomorrow not only have to be tastier ; they should also be more palatable for customers, the real economy, supervisors and the banks themselves. all of you here today are working on these new and improved recipes, and while there is still some way to go, i am in no doubt you are on the right track to come up with successful recipes. thank you for your attention. 1 dombret, andreas ( 2016 ) : digitalisation β repercussions for banks and their supervisors. speech delivered at the 16th norddeutscher bankentag at leuphana university 2016. www. bundesbank. de / redaktion / en / reden / 2016 / 2016 _ 06 _ 08 _ dombret. html 4 / 4 luneburg, june bis central bankers'speeches
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vitas vasiliauskas : welcome speech welcome speech by mr vitas vasiliauskas, chairman of the board of the bank of lithuania, at the kick - off meeting of the eu twinning project for the national bank of ukraine, 9 march 2021. * * * dear mr sologub, ms gajecka, dear ms allio, dear ambassadors, project participants, ladies and gentlemen, i am honoured to speak to you to at this kick - off event of the eu twinning project for the national bank of ukraine ( nbu ). for quite some time now, the nbu and the bank of lithuania have been engaged in intense bilateral cooperation. over the years, we have built strong and long - lasting professional, and even personal relationships. i would say that these relationships come easily and naturally β and not only between our institutions, but between our people as well. they are grounded in our shared experience between the two nations, our common historical and geopolitical backgrounds. in recent years, the ukrainian society has been showing increasingly more interest in the period of the grand duchy of lithuania in the history of ukraine. it has been rediscovered, widely researched and perceived as an example of a democratic coexistence of nations. indeed, the grand duchy is where our joint regional identity was born. if i had to pick a historical figure that best exemplifies this common identity, it would probably be kostjantyn ostroz β kyj β or konstantinas ostrogiskis in lithuanian. born in western ukraine, a devout orthodox loyal to the catholic monarch, he was the grand hetman of lithuania, the commander - in - chief of the armed forces of the duchy. in certain cases, ostroz β kyj led both the polish and lithuanian militaries. in modern times, the lithuanian - polish - ukrainian brigade was named after him. his legacy is one of many that we share between ukrainians and lithuanians. our common narratives and cultural ties help us understand each other well today. this understanding manifests itself in practical and mutually beneficial cooperation. having successfully integrated into the eu and nato, lithuania has been actively assisting ukraine on its path towards euro atlantic integration. one key contribution has been lithuania β s participation in the eu twinning projects aimed at promoting cooperation between public institutions in the eu and eastern partnership countries. these projects may not necessarily look revolutionary, yet they yield tangible results. the euukraine association agreement commits ukraine
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of lithuania has become more actively involved in technical assistance projects. the twinning project with the nbu is the second twinning venture for us. it is also the second one in which we are, as a junior partner, working side - by - side with the nbp. in both cases, we could never have been provided with more competent and professional teammates than our polish colleagues. on my final note, let me wish us all a successful and engaging event today and a rewarding cooperation in the times ahead. i hope to see you all soon in person when we finally put this pandemic in the rear - view mirror. 2 / 2 bis central bankers'speeches
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swaminathan j : safe banking practices β protecting the young speech by mr swaminathan j, deputy governor of the reserve bank of india, at the global money week 2024, paris, 18 march 2024. * * * mr. yoshiki takeuchi, deputy secretary general, oecd, ms. mairead mcguiness, european commissioner for financial services, ms. magda bianco, chair of oecd infe and g20 gpfi, mr. connor graham, youth representative from enactus, assembled regulators from across the world, ladies and gentlemen. a very warm good morning to all of you. it gives me immense pleasure to speak to you today on a highly relevant topic - safe banking practices and protecting the young. as we are all aware, the covid - 19 pandemic accelerated digitalisation in financial services, prompting a swift transition to online mode by service providers and customers. accompanying this surge in digitalisation was also the proliferation of fintech platforms. often operating outside the regulatory envelope and unconstrained by legacy systems that typically encumber traditional banks, fintech companies exhibit remarkable agility and adaptability in offering customised financial products. these developments are indeed welcome. however, while they offer immense benefits such as accessibility and hyper - personalization, they also heighten the risk of misuse and fraud. they can expose consumers to risk of cyberattacks, data breaches, and often times, some financial harm. consumers may struggle to resolve disputes or obtain compensation due to lack of transparency on the part of such players. these new risks must be addressed through robust regulatory frameworks, enhanced cybersecurity measures, and increased consumer awareness initiatives. in this context, i would like to share some of the approaches adopted in india through regulation, supervision and most importantly, enhanced consumer awareness. regulation and supervision in india, regulated entities are required1 to implement multi - factor authentication for all payments through electronic modes and fund transfers, except for some explicitly exempted small value transactions. at least one of the authentication methodologies should be generally dynamic or non - replicable such as one - time password, mobile device binding, biometric, etc. regulated entities are required to put in place security controls for internet banking, mobile payments application and card payments security. regulated entities are also required to conduct risk assessment of the safety of digital payment products as well as suitability and appropriateness of the same vis - a - vis
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the target users, both prior to establishing the service and regularly thereafter. further, they are required to have systems to identify suspicious transaction behaviour and mechanisms in place to alert customers of the same. 1 / 3 bis - central bankers'speeches to protect customers, regulations2 provide for zero liability for customers for losses due to negligence by the bank or a third - party breach. where it is due to customer negligence, the liability is limited to the point of reporting. rbi has also issued guidelines on digital lending3 which require regulated entities to provide a key fact statement to the borrower before the execution of the contract. this statement must disclose the annual percentage rate, the recovery mechanism, the grievance redressal mechanism, etc. any fees or charges, including penal charges, which are not mentioned in the key fact statement cannot be charged to the borrower. regulatory requirements are backed by a strong supervisory framework that inter - alia evaluates business conduct and it system controls. where warranted, rbi takes appropriate supervisory actions including imposition of business restrictions. one of the notable initiatives of the government of india is the indian cyber crime coordination centre ( i4c ) for better coordination amongst law enforcement agencies. under this initiative a national cyber crime reporting portal4 has been set up with a 24x7x365 national helpline number to allow victims of cyber - fraud to report such crimes. customer awareness despite all these measures, instances of unauthorised transactions due to compromised credentials from phishing attacks or customer negligence are not uncommon. rbi therefore, makes concerted efforts to foster a culture of financial prudence and resilience through customer awareness and education campaigns. in consultation with other financial sector regulators, a national strategy for financial education has been drawn up to enhance financial literacy. we have intensive awareness campaigns running across multiple mediums including print, radio and television under the banner of'rbi kehta hai'('rbi says'). apart from integration with school curricula, initiatives such as the rbi all - india quiz for school children on financial literacy aim to instil financial acumen from an early age. the rbi website hosts a microsite5 on financial education in english, hindi, and 11 vernacular languages, offering comic books, films, games, messages on financial planning, etc. in collaboration with our regulated entities, innovative approaches such as street plays ('nukkad nataks'), flash mobs, folk arts, sports rallies and marathons have
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guidance that β by and large β mirrored the one we had used for steering app expectations. this conditionality consists of both date and state - contingent legs. the smooth financial market reaction to the end of net asset purchases suggests that our enhanced forward guidance had the intended effect. our reinvestment policy reinforces the effects of forward guidance on policy rates. today, the stock of securities acquired under the app has reached such a sizeable level that our 2 / 5 bis central bankers'speeches reinvestment policy is sufficient to ensure the degree of continued duration extraction needed to keep a lid on term premia. 7 keeping the stock of securities constant also contributes to maintaining favourable liquidity conditions. ample volumes of excess reserves ensure that the overnight interest rate stays close to the floor of the interest rate corridor, which is provided by the deposit facility rate. this, together with forward guidance on the expected evolution of our policy interest rates, reduces rate uncertainty across maturities and thus adds to the compression of term premia brought about by the duration extraction channel. preserving significant monetary stimulus at the beginning of march this year the governing council was faced with a delicate call. on the one hand, the economic expansion was clearly losing steam and the sagging economy threatened to slow the pace at which inflation was expected to climb back to our objective. indeed, for the first time in a number of projection rounds, the march staff projection exercise had downgraded the inflation outlook uniformly throughout the horizon, including at the end point. on the other hand, there was no doubt that underlying conditions had come a long way since the start of our asset purchase programme, in terms of both the overall progress achieved and the resilience of the economy to negative shocks. the weaker economic momentum had not fundamentally undermined the conditions on which progress towards our aim ultimately depends, but it was slowing the pace of inflation convergence. in the light of the downward revisions to the macroeconomic outlook, additional measures were needed to preserve the ample degree of monetary accommodation supporting inflation convergence towards our aim. in march we adjusted our forward guidance on the key ecb interest rates, our main instrument, while announcing some other measures to preserve favourable lending conditions and the smooth transmission of monetary policy. long - term interest rates and, indirectly, financial conditions depend on market participants β expectations of the path that monetary policy interest rates are likely to follow. today, this path is constrained on the downside, as the overnight interest rate β which underpins the whole term structure of risk
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the framework of modern risk management principles, against interest rate or exchange rate risk on their balance sheets. the izmir derivatives exchange provides an important opportunity in this respect. after focusing on the monetary and exchange rate policies conducted by the central bank and the developments in inflation and financial markets, now i would like to talk about the strong growth performance that has been displayed by the turkish economy since 2001 and the growth outlook. as you all know, in the first quarter of 2006, the turkish economy grew by 6. 3 percent in real terms. hence, cumulative real growth has been 36. 9 percent since 2001. the turkish economy has been growing for the last 17 quarters consecutively. i would like to draw your attention to the first point that is related to this growth process ; the dynamics and actors of growth has changed parallel to the structural changes in the economy. today, growing with public resources is no longer the case. the determinant of the growth rates is the consumption and investment of the private sector. while private sector real investment expenditures increased by 118. 2 percent in the period between 2001 and the first quarter of 2006, the said increase in the public sector was realized as 18. 6 percent. on the consumption side, expenditures of the private sector and the public sector increased by 32. 8 percent and 7. 5 percent, respectively, during the same period. meanwhile, machinery - equipment expenditures of the private sector have increased cumulatively by 217. 7 percent since 2001. these figures underline the fact that investment - based growth has also been increasing. the main contribution of the public sector to growth no longer comes through its expenditures, but through the role it undertakes as a strong supervisory and regulatory agent in the framework of good governance principles and also from its policies focusing on the goal of increasing competitiveness. the public sector β s need for borrowing from financial markets declined due to tight fiscal policies, which provided the private sector the opportunity to find lower - cost and longer term resources. another change observed in growth dynamics in line with the structural transformation in the economy is that productivity increases have become the most significant factor in growth. the cumulative productivity increase in the private manufacturing industry for the period between 2001 and the first quarter of 2006 reached 35 percent. while the said productivity increases support the growth process on the one hand, they improve the quality and contribute to the sustainability of growth on the other. the last issue i will touch on about growth factors has to do with the increased level of integration of the
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my view, the cmu project is an important step forward to reach the goal of correcting some structural deficiencies of the eu capital markets in terms of their relative underdevelopment and fragmentation. cmu action plan was launched in 2015 by the european commission by setting out a list of over 30 actions and related measures to establish the building blocks of an integrated capital market in the european union by 2019. so far the implementation of these measures has been slow. in any event, in recent years the role of european capital markets as a source of funding for firms has increased. for example, the ratio of financing through fixed - income securities to total debt financing has grown from 8 % in 2007 to 12 % in 2017. a similar trend has also been observed in other advanced economies including the united states. understanding the driving forces of this trend is important in order to assess its main implications. some factors are possibly of a transitory nature. among these factors are the post - crisis monetary policies and their implementation. in particular, the introduction in mid2016 of the corporate sector purchase programme ( cspp ) as part of the ecb asset purchase programme, has contributed to lower the cost of firms β financing through the issuance of fixed - income securities relative to the cost of bank funding, thus encouraging see bentolila, s., jansen, m., and jimenez, g. ( 2017 ) " when credit dries up : job losses in the great recession ", journal of the european economic association, 16, 650 β 695, and martinez - pages, j. ( 2014 ) β impact of restructuring plans on lending to non - financial corporations β economic bulletin banco de espana, july β august 2014. see special feature a β financial integration and risk sharing in a monetary union β, in financial integration in europe, ecb, april 2016 and box 1 β what could enhance private financial risk sharing in the euro area? β in financial integration in europe, ecb, may 2018. see also asdrubali, p., sorensen, b. and yosha, o., ( 1996 ) β channels of interstate risk sharing : united states 1963 - 1990 β, quarterly journal of economics, 111, 1081 - 1110 ; athanasoulis, s. and van wincoop, e. ( 2001 ) β risk sharing within the united states : what do financial markets and fiscal federalism accomplish? β, review of economics and statistics, 83, 68
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about whether they should make these payments by cheque in the days immediately following the rollover to the year 2000 as part of their contingency planning. i hope these organizations carefully consider all of the implications of such a step before making a final decision in this regard. we have a high degree of confidence in the ability of the federal reserve and the banking industry to continue to process electronic payments during this period. the drawbacks to the payment recipients of this change to business - as - usual practices may well outweigh any perceived benefits. conclusion i believe that the financial services industry has made great progress in addressing year 2000 issues. during this next year you will not only need to do your best to continue to repair and test your own systems, but will also need to evaluate the risk of potential failures and the effect of these failures on your business. further, you will need to test fallback procedures or work - around processes that mitigate the effect of such failures on your ability to continue to conduct business. finally, we must continue to be a reliable source of accurate and sound information to maintain the public β s trust. i do not doubt that we can collectively rise to these challenges.
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- added economy. increasing global importance of green technology against the backdrop of current climate and environmental concerns that are the consequence of unsustainable economic activities, green technology emerges as a winning proposition. green technology has strong potentials to stimulate economic growth while mitigating environmental degradation. national and international efforts to promote green technology as a new source of growth have intensified in recent years. there is a growing momentum in scaling up the green agenda on a global basis, with countries such as denmark, south korea, finland and germany already embarking on green technology movements in their respective countries. since 2007, the worldwide market for green technology has grown on an average of 12 % annually, and is now worth over eur2 trillion. by 2025, it is forecasted to double to eur4. 4 trillion. the global market for renewable energy namely wind, solar photovoltaic ( pv ) and biofuels has grown by more than 30 % in the recent few years and is estimated to reach nearly us $ 400 billion by 2021. economies that have bis central bankers β speeches strategically invested in the green technology sector are already reaping the benefits of the transition to green initiatives. germany, for example, has a green industry growing at an annual average of 12 % since 2007 and a global market share of 15 %. green technology companies contributed 11 % of its gdp and employing 1. 4 million workers. in the case of the solar energy sector, malaysia is now one of the top producers in pv manufacturing and this industry has generated direct foreign investment of over rm12 billion and created over 10, 000 skilled and well paid jobs. green technology offers specific solutions for pressing ecological and social challenges, and for this reason it is expected to continue to gain global importance. there are many forces that would drive the green technology industry into the future ; demographic change, urbanisation, globalisation, scarcity of resources and the challenge arising from climate change. these forces would inevitably transform society towards a green economy. its usage in traditional industries would promote the development of new technology and recast existing one. green technologies have also proven to drive modernisation in the traditional industries, in terms of better utilisation of energy and natural resources and could prove to be a strategic advantage in doing business. some have aptly compared the green revolution to the industrial revolution, an era that had profoundly changed our civilisation. just as the transformative 19th - century innovations changed businesses, so too will green technologies alter industries,
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. see board of governors of the federal reserve system ( 2009 ), β board announces availability of online credit card repayment calculator β, press release, april 16. see board of governors of the federal reserve system, β consumer information brochures β, webpage. see board of governors of the federal reserve system ( 2010 ), β federal reserve announces an online consumer guide to credit cards β, press release, february 19. as for consumer protection, the federal reserve continues to demonstrate its commitment in this area. we have recently issued rules pertaining to mortgages, credit cards, student loans, and overdraft protection programs, among others. i should note that in recent years we have used extensive consumer testing, both to improve financial disclosures and to highlight practices that simply cannot be understood by consumers even with the best disclosures and thus must be prohibited. we β ve also stepped up our consumer protection supervision and enforcement, including at the nonbank subsidiaries of bank holding companies and foreign banking organizations. again, let me congratulate the foundation for organizing tomorrow β s financial literacy summit and for all the good work that it does. i would also like to recognize and congratulate the others honored this evening β john bryant, founder of operation hope ; the late jack kemp, who served as secretary of housing and urban development and as congressman of western new york ; and congresswoman sheila jackson lee of texas. it is wonderful to see so many individuals and organizations working toward the common goal of helping americans make the best choices for their financial futures. thank you again.
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recognition among financial institutions and related parties that an appropriate evaluation of the economic value of nonperforming loans ( npls ), and higher provisioning and more aggressive write - offs of these loans based on such an evaluation, are important in accelerating the disposal of npls. further efforts have been made in this direction. in fiscal 2002, japanese banks recorded a large net loss for the second consecutive year. this result clearly reflected the severe conditions faced by the japanese financial system. at the same time, it signified the aggressive disposal of npls as shown by the substantial decrease in npls outstanding at major banks. the time has now come to move to the final stage to restore the effective functioning of the financial system, keeping in mind the complete removal of blanket deposit protection scheduled in april 2005. this removal, in my view, should not be perceived simply as a change in the type of coverage of deposit insurance protection. instead, it should be recognized as a turning point for financial institutions in the reform of their management. protection has been provided as a temporary buffer to avoid potential confusion. following the complete removal, financial institutions must pursue a dynamic management strategy based on their own judgment. to this end, it is the financial institutions themselves, not the regulatory authorities, that should take the initiative in dealing with npls. moreover, they should redouble their efforts to strengthen their earnings power besides accelerating the disposal of npls. v. disposal of npls and corporate revitalization in addition to the appropriate evaluation, higher provisioning, and more aggressive write - offs in the disposal of npls, increasing attention is being paid to the importance of corporate revitalization from the viewpoint of promoting the reform of industrial structure. the industrial revitalization corporation of japan ( ircj ), which began operation in may this year, recently decided to support four firms. the ircj will subsequently purchase the loan assets of these four firms from lenders other than their main bank, decide on a restructuring plan and then implement it. individual financial institutions, major banks in particular, are establishing a subsidiary specializing in corporate revitalization. moreover, we observe an increasing number of cases in which financial institutions set up an internal section specifically devoted to corporate revitalization, and form an alliance with outside experts like lawyers and certified accountants. the success of corporate revitalization requires a speedy and decisive response on the part of both firms and financial institutions. some firms with useful technology and expertise find it difficult to improve
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bankers β speeches from the ending of support for some software programs and to the front - loading of demand prior to the strengthening of gas emission regulations. looking ahead, since corporate profits are likely to continue improving, business fixed investment is projected to follow a moderate upward trend as firms seek to expand capacity on the back of increased capacity utilization and as monetary easing continues to underpin demand for investment. with regard to private consumption, the outlook crucially depends on the effects of the consumption tax hike. to consider these effects, they need be divided into two aspects. the first aspect is the short - term effects of the decline in demand following the front - loading of consumption prior to the tax hike, while the second aspect is the longer - term effects of the decline in real incomes as a result of the tax hike, which will materialize only gradually. economic indicators released so far indicate a clear decline following the tax hike in purchases of durable goods such as automobiles, demand for which increased substantially prior to the tax hike. however, many firms indicate that the magnitude of the decline in consumption following the tax hike has been broadly in line with expectations and that private consumption continues to remain resilient as a trend. at this stage, it therefore appears that the effect of the decline in consumption due to the front - loading of demand is likely to start waning in the coming few months. as for the adverse effects through the decline in real incomes, the key will be to what extent improvements in the employment and income situation can alleviate these effects. with labor market conditions continuing to improve steadily, employee income is expected to continue rising moderately, and private consumption is likely to remain resilient. how the tax hike affects consumption is something we will continue to examine in the coming months. prices let me turn to price developments. the year - on - year rate of change in the consumer price index ( cpi, excluding fresh food ) was plus 1. 3 percent for four consecutive months from december last year to march this year, and, after excluding the direct effects of the consumption tax hike, accelerated somewhat to plus 1. 5 percent in april ( chart 5 ). breaking down the year - on - year rate of increase shows that price increases have been seen in a wide range of items reflecting that japan β s economy has continued to recover moderately, while energy - related goods have stopped pushing up the year - on - year rate of increase. with regard to the outlook, the year - on - year rate of change in the
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asset purchases and liquidity provision to banks in the euro area have clear fiscal consequences and there have recently been several political calls for more action from the central banks. second, one can ask whether this kind of policy mix can lead the economy back to the β normal regime β, where inflation is near the targeted level and the economy grows near its potential. the traditional answer is due to pigou and patinkin, who argued that wealth effects at very low inflation levels eventually lead to increased consumer spending and recovery of the economy to the normal regime. it should be noted that efficacy of the pigou - patinkin mechanism depends on the degree of private - sector indebtedness β high debts weaken the mechanism. modern answers to this question are surprisingly few. looking at current research, there has been a lot of work in the efficacy of fiscal policies when interest rates are at their effective lower bound. 2 another major research effort focuses on the significance of financial market imperfections for macroeconomics and for macroeconomic policies. 3 however, i have seen only limited amount of new work that tries to assess the role of monetary and fiscal policies in aiding the path toward the normal regime. a careful approach requires taking a global viewpoint. i do not have time to go into further detail, except to note that this area is in need of much more research. 4 iv. interrelations between domains of fiscal and monetary policy the latest stage of the financial crisis, the sovereign debt crisis, is also affecting the boundary between monetary and fiscal policies. this situation is not new. we know well from economic history that the lines between monetary and fiscal policies and the respective decision - makers become strained from time to time in situation of high levels of public debt. the recent paper by reinhart and sbrancia ( 2012 ) describes very well the strains in this relationship in the decades after world war i and ii. the current situation has compelled many central banks take a more encompassing view of their mandate in relation to the fiscal authorities. in particular, there are major difficulties in the euro area in this respect, though the debates are also visible in other countries, for example, in the uk and the united states. the ecb is the central bank not for a single sovereign country but for 17 sovereign countries. in this setting there is no one - to - one correspondence between the ultimate owners of the central bank and the ultimate owners of each government β s budget. the fact that the ecb has to serve 17 sovereigns
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consider the sustainability of the developments in the banking sector and their compatibility with price stability. after the hard lessons we learned over the last five years, the case for benign neglect of asset booms and only picking up the pieces afterwards is not very attractive. the crisis experience supports rather the idea that financial excesses are better prevented as they happen than only managed after they have caused a recession. one option is leaning against the wind. that would mean taking the price stability objective in a more flexible way and paying more attention to asset prices in monetary policy formulation. but there are difficulties with that : one difficulty is the problem of detecting the credit cycle in time, and correctly timing the monetary policy response. another problem is that price stability might get too little attention. if the price stability objective had to be compromised because of the developments in the banks and in the financial markets, we would actually have a case of financial dominance. how can this be avoided? naturally, it is the quality of commercial bank management and the internal incentives built into the banks β management systems that are the first line of defence. but we have also learned that prudent management practices need to be supported by good and effective regulation. this leads to my other main point today. in today β s environment, the effective independence of monetary policy requires good regulation which ensures that the banking system as a bis central bankers β speeches whole remains stable and solid through the interest rate cycle, not only in times of tight monetary policy but also in times of very accommodative monetary policy. like the fiscal discipline of governments, which protects monetary policy from forms of fiscal dominance, effective banking regulation protects monetary policy from financial dominance. we can see how these prerequisites for independent monetary policy are as important for today β s accommodative monetary policy as they were for a disinflationary monetary policy when the concept of independence was developed. * * fortunately, major progress has been achieved in the field of banking regulation, not least in the euro area with the banking union. there are three aspects of the developing banking regulation that i want to mention in this connection. first, the prudential regulation of banks is now stronger and more uniform than before. banks β capital ratios have been strengthened a lot since the crisis, and the responsibility for supervision has been centralized at the ecb. this has already made banks more resilient in the face of any future shocks. the new bank recovery and resolution framework is also part of the
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discussion arises when inflation is well below the target level is not in itself surprising. however, it is important to have realistic expectations as to what monetary policy can achieve. changes of a structural nature are difficult to capture at an early stage of the forecasting work as it takes some time before it becomes clear that the changes are not merely transient factors. this is one reason that needs to be recognised why inflation may deviate from the target level. one indication of the difficulties in making accurate forecasts is that inflation in 2005 was overestimated by in principle all forecasters ( diagram 10 ). a comparison indicates, if anything, that the riksbank was among the first forecasters to take into account the effects that have subdued inflationary pressures. some analysts have periodically advocated a somewhat faster rate for interest rate cuts than that chosen by the riksbank. however, the difference has on average been small. given the effects of monetary policy normally assumed, the difference in inflation and employment would have been marginal. for monetary policy to bring inflation much closer to the target level, a radically different policy would have been necessary. for instance, the riksbank would probably have needed to cut the repo rate quickly and substantially a couple of years ago rather than making the gradual cuts that were implemented. it would have been difficult to justify this type of monetary policy given the view of economic prospects at that time. it is also clear that the monetary policy that was conducted has had a strong expansionary effect on the economy. for instance, gdp growth has been high. the expansionary monetary policy has also been evident in the rapid credit expansion in the household sector and the price increases in the housing market. it is doubtful whether it would have been wise to reinforce this development with even more expansionary monetary policy. unfortunately, the strong growth has not resulted in a corresponding recovery in employment. on the contrary, the labour market has developed more weakly than might have been expected from a historical perspective, given the high gdp growth. to some extent this reflects the unexpectedly high productivity growth. however, a reasonable explanation is that there are also problems in the labour market that are not cyclical. this is something that should be resolved by other means than monetary policy. let me conclude by saying that i welcome discussions on monetary policy. monetary policy is to a great extent based on assessments and it is therefore natural that there are differing opinions as to what should be done with the repo rate β both outside of the riksbank and
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the banks, with well - known results. we need to put this right. we will therefore now have a system with many different types of constraints. government exposures are also risky another question discussed by the basel committee is if and how the banks should maintain capital to cover their exposures to governments and other public bodies. today it is in practice possible for the financial supervisory authorities to completely exempt such exposures from the capital adequacy requirement. we know from experience, however, that the banks β exposure to governments is not risk free. the basel committee has therefore decided to review whether and how the regulations need to be changed. almost 10 years on from the crisis β time to complete reforms the international regulatory work has been in progress since the global financial crisis broke out in 2007. it is important to many parties, not least banks, investors and policy - makers, to clarify how the global regulatory framework for banks will function. the basel committee is therefore working intensively on completing the current reform work by the end of the year 1. however, it is still not clear when the review of the exposures to governments and public bodies will be complete. 3 critics have expressed fears that the reforms i am talking about now will lead to minimum capital for certain banks increasing radically, which in turn risks resulting in a real economic decline. here i would like to point out that the basel committee β s ongoing reform work does not aim to significantly increase the total global capital requirements. instead, it concerns ensuring that all banks around the world have adequate resilience to manage financial crises and that risks are covered by capital in a uniform way in all banks and all countries. one result of this exercise is that banks that currently have very low risk weights will probably face higher capital requirements, while banks with very high risk weights may face lower capital requirements. designing a uniform global regulatory framework is not an easy task, particularly as banking systems differ from country to country, but also because we are living in a changing world. the basel committee's work is therefore largely a question of finding compromises that all member countries can support and which will stand the test of time. naturally, the basel committee is also evaluating very carefully the effects of the proposals now under negotiation. this applies to the effects on the banks as well as on society. following the financial crisis, a number of studies have been made regarding which capital levels are most appropriate from a socioeconomic perspective 2. many of them have shown that the macroeconomic advantages of
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above national and international requirements. in other words, economic opportunities abound across the country today at a time when the financial system is sound, stable and liquid. this is fertile ground indeed for proactive work on financial inclusion. who should be financially included our goal is to mainstream filipinos across the country as regular clients of our financial system, particularly ( 1 ) msmes, ( 2 ) overseas filipinos and their beneficiaries, ( 3 ) agriculture bis central bankers β speeches and agrarian reform sectors, ( 4 ) indigenous peoples and cultural minorities, ( 4 ) women, ( 5 ) the youth, ( 6 ) and persons with disabilities. these sectors are typically unserved or underserved by conventional financial service providers. we want to provide effective access to a wide range of financial products and services. this broadly encompasses a multitude of target sectors and inclusion issues. it also indicates the multi - dimensional financial needs of these sectors β needs that can be addressed by a variety of financial service providers and support institutions. what should we do to achieve financial inclusion given a clear vision and target market, the next step is to implement the national strategy for financial inclusion. the nsfi spells out high - level principles and systematic strategies ; guides coordination across government and private sectors ; ensures policy and program cohesion ; and promotes multi - sectoral synergies. in particular, the nsfi lays down precise objectives : ( 1 ) financial products that are diverse, well - designed, suitable and relevant to different market segments ; ( 2 ) providers and business models that are diverse, responsible, responsive and innovative ; and ( 3 ) a citizenry that is financially - learned and adequately protected. the nsfi strategic statements and clear objectives serve as guide to all stakeholders when designing and implementing financial inclusion policies and programs. moving forward to implementation and progress measurement later in the program, the government agencies that crafted the nsfi will sign a memorandum of understanding. these are the agencies that will spearhead the implementation of our nsfi : β’ department of finance ( dof ) β’ department of education ( dep - ed ) β’ department of trade and industry ( dti ) β’ department of social welfare and development ( dswd ) β’ department of budget and management ( dbm ) β’ national economic and development authority ( neda ) β’ insurance commission ( ic ) β’ commission on filipinos overseas ( cfo ) β’ securities and exchange commission ( sec ) β’ philippine statistics authority ( psa ) β’ philippine deposit insurance corporation ( pd
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##ic ) β’ cooperative development authority ( cda ) and β’ bangko sentral ng pilipinas at the same time, we have invited multi - sectoral representatives here today because we believe that you can play a significant role in the successful implementation of our nsfi. ladies and gentlemen, we need your cooperation, collaboration and overall support to ensure that financial inclusion becomes a reality throughout the philippines. equally important, we hope that you will help us in measuring and monitoring the progress of our financial inclusion initiatives. moving forward, we need data to guide and inform us if we bis central bankers β speeches are on the right track ; to evaluate if we need to refine our tactical plans ; to help us prioritize our resources ; and to help us calibrate our policies and programs accordingly. indeed, the importance we ascribe to data and measurement is underscored by the simultaneous launch today of the result of our maiden national baseline survey on financial inclusion. the survey, completed this year, showed the following results : β’ 25 % of filipino adults have never saved, 32 % used to save, and only 43 % presently have savings. β’ of those with savings, only 32 % save in banks while 68 % keep their savings at home. β’ 65 % of unbanked adults cited lack of money as the main reason for not having a bank account. β’ about 47 % of adults have outstanding loans. the main source of borrowing is informal β 62 % borrow from family, relatives or friends while 10 % borrow from informal lenders. β’ in the past six months, about 44 % of adults sent or received money while 42 % made payments. β’ only 3. 2 percent of adults have microinsurance coverage. β’ clients rated themselves as only β somewhat satisfied β with how issues were resolved in most financial service access points. the survey results tell us we have a long way to go to achieve financial inclusion. the survey also tells us that there are plenty of opportunities for those looking to expand their business or to introduce game - changing innovations. clearly, we will need broad - based cooperation from local and international institutions to address these gaps. together, i believe we can make substantial gains on our financial inclusion targets. conclusion we look forward therefore to work with you in our journey to achieve inclusive finance that supports inclusive growth. we want to ensure that filipinos across the country are able to identify, gain and prosper from the fruits of economic progress. in particular, we want our people to be
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benoit cΕure : asset purchases as an instrument of monetary policy speech by mr benoit cΕure, member of the executive board of the european central bank, at the high - level conference on β monetary policy in the new normal β organised by the imf, washington dc, 13 april 2014. * * * thank you very much for inviting me to open this session on whether central banks should continue to target longer - term bond yields in normal times. my first instinct when presented with this question was to provide a rhetorical answer and say that to continue targeting longterm bond yields one has first to have started doing it. and indeed, the ecb has so far only intervened in long - term bond markets, such as the covered bond market, to restore monetary policy transmission in malfunctioning market segments and help enforcing a given monetary policy stance. we have not so far resorted to a policy of targeted asset purchases that aim to alter the monetary policy stance β what is universally, if in my view inaccurately, referred to as quantitative easing. on second thoughts, however, this would be the wrong way to reply. it would not only be wrong because we have recently made clear that asset purchases are an instrument that we are ready to use if we deem necessary. it would also be the wrong answer because the question of whether central banks should target longer - term bond yields provides a good focal point to reflect on what monetary policy is trying to achieve in the first place. in other words, instruments are just the tail that wags the dog. let me try and explain what i mean as concisely as possible. focusing specifically β and at the risk of over - simplifying the issue β on the interest rate channel of monetary transmission, monetary policy operates by raising or lowering the interest rate in the economy. a lower ( real ) interest rate lowers the cost of capital for firms, encourages investment spending and stimulates consumption. a higher real interest rate has the opposite effect. but the point of course is that there is no such thing as one interest rate to which all economic agents respond. there are at least three ways in which interest rates are differentiated in the euro area. there is vertical differentiation β different economic agents are sensitive to interest rates with different maturities. there is spatial differentiation β different interest rate curves provide the reference rates in different jurisdictions. and there is horizontal differentiation β within jurisdictions, different markets determine firms β and households β cost of borrowing. what this implies is
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##ing climate were significant but manageable, while delayed action was dangerous and much more costly. importantly, the report concluded that there was still time to avoid the worst impacts of climate change, if we took strong action. source : world meteorological organization, 3 december 2019, january to october. https : / / public. wmo. int / en / media / press - release / 2019 - concludes - decade - of - exceptional - global - heat - and - high - impactweather intergovernmental panel on climate change ( 2018 ). european parliament, press release 29 - 11 - 2019. https : / / www. europarl. europa. eu / news / en / pressroom / 20191121ipr67110 / the - european - parliament - declares - climate - emergency http : / / www. lse. ac. uk / granthaminstitute / publication / the - economics - of - climate - change - the - stern - review / https : / / webarchive. nationalarchives. gov. uk / 20100407163608 / http : / / www. hmtreasury. gov. uk / d / summary _ of _ conclusions. pdf 2 / 5 of course, it is worth repeating that these conclusions were flagged already in 2006, more than thirteen years ago. unfortunately, it would seem that it hasnΒ΄t been till recently that this call for action has been taken seriously. in his keynote presentation lord stern will shed some light on whether we are still in time to avoid the worst impact. thank you very much for accompanying us today. still, we shouldnΒ΄t forget that the fight against climate change also has a human and social dimension. the transition to a low - carbon economy must also be β fair β or β just β for the economic sectors most affected. this is one of the objectives of the 2030 agenda for sustainable development, which commits to eradicate poverty and achieve sustainable development worldwide by 2030, ensuring that no one is left behind. the agenda integrates in a balanced manner the three dimensions ( economic, social and environmental ) of sustainable development through seventeen sustainable development goals. ms. cristina gallach, high commissioner for the 2030 agenda, will moderate the panel that will follow lord sternΒ΄s presentation, and will share with us the progress that is being made in this respect. thank you very much, cristina, for being here today. i am sure we are all looking
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refinancing operations in the first quarter of 2010, we decided to carry out the last six - month longer - term refinancing operation on 31 march 2010. this operation will be carried out using a full allotment fixed rate tender procedure, as will the regular monthly three - month longer - term refinancing operations already announced for the first quarter of 2010. further operational details on these decisions can be found in a press release that will be posted on our website after this press conference. the improved conditions in financial markets have indicated that not all our liquidity measures are needed to the same extent as in the past. with these decisions, the eurosystem continues to provide liquidity support to the banking system of the euro area for an extended period at very favourable conditions and to facilitate the provision of credit to the euro area economy. let me now explain our assessment in greater detail, starting with the economic analysis. economic activity in the euro area improved further in the third quarter of 2009, with real gdp growth returning to positive territory following five quarters of contraction. according to eurostat β s first estimate, real gdp increased by 0. 4 % quarter on quarter. available survey data suggest that the recovery is continuing during the fourth quarter of 2009. at present, the euro area is benefiting from the inventory cycle and a recovery in exports, as well as from the significant macroeconomic stimulus under way and the measures adopted to restore the functioning of the financial system. however, a number of the supporting factors are of a temporary nature and activity is likely to be affected for some time to come by the ongoing process of balance sheet adjustment in the financial and the non - financial sector, both inside and outside the euro area. for this reason, the euro area economy is expected to grow only at a moderate pace in 2010, and the recovery process is likely to be uneven. eurosystem staff project annual real gdp growth of between β 4. 1 % and β 3. 9 % in 2009, between + 0. 1 % and + 1. 5 % in 2010, and between + 0. 2 % and + 2. 2 % in 2011. the range for 2010 has been revised upwards compared with the september 2009 ecb staff macroeconomic projections. forecasts by international organisations are broadly in line with the december 2009 eurosystem staff projections. the governing council continues to view the risks to this outlook as broadly balanced. on the upside, there may be stronger than anticipated effects stemming from
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come. in order to support sustainable growth and employment, labour market flexibility and more effective incentives to work will be needed. furthermore, policies that enhance competition and innovation are also urgently needed to speed up restructuring and investment and to create new business opportunities. an appropriate restructuring of the banking sector should also play an important role. sound balance sheets, effective risk management, and transparent as well as robust business models are key to strengthening banks β resilience to shocks, thereby laying the foundations for sustainable economic growth and financial stability. we are now at your disposal for questions.
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miroslav singer : central bank governor of the year for emerging europe acceptance speech by mr miroslav singer, governor of the czech national bank, at the central bank governor of the year for emerging europe 2013 awards, washington dc, 12 october 2013. * * * let me start by thanking you for this award. i see it not so much as personal recognition, but more as recognition of the team of people that make up and define the czech national bank that i have the pleasure to represent here. special thanks go to those i work with directly, among others to my colleagues on the board for their unlimited patience with my generally awful manners and attempts to claim leadership. whenever i meet a group of investors or analysts, i always start by noting that any issues and questions requiring knowledge and wisdom would be better addressed by our experts, those requiring only wisdom would be better be fielded by my colleagues on the board, and those requiring neither knowledge nor wisdom can be safely left to me. so, let me share some of my knowledge - and wisdom - free observations with you. ten years ago, when i was working in restructuring, i could never have imagined that i would join the central bank in less than two years and later rise to the top job there. but the offer came, and it was one i truly could not refuse. i owe a big debt of thanks to my predecessor zdenek tuma, who steered the bank to a position where its reputation, which had been severely tarnished before his arrival, was growing steadily. he achieved this by, among other things, imposing his own highly developed sense of self - control and restraint on the bank. as the czech national bank started communicating less on general topics and more on its areas of expertise, it became recognized as an institution of true independence and authority β to such an extent that the czech political system allocated all supervisory competences to it and continues to broaden its responsibilities. i believe that the crises from which a significant part of the developed world is still emerging have β at least for smaller economies β justified a scheme in which some or all supervisory roles are allocated to the central bank, which holds responsibility for stability issues anyway. but i also have to warn against the trend where the public sees central banks gaining more and more competences and mandates and starts to overestimate their ability to deal with crises. central banks are far from omnipotent, and this trend may harm them. after all, their independence is only a product of the political
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our balance sheet and the quantity of reserves, we are allowing agency debt and mbs to run off as they mature or are prepaid. the federal reserve is currently rolling over all maturing treasury securities, but in the future it may choose not to do so in all cases. in the long run, the federal reserve anticipates that its balance sheet will shrink toward more historically normal levels and that most or all of its security holdings will be treasury securities. although passively redeeming agency debt and mbs as they mature or are prepaid will move us in that direction, the federal reserve may also choose to sell securities in the future when the economic recovery is sufficiently advanced and the fomc has determined that the associated financial tightening is warranted. any such sales would be at a gradual pace, would be clearly communicated to market participants, and would entail appropriate consideration of economic conditions. as a result of the very large volume of reserves in the banking system, the level of activity and liquidity in the federal funds market has declined considerably, raising the possibility that the federal funds rate could for a time become a less reliable indicator than usual of conditions in short - term money markets. accordingly, the federal reserve is considering the utility, during the transition to a more normal policy configuration, of communicating the stance of policy in terms of another operating target, such as an alternative short - term interest rate. in particular, it is possible that the federal reserve could for a time use the interest rate paid on reserves, in combination with targets for reserve quantities, as a guide to its policy stance, while simultaneously monitoring a range of market rates. no decision has been made on this issue ; we will be guided in part by the evolution of the federal funds market as policy accommodation is withdrawn. the federal reserve anticipates that it will eventually return to an operating framework with much lower reserve balances than at present and with the federal funds rate as the operating target for policy. 9 conclusion to sum up, in response to severe threats to our economy, the federal reserve created a series of special lending facilities to stabilize the financial system and encourage the resumption of private credit flows. as market conditions and the economic outlook have improved, many of these programs have been terminated or are being phased out. the federal reserve also promoted economic recovery through sharp reductions in its target for the federal funds rate and through purchases of securities. the economy continues to require the support of accommodative monetary policies
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stanley fischer : the us economy and monetary policy speech by mr stanley fischer, vice chair of the board of governors of the federal reserve system, at the 31st annual group of thirty international banking seminar, washington dc, 9 october 2016. * * * with friday morning β s labor market data prominently in the news, i will start with the labor market and end with a discussion of monetary policy. 1 recent reports pertaining to the labor market, including friday β s release, have been solid, showing continued improvement. so far this year, payrolls are reported to have increased by 180, 000 per month. that is down from last year β s gains of 230, 000 per month but well above what is needed to provide jobs for new entrants into the labor force. despite the strong job growth, the unemployment rate, at 5 percent in september, has essentially moved sideways this year as individuals have come back into the labor market in response to better employment opportunities and higher wages. as a consequence, the labor force participation rate has edged up against a backdrop of a declining longer - run trend owing to aging of the population. this increase is a very welcome development. all told, with the unemployment rate not far from levels that most federal open market committee ( fomc ) participants view as normal in the longer run and the rise in the participation rate, i see the u. s. economy as close to full employment, with some further improvement expected. real gross domestic product ( gdp ) rose at a subdued 1 percent pace during the first half of the year and only 1 - 1 / 4 percent over the past four quarters. this pace likely underestimates the momentum in aggregate demand because it includes a sizable inventory correction that began early last year. it is likely that this correction has by now run its course, and most analysts are expecting inventories to make a positive contribution to demand over the second half of the year and for gdp to increase in the neighborhood of 2 - 3 / 4 percent. 2 household spending has been the main contributor to real gdp growth over the past four quarters, and, with solid gains in employment and household income and upbeat consumer sentiment, this sector should continue to support growth over the second half of the year. in contrast, residential construction has cooled this year despite rising home prices and low interest rates. housing starts have been moving sideways, suggesting little pickup in construction over the near term. in addition, business investment spending has been weak, held down in part by declining activity
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no inclination on the part of the fed to move to a less expansionary stance of monetary policy. the united states makes its monetary policy for its own domestic needs : no - one could expect it ( or any other country ) to do otherwise. the problem is that a number of other countries, which fix their exchange rates to the us dollar, effectively also match us monetary policy. another group of countries, even though they have no desire to match us monetary policy, are nevertheless limited in the extent to which they can depart from it by exchange rate considerations. the net effect of all this is that, to some extent, the united states sets the world β s monetary policy - a partial return to the situation that prevailed under the bretton woods system. this may or may not be a bad thing, depending on where you view it from. for some parts of the world, where economic activity is subdued and domestic inflationary pressures non - existent, an extremely low interest rate structure like that in the united states may be suitable. but for other parts of the world, it could lead to the build - up of imbalances. for the world as a whole, we do not yet know whether the maintenance of an extremely low average interest rate is helpful or harmful to its longer - term interests. on the one hand, the after - effects of the bursting of asset price bubbles are still exerting downward pressure on goods and services prices in the united states and europe, and in japan ( where it has been going on for a decade or more ). more importantly, the downward pressure on goods prices - particularly internationally traded manufactured goods prices - caused by the massive expansion in chinese capacity continues apace. this is a structural phenomenon which has been with us for some time now and can be expected to remain important for the foreseeable future, particularly with india joining in. it is what economists call a positive supply shock, and among many of its effects, the one most relevant to the current discussion is that it has made the maintenance of low cpi inflation easier than it formerly was. while these influences are important, we should not forget that the international business cycle is also alive and well, and can be expected to have an influence as we go forward. good economic growth and expansionary policies are now starting to make their presence felt in a range of international markets. commodity prices ( as shown in the crb index, graph 4 ) have risen over the past two years and are now at their highest level
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, and delinquencies on commercial mortgage - backed securities have reversed the modest increase that occurred from 2000 to 2003. the latest information on property prices hints at some moderation in price increases in the first quarter from the rapid price appreciation of last year. but, as in the housing market, commercial real estate prices are continuing to rise in the aggregate. recent supervisory guidance relating to real estate lending the federal reserve will continue to monitor developments in the residential and commercial real estate markets very closely. in addition to scrutinizing the effect of these developments on the economy, we are also, in our role as bank supervisors, monitoring banks'mortgage lending practices. last year, the federal bank regulatory agencies issued draft guidance on both residential and commercial mortgage lending. the agencies have received many comments on the proposed guidance, including comments from your association, which we will consider as we discuss what steps to take next. i will address the guidance on residential mortgage lending first. nontraditional mortgage products over the past few years, the agencies have observed an increase in the number of residential mortgage loans that allow borrowers to defer repayment of principal and, sometimes, interest. these loans, often referred to as nontraditional mortgage loans, include interest - only ( io ) mortgage loans, for which the borrower pays no loan principal for the first few years of the loan, and payment - option adjustable - rate mortgages ( option arms ), for which the borrower has flexible payment options - and which could result in negative amortization. ios and option arms are estimated to have accounted for almost one - third of all u. s. mortgage originations in 2005, compared with fewer than 10 percent in 2003. despite their recent growth, however, it is estimated that these products still account for less than 20 percent of aggregate domestic mortgages outstanding of nearly $ 9 trillion. although the credit quality of residential mortgages generally remains strong, the federal reserve and the other banking supervisors are concerned that banks'current risk - management techniques may not fully address the level of risk inherent in nontraditional mortgages, a risk that would be heightened by a downturn in the housing market. mortgages with some of the characteristics of nontraditional mortgage products have been available for many years ; however, they have historically been offered to higher - income borrowers. more recently, nontraditional mortgages have been offered to a wider spectrum of consumers, including subprime borrowers, who may be less suited
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federal reserve will do all that it can to prevent fraud and abusive mortgage lending practices. however, any new rules should be drawn clearly to avoid creating legal or regulatory uncertainty that could have the unintended consequence of restricting consumers'access to responsible subprime credit. another area of possible financial risk that we are watching is leveraged lending. 8 business borrowing for mergers and acquisitions and for corporate refinancing has been quite robust over the past few years as firms have taken advantage of relatively low interest rates to reduce their cost of capital. as underwriters have brought these deals to the market, the good earnings of corporate borrowers and several years of very low defaults have encouraged lenders and investors to fund hundreds of billions of dollars in leveraged loans. however, with this growth we are seeing some trends in the leveraged loan market that warrant closer monitoring : deals continue to be structured with thin pricing, more leverage, and looser covenants than is typical for non - investment - grade borrowers. further, originating banks are capitalizing on the strong investor demand for these loans by underwriting to distribute them, including board of governors of the federal reserve system ( 2007 ), β the april 2007 senior loan officer opinion survey on bank lending practices, β may, www. federalreserve. gov / boarddocs / snloansurvey / 200705. board of governors of the federal reserve system, federal deposit insurance corporation, national credit union administration, office of the comptroller of the currency, and office of thrift supervision ( 2007 ), " federal regulators encourage institutions to work with mortgage borrowers who are unable to make their payments, " press release, april 17, www. federalreserve. gov / boarddocs / press / bcreg / 2007 / 20070417. board of governors of the federal reserve system, federal deposit insurance corporation, national credit union administration, office of the comptroller of the currency, and office of thrift supervision ( 2007 ), " agencies seek comment on subprime mortgage lending statement, " press release, march 2, www. federalreserve. gov / boarddocs / press / bcreg / 2007 / 20070302. randall s. kroszner ( 2007 ), β creating more effective consumer credit disclosures, β speech delivered at the george washington university school of business, financial services research program policy forum, washington, june 1, www.
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managers contact group ( see the ecb website for more information on these groups ). see ecb opinion of 22 march 2012 on ( i ) a proposal for a directive on markets in financial instruments repealing directive 2004 / 39 / ec of the european parliament and of the council, ( ii ) a proposal for a regulation on markets in financial instruments and amending regulation [ emir ] on otc derivatives, central counterparties and trade repositories, ( iii ) a proposal for a directive on criminal sanctions for insider dealing and market manipulation and ( iv ) a proposal for a regulation on insider dealing and market manipulation ( market abuse ) ( con / 2012 / 21 ). see e. g. madhavan, a., β consolidation, fragmentation, and the disclosure of trading information β, the review of financial studies, vol. 8, no 3, pp. 579 - 603 and bloomfield, r. and o β hara, m., β can transparent markets survive? β, journal of financial economics, vol. 55, no 3, pp. 425 β 459. bis central bankers β speeches opacity enables the extraction of rents and can lead to increased price dispersion7, with negative consequences for market integrity and fairness. furthermore, a low level of posttrade transparency can significantly distort the informational role of prices by preventing the diffusion of value - relevant information, which may hamper market liquidity because of adverse selection. in line with this rather positive view of post - trade transparency, a number of empirical studies8 have found that the introduction of mandatory trade reporting has significantly improved formerly opaque market segments, such as the market for us corporate bonds. at the same time, one must be aware of potentially negative side effects. for example, liquidity providers may be reluctant to take on a large inventory position because they will find themselves in an unfavourable bargaining position if this information is known to others. they may ask for an additional premium in order to take on such a risk, which can raise transaction costs for investors. 9 similarly, very large market participants, such as pension funds, may find it more difficult to execute large transactions without being front - run by predatory traders. in very transparent markets such as those for equities, this has become a substantial concern. with these issues in mind, it is imperative that the new regulatory environment carefully considers all possible implications of increased market transparency. in particular, it is important that the new set
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regulatory framework. for example, the g - sib framework currently penalises cross - border transactions within the banking union by attaching a higher systemic risk score to banks with more of such transactions. this goes against the very rationale of the banking union, as it reduces the incentives for cross - border transactions and risk diversification. the international regulatory framework should recognise the progress that has been made in the banking union and exclude intra banking union positions from the cross - jurisdictional indicators in the g - sib methodology. fourth, there are also some resolution related aspects that warrant further consideration. in particular, the allocation of internal mrel has turned out to be an area of tension between national jurisdictions. jurisdictions with a foreign bank subsidiary prefer to have a high pre - positioning of internal mrel to ensure an orderly resolution of its local subsidiary. however, this implies a certain degree of ring - fencing to the detriment of the foreign parent bank. the compromise reached by member states in the council only allows that internal mrel is 1 / 2 bis central bankers'speeches waived if the resolution entity and the subsidiary are located in the same member state, neglecting the fact that we have achieved so much in terms of joint supervision and resolution among euro area countries. to account for this progress, internal mrel waivers on a crossborder basis in the banking union should be allowed as this would contribute to continuous cross - border banking, e. g. by generating efficiency gains and promoting further integration. therefore, it should also be possible to use guarantees to replace internal mrel and allow for more flexibility in the allocation of resources within the banking union. of course, to install confidence it will be important to have adequate safeguards in place, including that there is no legal or practical impediments to the provision of support by the parent to the subsidiary, in particular when the resolution action is taken. 2 / 2 bis central bankers'speeches
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randall s kroszner : federal reserve initiatives to support minorityowned institutions and expand consumer protection remarks by mr randall s kroszner, member of the board of governors of the us federal reserve system, at the interagency minority depository institutions national conference, miami, florida, 1 august 2007. * * * it is a pleasure to be here today to talk about issues and programs of mutual interest, with a focus on the federal reserve β s work to strengthen our support of minority - owned depository institutions. the federal reserve recognizes the important role that minority - owned banks play in the financial services market through the services they provide to their communities. i have chaired the oversight committee on consumer and community affairs at the board since march and am especially excited to be involved with a number of new and ongoing initiatives. in particular, this morning i am delighted to announce a new program that formalizes the federal reserve β s long - standing commitment to minority - owned depository institutions. in addition, i will discuss several ongoing supervisory and regulatory initiatives that aim to improve consumer information and expand consumer protection. federal reserve system β s minority - owned institutions ( moi ) program nationally, there about 200 minority - owned depository institutions serving a broad range of communities and populations. these banks have long played a unique and important role in our banking system by providing access to credit and financial services in markets that have historically been underserved. the federal reserve, which supervises just under twenty of these institutions, is committed to promoting the success of the minority - owned depository institutions we oversee. supporting these institutions is fundamental to our overall supervisory responsibilities for ensuring a safe, sound, and competitive banking system that also protects consumers. we have consistently provided ongoing assistance, through our regulatory, supervisory, and community development functions, to address the unique challenges and needs of minority - owned banks, while at the same time holding them to the high standards of supervisory performance. the federal reserve has tapped the expertise at the federal reserve bank of philadelphia to spearhead development of a proactive training and technical assistance program for minority - owned depository institutions. the new minority - owned institutions ( moi ) program i will discuss today reflects our experience in addressing the needs of these institutions as well as the insights offered in a recent report issued by the government accountability office. in developing the program, federal reserve staff met with a number of minority - owned and de novo banking organizations across the country, as well as trade groups, bank consultants, and
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industry and consumer groups, input from our consumer advisory council, and other sources. the amendments we have proposed would better protect consumers from a range of unfair or deceptive mortgage lending and advertising practices that have been the source of considerable concern and criticism. our proposal includes key protections for higher - priced mortgage loans secured by a consumer's principal dwelling. specifically, the proposal addresses concerns about underwriting and lenders'consideration of the borrower's ability to make the scheduled payments, including verifying the income and assets that lenders rely upon in making the loan. the proposal also addresses concerns about prepayment penalties and the impact on consumers when lenders fail to establish escrow accounts for taxes and insurance. we are working toward issuing final regulations in july. for credit cards, the federal reserve has employed a two - step strategy toward improving consumer protection. our first step was the board's proposal to substantially revise and improve credit card disclosures under the truth in lending act. we have done extensive consumer testing to determine the type of information and its format that consumers find most useful in shopping for and choosing a credit card. we issued this proposal last year, and we are still carefully considering the public comment letters received on that proposal, many of which contain suggestions for how we might further improve the disclosures. we believe that this proposal will result in credit card disclosures that are significantly more effective for today's complex products. testing disclosure forms and formats with credit card users is crucial to ensuring that the disclosures are understandable and useful to consumers. effective disclosures can help to empower consumers and enhance the competition because consumers find it easier to comparison shop. we are continuing to use consumer testing as we work toward issuing final rules by year - end. this extensive consumer testing β and the thousands of public comments generated by our 2007 credit card proposal β suggested that disclosures might not provide sufficient consumer protection with regard to certain practices. therefore, in may we took the next step in our ongoing effort to enhance protections for consumers who use credit cards by proposing rules under the federal trade commission act to prevent financial harm to consumers from specific practices. we proposed rules that go beyond disclosure and could require financial institutions to make changes to their business models and to alter some practices. the board has worked jointly with the office of thrift supervision and the national credit union administration in drafting and issuing a proposal intended to prevent financial harm to consumers from specific practices that the agencies find to be potentially abusive. among other things
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the hipc initiative. the overriding fiscal thrust of the government, is to contain the stock of debt to a sustainable level of 40 percent of gdp. debt sustainability analysis carried out by the ministry of finance, the imf and the world bank have not found any significant risk posed by our debt levels. to demonstrate this commitment of reducing the domestic debt, the government will reduce its domestic borrowing from 5. 1 percent of gdp in 2009 / 10 to 3. 8 % in 2010 / 11. this fiscal space, as was demonstrated during the drought and global financial crises is important for propelling growth even in times of crisis β the fiscal stimulus would not have been possible β gives room for monetary policy to perform. 6. it is the central bank β s belief that the fiscal and monetary policies currently in place will enhance investor confidence by increasing expectations of economic recovery or reducing tail risks associated with the exogenous shocks that have buffeted kenya β s economy in the recent past. in particular the government expenditure programs and the current monetary policy stance are likely to have larger than normal positive impacts on demand and benefits that may persist for a significant period of time. 7. for us in the central bank, our pre - occupation is to align monetary policy with the growth and development goals while at the same time maintaining low and stable inflation β a target of 5 %. in addition, a stable and market driven exchange rate, increased efficiency in the financial system, financial stability, and a reliable and efficient national payment system. to give you some indication : inflation was provisionally 3. 2 percent for the month of june 2010. inflation expectations as indicated in the mpc market surveys are anchored at a lower level. the current exchange rate movements of the kenya shilling against other major currencies is largely a response to external developments especially the uncertainty in the euro zone market. the exchange rate in this case works as an automatic stabilizer via relative price movements. interest rate structure that carries with it cost of investment as well as inflation expectations have declined drastically since the middle of 2009. distinguished members, ladies and gentlemen 8. let me note that the current economic environment in kenya is based on policies that are market leaning and offer a level playing field for potential investors. 9. in the banking sector, our vision is to build a strong financial sector and be the financial hub of the east african community. the strength and presence of kenyan banks is now being felt in the region, specifically within the east african community where some of our
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bills, building and safeguarding strong institutions and moving fast on fatf deficiencies. the fourth dimension is that kenya had to go to war to fight terrorism ; this is beyond financial risks but also national sovereignty. we need : ( a ) time to finalize all these interlinked issues. ( b ) capacity building support. ( c ) to adopt, replicate and build a strong frc and the best model in the world. bis central bankers β speeches and with these kenya will succeed. whilst the focus of this forum today will be to raise awareness and sensitize you on upcoming programs on issues surrounding aml / cft, allow me to briefly touch on a number of initiatives that have been undertaken by the central bank to address some of these issues. ladies and gentlemen ; the central bank of kenya is mandated to foster the financial integrity of the financial system in the country. the bank has continually enhanced the regulation and supervision of the financial system in order to improve the sector β s integrity. as part of our efforts in ensuring appropriate and effective oversight, the central bank first issued aml guidelines in 2000. these guidelines were revised in 2006 and are currently in the process of being reviewed to reflect the prevailing international best practice and to align them with the proceeds of crime and anti - money laundering act, 2009 ( pocamla ). over the last two years, the central bank has issued regular aml / cft guidelines to financial institutions to further support and enhance the implementation of pocamla. the guidance has covered various issues such as the operationalization of the aml act, suspicious transaction reporting and measures to be adopted by financial institutions to combat the financing of terrorism. the central bank has also revised the forex bureau guidelines so as to align these guidelines to pocamla. on the microfinance front, the microfinance regulations and the agency guidelines require deposit taking microfinance institutions and their agents to implement aml / cft measures. all these measures are aimed at ensuring the integrity of the financial sector. as you may be aware, kenya is now a leading light in financial inclusion. the systems and practices we have put in place to deepen financial inclusion are now considered as acceptable best practices and are being emulated by other jurisdictions. the challenge before us on this front is to maintain the delicate balance between financial inclusion and financial integrity. by putting in place the required measures to address money laundering and terrorism financing in the financial sector while at the same time deepening our financial
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decreasing, and we have smaller accounting value of the gold price in euros, as a result of which the foreign reserves reduced. however, we should know that in the previous period when the gold price was mounting, our foreign reserves were also increasing, for the same, purely accounting, reason. in the second quarter, we made a slight intervention, which is seasonally common because some large companies pay dividends, and then there is a lack on the foreign exchange market which is covered by the national bank. however, in the third quarter, once again due to seasonal reasons, there are reverse movements, and we have already compensated those interventions we had in the second quarter. at the level of the entire year, the amount of foreign exchange that the national bank has purchased on the foreign exchange market exceeds the amount of the foreign exchange it has sold. it means that the decrease in this moment is quite smaller than the one i have mentioned previously, which is totally due to the changes in the gold price. bis central bankers β speeches
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according to the national bank data, increase in the savings deposits was registered. if my data are right, the deposits increased by about euro 87 million. what is the reason for such a trend? yes, it is interesting that the deposits here are growing continually, even during the hardest times of the global financial crisis at the beginning of 2009, we had a deposit growth. it is sometimes hard to explain where this inflow comes from, but it indicates that in the economy there are sources that generate income, that create savings potential, meaning, the savings, although maybe not sufficient, is still substantial in our country and that deposit growth is just below the one in the good years, but it is positive and continuous, which is encouraging. does this mean that the banks are more focused on collecting capital, than releasing money in the economy in form of credits? we can state that the deposit growth is higher than the one in the last several years, but the deposit growth is also a reflection of lack of enough alternatives for investments. you know bis central bankers β speeches that the stock exchange is in standstill, we don't have some other developed financial markets where the citizens can place their savings, so every savings is mainly placed in form of banks deposit. despite the inflation slows down, in the last several months, according to the nbrm estimations, it seems that the banks restrain over landing. is this an indicator for the unfavorable conditions in the economy, or on the market, or is it a try for further reduction of the inflation? no, the inflation is not an issue, since it is on quite moderate level, 2. 8 percentages is the latest data for august and we expect average inflation of about 2. 8 percentages for the entire year, there is no probability for inflationary pressures in the following period. the banks restraint over crediting is a result of several factors. one is the economic crisis in the euro area, the deceleration of our economy last year, the banks prudency, the rise of the bad placements. another very important factor is the condition in the parent banks of some of the owners of our banks, you know that they mainly come from the euro area, some of them have serious problems in their own countries and they face with serious challenges, although their banks in macedonia have extremely good quality and they are in good condition, since the strategy is developed at the level of the group, the problems in the parent
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year β s candidates all the very best and now take much pleasure in inviting our sponsors to say a few words. thank you. bis central bankers β speeches
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barry whiteside : microfinance initiatives in fiji opening address by mr barry whiteside, governor of the reserve bank of fiji, at the launch of the 2014 microfinance awards, reserve bank of fiji, suva, 2 june 2014. * * * fellow national financial inclusion taskforce members our valued sponsors of the microfinance awards : life insurance corporation of india and the pacific financial inclusion programme all our stakeholders in financial inclusion colleagues and members of the media ladies and gentlemen a very good evening to you all. it is with great pleasure that i welcome you all to the launch of our 2nd national microfinance awards. a number of us were fortunate to be present during the first awards presentation ceremony last october, which coincided with the pacific microfinance week conference in nadi. at the time we experienced the great excitement amongst our winners, but what was also gratifying were the emotions and sentiments shown by all the regional participants at the conference. the national microfinance awards is a special event in the rbf calendar. this is when we get the opportunity to pay tribute to the key stakeholders and recognise the valuable contribution that microfinance makes to the national economy. more importantly it is about recognizing and supporting our budding micro - entrepreneurs. i am pleased to learn from last year β s winners, that participating in the awards has helped them raise their strategies, goals and ways to improve and achieve a better future. furthermore it has inspired their respective communities, highlighting the hard work and discipline that is needed in keeping a small business running. at the reserve bank we are pleased to learn that as these micro - businesses have grown the business owners often involve their family members. this has provided valuable work experience, especially for their young ones. the extra income to the family translates into important advantages, including a chance for a better education. micro - entrepreneurs not only create a path to economic self - reliance but they also bring positive social and economic benefits to their local communities and the economy as a whole. we all know many examples of large successful companies in fiji today that started from very humble beginnings. in 2013, there were approximately 4, 200 micro, small and medium enterprises or msmes in fiji accounting for approximately 12 percent of our gdp or around $ 800 million. msmes, when given the right support, have the potential to lift the economy and can contribute strongly to employment, an issue which has been very much at the forefront of our development and growth objectives. i am pleased that the reserve
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##bu board last met to discuss monetary policy. 1 / 2 bis central bankers'speeches on the one hand, increases in social payments, as well as the monetization of utility subsidies are planned for the coming months. although the effects of these individual factors are insignificant, their combined impact on inflation expectations could be substantial, on the back of greater uncertainty arising from presidential and parliamentary elections. on the other hand, a more noticeable strengthening in the hryvnia exchange rate than is envisaged in the current forecast, is helping curb inflation. that said, the risks to inflation decreasing mentioned by the nbu in its january macroeconomic forecast continue to persist. what will the nbu β s monetary policy stance be in future? after balancing the need to bring inflation back to its target against the risks that could prevent inflation from decreasing, the nbu board has decided to leave the key policy rate unchanged, at 18. 0 % per annum. although leaving the key policy rate unchanged, the nbu board said that it could cut it in the future. how soon the nbu will adopt an easing cycle will depend on how steadily risks of inflation decrease and inflation expectations improve. looking ahead, any changes to the key policy rate will be based on the nbu β s updated macroeconomic forecast that will be published in april. a summary of the discussion by monetary policy committee members that preceded this decision will be published on 25 march 2019. the next meeting of the nbu board on monetary policy issues will be held on 25 april 2019. thank you for your time! 2 / 2 bis central bankers'speeches
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andriy pyshnyy : national bank of ukraine press briefing - monetary policy decisions speech by mr andriy pyshnyy, governor of the national bank of ukraine, at a press briefing on monetary policy decisions, kyiv, 25 january 2024. * * * dear colleagues, the board of the national bank of ukraine has decided to keep its key policy rate at 15 % per annum. this decision comes along with the need to maintain exchange rate sustainability, keep inflation moderate in 2024, and bring it to the target range of 5 % Β± 1 pp over the monetary policy horizon. despite russia continuing its aggression against ukraine, the inflationary pressure eased significantly last year, including due to the nbu's consistent monetary policy inflation slowed to 5. 1 % yoy in november and stood at this level in december. good harvests and lower global energy prices were major factors behind the decrease in the pressure on prices. the moratorium on tariff increases for certain utilities played an important role. at the same time, a decline in core inflation to 4. 9 % as of the year end also points to a sizeable contribution made by the nbu's consistent monetary policy, in particular measures to ensure exchange rate sustainability and attractiveness of hryvnia assets. these measures helped improve exchange - rate and inflation expectations. despite the expected acceleration of inflation in 2024, it will remain moderate and will return to the target range in 2025 inflation will be within the target range in the coming months. from the middle of the year, it will accelerate somewhat as effects of last year's bumper crops wane. additional pressure on prices will come from the further recovery in consumer demand, as well as the pass - through of business costs to consumer prices, in particular due to persistently high security risks and wage increases. however, inflation will remain moderate, in part due to the nbu's measures to maintain exchange rate sustainability and the attractiveness of hryvnia assets. inflation is expected to reach 8. 6 % as of the end of the year. in 2025, it will return to its target range, slowing to 5. 8 % as of the end of the year. in 2026, inflation will meet the target of 5 %. this will be primarily driven by a decline in security risks, which is assumed by the forecast. it will ensure an overall improvement in expectations, and will allow restoring the logistics and production processes. the price pressure
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stanley fischer : us economy and monetary policy speech by mr stanley fischer, vice chair of the board of governors of the federal reserve system, at the group of thirty international banking seminar, lima, peru, 11 october 2015. * * * the u. s. economy continues to grow at a moderate pace, a pace sufficient to generate ongoing improvements in the labor market. on average, payrolls have expanded about 200, 000 per month so far this year, and the unemployment rate has declined to 5. 1 percent, just a bit above federal open market committee ( fomc ) participants β median estimate of the normal long - run level of unemployment. but there remain additional forms of slack in the labor market that are not fully captured by the standard unemployment rate. the labor force participation rate remains below most estimates of its underlying trend, and an unusually large number of people are working part time but would prefer to work full time. moreover, nominal wage growth has remained subdued. real wage growth has also been subdued, possibly reflecting the low rates of productivity growth in the united states economy during recent years. as you know, the last two months saw slower reported payroll gains of about 140, 000 per month. while this step - down is somewhat disappointing, the pace of job growth is still sufficiently strong gradually to erode slack in the labor market, and the prospects for further labor market improvement look good overall. gross domestic product ( gdp ) growth in the first half of 2015 is now estimated to have been at an annual rate of 2 - 1 / 4 percent, and private forecasters are projecting gdp to continue to rise, at a pace in the neighborhood of 2 percent, in the second half. consumer spending has been rising solidly of late, likely a reflection of the boost to purchasing power from the lower oil prices as well as the ongoing job gains and a wealth - to - income ratio that remains high even after the recent declines in the stock market. further, the negative effect of low oil prices on the growth of investment in the u. s. energy sector appears to be waning. the restraint on net exports stemming from the appreciation of the dollar over the past year, and from global developments more generally, may be a negative influence on gdp growth for somewhat longer, but that restraint is likely to continue to be outweighed by the other sources of growth. although the labor market has been approaching estimates of maximum employment, inflation has been well below the fomc β s 2 percent objective.
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will be able to travel, eat out, and shop in person safely. in addition, the fiscal package enacted in december provides much - needed support to households and businesses until vaccinations are more widespread. moreover, additional measures are currently being discussed in the congress. fiscal support, combined with highly favorable financial conditions and steady progress on vaccinations, are all reasons to be optimistic the economy will experience a strong recovery this year. but the speed of the recovery will also depend on the global picture. we are seeing a slower rollout of immunizations in parts of europe and a more subdued rebound in other parts of the world, which will have an effect on the united states. in addition, the emergence of new strains of the virus could slow the path to a post - covid world. our response given all the factors i mentioned earlier, in january the fomc decided to maintain the target range for the federal funds rate at zero to ΒΌ percent. the fomc stated that it expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with its assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time. 7 in addition, the federal reserve will continue to increase its holdings of treasury securities by at least $ 80 billion per month and of agency mortgage backed securities by at least $ 40 billion per month until substantial further progress has been made toward the committee β s maximum employment and price stability goals. in other words : despite uncertainties, we are fully committed to supporting the economy through this period and reaching our maximum employment and price stability goals. we will continue to watch and learn and remain committed to using our full range of tools to help assure that the recovery will be as robust as possible. conclusion i β ll conclude with this : despite the progress so far in recovering from the recession, some of the numbers that i β ve shared are staggering. families, businesses, and communities are struggling. almost a year into the pandemic, there is still so much uncertainty. but despite the near - term challenges, the longer - term outlook for the economy has improved, and our actions of the past year position monetary policy well to support a strong, full recovery and achievement of our goals of maximum employment and price stability. with this progress in mind, i am hopeful for a time soon that looks β more like normal. " thank you. 1 beverly hirtle, the economic health
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john c williams : the economic outlook - getting back to " more like normal " remarks ( via videoconference ) by mr john c williams, president and chief executive officer of the federal reserve bank of new york, at one hundred black men of new york, 25 february 2021. * * * hello, everyone. i β m really pleased to be joining your meeting today. your work in bringing together leaders and visionaries in support of black communities across our city is invaluable. we β re approaching the one - year mark since the pandemic took hold. at this time last year there was an increasing sense of fear and uncertainty about the future. and the events since then have posed tremendous challenges to families, communities, and the economy. the ongoing human toll is a tragedy we won β t forget in our lifetimes. what has been an extraordinary public health crisis also has had profound consequences for the american and global economies. the cause of this recession β a global pandemic β means that our economic future will be determined in large part by the path of the virus and our collective success in overcoming it. we still face many hurdles on the road to recovery from both covid - 19 and the severe economic hardship that has ensued. a lot depends on the success in quickly getting a large part of the public vaccinated against a backdrop of the spread of emerging new strains of the virus. despite these challenges and uncertainties, i have become more optimistic about the mediumterm outlook for the economy. i don β t expect our lives to look like they did a year ago β our sense of β normal β may be forever altered β but with vaccinations well underway and a significant decline nationwide in confirmed new cases, i do expect that we can start to look toward a time that will be β more like normal. " in my remarks today i β ll set the scene for the economic picture locally, and for the u. s. economy as a whole. i β ll also highlight some of the disparities we are seeing in the labor market. finally, i β ll share more about the federal reserve β s response and how i view the path forward. before i continue, 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 federal open market committee ( fomc ) or others in the federal reserve system. dual mandate prior to sharing the outlook, i think it β s
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a result of lower house price inflation. nevertheless, growth in household debt will be higher than growth in disposable income until 2008. as a result, the debt burden, i. e. debt in relation to disposable income, will rise to a level that is appreciably higher than the level prevailing at the end of the 1980s. the debt burden for norwegian households is relatively high compared with other countries. structural factors such as the percentage of owner - occupied dwellings and differences in tax systems are important to explaining the differences in debt burdens. the transition in monetary policy from an exchange rate target to an inflation target has probably made it less likely that households will be exposed to a β dual shock β in the form of higher unemployment and higher interest rates, as was the case during the banking crisis. as a result of the change in monetary policy and more stable macroeconomic developments, households may also have chosen to adapt to a higher debt burden than before. ii. household wealth household gross financial assets have increased more than debt in recent years ( measured in nok ). this financial buffer reduces some of the concern related to debt growth. debt as a percentage of gross financial assets is lower today than at the end of the 1980s. insurance claims account for a substantial share of household wealth. insurance claims are illiquid, however, and cannot be utilised if payment problems arise. however, debt as a percentage of liquid financial assets, i. e. financial assets minus insurance claims, is also lower now than it was at the end of the 1980s. the strong increase in wealth indicates that the debt growth in recent years has not led to a reduction in saving. this contrasts sharply to the situation in the 1980s. at that time, debt growth was also high, but it financed consumption and not investment, and overall saving fell sharply. in addition to financial assets, households also have housing wealth. there is considerable uncertainty attached to the estimates for housing wealth. a cautious estimate indicates that household housing wealth is 11 per cent higher than financial assets and more than 40 per cent higher than debt. total debt is unevenly distributed one worrying aspect of these developments is that debt and wealth are unequally distributed across different household groups. compared with the 1980s, the debt burden has increased in low - and middle - income households ( deciles 1 - 6 ). households with higher income ( deciles 7 - 9 ) have the highest debt burden. the debt burden for households with
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that growth will be at least as strong six months ahead as it is now. the figures show that capacity utilisation in the business sector is gradually increasing. some petroleum - related activities and parts of the construction sector are experiencing capacity problems, but so far, the pressure on factors of production does not seem to be particularly high in other industries. all industries report plans for moderate to solid growth in investment. in tandem with the economic upturn, employment is also rising throughout the private sector, with in general little evidence of wage pressures. developments in hedmark and oppland counties are largely consistent with the overall picture for norway. the industry structure in hedmark and oppland does not differ substantially in most sectors from the country as a whole. the exception is the primary industries, which play a far more important role in these two counties than in the rest of the country. the largest farming areas in norway are to be found in hedmark and oppland, and employment is high in the primary industries. the share employed in the public sector is also somewhat higher than in norway as a whole. unemployment has also been markedly lower in the inland region than in most other regions in recent years. according to the most recent reports, the economic situation in the region is favourable. participating companies report rising employment and solid growth in all industries. in retail trade and in the construction sector, activity is brisk and increasing, with a somewhat wait - and - see approach to future developments. growth in manufacturing has slowed slightly, but is likely to stabilise. investment is rising in all sectors. enterprises in the region envisage a slight rise in prices in the period ahead. inflation has edged up since the beginning of 2004. in october, the year - on - year rise in consumer prices adjusted for tax changes and excluding energy products ( cpi - ate ) was 1. 2 per cent. adjusted for the estimated direct effect of the interest rate fall on house rents, the rise in prices is estimated at 1. 3 per cent in october. total consumer prices ( cpi ) rose by 1. 8 per cent in the same period. prices for domestically produced goods and services rose by 2. 0 per cent in the twelve months to october this year. the rise in prices for domestically produced consumer goods exposed to international competition has been very low this year. in october, prices for these goods were 0. 2 per cent higher than in the same month one year earlier. this probably reflects the strong
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