text1
stringlengths 1
3.21k
| text2
stringlengths 1
3.21k
| label
float32 0
1
|
|---|---|---|
savenaca narube : reserve management in fiji opening remarks by mr savenaca narube, governor of the reserve bank of fiji, at the imf pftac workshop on foreign exchange reserve management framework for strategic asset allocation, suva, 17 september 2007. * * * dr susan adams, pftac coordinator resource persons ( jay surti from the imf, kristian flyvholm from the imf and, tΓΈrres trovik, senior advisor ( research ) and formerly senior advisor ( investment strategy ), norges bank ; board of trustees of the east timor pension fund. participants ladies and gentlemen introduction good morning, bula and welcome to fiji. let me thank the international monetary fund for bringing this important workshop to the pacific. i thank the resource persons and the workshop coordinatorsyou β re your contribution to this workshop. i thank you, the participants for taking time to attend this workshop. i am told that such a workshop is very expensive to mount as it is usually coordinated by investment houses. i am therefore glad to see so many participants from the region here today. reserves management reserve management, as you will no doubt know, is a complex set of processes, guidelines and strategies. they are made more complex by the financial crises that seem to be happening now and then in the global financial markets. the recent crisis on sub prime mortgages in the united states is a classical example. while this crisis appear to have a long tail, we are somewhat insulated from its impact by our fixed exchange rate and the narrow range of our allocation of foreign assets. you see for fiji we only have cash in our investment portfolio. this is not entirely by choice. while we have a benchmark of 60 percent cash and 40 percent bond we have not been able to replicate this benchmark. as a result, the average duration of our currency portfolio is well short of the benchmark. this is largely because of our difficulty in dealing with the flow on impact of valuation losses from falling bond prizes on our profit at year end. our valuation dilemma arose because of the accounting classification of our bond holding. while we had classified these as β held for trading β and we were marking to market, we were in fact holding these bonds to maturity. hence, by marking to market, we sometimes were booking unrealized losses on our bonds at the end of the year. we have resolved this by reclassifying the bonds as β available for sale β. our external
|
auditors have advised us that under this new accounting classification, we do not have to take the unrealized losses to the profit and loss statement of the bank. very recently, we therefore decided to liquidate all of our bond holdings. we will then reclassify the new bonds that we are going to buy under the new classification. this example shows some of the issues around reserve management and the allocation of assets. as i have said, we have a benchmark which is anchored on the maintenance of value of our foreign reserves. we have liquidity guidelines. the question that is normally posed is : what about return? this becomes more critical when reserves are falling as what is happening in fiji now. the temptation is perhaps to abandon your benchmark in search for higher return. to me this is a dangerous road to take. you may end up in a win - win situation. but you may also end up in a loose - loose situation too! my risk - averse nature as a central banker compels me to keep to our benchmark and protect values then look for return in the better allocation of assets. this workshop addresses many of these asset allocation issues and i am certain will add value to how we manage our foreign reserves. the contents of your workshop are relevant and interesting. i know that you will have an interesting 5 days. we may have different levels when it comes to reserve management methods and capacities. therefore, please freely share your country experience during the course of the workshop and in the case studies. i find that this sharing is one of the best parts of what we take home after such workshop. and please keep your network intact after the workshop so you may be able to help your colleagues in some way. there is also the related issue of how important is the central bank β s profits. reserve management is the major source of our revenue. while we predominantly spend this revenue on the important role of monetary policy and financial stability, i am of the view that we cannot totally ignore the strength of our balance sheets. not so much from the point of view of funding the government budget, but more so from the confidence that a strong balance sheet gives to the financial system. conclusion i wish you all a fruitful week of discussions and deliberations. please also take some time away from your workshop to enjoy suva. once again, i thank the imf, the resource persons and the organizers for putting together this workshop. official opening i have much pleasure in declaring this workshop
| 1 |
flows to emerging economies. as regards the medium and long term, the nature and functioning of transactions differ from those for short - term transactions. the financial services provided by banks for longer - dated terms are, essentially, financing and the extension of guarantees and bonds needed to participate in international tender procedures. on many occasions these are syndicated operations, or operations performed by several banks from various countries. we should highlight here the role played by export credit companies. this activity is subject to the rules set under the oecd arrangement on officially supported export credits, or the oecd consensus, as it is usually called. the oecd consensus the oecd consensus, signed in 1976, has regulatory status in the european union and seeks to prevent financial facilities granted by a state to an exporter from distorting bis central bankers β speeches competition and giving an exporter an unfair advantage against competitors from other countries. the consensus also works on the assumption that official support is warranted only if there is a β market failing β that prevents the private sector from properly meeting its task as a financier. the consensus sets common rules for exports in the medium and long term, understanding as such terms over two years, and specifies that official support may take the form of either direct public financing of the export, or the underwriting by the public sector of the refund of the export financing granted by private institutions. in spain, cesce ( spanish export credit insurance agency ) pursues its activity on behalf the state, complementing that of the banking system. among its operations, what affords the greatest value added is the coverage of credit risk arising from a spanish export, of a relatively high amount, at a term of over two years, habitually financed by a bank. such coverage is the norm for exports towards countries with appreciable risk and in transactions which, frequently, have the sovereign guarantee of the importing country. cesce also provides underwriting on the state β s behalf for the political risks associated with exports ( the main such risk being default by the sovereign or by the institutions backed by the sovereign ), except in operations at less than two years in eu and oecd countries, where it is considered that there is a sufficiently developed private underwriting market ; it also extends guarantees and bonds for participating in international tender procedures and projects. from 1998 to 2007 there was a strong expansion in international banking activity in financing for spanish companies β international activity. banks took on a relevant
|
emmanuel tumusiime - mutebile : bank of uganda β s position on the exchange rate statement by prof emmanuel tumusiime - mutebile, governor of the bank of uganda, kampala, 19 january 2011. * * * i think that it is now necessary to state clearly bank of uganda β s position on the exchange rate. we believe that the current level of the uganda shilling / dollar exchange rate is undervalued. moreover, further depreciation will be counterproductive for macroeconomic management, especially because of the impact this will have on the prices of imported goods and hence on consumer price inflation. consequently, the bank of uganda intends to adopt a more aggressive stance to support the exchange rate. we sold dollars yesterday to the interbank market. we are prepared to intervene again if necessary. we are complementing this by raising interest rates in the interbank market and on repo instruments. of course open market exchange rates are difficult to control and no central bank can guarantee to move the exchange rate in the direction it wants. however, i want to stress that we are not indifferent to further exchange rate depreciation and that for the immediate future, curbing such depreciation will be a priority of the bank of uganda β s macroeconomic management. bis central bankers β speeches
| 0 |
sada reddy : economic indicators and implications β where to from here? presentation by mr sada reddy, governor of the reserve bank of fiji, to the fiji institute of bankers β convention, suva, 23 october 2010. * * * his excellency the president of the republic of the fiji islands, ratu epeli nailatikau, the attorney - general & minister for justice, anti - corruption, public enterprise, industry, tourism & trade and communications, mr aiyaz sayed - khaiyum, the president of the fiji institute of bankers, mr norman wilson, distinguished guests, ladies & gentlemen good morning and thank you for inviting me to speak to you on this occasion of the inaugural convention of the fiji institute of bankers ( fib ). the fib, which will turn 20 years soon, plays a very important role in the training and development of bank professionals in fiji. i must congratulate the fib for this excellent initiative in bringing together professionals and partners from the financial sector as well as stakeholders from the public and private sectors towards a common interest, that is, to establish a vision and strategic direction for the banking sector towards 2015 β the theme of today β s convention. i have great pleasure this morning to speak on the topic β economic indicators and implications β where to from here? β first i will provide an overview of the current state of the economy and its future outlook, before i move on to outlining the future policy direction for our economy. as bankers, we can attest to the prominent role played by financial institutions in the development of any economy. in fiji, the contribution of the financial sector to total real growth or total value added product of the economy is around 9 percent. as a measure of its size, total assets of the financial sector in fiji is around 180 percent of the country β s overall gross domestic product ( gdp ). this ratio has increased from about 150 percent five years ago and shows the increasing importance of the financial sector in our economy. in addition, the financial sector employs around 8, 800 people which accounts for around 7 percent of paid employment in fiji. an efficient and sound financial sector is essential for economic growth. the intermediation process which facilitates the transfer of funds from savers to borrowers, contributes significantly to raising investment, generating income, creating employment opportunities and supporting our economy. as someone said, credit is the oxygen on which businesses grow and survive. therefore, as would be true in other developing
|
. it is the responsibility of everyone. if we are to improve our quality of life, then each one of us, every worker, business, industry, and government must be committed to the same common goal. thank you.
| 0.5 |
bank failures and stress among some other mid - size banks. let me talk about each of these three key issues and then conclude with how i see these factors playing into my june policy decision. a very tight labor market the employment report for april showed solid job growth, but previous months were revised downward by a significant amount. the unemployment rate fell slightly to 3. 4 percent, reaching its low in recent years, which is the lowest since 1969. the labor force participation rate held steady in april after several months of increases. average hourly earnings rose at their fastest pace this year, and, over the past 12 months, were up 4. 4 percent, slightly higher than the yearly pace in march. these data suggest the labor market is still powering forward. 1 / 5 bis - central bankers'speeches however, there are some other signs that the labor market may be cooling. temporaryhelp employment fell for the third straight month and is considerably down from last year. some see this category as a leading indicator for overall employment, meaning we may see some softening in labor demand going forward. furthermore, job vacancies declined by 384, 000 in march, and the number of job vacancies for every person counted as looking for a job has declined to 1. 6, down from the peak of 2 for every job seeker. this reduction is consistent with a softening in labor demand, but it is still far above the 1 - to 1 ratio that was typical before the pandemic. finally, the rate at which people are quitting jobs, a sign of confidence in the job market, has fallen and is in hailing distance of the level that persisted for the couple of years before the pandemic recession. as i have argued in other speeches, a loosening labor market, to help our fight against inflation, doesn't have to mean a recession or big job losses. 2 but we do need to see more loosening than we have seen to help take the heat off the inflation rate. inflation is stubbornly high let's talk about where we are on inflation. the latest consumer price index ( cpi ) report showed that headline inflation fell from 5 percent year over year in march to 4. 9 percent in april. but that decline was only due to rounding - the actual decrease was just five onehundreds of a percentage point, from 4. 98 percent to 4. 93 percent. almost no progress. the news on core inflation was similar. core cpi
|
. from this viewpoint, the policy rate is high enough and we simply need to hold it there to bring inflation down toward our 2 percent target. i do not expect the data coming in over the next couple of months will make it clear that we have reached the terminal rate. and i do not support stopping rate hikes unless we get clear evidence that inflation is moving down towards our 2 percent objective. but whether we should hike or skip at the june meeting will depend on how the data come in over the next three weeks. we will get additional labor market data, with some information about wages, and additional inflation numbers in the next few weeks that will continue to shape my view on where we stand relative to the fomc's dual mandate. during this time, i'll also be reviewing data on credit conditions to evaluate how much potential tightening is coming from the banking sector. fighting inflation continues to be my priority. we worked very hard over the past year to quickly raise the target range for the federal funds rate from near zero to about 5 percent. while we are seeing some tentative signs of cooling in the labor market, i am determined to continue to use our policy tools as needed to appropriately bring inflation down to 2 percent. 4 / 5 bis - central bankers'speeches thank you. 1 the views expressed here are my own and are not necessarily those of my colleagues on the federal open market committee. 2 see christopher j. waller ( 2022 ), " responding to high inflation, with some thoughts on a soft landing, " speech delivered at the institute for monetary and financial stability distinguished lecture, goethe university, frankfurt, germany, may 30. 3 see kevin l. kliesen ( 2023 ), " measures of'trend'inflation, " federal reserve bank of st. louis, economic synopses, april 18. 4 of course, i want to see wages grow. but wage growth needs to be at levels that are consistent with our two percent inflation goal. otherwise, wage gains will be outstripped by inflation and families effectively will have less take home pay. 5 / 5 bis - central bankers'speeches
| 1 |
, and it expands the financial sector and promotes the use of cost - effective financing instruments. however, while the corporate bond market has been gaining new momentum elsewhere, the development is being viewed with apprehension here. we embarked on this policy to develop a corporate bond market in 2009 when we acquired the so - called aqualectra bonds. in 2012, we participated in the bond issue of the sint maarten harbour company. the case of sint maarten is a special one. contrary to the aqualectra bond, the sint maarten harbour bonds have a much wider and broader participation as more market participants acquired the bonds. this increased participation is also thanks to the standby arrangement according to which the central bank stands ready to buy or sell bonds at all times as dictated by the monetary conditions of the union. however, a necessary condition for this arrangement to be successful is that our public enterprises have unconventional monetary policy measures : principles - conditions - raison d β etre. speech delivered at the ijcb conference β central banking : before, during, and after the crisis β held on march 23 β 24, 2012, at the board of governors of the federal reserve system in washington, dc. bis central bankers β speeches to be well managed and sound. in this regard, i concur with dr. age bakker2, chairman of the board of financial supervision β cft β who last november during the kingdom conference stated that, β the sint maarten economy has been performing well during the past decade. the budgetary challenges in sint maarten are less pronounced than in curacao, the netherlands, and aruba. the main reasons are that sint maarten has a younger population, well capitalized social funds, and sound public enterprises. β that the sint maarten harbour company is well managed, was another important consideration for the bank to facilitate the bond issue of the sint maarten harbour company. ladies and gentlemen, with a much broader set of policy instruments, we hope that the bank can continue to promote the stability of the guilder, thereby creating an environment conducive to more growth and prosperity. as recent policy measures of the bank demonstrated, we were able to reduce the current account deficit and turn the balance of payments deficit into a surplus. however, for these results to be sustainable, we have to strengthen our export - generating capacity by making sint maarten a welcome place
|
i should like to emphasize that the credit measure sets a limit only on the growth of credit. hence, in the case of sint maarten, where credit extension has actually been declining since 2011, the credit measure has no effect. the decline in private credit extension in sint maarten clearly indicates certain weaknesses in the economy β s macroeconomic environment. these weaknesses may be the result of either a decline in the demand for credit or a reduction in the supply of credit by commercial banks. ladies and gentlemen, so far, the bank β s monetary policy has produced the intended results by moderating credit growth, improving the current account deficit on the balance of bis central bankers β speeches payments, and stemming the decline in reserves in the monetary union. in 2013, the deficit on the current account of the balance of payments dropped further, primarily because the growth in exports of goods and services exceeded the rise in imports. export growth was driven largely by the tourism and transportation sectors, mitigated by a decline in the reexport activities by the free - zone companies in curacao. imports rose as a result of more merchandise imports to meet tourism demand and the import of construction materials related to investment projects, including the simpson bay causeway. however, a decline in merchandise imports by the free - zone companies in curacao combined with a decline in domestic demand in curacao moderated import growth. also, the lower international oil and food prices contained the increase in the import bill. the deficit on the current account was financed primarily by external financing to the private sector, as reflected by a worsening of the direct investment, portfolio investment, and loans and credit balances. as the inflow of capital during 2013 exceeded the current account deficit, the balance of payments of the monetary union recorded a surplus as reflected by an increase of approximately naf. 77 million in the gross official reserves. we should not consider the improved situation on the balance of payments in 2013 as a reason to lessen our efforts to address the imbalances on the current account. after all, the current account deficit as a percentage of gdp is still too high. in this context, we must realize that the deployment of monetary tools can bring only a short - term solution to a structural problem. the situation on the balance of payments can be structurally improved only if both curacao and sint maarten take the necessary actions. an analysis of the developments on the current account of the balance of payments over the
| 1 |
for example : β’ we have held financial education classes in 140 primary schools and, in a pilot project, in 28 secondary schools. β’ we have had 75 work - place β lunch and learn β sessions, sponsored by employers but with instructors and material provided by the programme. β’ we have accepted invitations from several trade unions to conduct financial management seminars for employees in receipt of back - pay or other lump - sum payments. β’ we have had several interventions at the community level, mostly in rural areas. β’ we have used the wider pathways, the print and electronic media and other publications to disseminate basic financial information and types that could be useful to consumers of financial services. ladies and gentlemen, when we launched this programme we emphasized that financial literacy should be the business of the entire society and sought the support of all those who were in a position to help. we even suggested that some individuals with financial skills should see the financial literacy programme as a way of giving back to society. we are pleased that many people have responded to our invitation. we have been able to sign some 150 volunteers, many from the financial sector but other interested persons from all walks of life. we are now trying to encourage sixth form students to join the programme to provide instructions to their peers and to other students. i would like to express our deep appreciation to those volunteers who have devoted their time and talents to this very worthwhile venture. thanks also to our service providers who have helped get the programme off to a successful start. we saw the programme as an opportunity for good corporate citizenship and much of that has been forthcoming. some corporations have contributed through the financing of lunch and learn sessions for their employees. a few have provided or have pledged financing. in this context, we would like to recognize and express our special appreciation to : β’ bankers β association of trinidad and tobago ( batt ) β’ trinidad and tobago petroleum company ( petrotrin ) β’ bp trinidad and tobago ( bptt ) β’ telecommunications services of trinidad and tobago ( tstt ) β’ trinidad and tobago unit trust corporation ( utc ) β’ trinidad and tobago mortgage finance ( ttmf ) β’ association of trinidad and tobago insurance company ( attic ) ladies and gentlemen, this programme will in time have tremendous payoffs for our entire society. the economy has been going through a period of strong growth with increasing employment and rising incomes. it is critically important that the current gains in real income have a sustainable impact on our economic welfare. and this will only happen if more and more people
|
more complex landscape, however, has also presented risks β posing challenges for regulators, industry and consumers alike. this is particularly true when complexity leads to opacityor when novel innovations neglect to account for basic risks β either to the entity or their customersit is also true when information and " choice " grows in such abundance to be neither informative nor an enabler of decision making. such risks are ones we have been considering in a consumer context for some time now, and featured in our regulatory and supervisory outlook2 earlier this year β including : risks from unclear information being provided at various points in the customer journey ; risks to consumers from evolving business models ; and technologydriven risks from cyber security as well as frauds and scams β the latter one of the reasons combatting financial crime is the theme of our inaugural innovation sandbox to launch later this year. and these are just some examples of how the financial sector and financial risks are changing for consumers β mirroring the wider complexity and change in our daily lives. the paradox of choice " too many choices, too many decisions, too little time - " 3 no i am not talking about trying to keep up with my streaming habits, rather this is a quote from'the paradox of choice'β a book about how decision making had become too complex due to an abundance of choices. the point is while choice is obviously a good thing β too much choice can be counterproductive. published 20 years ago, i would suggest that the situation has significantly worsened in the intervening years. and while this issue extends to all parts of our lives, and is most often merely an annoyance, in a financial services context it increases the risks of consumer detriment and financial loss, and can run counter to empowering consumers to make decisions in their own best interests. in the health insurance context, in terms of in - patient plans, it does appear there is an abundance of choice. for example, at the end of 2023, there were 350 active in - patient plans. notwithstanding this proliferation of plans, around 50 % of people with health insurance are on one of only 30 plans. again, while consumer choice is obviously a good thing β there is a concern that too much choice is impacting how much engagement consumers are having with the options available to them, resulting in consumers not considering, or not being offered, the best and most suitable product available. 2 / 5 bis - central bankers'speeches this is something from a supervisory point of view that
| 0 |
in our economies over time, every now and then, the governing council needs to consider the merits of the strategy it is pursuing. in this context, the guiding question is how we can fulο¬l our mandate in the best possible manner. the last time the governing council evaluated its strategy was in 2003. back then, the risk of inο¬ation approaching very low levels was already on the minds of council members. as otmar issing stressed at that time : β we have both eyes [ β¦ ] watching deο¬ationary as well as inο¬ationary developments. β since then, the ability of central banks to prevent very low rates of inο¬ation through the conduct of interest rate policy has weakened. from a theoretical point of view, monetary policy needs to push the key interest rate in real terms below the natural rate of interest, or β r star β, in order to achieve an expansionary stance. thus, β r star β is often regarded as a navigational guide for monetary policy, just as celestial stars used to guide sailors across the seas. but unlike the stars above our heads, the natural rate isn β t ( tonne ) something we can observe directly. instead, we must resort to models and econometric methods to estimate it. often, β r star β can only be gauged with very wide uncertainty bands, while the estimated level may vary greatly across the methods and data used. moreover, β r star β is not ο¬xed over time. fundamental forces such as demographic trends or productivity growth may shift it. indeed, the empirical evidence across advanced economies points to a secular decline in the natural rate of interest that started back in the 1980s and has continued since 2003. the resulting implications for monetary policy are challenging. at last year β s jackson hole conference, philip lowe, the governor of the reserve bank of australia, referred to them as β the [UNK] of navigating when the β stars β are shifting β. in particular, central banks around the world are searching for ways to respond to the decline in the natural rate. since policy rates may hit the lower bound more and more frequently, the leeway of traditional interest rate policy has diminished. in this context, the federal reserve β s shift to a variant of average inο¬ation targeting and the clariο¬cation regarding the high importance it attaches to its employment objective grabbed the headlines recently. [ 6 ] it is worth highlighting that we do not have a dual mandate like the federal reserve.
|
of 8 β 10 % in the next five years and funds required for infrastructure development. presently as industrial growth is in the phase of stagnation and infrastructure well below satisfactory levels due to a varied set of factors around policy action, the demand for funds has not really reached the expected levels. evidently this should not give rise to complacency and we should work in this period in building structures for growing our corporate debt market. need to develop the corporate debt market 9. the government has its own limitations when chipping in as the fiscal responsibility targets leave little scope for finding funds. though the commercial banks do cater to the bis central bankers β speeches investment needs of corporate and infrastructure sectors, they are also reaching their own limitations. we have gotten support from fdi and external borrowings, but they have their own pace and size. external borrowings are a good way out when global interest rates are low. but, the repercussions on our external debt are significant, and while we have been permitting ecbs into various sectors, the external debt levels have been rising which has servicing implications. intuitively we can see that the capital market has to become progressively more relevant in this process of garnering long term funds. 10. economists contend that the absence of an adequately sized corporate debt market leads to an oversized banking system in any economy. it also results in a large portion of the lending market being excessively regulated, without being subjected to free market forces. such an imbalance is not desirable, because this becomes the perfect breeding ground for crony capitalism, sloppy lending by banks and careless investments by corporates. financing of resources through corporate bonds rather than bank finance instills a greater sense of credit discipline among the borrowers as the default events are captured immediately and placed in the public domain. the disclosure requirements act as a big disincentive for default or delayed payment. it has been observed that borrowers take the regulatory norm of 90 days period for a default to be recognised as a non - performing asset as a leeway for withholding the payment till the 89th day from the due date. on the other hand, even a single day default by an issuer of corporate bond will be recognised as default in the market and the information of default will be publicly available. further, such information / risk will also be reflected in external credit ratings and traded credit derivatives on a real time basis. pricing of credit also gets diluted in bank financing as credit facilities are extended not only
| 0 |
derivatives booking hubs from europe to asia. this is very logical as the underlying securities and clients are based in asia. the hkma welcomes these moves and stands ready to facilitate such moves, on the condition that the booking business must be accompanied by the necessary risk management functions. again, this will enhance hong kong β s position as the risk management hub for asian equities and derivatives, particularly mainland related stocks. bond connect 9. by the same token, the launch of the northbound bond connect in 2017 has opened another window of opportunity for hong kong to enhance its risk management functions for offshore investors wishing to invest in the mainland bond market. it is still early days yet, but i am confident that bond connect offers attraction to those investors who prefer using a nominee holding structure through the central moneymarkets unit of the hkma. other value - add services for these bond investors would likely be launched in the months ahead. mainland - related lending 10. the bread and butter of banks are of course their lending businesses. there is no point in collecting deposits from customers if the bank cannot find useful and hopefully profitable outlet for these funds. with the rapid development of the mainland economy and the deepening of the reform and opening programme, hong kong has become the most important financial intermediation hub for investments into and out of mainland. the hkma has been collecting statistics under the category of β mainland - related lending β by banks in hong kong. this category includes lending to hong kong and foreign corporates investing in the mainland and to mainland corporates, mostly large state β owned enterprises. as hong kong is becoming an important source of funds for foreign direct investments into the mainland and overseas direct investments from the mainland to overseas markets, the size of mainland - related lending has grown from a very small amount in 2009 to hk $ 4. 6 trillion now, which accounts for around 45 % of the total bank loans in hong kong. this is a very significant component of our banking system and is of critical importance to the profitability as well as soundness of our banks. so clearly it is crucial that, in growing this lending business, banks must maintain a high standard of risk management in underwriting these 2 / 4 bis central bankers'speeches loans. the credit risk capability, both at the point of origination in terms of know - yourcustomer ( kyc ) and customer due diligence and for ongoing monitoring, must be enhanced to cater for the rapid growth of this new line of business
|
. naturally the hkma has accorded high priority in our ongoing supervision of banks to ensure that the underwriting standards are upheld all the time. i am pleased to report that the non - performing loan ( npl ) ratio, which is a key indicator to assess the credit quality of the mainland - related lending, has remained at a healthy level of around 0. 7 %, which is just slightly above the overall npl ratio of 0. 56 % for all bank loans. wealth management 11. given the rapid growth and accumulation of wealth in hong kong and the mainland, there is a strong demand for wealth management services. the asset - under - management of private banking in hong kong now amounts to roughly us $ 1 trillion. again, risk management is the key to the sustainable development of the private banking industry. there are two key aspects of risk management in the private wealth business. first, the banks must conduct proper kyc processes, especially on the source of funds and ongoing monitoring of suspicious fund flows for anti - money laundering / counter - terrorist financing purposes. second, the private banks must understand the risk appetite / tolerance level of their clients on the one hand and conduct proper product due diligence before marketing them to clients. if hong kong wishes to remain the preferred centre for private wealth management, we must strive to strike the right balance between the need to accord appropriate investor protection and allow the banks to provide user - friendly and efficient services to clients. to succeed in this endeavour, the regulators must work in close collaboration with the industry to continue adapting the rules and practices to cater for the evolving demands of the customers and the rapidly changing financial markets. there is no magic quick fix available, and i hope that the stakeholders would agree to adopt a truly risk - based approach. what it means is that the regulators should articulate the risks or problems that they seek to address while the industry should consider how proper risk management could be achieved without over - interpreting the regulations or imposing rigid processes that drive away customers. soft power 12. at the end of the day, any premier ifc must possess superior soft power if it wishes to sustain such position. soft power is the sum of a wide range of tangible market infrastructure and intangible strengths. while there must be a robust but market - friendly regulatory regime, we need to have a high degree of professionalism amongst the industry practitioners. fully cognizant of this principle, the hkma has in the last decade or so launched many soft power
| 1 |
these benefits are known as ecosystem services. some of these ecosystem services are air quality, climate ( both global co2 sequestration and local ), water purification, pollination, and prevention of soil erosion. while scientists and environmentalists have discussed ecosystem services for decades, these services were popularized and their definitions formalized by the united nations 2004 millennium ecosystem assessment ( ma ), a four - year study involving more than 1, 300 scientists worldwide. the study grouped ecosystem services into four broad categories : provisioning, such as the production of food and water ; regulating, such as the control of climate and disease ; supporting, such as nutrient cycles and crop pollination ; and cultural, such as spiritual and recreational benefits. if the world β s economies are rationally organized, it would suggest that biodiversity and ecosystem services must have less economic value than the economic activities giving rise to its loss. many of the activities that threaten biodiversity have lower economic value, but the market does not recognize the economic value of biodiversity and eco system services and that is the reason for loss of biological diversity. if we can address this issue, there is a chance of addressing biodiversity loss. the reason why market value fails to capture intrinsic economic value is because of the gap between what is good for the individual and what is good for society β the problem of externality. the other reason is the time horizon factor viz. the initial returns and long term sustainability of the returns. again, what may be worth preserving from a global perspective may not be affordable from a national perspective. hence if we have to make rational allocation of natural resources from a global societal and inter - generational perspective, one will need to attribute monetary values to biodiversity and the costs and benefits should include such values for decision making. the ongoing challenge of prescribing such value to nature is critical in how we recognize and manage the environment, social responsibility, business opportunities, and our future as a species. in a speech at the financial student association, amsterdam, on 28 april 2009, andrew g haldane, executive director, financial stability, bank of england, drew an interesting parallel between the recent global crisis and ecosystems. he cited the collapse of fisheries that came to a head during the 1970s. and 1980s, leading to the imposition of fishing quotas for various species. in setting quotas, no account was taken of interaction between species and the surrounding eco - system. relating this to the global crisis, he observed that the existing regulatory rules for financial institutions
|
closing address delivered by mr. millison narh first deputy governor, bank of ghana at 2017 continental seminar of the association of african central banks ( aacb ) at movenick ambassador hotel on may 05, 2017 the executive secretary, aacb, colleague central bankers, distinguished guests, ladies and gentlemen, introduction 1. i am delighted to be part of the 2017 continental seminar. i am reliably informed that the deliberations were very fruitful. 2. effective communication has now emerged as one of the most crucial and latest addition to the menu of monetary and financial stability policy tools at the disposal of central banks in our modern era. within the framework of inflation targeting and market based, prudential regulation of financial institutions, the need to have an effective, wellcoordinated and targeted communication strategy cannot be ignored by any central bank that wants to succeed in delivering the twin mandate of price and financial stability. 3. as was mentioned, the importance of having a carefully planned communication strategy is well captured in the statement by a deputy governor of the federal reserve bank of new zealand, that β central bank β s pronouncements have economic and social impact. β 4. to this end my colleague, the second deputy governor of bank of ghana, challenged you to find answers to three important questions at this seminar : a. how should central banks manage communication in times of financial crisis? b. how does effective communication enhance central bank credibility and effectiveness of monetary policy and for maintaining stability in the financial sector? and c. what lessons should we learn from cross - country experiences in central bank communications strategies? 5. i hope the various expert presentations and the plenary sessions have helped you enhance your knowledge and understanding of these and other pertinent issues bordering on communication in the central bank. 6. some of the key points gathered at this seminar include but not limited to the following : a. that effective central bank communication requires a consciously designed strategy in line core mandates, the adoption of the most suited medium, and with specific target audience in mind ; b. there is also the need to have specific strategies for monetary policy and financial stability. but the effectiveness of adopted strategies should be assessed regularly through surveys and feedback in order to adjust to the changing circumstances ; c. finally, the issue of consistency in message, proper coordination and adequate funding of communication activities must not be underestimated. 7. colleague governors and i would surely be expecting to receive the communique from this seminar to help us consider
| 0 |
the uk, the independent ( β vickers β ) commission on banking has also proposed structural, quantity - based reforms : β thou shalt not co - mingle retail deposit - taking and investment banking β. yet even these notionally simple, structural proposals run some risk of backdoor complexity. for example, the consultation document accompanying volcker already runs to 298 pages. were these proposals to become mired in detail, they risk sinking, like the tower of basel, into the swamp. this is not because these proposals go too far but because they may not go far enough. these reform efforts have too many commas, semi - colons and sub - clauses. they would benefit from a few more full stops. that logic suggests cleaner solutions than are currently being implemented, if not than are currently being contemplated. strict size limits and forced separation of commercial and investment banking are two frequently cited such radical options ( haldane ( 2010 ), fisher ( 2011 ), johnson and kwak ( 2010 ) ). the debate on them has waxed and waned on both sides of the atlantic. a stalemate has been reached. having risen to a peak of almost three in 1928, the largest us banks β price - to - book ratios had by 1931 plummeted to below one. they remained close to these levels for several years afterwards ( chart 20 ). this discount implied that investors in the bank could improve their wealth by selling - off the banks β assets separately. investor pressures to separate began to mount. in response, a number of banks began selling off their equity brokerage affiliates, including the two largest banks, chase national bank and national city bank in 1933. a number of banks delisted their shares. this response, led by the market, paved the way for the passage of glass - steagall in 1933. as fuller ( 2009 ) puts it : β divorce made a virtue of necessity and cursed and condemned bankers jumped at the opportunity to demonstrate their virtue β. the market was leading where regulators had feared to tread. bank of england ( 2011 ). bis central bankers β speeches today, the situation is not so dissimilar. as then, many of the world β s global banks have fallen from heady heights to trade at heavy discounts to the book value of their assets. if anything, the discounts to book value are even greater today than in the early 1930s ( chart 20 ). as then, this conjunction is stirring market pressures to separate. bankers
|
luis de guindos : building the eu β s capital markets - what remains to be done speech by mr luis de guindos, vice - president of the european central bank, at the association for financial markets in europe conference, supervision and integration opportunities for european banking and capital markets, frankfurt am main, 23 may 2019. * * * it is a pleasure to be here today to share my thoughts on the future of capital markets union ( cmu ). cmu is undoubtedly a key project for the association for financial markets in europe ( afme ), but it is also important for the european central bank ( ecb ). the primary objective of cmu is to foster deep and diversified capital markets that provide a wide source of financing options to european companies and citizens and act as an engine for investment, innovation and growth. vibrant eu equity markets and truly diversified cross - border debt markets would complement traditional bank lending by fostering risk - taking and investment. 1 indeed, capital markets can, for instance, provide different forms of funding sources that are better tailored to firms β needs along their stage of development. a well - functioning cmu would also complement the banking union by providing channels to mobilise the large existing pool of savings towards financing the economy. it could help facing tomorrow β s challenges, such as climate change and digital innovation. within our economic and monetary union, more integrated capital markets can also help to cushion shocks to parts of the euro area, thereby enhancing the resilience of the euro area as a whole. 2 from the companies β point of view, cross - border ownership would mean that they have a wider pool of investors and potentially more stable sources of capital available for their investments. from the side of investors, diversified portfolios would help them hedge against country - specific risks. cross - border capital markets and banks would thus provide the level of private risk - sharing we need to ensure the long - term resilience of the euro area. in my remarks today i will argue : first, that financial markets are playing an increasingly important role in funding the economy, but more needs to be done to foster sustainable cross - border financial integration and risk - sharing ; second, that a revamped cmu agenda should be geared towards addressing the challenges facing europe, such as brexit, and ensuring that capital markets growth does not endanger financial stability ; and finally, i will highlight the important synergies that exist between the capital markets and banking union projects. how
| 0 |
economic policy, e. g. economic growth and high employment. developments in household indebtedness and house prices can be significant in all these respects. when forecasting inflation, the riksbank tries to take account of the connection between indebtedness and developments in house prices, on the one hand, and inflation on the other. for example, it may be a question of judging how large an impact rising house prices have on household wealth and, at the next stage, on demand in the economy. these relationships are in no way simple or straightforward, and even though statistical studies show a clear correlation between these different variables, it is entirely possible that there are underlying explanations, e. g. sentiment in the economy, that could affect the relationships. in any case, when producing our forecasts, we do our best to estimate the effects of house prices and indebtedness. the riksbank also illustrates regularly the effects on the payment system of developments in house prices and household debt, mainly in the bank β s reports on financial stability. our assessment so far is that there are no signs that property prices are markedly out of balance. high growth in households β disposable incomes, low interest rates and a low level of housing construction, coupled with increased demand for housing, may to a large extent justify the price rises seen in the housing market at national level, as well as current debt levels. it is also possible that the increase in debt is partly an adjustment to an economy with - compared with before - better functioning financial markets, low inflation and expectations of relatively low interest rates in the future. most indications also suggest that the majority of households would be able to service their debt even if interest rates were to rise sharply. nor does it appear likely that banks and mortgage institutions would risk incurring losses that would appreciably affect their capital bases. this wasn β t the case either during the financial crisis at the beginning of the 1990s. while the banks β losses during the crisis were largely propertyrelated, they did not stem from lending against collateral in housing but from loans secured by commercial properties. and prices of commercial properties have this time not at all shown the same development as prices of residential property. on the contrary, they have fallen during the economic decline and have still not recovered. what remains then are the effects on the economy in general. in this respect it is perhaps first a question of whether the build - up in debt and developments in house prices should
|
institutions, which largely finance their activities by issuing bonds and certificates in the securities markets. the market is dominated by five mortgage institutions, which together account for around 99 per cent of all borrowing. the four largest mortgage institutions are subsidiaries of the four largest swedish banks, while the fifth, sbab, is state - owned. the mortgage institutions β annual reports show that as much as around 30 per cent of securities borrowing is carried out abroad, which suggests that there was already considerable interest among foreign players before the legislation on secured bonds was proposed. however, there are considerable differences between the institutions. some institutions have an explicit policy of raising half of their borrowing requirement abroad in their own name, while others manage their borrowing abroad via their parent bank, which issues securities in the banking group β s name so as to ensure the lowest possible borrowing costs. neither is it unusual for banks that own mortgage institutions to buy bonds issued by the mortgage institutions of competing banking groups. the reason for doing so is that banks are not allowed to use bonds issued by their own institutions as collateral when borrowing from the riksbank, while they are allowed to pledge bonds issued by institutions outside their own banking group. as a result, mortgage bonds are largely owned by the banks, which contributes to reducing liquidity in the mortgage market. there are several factors that affect the ability of companies to borrow in the market. these include, of course, the possibility to easily assess the borrowers β credit ratings and the quality of their assets. this is made easier if the borrower has an extensive contact network so that institutional investors are familiar with the borrower and its activities. building up and maintaining this type of contact network and credibility requires time and considerable resources. the swedish mortgage institutions have long established such contact networks, primarily in the swedish securities market, where the liquidity for swedish mortgage bonds is greatest. a rough measure of liquidity, the ratio of bonds sold and the stock of outstanding bonds, shows that bonds were sold around 4 times during one year in the swedish mortgage bond market. this can be compared with the market for swedish government bonds, where the corresponding turnover rate is around 7. the difference is not insignificant, and indicates that more can be done to create a more liquid secondary market for swedish mortgage bonds. the new legislation will create the conditions for improved terms for mortgage institutions and housing finance. however, the responsibility for making use of these conditions will lie with the banks and mortgage institutions themselves. a decisive factor as to whether the banks
| 0.5 |
external financing the imbalances that i referred to made the portuguese economy extremely vulnerable to the international financial crisis that started in 2008 and to its contagion effects. when the crisis hit, followed by a global recession, an expansionary fiscal policy was once again adopted, and this time it was particularly intense, despite the imbalances hitherto accumulated and the absence of fiscal space. in 2010, the budget deficit was above 11 % of gdp and gross public debt was around 96 % of gdp β of which, more than half was external debt. the high and rising level of external indebtedness, coupled with weak growth of potential output, fuelled investors β concerns about the country β s ability to pay back its debt. domestic banks and the government found it increasingly difficult to obtain external financing : banks had to turn to the eurosystem, whereas public debt was increasingly placed in domestic banks. this situation ultimately resulted in the country β s inability to fund itself in the international financial markets in the first half of 2011, after the 10 - year yields had nearly doubled those of the previous year, reaching over 9 %. recourse to external official financing under a financial assistance programme became unavoidable. 5. 2011 onwards β the adjustment programme the economic and financial assistance programme was agreed in may 2011 between the portuguese authorities, the eu and the imf. on the basis of a strategy aimed at restoring international financial market confidence in the portuguese economy and fostering competitiveness and sustainable economic growth, the programme rested on three major pillars : fiscal consolidation ; safeguarding the stability of the financial system ; and structural transformation of the portuguese economy. banco de portugal participated in the definition and implementation of the programme β s financial stability pillar, which aimed to : reinforce solvency, promote gradual and orderly deleveraging and ensure the stable financing of the banking system ; reinforce banking system supervision ; improve the regulatory framework. banco de portugal β s responsibilities in the programme β s implementation were mostly related to its mandate to safeguard the stability of the portuguese financial system. the bank also participated directly and indirectly in other ways β for example by providing 3 / 6 bis central bankers'speeches economic and financial advice to the government and reporting statistical data β and took part in different initiatives led by the portuguese authorities. the bank also shared responsibilities in processing the financial assistance disbursements and interest payments, acting as an intermediary between the financing bodies and the portuguese treasury and government debt agency. the total amount of
|
goods and services that create import purchasing power and liability servicing capacity. over the years, the policy endeavour has been to secure a wide diversification in india β s export profile in terms of both products and destinations. in particular, product diversification has enabled india to broaden its export basket relative to brics peers and reduce its vulnerability to trade shocks. apart from diversification, india is now exporting sunrise products like electronics, chemicals and drugs and pharmaceuticals for which demand is expanding at the global level. in the smart phone segment of electronic goods, india has transformed itself from being a net importer to an exporter with the impetus from the phased manufacturing programme. 9. looking ahead, several initiatives have been put in place and others are being launched on an ongoing basis to enable export industries to regain productivity and cutting edge competitiveness. they include upgradation of export facilities, integration of indian farmers and their products with global value chains, and trade facilitation measures. more recently, efforts are going into reimbursement of taxes and duties, including electronic refund of input tax credits in gst. an 2 / 4 bis central bankers'speeches action plan for 12 β champion β services sectors, including it, tourism and hospitality, and medical services has been developed since february 2018. the reserve bank and the government are actively engaged in the promotion of e - commerce platforms that will boost the exports of both merchandise and services. all these steps seek to create a more conducive climate for exports. capital flows 10. with regard to capital flows, india has adopted an approach marked by progressive liberalisation but calibrated to the realities of the domestic situation, including the evolution of financial markets. a diverse range of instruments for managing exchange rate risk for an expanding investor base has come into play. india β s hierarchical policy approach β preferring equity flows over debt flows, and preferring fdi flows over portfolio flows within equity flows and long - term debt flows over short - term flows within total debt flows β has influenced the composition of capital flows. 11. turning to equity flows, fdi policy has been progressively liberalised across various sectors in recent years to make india an attractive investment destination. sectors that have been opened up in recent years include defence, construction development, trading, pharmaceuticals, power exchanges, insurance, pensions, financial services, asset reconstruction, broadcasting and civil aviation. 100 per cent fdi has also been allowed in insurance intermediaries. in august 2019, fdi norms in
| 0 |
where the economy was in a state of chaos following the napoleonic wars, and confidence in the monetary system was low. the previous joint currency with denmark had col - lapsed, and attempts to restore it had failed. it took a long time before the newly established norges bank managed to create credibility for the norwegian currency. in the first years of its existence, the bank β s main tasks included managing silver tax payments and handling receipts, printing and distributing banknotes and bookkeeping. in january 1817 it was the only bank in the country. it received deposits, but charged a fee for that service. thus, today β s situation with depositors having to pay for keeping their money in the bank is not entirely a new phenomenon. in the 1870s norway joined a currency union with denmark and sweden that lasted until the outbreak of the first world war. the scandinavian countries enjoyed strong economic growth during this period. large cross - border capital flows supported the industrialization of the scandinavian countries, and financial integration driven by the gold standard and the currency union was probably a contributing factor to the favourable development. both sweden and nor - way were relatively poor countries situated on the outskirts of europe when norges bank was founded 200 years ago, but with the advent of industrialization in the late bis central bankers β speeches 19th century both countries began their journeys to become two of the richest nations in the world. economic and political developments in norway and sweden have also showed similar patterns in the period since the second world war. the role of the central banks was very limited in both sweden and norway. the monetary policy decisions were made by the government and norges bank became more of a technical implementer of government policy. for much of the 1970s and 1980s, economic policy in both norway and sweden lacked a long term strategy and credibility. inflation and wages soared, and lost competitiveness resulted in repeated devaluations. in 1982, after a large devaluation of the swedish krona, it was declared that there would be no more devaluations. the same thing hap - pened in norway in 1986, when the norwegian krone was devalued for the tenth time in a decade. interest - rate setting once again became the genuine responsibility of norges bank. we have also shared similar problems regarding the lending spree that started in the mid - 1980s, and ended in a systematic banking crisis and in the worst re - cession since the 1930s. both countries experienced solid economic growth and very rapid credit
|
. furthermore, the fund managed by norges bank is now seen as a model showing the way for other sovereign wealth funds. bis central bankers β speeches even though monetary policy in norway β and sweden β is geared towards an inflation target, the development of the exchange rate cannot be ignored. it is also worth noting that both the riksbank and norges bank pursue their monetary policy in the shadow of the ecb. both central banks have to take into ac - count the effects on the exchange rate of its monetary policy, since the value of the krona greatly influences import prices and ultimately inflation. this may imply a monetary policy stance that is not optimal in terms of stabilizing the domestic economy and its financial system. in fact this is one of the main issues in economic policy in sweden and norway these days. central banking is not limited to finding and optimal strategy for monetary pol - icy. what central banks can and need to do is shaped by the developments in the whole world economy, and largely influenced by political circumstances, in - side and outside our own countries. both formal cooperation and informal ex - changes of ideas is now intense between central banks in many countries, and in particular between norges bank and the riksbank, who continue to face very similar challenges. so to round off : norway and sweden have followed one another through the centuries, in war and peace, through crises and growth. and we can be thankful that we have succeeded in moving from poverty to wealth and becoming two of the world β s wealthiest nations. often the central banks have been able to contribute to higher welfare, but sometimes monetary policy has unfortunately been destabilizing. our joint history is continuing, we have common challenges to face going for - ward. higher capital and labour mobility throughout the world opens new possibilities to raise welfare even further, but globalisation also require that we try to find common strategies across countries. we can also enjoy our similarities and continue teasing one another when we meet on the sports field. as sweden now follows its team in euro 2016, we can β t help but ask, oh where β s norway? but on the other hand we can expect a lot of teasing from you in the next world cup ski event! bis central bankers β speeches
| 1 |
the height of the crisis. at that time, italy did not. in my view, much more important than the question of where the money comes from is that there is a clear - out in the banking sector. there are too many banks in italy and they are not profitable enough. 3 / 3 bis central bankers'speeches
|
benoit cΕure : low interest rates are not inevitable opinion piece by mr benoit cΕure, member of the executive board of the european central bank, in les echos, 9 november 2016. * * * after nearly a decade of crisis, the euro area is once again experiencing growth. in volume terms, gdp now exceeds its 2008 level and the unemployment rate has posted a steady decline. monetary policy has been instrumental in supporting this welcome recovery. but the improvement is too feeble to be a cause for true rejoicing. and some observers are concerned about the consequences of low interest rates on financial stability and profitability in the financial sector. is monetary policy facing an efficiency problem? or is it actually dangerous? the answer is clearly no. let β s remember where we β re coming from. the euro area experienced a sovereign debt crisis coupled with a banking crisis, which shattered confidence and precipitated a double - dip recession in our continent at a time when other major economies were already recording positive growth. today, high debt levels are still holding back the recovery and non - performing loans weigh heavily on the balance sheets of many of our banks. headwinds have also emerged β this time from the external side β as a result of weakening global economic activity. since 2014, net exports have made practically no contribution to euro area growth. that means that we have only our own strengths to rely on to sustain growth. finally, and most importantly, our economies are suffering the effects of an erosion of long - term growth prospects and a relative increase in the global supply of savings. long - term growth in the euro area has halved since the crisis, to less than 1 % a year. these factors β the origins of which are in part technological and demographic β have played a part in reducing the β natural β level of interest rates that is consistent with balanced growth and price stability over a longerterm perspective. this is crucial : to support a given growth trajectory, monetary policy must be more accommodative than before. without our exceptional measures, growth would be weaker, the unemployment rate higher and inflation would be zero or even negative. the ecb will continue to support the recovery of the euro area in an uncertain international climate. a highly accommodative monetary policy remains appropriate, and will continue to be appropriate until inflation is firmly back on track and heading towards 2 %. the side effects of our measures are at present limited and give us no reason to question their
| 0.5 |
the increase in surplus essentially reflects a fall in investment as opposed to a rise in savings as is the case for china and the oil - exporting economies. in the thai case, a deep currency depreciation after the crisis led to a shift in profitability towards tradeables, and induced a major shift in resource allocation. also, the damage to the banking sector compromised credit growth and the subsequent expansion of domestic demand, as the ability of the financial sector to take risk became more constrained. as a result, there was a sharp fall in domestic demand, especially private investment. and exports, by default, became the key engine for growth. similar adjustment was observed throughout east asia. the adjustment led to a turnaround in the external current account, a decline in external indebtedness, and a rise in international reserves, all of which helped strengthen the region β s external position. given the weakness in domestic demand, limiting large currency appreciation becomes a necessity for some economies to support economic recovery. and with weak domestic demand, pursuance of banking reform was an important policy to normalize lending and credit growth. on top of this, liberalization to allow more capital outflows also became an instrument of choice in managing the macroeconomic impact of rapid capital inflows. on the demand side of global capital, policy configuration in the us was instrumental in allowing the external surplus of emerging markets to be absorbed through the us current account deficits. the key mechanism, as i noted, has been the easing of us monetary policy that has helped support global growth through the expansion of us demand. with private investment in the us still recovering from the stock - market correction in early 2000 $ s, lower interest rate and greater access to credit significantly increased us consumption at the expense of a fall in private savings. as a result, the us external imbalance widened while reserves accumulation by emerging markets increased. the next question is can this go on? and is reserves accumulation a temporary or a permanent feature of the international monetary system? to answer this question, one has to distinguish between stock and flows. on the flows side, given reserves accumulation essentially mirrors external surpluses of emerging markets, the pace of reserves increase going forward is more likely to ease. this is because the adjustment process that is now ongoing will reduce the imbalance. the more the adjustment, the less will be the additional flows, and hence the pace of reserves accumulation. but to be successful, the adjustment will require both expenditure reduction, through
|
first is the export - led development model, i. e. the new bretton woods, which sees reserves accumulation as a consequence of an attempt to maintain export - led development, especially in asia. the second explanation is the global - saving glut hypothesis, of which the glut is driven by the transformation of emerging markets from net borrowers to net lenders in the international capital market. both interpretations i think have merits, and reserves accumulation is probably a reflection of both. but the point that really should be emphasized is that external surplus and reserves accumulation, for the most part, are a reflection of the dynamic of the adjustment in global investment and saving that has taken place since the asian financial crisis. this dynamic has been instigated by the configuration of policies pursued by the major economies and by emerging markets, as well as by the development of financial institutions and markets around the world that has sped up and influenced the direction of global capital flows. but why the asian financial crisis as a starting point? to me, the asian financial crisis marks a number of important watersheds in the global financial relationship. first, the crisis reaffirms the dominant roles of market and globalized capital. second, the severity of the crisis led many emerging economies to rethink their policies of relying on external help for crisis prevention and resolution. and this has led to consideration to selfinsure against risk of crisis, with reserves accumulation becoming an important aspect of this consideration. and third, sharp adjustments in relative prices, especially real exchange rate and real interest rates after the crisis, brought into play the major forces that led to the adjustment in global investment and savings, as well as reserves accumulation. today, i want to identify three factors as the major forces contributing to external surplus and reserves accumulation. the first is the process of global investment - savings adjustment that i have noted. the second is the policy configuration in the us, especially the easing of monetary policy that plays a crucial role in promoting expenditure of us households. and the third is financial innovation and the deepening process of financial globalization, especially in the us, that facilitates risk allocation and enhances access to credit by households. the growth of credit derivatives and sub - prime mortgages are two examples of the developments that have taken place. on the global basis, these forces have led to a widening of the us current account deficits that was matched by surpluses elsewhere. as for east asia, in terms of the investmentsavings gap,
| 1 |
, at variable rates with amortization periods of more than 25 years. and our models suggest that the most highly indebted households saw only a small increase in their liquid assets in that time. this brings me to our second, and related, vulnerability β elevated house prices. strong demand for more living space, low interest rates, inadequate supply, increased investor activity and expectations of future price increases all made for a hot market during the pandemic. house prices rose about 50 %, on average, since the beginning of the pandemic. as canadians return to more normal activities and interest rates rise, we expect to see some moderation in the housing market. indeed, this has started. recent data indicate a marked decline in the level of resale activity from its peak. and even if house prices are up sharply on a year - over - year basis, some markets have recently seen declines. with inflation well above the 2 % target and the canadian economy overheating, the bank β s number one priority is to get inflation back to target, and we are raising interest rates to make that happen. labour markets are very strong, and household balance sheets have improved overall. the economy can handle β indeed needs β higher interest rates. and given the unsustainable strength of housing activity, moderation in housing would be healthy. but high household debt and elevated house prices are vulnerabilities. if the economy slowed sharply and unemployment rose considerably, the combination of more highly indebted canadians and high house prices could amplify the downturn. if those in highly indebted households lose their jobs, they would likely need to reduce their spending sharply to continue servicing their mortgage. in addition, a big correction in house prices would reduce both household wealth and access to credit, particularly among the most - indebted households. were this to affect many households, it could have broad implications for the economy and financial system. this is not what we expect to happen. our goal is for a soft economic landing with inflation coming back to the 2 % target. but it is a vulnerability to watch closely and manage carefully. let me now turn to carolyn to address three global vulnerabilities outlined in the fsr. thank you, governor. the final set of vulnerabilities described in our fsr has been highlighted by the war in ukraine and other geopolitical tensions, and some risks are rising. events over the past year have emphasized the interconnected nature of the
|
opening statement by tiff macklem and carolyn rogers governor and senior deputy governor of the bank of canada press conference following the release of the financial system review june 9, 2022 ottawa, ontario good morning. i β m pleased to be here with senior deputy governor carolyn rogers to discuss the bank of canada β s financial system review ( fsr ). the fsr is our annual assessment of the key vulnerabilities of and risks to the canadian financial system. our goal in identifying these is to help households, the private sector, financial authorities and governments take actions to reduce them. we have just come through the biggest shock i hope any of us ever have to face β two years of a pandemic and unprecedented economic and social upheaval. we are pleased to report that our financial system is strong and weathered the crisis well. now, the global economy is dealing with a new set of challenges : high inflation, rising interest rates, russia β s unprovoked invasion of ukraine and financial market volatility. so this is a good time to discuss existing and emerging vulnerabilities and risks. in nearly every fsr, we warn about the high debt that many canadian households are carrying, and we warn about elevated house prices. those are not new vulnerabilities, but the pandemic has affected them. over the course of the pandemic, household balance sheets shifted as both spending and incomes adjusted. on average, household wealth increased as a result of rising asset values, including real estate, and markedly higher savings. this improvement, and the rise in savings in particular, is remarkable considering the devastating and lasting impacts the pandemic could have had. but to assess vulnerabilities we need to look beyond the average and examine the distribution of changes across households. what we see is that, even as the average household is in better financial shape, more canadians have stretched to buy a house during the pandemic. and these households are more exposed to higher interest rates and the potential for housing prices to decline. two - thirds of canadians are homeowners. just under half own their home outright, and the rest have a mortgage. of those, 70 % have a fixed - rate mortgage that is not immediately affected by higher interest rates. the other 30 % β or 10 % of canadian households β have a variable - rate mortgage. throughout the pandemic, a growing number of canadians took out mortgages that were very large relative to their incomes
| 1 |
##b also explains the subdued demand in most countries for guarantees on shortterm debt with maturity less than one year. finally, certain factors might have discouraged the use of government guarantees, such as the associated β stigma effect β and the pricing, which may appear high in current market conditions. overall, the use of government guarantees on bank debt is considered satisfactory in most countries. at the same time, it is still too early to comprehensively assess the effectiveness of all bank support schemes in improving the longer - term funding of banks and in fostering bank lending to the private sector. the implementation of the bank support schemes has been gradual over the past few months and the evidence is relatively limited. but on one aspect, the facts already speak a clear language : namely that the use of guaranteed debt has been indispensable in providing banks with access to medium and longer - term financing : most β and in some countries even the totality β of the new bank debt issued since october last year has been government guaranteed. banks should take advantage of the available government support and strengthen their capital buffers, not least with a view to the prospect that the current extraordinary liquidity provision by the ecb will not remain in place indefinitely. this issue relates to the exit strategy to which i will return shortly. the governments β actions aimed at dealing with the crisis have not been limited to the support of the financial sector. fiscal stimulus packages across the euro area amount to β¬100 billion ( 1. 1 % of euro area gdp ) this year and a further β¬75 billion ( 0. 8 % ) is planned for next year. their financing as well the deterioration of budgetary balances due to the operation of the automatic stabilisers in the wake of the economic downturn, and the aforementioned bank support measures imply that the fiscal deficit for the euro area as a whole will surge, from 1. 9 % of gdp in 2008, to 5. 3 % in 2009 and further to 6. 5 % in 2010. 12 the dynamics of public debt are equally striking. compared to last year, the debt burden of euro area countries will grow by almost 9 % of gdp this year, from 69 % ( 2008 ) to almost 78 % ( 2009 ). these are worrying developments, especially when bearing in mind that this deterioration of public finances in the span of only one year wipes out the consolidation efforts of euro area governments of an entire decade. 13 by mentioning these figures i do not wish to deny that the current focus
|
future. let me turn to my second point, namely how macro - prudential regulation and supervision may affect the macroeconomic environment and hence monetary policy - making. it has been widely acknowledged that the regulatory framework has been contributing to the amplification of the natural fluctuations of the economic cycle. this phenomenon β known as pro - cyclicality β can for example be linked to the time - varying risk parameters for the calculation of capital requirements or the accounting framework. the need to address this excessive pro - cyclicality is a concern now shared by policy - makers globally. after their meeting in pittsburgh last month, the g20 leaders stated β we want growth without cycles of boom and bust and markets that foster responsibility not recklessness. β in other words, we need to preserve the efficiency gains arising from advances in financial development, but we also need to find ways to reduce threats to financial system safety and stability which seem to be inherent to the new developments and avoid, or at least limit, β roller - coaster β paths. moreover, there may be mechanisms through which macro - regulation may affect the provision of credit and ultimately output and inflation. for example, by requiring financial institutions to hold large capital and liquidity buffers or by limiting leverage, their cost of capital and lending may be impacted, which in turn may affect, at least in part, the provision of bank credit. these are only a couple of examples of how the regulatory framework may affect the provision of credit. there are many more rules and regulations that affect the supply of and demand for credit, thereby impacting broader macroeconomic outcomes. overall, the above examples clearly show that the regulatory framework can have important implications for macroeconomic outcomes and thereby can have direct consequences for monetary policy - making. at the same time, the regulatory framework may equally affect the transmission of monetary policy through its impact on the aggregate behaviour of the banking sector and, hence, also affect the effectiveness of monetary policy. looking forward, the question arises how the currently envisaged global reform agenda of the g20 will affect the macroeconomic environment. for example, will the general increase in capital and liquidity requirements or the introduction of a leverage ratio reduce the available resources for credit creation? how will the introduction of counter - cyclical capital buffers and more emphasis overall on risk management frameworks affect the behaviour of banks and the real economy? and more generally, are additional measures needed to make the regulatory framework more flexible and dynamic depending on the state of the economy? these
| 0.5 |
open financial system and free capital movements gave opportunistic investors the chance to discover iceland. their trading has a range of positive effects but also poses a risk of heightened volatility and fluctuations in exchange rates and interest rates. icelandic financial companies have expanded rapidly overseas, and too rapidly in some people β s view. meteoric growth tends to raise questions anyway, and when small institutions are involved from a country that has not had a high profile in the banking world, these questions may be more aggressive and critical than otherwise. icelandic banks discovered this last year. they have learnt a valuable lesson and clearly realise the importance of transparency and open communication, and the need for leeway in their funding and good credit ratings. this experience must not be forgotten. general market discipline and scrutiny will help to prevent that from happening. for government authorities, it is important to pursue balanced and credible economic policies and ensure that the administrative and financial infrastructure remain solid, including strong and efficient financial supervision. the central bank tightened its monetary stance sharply last year, one result of which was a lower rate of inflation than otherwise. the treasury has shown a surplus for many years and privatisation proceeds were deployed to retire debt. today, the treasury β s foreign debt is not higher than the central bank β s foreign reserves, i. e. roughly 15 % of gdp, and its domestic debt only 10 % of gdp. financial supervision has been boosted and will be strengthened further. it is in line with best european practice. iceland β s economic imbalances are waning and the inflation rate and current account deficit are coming down, the latter from a record level in 2006. the financial sector is on a firmer footing than a year ago. the headline of the central bank β s financial stability report for 2007 was the commercial banks are more resilient. however, the battle is not over and risks may still be present. the current account deficit is still large. tighter conditions for funding it could undermine the exchange rate and rekindle higher inflation and instability. while the banks have strengthened their liquidity and have a larger share of deposits on the liabilities side of their balance sheets and fewer challenges in their refinancing, they still rely on easy access to international credit markets. a shift in investor sentiment about the banks, or in general risk assessment in the markets, could tighten liquidity and lead to less favourable borrowing terms. thus prudence is called for, along with contingencies for facing tighter conditions and
|
on our time - tested resiliency and ability to innovate amidst challenging times. and don β t forget, our economic fundamentals continue to be a source for optimism. this includes sustained economic growth, slowing inflation, declining interest rates, record high international reserves, balance of payments surplus, a competitive peso and a stable banking system. in the end, the challenge in 2009 for the banking sector is to quickly act on the painful lessons of the global financial crisis. it is simply far too convenient to point at the complexities of structured products, the over - leveraging, or the fundamental dilemma with market greed. all these were necessary inputs but together they are not sufficient to explain where the world is today. more importantly, debating the whys and wherefores will have its place, but at this juncture we need to act decisively with conviction, in unison, and move forward. ladies and gentlemen, while the global prognosis for 2009 is daunting, the bangko sentral continues to believe that the philippines remains in a position of relative strength as we navigate through these difficult times. what we do to consolidate our gains rests squarely on us. in the case of the philippine banking community, i am confident it will prevail and remain sound and stable. on behalf of the members of the monetary board, i thank all the sectors represented here tonight for their continuing support : the banking community ; the legislative, executive and judicial branches of government ; the private sector, the diplomatic corps, the academe, the media, our special guests, and our partners in bilateral and multilateral agencies. together, let us offer a toast to our continuing partnership in sustaining economic growth in our country and improving the quality of life of filipinos. cheers! finally, before it becomes totally unfashionable, let me take this opportunity to wish all of you blessings of good health, success, and prosperity this new year. mabuhay! thank you all and enjoy the rest of the evening.
| 0 |
productive investments benefitting the society in large. lack of hr policies and professionalism 17. the quality of human resources is an important determinant of the success of any organization. this aspect, however, has not received due importance in the cooperative institutions. the cooperative banks are headed by a committee of elected members who are not professionals and do not possess sound knowledge in banking functions. the committee takes crucial business decisions involving sanction of loans, investments, interest rates on deposits and loans, etc. which require a minimum degree of skill and expertise. often, the role of chief executive officers in these areas is minimal. 18. cooperatives do not have well defined capacity building and hr policies in crucial areas like recruitment, placement, training, career progression, succession planning, etc. recruitments are done without any objective and systematic manpower assessment. all these have led to inefficiency and lower productivity. though there is a system of training in place in many cooperative banks, there is no need - assessment to align training with the current and future staff requirements. training programs should be designed to achieve skill upgradation in areas related to audit and expenditure, management and aptitude development. it is also necessary to keep the staff sufficiently motivated through periodic job rotation, job enrichment and recognition of performance. poor recovery performance 19. frequent loan waiver announcements by governments aimed to garner electoral support have vitiated the credit discipline among the borrowers and affected the recovery atmosphere. the resultant weak finances, growing npas and poor resource base have contributed to the declining performance of the cooperatives, particularly at the grass root level. since these grass root institutions depend on liquidity support from higher financing bis central bankers β speeches agencies like state and central cooperative banks, non - payment of dues impairs the financial health of the entire chain. inadequate internal control and audit 20. cooperatives do not pay attention to implementation of adequate and foolproof internal checks and control. balancing of books and reconciliation of entries are in arrears for unduly long periods. as a result, there is frequent incidence of frauds involving the staff who game the system. very often, these cases are held up due to protracted litigation in courts of law and the guilty are not brought to book. there is absence of effective audit mechanism. there are delays in the conduct of audits and submission of reports. quality of audit leaves much to be desired in as much as it fails to address the gaps in the systems and processes and
|
, which posed a systemic risk. in order to protect the interests of the general public and also that of the other co - operative banks, rbi issued directions to the bank restricting certain operations ( acceptance of fresh deposits, restricting payments to any single depositor to rs. 1000 and ban on fresh lending ) and requisitioned the central registrar of co - operative societies, new delhi to supersede the board of directors and appoint an administrator. an order of moratorium was also enforced on the bank by the central government for a short period. the bank was subsequently placed under a scheme of reconstruction with the approval of reserve bank of india. 29. the gujarat episode was followed by another major crisis in the state of andhra pradesh in 2002, when one of the largest co - operative banks in the state faced a run, following a newspaper report regarding an inquiry instituted into the affairs of the bank by the state registrar of cooperative societies. the bank was in a weak position, and ultimately, after attempts for its revival failed, its licence was cancelled by the reserve bank in 2004. 30. the decline in public confidence in the ucb sector, deepened in the aftermath of the crisis in gujarat and andhra pradesh and concomitantly, the position of ucbs generally deteriorated. as on june 30, 2004, 732 out of 1919 ucbs were categorised in grade iii or iv signifying weakness and sickness. with a view to facilitating consolidation and emergence of strong entities and providing an avenue for non - disruptive exit of weak / unviable entities in the co - operative banking sector, rbi had also issued guidelines in february 2005 to the ucbs to encourage merger / amalgamation in the ucb sector. although the banking regulation act, 1949 ( as applicable to the cooperative societies ) does not empower reserve bank to formulate a scheme with regard to merger and amalgamation of co - operative banks, the state governments have incorporated in their respective co - operative societies acts a provision for obtaining prior sanction in writing, of the rbi for an order, inter alia, for sanctioning a scheme of amalgamation or reconstruction. the reserve bank β s role in the merger of the cooperative banks is, thus, confined to the examination of only the financial aspects of the scheme of merger and to protect the interests of depositors of the banks concerned as well as ensuring the stability of the financial system while considering such proposals. subsequently, recognising that the ucbs are an important part of the
| 0.5 |
indicator loses its value as a gauge of the state of the economy. rather, the indicator becomes a signal of the public's belief in the competence and commitment of the government agency that is targeting the indicator. something along these lines could be happening to inflation, especially given the important role of expected inflation in the behavior of actual inflation. perhaps inflation is just sending a signal of people's trust in the fed's ability to meet its inflation objective. if so, no complaints here. that is a good thing. however, a problem does arise if the fed remains reliant on inflation as our only gauge of the economy's position relative to its potential. there are risks in pushing the economy into a place it does not want to go if we limit ourselves to navigating by what might be a faulty indicator. anchored inflation expectations might mask the inflation signal coming from an overheated economy for a period, but i have no doubt that prices would eventually move up in response to resource constraints. the ultimate price, from the perspective of the dual mandate, would be an unanchoring of inflation expectations. of course, i view this more as a risk than my baseline expectation. as i have said, i am optimistic about potential growth, and i expect that even relatively strong growth can be met without running into economic constraints. however, i also think that we should pay attention to other indicators of tightness and overheating in addition to inflation. there are other signs of potential besides inflation, including, but not limited to, direct measures of labor utilization or indications of shortages and bottlenecks in production. policy considerations how should these thoughts affect monetary policy? i began my remarks by noting that there may be reason to think that the productive capacity of our economy could be accelerating, which would allow a more gradual withdrawal of accommodation without overheating. but i have noted as well that there may be reason to think that resource constraints could be more binding than 3 / 5 bis central bankers'speeches current inflation measures would traditionally indicate, which would call for a more athletic response. moreover, there is today a higher degree of uncertainty about many of these factors - measures of labor slack, the relation between labor slack and inflation, the sensitivity of current inflation measures to actual resource constraints, and the future growth of productivity, to name a few - - than there has been for many years. in such an environment, some have argued that this greater uncertainty leaves policymakers without a clear guide and
|
the year, and indicators suggest continued strong growth through the summer. economic conditions are as close to meeting the federal reserve's dual mandate for monetary policy - - maximum sustainable employment and price stability as they have been in a long time. inflation is in line with the committee's 2 percent objective, and the unemployment rate is at nearly a 50 - year low. how long can this strong growth be sustained? the answer depends largely on what form growth takes. growth that is supported by increases in the productive capacity of the economy should be durable. however, if growth primarily reflects strong demand that stretches production beyond its sustainable capacity, the economy will run into constraints that will result in slower growth, higher prices, or a potentially destabilizing buildup of financial imbalances. so, which is it? unfortunately, it is very difficult to tell. i will return to that question shortly. that said, i see many reasons to be optimistic about the growth of the potential capacity of the economy over the next few years. in part, my optimism is rooted in the view that many of the factors that have been weighing on potential growth since the financial crisis could be lifting. so, have we reached the turning point? while i believe the issue remains unresolved, the recent evidence is encouraging. 1 / 5 bis central bankers'speeches have we reached a turning point? why am i optimistic about the economy's supply potential? the growth of potential can, at the most basic level, be broken down into two factors : the supply of labor and the productivity of that labor. productivity, in turn, is importantly affected by changes in the stock of capital - - that is, machines and factories - - as well as technological advances and improved production methods. i see reasons to be hopeful about both factors. let us start with labor. for some time, the contribution of the labor force to potential growth has been held down by the predictable drag of baby boomers moving into retirement. however, the decline in labor force participation following the financial crisis exceeded even what might be expected given this long - standing downward trend - - in particular, as the participation of primeage workers ( those between the ages of 25 and 54 ) fell and teenagers exited the workforce in droves. the reasons behind the fall in participation among non - retirement - age workers have been the subject of much debate. however, i see little reason to assume that it will be permanent, and we have already seen some signs of a turn
| 1 |
have not got involved in step - up mortgages. indeed our variable rate mortgages are always related to future market rates, not to a pre - determined schedule of step - ups in interest rates. the notion of having an enticement rate to lure borrowers in, which steps up sharply two to three years later irrespective of where market rates are at the time, has not been a part of our financial landscape. in our situation higher default rates tend to occur mostly if the job market gets difficult and borrowers cannot service their loans, or, as was becoming the case late last year when high rates of inflation eroded real incomes. fortunately, that should be corrected in 2009 as low global demand will lead to lower inflation rates. in recent times however, the lure of the credit card has become a potential problem. borrowers must be more prudent in accepting the offer of an increasing number of credit cards. in this regard, the central bank has initiated a financial education programme which will include guidance on money management and personal financial planning. this programme was launched last year and will continue in 2009, and will draw on presenters inside and outside the bank. for the moment, however, although there has been an increase in delinquency as noted in the increase in commercial bank provisioning last year, it is within manageable proportions. securitization the policy of originate and securitize taken to its extreme in the case of the us market is also a development that does not exist here. there is limited securitization here in barbados. in fact there is not sufficient securitization. entities which were supposed to be securitizing, that is, issuing commercial paper and money market instruments were issuing certificates that looked very much like deposits. perhaps this is related to the barbadian desire to avoid taking risks, but it shifts the risks on to the institution. in the case of commercial paper, it can be traded and could trade at above or below its value, so that the institution does not bear all the risk. this allows the lender to take his money out at any time β at a price. in the case of deposits the institution has an obligation to return the value of the deposit plus interest at the due date, unless some prior arrangement has been agreed as to early removal. to this extent in the barbados situation with its tendency to deposit - taking, systems are less liquid. however securitization has its merits. it leads
|
yakiv smolii : national bank of ukraine press briefing - changes in the denominations of banknotes and coins of hryvnia speech by mr yakiv smolii, governor of the national bank of ukraine, at a press briefing on optimization of the denominations of banknotes and coins of hryvnia, kyiv, 25 june 2019. * * * dear colleagues, today, we are holding meetings in many ukrainian cities, kyiv, dnipro, odesa, kharkiv, lviv and khmelnytskyi, to present to the public the changes in the denominations of banknotes and coins of hryvnia that aim to harmonize cash circulation. despite the fact, that cashless settlements are gaining more popularity in ukraine, cash remains the most used means of payment. our domestic currency, it β s banknotes and coins, is something that everyone of us, regardless of their location, profession or age, deals with on a daily basis. therefore, it is of outmost importance for us that hryvnia in any material form remains high - quality, secure, and stable, and that payments in hryvnia are convenient. already this year we β ll take two important steps : first, 1, 2, and 5 kopiika coins will cease to be means of payment in ukraine and will be withdrawn from circulation. also 25 kopiikas, that is still used for payments, will be gradually withdrawn second, a new 1, 000 hryvnia banknote will be introduced. in three years, after complete withdrawal of the above coins and the introduction of the new banknote, the number of hryvnia denominations will reduce from 17 to 12. a total of 6 coin denominations and 6 banknote denominations will remain. this will streamline existing hryvnia denominations. 11 β 13 currency denominations are the most common in the leading countries of various parts of the world, from the us to canada, the uk to the czech republic, denmark, switzerland and australia. why are we introducing changes to the currency denominations? i can give you three main reasons backing these decisions : customer convenience, economic feasibility, and saving costs for the state and business. let me add some details. the first reason is customer convenience. the changes we present today will reduce the average number of coins per ukrainian almost by half, and the number of banknotes by almost a third. consequently, cash settlements and savings will be streamlined.
| 0 |
robert holzmann governor oesterreichische nationalbank welcome remarks vienna, may 22, 2023 check against delivery! monetary policy in uncertain times : towards robustness and resilience opening remarks for the 50th oenb economic conference and the 60th suerf anniversary conference on 22 may 20231 ladies and gentlemen! let me start by thanking you all for joining us, both virtually and in person. i would also like to extend my sincere gratitude to the distinguished speakers, panelists and researchers who have agreed to honor us with their contributions to this event. a heartfelt β thank you β also goes to the oenb and suerf teams behind this event. in fact, this year β s edition of our conference marks a double anniversary. in 2023, we celebrate 50 years of oenb annual economics conference and 60 years of suerf. our long - standing joint efforts are a testament to the strong cooperation which we have successfully pursued for several decades. i must say i personally have come to believe in the β prophetic capacities β of oenb - suerf annual conferences. for last year β s conference, we convened in late 2021 to decide on the main conference theme. back then, we thought it would be wise to ask whether we would see a β return of inflation β in 2022. as you know, reality sadly answered this question extremely clearly. if you remember, in my opening speech last year i even had to replace the question mark in the conference title with an exclamation mark! for this year β s event, we came together a couple of months ago and concluded it would be a good idea to organize a conference focusing on how to render our monetary policy more β robust and resilient β to shocks β only to experience significant turmoil on financial markets in spring. so, i i want to thank kilian rieder for his excellent research and support to these opening remarks. publisher and editor : oesterreichische nationalbank communications division otto - wagner - platz 3, 1010 vienna, po box 61 am asking myself : what will come next? perhaps we need to think about formulating more positive and optimistic conference topics. in any case, i should emphasize that our β prophecies β are purely delphic in nature, and certainly not intended as odyssean. defining robustness and resilience on a more serious note : it seems obvious that a conference discussing robustness and resilience in policymaking requires
|
the european union across national borders. hence, the capital markets union fosters cross - border private financial risk sharing. in the european union, smes account for a share of over 90 % in total businesses, which patently illustrates the potential of the capital markets union initiative to promote sustainable growth. only 3, 000 of the 20 million smes in europe are listed on a stock exchange. this is about to change, as rules have been proposed that make it easier for smes to tap into a wide range of funding at all stages of their development and i fully trust the initiative and energy of my friend christoph leitl, president of eurochambers and co - initiator of this conference, to achieve progress in this field. let us not forget that all eu countries, except two with an opt - out, should one day adopt the euro. however, compared to the situation before the crisis, the setting in which euro area enlargement is taking place has changed profoundly. lessons drawn from the crisis have substantially transformed the institutional set - up of emu itself. in particular, the creation of the ssm has added an entirely new dimension to future euro area accession processes. at the same time, experience from the crisis has sharpened the views of policymakers, both in the current euro area member states as well in the non - euro area members, on what it takes for an individual country to participate smoothly in a monetary union. in a nutshell, we are today facing twin challenges in the eu β namely, that of deepening monetary union for the euro area countries and that of achieving convergence to allow for a smooth integration into monetary union for those eu member states not yet part of the euro area. at today β s and tomorrow β s conference, renowned experts and policy makers will provide us with new insights and help us understand where we stand right now in terms of emu deepening and convergence. let us take this opportunity to discuss what the major risks and needs for actions are. during austria β s eu presidency, we will strive to help master these challenges. i look very much forward to stimulating presentations and fruitful discussions, and i wish you an interesting and pleasant stay in linz.
| 0.5 |
of more moderate rises in food and energy prices, which had shown exceptionally large increases in 2000. more fundamentally, the slowdown in inflation was related to the moderate rise in unit labour costs over the past two years. in our monetary policy committee statement we noted that with continued fiscal and monetary discipline, the target range of inflation in the year 2002 was achievable. the rate of imported inflation in production prices has declined from 15 per cent year - on - year in december to 11, 8 per cent in may. inflation in domestically produced goods slowed from a year - on - year rate of 8 per cent in november 2000 to 7, 5 per cent in may. this was largely because of declining food prices which had a positive impact. similarly, the headline cpi accelerated from 1, 7 per cent in october 1999 to 7, 8 per cent in february 2001 but declined to 6, 4 per cent year on year in may. although we remain reasonably confident of meeting our inflation target, we nonetheless remain vigilant. there are some forces at work that may obstruct the gradual decline we have witnessed up until now. these include the faster growth in aggregate demand over output, uncertainties about the stability of the oil price, and possible delayed second - round effects from the rand β s depreciation of last year. although the rand depreciated by 1, 3 per cent during the first quarter of this year, it appreciated by 1, 2 per cent against the basket of currencies during the second quarter. against the dollar the rand depreciated by 5, 9 per cent in the first quarter. however, during the second quarter, the rand depreciated against the dollar by only 0, 6 per cent. 5. exchange rate of the rand having declined from a level of about r7, 50 against the us dollar early in january 2001 to levels around r8, 00 at the end of may, the rand seemed to stabilise against the us dollar in june. the monthly average exchange rate of the rand against the dollar in june 2001 was r8, 05. however, from 3 july 2001 the rand weakened against the us dollar to a level of r8, 2403 on 9 july reaching an all time low of r8, 2456 in intra - day trading. subsequently the rand declined further to a level of r8, 34 on 11 july 2001. since the beginning of the year, the rand has depreciated by about
|
##ised rate of 6 per cent in the first quarter, coming off a high base. although mining output rose slightly, this was not near the levels seen at the beginning of 2000. demand for platinum and coal remained firm but diamond stockpiling continued in the face of weaker demand. of some worry is that the sector that bore the brunt of the slowdown was the manufacturing sector. the growth rate in this sector slowed down from an annualised 4, 5 per cent in the fourth quarter to a mere 1 per cent in the first quarter. this is somewhat puzzling because there appears to be strong demand for manufactured goods. domestic demand remained strong in the first quarter with household and government consumption expenditure rising. however, the growth in real fixed capital formation and inventory investment accelerated. however, it was net inventory investment which slowed down the growth in aggregate spending in the fourth quarter of 2000. an acceleration in inventory levels followed in the first quarter of 2001. this suggests that producers are positive about south africa β s future growth prospects and anticipate an increase in domestic demand. household spending was still holding firm in the first quarter of 2001. real final consumption expenditure by households increased at a quarter - on - quarter seasonally adjusted and annualised rate of 3 per cent in the first quarter, slightly lower than the 3, 5 per cent recorded for the fourth quarter of 2000. the weakness was mainly due to a slowdown in spending on services other than communications services. a rise of 28 % in the purchase of cellular telephones over the past year was not enough to cushion this. the real gross fixed capital formation accelerated steadily in the 12 months to the first quarter. the private and general government sector registered high fixed capital formation but there was a decline in the public corporations sector. the private sector continued to expand communication infrastructure. general government also increased their outlays on infrastructure spending, although from a very low base. total fixed capital formation amounted to approximately 15, 5 per cent of gdp in the first quarter. 3. employment and labour remuneration south africa is labouring under a scenario of low growth that appears insufficient to create the levels of employment we would like to see. however, it must be remembered that a drop in formal unemployment does not necessarily imply an equal rise in the number of the unemployed. often those who are no longer employed in the formal sectors of the economy enter the informal sectors or become self - employed. from 1999 to 2000, employment fell in the formal private and public non -
| 1 |
are already promising results β for instance to analyse labour market conditions, gauge economic sentiment, predict consumer behaviour, improve the offering of official statistics or detect anomalies and improve data quality. in particular, we are clearly at a turning point with the emergence of large language models ( llms ) and generative ai. these new techniques can clearly revolutionise the way we work with data, by expanding beyond traditional statistical series, developing new types of indicators and extracting fresh insights. but, clearly, we need to understand better how the new models being developed can complement, or perhaps replace, our existing toolkits. we are very lucky to have present with us today, fabrizio ruggeri, president - elect of the international statistical institute, who has accepted to present his views on these issues. third, the amount and type of data mentioned above, encourage us to establish strong data governance frameworks. these are needed to manage the growing and increasingly complex pool of information available. central banks are actively engaged with other public and private entities to make progress on this front. the objectives are to be able to meet growing information demands while ensuring strong data quality. this calls in particular for developing robust data standards that can serve as a common language for exchanging information, ensuring that 2 / 3 bis - central bankers'speeches data are only collected once, and providing transparent information about the data themselves β that is, data about the data, or metadata. fourth, the combination of stronger governance frameworks and sophisticated techniques can help us to benefit from the wealth of granular data available in today's society. these data offer multitude of opportunities, providing central banks with insights that were previously inaccessible through aggregate indicators. however, working with micro - level information presents important challenges especially to protect privacy and confidentiality β which are fundamental concerns for official statisticians and public institutions. i am happy to note that a specific session devoted to these issues has been organised during this conference that also includes a presentation on statistical disclosure control by inexda, the international network for exchanging experience on statistical handling of granular data. indeed, and this is my fifth point, these initiatives should not be taken in isolation as they require close international collaboration. we are very fortunate to have at our disposal international statistical manuals like the system of national accounts ( sna ) or the balance of payments manual ( bpm ). they provide a common language to discuss and analyse economic and social phenomena. but they need to be constantly refined
|
##mediaries. a number of recurrent failures to comply fully with the rules were found : insufficient checking of customers, incomplete record - keeping, inadequate assessment of anomalous transactions, poor staff training, and methods of control lacking in incisiveness. sanctions, reprimands and numerous reports to the law enforcement authorities show that the banks underestimate the need for full compliance with the rules, for strict performance of their obligations. a change of attitude is necessary. corporate bodies and officers must take responsibility for the proper functioning of the anti - money - laundering systems. the control bodies have specific duties for which they can be called to account, including in the course of inspections. this anti - money - laundering strategy is beginning to produce effects. the number of reports of suspicious transactions that intermediaries transmitted to the fiu increased by 16 per cent to around 14, 600 in 2008, and in the first four months of 2009 there was a further sharp rise of about 50 per cent compared with the same period of the previous year. customer protection the crisis has accentuated the need for continuing action to raise the standards of correctness and transparency in relations with the public, to resolve disputes between banks and customers quickly and to promote the informed use of financial instruments by savers and investors. the stability of the financial system hinges on customer confidence. the bank of italy β s new rules on the transparency of banking and financial services represent a thorough overhaul with respect to the past. customers must be provided with information that is easy to understand and effectively useful for determining whether the transactions proposed are in their interest and for assessing the correctness of the person making the proposal. the rules require intermediaries to institute internal procedures that guarantee correct conduct. the comments received in the course of the public consultation that was completed in may confirmed the validity of the reform, which will be issued this month. as a complement to the civil justice system, a banking and financial arbitrator has been created to give customers an economical and rapid means of obtaining impartial rulings in disputes over banking and financial services. three boards will be instituted, one for the north of italy, one for the centre and one for the south. bank customers will also be able to appeal to the boards through the branches of the bank of italy, which will provide the facilities and technical support for the arbitrator. i raised the question of the fee charged on a customer β s maximum overdraft at the beginning of 2007, calling on the
| 0 |
president of the french republic speaks of the necessary " european sovereignty ". i am aware that this expression gives rise to debate. in any case, it means that europe must not passively put up with events, in the face of the growing rivalry between the united states and china. that we can and should be proud collectively of our achievements. in the economic sphere, these are the single market, the single currency, and our european social model - the soziale marktwirtschaft. the world needs europe, today. we must be decisive... and at the same time aware that economic rigour is a prerequisite for our political influence in this world of 2020 so fraught with danger. this brings me to what i want to say today. so far europe has stood firm in the face of a shock of unprecedented severity : this will constitute the first part of my speech. and i will then address the following question : can reconstruction now strengthen europe and the franco - german alliance? * * i. so far europe has stood firm in the face of a shock of unprecedented severity over the past six months, we have experienced a crisis of unprecedented proportions : the most serious that the european economy has endured since 1945. the european project has been 1 / 4 bis central bankers'speeches subjected to a veritable full - scale - almost existential - " stress test ". but, to date, europe has held firm. europeans have an essential asset : their common social model based on social solidarity and organised public services. for instance, household purchasing power has been preserved overall, thanks in particular to short - time working measures. this is one major difference with the united states, where 22 million jobs were destroyed in a matter of weeks. we know that the health shock has affected european countries to varying degrees, but the economic shock has been more symmetrical, due to the restrictive measures that ended up being substantial in all countries. gdp figures for the second quarter show that the recession is widespread, with double - digit percentage declines : - 11. 8 % in the euro area, - 13. 8 % in france and - 9. 7 % in germany. almost half of the differences between our two countries can be attributed to the construction sector, which has contracted much less in germany, and more than half to the differences in methodology regarding public services statistics. the european response to the health crisis was initially monetary, thanks to the rapid and decisive action of the eurosystem. i attended the
|
not, have provided important links between the federal reserve banks and the businesses and communities your institutions serve. we have reached out and listened to community bankers through their representation on our boards of directors and advisory councils, as well as through our ongoing contacts with individual firms and the business organizations you serve. the insights we gather from community bankers in our district help me as a policymaker bring main street perspectives to the national policy table each time the federal open market committee, or fomc, meets in washington. when such information from all the districts comes together at our meetings, it forms a rich mosaic of our economy that helps shape our monetary policy decisions. bis central bankers β speeches so, i want to thank nick difrancesco, president and ceo of the pacb, and dennis cirucci, your chairman, for inviting me here today. i also want to publicly thank dennis for serving so ably on our bank β s community depository institutions advisory council, or cdiac, and as our council β s representative to the board of governors. my last opportunity to address the pacb was in september 2007, a very different economic environment than we find ourselves in today. i used that speech seven years ago to discuss the federal reserve β s initial responses to growing financial instability in the housing sector. i explained that the fed β s role in promoting financial stability rather than its monetary policy responsibilities had prompted the short - term injection of some $ 68 billion in liquidity through open market operations in early august 2007, a mere 12 months after i joined the fed. that seems like a long time ago and much has transpired since then. at the time, the fomc had yet to lower the federal funds rate from its target of 5. 25 percent. weeks later, though, the fomc began to lower the federal funds rate target and then kept lowering it to essentially zero in december 2008, as the global financial crisis and the ensuing great recession enveloped economies around the world. the rate has been near zero for nearly six years now, and the fed has augmented its aggressive policy actions through large - scale asset purchases, now tallying in the trillions, rather than in the billions of dollars. today, i would like to give you my assessment of the u. s. economy and then share some thoughts about the stance of monetary policy. i should note that my views are my own and not necessarily those of the federal reserve board or my colleagues on the fomc, which will shortly
| 0 |
monetary policy, and some institutional structure with which to implement that monetary policy. the key issue is what that institution, typically a central bank, should try to achieve with its powers. i presume that those who accuse us of having become β muldoonist β believe that we have given up our single - minded pursuit of price stability and have instead started using monetary policy to achieve other objectives, perhaps trying to help to reduce the balance of payments deficit or trying to deflate property prices. some people have of course welcomed this β more pragmatic approach β. i don β t think even our worst critics have accused us of manipulating monetary policy for political purposes, which of course was one of the accusations levelled against rob muldoon. so let me say it again : monetary policy has been exclusively focused on delivering low inflation in accordance with the target agreed with government ( initially 0 to 2 per cent, now 0 to 3 per cent ) since at least the time i was appointed governor, now almost 10 years ago. monetary policy remains focused exclusively on that objective. indeed, any other focus for monetary policy would be inconsistent with the legislation under which the reserve bank operates, passed without dissent in 1989. but it is important to recall that price stability was not chosen as the single objective of monetary policy because parliament thought that other objectives were unimportant. rather, by the late eighties it had become increasingly recognised here and abroad that the best contribution which monetary policy could make to those other objectives - social justice, growth in employment, growth in output - was to deliver predictably stable prices. and indeed, this point is now recognised quite explicitly in the wording of the policy targets agreement between the treasurer and myself. monetary policy aimed at stable prices assists social justice by avoiding the kind of capricious transfers of income and wealth which are the inevitable result of inflation. monetary policy aimed at stable prices assists growth in output and jobs by helping the price system, which is at the heart of the market economy, work more effectively. and monetary policy aimed at stable prices assists the economy by helping to smooth business cycles. ah, you say, he admits it : the reserve bank is using monetary policy to try to smooth the business cycle. no, i am not saying that at all. what i am saying is that when monetary policy is aimed at delivering stable prices it has the ancillary benefit that the business cycle may be smoothed to some degree also. why? because the situations where inflationary pressures
|
jean - claude trichet : ecb press conference β introductory statement introductory statement by mr jean - claude trichet, president of the european central bank, and mr vitor constancio, vice - president of the european central bank, frankfurt am main, 9 june 2011. * * * 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, which was also attended by commissioner rehn. based on its regular economic and monetary analyses, the governing council decided to keep the key ecb interest rates unchanged. the information that has become available since our meeting on 5 may 2011 confirms continued upward pressure on overall inflation, mainly owing to energy and commodity prices. the underlying pace of monetary expansion is gradually recovering. monetary liquidity remains ample, with the potential to accommodate price pressures in the euro area. furthermore, the most recent data confirm the positive underlying momentum of economic activity in the euro area, while uncertainty remains elevated. overall, our monetary policy stance remains accommodative, lending support to economic activity. on balance, risks to the outlook for price stability are on the upside. accordingly, strong vigilance is warranted. on the basis of our assessment, we will act in a firm and timely manner. we will do all that is needed to prevent recent price developments giving rise to broad - based inflationary pressures. we remain strongly determined to secure a firm anchoring of inflation expectations in the euro area in line with our aim of maintaining inflation rates below, but close to, 2 % over the medium term. this is a prerequisite for monetary policy to make an ongoing contribution towards supporting growth and job creation in the euro area. the governing council today also decided to continue conducting its main refinancing operations ( mros ) as fixed rate tender procedures with full allotment for as long as necessary, and at least until the end of the ninth maintenance period of 2011 on 11 october 2011. this procedure will also remain in use for the eurosystem β s special - term refinancing operations with a maturity of one maintenance period, which will continue to be conducted for as long as needed, and at least until the end of the third quarter of 2011. the fixed rate in these special - term refinancing operations will be the same as the mro rate prevailing at the time. furthermore, the governing council decided to conduct the three - month
| 0 |
quality content with dynamic and arrangement with the imf. interactive features. we would also continue to strengthen at the same time, continuing the the technical capability, particularly with practice that has been followed in the regard to the compilation past, we intend to make monetary policy methodologies of macroeconomic announcements according to an statistics in line with international advance announcement calendar. the standards. this will promote sound calendar for 2017 is set out below. central bank of sri lanka β road map 2017 monetary policy announcements in 2017 expending us dollars 4. 0 billion of scarce external reserves in a futile attempt to 7 february, tuesday 24 march, friday 9 may, tuesday 27 june, tuesday defend the external value of the rupee through market intervention. there was a similar experience in 2015 when the currency depreciated by 6. 5 per cent after spending us dollars 2. 1 billion of our reserves. wasting large amounts of 3 august, thursday the country β s external reserves, much of 26 september, tuesday it borrowed, in a vain effort to defend 7 november, tuesday 28 december, thursday the currency, which has to be ultimately depreciated anyway, is clearly unsustainable. it is time to stop this pattern and commence building up of external reserves through sustainable volatile global market conditions and sri foreign exchange inflows. lanka β s vulnerability as a twin deficit country underscore the vital importance the impact of global developments, of having a flexible exchange rate policy such as brexit, recent presidential to adjust to external pressures. recent elections in the united states ( us ) as experience has clearly demonstrated well as interest rate hikes by the us that it is unsustainable to maintain an federal reserve, the forthcoming overvalued exchange rate at the elections in france and germany in expense of external reserves. a smooth europe, the projected slowdown in the market based exchange rate would chinese economy, as well as economic prevent highly disruptive adjustments conditions in sri lanka β s major trading after a period of stable rates artificially partners, including india, japan, russia maintained by continuous intervention and the middle east, will also have a by the central bank, as experienced in significant influence on the domestic the 2011 - 12 period when the currency economy. depreciated by around 14 per cent after central bank of sri lanka β road map 2017 trends in oil prices and international notably agriculture and power capital flows, following the generation. normalisation of interest rates in the us are likely to be particularly important
|
policy tools that we deployed to address the great recession? while i believe that influencing short - term interest rates should continue to be our primary monetary policy lever in normal times, our unconventional policy tools will likely be needed again should some future economic downturn drive short - term interest rates back to their effective lower bound. indeed, empirical analysis suggests that the neutral federal funds rate β defined as the level of the federal funds rate that is neither expansionary nor contractionary when the economy is operating near its potential β is much lower than in previous decades. consequently, the probability that short - term interest rates may need to be reduced to their effective lower bound at some point is uncomfortably high, even in the absence of a major financial and economic crisis. i will return to the question about the future of our various policy tools, but first i would like to review our experience this decade, which i view as instructive for addressing that question. meeting the challenge of providing additional accommodation a substantial body of evidence suggests that the u. s. economy is much stronger today than it would have been without the unconventional monetary policy tools deployed by the federal reserve in response to the great recession. two key tools were large - scale asset purchases 1 / 7 bis central bankers'speeches and forward guidance about our intentions for the future path of short - term interest rates. the rationale for those tools was straightforward : given our inability to meaningfully lower short - term interest rates after they reached near - zero in late 2008, the fomc used increasingly explicit forward rate guidance and asset purchases to apply downward pressure on longer - term interest rates, which were still well above zero. longer - term interest rates reflect, in part, financial market participants β expectations of the future path of short - term interest rates. as a result, fomc communications that affect those expectations β such as the enhanced forward rate guidance provided in our post - meeting statements in the aftermath of the great recession β can affect longer - term interest rates. 1 in addition, longer - term interest rates include a term premium, which is the compensation demanded by investors for bearing the interest rate risk associated with longer - term securities. when the federal reserve buys longer - term securities in the open market, the remaining stock of securities available for purchase by the public declines, which pushes the prices of those securities up and thus depresses their yields by lowering the term premiums embedded in those yields. 2 several studies have found that our forward rate guidance and asset purchases did app
| 0 |
reforms, fiscal, macroprudential and monetary policies. we strongly support the fund β s role as the key institution in the global financial safety net ( gfsn ). we welcome the fund β s continuous work on reforming its lending facilities and instruments to address potential gaps in the gfsn. we welcome the discussions on the new tools and the introduction of the policy coordination instrument, which could encourage countries to commit to and signal strong national policies. at the same time we believe that further work is needed in order to ensure an adequate and strong gfsn with the fund at its center. we stand ready to engage in an open and constructive discussion on the 15th general review of quotas. the outcome of the review should be broadly acceptable and beneficial for all members. the results should not serve the interests of the largest member countries at the expense of small and medium open economies, as it would threaten the credibility and legitimacy of the fund. to conclude, we face changes in the global economy and live in the environment which requires us to think and operate in the frame of an appropriate policy mix of structural reforms, fiscal, macroprudential, as well as monetary policies. the fund has a crucial role in advising countries and ensuring a smooth transition through cyclical as well as systemic changes. the fund β s contribution in multilateral cooperation remains significant and especially relevant when facing possible threats of protectionism. the fund should stay alert to long - term tendencies in the global economy. we stand ready to cooperate. 2 / 2 bis central bankers'speeches
|
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
| 0.5 |
our plan is an open competition. for instance, the current financial landscape in thailand, as in many markets in the region, is dominated overwhelmingly by banks. nevertheless, we see that non - banks should play a more significant role going beyond, and thus we are opening the market to new players like virtual banks and trying to ensure a level playing field. secondly, we are also to look at open infrastructure to make sure that the infrastructure is open and accessible to players to get that level playing field. for example, as we have made significant improvements in the payment landscape on the retail front, we are now trying to put in place a similar infrastructure for smes. to do this, we have the smart financial and payment infrastructure program that allows smes to access more digital solutions on finance, including invoicing and issuing receipts, doing taxes, and on an end - to - end basis. we are also to introduce the retail central bank digital currency ( cbdc ) and expect to put out a pilot program by the fourth quarter of this year. we have page 5 of 8 done quite well on the wholesale cbdc, dealing with cross - border issues, and the next phase for us is to implement the retail project by preparing ourselves through this pilot project. since we see that digital currencies are appearing and becoming popular very rapidly, we want to make sure that the public has a safe option that is accessible to all and is for non - profit purposes. we thus see the retail cbdc as an essential part of that open infrastructure component of our digital landscape vision. the third open is open data because we realize that data will become an important asset. we have recently launched the d - statement program that allows people to use the information at one bank to apply for financial services at another bank to improve access to services and competition. the other key element in the new financial landscape is sustainability which comprises two key components. one is the sustainability of the household debt. we have recognized that the household debt is very high in thailand at about 90 percent of gdp, and hence it is crucial to design measures that attempt to put the household debt burden on a more sustainable basis. there is also another aspect of sustainability which is on the green and environmental issues. we are putting in place key building blocks that will be an essential part of the sustainability landscape. they include the green taxonomy and better disclosure to measure progress in the sustainability area. the last part of our financial landscape paper is about a more flexible regulatory framework.
|
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
| 0.5 |
##nctly by the former deputy governor of the south african reserve bank who wrote that : β... higher interest rates will not help to make the maize crop grow higher β. the forward looking nature of monetary policy why does the bou frame its policy target for inflation in terms of the medium term? consumer prices, even when excluding volatile commodity prices, are subject to shocks from both the demand and supply side of the economy ; for example, movements in the nominal exchange rate have an impact on the domestic prices of imported goods. these shocks can operate over a much shorter horizon than that of the transmission mechanism of monetary policy. the transmission mechanism of monetary policy normally extends over a period of one to two years. what monetary policy can feasibly achieve is to control average inflation over a longer term time horizon, which is why we have defined our inflation target as a medium term target. the medium term time horizon over which the transmission mechanism of monetary policy operates mean that monetary policy decisions must be made on the basis of a forecast of future developments in the economy. current or past developments, such as the latest available inflation outturn, are only relevant to the monetary policy decision to the extent that they provide useful information about future developments, which may not be very relevant at all. this entails a qualitative shift in the way in which policy makers think about the economy and make decisions, to embrace a forward looking approach. inflation forecasts spanning the time horizon of the monetary policy transmission mechanism are the most important inputs for monetary policy decisions in an itl framework. inflation forecasts need to include both forecasts derived from quantitative models and qualitative judgements about how the factors which influence inflation, such as fiscal policy and the exchange rate, will evolve over the medium term. policymakers also need to think in terms of probabilities and risks ; for example, what is the probability that aggregate demand growth will accelerate over the forecast horizon? and given this probability, do we need to take action to forestall a rise in inflationary pressures? bis central bankers β speeches the role of the exchange rate policy towards the exchange rate is one of the most difficult and challenging aspects of implementing an itl monetary policy framework in a low income open economy. both the bou β s primary and secondary policy monetary policy objectives are domestic objectives : inflation and output stabilization respectively. the policy interest rate is only used to influence these two objectives. but that does not mean that policy makers can be indifferent to the level
|
emmanuel tumusiime - mutebile : uganda β s financial sector at 50 β achievements, challenges and expectations for the future remarks by mr emmanuel tumusiime - mutebile, governor of the bank of uganda, at the annual general meeting of the uganda institute of banking and financial services, kampala, 14 june 2013. * * * the board chairperson of the uganda institute of banking and financial services members of the board of directors of the institute, members of the institute present, ceos of financial institutions and all bankers present, invited guests in your respective capacities, ladies and gentlemen, it is a great pleasure for me to address this agm of the uganda institute of banking and financial services. i will begin by thanking the board and members of the institute for arranging the agm and for their choice of theme : β uganda β s financial sector at 50 ; achievements, challenges and expectations for the future β which is clearly very pertinent for everyone involved in the sector. in keeping with this theme, i want to share with you my thoughts on what i believe are the most pressing challenges facing the financial services industry in uganda today. these are challenges which must be confronted if the industry is to contribute fully to our efforts to transform the structure of the economy and move it towards middle income status. i would like to highlight three issues in particular ; the need to reduce interest rate spreads in the banking industry ; strengthening the financing of small and medium scale enterprises and the diversification of our financial sector. the regional financial sector assessment program, which was conducted in may of this year, showed that bank interest rate spreads in uganda are the highest in the east african region after burundi and among the highest in the world. the interest rate spread in uganda in 2012 was 15 percent, compared to less than 12 percent in both kenya and tanzania. spreads are high mainly because of heavy overheard costs and high profits earned by banks. overheads and profits before tax accounted for 42 percent and 28 percent of banks β gross income respectively in the 12 months ending in march of this year. unless we can reduce spreads, it will be very difficult to bring bank lending rates down to levels which are more affordable for borrowers. to reduce interest rate spreads it will be necessary for banks to cut overheads as a share of their income, by becoming more efficient. the banking industry is very profitable in uganda : the average return on assets earned over the last 12 months was 3. 6 percent. but banks should also recognize that
| 0.5 |
of savings is the integration of china into global financial markets. savings in china are high as a result of its ageing society and its rudimentary state pension system. in the current economic situation, uncertainty regarding the future development of the economy in certain parts of the world may also have pushed up the supply of savings. while the propensity to save has increased, the willingness to invest may also have fallen. on the one hand, this may once again reflect heightened uncertainty over future economic conditions. on the other, expectations of lower productivity growth might also be playing a role. furthermore, industrial economies are being transformed into service economies, with potentially lower capital needs. all these factors have resulted in a relatively low real equilibrium interest rate today β across the world, and thus also in switzerland. moreover, global monetary policy is expansionary due to undesirably low inflation and subdued economic growth in the wake of the financial crisis. the long - term downward trend in interest rates globally and expansionary monetary policy occasioned by cyclical factors have therefore combined to produce historically low interest rates. transmission channels of negative interest rates in switzerland irrespective of the equilibrium rate, questions arise regarding the transmission mechanism of monetary policy below the zero lower bound. specifically, how does monetary policy using negative interest rates effect a rise in inflation? as you will probably remember from your student days, monetary policy usually operates through a variety of transmission channels. for a small open economy like switzerland, the exchange rate channel is the most important. lower interest rates, other things being equal, make the swiss franc less attractive as an investment currency. the franc loses value, which makes swiss goods cheaper abroad, and leads to a rise in net exports. this in turn raises gdp and inflation in switzerland. depreciation of the swiss franc also has a direct impact on inflation because import prices rise. a reduction in interest rates also operates via the credit channel. put simply, if the snb reduces the short - term interest rate, longer - term market rates also fall. loans become cheaper and this stimulates consumption and investment. these factors boost the economy and inflation rises. page 4 / 16 is the negative interest rate in switzerland having the anticipated effect? let me first look at transmission via the exchange rate channel. historically, switzerland has always had lower interest rates than most other countries, particularly euro area countries. the interest rate differential reflects not only lower average inflation in switzerland compared to other countries, but also the country β
|
perfectly appropriate for institutions to consider alternative funding strategies to meet customer demand. on the one hand, choosing to meet loan growth through wholesale funding rather than attempting to attract new money market accounts, for example, may avoid a costly rate hike on existing deposits. on the other hand, institutions should consider the costs of choosing wholesale funds in lieu of building the institution's retail funding base. significantly, the accumulated effect of these decisions on an institution's risk and liquidity profile may not be noticed until difficult times place pressure on the institution's ongoing funding. management should keep in mind that the value of the federal subsidy provided by lower - cost insured deposits is rarely appreciated until periods of crisis, when a stable funding base cannot be maintained at any price. management should ensure that complex funding products are well understood, especially those with embedded options that cause cash flows to change dramatically depending on market conditions. the funding products should also be consistent with the portfolio objectives of the bank and the sophistication of the bank's risk - management system. in addition, management should seek to identify liquidity pressures and other risks through stress tests so that appropriate contingency funding and hedging programs can be formulated. it is important in this market to place the liquidity and core deposit erosion at both small and large banks, as well as the resultant increased reliance on managed liabilities, in a proper historical context. an unpleasant fact is that the wider range of choices for near - deposit substitutes, and broader understanding by consumers of what those choices are, may have decreased, perhaps permanently, the share of core deposits funding assets. this change may be as significant in the current banking landscape as the tax on state bank notes was in the nineteenth century. to be sure, the imposition of the tax was sudden, while the erosion of the share of funding from core deposits has been, and presumably will continue to be, gradual. but just as state banks responded to the tax by innovating deposit banking to flourish once again, community banks will, i am sure, adjust to the changing realities of the deposit market. moreover, it is also important to recognize that the reduction in portfolio liquidity is more a product of good business - - high loan demand - - than of the relatively slow growth in core deposits. some liquidity pressures will be alleviated as demand for loans declines. though core deposits may be more difficult to attract, they have in fact continued to grow, just not as rapidly as the loan
| 0 |
. i would like to end my address by commenting on these two points in particular : sustainability of the public finances and stability of the financial system. sustainability of the public finances necessarily involves improving the primary structural balance, as i have mentioned before. the sectoral spending programmes will have to be resized, to ensure that portugal β s public spending level is compatible with the productive capacity in the economy, demographic trends and socially acceptable tax burden. in parallel, the institutional framework for the public finances will have to be changed dramatically, to ensure that primary balance adjustments are not reversed. budget rules and procedures are required so that ( i ) budgetary goals are compatible with the medium and long - term sustainability of the public finances in a context of stable taxes ; and ( ii ) budgets are executed without major slippages. deep reflection is needed on the organisational model and management of the public sector, to find solutions offering efficiency gains in producing public goods and services, thereby minimising the impact on society of the reduction of the resources allocated to the main spending areas. i do not want to take up much more of your time. however, as part of the debate about the conditions for sustained growth in the portuguese economy, and given that today we celebrate world savings day, i have to say a few words on the importance of financial stability and the role performed by banco de portugal. 3. financial stability and the role of banco de portugal safeguarding financial stability is a key aspect of the adjustment programme alongside lasting consolidation of the public accounts and increasing the economy β s growth potential. these three aspects are inseparable and have to be seen as linked. we have seen how sustainability of the public accounts is a necessary condition for sustained growth and how this is crucial for reversing unsustainable public debt trajectories. bis central bankers β speeches the same kind of β dialectic relationship β exists between financial stability and sustainability of the public finances and between financial stability and sustained growth. as the case of ireland well illustrates, problems in the financial system require the intervention of the public sector, jeopardising the sustainability of public debt. conversely, unsustainable public indebtedness affects the banking system β s financing capacity, jeopardising financial stability. an environment of financial stability reduces uncertainty, protects investors, contributes to lower, less volatile interest rates and ensures stable financing flows to the economy. these factors are decisive for promoting investment and an efficient allocation of capital, and moreover,
|
with price stability. economic actors are confident that the snb will also be able to keep inflation well under control over the long term. in view of the stable inflation expectations, it is not surprising that long - term rates have changed little since the beginning of the year. the yield on ten - year confederation bonds has fluctuated between β 0. 1 % and + 0. 2 % since the start of 2018. andrea maechler will examine exchange rate and interest rate developments in more detail later. monetary policy outlook let me summarise the key points with regard to monetary policy. we anticipate that our economy has expanded by around 2. 5 % this year. in line with a gradual slowdown in the global economy and high capacity utilisation in switzerland, domestic growth is likely to stabilise at around 1. 5 % next year. the inflation forecast for this year is unchanged ; for 2019 and 2020 it is somewhat below our forecast last quarter. the swiss franc is still highly valued. given the slightly muted inflation outlook and the continued fragility in the exchange rate situation, our expansionary monetary policy remains appropriate. with the negative interest rate and our willingness to intervene in the foreign exchange market as necessary, we support economic activity and ensure price stability. ladies and gentlemen, thank you for your attention. it is now my pleasure to give the floor to fritz zurbrugg. page 4 / 4
| 0 |
of business investment raised the amount of capital per worker and thereby boosted productivity. about Β½ percentage point of the increase in productivity growth over the 1995 - 99 period can be attributed to this so - called " capital deepening, " most of which reflected greater spending by businesses on computers, software, and communications equipment. the balance of the pickup reflected other factors, including technological innovations in the actual production of computer hardware and semiconductors as well as better management β perhaps assisted by these high - tech investments β of the nation's capital and labor resources. oliner and sichel estimate that the consolidated influences of information technology investments account for about two - thirds of the acceleration in productivity since 1995. this research supports the view that fundamental changes are under way in our economy. what's so special about this capital? that trend productivity has picked up and that high - tech investments are the source of the acceleration are important facts, but by now they are not new observations. perhaps at this stage it would be useful to explore in greater detail this positive " shock " to the ability of our economy to produce goods and services. what is so special about computers and other information technologies that they can have such a strong influence on our economy? let me highlight three special characteristics of high - tech equipment. first, computers and communications equipment depreciate at a very rapid pace. the current best estimate is that computers probably depreciate about 30 percent annually, although that estimate might be low, while other equipment probably depreciates at a rate of less than 15 percent annually. therefore, computers are retired, on average, after three years, and the useful life for other equipment is about seven years. firms must invest in computers at a faster rate than they do in other forms of capital just to maintain a given level of the capital stock. the rapid replacement of high - tech capital means that technological progress becomes " embodied " in the capital stock at a faster rate than is the case for longer - lived assets. the second feature of high - tech equipment that sets it apart from other classes of capital is the sensitivity of demand to fluctuations in the cost of capital. for decades, economists have debated the magnitude of cost - of - capital effects on traditional capital goods. a past consensus was that the cost - of - capital effect was small and difficult to identify empirically. but a somewhat different conclusion has arisen lately when the same basic models of investment are applied to spending on computers alone. the latest research suggests
|
may place insufficient value on systemic stability because material operational failures are low - probability events and difficult to anticipate. their assessment horizon may also be shorter than the social optimum. and, crucially, coordination failures may be a factor : users of a particular infrastructure, many of whom may compete in underlying markets, need to coordinate their actions if they are to influence decisions on the future strategy of the infrastructure provider. investment in the reduction of operational risk will be one such decision. difficulties in organising effective bargaining among users may leave them unable to coordinate, particularly in the face of differences in their information, expectations or preferences. potential welfare - increasing actions may, therefore, not be carried out. these market failures may justify intervention by the public authorities : either via a continuous oversight or regulatory regime ; via targeted intervention ; or maybe even via public ownership, as is often the case in respect of large - value payment systems and sometimes with securities settlement systems. an alternative strategy when faced with a monopoly provider might be to promote ( or even set up ) alternative, competing suppliers, to improve market contestability while ensuring adequate interoperability and substitutability across systems. of course, given the existence of network externalities and increasing returns to scale, the cost of this form of risk mitigation may well be higher than the cost of regulating a natural monopoly on an ongoing basis. most typically, public intervention would seek to address the vulnerability stemming from single points of failure by the imposition of minimum standards of resilience on monopoly ( or near - monopoly ) systems, either to reduce the probability of operational failure ; or to mitigate the impact of such failure by improving contingency arrangements β for instance, via increased investment in back - up facilities. steps might also be taken to improve general risk management practices and mitigate the risk of exit of a key infrastructure ; financial resilience and business risk is an important consideration here. a regulator or overseer might also ( or alternatively ) seek to narrow the gap between the choices of a monopoly provider and the social optimum by encouraging more effective and inclusive governance arrangements. user - as opposed to external - ownership might be promoted, though, as previously noted, this might not be enough. other measures might include steps to clarify the scope of the system β s activities, admissions criteria, voting rights, transparency, and the role of external stakeholders. for instance, in the uk, overall governance of payment systems is carried out via the newly - formed payments
| 0 |
encik abu hassan alshari yahaya : financial crime and terrorism financing keynote address by mr encik abu hassan alshari yahaya, assistant governor of the central bank of malaysia, at the 5th international conference on financial crime and terrorism financing ( ifctf 2013 ), kuala lumpur, 23 october 2013. * * * it is a great pleasure for me to be here today and i would like to thank the conference organiser, the asian institute of finance in collaboration with the malaysia β s compliance officers β networking group, for the invitation to deliver the keynote address at this 5th international conference on financial crime and terrorism financing. i am happy to note that this annual conference has received strong response and continued to provide industry players with the developments in the area of financial crimes and terrorism financing and how financial service providers and relevant businesses and professions could continuously strengthen the capacity and capabilities in addressing these risks. i am glad to note that there has been an increased participation from the designated nonfinancial businesses and professions ( dnfbps ) in this year β s conference. this reflects heightened awareness and seriousness by the dnfbps to improve their compliance and understanding of their roles in combating money laundering and terrorism financing. i am also informed by the organisers that the malaysian bar council, the malaysian institute of accountants and the association of money services business have also reached out to their members to attend this and by accrediting this program as part of the continuous professional development. ladies and gentlemen, weaknesses in risk governance have been one of the major cause for the recent global financial crisis. until now, risk governance remains a work in progress as evident from the recent money laundering control failures experienced by some big financial institutions in developed economies. the theme for this year β s conference, the β risk, governance & selfregulation : within and beyond β, is not only timely but also an ongoing self - reflection for all of us. the organisers have also impressed upon me that this year theme is a continuation of 2012 theme of β compliance, challenges and effectiveness : the next level β. after the efforts in putting in place the appropriate risk management framework, it is time for us to ask ourselves the following questions : have we done enough on risk and governance? and can we do it better? sound risk management is fundamental to preserve the integrity of the financial system and there has been increased attention given to this area. in my remarks today, i intend to focus on the following key points and highlight initiatives
|
vehicles. demand will also grow for green services, such as forest management, sustainable engineering and design, green finance, and emissions measurement and tracking solutions. fifth, inflation is likely to be higher during the long transition to net zero. higher energy prices will feed through into the production of many goods, and prices overall will rise. the bank of england estimates inflation will increase by nearly 0. 6 percentage by the early 2020s if there is an orderly transition to net zero and 2 percentage points by the early 2030s if the transition is disorderly. we are probably seeing a preview of that scenario currently. but it's not just energy prices. demand will surge for minerals such as copper, aluminium, cobalt, lithium, nickel, and rare earths, which are critical to various clean energy technologies, including wind turbines and electric vehicles. for example, solar or wind power plants use up to six times more copper than conventional power generation. according to the iea, a world on track for net - zero in 2050 will need six times as much of these materials in 2040 as it does today. the result is greenflation, or rising prices for these metals and minerals that are essential to renewable energy and technologies. sixth, the labour market will undergo a major adjustment. jobs will be lost in traditional carbon - intensive sectors but new jobs will be created in carbon - neutral industries. it is estimated that about 200 million jobs would be created and 185 million lost globally by 2050 from a net - zero transition. there will be a period of net job losses during the transition : foundry workers will not instantaneously be transformed into building - insulation experts. worker reskilling and redeployment will thus be crucial. identifying skills adjacencies will be a key part of worker retraining programmes. in singapore, a comprehensive strategy to green the economy is taking shape, with a focus on boosting energy and resource efficiency and creating good jobs. 6 / 9 bis central bankers'speeches in the petrochemical industry, all the major players have committed to reach net zero by 2050 and government agencies, industry players, and research institutes are developing capabilities in carbon capture and storage technologies. in the maritime industry, investments are being made to help our port terminals become net zero by 2050 and support the provision of low and zero carbon marine fuels such as ammonia, hydrogen, and biofuels. in road transport, singapore aims to do away with the internal combustion engine and switch
| 0 |
is because we are still a long way off finding solutions for live systems that are suitable for mass use. blockchain technologies still have many hurdles to jump before they can be applied in real life to alleviate large - scale applications. their biggest problem at present seems to be their all too limited scalability. innovation is the driving factor behind growth. however, the practical application of new innovations must not lead to a trade - off between efficiency and security, both of which need to be safeguarded to maintain the architecture of our financial system in the long term. this applies not just to distributed ledger technology and instant payments but also to other innovative fintech solutions. at this stage in developments it is too early to say much about the implications of blockchain technology. this is partly due to the fact that it is not a simple case of one technology replacing another. what we are dealing with here is a new technology whose actual worth probably lies in its capacity to usher in different processes and structures that are broadly more efficient than those in place today. the task of analysing financial market structures consists in identifying the potential and the risks associated with the various technologies that are being used and understanding their impact on market participants β behaviour. in future, ever greater priority will be attached to interconnectedness and appreciation of the β big picture β as it affects the individual market participant as a means of gauging developments and 2 / 3 bis central bankers'speeches the risks they entail. on top of this, a solid understanding of market participants as can be garnered from payment and settlement systems, is also useful outside the confines of the actual systems themselves. that is why the direct access to customers afforded by a current account is of such importance to credit institutions. for it allows them to get to know the customer. and the same holds true for central bankers. analyses derived from payment and settlement systems can be of great use in connection with monetary policy, banking supervision and financial stability. the aim of this conference is to bring central bankers and researchers together with a view to discussing changes and challenges in the world of payments deepening our understanding of today β s payments landscape forging ahead with innovations in this field. last year, the bundesbank held its first ever academic conference on the topics of payment and securities settlement. that event was a major success. and we hope to expand on that success with this event. in making our invitations this year we teamed up with partners from the united states and we are glad to see
|
the excellent response that has been generated. ladies and gentlemen, the ball is now in your court to enliven this conference through your input and to use it to your own benefit. the expectations made of economic analysis are at least as high as those made of payment and securities settlement services. let us live up to the olympic motto of β citius, altius, fortius ". for my part, i look forward to encountering multiple ingenious analyses and ideas and a lively exchange of information. thank you for your attention. 3 / 3 bis central bankers'speeches
| 1 |
haruhiko kuroda : the bank's semiannual report on currency and monetary control statement by mr haruhiko kuroda, governor of the bank of japan, at the committee meeting on financial affairs, house of representatives, 5 april 2022. * * * introduction the bank of japan submits to the diet its semiannual report on currency and monetary control every june and december. i am pleased to have this opportunity today to talk about recent economic and financial developments and about the bank β s conduct of monetary policy. i. economic and financial developments i will first explain recent economic and financial developments. japan β s economy has picked up as a trend, although some weakness has been seen in part, mainly due to the impact of the novel coronavirus ( covid - 19 ). overseas economies have recovered on the whole, albeit with variation across countries and regions. however, in the wake of russia β s invasion of ukraine, global financial and capital markets have been volatile and prices of commodities such as crude oil have risen significantly. in this situation, japan β s exports and production have continued to increase as a trend, despite the remaining effects of supply - side constraints. although the march 2022 tankan ( short - term economic survey of enterprises in japan ) shows that business sentiment has deteriorated slightly, corporate profits have continued to improve on the whole and business fixed investment has picked up. on the other hand, a pickup in private consumption has paused due to increased downward pressure stemming from the spread of the omicron variant since the beginning of the year. with regard to the outlook, japan β s economy, although expected to be affected by a rise in commodity prices, is likely to recover, with downward pressure stemming from covid - 19 and the effects of supply - side constraints waning and with support from fiscal and monetary policies. the year - on - year rate of change in the consumer price index ( cpi ) has been at around 0. 5 percent recently. it is likely to increase clearly in positive territory for the time being due to a significant rise in energy prices, a pass - through of raw material cost increases, and dissipation of the effects of a reduction in mobile phone charges. meanwhile, the underlying inflationary pressure is projected to increase, mainly on the back of improvement in the output gap and a rise in medium - to long - term inflation expectations. concerning risks to the outlook, the course of covid - 19, including variants, and
|
its impact on domestic and overseas economies continue to warrant attention. in addition, there are extremely high uncertainties over how the situation surrounding ukraine will affect japan β s economic activity and prices, mainly through developments in global financial and capital markets, commodity prices, and overseas economies. japan β s financial system has maintained stability on the whole, despite the pandemic. regarding financial risks from a longer - term perspective, there is a possibility that prolonged downward pressure on financial institutions β profits may lead to a gradual pullback in financial intermediation. meanwhile, the vulnerability of the financial system could increase, mainly due to the search for yield behavior. although these risks are judged as not significant at this point, it is necessary to pay close attention to future developments. ii. conduct of monetary policy next, i will explain the bank β s conduct of monetary policy. 1 / 2 bis central bankers'speeches japan β s gdp has remained below the pre - pandemic level. although the year - on - year rate of change in the cpi is likely to increase clearly in positive territory in the short run, this is expected to occur mainly due to an increase in energy prices. inflation resulting from higher import costs could push down japan β s economy through a decline in households β real income and deterioration in corporate profits. given such developments in economic activity and prices, the bank will persistently continue with the current powerful monetary easing centered on yield curve control, aiming to firmly support japan β s economic activity, which is on its way to recovery from the pandemic, and thereby achieve the price stability target of 2 percent in a sustainable and stable manner. on this basis, while closely monitoring developments at home and abroad, the bank will continue to ensure stability in financial markets through, for example, providing ample liquidity ; it will also continue to do its utmost to support financing, mainly of small and medium - sized firms, by providing funds through the special funds - supplying operations to facilitate financing in response to the novel coronavirus ( covid - 19 ) at a low interest rate to financial institutions that make loans in response to covid - 19. thank you. 2 / 2 bis central bankers'speeches
| 1 |
without any success. ladies and gentlemen, we meet today at a challenging time with many headwinds going forward. the global economy is on a downhill path and financial turbulence continues to affect the masses across the globe. all this started in 2007 / 2008 as the private debt subprime crises related to the us housing market transformed into a systemic financial crisis that spread from the us to the euro area. more recently, this has turned into a sovereign debt crisis. the crisis, now in its fifth year, has morphed into a new phase of a political crisis. in the euro region, important steps have been taken to address the current problems. however, political differences within economies undergoing adjustment and among economies providing support have impeded achievement of a lasting solution. we have already witnessed causalities of these crises. similarly the political processes in the united states and japan are facing challenges in reaching consensus on medium term fiscal adjustments. what we have seen is a complete transformation resulting from the worst crisis of modern times. all these events have challenged the approach of financial leadership, business leadership, economic managers and political leaders. bis central bankers β speeches notwithstanding, we also have some bright spots in the form of emerging market economies with positive growth prospects. this is primarily because these economies have dealt with relatively more frequent, though small scale crises on their domestic fronts. of the advanced countries, australia and canada have been least affected by the global financial crisis because of their relatively stricter regulatory regimes and handson approach. the approaches of these economies and their leaders seem more practical and proactive, a trait necessary for leadership and a necessary part of a vision about the future. as mentioned earlier, this conference is significant in the sense that it comes at a time when the financial services sector across the world is in the midst of a crises. since the disruption has become acute, there is a debate over a number of issues relating to management and supervision of the financial services industry. in order to be effective, the concern and tone for risk management must start at the top. you would agree that while the management may get influenced by business targets and short term profitability, the board, representing owner β s perspective, always targets for long term viability and sustained growth of the bank. by virtue of this different perspective and its legal powers, the board is better positioned to enhance the role of risk management in a bank. that is why sbp has always emphasized the involvement of the board and made it accountable for establishing enterprise wide risk management
|
; now there are several contagion effects at different levels. bis central bankers β speeches so how do we address these challenges for a country like ours that is subject to exogenous shocks and maintain steady economic and social growth? our visionary business and political leaders must be alert to the challenges they face now and are likely to face in the future due to developments in other parts of the globe. on the domestic front, we need to manage our macro - economic fundamentals. both our economic and political leadership is faced with multiple challenges of trade imbalance, inflation, unemployment, power crises and security situation. the challenges for making good decisions on these fronts requires political will and a clear long term vision. there are no shortcuts to sustained economic development. we need to develop the right strategies and then translate these strategies into action. similarly the challenges for business leaders, though at a micro level, are by no means less critical. these challenges range from the survival of businesses in a stagnant business environment to developing strategies for further growth through developing new business models, new products or restructuring and re - engineering. we need to understand the issues and accept that in implementation we will make mistakes, but in the long run with continuous improvement we can be on the road to recovery. this is by no means an easy task. it is important to recognize the true nature of any problem, and develop workable solutions to these problems in a timely manner. leaders with perseverance and vision will tackle these issues successfully and emerge as the business leaders of today. effective leadership must also include skills to manage people and teams. management of human resources is extremely critical to the success of any business across the globe. an important challenge during difficult times is to ensure employees β performance is maintained at a high standard. owing a crisis, institutions must recognize they still need to retain their critical workforce. here i would like to underscore the importance of women representation in the work force. women represent almost half of the population of pakistan and a significant talent pool that is ignored. how can we as a nation progress if 50 % of our work force is in a non - productive capacity. given globalization and the crises we all face, let β s recap the traits of effective leadership that are universally applicable. leaders must be visionary to see future trends, anticipate institutional bottlenecks, remain competitive and be able to adapt rapidly to changes. they should be continuous learners, a necessity for enhancing leadership skills. leaders need also
| 1 |
in interest ) will amount to eur 9. 6 billion ( eur 10. 8 billion in 2009 ) ; and β total utilisation of foreign sources of financing will stand at eur 12. 6 billion ( 13. 5 billion in 2009 ). the anticipated fiscal deficit reduction, in terms of consolidated general government ( including hac ), from hrk 15 billion to hrk 12. 1 billion, i. e. from 4. 5 % to 3. 6 % of gdp, with the deficit being predominantly financed by foreign borrowing, would slow down government demand for domestic borrowing. the growth in government demand for credit could decrease from this year β s 32. 7 % to about 6 %. however, even with this relatively low growth rate, there will be little room for the rechannelling of banks β domestic credit potential towards the private sector. the situation can be further aggravated by shipbuilding, which is not included in these estimates, but can nevertheless affect the budget and its borrowing in 2010. ( x ) under such circumstances, monetary policy will have to balance between reducing the current account deficit and providing for the aggregate domestic credit growth accompanied by exchange rate ( foreign exchange reserves ) stability. consequently, we expect to continue implementing the existing instruments ( foreign exchange interventions and open market operations ), for now, without changing the reserve requirements ( because of the favourable liquidity situation in the banking sector ), or relaxing the prudential measures, as well as without raising regulation costs. we anticipate that total liquid assets, money supply and bank placements will increase by about 7 %, 4. 5 % and 4. 4 % respectively. ( x ) bank behaviour it can be expected that the following trends, observed in the previous part of the current year, will continue into 2010 : stagnation in high foreign sources of financing ( standing at eur 10 billion, of which about eur 2 billion represents short - term inflows from parent banks in late 2008, which remained in the country throughout the year ) and a very slight increase in domestic deposits ( by 3. 2 %, suggesting that there is no potential for any significant strengthening of banks β credit activity ; gradual extension of the maturity structure of both foreign sources ( 62 % β 68 % ) and domestic ones ( 73 % β 77. 4 % ), which is good in terms of safety, and facilitates longer maturity placements, but these sources are more expensive ; an increase in the foreign - currency portion of
|
can obtain new loans from abroad. in this respect, the current world situation is favourable, because free liquidity grows again and waits to be placed, credit supply goes up and buyers are sought for this money. a continuation of eu accession negotiations improves the political perception of croatia as a debtor. therefore, i have no doubts that the current search for a billion dollars, or euros or whatever, will be successful. this is a relief, but it also poses the most serious dangers to this country : the danger of inactivity, the danger of believing that we can go on functioning by following the established routine and the danger that we neither have learned, nor will learn enough from the crisis. it is often repeated that our problems are of a structural nature and that it takes time to carry out the necessary reforms. this statement is not unfounded. however, an old chinese wisdom says : β even the longest way starts with the first step. β the truth is that the first step is often the most difficult, and we have been putting it off for a long time.
| 1 |
toshihiko fukui : new framework for the conduct of monetary policy - toward achieving sustainable economic growth with price stability summary of a speech by mr toshihiko fukui, governor of the bank of japan, to the japan chamber of commerce and industry, tokyo, 16 march 2006. * * * introduction at the monetary policy meeting ( mpm ) held on march 8 and 9, 2006, the bank of japan decided to terminate the quantitative easing policy, which had been maintained during the five years since march 2001. the bank shifted the operating target of money market operations from the outstanding balance of current accounts at the bank to a short - term interest rate, namely, the uncollateralized overnight call rate. it also introduced a new framework for the monetary policy conduct, including clarification of its thinking on price stability. today, i will focus on the background to the termination of the quantitative easing policy by looking back on economic and financial developments during the past few years, and explain the bank's future monetary policy conduct. i. embarking on a sustainable growth path japan's economy continues to recover steadily. the current economic expansion started in january 2002 and has lasted for more than four years, according to the cabinet office's reference dates of business cycles. the recent recovery is well balanced in terms of the balance between domestic and external demand, and also between the corporate and household sectors. although the recovery is not accelerating, the foundation for economic growth is solid, and its resistance to various external shocks has been increasing. the present phase of the recovery is the third since the bursting of the economic bubble. unlike the previous two phases, this time we may reasonably expect the current expansionary phase to last longer and to be more sustainable. japan's economy has, at last, succeeded in emerging from its prolonged adjustment phase, which continued for more than a decade, and has embarked on a sustainable growth path with price stability. several factors support this view. in addition to external factors, such as the continuing expansion of overseas economies, on the domestic side structural reforms have made significant progress in both the business and financial sectors. moreover, the positive effects of the recovery are spreading to the household sector. i will now discuss these contributing factors and then go into some detail regarding the sustainability of the current economic recovery. a. progress in structural reforms the most important factor contributing to the achievement of sustained economic recovery has been the elimination of the burdens, or adjustment pressures, in the corporate
|
the outlook deemed most likely by the bank follows a path of sustainable growth under price stability. it should be added that, in order to implement the appropriate policy for achieving sustainable growth and price stability, it is not sufficient merely to assess the economic and price situation according to the first perspective. needless to say, any forecast entails uncertainty. it is for this reason that the bank's outlook report contains detailed descriptions with regard to upward and downward risks affecting the scenario deemed most likely by the bank. among risk factors, there are those that will have a significant impact on economic activity and prices should they materialize, even though the likelihood of materialization is low. such risks include that of falling into a deflationary spiral, or conversely, the risk of sparking inflation or generating an asset price bubble. in conducting monetary policy, the bank needs to do its utmost to prevent the materialization of such potential risks. the economic projection described in the outlook report covers a period of about one and a half to two years. there could, however, be risk factors that might affect economic activity and price development in the medium to long term, beyond the outlook report's projection period. experience inside and outside japan shows that wide swings in asset prices and significant changes in the financial environment, including those affecting the intermediation function of financial institutions, may impact on economic activity and price development with a considerable lag. in addition, when the public's longer - term expectations of inflation change, this can have a significant impact on the existing relationship between economic activity and prices. the second perspective, therefore, involves examining, over a longer horizon, the various risks that are most relevant to conducting monetary policy aimed at realizing sustainable growth under price stability. major central banks seem to share the opinion that to conduct monetary policy putting too much emphasis on achieving price stability in the short term results in large swings in economic activity, and this in turn impedes long - term price stability and the sound development of the economy. c. conduct of monetary policy for the immediate future lastly, as the third element of the new framework for the conduct of monetary policy, the bank will outline its current view on monetary policy in light of its deliberations from the two perspectives i have described, and disclose it periodically, as a rule in the outlook report. on the current occasion, the bank decided to release the results of its deliberations ahead of the release of the april outlook report, to coincide with the timing of the
| 1 |
the june tankan also showed that private firms β fixed investment was starting to pick up as evidenced by reasonably upbeat business fixed investment plans, which were revised upward from the march tankan, particularly in the manufacturing sector. with supply - side constraints easing further and production regaining traction, japan β s economy is expected to return to a moderate recovery path from the second half of fiscal 2011, backed by an increase in exports reflecting the improvement in overseas economic conditions and by a rise in demand for rebuilding. as for financial conditions, the overnight call rate has remained at an extremely low level, and the levels of firms β funding costs have also continued to be low. firms have continued to see financial institutions β lending attitudes as being on an improving trend. issuing conditions bis central bankers β speeches for cp have continued to be favorable. in the corporate bond market, although the views of issuers and investors continue to diverge on the terms of issuance of electric power company bonds, issuing conditions have been favorable as a whole, leading to an increased variety of corporate bond issuers. in these circumstances, firms have retained their recovered financial positions on the whole, albeit with the observed weakness at some firms, mainly small ones. on the price front, the year - on - year rate of change in the cpi ( excluding fresh food ) marked 0. 6 percent in april and may. the rate turned positive in april for the first time in two years and four months since december 2008. as for the outlook, the year - on - year rate of change in the cpi is expected to remain slightly positive. however, the bank recognizes that the yearon - year rate of increase in the cpi is likely to be revised downward with the base - year change scheduled for august 2011. based on these assessments, japan β s economy is expected to return to a sustainable growth path with price stability in the longer run. let me turn to risks to the outlook i have mentioned. regarding risks to the economic outlook, although concern over supply chains has subsided, the impact of the earthquake disaster on japan β s economy, especially through changes in household sentiment, still requires due attention. moreover, uncertainty has increased somewhat with regard to the longer - term outlook for electricity supply constraints beyond this summer. with regard to risks to overseas economies, the effects of balance - sheet adjustments on the u. s. economy and the possible consequences of the sovereign risk problems in europe continue to warrant attention. as for emerging and commodity - exporting economies, although many economies
|
; and second, providing support from the financial side. bis central bankers β speeches vi. stronger yen recent developments in foreign exchange rate and its background related to the current economic developments, i would now like to talk about the problem associated with the stronger yen, the fifth topic of my speech today. this is the issue that i have been asked about most frequently. looking at the foreign exchange developments after the lehman shock, the tide changed from a weaker yen up until then to a stronger yen. the effective exchange rate, weighted by trade volumes, shows that the yen and the swiss franc appreciated sharply while the euro depreciated ( chart 15 ). the u. s. dollar, while it appreciated temporarily after the lehman shock, has been depreciating moderately on the whole. meanwhile, the korean won depreciated sharply after the lehman shock and has remained at that depreciated level. in the foreign exchange market, a large volume of transactions takes place on a daily basis, and capital transactions account for 98 percent of total transactions ( chart 16 ). in the formation of foreign exchange rates, capital transactions play an important role. there are basically two types of capital flows behind the stronger yen following the lehman shock. the first is the reversal of yen carry trades that had actively taken place before the lehman shock. prior to the lehman shock, a very low interest rate was observed in japan, but now interest rates around the globe have also become extremely low. second, overseas investors have become more risk averse against the background of uncertainties about the outlook for the global economy as well as the european debt problem, and the yen has become a safe - haven currency that is more likely to be purchased under the current situation. in a case where the european debt problem raises urgent concerns, the currency of the country with abundant overseas assets β which is the outcome of the past current account surplus β is regarded as a safe - haven currency. effects of foreign exchange rate movements and responses a stronger yen creates a significant impact on the economy and prices. the way in which its effect is realized depends on economic conditions and the passage of events. at present, the stronger yen causes a decline in exports and corporate profits as well as deterioration in business sentiment ; hence, i recognize that the negative effect is dominant. indeed, in domestic demand driven sectors such as retail sales, the decline in import prices has been beneficial, and the stronger yen also reduces costs associated with energy - related imports under the current
| 0.5 |
this ties in with our proposals to refocus wama so it can also deliver most efficiently on the objectives behind its establishment. the ecowas sub - region has for long championed the cause of economic and monetary integration. we are now at a stage where we need to take stock of our activities to examine the record of what we have been able to achieve as a sub - region and develop strategies for the way forward, to build on stabilization, to accelerate growth and become significant participants in international trade and capital flows. fellow governors, i know that most of you were here in accra during the meetings of the association of african central banks. but i would still like to formally inform the committee that ghana, as a member of our group assumed the chairmanship of the association for 2005 / 2006. this is a challenge. your continued support, advice and collaboration during my 1 / 2 chairmanship of the association would be essential to move the cooperation arrangements significantly forward. the issues that confront us at these meetings are all too familiar and this may suggest that we are not trying hard enough on the policy front in dealing with these issues over time. today, some of the issues on the agenda go to the core of the integration strategy, therefore i hope we can use this opportunity for serious discussions on integration in the sub - region as we look to the task ahead. on this note fellow governors, let us all have fruitful deliberations. i hope you enjoy your stay in accra. thank you for your attention. 2 / 2
|
remarks by the second deputy governor, mrs. elsie addo awadzi, at the joy fm financial sector forum on november 1, opening remarks the stability and integrity of our financial system should be of utmost important to everyone and the economy as a whole. banks and other institutions that take deposits are regulated to help ensure that they remain safe and sound to perform their critical role in the economy. as you know the bog has undertaken a number of reforms recently and continues to strengthen the system. i look forward to sharing some of these reforms with you, and to hearing your thoughts on the reform process so far and going forward. qs & as q. what is the current state of affairs in ghana β s banking sector? the banking sector is generally strong and continues to be profitable, judging from a number of key indicators. for example : total assets continue to increase ; profitability remains high ; industry car of 19 % compared to required minimum of 10 % ; and the quality of bank loans continues to improve, with a reduction in npls. q. bog has carried out a number of reforms recently. why is bog finally cracking the whip after doing nothing for a long time indeed, bog has initiated a number of reforms over the last year and half to make the banking sector stronger and more resilient. key among these reforms are : the revocation of licences of 7 failed banks, and the appointment of receivers for these banks ; strengthening the regulatory framework through a number of new directives on a number of key issues such as capital, corporate governance, provisioning for loans, and others ; a renewed focus on risk - based supervision of banks to help identify problems sooner than later ; stronger enforcement of our laws and directives ; increasing public awareness to help the banking public make prudent banking decisions. bog is committed to ensuring that banks and other financial institutions it regulates, remain safe and sound and engage in practices that protect the deposits of their clients as well as ensure that the financial system is safe and stable for all users. bog has demonstrated this commitment by the bold steps it has taken so far, as difficult and painful as some of them have been. q. were the actions taken against the 7 defunct banks necessary? why were they taken? the bog β s recent actions were necessary to ensure that banks that failed were made to exit the market in an orderly fashion and without disruptions to our financial system. failed banks become serious sources of risk for the entire financial system and the economy as a
| 0.5 |
of funding, as well as provide alternative financing opportunities for infrastructure projects. of course, the program is not a silver bullet. and if policymakers are not careful, it could also pose challenges in the economy. in the long - run, while infrastructure investments promise to support economic growth and employment, unforeseen large external demand and price pressures that affect the import requirements of infrastructure projects can, in turn, limit the benefits of improving macroeconomic conditions. other challenges facing policymakers include issues on skilled labor shortage that may cause delay in the infrastructure projects ; budget drawdown issues ; and possible inequity in resource allocation at the local level. 1 / 2 bis central bankers'speeches in this regard, greater policy dialogue and close coordination of relevant government agencies in terms of fiscal planning and budget execution, as well as program planning is a policy imperative. needless to say that the road ahead requires a lot of work. let us start today by making this event a fruitful one through the productive and meaningful exchange of ideas on the topic. in particular, our discussions shall revolve around the following : 1. the developments / issues encountered in the bbb program. 2. funding requirements for the continued and sustainable implementation of the bbb program. 3. impact of the bbb program in the short and medium - term on macroeconomic conditions, namely, inflation, current account, exchange rate, and growth output ; and 4. the possible disadvantageous effects, if any, of infrastructure program on jobs, equity, and the β crowding out β of credit and investments. i look forward to have a meaningful exchange of views and ideas on these issues. let me also take this opportunity to thank our speakers in advance for your time and contribution in this exercise, which is part of our effect to look at a broad range of economic and non - economic issues that provide useful insights for policymaking. rest assured, your insights will serve as useful inputs to the bsp β s conduct of monetary policy, as we all strive to build the β hardware β that would propel our country to sustainable and inclusive growth. thank you and mabuhay tayong lahat! 2 / 2 bis central bankers'speeches
|
benjamin e diokno : realizing the golden age of infrastructure speech by mr benjamin e diokno, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the 32nd environmental scanning exercise, manila, 26 june 2019. * * * members of the monetary board, colleagues from the bsp, guests, ladies and gentlemen, good morning! i am very pleased to welcome all of you to the 32nd bsp environmental scanning exercise ( ese ). while this is my first time to address this affair as the bsp governor, it is certainly not my first time to attend in this event. i was here eight years ago, in 2011, when i was invited to be a resource speaker on the topic public - private partnership ( ppp ) program. over the years, i have come to know that this forum serves as an important platform for the bsp to discuss relevant economic and financial issues with its stakeholders and experts. today, we have once again gathered experts to listen to their thoughts on a similar and very urgent topic β β realizing the golden age of infrastructure. β i say very urgent because this so - called β hardware β for economic growth, has been a major challenge to our country β s path to sustained inclusive growth. for instance, the 2018 global competitiveness index of the world economic forum ( wef ) ranks our public infrastructure at 92nd out of 140 countries. this indicates how far behind the philippines is compared to other countries. in fact, we could see and experience for ourselves that we need better roads, bridges, airports, seaports, and railway systems that will provide convenient movement of goods and services throughout the country. this is why the government has put in place the β build build build β ( bbb ) program at the forefront of its economic agenda to address the gaps in the country β s infrastructure sector. this program is expected to boost and expand the economy β s productive capacity and support a sustainable and inclusive economic growth. on our part, the bsp will continue to safeguard an enabling macroeconomic environment that will help facilitate the country β s β golden age of infrastructure, β through the implementation of sound monetary and financial policies. moreover, we continue to spearhead reforms that promote further deepening of our domestic capital markets. we have also worked on enhancing the quality of competition in the banking system by allowing the entry of new foreign banks and liberalized foreign exchange regulations. all these developments could help increase the availability
| 1 |
, but have also been unable to fulfill their traditional role of cushioning this type of situation and probably explain a significant part of the unusual increase in inactivity ( figure 6 ). by sector, the fall has been widespread, especially in retail, construction and housing, and food services. what we see in chile is replicated in many countries, although with varying intensity. depending on countryspecific conditions, there have been sharp falls in employment, significant decreases in hours worked and increased inactivity ( figure 7 ). according to the international labor organization ( ilo ), compared to the last quarter of 2019, in the second quarter of this year hours worked fell 14 % globally β the equivalent to 400 million full - time jobs. the decline has been led by south america ( - 20. 6 % ), where inactivity has grown substantially. for the remainder of 2020, the ilo anticipates that, globally, hours worked will continue to remain below prepandemic levels. in chile, the reduction in labor income has continued to be reflected in the evolution of nominal wages and total hours worked ( national statistics institute, ine ), both remaining around their historical lows. at the same time, data from the august business perceptions report ( ipn ), based on interviews with more than 100 company executives and an online survey of another 760, shows that almost 70 % of those surveyed indicated that their company had cut costs, whether through reduced commissions and bonuses, cutbacks in overtime, or reductions in base salaries, among other measures ( figure 8 ). household spending has been severely affected by the decline in income, which is reflected in the sharp contraction of demand in the second quarter, particularly from private consumption. especially marked is the drop in services consumption, where social distancing measures have significant effects, such as the dramatic drop in spending on restaurants and hotels, transportation, health care and leisure activities. nevertheless, the short - term outlook for consumption has improved in the third quarter due to a set of support measures and which is reflected in better business expectations β especially for trade β and, more recently, in improved consumer expectations. in recent months, a significant number of direct aid programs, subsidies, repayment deferrals and tax breaks have been implemented. as a result, the balance between the fall in income and aid received improved significantly between the second and third quarters ( figure 9 ). in addition to the above, part of the pension savings was
|
expectations show improvements in some countries ( figure 3 ). it should be noted that in china the data for the second quarter were above expectations. financial markets and commodity prices have been favored by these trends, as well as by the highly expansionary monetary conditions promoted by the major central banks. the price of copper has fluctuated around $ 3 per pound and market volatility has seen significant reductions from its highs of march and april. this represents an important difference with respect to external shocks that have affected the chilean economy on past occasions. our country β s economy contracted by 14. 1 % annually in the second quarter, its worst record in several decades. the biggest month - on - month drop was in april, subsiding in may and recovering slightly in june and then again in july. the sharp initial contraction also occurred in a wide range of countries, although with some nuances ( figure 4 ). among the factors behind these differences are the date that the first cases appeared, the speed of the spread of new cases, how strictly containment measures were adopted and the response of the population. in the case of china, the greatest impact of the pandemic was recorded in the first quarter. peru, on the other hand, saw a dramatic drop in the second quarter, as strict nationwide quarantine was implemented. incoming information for chile suggests that activity is picking up in sectors that had been particularly hard hit, such as retail and some services ( figure 5 ). this reveals that some activities have managed to adapt more quickly to new forms of operation, notably a more intense use of online sales and teleworking. in contrast, sectors such as construction, which are highly intensive in on - site work, have suffered greater than expected consequences, given the territorial and time extension of the quarantines. because of its highly contagious nature, the pandemic caused a particularly sharp contraction in demand and supply in socially intensive areas, directly affecting the incomes of businesses and individuals. this has had a strong impact on the labor market, including self - employment. thus, in the moving quarter ending in july, the annual drop in employment affected slightly more than 1. 8 million jobs. about half of this figure corresponds to salaried jobs, mostly formal. another 760, 000 interrupted occupations correspond to non - salaried workers ( i. e. self - employed workers and employers ). given the restrictions on mobility, the latter have not only been unable to do business as usual
| 1 |
levels for the federal funds rate at least through late 2014 β. that follows a structure for forward guidance that the committee first began last august, when it said conditions were likely to warrant exceptionally low rates through mid 2013. then in january, it pushed back that calendar date another 18 months. the fomc has also announced that the fed intends to continue the maturity extension program, or β operation twist β, first launched last september and set to end in june. in this program, the fed is buying $ 400 billion of longer - term treasuries and selling an equal amount of shorter - term treasuries, in an effort to reduce long - term yields from already historically low levels. the fomc is also continuing to reinvest principal payments from its holdings of agency debt and mbs into mbs in an effort to help mortgage markets. you may know that i dissented from the fomc decisions in august and september, because it was not clear to me that further monetary policy accommodation was appropriate then. after all, inflation was higher and unemployment was lower relative to the previous year, as we have been discussing. monetary policy should be responsive to economic conditions, and since that time, unemployment has decreased, and inflation is above target. i believe monetary accommodation is still called for, but i do not believe it should be as accommodative or aggressive as it was at the height of the crisis, when unemployment was over 10 percent and inflation was just 1 percent. now that unemployment is at 8. 3 percent and falling and inflation is over 2 percent and drifting up, we should not anticipate additional accommodation. indeed, in the absence of some shock that derails the recovery, we may well need to raise rates before the end of 2014. nevertheless, monetary policy should be responsive to economic conditions. in my view, current conditions do not warrant further accommodation. yet, should economic conditions significantly deteriorate or the upside risks to inflation i have stressed fall and significant risk of deflation emerge, we should rethink our policy stance. but neither of these events seems likely to me at this juncture. i believe further accommodation at this stage of the business cycle could lead us down a very treacherous path β one that would be ever more difficult for us to navigate and one that would increase the already substantial risk of higher inflation. yet, the problem is not just inflation risk down the road. prolonged efforts to hold interest rates near zero can lead to
|
decline in crude oil prices. nevertheless, a decline in crude oil prices by nature is a considerable positive factor for japan β s economy, and its effects on overall prices eventually will dissipate. thus, i consider that the delay itself is acceptable. also, in terms of monetary policy, i believe that it is appropriate to exclude the effects of energy prices as temporary factors and grasp the underlying trend in prices. the year - on - year rate of increase in the cpi ( all items less fresh food ) for december 2015 was 0. 1 percent but that for all items less fresh food and energy β which indicates the underlying trend in prices β was 1. 3 percent. the bank projects that, in a situation where japan β s economy is likely to continue growing at a pace above its potential, the year - on - year rate of increase in the cpi ( all items less fresh food ) will likely rise closer to 2 percent through fiscal 2017 when the negative contribution of energy items dissipates. inflation expectations are referred to as a factor that largely affects the price outlook, but it is difficult to actually assess them. it can be said that the inflation expectations of both firms and consumers have been rising from a somewhat longer - term perspective β as suggested by the recent price - setting behavior of firms and the subsequent purchasing behavior of consumers, or by rises in base salaries for two consecutive years. in addition, i consider that two indicators β the inflation swap rates and break - even inflation ( bei ) rates for jgbs, both of which are frequently used to assess inflation expectations and are compiled based on financial market data β have not sufficiently reflected the actual inflation expectations in japan, unlike in the cases of the united states or europe, given the size and liquidity of japanese financial markets. therefore, these indicators should be regarded only as a reference. let me note here that prices are normally determined when consumers accept the prices set by firms. since spring 2015, manufacturers have been raising the wholesale prices of their standard products, due mainly to the rise in costs, and this has led to a rise in sales prices. in addition, prices of general services have been rising due to labor shortages. these factors have been pushing up the underlying trend in prices. it is the second year of such price increases, which raises difficult issues including the following : ( 1 ) whether manufacturers can raise the prices of their standard products again ; ( 2 ) whether manufacturers will implement a de facto price increase by developing new products with value
| 0 |
caleb m fundanga : setting new standards for cellphone banking opening remarks by mr caleb m fundanga, governor of the bank of zambia, at the celpay 2010 mobile payments conference, lusaka, 27 october 2010. * * * the chief executive officer celpay international bv the managing director β zain zambia limited managing director, celpay zambia ltd, mr miyanda mulambo the conference chairperson, mr maxwell banda representatives of commercial banks and financial institutions present representatives of international organizations present representatives of zambian business associations distinguished invited participants members of the press ladies and gentlemen, it is an honour and privilege for me to officiate at the 2010 mobile payments conference. this year β s conference follows the success of the inaugural 2009 conference and it is therefore my earnest anticipation that as in 2009, you will find the 2010 conference productive and beneficial. the conference provides an excellent opportunity for the exchange of views and sharing of ideas on how to continuously improve the functioning of our financial systems against the backdrop of the global financial turmoil. mr chairman, allow me to begin by commending celpay zambia limited, for making the mobile banking conference an annual event. i hope that the conference will provide a forum for long - term collaboration in the area of mobile banking to provide sustainable banking solutions to our people. the bank of zambia applauds this initiative which is collaborative and consultative. it is only through such collaboration and consultation involving key stakeholders that we are able to improve our local situations as we seek to have a stable macroeconomic environment and an inclusive financial system. these are preconditions for achieving economic development and accordingly, one of the principal tenets of economic development is access to financial services. in this regard, a national payment systems development has a fundamental role to play to enhance access. chairperson, i have noted that the theme for this year β s conference, β setting new standards for cellphone banking β is very fitting for zambia as we face the challenge of ensuring that the majority of our adult population has access to formal financial services. as you may be aware, a large component of the work being undertaken under the financial sector development plan ( fsdp ) and the national payment systems vision and strategy 2007 β 2011 is focused on improving financial access and contributing to the establishment of inclusive financial markets in general. the recent finscope survey revealed that only 37. 3 % of the adult population have access to formal financial services leaving 62. 7 % of adult population financially excluded. although
|
innovation that may have significant macroeconomic benefits to all involved. we are therefore keen to draw on the policy debate arising from this conference to move financial services in zambia to new frontiers. as bank of zambia, we will play a catalytic role and facilitate private sector led developmental initiatives. i thank you.
| 1 |
labour market measures β which provide programmes of education, training and work experience targeted at the long - term unemployed. third, reforms to the tax and benefit systems could be implemented which ensure that people are significantly better off in work than out of it. i should like to emphasise that the structural reform agenda available to national governments to promote economic development extends well beyond the reform of labour markets. for example, national governments can take steps to promote entrepreneurship and make it easier for people to start and run businesses and thus create new jobs. this could involve encouraging competition through measures to promote the entry of new firms, such as reducing the administrative burdens they face and making markets more competitive. governments can also liberalise previously highly regulated sectors, such as utilities, to increase efficiency and reduce prices to the benefit of industrial and household users of these services. national governments may also wish to take steps to raise productive investment in research and development to increase growth in expanding high - tech industries. experience in the netherlands shows that reform programmes indeed have the potential to substantially improve the labour market situation. the decline in the unemployment rate from its historical peak at 11. 6 % in 1983 to today β s 3. 2 % is indeed impressive. however, even in the netherlands there is little reason to become complacent. thus, there seems to be a need to step up efforts to reduce inactivity and improve the flexibility of the labour market in order to help ensure responsible wage developments and price stability. it would also seem that the netherlands has not, as yet, been successful in increasing output growth. a β polder model β yes, a β new economy β, no, not yet. 4. conclusions to conclude, i am convinced that economic and monetary union provides a great opportunity to create and maintain a large zone of price stability and economic prosperity in europe, including a substantial reduction of unemployment. however, while price stability is a necessary condition for fully grasping the opportunities of emu, it is not sufficient. stability - oriented polices regarding the development of national fiscal positions and structural changes to improve the functioning of markets are of crucial importance as well. policymakers in all areas must take the new environment of stage three of emu and its consequences appropriately into account when forming their policies. only then will the euro be able to function as a true accelerator of economic growth in europe. the introduction of the euro and a common monetary policy have certainly not rendered national governments impotent. with the possibility to vary fiscal policy
|
and undertake structural reforms, national governments retain the key powers to improve the performance of their economies. if the terms of the stability and growth pact are adhered to, there is sufficient flexibility to allow automatic stabilisers to work in the event of cyclical fluctuations. together with the social partners, governments have a key responsibility to act decisively to ease the unemployment problem in europe. structural reforms provide the only means of achieving lasting reductions in unemployment, preparing for the ageing of the population and reducing the burden of government debt.
| 1 |
transaction - oriented approach to supervision and as we move further away, cooperation among the regulatory bodies will become even more important given the home / host relationship and the magnitude of the risk that is inherent in such relationships. i have noted that over the last thirty years, the cgbs has endeavoured to strengthen its supervisory and regulatory framework of the regional central banks and monetary authorities. it has established technical working groups to address inter alia consolidated supervision, crisis management and basle requirements and has put in place the requisite instrument to facilitate information sharing and cooperation with foreign regulatory bodies. your members are also active participants in supervisory colleges where banks span several countries and i am aware that yesterday three supervisory colleges were held. much emphasis has been placed on ensuring that the banking sector remains safe and sound, however, there are non - bank institutions that could severely threaten such safety and soundness and consequently the same level of attention / emphasis should also be directed to those institutions. perhaps, cgbs could consider expanding its conference scope in the future to include regional non - bank regulators with whom your constituents interface. both banks and non - bank financial institutions are integral to the safety and soundness of the financial system. ladies and gentlemen, let me conclude by saying that our approaches to supervision and the depth of our regulation would continue to require proactivity and enhancement as the financial landscape continues to change. the central bank governors of the region will continue to rely on the cgbs to provide the advice and guidance needed to keep our region safe. success in this regards depend on the thoroughness and robustness of your work and bis central bankers β speeches the reliability and efficacy of the methods you employ. you must continue to organize and support the necessary training and mentoring of supervisors so that a pool of capable and technically sound personnel is always available and that greater reliability may be placed on their output. during today and tomorrow several papers will be presented on a variety of sub themes and i anticipate that at the end of this conference some critical imperatives would have been identified to steer us through the current challenges and others looming on the horizon. our confidence in the role of the cgbs has never been misplaced. i wish you all successful deliberations and trust that your stay here will afford you the opportunity to discover for yourself the beauty of our country and the warmth of the guyanese people. welcome once again to all. bis central bankers β speeches
|
to the benefits received. this contributes to increased investment and augments the productive base, thereby facilitating the financing of social security expenditure commitments. apart from specific reforms in the social security system itself, an improvement in the fiscal position would have an overall positive macroeconomic effect, compensating in part for the addition in aggregate demand brought about by ageing. the lower absorption of resources by the state could also lead to a higher average level of productivity and to an improvement in the country β s balance of payments. productive capacity would also be enhanced if the state creates fiscal and other incentives for individuals to provide for their own needs after retirement, leading to an increase in the household saving rate and, consequently, also to a faster accumulation of capital. fiscal consolidation will, however, only solve part of the problems created by population ageing. the negative supply shock caused by this phenomenon must also be countered by a positive shock. supply - side reforms aimed at increasing the availability and the efficient use of economic resources are, therefore, essential. the efficiency of markets can be improved by implementing a vigorous competition policy and reducing public sector involvement in the economy. productive capacity would also be improved through such policies as market liberalisation, greater investment in infrastructure and education, and a market - driven industrial policy. structural rigidities in the labour market must be eliminated in order to decrease their disincentive effects in terms of the labour supply and the work ethic. a labour market policy intended to increase skills, and consequently the employability of individuals, is also desirable. conclusion this β grey cloud β on the horizon, therefore, appears to have a silver lining in the form of appropriate policy responses that would effectively enhance the welfare of populations. moreover, as the secretary - general of the united nations, kofi annan, has said : β trees grow stronger over the years, rivers wider. likewise, with age, human beings gain immeasurable depth and breadth of experience and wisdom. that is why older persons should be not only respected and revered ; they should be utilized as the rich resource to society that they are. β the wealth of skills and experience that older people bring to the workplace, to public life and to the family are generally not recognized. technological advances and new ways of organizing society can be put to good use to increase the participation of older people in work and to make appropriate socio - economic changes.
| 0 |
hkma has also required banks to standardise the maximum ltv ratio of mortgage loans for all standalone carpark spaces at 40 % and the maximum loan tenor at 15 years. other requirements on maximum ltv ratio and debt - servicing ratio applicable to commercial and industrial property mortgage loans also apply to standalone carpark space mortgage loans. the above measures take effect immediately. however, loan applications in respect of property transactions with provisional sale and purchase agreements signed today or earlier will not be affected. the hkma is also aware that the risk weight allocated by hong kong banks adopting the internal ratings - based ( irb ) approach under the basel capital accord to residential property exposures is at a relatively low level. this may not fully reflect the existing and future risks of property market volatility. to further enhance the risk management of banks in hong kong, the hkma has decided to introduce a risk weight floor of 15 % for residential mortgages approved by banks on or after 23 february 2013 under the irb approach. mr arthur yuen, deputy chief executive of the hkma, will explain the above - mentioned measures in more details later. bis central bankers β speeches meanwhile, the hong kong mortgage corporation will introduce revisions to its mortgage insurance programme in line with the latest developments in the property market and will announce the details later. i hope the public would understand that hong kong is facing an extremely unusual macromonetary environment. the ongoing quantitative easing by advanced economies is unprecedented in both scale and duration. interest rates have been artificially maintained at extremely low levels, and we see huge volumes of liquidity flow into emerging markets like hong kong. the current unusual circumstances are one of the main drivers for the prolonged boom in the local property sector. the risk of over - heating in the property sector to financial stability in hong kong is no smaller than that seen in 1997. we should note in particular that while mortgage rates were generally over 10 % in 1997, after the burst of the property bubble, us interest rates have fallen, and mortgage rates in hong kong have spiralled down reaching about 2 % in 2004. the situation we faced now is just the opposite. mortgage rates are around 2 %. and, even if the low interest rate environment were to remain until 2015 as anticipated by the us federal reserve, the us interest rates are bound to head back to more normal levels. will mortgage borrowers in hong kong then be able to withstand the impact of interest rate hikes and property price falls? for example, under
|
making available sme financing at reasonable cost is therefore crucial to the growth of this important sector. providing policy loans directly to smes helps, but the assistance is limited relative to the enormous financing needs and there are always concerns about economic distortions and the efficient use of public resources. to achieve greater and more sustainable sme financing, it is necessary to develop market - based approaches which are commercially viable to mobilise private sector investment into the sme sector. i encourage the adb to further work on this front, including exploring possible mechanisms such as credit enhancement and securitisation. scaling up private sector lending would require a change in the skill mix of the adb, in particular in strengthening its market expertise and risk management. partnering with domestic agencies and private sector financial institutions, other international financial institutions and developed members in the region that have relevant experience would be useful in utilising their expertise, building the capacity of the bank, and sharing credit risk. there are, of course, other important areas concerning the development of the region where the adb could play a meaningful role as identified in the new long - term strategic framework. as a member of the bank and the region, we stand ready to provide support and look forward to strengthening our cooperation with the adb in furthering the development agenda of the region. and lastly, to successfully implement strategy 2020, further enhancing the organisational effectiveness of the adb will be of critical importance. we welcome the bank β s commitment to develop a more robust results framework and to continue its institutional reforms, and we look forward to ongoing efforts by the bank in this regard. thank you.
| 0.5 |
a marked improvement in the deficit in 2006 to 6. 3 % of gdp. in the long run, however, this imbalance needs to be further reduced to a more sustainable level. this can only be achieved to the extent that growth is driven more by export - oriented activities and less by consumption. in view of the large amount of currency in circulation and your interest in ensuring a smooth changeover to the euro, what advice would you give to the public in this regard? as i said earlier, the amount of currency in circulation has been contracting and there is evidence that cash hoards and bank deposits are being converted into euro. we are trying to discourage this premature conversion because portfolio diversification at this stage is expensive and makes little sense. in the case of maltese lira bank deposits, these will be converted automatically, and at no cost, into euro on the changeover date. as for cash conversions, people who are buying euro currency notes from banks and other financial institutions are having to pay exchange commissions ; those who obtain euro notes outside the banking system are being offered an even more unfavourable exchange rate, besides running the risk of receiving counterfeit notes. these early conversions, moreover, constitute a drain on the bank β s reserves. we are, therefore, encouraging the public to deposit maltese lira cash holdings into the banking system and retain them in maltese lira denominated deposits, thereby earning interest. in this regard, some of the domestic banks have launched special deposit schemes to attract such funds. those who already hold lira deposits, bonds and similar assets do not need to do anything. such assets will be automatically converted into euro when the changeover takes place, and free of any charges. for those who own maltese lira and euro assets that represent income previously not declared for income tax purposes, the recently launched special registration scheme represents a timely opportunity for such persons to regularize their holdings in terms of the law. in summary, therefore, i would say that there is no advantage to be gained by converting maltese lira assets into euro before the changeover date. from that date onwards, there will be an ample supply of euro notes and coin to satisfy the needs of the public. more importantly, euro currency will be provided at the official conversion rate without any changes or commissions. still on the euro, do you think that people are as worried about inflation as they were? according to the eurobarometer poll taken in september 2006, some 70 % of maltese respondents said
|
them permanent are needed to bring the recently high budget deficit towards a more comfortable level in 2011. the resulting budget deficit of 6 % is not a magic number, though! circumstances permitting, the deficit could be even smaller, provided latvia with higher rating, lower interest rates, new investments and new jobs. this would also bring us much closer to the euro introduction in 2014 as an exit from the international support program. i am perfectly aware that this is not an easy task ; however, it is realistic should we have a strategic mindset and enough ambition. in conclusion let me quote the estonian president toomas hendrik ilvess from what he said back in april 2009 during a meeting with his latvian counterpart valdis zatlers : β in estonia we know that tax revenue is lower than expected and additional steps are required. (.. ) at times when money runs out, there are no simple or pleasant solutions left β expenditures have to be cut. it is an illusion to think that we will be able to spend money, which we actually do not have. that is impossible β for individuals and states alike. therefore β if one does not have the money to spend, expenditures have to be cut. the question then naturally is β where to cut. i believe that both estonia and latvia are clearly aware that it is fiscally responsible to make these complicated choices now and not dump these complicated choices on the future generations. thank you for your attention!
| 0 |
the leasing sukuk are the first of their kind to be issued by a central bank. let me turn now to the future prospects for islamic finance. the global economic crisis has forced the financial industry as a whole to reassess its growth prospects for the years ahead. the islamic financial industry has not been exempted from this reassessment, although there are those who argue that the prospects for shari β a compliant finance have improved as a result of the crisis. it has been pointed out that islamic financial institutions have escaped relatively unscathed from the severe downturn which is affecting most conventional financial institutions. this certainly presents the industry with an opportunity to continue its rapid and successful growth of recent decades. because interest - based transactions are prohibited, islamic finance encourages business and trade activities that generate fair and legitimate profit. the prohibition on speculative activity also helps to ensure that there is a close link between financial flows and productive activities. these intrinsic properties of islamic finance have contributed towards insulating it from the potential risks resulting from excess leverage and speculative financial activities. for example, shari β a compliant financial institutions were unable to invest in the cdos and other structured financial products β the β toxic assets β β which have been at the centre of the current crisis. this is not to pretend that the islamic financial industry does not face some important challenges. some of them are specific to global economic conditions, as the clients of islamic financial institutions are no more immune to the global recession that are the clients of conventional banks. however, some of them are more specific to islamic finance. first, islamic finance in its modern form is a relatively young industry. the first islamic banks were licensed little more than 30 years ago. of the 26 islamic finance entities operating in bahrain, nearly half have been licensed within the past 5 years, and nearly three quarters have been licensed in the past 10 years. this has several consequences : few shari β a compliant financial institutions have yet been able to achieve significant economies of scale. many remain comparatively small and focused on niche markets. newer entrants to the industry have also exhibited a tendency to copy the business models they see being successfully pursued by their more established competitors. as a result we have an industry which comprises many small - scale firms engaged in very similar activities and with comparatively high concentrations of risk. for the long - term health of the industry it will be important to generate greater scale and diversity. secondly, one of the major constraints on generating scale economies is the difficulty in
|
in argentina, the monetary policy transmission channels are only just being rebuilt, since credit to the private sector accounts for 10 percent of the economy, still far below the latin american average. therefore, patiently rebuilding the power of monetary policy tools is a great step towards consolidating growth and stability. meanwhile, monetary and financial policy should be conceived under a general equilibrium approach, where fiscal solvency, the monetary balance and external sustainability are mutually determined. against this backdrop, a sustainable and long - lasting reduction of the inflation rate depends on the comprehensive, joint and coordinated action of the monetary policy, the fiscal policy, the wages policy, and the competition policy. thus, we see that the current regime of control over the money supply and the demand for money combines the necessary doses of monetary prudence ( as shown by sixteen running quarters of compliance with self - imposed monetary aggregate growth targets ) and flexibility ( which has enabled us to weather the recent turbulence ). through this scheme, by trading in the repo market, issuing central bank notes and bill, and collecting in advance the rediscounts granted during the crisis, we eliminated any potential excess money supply. in fact, in the first half of the year we sterilized 80 percent of foreign exchange purchases β up to almost ars 25 billion. and this did not affect the bank β s positive balance sheet. the monetary program sets indicative targets for all monetary aggregates. however, the achievement of these targets is linked to the change in the means of payment, since in an economy where financial normalization has not yet been achieved, it would be healthy for savings β time deposits β to be more rapidly channeled back into the financial system. deposit performance has not been affected by financial uncertainty and time deposits keep growing above the average. this is another eloquent example of the strategy developed in the past few years to face contingencies : the recovery of banking liquidity and solvency, which allows us to have a sound financial system today that acts as a β turbulence buffer. β in turn, improved profitability, together with capitalizations, strengthen the solvency of the system. just as reserves play the role of liquidity insurance to the monetary authority, banks β cash is the first defense line against unexpected events. for this reason, banking regulations fostered the recovery of liquidity, equivalent to almost 40 percent of total deposits, one of soundest of the region. we should not forget about the growing dynamism of banks in getting
| 0 |
francois villeroy de galhau : franco - german experiences and challenges in the euro era relations - speech by mr francois villeroy de galhau, governor of the bank of france, at the europadialog, organized by the investitions - und strukturbank rheinland - pfalz ( isb ), mainz, 21 march 2017. * * * madam minister - president [ ms dreyer ], madam finance minister [ ms ahnen ], mr spokesperson [ m. dexheimer ], ladies and gentlemen, i am delighted to be here with you today in mainz, and i sincerely thank you for inviting me. on a more personal note, i am here as a committed european and a friend of germany. i am particularly attached to the franco - german friendship : i am french and live in paris, but my family β s roots are in a neighbouring land, saarland, where my family has lived since the end of the 18th century and where its porcelain manufacturing company villeroy & boch forms part of the german β mittelstand β. when i spend my holidays in saarland and i go north, i admire trier ; or east, neustadt an der weinstraΓe. and when i come fortnightly to participate in the ecb governing council, i am very close to your beautiful town of mainz. there is no doubt in my mind that β we, the citizens of the european union, have united for the better β, as stated in the berlin declaration of 25 march 2007. this was for the 50th anniversary of the treaty of rome, and this is still just as true four days before we celebrate its 60th anniversary. and yet, our unity may appear threatened today : euroscepticism is on the rise, driven by populism throughout europe ; brexit triumphed in the united kingdom last june ; and the new american government freely expresses its reservations about the european union. in these times of turmoil, we mustn β t lower the european flag. let us remember the formidable progress that we have made since our two countries decided to share their destinies by signing the treaty of rome, along with belgium, italy, luxembourg and the netherlands. today, in europe, we share three major economic assets : the single currency, the single market and our common social model. we have built them together and we can be proud of them. this will be my first point. for the future, european unity continues
|
francois villeroy de galhau : monetary policy transmission speech by mr francois villeroy de galhau, governor of the bank of france, at the annual general meeting of the international capital market association ( icma ), paris, 25 may 2023. * * * ladies and gentlemen, it is a pleasure to deliver this address at this icma's conference in paris, and i would like to pay tribute to your collective contribution to capital markets. let me thank among others bryan pascoe, rene karsenti, mandy defilippo and the icma french regional committee. in particular, icma's emphasis on sustainable finance perfectly echoes our call alongside christine lagarde for a " green capital markets union ". it is an important way forward for europe in the coming years. in the short and medium term, let me focus today on the transmission of monetary policy. in the euro area, inflation has begun to fall back, from 10. 6 % in october 2022 to 7 % in april, after 6. 9 % in march, and is expected to recede by the end of the year. but it will still be too high. and while headline inflation has been declining, underlying price pressures are showing persistence. the governing council has already taken prompt and forceful actions to tighten the stance of monetary policy. the increase in policy rates since 2022 has been exceptionally rapid by any historical standards : 7 hikes in less than ten months, amounting to + 375 basis points. the primary question today is not so much how much further we need to go with interest rate hikes, but how large is the pass - through of what is already in the pipe. overall, evidence shows a quick and smooth pass - through of ecb decisions to broad financing conditions, which is the first step of monetary policy transmission. the growth rate of bank loans to households and firms has slowed due to a combination of higher borrowing rates, lower demand, and - for firms - tighter credit standards. volumes of loans are decelerating, even though growth in outstanding amounts remains positive [ + 3. 3 % in the euro area for mortgages to households and + 5. 2 % for loans to businesses ]. by the way, the growth of loans in france remains significantly higher than in the euro area average. the second step of monetary policy transmission goes from the overall financing conditions to the economy and to inflation. in the textbook theory, tighter financial conditions moderate aggregate demand, and then decrease
| 0.5 |
. the forward - looking indicators suggest further growth in jobs over the months ahead with vacancies at a very high level. our central forecast is for the unemployment rate to decline to below 4 per cent later this year and remain below 4 per cent next year. if this comes to pass, it would be a significant milestone. australia has not experienced unemployment rates this low since the early 1970s, almost half a century ago. the main source of uncertainty about the outlook continues to be covid - 19. the pandemic is not yet behind us and it is entirely possible that there will be more outbreaks. it also remains to be seen how households use all those savings that they have accumulated over the past two years. there are major geopolitical uncertainties and our largest trading partner, china, is working through a difficult adjustment in its property market. the sharp pick - up in inflation in parts of the 1 / 4 bis central bankers'speeches world, especially in the united states, has come as a surprise and is an additional source of uncertainty about the outlook. inflation for the first time in several decades, inflation has become a major issue in the global economy, although it is worth noting that inflation rates in most of asia remain low. in the united states, cpi inflation is running at more than 7 per cent and in the united kingdom it is expected to be at a similar rate soon. in germany, inflation is 5. 7 per cent and in new zealand it is 5. 9 per cent. these are the highest rates in decades and the higher inflation is turning out to be more persistent than earlier expected. this lift in inflation largely reflects the surge in global demand for goods during the pandemic coinciding with a reduced ability of the global economic system to produce and distribute goods. a related factor in a few countries, including the us and the uk, has been a decline in labour force participation, which has reduced the supply of labour and contributed to stronger wages growth. higher prices for petrol, electricity and gas have also pushed inflation up in many countries. in australia, we too have had higher inflation than we and others expected, although the increase here is smaller than in many other countries. in headline terms, inflation is 3Β½ per cent and in underlying terms it is 2. 6 per cent. we are feeling the effects of global supply - chain problems and higher oil prices, but we have not seen the same increases in goods prices as have occurred in the united states. it
|
centre. the centre will encourage regional sharing and analysis of cybersecurity information within the financial services sector. it is expected to begin operations soon. conclusion let me conclude. financial regulation remains work - in - progress. we must press on with the reform agenda and see it through to full, timely, and consistent implementation. at the same time, we must evaluate the effects of the reforms put in place and make adjustments where appropriate, to maximise their effectiveness and minimise their costs. we must strengthen the foundations for sound risk management and good conduct by working with the industry to embed deeply a culture of responsible risk - taking and ethical conduct. 6 / 7 bis central bankers'speeches we must prepare our regulatory and supervisory frameworks for the technological changes sweeping the industry - addressing new risks while promoting innovation, harnessing the benefits of technology, and promoting growth and opportunity in our societies. thank you. 7 / 7 bis central bankers'speeches
| 0 |
the 1. 8 % enjoyed by the countries that would go on to form the euro area. however, between 1986 and 1998, before the euro was introduced, spain β s per capita income grew at an extraordinary annual rate of 2. 7 %, above the average for future euro area countries of 2. 1 %. the arrival of the euro also had a positive effect on growth, in spite of the serious difficulties during the crisis. since 1999, gdp per capita has been growing at 1. 2 %, which is 0. 1 % higher than in the other euro area countries and much higher than during the early years of our democracy. recently, some people have tried to blame the euro for the length of the financial crisis in spain and have advocated control over monetary policy interest rates and exchange rates. what they 1 / 2 bis central bankers'speeches often forget is that being a member of the euro area enables spanish households and businesses to benefit from lower real interest rates, lower inflation rates and reduced macroeconomic volatility, all of which boost productive investments and make a vital contribution to the sustainability of public finances. furthermore, it is not true that structural currency devaluations solve economic crises. devaluations are short - term measures. in the long term, the competitive boost they provide is eroded by the higher inflation they cause. and, in a complex system of global production chains like the one we have today, devaluations can make it harder for businesses to plan. the euro is also the second - most important currency in the international monetary system3, which strengthens spain β s credibility in a global context. it β s true that the crisis revealed significant institutional shortcomings in the structure of the monetary union, but it β s equally true that european countries have taken this on board and carried out substantial reforms. the banking union represents one of the greatest achievements of european integration. banks are now supervised at the european level, which enables risks that transcend national borders to be identified. completing the banking union, in particular by setting up a european deposit insurance scheme, should be a priority for national governments. if we look back 40 years, it β s clear that spain today is a more prosperous and modern country. however, we must not forget that much remains to be done. improving the functioning of the labour market is still an outstanding issue β more than 3 million people remain unemployed, and the youth unemployment rate is still above 30 %. but there are grounds for optimism
|
luis de guindos : integration and convergence - from the peseta to the euro remarks by mr luis de guindos, vice - president of the european central bank, at an event in honour of the 40th anniversary of the spanish constitution, organised by the spanish ministry of economy, madrid, 18 december 2018. * * * this month marks 40 years since spain began writing the most optimistic chapter of its history1. on 6 december 1978 the spanish people did more than just vote in favour of a democratic country that would uphold the values of the rule of law and equality. our support for the constitution also laid the foundations for spain to modernise its economy and become an integrated part of the european family. in addition to safeguarding fundamental rights and civil liberties, section 38 of the constitution states that β free enterprise is recognised within the framework of a market economy β and confirms that the public authorities guarantee its exercise. in practical terms, this meant spain would align itself with the western model of parliamentary democracy, based on a market economy and free competition and underpinned by the social rule of law. a little more than a year later, negotiations began for spain to join the european economic community, a historic milestone that would be achieved in 1986. but this wasn β t an easy road to follow. the first years of our democracy were marked by economic difficulties, partly resulting from the international crises linked to sharp oil price increases and the lack of an anchor for inflation expectations in most developed countries. nevertheless, this new spain, democratic and integrated into europe, never stopped looking outwards. trade and financial flows and the movement of capital increased, and exports and imports rose from accounting for roughly 35 % of gdp in 1986 to 66 % in 2017. these steps towards modernisation would never have been possible without a society that was convinced of the fact that europe represented prosperity and the future. the pro - european nature of civil society united spaniards more strongly than their ideologies or political affiliations, and this sentiment has held firm despite the difficulties people experienced during the financial crisis. a recent survey by the elcano royal institute shows that eight out of ten spaniards believe that opening up markets provides spanish businesses with good opportunities2. this is resounding proof that spain benefits from the european union in general, and the economic and monetary union created by the euro area in particular. the annual growth in per capita income between 1977 and 1985, one year before spain joined the eu, was 0. 7 %, well below
| 1 |
christian noyer : there will be no break - up of the euro area β interview in sud ouest interview with mr christian noyer, governor of the bank of france and chairman of the board of directors of the bank for international settlements, in sud ouest, bordeaux, conducted by mr bernard broustet on 17 january 2011. * * * sud ouest : how is our economy faring? christian noyer : the economy is picking up. the third quarter of 2010 was slightly disappointing, but the fourth was better, with estimated growth of 0. 6 %. this trend is expected to continue in early 2011, even though a number of factors call for caution : the automobile sector could slow down due to the phasing out of the scrappage scheme, and the fiscal retrenchment measures implemented in some european countries may weigh on demand. but, all in all, growth is there. sud ouest : will household consumption, which is the main driver of growth in france, be impacted by higher inflation? christian noyer : the surge in inflation that we are now observing at the start of year can be ascribed to higher energy and commodity prices. current price levels appear particularly high when compared to the exceptionally low levels seen at end - 2009. this difference will no doubt become less marked in the coming months. given the unemployment rate and the still low capacity utilisation rate, i think that it is unlikely that the rise in commodity prices could result in second round effects in our economy. nonetheless, higher prices are temporarily weighing on household purchasing power and we must remain vigilant. sud ouest : might the speculative attacks on the some countries β sovereign debt and concerns over the euro β s future dampen consumption and investment? christian noyer : no, there are no grounds for concern. europe has shown over the past few months that it is capable of rallying together and providing effective and innovative solutions for countries that fall prey to speculative forces. sud ouest : but it is evident that this is not enough to deter investors from attacking the sovereign debts of some countries β¦ christian noyer : at present, these attacks are centred on the countries of southern europe. markets tend to tar with the same brush all the countries perceived as the most fragile in the euro area, whereas their situations differ considerably. the sovereign debt dynamics of some non - european g7 countries are more worrying that those of many euro area countries. sud ouest : aren β t speculators betting on a
|
spillovers that affect consumer prices primarily by lowering import price inflation. 3 chart 8 shows that most of the downward pressure on swiss inflation is attributable to these international spillovers. however, as can be seen in the chart, domestic price components have shifted down as well. this harks back to the flexibility of swiss companies, which i referred to earlier. in particular, those swiss companies that compete in markets for imported goods have lowered their prices in order to maintain competitiveness in the wake of the exchange rate appreciation. such price cuts play an important role in restoring the swiss economy β s price competitiveness over the medium term. they are thus part of the adjustment process in response to the sudden exchange rate appreciation. that such a process can be painful for some of the companies directly involved goes without saying. for this year, we expect consumer price inflation to average about β 1. 2 %. we think that the inflation rate will reach its trough this quarter. for 2016, we expect average inflation of β0. 5 %. as you can see from the chart, inflation will move back into positive territory in early 2017. these forecasts assume that the three - month libor remains at β 0. 75 % over the entire forecast horizon, that the brent crude oil price remains at usd 50 per barrel and that the swiss franc weakens. again, our forecasts show that the current period of negative inflation is temporary. nevertheless, even temporarily negative inflation rates are undesirable. yet they cannot always be avoided β especially during phases of strong exchange rate appreciation. what matters is that inflation expectations remain firmly anchored and that monetary policy is able to ensure medium - term price stability. medium and long - term inflation expectations are still positive. this can be seen in various surveys of inflation expectations, and is confirmed by discussions between the snb β s delegates for regional economic relations and company representatives from different sectors of the economy. thus, we do not expect sustained negative inflation, let alone a deflationary spiral. concluding remarks this brings me to the end of my speech. earlier this year, the snb took some far - reaching decisions : it discontinued the minimum exchange rate against the euro, and lowered the negative interest rate on sight deposits significantly into negative territory. these measures were necessary to promote adequate monetary conditions for the swiss economy, and to ensure the snb β s ability to provide medium - term price stability in the future. since mid - january this year, the snb β
| 0 |
well here at danmarks nationalbank, we are invisible to most danes. * * * except in one respect. wherever we have become less visible in recent years. banknotes and coins. do you remember the first 25 - ΓΈre coins with a hole? or the 10 - krone banknote with hans christian andersen? many of you also know what a " ploughman " is. banknotes and coins are highly visible. they are part of our shared memory. but today only one tenth of private consumption is paid for in cash. i don't think denmark is about to become a cashless society β at least not in my lifetime. but we will have a future where fewer choose to pay with cash. issuing cash is probably the task that most people know danmarks nationalbank for. what many may not know about is that we are also the centre that keeps the electronic payment circuit running. we own and operate an online bank for the commercial banks and together with the financial sector we have developed systems that have paved the way for the dankort. betalingsservice. mobilepay. instant payments. electronic securities. exchanging payments is constantly becoming cheaper, easier and faster. at least for payments in danish kroner. but when we need to transfer amounts in other currencies, it is expensive and cumbersome. in that situation we may cast envious glances at the countries that have a single currency where citizens and enterprises avoid exchange fees when they trade with each other. the way we pay today is not the same as it was 200 years ago. page 7 of 9 but in one respect it has not changed : money and payments is based on trust. nor will banks be the same in the future as they are today. and to be honest, i don't care what a bank looks like β physically. it does not have to resemble a greek temple. but the function carried out by banks will always be required. what matters to me is that banking operations are subject to solid regulation. so that people can feel secure. so i find it difficult to imagine a future without a need for a central bank. * * * it is my hope that when danmarks nationalbank celebrates a new anniversary 100 years from now, our great - and great - great - grandchildren will be living in a society that is even more affluent and offers even more opportunities than ours. what will that require? well, basically, we need to be aware of how we became
|
under two banks ]. what happened? accountability, when things go wrong, is also extremely important. [ maintaining ] the level of the trust of the public so that when some things go wrong, they will be addressed properly and quickly. 1 / 4 bis - central bankers'speeches but, as we discussed in a meeting prior to this, it is not a question of yes or no ; it is a question of when. it is also a question of what are the parts that could come ahead of the others. for instance, we can start by stopping the practice in the philippines where you are a captive of the banker of your employer. just give the employee the choice [ to choose his own payroll account ]. after all, with pesonet, that should not be too difficult. i was quite surprised [ when i learned ] that most employees actually do not have [ traditional ] bank accounts - i will not mention the name of the company - but have a " gmaya " [ ewallet account instead ]. the importance of governance structures and regulation building on a transport analogy, the " rails " lead the doors of data, made possible by apis [ application programming interfaces ]. but said rails can only be built with the consent of the customer or the owners of the data. i should emphasize if the customer wants it shared, his bank cannot refuse. that is the other side. if i have a very good borrower, why would i want other banks to know that he is a good borrower? it is not just an api or a technology story, it is a governance story as well. these are the things that we are doing : capacity building, collaborative engagements, and, of course, commensurate regulations. as i said, there are - i look at regulations in two ways : one is before it [ crisis ] happens, and the other one is after it happens. when things go wrong, that is the most important part. people trust that things will be corrected, and you will not need lawyers to pay for it. revised roadmap takes readiness into account as part of our phased and incremental approach to open finance, we have adopted a more feasible timeline for the philippine open finance journey - from three years to, now, seven years. the revised roadmap is anchored on the bangko sentral ng pilipinas ( bsp )'s digitalization and sustainability agenda. hopefully, 98 percent of the things are done before the
| 0 |
enhance the important role you will play in influencing policy and strategic outcomes. my final message in this context is, therefore, an invitation to consider how we can support each other and develop stronger relationships, communicating with consumers together at a grassroots level to ensure that they are in a position to make informed and confident financial decisions. i am sure it was long and difficult road to get where you are today, and the launch will certainly not remove all obstacles on the road ahead. i therefore wish to urge you to continue working hard towards your objectives of protecting and educating consumers in namibia of their rights in all sectors of the economy. director of ceremonies, ladies and gentlemen, i thank you for your kind attention. bis central bankers β speeches
|
practice. the code shall set out the banking industry β s key commitments and obligations to customers on standards of practice, disclosure and principles of conduct in relation to banking services. director of ceremonies, in terms of the best practices, the code shall provide that contract between the commercial banks and customers shall have a clear, plain and simple terms, for the understanding of which no special knowledge is required. a very good example to draw from is when president obama signed the new credit card bill of rights into law, he challenged the industry to create a simple, easy to understand credit card agreement that you β don β t need a law degree or a magnifying glass to understand. β this means eliminating provisions and confusing terminology used by lawyers for reasons of tradition or habit, replaces the legalistic with plain - language, and introduces information design to enhance readability and comprehension. it is thus the intention of the bank that contracts should be simple, short, and preferable designed to fit on one or two pages. the other key aspect of this code will be to enforce good lending practices by banks to avoid over - indebtedness. banks will, therefore, be expected to act in the best interest of its customers by ensuring that they know and understand the customer β s needs, only offer them products and services that are suitable to such needs, and provide them with information to enable them to make informed choices. the code will further require banks to have in place effective complaints handling procedures and appropriate timelines within which complaints should be dealt with. this also means that banks will be directed to be the first β port - of - call β to offer redress for customers, by having dedicated complaints desks to handle customer grievances. at this juncture i wish to inform you that the bank of namibia, together with the industry, will issue the said draft code of good banking practice, during the course of this year for public comments. therefore, director of ceremonies, i humbly request the audience present in this room to spend time and do justice to all consumer protection initiatives, which we bis central bankers β speeches all agree are close to our hearts by providing extensive comments to the bank on the draft consultative paper. director of ceremonies, ladies and gentlemen, the other initiative being pursued by both the bank of namibia and our sister regulator, the namibia financial institutions supervisory authority, is the establishment of financial services ombuds office, in terms of the draft financial institutions and markets bill. this office will be financed and
| 1 |
prudence, and a great credit to hong kong's banking system. we also seem to have achieved a good balance in the relationship between the supervisor and the banking system. an excellent example of how that balance has contributed to banking stability is the 70 % loan - to - value policy for residential mortgage lending by banks. this policy, now a cornerstone of our prudential arrangements, pre - dates even the foundation of the hkma and evolved out of a productive dialogue between hkab and the supervisor. it has survived strong political pressure for relaxation and market pressure for innovative credit risk transfer through securitisation. the policy β now nearly two decades old β fits in well with the macroprudential approach which, particularly in the light of the recent crisis, supervisors in other jurisdictions now consider to be essential to banking stability. the fact that no such policy existed in the advanced financial systems is remarkable enough. but what is more remarkable is the level of initiative of the hong kong banking sector itself in seeing the importance of systemic stability and giving it precedence over the profitability of individual institutions. we might therefore observe, in the light of this and of our experience over the past year, that hong kong has got it broadly right in the relationship between the supervisor and the banking system. however, this should not lead us to the complacent conclusion that there is nothing much that needs changing. and indeed, no such conclusion is in our minds. both the carse report and the recent reports to the financial secretary on the sale of lehmanrelated products see room for development and improvement in the way we carry out our work. quite apart from our own hong kong - specific initiatives, there are movements for reform at the international level, resulting from a very different experience in the more developed economies, which we cannot ignore. this point brings me to my second observation : the need to move with the times. the past year has seen a plethora of ideas and proposals for reforming financial regulations, and interventions by government that were unprecedented in their nature and scale. even in economies less deeply affected by the latest crisis, including hong kong, it has been necessary to deepen government involvement, for example in more extensive deposit guarantees or in more intense supervision of banks'risk management β although it is gratifying that so many of the tools that we have been able to rely on, including the apparatus and contingency arrangements for ensuring liquidity, have been developed in a pre - emptive rather than
|
financial secretary in the 2013 β 14 budget to provide more choices to market participants in terms of the legal form of funds. this would be a major step to attract more funds to domicile in hong kong ; and ( e ) last but not least, the hkma, in close collaboration with the securities and futures commission ( sfc ) and the private banking industry, has undertaken a series of measures to promote the development of hong kong as the premier private wealth management hub in bis central bankers β speeches the region. the hkma issued guidance to private banks in june 2012 to facilitate the adoption of a portfolio based approach in assessing the suitability of investment recommendations so that private banks can be more flexible in serving customer needs without compromising investor protection. 7. in addition to lobbying and advising the hksar government on the abovementioned measures that are crucial to hong kong β s development as a wealth and asset management centre, the hkma has seconded staff to provide technical support to the financial services branch during the policy formulation as well as the legislative process. 8. ladies and gentlemen, while we have done a lot in the past few years to build and reinforce hong kong β s platform as the wealth and asset management hub, we fully appreciate that such work is a never ending task as most financial centres in the region, including those in mainland china, all harbour the understandable aspirations to become an international financial centre. outreaching to supplement platform building 9. now let me turn to the second β building block β of soft powers, which is β reaching out β. i am sure most of you would agree with me that the platform building work must be supplemented by appropriate β outreaching β efforts. this is similar to the situation in which a company, having created a very superior and competitive product, needs to do a lot of marketing and advertising in order to increase customer awareness and market share. for this reason, the hkma has over the past few years undertaken a series of outreaching and marketing programmes with special emphasis on hong kong as the asian hub for wealth and asset management businesses. 10. hong kong is already a hub for private wealth and asset management. nearly 80 of the top 100 global money managers are in hong kong. fifteen private banks have opened for business since 2009, bringing the total to 45 banks offering private banking services to their clients today. for the asset management business as a whole, the combined fund management assets hit a record high of us $ 1. 6 trillion in 2012, with
| 0.5 |
that β they do not have enough technical resources to deliver their ifrs 9 project β and almost 25 per cent of the respondents did not think that β there will be sufficient skills available in the market to cover shortfalls. β the worst case scenario is that the bank ends up, after 1 january 2018, with the subsidiaries and branches of international banks successfully implementing ifrs9 while the domestic and smaller banks are unable to do so. thank you for your attention. 3 / 3 bis central bankers'speeches
|
venture capital funds is being considered. measures have also been adopted to promote the use of simple, transparent and standardised securitisations in order to provide bank lending to small firms. these examples evidence the complementarities between bank markets and capital markets, and also how the banking union and the capital markets union reinforce one another. turning to equity markets, progress has been made to provide firms with access to these markets. further, many studies have been undertaken to identify the obstacles to international investment. yet, in order to equip the euro area with greater stability, resolute headway must also be made in european bank integration. pan - european banks are an essential requirement if we are to have a single market for wholesale and retail financial services. that will provide both for gains in efficiency and cost reductions in banking services. and, moreover, it would contribute to improving the euro area β s stability in the face of shocks. in this respect, the culmination of the banking union with its three pillars and the subsequent creation of pan - european banks would also enable the link between sovereign risk and bank risk to be substantially mitigated. there has been significant progress on the first two pillars, the single supervisory mechanism and the single resolution mechanism. but the third pillar β the creation of a european deposit guarantee scheme β remains pending. in conclusion, in europe, and in spain in particular, we have witnessed a phenomenon of greater disintermediation in recent years. associated with it is a more significant role for capital markets when it comes to providing financing for the economy and channelling citizens β savings. in parallel, technological change conducive to disintermediation is under way, and is prompting the creation of new services and risks that must be addressed by the supervisory community. to harness these market trends so as to promote the soundness and stability of economic and monetary union, resolute progress must be made towards the greater european integration of banking markets, fomenting at the same time the development and integration of capital markets throughout the union. thank you. 7 / 7
| 0 |
than expected, bond yields can easily reverse part of their recent decline, especially if the recent us inflation softness proves transitory, as most economists indeed anticipate. conversely, if global growth data surprise on the downside, emerging markets could suffer from a β flight to safety β and renewed appreciation of the us dollar. last year β s events, just like the β taper tantrum β of 2013 or the β investment recession β of 2016, show that if global financial conditions become less favourable, all the emerging countries will be affected to some extent, although those with stronger fundamentals will show greater resilience. building resilience thus appears to be a necessary task for governments and central banks alike. in particular, it is important to ensure that page 8 of 10 inflation expectations remain well anchored and that, as a consequence, the lower exchange rate pass - through to inflation observed in the recent cycle remains the norm. but authorities should also keep the growth in fx - denominated liabilities under control, so as to allow exchange rate depreciation to play its role as an β adjustment variable β and minimise any impacts from external currency and asset price shifts onto private sector balance sheets. they also have the option of using the available macroprudential tools should conflicts emerge between the respective goals of price and financial stability, including risks to these balance sheets. resilience also depends on limiting dependence on foreign capital to meet domestic funding needs. it is therefore important for governments to ensure, through a mix of prudent fiscal policies and an environment that is conducive for private savings, the absence of any major mismatches between the domestic supply and demand of debt securities. hence, when non - residents eventually reduce their bond holdings, these net sales will be more easily absorbed by domestic investors, and the domestic market for securities will remain liquid. appropriate, sophisticated market tools to hedge against currency and interest rate risk can only help in the deepening of domestic markets. these tools i have just mentioned deal more specifically with currency - and capital flow - related risks. nonetheless, the list is not exhaustive. resilience also depends on the way in which investors perceive the institutional and governance quality of the recipient country, the existence of checks and balances, and the depth and quality of its political debate. and, as south africa β s experience shows, financial resilience also depends on real economic resilience. south africa β s inflation expectations may be better anchored than
|
keynote address by daniel mminele, deputy governor of the south african reserve bank, at the 2019 bnp paribas global official institutions conference paris 19 june 2019 the global backdrop and monetary policy in emerging markets introduction ladies and gentlemen, good afternoon. thank you to bnp paribas for allowing me the honour to deliver the opening keynote address at this prestigious gathering of global official institutions. also allow me to commend the organisers of this event for their foresight in coming up with diverse and well - balanced topics that have risen to the top of the global agenda. there is no doubt in my mind that, at the present moment, uncertainty in the global macroeconomic environment, including rising geopolitical uncertainties, elevated trade tensions and rising debt levels, dominate the discussions of most global investors and policymakers. in my remarks today, i will discuss the implications of these developments for emerging market economies and the possibility of further risk from market volatility, before i conclude by touching on the policy options at our disposal to navigate through these rather turbulent times. page 1 of 10 an uncertain global economic environment investors and policymakers alike have had a nervous last few months. it is often said that expansions do not die of old age. yet, as they lengthen in duration, reaching nearrecord periods in some cases, observers increasingly worry about whether the trigger of the eventual downturn is already there. are we in such a case at present? in his foreword to global economic prospects published earlier this month, world bank president david malpass writes that β global growth has continued to weaken and momentum remains fragile β 1. compared to its january forecast, the world bank has this month downgraded its forecast for global growth in 2019 by 0. 3 percentage points to 2. 6 %. furthermore, it sees only a mild recovery ahead, to 2. 8 % by 2021. revisions to this year β s forecasts are broad - based, across both advanced and emerging economies. private sector consensus forecasts have similarly been scaled down in recent months. in some countries, a moderation was expected after the strong momentum observed in late 2017 and early 2018. in the united states ( us ), for instance, economists anticipated that the boost to private spending from the fiscal stimulus of the first half of 2018 would eventually fade. this has indeed happened, although the us economy remained dynamic at the start of 2019, rising by a surprisingly strong 3. 1 % when annualised, despite a
| 1 |
whole and not be limited to the individual financial institution or the individual financial market. the term used to refer to this supervision of the financial sector is macroprudential policy, which has to be based on analyses of the financial sector as a whole. the bank for international settlements ( bis ) defines the objective of macroprudential policy as follows : β β¦ the objective of macroprudential policy is to reduce systemic risk by explicitly addressing the interlinkages between, and the common exposures of, all financial institutions, and the procyclicality of the financial system. β new rules regulating the financial sector have now been adopted in the us. a new council, the financial stability oversight council, will be established to monitor risk in the us financial system. the council can propose stricter regulation of systemically important financial corporations, approve any proposals from the federal reserve to break up large banks and require that systemically important financial institutions other than banks are subjected to supervision. in the uk, a proposal has been made to assign responsibility for supervision and regulation of the financial sector to a subsidiary of the bank of england ( the prudential regulation authority ). a financial policy committee, similar to the bank β s monetary policy committee, will also be established within the bank. in the eu, the european systemic risk board ( esrb ) will be established and will probably be chaired by the president of the european central bank ( ecb ). we can distinguish between two approaches to the design of instruments to safeguard financial stability. one is to make the financial system more robust by, for example, reducing interdependency among financial corporations. the other is to curb procyclical behaviour in financial corporations. limitations on loan - to - value and loan - to - income ratios, which are applied in norway, are examples of rules that can have a stabilising effect. minimum capital requirements for financial institutions and liquidity and funding structure requirements are other examples of rules that will make high credit growth more expensive for financial institutions, and thereby for customers. rules to ensure that shareholders and creditors bear the cost if banks suffer substantial losses or have to be wound up will have a similar effect. financial vulnerability can build up more quickly in periods of expansion, partly because financial institutions then have a stronger inclination to take risk. this implies that regulations should be countercyclical, having the strongest effect when the risk of a buildup of imbalances is greatest. it is important that the rules
|
keep real interest rates below r * will eventually face rising inflation and inflation expectations, while a central bank that seeks to keep real interest rates above r * will eventually face falling inflation and inflation expectations. 3 my own and others'research suggests that the failure of the fed to respect this principle contributed to the great inflation of the 1970s, while the incorporation of this principle into fed policy in the 1990s and 2000s contributed to the achievement of stable and low inflation during and since those years. 4 so, even though estimates of r * are imprecise, i do not believe they should be ignored. instead, when thinking about monetary policy, i believe it is best not to ignore entirely an admittedly imprecise estimate of r * today, but instead to update that estimate as new data on inflation, inflation expectations, employment, growth, and productivity arrive. moreover, because monetary policy operates with a lag, and with inflation presently close to the 2 percent goal, it will be especially important to monitor inflation expectations closely using both surveys and financial market data to best calibrate the pace and destination for policy normalization. it will also be important to monitor both model - based and financial - market based estimates of expected future inflation - indexed real interest rates ( for example, 5 - year real rates 5 years forward ) suitably adjusted for term premium and liquidity effects as one indicator of longer - run r *. before the financial crisis, these 5 - year real rates 5 years forward averaged around 2 percent after a term premium and liquidity adjustment. since 2015, they have averaged about 0. 50 percent but recently have approached 0. 75 percent, also after a term and liquidity premium adjustment. given that real interest rates and economic growth tend to move together over the longer run, one possible source of these upward revisions in forward real rates could be that financial market participants may have become more optimistic about the growth potential of our economy. evidence also suggests that the term premium that investors require to hold longermaturity bonds has risen as well. the way forward if the data come in as i expect, i believe that some further gradual adjustment in the federal funds rate will be appropriate. as i mentioned earlier, i believe monetary policy today remains accommodative, and that, with the economy now operating at or close to mandate - consistent levels for inflation and unemployment, the risks that monetary policy must balance are now more symmetric and less skewed to the downside. raising rates too quickly could un
| 0 |
explain why firms are still hiring even as growth slows, with permanent contracts accounting for the vast majority of the increase in employment this year. but clearly this could change if firms start to see the slowdown as more persistent. the third consideration is the still very favourable financing conditions in the euro area, underpinned by our accommodative monetary policy. the cost of bank borrowing for firms fell to record lows in the first half of this year across all large euro area economies, while the growth of loans to firms stood at its highest rate since 2012. the growth rate of loans to households is also the strongest since 2012, with consumer credit now acting as the most dynamic component, reflecting the ongoing strength of consumption. household net worth remains at solid levels on the back of rising house prices and is adding to continued consumption growth. but there are some risks to financing conditions as well. lack of fiscal consolidation in high - debt countries increases their vulnerability to shocks, whether those shocks are autonomously produced by questioning the rules of emu β s architecture, or are imported through financial contagion. so far, the rise in sovereign spreads has been mostly restricted to the first case and contagion across countries has been limited. such developments feed into tighter bank lending conditions for the real economy. to date, though some repricing in bank lending is happening where the rise in spreads has been more significant, overall bank funding costs remain near historical lows in all large countries, thanks to a steady deposit base. to protect their households and firms from rising interest rates, high - debt countries should not increase their debt even further and all countries should respect the rules of the union. other risks stem from the possibility of a disorderly increase in global risk premia. the reaction of asset prices to surprise inflation in other jurisdictions at a more advanced stage in the business cycle, a return to the financial deregulation that was the primary cause of the financial crisis, and fragilities in several emerging market economies exposed to currency mismatches, are all risks that warrant close monitoring. outlook for inflation and monetary policy so, how is the growth picture affecting the outlook for inflation? here we need to assess to what extent wage growth will be robust to slowing growth momentum, and to what extent wage increases will pass through to prices. the link between output growth and wage growth in the euro area has strengthened compared with recent years. as the domestic expansion continues, wage pressures have started to build and have surprised
|
on the upside this year. annual growth in compensation per employee reached 2. 3 % in the second quarter. this increase is broad - based and present across most sectors and euro area economies. two factors suggest wage growth should be resilient to a period of slower growth. 3 / 6 bis central bankers'speeches the first is that the labour market is already showing signs of tightness, and this should remain the case so long as growth continues at or above potential. labour shortages have become more prominent and widespread across the euro area. broader measures of slack β that include underemployed workers β have also fallen substantially, although there is still some heterogeneity across countries. the second factor is the changing composition of wage growth. the initial pick - up in wages from the trough in 2016 was driven by wage drift, which includes components such as bonuses and overtime and tends to react more quickly to the cycle. but more recently negotiated wages have strengthened, rising from the trough of 1. 4 % in mid - 2016 to 2. 2 % in the second quarter of 2018. negotiated wage agreements frequently last two or three years, suggesting that higher rates of wage growth are likely to persist. however, the next leg of the inflation process β the pass - through of wage growth to prices β remains relatively muted. measures of underlying inflation, such as core inflation, continue to hover around 1 % and have yet to show a convincing upward trend. to some extent, this lagged response is in line with the standard pattern of demand - driven expansions in the euro area. 4 as demand picks up, employment initially reacts slowly, which boosts overall productivity and lifts margins. firms therefore have little need to increase prices. but as the expansion matures, businesses increase wages more strongly to attract labour, and unit labour costs rise, squeezing margins and putting upward pressure on prices. this pattern has been visible in the euro area since the start of 2017. unit labour cost growth fell initially last year, but rose measurably this year to reach 1. 6 % in the second quarter, its strongest rate since the start of 2013. there is evidence that margins are now being squeezed, with unit profit growth decreasing substantially from 2. 7 % in the third quarter of 2017 to 0. 7 % in the second quarter of 2018. we should therefore expect price pressures in the euro area to mount. however, the speed of this process is state - dependent. preliminary ecb research finds that
| 1 |
basel liquidity standards was met by the required banks, with nearly all others having met this regulation in advance. in addition, the levels of corporate and household indebtedness are moderate, and as a share of gdp well below the figures observed in other emes and in aes. 6 furthermore, risks from corporate foreign - currency liabilities are alleviated by long amortization periods, fixed interest rates, natural hedging and the prudent use of derivatives. it is also important to note that a comprehensive framework has been set in place for monitoring financial stability risks. on the other hand, risks must be carefully assessed, particularly in view of the difficult external environment. for these reasons, it will be essential to persevere in the strengthening of the macroeconomic framework and in the implementation of any regulatory measures required to cope with those risks. during the period 2010 β 2014, the corresponding figure was around 36 percent. with the increase in tax revenues, the drop in oil prices and the reduction in oil output, the share fell to 19. 3 percent in january β november 2015. see institute of international finance ( 2015 ) : emerging market debt monitor β update, december. bis central bankers β speeches fourth, a major effort of structural reform. the potential rate of gdp growth in mexico during the last decades has been insufficient to meet the population β s needs. the measures of structural reform adopted since late 2012, considered by the oecd as the most ambitious among the organisation β s membership, 7 have been focused on overcoming this problem, by increasing both private investment and productivity. it is worth to highlight the broad - ranging scope of such efforts, as they comprise not only several key sectors of the economy, but also measures aimed at improving the institutional framework. even though the full impact of these structural changes on potential gdp will take time to materialize, some effects are readily visible in a number of areas. these include, among others, a more flexible labor market ; increased competition in several sectors of the economy ; a fall in the prices of some widely used key inputs ; higher private investment in areas such as telecommunications, gas and electricity generation ; widespread participation of private firms in oil field auctions ; and a more important role of the financial system, through both private and public intermediaries, in supporting economic growth. two additional implications of the policies implemented are worth noting. according to the world bank, the business climate in mexico has improved significantly in recent years, to levels close to
|
taxes and expenditure cuts to confront the unsustainable path of projected public debt, and the implementation of new regulations to prevent financial crises. to some extent, this environment of uncertainty may have partly induced the recent reduction of producer and consumer confidence. additionally, the european monetary union ( emu ) is severely affected by the fiscal fragility of some of its member countries, which since the financial crisis have exhibited sharp rises in their public debt - to - gdp ratios, with projected paths that are judged to be unsustainable. some states have already received substantial financial support from the european community and the international monetary fund, and are implementing strict fiscal and structural adjustment programs. however, the perception of credit risk of the corresponding governments, as summarized in the spreads paid for credit default swaps, has continued to portray the deteriorating trend observed since 2010 and has reached worrisome levels. several concerns apparently lie behind market skepticism surrounding remedial actions in the emu. one is the difficulty of resolving the troubled governments β debt burden through austerity programs and ever - increasing support funds. another factor is the negative impact that the worsened public finances of any country can have on others within the union, given the fact that their financial systems are interlinked and their institutions, notably banks, are significant holders of government bonds. contagion fears have spread to other regions outside the emu, where financial intermediaries may also have substantial exposures to european sovereign bonds, either directly or indirectly. in the past weeks the urgency of finding a solution to these problems has become even clearer. uncertainty on future developments in the monetary union hinders growth prospects in this area and fuels sharp volatility and an investor rush to safety, factors that have recently deepened in international financial markets. policy challenges the existence of fundamental factors that, to a large extent, explain the meager growth of the world economy poses important challenges to policy makers. first, short - term economic policies are facing significant limits in advanced countries. the high and rising public - debt ratios in many economies call for substantial fiscal consolidation efforts in order to make public finances sustainable and, hence, supportive of financial stability and long - term growth. monetary policy is already extraordinarily accommodative, and authorities will need to continue monitor the anchoring of low inflation while at the same time remain ready to function as lenders of last resort to guarantee the integrity of their payment systems. as noted earlier, slow growth after the crisis seems
| 0.5 |
barry whiteside : bank south pacific group expansion in fiji opening address by mr barry whiteside, governor of the reserve bank of fiji, on the occasion of the rebranding of dominion house to bsp life centre, the opening of the bsp life β s customer service centre, and the opening of the bsp β s thomson street branch, suva, 4 october 2012. * * * his excellency, the president, rau epeli nailatikau the first lady, adi koila nailatikau mr kevin mccarthy, bsp fiji country manager mr malakai naiyaga, managing director, bsp life limited board members of bsp life limited and bank south pacific management and staff distinguished guests ladies and gentlemen introductory comments bula vinaka and a very good evening to you all. i wish to thank kevin and malakai for their kind invitation to yet another significant event in the relatively short history of bsp β s operations in fiji. it is indeed a privilege to be here to support your development initiatives and i welcome your ongoing rebranding & refurbishment programme in fiji. it definitely is another sign of the bsp group wishing to further stamp its mark as a major player in the market and is a real vote of confidence for fiji β s economy and our domestic financial system. the bsp fiji group we are actually here today to celebrate three different milestones : ( i ) the re - branding of this dominion house complex to bsp life centre ; ( ii ) the opening of bsp life β s customer service centre ; and ( iii ) the renaming of the refurbished bank operations to bsp thomson street branch. the bsp fiji arm of the group has an impressive pedigree. it is a union of two prominent fijian financial institutions, colonial fiji life limited and colonial national bank, which were acquired by bsp in december 2009. colonial fiji life limited, which used to be known as colonial mutual life assurance society ( or more simply as just cmla to us older folk ), was founded in melbourne in 1873, and almost simultaneously opened offices in several other centers in australia. a branch office was opened in fiji in 1876 and i understand that this was the first overseas branch of colonial mutual, before the company opened up in new zealand and south africa in 1883, and expanded into great britain and ireland in 1886. the company officially demutualised in 1996 after acquiring blue shield ( pacific ) limited in 1991. the colonial business was domesticated in
|
to gain an enhanced significance in this area β and i repeat it has every potential to do so β it will be largely at the cost of the ( us ) dollar. of course, the dollar will remain the most important international reserve currency for any foreseeable time. but the euro has the opportunity of winning a greater share in the reserve portfolios of central banks around the world. v. during the first half of 1999 the euro depreciated steadily against the dollar. the decline in the bilateral exchange rate accounted for about 10. 8 % between january and july 1999 ( based on monthly averages ). in the meantime the euro has, partly, recovered from these previous losses. the public debate about this depreciation, in my view, was sometimes ill - informed and mostly superficial. a central bank must primarily pursue internal price - stability. that doesn β t mean that it should be indifferent to large fluctuations in the external value of its currency. however, in the case of the euro it is essential to declare an unambiguous commitment to a strong currency policy, be it internally or externally. in this respect there was no lack of clarity on the part of the ecb. however, some european governments did, at least temporarily, create the impression that they had a preference for a low external value of the euro, believing this would stimulate economic activity at a moment when growth looked feeble and vulnerable with respect to the international financial crises around the end of last year. in the meantime, most european governments have become more sensitive in their public statements with respect to the external value of the euro. awareness has grown, as one finance minister recently put it, that β we are all sitting in one boat β. a lot has been said and written about the underlying factors that may have caused the euro β s initial depreciation, which should not be over - dramatised. often cited were the cyclical divergences between the european and the us economies, with a continuing boom over there and a temporary weakening of activity here. sometimes, part of the weakening of the euro was attributed to the crisis in kosovo. although cyclical and political factors are important, the external value of the euro should, in a long - term perspective, be viewed as a general judgement of the markets on the attractiveness of investment in the euro area. thus, markets assess very carefully, on a continuous basis, the internal economic and fiscal policies of the member countries of the euro, especially of the
| 0 |
to tell you that dnb has its own network for homosexual and lesbian employees and that, for the third time, dnb will participate with its own boat in the canal parade as part of the amsterdam gay pride celebration. the talent to the top charter let me tell you about an interesting dutch initiative, launched in 2007 by the government, corporate sector and women β s representatives : the talent to the top charter. the idea behind the charter is to bring more talented women to the top and help keep them there. the netherlands was lagging behind internationally in respect of the number of women in top bis central bankers β speeches management positions. in 2008, the signatories reported that the number of women in top functions at their organisations was 16. 7 %. their aim is to bring this figure up to 24. 6 %. the talent to the top charter has since been signed by almost 170 organisations, including dnb in 2008. commitment by dnb by signing the charter, we committed ourselves to realising and preserving a continuous smooth flow of women into top positions. here is an overview of the exact percentages at dnb over the past few years. a commission will monitor whether we actually honour our commitment as a signatory. starting from the year 2009, when women were underrepresented at 28 %, dnb has set itself a target that women will fill 32 % of its management positions in 2012. it β s important to note that at that moment β in 2009 β there were not many women whose potential talent had been recognised and who were being groomed for a managerial position. so what is dnb β s vision and policy to meet the challenge of increasing gender diversity. what measures have been taken to realise this vision? i β d like to share our experiences and the lessons we have learnt in the process. dnb β s vision and objectives in the context of our commitment to the talent to the top charter, we have set some target figures for 2012. these clear and measurable targets show where we are heading, but are not an end in themselves. the slide shows the situation in 2004, where we are now, and our target for 2012. the target for divisional directors is set at 25 %, for department heads at 30 % and for section heads at 40 %. dnb β s governing board has expressly committed itself to these targets and the supervisory board is given an annual update on progress towards them. dnb has translated this vision into several diversity targets. within d
|
policy implies that the ecb will maintain a large portfolio of assets on its balance sheet for a pronounced period of time. alongside low policy rates this will ensure that financial conditions will remain accommodative even when the net asset purchases have been reduced to zero. this way monetary policy will continue to support the economy and a gradual increase of inflation to levels consistent with our aim over the medium - term. second, some have looked at the recent appreciation of the exchange rate of the euro as a source of concern. and indeed, excessive exchange rate volatility and overshooting can be detrimental to economic growth and price stability. however, it is often overlooked that exchange rates move endogenously in response to changes in the economic outlook and market sentiment. for example, the recent appreciation of the euro area reflects to an important extent a more benign assessment of the economic outlook vis - a - vis the rest of the world. and safe - haven capital inflows have also increased in response to increased political uncertainty in other major economies. through this lens, the appreciation of the euro should be considered a reflection of the relative strength and stability of the euro area economy. a clear indicator of the factors that underlie the reduced necessity of continued asset purchases that i have outlined earlier. all supporting the call for a gradual but decisive rebalancing away from non - standard towards traditional instruments of monetary policy. tilting the broader policy mix thus, monetary policy has played and will continue to play its part in helping to keep the economy at solid footing. by itself, however, monetary policy is not enough to achieve and maintain sustainable economic growth. indeed, structural factors play a key role in the low prospects for growth. calling for yet another reorientation of macroeconomic policies. let me explain this in more detail in the remainder of this talk. many countries have failed to adapt to the changing environment in recent decades, most importantly in terms of technological progress and globalisation. in addition, the monetary union removed the exchange rate as an adjustment mechanism for member states. by 1999 it was clear that several member states needed structural reforms to strengthen alternative adjustment mechanisms, like wage and price flexibility. in practise, however, structural differences between emu countries have not lessened, unlike in the rest of the eu. the lack of structural convergence has had important real effects. since 1999, income differences between the initial emu member states have not been reduced. the structural nature of the disappointing growth in the emu calls
| 0.5 |
real gdp from its peak in 1989 to the trough in 1993 was over 12 %. the pre - crisis level of gdp was reached only in 1996. the unemployment rate peaked at close to 20 %. the crises was an amalgam of an overly leveraged banking sector, due to badly managed financial deregulation, and of overly loose and pro - cyclical fiscal and income policies. these domestic policy failures were amplified by the virtually overnight collapse of the finnish - soviet trade in 1991. 1 our lessons of the booming 1980s and busting early 1990s underline the capacity of a small open economy to adjust to both idiosyncratic and global shocks. they also underline the need for economic renewal. these years saw large swings on interest rates and the external value of the markka. in her search for monetary stability, finland joined the euro as of 1 january 1999, among the first 1 / 3 bis central bankers'speeches eleven countries. over the past two decades, the euro has brought us price stability and a stable currency. its public support is very high. as many as 80 % of the finns support emu and the euro. after joining emu, unfavourable demand and supply shocks have tested our ability to adjust, when the nominal exchange rate has no more been available to smooth out the ramifications to the real economy. as a case in point on how a small open economy can adjust in a monetary union, a social pact was agreed in 2016 to correct the serious loss of cost - competitiveness. after concluding that the rise of finland β s labour costs had outpaced that of her peers, an agreement was reached with the social partners to narrow the gap of cost competitiveness to our main competitors. mostly due to the competitiveness pact, relative unit labour costs were reduced by 6Β½ % in the period of 2014 β 17. supported by strong global demand and the ecb β s monetary stimulus, the pact was essential for finland β s rebound from zero growth to 2Β½ % growth in 2017 β 18. ladies and gentlemen, let me turn to the current and future challenges of monetary policy and the topics we will discuss in - depth today in our conference. slide 2. agenda of the bof 2019 monetary policy conference right now, central banks must pay attention on the short term due to the current headwinds. the governing council of the ecb recently responded to the prolonged uncertainty by amplifying the accommodative monetary policy stance.
|
based information about the economy, the bank of finland and the eurosystem in a comprehensible manner. i hope that during the breaks you can find time to explore our centre. its manager anu raijas is happy to tell you more about our activities and operations. dear friends, with these words, i thank you for your attention and wish you all a very good conference! 5 / 5 bis - central bankers'speeches
| 0.5 |
few years has been the flexibility exhibited by our market - driven economy and its ability to generate substantial increases in productivity. going forward, these same characteristics, in concert with sound economic policies, should help to foster a return to vigorous growth of the us economy to the benefit of all our citizens. in fact, we will need some further acceleration of productivity just to offset the inevitable decline in net labor force, and associated overall economic, growth as the baby boomers retire.
|
that captures all significant processing events over the entire lifecycle of trades, delivers operational reliability, and maximizes the efficiencies obtainable from automation and electronic processing platforms. in addition to supporting more robust exposure measurement and capture, these enhancements should strengthen participants'ability to manage counterparty risk through loss mitigation techniques such as the use of netting and collateral agreements. we are encouraged by recent industry efforts to address counterparty credit risk, such as plans to extend central counterparty clearinghouse services to credit derivatives and other initiatives. credit cards credit card charge - offs have continued to rise over the past several quarters, although charge - offs remain well below their early 2002 peak. not surprisingly, some banks report that delinquency rates for unsecured consumer debt are generally higher in areas that have experienced significant home price depreciation and increased unemployment. in response to these trends, many issuers are tightening credit standards and reducing exposures in these higher risk markets. rising delinquencies and increased card usage that has been reported in recent months are likely to push charge - off levels higher in future quarters. therefore, we will continue to monitor credit card markets and other consumer lending sectors for potential weaknesses. the federal reserve has also taken steps toward improving consumer protection for credit card users. our first step was the board's 2007 proposal to substantially revise and improve credit card disclosures under the truth in lending act. in preparing this proposal, we conducted extensive consumer testing to determine the type and format of information that consumers find most useful in shopping for and choosing a credit card. this extensive consumer testing β and the thousands of public comments on our proposal β suggested that disclosures may not provide sufficient consumer protection with regard to certain practices. therefore, we recently proposed rules under the federal trade commission act to protect consumers from financial harm caused by those practices. if implemented, the proposed rules would require financial institutions to make changes to their business models and to alter some practices. the federal reserve developed this proposal jointly with the office of thrift supervision and the national credit union administration. we are continuing to use consumer testing as we work toward issuing final rules for credit cards by year - end. commercial lending commercial lending activity, aside from a few sectors such as leveraged lending, has not been markedly affected by the recent volatility in the financial markets, but may encounter more difficulty should slow economic growth persist. lenders and investors are demanding stricter underwriting standards and higher returns for commercial loans.
| 0.5 |
has established a firm basis for implementing monetary policy and contributed towards price stability. the central bank has also announced its decision to reduce its policy rates by 0. 5 percentage points. this is a reflection of the bank's assessment that the economy will begin to cool this year and that the targets now set for inflation do not require interest rates to be as high as they have been recently. interest rates will nonetheless remain high and a tight monetary stance is still being maintained. all of these are decisions, which hopefully will consolidate the position of iceland's financial markets, will contribute towards price stability and bolster the foundations for improved living standards. i would like to end by thanking the government authorities and financial institutions for their pleasant cooperation.
|
of inflation for the income and financial position of businesses and households ; the repercussions are familiar enough. it is often said, even by supposedly responsible people, that the tools used by central banks all over the world to combat inflation will not work here in iceland, not least because of the way globalisation treats small currencies like the krona, and because of how many investors, through the shelter afforded by globalisation, have the means to avoid the central bank β s thumbscrews. the cannons on iceland β s coast guard cruisers were no weapons of mass destruction, and the difference in size between thor and aegir, on the one hand, and the british navy, on the other, was horrific, but we managed nonetheless. of course, a reference to the cod wars is merely a metaphorical one, and i use it more or less in jest, as it doesn β t fully apply to the current situation. but the comparison between the central bank of iceland β s tools and those of other central banks, which enjoy the relative security of a large currency, is worth examining. in the past few months, though, large currencies have not been protected from tremors, shocks, and even wide fluctuation. for example, the euro has appreciated by more than 70 % from its weakest point against the us dollar, an enormous change in a relatively short period of time. the icelandic krona has not been nearly so volatile despite all of the shocks it has had to tolerate. a volatile krona in a turbulent season tends to indicate that the krona is effective as a currency, and not the reverse. when interest rates and capital flow allow it, the krona appreciates, whether people like it or not. when there is a credibility loss in the market, either in iceland or abroad, the krona will depreciate suddenly and sharply, and when there are tremors and rumblings in the economy, domestic or foreign, the exchange rate tends to resemble a meteorological office seismograph. in short, the krona functions just like any other currency, and if it did not react in this way to these conditions, we should complain loudly indeed. globalisation has made a massive impact on all markets and all currencies, and there is little doubt that, until now, it has lightened the load borne by central banks and central bankers in the battle against inflation. this could well change in the future, so that
| 0.5 |
with other institutions from their network. as such, the single rule book runs counter to the idea of a level playing field and creates problematic incentives in terms of uniformity and size in the banking sector. regulation today already takes account of proportionality to a degree. tiered standards exist in areas such as reporting, where large institutions are required to meet more frequent and comprehensive reporting standards, and supervisors largely exercise proportionality when applying the minimum requirements for risk management. proportionality is also embedded, in principle, in the eba guidelines on the supervisory review and evaluation process. but in practice i repeatedly encounter situations where the existing gradations are inadequate in my eyes. the proportionality principle is nothing new, then, but it still has not been anchored deeply enough. 4. the road to greater proportionality : a chronology that β s why we took action and explored ways in which the principle of proportionality could be embedded more deeply within the regulatory and supervisory frameworks. let me start by running you briefly though the events of the past one - and - a - half years. 2 / 13 bis central bankers'speeches german finance minister wolfgang schauble and his then uk counterpart george osborne moved the ongoing debate forward substantially in april last year by noting, in a joint paper, the increasing complexity of banking regulation and pointing to the excessive burden on small institutions running straightforward business models. it is a topic we at the bundesbank also feel very strongly about. hence my decision to go public with the first set of specific proposals a little while later. that november then saw the european commission likewise table its proposals for strengthening proportionality as part of the general overhaul of eu banking regulation, which is still an ongoing process. these proposals would make major changes to the small print, and i am certain that we will be able to roll out a number of meaningful initial improvements. that said, the proposals don β t go far enough β which is why we thought ahead. the establishment of a german specialist working group was followed by the drafting of a bundesbank paper setting out concrete measures as well as several consultations with the german central associations. the outcome of this process is a german β non - paper β β that is, a discussion paper β which the federal ministry of finance put before the competent expert group of the european commission in june this year. 3 / 13 bis central bankers'speeches 5. which way? when working out this common german proposal, there were essentially two paths we could take to move
|
jean - claude trichet : two successes of the euro - the single monetary policy and european financial integration speech by mr jean - claude trichet, president of the european central bank, at the conference on experience with and preparations for the euro, organised by the austrian national bank ( oesterreichische nationalbank ) and the austrian federal economic chamber together with the austrian federal ministry of finance and the european commission, linz, 11 may 2006. * * * introduction ladies and gentlemen, i would like to start by thanking the oesterreichische nationalbank and its co - hosts for inviting me to speak today at your conference session entitled β experience with and preparations for the euro β. this year, the euro is in its eighth year, and serves as a single currency for more than 300 million citizens. i would like to address two successes of the euro which are particularly relevant to the ecb β s responsibilities : the single monetary policy and the progress in european financial integration, for which the euro has acted as a major catalyst. first, i will discuss some of the key successes achieved by the single monetary policy over the seven and a half years since the introduction of the euro in january 1999. above all, the single monetary policy has served to anchor longer - term inflation expectations securely at levels in line with our definition of price stability. this anchoring has facilitated the preservation of price stability, which is a prerequisite for sustainable economic growth and employment creation in the euro area. i would then like to share with you some thoughts regarding the progress in european financial integration that has been witnessed in particular since the introduction of the euro. my basic assessment is that the overall pace of integration has been impressive. and while the euro generally acted as a major catalyst for the integration of all the financial markets, integration is more advanced in those market segments that are closer to the single monetary policy β above all the money market. the single monetary policy the introduction of the euro on 1 january 1999 was an event of the greatest historical, institutional and economic significance. seven and a half years on, we can take stock of the considerable successes achieved by the euro, successes of which the european central bank ( ecb ) is justifiably proud. more importantly, when seeking to perpetuate these successes and, as the euro area enlarges, to extend them to others, we must identify the key principles on which the successes of the single monetary policy rely. to manage the new currency, the ecb
| 0 |
emmanuel tumusiime - mutebile : providing affordable banking services in uganda speech by mr emmanuel tumusiime - mutebile, governor of the bank of uganda, at the official opening of orient bank limited, acacia mall branch, kampala, 3 april 2014. * * * the shareholders of orient bank limited ; members of the board of directors ; senior management and staff ; invited guests in your respective capacities ; ladies and gentlemen. it is an honour and pleasure for me to join you today at the official opening of orient bank β s acacia mall branch. let me begin by congratulating the shareholders, directors and senior management of orient bank for the commendable job they have done in implementing their branch expansion programme, thereby bringing banking services nearer to the people. during the past twenty years of operation in uganda, orient bank has expanded its service delivery channels and outlets. the branch being opened today here at the acacia mall brings the total number to twenty. ladies and gentlemen, this occasion not only marks success for orient bank in increasing its presence in the banking industry, but also lends support to the bank of uganda β s financial inclusion agenda, which aims to extend access to affordable financial services more widely among the population. extending access to financial services will only be possible on a large scale if banks can overcome the cost barriers which are a major obstacle to the wider provision of financial services. therefore, i would like take this opportunity to reiterate my view that banks in uganda must prioritise improving efficiency. operating costs as a share of total assets are too high. it will only be possible to provide more affordable financial services to ugandans when operating costs are brought down. one of the ways in which costs can be lowered is through the introduction of new technologies for delivering financial services, such as information technology. orient bank has been at the forefront of introducing innovative technologies and products to the ugandan banking market. it was the pioneer of the point of sale technology in uganda with its benefits of promoting a cashless economy. in addition, the bank remains the sole issuer of american express cards in uganda. i also understand that the bank will soon launch the β chip and pin β visa cards, an innovation that will enhance the security features of the bank β s existing visa card product. it is however, important to note that increased innovation comes with increased risks. i therefore urge orient bank to design robust risk management processes and internal controls to mitigate the risks inherent in technological advancement. turning
|
such as treasury bills and bonds through regular auctions. issuing local currency instruments on the domestic market is the optimal vehicle for raising private sector finance for the budget. with such instruments auctioned in competitive market and actively traded in the secondary market, their pricing is relatively cheaper than other forms of debt such as commercial bank loans. the main investors in local currency denominated government bonds are pension funds, insurance companies, commercial banks and, to a lesser extent, offshore portfolio investors. all of these investors are acutely aware of the need to balance risk with competitive rates of return. the main risk facing investors in local currency bonds is that the government β s fiscal position becomes unsustainable, such that it either defaults on its debt or has to resort to inflationary finance to service its debt, which would then erode the real value of the debt. hence to mitigate these risks, government must be able to demonstrate, in a credible manner, that it will not allow its fiscal position to become unsustainable. to generate confidence in the sustainability of public finances, governments should formulate their budgets within a medium term fiscal framework which clearly shows the path of the fiscal deficit over at least the next five years and the associated path of public debt. a fiscal framework in which fiscal deficits are so large as to require continuously rising public debt to gdp ratios will be perceived as being unsustainable and is, therefore, not conducive bis central bankers β speeches to mobilising long term finance from the private sector except at very high interest rates. therefore, the prerequisite for mobilising long term finance for infrastructure projects is a prudent fiscal framework, in which the future path of public debt remains comfortably within sustainable levels. the most important message which i want you to take from my remarks this morning is that any consideration of mobilising finance for infrastructure by governments must take place within a framework of fiscal sustainability. the second category of infrastructure project is that of commercial projects. these are projects for which it is feasible, and usually optimal, to sell the services produced by the infrastructure directly to the users, with the tariffs charged covering the full cost of producing the service, including its debt servicing. they include electric power generation and port facilities. such projects are usually owned by separate legal entities from government ; e. g. limited liability corporations. increasingly in east africa, as elsewhere in the world, the corporations which own and manage these projects are owned by the private
| 0.5 |
key insights from our latest research and analysis of mortgage arrears and outlined our associated expectations of lenders in relation to addressing this distress. our analysis helps break down the problems into the actions that can be taken to address them ( rather than conflating them into an amorphous whole ) and suggests that more than half of those in long - term mortgage arrears can be solved through the actions i have outlined today β i. e. within the financial system. this will improve the situations of thousands of distressed borrowers as well as improving the functioning of the mortgage market for all. you can all expect that our supervisory efforts will intensively focus on you delivering in line with our expectations. importantly however, it is also clear that not all of the longer - term arrears can be resolved within the financial system, with lenders taking decisions on a commercial basis. in the absence of other interventions from outside the financial system, a significant number of engaged borrowers in the deepest levels of distress will, at best, remain in the highly stressful position of not being able to afford the home that they are living in with no solution in sight, and at worst at serious risk of losing their home. the central bank will continue to engage with all stakeholders to play its part in seeking solutions for all distressed borrowers. each of your institutions have a role to play too. thank you for your attention. https : / / www. centralbank. ie / news / article / speech - the - need - for - continued - focus - on - resolving - long - term - mortgage - arrears - ed - sibley - 13 - july - 2021 7 / 9 7 / 14 / 2021 a long shadow β the need for continued focus on resolving long term mortgage arrears - deputy governor ed sibley 1 with thanks to michael smyth, steven cull, aisling menton, sean fitzpatrick, tony cahalan, catharina lawless, triona forde, shane baker and ciaran meehan for their assistance in preparing these remarks. 2 for example, quarterly bulletin 2 2021 ( april 2021 ), central bank of ireland. 3 for example, macro - prudential policy, central bank of ireland. 4 for example, see letter to retail banks re expectations around change dear ceo letter - " consumer protection expectations in a changing retail banking landscape 2021 " ( june 2021 ), central bank of ireland. 5 the papers are : duignan and kearns (
|
and complex agenda which is being very actively pursued in many different international groupings, involving both the industrial and emerging countries, across a broad front. we are i believe steadily moving towards consensus or many of the issues and this is β leading the way towards sustainable economic growth β into the next millennium. in the meantime we are collectively having to manage the consequences of the recent global financial disturbances and their economic after - effects. happily we have recently been making progress on that too, particularly in many of the emerging countries here in asia.
| 0 |
closely monitor the external environment to capture these risks. it is also important to improve thailand β s capacity to cope with international capital flows by developing a systematic capital flows master plan, and promoting the use of financial hedging instruments and the foreign exchange risk management capability of the private sector. the bank of thailand also stands ready to implement emergency measures of varying degrees to deal with volatile capital movements as appropriate. in addition, to prevent these inflows from causing economic and financial instability, the bank of thailand has prepared a toolkit of macro prudential measures to ensure the soundness of the macro economy and the financial sector. measures to prevent overheating in particular segments of the property market are one example. ladies and gentlemen, it would be uncommon for a central banker not to mention inflation and monetary policy in any speech. i would therefore like to emphasize that the bank of thailand β s monetary policy aims to achieve domestic price stability and tighten to more normal levels consistent with thailand β s macroeconomic fundamentals. price stability helps foster a stable and predictable macroeconomic environment conducive to investment and growth. this is because it helps investors, businesses, and household to effectively make plans and manage their risks, as well as lower businesses β cost of funds. to end my remarks today, i would like to stress that while there remain risks and uncertainties surrounding the overall outlook for global growth, prospects for asia remain relatively bright. however, countries in asia, and thailand especially, need to put real efforts to foster capacity, innovation, and productivity. we must also prevent excessive risk taking and lax policy - making from becoming the norm. this requires preempting excessive risktaking and conducting policy with prudence. i can assure you that the bank of thailand is committed to ensuring a stable macroeconomic environment which would help investors, businesses, and households in planning their economic activities and to operate effectively. however, policies can mitigate only parts of the spectrum of risks. the business sector must also be mindful and well - prepared to deal with new risks and challenges, going forward. thank you. bis central bankers β speeches
|
the theoretical example you cite underlines the problem i just mentioned of the borderline between monetary and fiscal policy. we are already supporting investment in the euro area through our monetary policy. we have brought down the entire yield curve and we are buying securities of public entities such as the eib as part of our asset purchase programme. but it is absolutely not our role to decide which investment should go ahead, which bridge should be repaired or which school built, nor whether the investment should be private or public. ben bernanke, in his memoirs, suggests that if the united states and europe took different paths out of the crisis, that is partly because europe β s monetary policy in the first years was too tight, and its fiscal policy too strict at the wrong moment β¦ i β m not for rewriting history, but the ecb and governments reacted with the tools they had at the time. they went through three crises β the subprime crisis in 2007, the 2009 global economic slowdown and the euro crisis from 2010 on β without a common fiscal backstop ( that only came in 2010 with the european financial stability facility ) and without the foundations of a banking union. if we were to draw lessons from the experience, i would rather insist on the fact that the euro area was too late and too timid in cleaning up and shoring up its banking system, i. e. stress testing the banks, raising capital and shedding bad loans. that partly explains why our recovery is lagging behind that of the united states. in banking matters, forbearance doesn β t serve a purpose. you can β t buy time. we β re catching up now, but we still have some way to go, and the banking union isn β t complete. some countries, such as germany, insist that there should be a limit on euro area banks β sovereign exposure. do you agree? there are three dimensions in my view. there is the question of sovereign risk for banks. but we must also consider the consequences for government financing, and the functioning of financial markets, which need risk - free assets as liquidity instruments. if you focus on one aspect of the problem and ignore the others, you run the risk of shifting risk around instead of reducing it. the ecb β s policy is increasingly unpopular in germany. do you foresee a moment when it might become an obstacle to your own action? europe nowadays is a source of irritation for many. not only its monetary policy, and not
| 0 |
burkhard balz : bolstering confidence, high - quality financial development promoting a chinese path to modernization keynote speech by mr burkhard balz, member of the executive board of the deutsche bundesbank, at the tsinghua pbcsf global finance forum " bolstering confidence, high - quality financial development promoting a chinese path to modernization ", beijing, 20 may 2023. * * * 1 introduction ladies and gentlemen, i am delighted to be able to speak to you today here at the tsinghua pbcsf global finance forum in beijing. as a central banker, i can certainly relate to the conference title, " bolstering confidence ". you see, confidence is a central bank's most valuable asset when it comes to fulfilling its tasks to the best of its abilities. none more so than in times of turbulence, when trust and confidence provide an essential basis. and we are living through turbulent times, there is no doubt about that. rarely has the immediate future been as incalculable und unpredictable as it was over the past three years. following on from the coronavirus pandemic, russia's war of aggression against ukraine has sparked deep uncertainty and sent anxiety levels soaring around the globe. the war poses potentially a threat to the tried - and - tested system of international cooperation and is placing a strain on the global economy. but surely everyone must grasp that the major global challenges we face in our time β first and foremost, climate change β can only be overcome if we pull together. and there are other developments as well which are putting many countries to a stiff test β the digital transformation is just one topic i could mention here. but true to the upbeat conference title of bolstering confidence, let me begin with some comparatively cheery news from germany. 2 economic activity and inflation germany's economy has weathered the fallout from the pandemic and the war better than had been feared for a time. true, the braking effect of higher energy prices in particular made itself felt for a while, and german economic output contracted by 0. 5 % in the fourth quarter of last year. but the current quarter is now expected to see a moderate rise ; real gdp is likely to increase somewhat on average in 2023. the german economy has proven itself to be more resilient and more adaptable than it is often believed to be. but what's far too high right now is inflation. measured in terms of the hicp, consumer
|
ratio. throughout 2010 the proposed measures will be calibrated on the basis of an extensive quantitative impact study. the fully calibrated set of measures will then be issued by the end of 2010 and the new standards will be phased in by the end of 2012 provided that economic recovery is assured. the proposed measures will certainly help to reduce the likelihood of individual bank failures. however, even though such events have proven capable of destabilising the whole financial system, totally eliminating the risk of failure would be highly detrimental to growth and efficiency. regulation at the microprudential level therefore has to be supplemented by a macroprudential stance that takes into account the stability of the financial system as a whole, thus constituting a second line of defence against systemic crises. a major concern in that respect is the treatment of systemically important institutions, as their failure might lead to system - wide disruptions. when approached at a more detailed level, the concept of systemic relevance proves to be rather complex. contrary to common perception, systemic relevance is driven by more than the sheer size of an institution. factors such as interconnectedness, substitutability and the state of the markets also determine whether the failure of an individual institution will have a systemic impact β the banks that played a core role in the crisis were actually often not that large. consequently, we need to put some effort into finding a reliable way of identifying systemically important institutions, and we might also have to accept that systemic relevance is not a zero - one criterion. the difficulties do not stop there. once an institution is defined as systemically relevant, moral hazard problems might occur. as the institution in question would most likely be aware of the fact that it cannot be allowed to fail, it would have every incentive to engage in riskprone behaviour and gamble on being bailed out as soon as it gets into trouble. any measures aimed at systemically important institutions must therefore take into account the moral hazard dimension. the reform of the basel ii framework is certainly part of the solution to this problem, as it will help to improve the capacity of systemically important institutions to absorb losses without creating moral hazard. however, what is required is a more comprehensive approach which specifically ensures that accountability is brought back into the game. major proposals that go beyond the reformed capital and liquidity framework include capital surcharges for systemically important institutions, better resolution regimes and a strengthening of the financial infrastructure. commissioned by the g20, the fsb
| 0 |
operations only have a direct influence on current short - term interest rates. economic activity and thus future price developments are, however, determined primarily by the shape of the yield curve, i. e. by the expectation of future monetary actions. transparency about how we judge future inflationary pressures enables us to guide expectations about future short - term interest rates and thus also long - term interest rates. the second reason is that transparency reduces the inevitable uncertainties related to monetary policy implementation. if markets know how we judge future inflationary pressures and how we may react to these, they can better predict our future monetary policy. improved predictability of monetary policy leads to fewer painful surprises in the economy. moreover, less uncertainty about monetary policy reduces both risk premiums in financial markets, and financing costs. the third rationale for central bank transparency is public and political accountability. central banks are mandated to act in the interest of their country, usually by maintaining price stability. this can imply unpopular decisions, which is essentially the reason for central bank independence.. central banks should thus be free from public and political pressure. but it is obvious that some mechanism must be set in place to ensure accountability of independent central banks. transparency about monetary policy is essential to central bank ensure accountability. however, transparency in itself is not enough. the statements made by central bankers must be accessible to the public and must be subject to scrutiny. here, a critical press has a very important role to play. 2. communication of monetary policy by the swiss national bank in order to improve monetary policy effectiveness and enable public accountability the swiss national bank started to regularly explain its monetary policy decisions to the public already in the 1970's. our first press conference was conducted in november 1974, shortly after the collapse of the brettonwoods fixed exchange rate regime. moreover, from 1975 onwards we published yearly goals for the growth of monetary aggregates in order to guide market expectations of interest rates and inflation. with the introduction of our new monetary policy concept six years ago, we took three specific measures in order to further enhance our transparency : β’ first, we have defined consumer price inflation of less than 2 % as our quantitative goal for price stability. this step has enhanced the predictability of our monetary policy because market participants know exactly what we want to achieve. they can expect monetary policy to be tightened if we believe that inflation could exceed 2 %. β’ as a second step, we now regularly publish a medium - term inflation forecast. this forecast helps market participants to predict future
|
monetary policy because they not only know our goal for inflation, but also how we judge future inflationary pressures. β’ our third step towards more transparency has been to explicitly communicate our operational target. we announce our target as a 1 % band on short - term interest rates, that is, on the three - month libor. we thus regularly offer market participants a quantitative indicator of changes in our monetary policy stance. our experience with the systematic communication of our monetary policy during the past six years has been very positive. market predictions of monetary policy measures have been accurate, leading to lower volatility in financial markets and improving the effectiveness of our policy measures a prime example of this is the most recent increase in our operational target in march 2006. an analysis of interest rate movements shows that the increase of our operational target by 25 basis points was almost fully anticipated by financial markets prior to the announcement. contrary to what many believe, a central bank does not lose any prestige in seeing its policy correctly anticipated by the markets. it is just proof of a well - understood monetary strategy. 3. credibility - words are not enough in switzerland, the systematic communication of monetary policy has had the desired effect of getting market participants to adapt their expectations well before actual policy interventions are made. does this mean that the swiss national bank now only has to indicate its intentions in order to influence interest rates? or as some academics and practitioners have posed the question : can central bankers now replace open market operations with " open mouth " interventions? considering the recent tightening of monetary policy in switzerland, one might be tempted to agree that open mouth operations are sufficient to move interest rates. after all, short - term interest rates rose long before an increase in the operational target was announced or before we raised the actual interest rates on repo transactions. however, this interpretation of the data ignores one crucial issue. interest rates moved upwards before the swiss national bank adapted its operational target or its repo rate because financial markets trusted that we would increase interest rates. given our objectives and our previous track record, it was credible that we would hike interest rates in the given economic environment. central bank transparency can only improve monetary policy effectiveness if it increases the predictability of future monetary measures. i would like to emphasise that predictability relies not just on information and the communication of intentions, but also on whether the public trusts a central bank to realise these intentions. central bankers can thus only benefit from transparency if their statements about future monetary policy are credible. ultimately, we know
| 1 |
, or if you expect the jump in infection rates to persist for an extremely long time, there will in theory be more limited effects on aggregate spending and a greater degree of switching across categories2. employing the economists β jargon, substitution from the risky activities will be more β intra - temporal β than β inter - temporal β. if, on the other hand, people expect the rise in infection rates ( and the associated restrictions ) to subside relatively quickly β and if there are also no close substitutes for the sorts of spending that expose people to infection risk β one would expect a more marked effect on aggregate consumption, and less expenditure switching. charts 5 ( a ) - ( c ) depict some simulations to get these points across. the model they β re based on is extremely simple and stylised. in particular, it assumes that incomes, current and expected, are held fixed, and that there β s no change in the degree of uncertainty about the economic outlook. the only thing that changes is the path, actual and expected, of the pandemic. this is very obviously unrealistic. household incomes have clearly been affected by the crisis. and we know from long experience that when uncertainty about people β s future incomes goes up, saving rates tend to rise as well. but as we saw earlier, from chart 4, household incomes have been significantly protected by the furlough schemes, at least as compared with the huge dip in national income. ( while this isn β t a free lunch β higher government debt has to be paid for eventually β it does spread out the cost of that dip. ) so the assumption 2 in a more general model than the one used here krueger et al ( 2020 ) also point out that the impact of the pandemic on aggregate spending is lower the closer the degree of substitutability between risky and non - risky consumption. charalampidis and guillochon ( 2020 ) and guerrieri et al ( 2020 ) also consider covid in multi - sector models. see cantore et al ( 2020 ) for a brief introduction to the epimacro literature. all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice that incomes have been relatively stable may not be as unrealistic as it might have been. it β s in any case useful, i think, to try to separate the direct effects of the pande
|
a spelman college undergraduate, to hear some details about the lobbying for full employment and other economic policy objectives by one of the leaders of that movement. it is generally agreed that the legal roots of the fed β s employment mandate are in the employment act of 1946, itself inspired by a 1944 speech by president franklin roosevelt. 3 the law required all of the federal government to β promote maximum employment, production, and purchasing power. β 4 alongside the preservation of β purchasing power, β even then, the employment goal was linked to inflation. federal reserve chairs cited the employment act as applying to monetary policy. 5 but it was rare for the federal reserve to refer to this statutory mandate when explaining monetary policy decisions. for example, the federal reserve board β s annual report for 1975 noted that in public statements on monetary policy given during the year by the federal reserve chair, he had pointed to the β the very high rates of unemployment and of idle industrial capacity then prevailing β as a factor bearing on the federal open market committee β s the act, which congress passed in 1945, was inspired by franklin roosevelt β s 1944 state of the union message, which proposed a β second bill of rights β or β economic bill of rights. β fdr said, β we have come to a clear realization of the fact that true individual freedom cannot exist without economic security and independence. β his list of rights included β the right to a useful and remunerative job, β echoed by the employment act β s recognition of β the right to a useful and remunerative job in the industries or shops or farms or mines of the nation. β the full 1944 state of the union message is available on the franklin d. roosevelt presidential library and museum β s website at https : / / www. fdrlibrary. org / address - text. see the declaration of policy on page 1 of the employment act of 1946, available at https : / / fraser. stlouisfed. org / files / docs / historical / congressional / employment - act - 1946. pdf. see, for example, william mcchesney martin β s august 13, 1957, statement before the committee on finance, u. s. senate, which is available at https : / / fraser. stlouisfed. org / files / docs / historical / martin / martin57 _ 0813. pdf? utm _ source = direct _ download. in 1971, a federal reserve board lawyer, howard hackley, wrote
| 0 |
. the weak labour market is expected to hold back wage increases in the central wage bargaining rounds during 2010, which should contribute to lower cost and inflationary pressures. and even if economic prospects look better than we anticipated in our earlier forecast in september, we will have more spare capacity than normal in the swedish economy throughout the forecast period. repo rate low until autumn 2010 the riksbank has cut the repo rate very substantially over a fairly short period of time, from 4. 75 per cent last autumn down to 0. 25 per cent in july this year. the largest cuts were made mainly during last autumn and winter. since february the repo rate has been lower than ever before during the period we have conducted inflation targeting ( figure 3 ). figure 3. repo rate forecasts, per cent, quarterly averages 90 % 75 % 50 % outcome forecast greater effects of support measures confidence strengthened more quickly - 1 - 1 phasing out of support measures higher productivity - 2 - 2 source : the riksbank we are currently expecting to hold the repo rate unchanged at a low level for a further period to come, until autumn 2010. this is necessary to contribute to a stable recovery and to attain the inflation target of 2 per cent. moreover, we executive board members decided at the most recent monetary policy meeting that further measures were necessary to contribute to interest rates on loans to companies and households remaining low. we therefore decided to offer the banks the opportunity to borrow from the riksbank at a fixed interest rate and a maturity of around 11 months. the loan auction was held on monday this week and the final amount lent was sek 95. 3 billion. we expect the loans to the banks to complement the repo rate tool in a way that enables monetary policy to have the desired effect. once economic activity has recovered, we are intending to raise the repo rate to more normal levels. this is necessary to ensure a balanced economic development and an inflation rate in line with our target. our repo rate forecast is exactly that β a forecast, not a promise. but it is nevertheless important that anyone borrowing money to buy a home or for other reasons should include a sufficient margin, taking into account that today's low interest rates will not last for ever. let me linger a bit with the housing market and interest rates as these subjects have much discussed recently. monetary policy and house prices one issue that has been taken up, not least in the media, is that the policy we are
|
now conducting could possibly contribute to a further rise in house prices, despite the weak economic activity. this could in turn increase the risk of imbalances arising in the housing market. it is true that the riksbank β s policy, by affecting interest expenditure, has significance for the way housing prices develop, although many other factors are also important. but the policy we are currently conducting is what we consider to be necessary to attain the inflation target and to provide sufficient support for the recovery in the swedish economy. we cannot adapt monetary policy on the basis of individual markets as long as we do not regard this as something that affects our ability to meet the inflation target and to safeguard financial stability. but this does not mean that we do not care about house price movements. on the contrary, we closely follow developments in the housing market. figure 4. house prices and lending to households, annual percentage change - 4 - 4 - 8 - 8 house prices - 12 - 12 household lending - 16 - 16 source : statistics sweden in the long term it is hardly sustainable that house prices should continue to rise as quickly as they have done since the mid - 1990s ( figure 4 ). since 1996 house prices have increased by around 8 per cent a year. but in the shorter term, our assessment is that there is no reason for the riksbank to give greater consideration to house prices than we already do in our forecasts for the economy. let me just add something that may not arise very often in the general debate on these issues. although interest expenditure is one of the factors that has significance for the way house prices develop, the responsibility for sustainable growth with regard to lending and house prices is largely beyond the riksbank β s control. monetary policy can probably only function as a complement to effective regulation and supervision. and there are many factors that are important in ensuring a balanced development in the housing market. one fundamental factor is that households endeavour to make realistic calculations of how much interest expenditure and amortisation they can manage in the long run, not only when interest rates are as low as they are now. something that can be said to be the flip side of the same coin is that the banks make responsible credit assessments when lending money. if these two basic components are in place, there is a good chance of avoiding an out - ofcontrol situation further ahead, although as i said before there are many other factors that may be important. finansinspektionen ( the swedish financial supervisory
| 1 |
benjamin e diokno : fostering cybersecurity for bangko sentral ng pilipinas ( bsp ) supervised financial institutions speech by mr benjamin e diokno, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), no occasion, manila, 15 february 2022. * * * to the officers and representatives from the israel embassy in manila β s foreign trade administration, members from the bankers association of the philippines, cybersecurity experts, ladies and gentlemen, good day. let me start by thanking the israel β s foreign trade administration for organizing this event and gathering experts from the israeli government and private sector to share best cyber - resilience practices and solutions. we hope to engage in conversation on how israel β s cybersecurity model and best practices can be adopted here in the philippines and how all of us can work together in combatting rapidly evolving cyberthreats. with the growing popularity of digital channels especially during the pandemic, cyber - attackers and scammers are increasingly targeting financial consumers to defraud them of their hardearned money. we, at the bsp, consider cybersecurity as one of our strategic priorities. this is in line with our mandate of ensuring stability, safety, and efficiency of the financial system. in fostering cybersecurity, the bsp adopts comprehensive, agile, risk - based, and engaging approach which we term as care to stay ahead of our common cyber enemies. this approach cuts across three key areas : first our regulatory policy framework ; second proactive monitoring through our surveillance capabilities and lastly, promoting resilience through supervisory and oversight activities. the bsp is adopting policies and regulations to guide banks and other supervised institutions to take on a risk - based approach to cybersecurity management. since 2013, the bsp has issued several regulations aimed at mitigating the effects of technology and cyber - related risks in bsp supervised financial institutions ( bsfis ). these regulations address various facets of technology, such as social media risk management, business continuity management and multi - factor authentication. recent issuances also include specific guidance on managing data breaches and sms - based attacks as well as combatting ransomware. allow me to share with you some major industrywide initiatives to strengthen the industry β s cyber defenses and overall resilience. first, in order to operationalize the bsp β s role as the
|
lead in the banking sector computer emergency response team ( cert ) under the department of information communications technology ( dict ), the bsp is developing the financial services cyber resilience plan that will serve as the primary framework covering strategies and plans to strengthen cyber resilience in the financial services industry. second, we are also in the development stage of implementing the advanced suptech engine for risk - based compliance, or what we call asterisc *. 1 / 2 bis central bankers'speeches this is unified regtech and suptech solution that will streamline and automate regulatory supervision, reporting and compliance assessment of bsfis β cybersecurity risk management. third, the bsp continuously engages with the bsfis through the bankers association of the philippines cyber incident database or bapcid. bapcid is currently provided by cyberint, which is a cybersecurity service provider based in israel. it is a web - based portal and an industry cyber threat and best practices sharing platform where participants can report incidents and threats anonymously, receive threat intelligence feeds and threat advisories from the bsp. lastly, the bsp is currently coordinating with relevant government agencies and industry associations for a joint consumer protection campaign and message amplification to raise overall cyber awareness in the country. given the supervisory expectations and industry - wide cybersecurity initiatives, there are several ways israel companies can help bsfis in increasing their cybersecurity capabilities and maturity and the financial sector in general. considering the sophistication and maturity of israel in terms of cybersecurity controls and management, the bsp and the bsfis would greatly appreciate hearing israel β s expertise, knowledge and technology in the following areas : cybersecurity trainings, education, and capacity build - up ; security operations center ( soc ) ; incident response and forensic investigation ; information sharing and threat - intelligence platform ; and set - up and establishment of israel β s financial sector and national certs. in closing, i hope that this session will strengthen ties and cooperation between the philippines and israel so that our respective financial services sectors remain safe, innovative, and resilient in the digital economy. thank you for your attention. 2 / 2 bis central bankers'speeches
| 1 |
established institutions. advances in data science allow analyses of extensive publicly available climate data sets. there is a lot of information from news agencies and public bodies, weather reports, geo data etc. big data analytics helps to evaluate and condense such data sets into so - called β heat maps β. they allow gauging the overall economic impact of climate - related risk on a local basis. they help, for example, to visualize and quantify the physical risk of climate change, which is typically driven by 1 / 2 bis central bankers'speeches extreme weather events such as typhoons. heat maps can be a useful instrument for investors and lenders to identify climatic high - risk areas before making decisions on the capital allocation. 2. 3 β¦ by pushing green financial products using digital technology thirdly, the application of digital technology is not limited to analysis. it can also help to further develop and push green financial products themselves. issuing green bonds is a vivid example. the eu green bond standard is still in the making, but it shows how green bonds come β compared to conventional bonds β with higher requirements : quite a few boxes are to be ticked before a bond may carry the green label. i see two immediate benefits of using digital technology here : more efficiency and more credibility β and these relate to both the issuance as well as the verification process of green bonds. with regard to efficiency, using β blockchain - based smart contracts β could smooth the complex issuance process of green bonds, saving costs and time for issuers. this could open up the green bond market to a wider investor base, including retail investors. a study1 shows that using blockchain can greatly reduce the typical denomination of green bonds. in terms of costs, there would be no difference between a usd 10 and a usd 10 million green bond on the blockchain. in turn, this would also make the issuance of green bonds a viable option for a new and much broader range of companies and project developers and could give a much - needed boost to the supply side. besides, the built - in features of blockchain technology ensure that the transfer of value is tamper - proof and secure, thus ensuring credibility. furthermore, by leveraging blockchain, internet of things ( iot ) and ai, readings from sensors in solar panels, for example, could be uploaded directly to the distributed ledger. this allows investors to monitor the environmental impact of their investment in real time. in a nutshell, green
|
globally systemically important financial sector. we are, so - to - say, a β coalition of the willing β. central banks always play a key role in the financial system, and this is also the case for green finance. in many ways, the market for green assets can be compared to the early stages of other relatively new market segments. for market dynamics to fully unfold, investors need a stable investment framework, including reliable market standards, market indices and transparency. and central banks are trusted parties. given our advisory role in politics and our perceived role as anchor investors, we can serve as catalysts for further market growth. but given our enormous market power and our independence, we have to act responsibly and be accountable. to address central banks β crucial role, the ngfs sees itself as a platform for best practices and for the exchange of views and experience between central bankers and supervisors. in our first comprehensive report, published in mid - april, we put forward six practical recommendations. 1 / 4 bis central bankers'speeches the four recommendations addressed to central banks and supervisors are : 1. integrating climate - related risks into financial stability monitoring and micro - supervision. this includes assessing climate - related risks in the financial system and integrating them into prudential supervision. 2. integrating sustainability factors into own portfolio management. the ngfs encourages central banks to lead by example in their own operations. 3. bridging data gaps. public authorities are asked to share data relevant to climate risk assessment and make these data publicly available. 4. building awareness and intellectual capacity and encouraging technical assistance and knowledge - sharing. the ngfs encourages all financial institutions to build in - house capacity and to collaborate to improve their understanding of how climate - related factors translate into financial risks and opportunities. two ngfs recommendations are addressed to policymakers : achieving robust and internationally consistent climate and environment - related disclosure. investors need to know about the climate risks in their investments. and supporting the development of a taxonomy of economic activities. a taxonomy makes investing green easier and prevents β green washing β. it creates more market transparency on which activities are really green and which are not. the ngfs is tackling these challenges in three workstreams : on banking supervision, on macrofinancial supervision and on scaling up green finance. i am a member of the ngfs steering committee and, as of april, i have also taken over the chair of workstream 3. tomorrow, workstream 3, hosted by the bundes
| 0.5 |
synergies to upscale pilot projects and good practices to reach more regions, especially remote areas and multi - stakeholder approach where governments, private sector and civil society need to jointly engage, scale up and harmonized efforts to enable all least developed regions to achieve their mdgs. lastly she believes that climate change mitigation and adaptation are far more than technology and infrastructure. it is about people β s resilience and building partnerships for everybody β s informed participation in climate change mitigation and adaptation together with efforts to achieve other mdgs. ladies and gentlemen, we have taken another step forward in shaping a common position for mitigating the global climate change impact toward a better life of human beings. following the bali roadmap on december 2007, and again through this seminar, the issues concerning the action of adaptation and mitigation of climate change will be discussed more comprehensively in searching for an effective and efficient global resolution. having done all these and more, i do believe that we have not only completed some part of our preparations for the world actions in mitigating negative global climate change impact, but also advanced our broad inspirations for the building of macroeconomic and financial stability, for the long lasting prosperity of human being. considering the multitude of points of view and the speakers and participants arguments, some of them conflicting with each other, on the various global climate changes impact that we have addressed, it is remarkable that we have accomplished as much as we discussed. i can only attribute this productiveness to your diligence and dedication and, above all, your will to accommodate and compromise in order to arrive at a common ground. for we all know that the stakes are exceedingly high, that the quality of life of future generations depends on the efficacy of our present efforts. we know that human welfare is indivisible and that has given us a strong sense of common purpose which is the unmistakable evidence that in all of us the spirit of bali is vibrantly alive. indeed, we have not merely paid lip service to history. through our exertions during yesterday, through what we have accomplished in this seminar, we have endeavored to pay proper homage to the first generation of world leaders who met in this island last year. my dear colleagues, distinguished participants, in this meeting you have all generously contributed your valuable thoughts and your power of articulation you have also given much of yourselves, many of you working until the small hours of the morning in order to fulfill this
|
to say that none of them yet seems to provide a completely convincing explanation. and although different mpc members place different weights on the possible explanations, we all agree that there is considerable uncertainty as to how productivity will evolve as the recovery proceeds. unemployment is certainly not a perfect guide to slack in the labour market. for instance, the recent increase in the number of workers wanting to work more hours suggests it understates the absolute level of slack1. but it is not unreasonable to expect this margin of β potential hours worked β to move in line with unemployment. and, unlike in the 1980s, we have not seen a substantial movement in the labour force participation rate, which suggests that the number of discouraged workers has not risen markedly. so overall, changes in the unemployment rate are, we think, likely to provide a reasonable guide to the evolution of labour market slack. now consider what will happen if the weak productivity performance of recent years is simply a consequence of the weak state of demand and so reverses as the recovery proceeds. in that case, businesses will be able to supply the extra demand without greatly expanding their workforces and unemployment will be slow to fall. in these circumstances, it is indeed appropriate to keep monetary policy loose as potential output is well above actual output. conversely, suppose that the financial crisis and subsequent recession has wrought lasting damage to productivity. in that case, unemployment is likely to fall faster as demand grows, meaning that unemployment will reach the 7 % threshold sooner. then it will be appropriate to tighten policy sooner in this case, as potential output will be lower. the only case where the linkage of policy to unemployment is potentially problematic is where there is scope for productivity to increase as demand recovers, but for some reason firms take on extra labour before the increase in productivity takes place. but this seems rather unlikely to me. in any case, it is important to realise that the 7 % threshold does not constitute a trigger for the mpc to raise bank rate. rather it represents a prompt for the committee to undertake a see bell, d n f and blanchflower, d g ( 2013 ) β underemployment in the uk revisited β, national institute economic review, no. 224. bis central bankers β speeches broad assessment of the prospects for demand, supply and inflation. if it appears that there is still a substantial degree of slack in the economy which can be absorbed without threatening the achievement of the 2 % inflation target in the medium term, then there will be
| 0 |
##pated shocks as is feasible to achieve. policymakers need to be able to rely more on the markets'self - adjusting process and less on officials'uncertain forecasting capabilities. the u. s. economy's response to the terrorist attacks of september 11, 2001, is a case in point. that shock was absorbed by a recently enhanced, highly flexible set of institutions and markets without significantly disabling our economy overall. but that flexibility should not be taken for granted, and every effort should be made to preserve and extend it. in this regard, the recent emergence of protectionism and the continued structural rigidities in many parts of the world are truly worrisome. in the end, i trust that we will all recognize our common interest in fostering global and domestic arrangements that promote the prosperity of our citizens.
|
schools excited about the subject of economics. eighty three schools from across the province were chosen to participate in the inaugural challenge. the initial selection of schools was done having reviewed all gauteng schools β 2011 matric economics results. only schools that received at least a 90 % pass rate were invited into the inaugural challenge and invited schools represented all income quintiles and districts. the 56 schools that finally entered needed to select a team of between four and five matric economics learners. these teams were given data from the bank β s research department to interrogate over the course of a few weeks in may and june. at the conclusion of the analysis period, each team then submitted a 1000 word essay to the bank. team essays followed the same format as the bank β s monetary policy statement, i. e. analysed local and global conditions and concluded with a decision as to what the country β s repo rate should be. reserve bank economists went through the initial essays and choose 5 finalist teams, who were then invited back to present to members of the bank β s monetary policy committee ( mpc ). the months of hard work by both bank staff and learners and schools culminated on the 7th of august at a function at the bank where krugersdorp high school β s team were announced as the winners of the inaugural challenge. both the team and the schools received cash prizes, the winning teacher a laptop and the team also became eligible for reserve bank bursaries. if you don β t remember the 7th of august, let me jog your memory by saying that it was the day that it snowed in gauteng. members of the bank β s mpc challenge team are still convinced that this is less to do with meteorological conditions and more to do with the fact that the walls of the bank β s conference centre auditorium were resounding to the sound of the black - eyed peas β β i gotta feeling β as part of the winners announcement and celebrations. for those of you who know central banks, this is about as common as snow on the highveld. the team β s final prize was to come to the bank on the 20th of september with their teacher and school principal, as my guests, to be present at the live mpc decision announcement to the media. they then joined members of the mpc at a small function hosted in their honour afterwards. the challenge really offered a wonderful opportunity to matric economics learners and their teachers to make a very abstract subject come
| 0 |
support ease of doing business and help improve the country β s investment climate. the banking sector was fully liberalized earlier in 2014 to allow entry of foreign banks under republic act no. 10641. since the law β s enactment, the bsp has already approved the entry of 11 new foreign banks. 3 / 4 bis central bankers'speeches fifth : the agricultural sector today β s fifth panel discussion will revolve around the agriculture sector. and this sector is indeed an important driver and draw for increased investments. recently, the bsp issued guidelines on agricultural value chain financing ( vcf ) to facilitate credit to the agriculture sector. this opens up credit provision to all the players in an organized value chain and promotes vcf as an effective, organized means of channeling funds to the agrifisheries sector, promoting their financial inclusion. by encouraging linkages among various players in an agri - value chain, the credit risk of participating smallholder farmers and fisher - folk can be reduced and facilitate their access to more credit. but beyond this sector are other unserved, underserved and untapped markets. to promote msme access to finance, the bsp has issued comprehensive credit risk management ( crm ) guidelines so that banks can be more flexible, extend more credit, and implement innovative credit products and lending programs. also, a wide range of microfinance services of banks now cover nearly 1. 7 million microentrepreneurs with an outstanding portfolio of p13 billion. empowering these sectors are not just opportunities to exercise social responsibility, but their inclusion creates viable business propositions. to sum up,... why the philippines? first, the philippines is among the fastest growing and most resilient economies in the region. second, coordinated efforts towards structural reforms and public sector investments in infrastructure and human capital development will make the business climate even more competitive. and third, you can rely on the bsp β s staunch commitment and effectiveness in delivering on its core mandates of price and financial stability conducive to economic growth. we are deeply committed to implementing ambitious financial sector reforms. let me end on this note. i wish you a very productive investment forum ahead! thank you! 4 / 4 bis central bankers'speeches
|
would like to talk about is quite different from the risks i've discussed so far. the end of libor is not a risk. it's a certainty that the finance industry needs to be ready for. it has now been just over two years since andrew bailey announced that the fca ( the financial conduct authority ) would no longer use its powers to sustain libor beyond 2021. financial regulators around the world expect institutions using libor to be ready to transition to more robust benchmarks. with strong support from the rba and apra, asic recently wrote to the ceos of major australian financial institutions to seek assurance that they are taking appropriate action. the transition from libor to alternative risk - free rates ( rfrs ) is accelerating internationally. usage of rfrs in derivatives markets is increasing, and they are being adopted in some cash products. there has also been good progress on developing more robust fall - back provisions in contracts referencing libor. isda has completed consultations on the fall - back methodology for almost all of the libor currencies ( and some other ibors including bbsw ). [ 7 ] isda found strong support for using as the fall - back : the compounded rfr with an adjustment for the historical spread between the rfr and libor. once isda has finalised the fall - back provisions, regulators expect users of benchmarks to adopt them. in australia, we have taken a different path. the credit - based benchmark bbsw ( the bank bill swap rate ) has been strengthened and coexists alongside the cash rate, which is the risk - free rate for the australian dollar. this has been possible since both bbsw and the cash rate are supported by underlying markets with enough transactions to calculate robust benchmarks. we have been encouraging users of australian dollar benchmarks to be choosing the benchmark that is most appropriate for their circumstances. sometimes it makes sense to use a credit - based benchmark, such as bbsw, particularly when banks are issuing funding instruments. however, it often makes more sense to use a risk - free benchmark, such as when governments raise funding. there has been progress on this in recent months, with the south australian government financing authority issuing the first frn referencing the cash rate. nevertheless, the lesson from libor is that no benchmarks should be taken for granted. so while bbsw remains robust, it is prudent to have robust fallbacks in your contracts in case it were
| 0 |
transactions executed through atms went up to 1, 335. 5 million in 2013 from 412. 1 million in 2004. during the same period, the total number of transactions carried out through pos terminals increased to 294. 1 million with a total value of sar 144. 3 billion from 52. 1 million with a total value of sar 23. 9 billion. the number of bills paid through sadad system increased to 160. 8 million with a value of sar 176. 6 billion in 2013 from 43. 5 million with a value of sar 22. 0 billion in 2007. within the framework of its supervisory and oversight functions over the insurance sector, sama considered many files of insurance companies. by the end of 2013, sama licensed 35 insurance and reinsurance companies. besides, sama approved 194 offices to provide insurance related services. sama issued a number of regulations and rules to regulate the activities of the financing sector in the kingdom, improve its services, promote governance and transparency, protect the rights of its beneficiaries and create a competitive environment to contribute to provision of better financing services to meet the needs of the market and beneficiaries at competitive prices. up to the end of july 2014, sama licensed 12 banks and 4 companies to conduct the activity of real estate finance and financial leasing, and 4 companies to carry out other bis central bankers β speeches financing activities. sama also granted initial approvals on 11 applications for licensing pending the completion of the legal requirements of the ministry of commerce and industry. at the international level, the kingdom holds a prominent position. it is an active member of the g20 since its establishment and of several international financial organizations. sama represents the kingdom in a number of international forums and institutions, such as the bank for international settlements, the financial stability board, basel committee, the international association of insurance supervisors, the islamic financial services board and the gulf monetary council. currently, sama is participating in more than 25 committees, working groups and sub - committees in international commissions and organizations. sama effectively contributes to the efforts exerted in international regulatory reforms, enabling sama to cope with the latest developments and international standards in supervision and control. on this occasion, i pray to almighty allah to preserve the security and stability of our country and may the kingdom β s continue its development march under the wise leadership of the custodian of the two holy mosques, crown prince and deputy crown prince. bis central bankers β speeches
|
fahad almubarak : top achievements of the monetary sector during the past decade speech by h e dr fahad almubarak, governor of the saudi arabian monetary agency, at the national day, riyadh, 25 september 2014. * * * our beloved country is celebrating its 84th national day, which is very dear occasion to all of us. the march of welfare and building continues under the prudent leadership of the kingdom. sama β s employees are overwhelmed with happiness on this occasion in light of the achievements of the monetary policy by focusing on the interests of the country and citizens. sama β s balanced monetary policy has contributed to strengthening the stability of the national economy during stages of global stress and turbulence. as a result, the credit rating of the kingdom of saudi arabia has been upgraded. fitch upgraded the kingdom β s sovereign credit rating to aa from aa - with a stable outlook. over the past ten years, the banking sector witnessed a great development quantitatively and qualitatively. m3 rose by 270 percent to sar 1, 669. 3 billion at the end of july 2014 against an increase of sar 451. 3 billion at the end of july 2004. total bank deposits also went up by 284. 5 percent to sar 1, 520. 6 billion in the same period. total commercial banks β claims on the private and public sectors grew by 193. 3 percent to sar 1, 314. 4 billion at the end of july 2014 compared to sar 447. 8 billion at the end of july 2004. all these developments contributed to the growth of the kingdom β s economy and enhanced the stability of its financial sector. domestic banks β capital adequacy ratio ( basel standard ) stood at 17. 8 percent at the end of the second quarter of 2014, exceeding the prescribed rate of 8 percent. in addition, stress tests conducted periodically by sama on commercial banks showed good results. banking services witnessed further expansion throughout the kingdom. commercial banks β branches increased by 53. 8 percent to 1, 862 at the end of july 2014, compared to 1, 211 at the end of july 2004. in recognition of the importance of using latest technological developments in the banking field, sama worked with domestic banks on the introduction of the latest secure banking technology. in this regard, the value of transactions carried out through sarie system picked up to sar 54. 6 trillion in 2013 from sar 8. 1 trillion in 2004. moreover, the total number of
| 1 |
, i β m watching, listening, and prepared to adjust my views depending on the data. 1 for more information on how the fomc specifies its goals, see statement on longer - run goals and monetary policy strategy, board of governors of the federal reserve system, amended january 30, 2018. 2 this question on whether jobs are β hard to get β is part of the survey conducted by nielsen for the conference board that is used to calculate the conference board β s consumer confidence index. information about the survey, including the latest press release of the index, is available at www. conferenceboard. org / data / consumerconfidence. cfm. 3 for example, the minutes of the december fomc meeting stated that β participants also reported hearing more frequent concerns about the global economic outlook from business contacts β ( page 8 ). later on the same page, the minutes said β however, contacts in a number of districts appeared less upbeat than at the time of the november meeting, as concerns about a variety of factors β including trade policy, waning fiscal stimulus, slowing global economic growth, or financial market volatility β were reportedly beginning to weigh on business sentiment. β see minutes of the federal open market committee : december 18 β 19, 2018, board of governors of the federal reserve system, january 9, 2019. 4 see fomc issues addendum to the policy normalization principles and plans, board of governors of the federal reserve system, june 14, 2017. 5 see john c. williams,'normal β monetary policy in words and deeds, september 28, 2018. 6 see fomc communications related to policy normalization, board of governors of the federal reserve system, updated june 13, 2018. 4 / 4 bis central bankers'speeches
|
the behavior of forward interest rates in financial markets, and, second, the pattern of external imbalances. these features are interesting, in part, because they seem somewhat anomalous, or inconsistent with what the past has led us to expect. they seem likely to be related to each other and both are a feature of the changes underway in global financial integration. understanding the forces behind these phenomena or anomalies is important to thinking through what they mean for policy. when alan greenspan first used the term β conundrum β to describe the surprising behavior of forward interest rates, he was reacting to the decline in forward nominal rates over a period in which the federal open market committee was raising its federal funds target rate. this behavior of forward rates, the counterpart of which is the behavior of the bond yield curve, looked anomalous both in comparison to observations from past tightening cycles and with what seemed to be strong evidence about the fundamental soundness of the outlook for the real economy. the source of the relatively low level of nominal rates is still a matter of considerable debate. part of the explanation lies in the decline in expectations of future inflation and uncertainty about future inflation. part of the explanation may also lie in greater confidence that the secular decline in the variability of economic growth observed over the past two decades in the united states is likely to continue. however, even with the information provided by the development of the market for inflationindexed government securities, we have less ability than we would like to draw conclusions about what any nominal forward rate means for expectations about the level of future real rates, uncertainty about future real rates, and what those might imply about expectations about future economic activity. this uncertainty makes it harder to assess the appropriate path of monetary policy. the other surprising feature of the current economic environment is the pattern of global imbalances, and the size and persistence of the u. s. current account deficit. as alan greenspan has explained, the greater dispersion in external imbalances can be seen as the inevitable result of fundamentally healthy changes in the world economy. as the world progresses toward increasingly integrated financial and goods markets, other things being equal, one might expect to see an increase in the number of countries with surpluses or deficits, and potentially larger surpluses and deficits, as flows of both financial assets and goods work to equalize desired saving and investment around the world. if one were confident that observed imbalances simply reflected a more efficient allocation of the world
| 0.5 |
. rather than delivering on its vast promise, digitalisation could instead become a polarising and divisive instrument. take the provision of online credit, for example, the use of algorithm - based online credit scoring tools have led in some cases to assessments that are gender - biased, with female candidates consistently assigned lower credit scores compared to male counterparts of equal financial standing. behaviourally, there is in fact evidence in malaysia and likely elsewhere, to suggest that the opposite is true. we can and must do better. proportionate laws and regulations must be in place to hold financial service providers accountable for establishing effective safeguards against the theft or abuse of personal data, and discrimination or unfair practices. the focus on consumer protection needs to shift from just addressing customer touchpoints, to the consideration of consumer needs much earlier in the product design process, in the formulation of distribution strategies or in the setting of risk limits. predictive models used for decision - making must be subject to regular reviews against consumer outcomes and redress channels need to be aligned with the digital experience. indeed, we should be concerned that while the delivery of financial products and services is taking on increasingly digital dimensions, when something goes wrong, processes for consumers to seek redress are still heavily manual in nature. as for financial education, i am reminded of the old adage by sir francis bacon : β reading maketh a full man, conference a ready man, writing an exact man β. today β s digital consumer β at least many of them β has neither the patience nor time to read, confer or write. in fact, this is almost the entire premise of digital financial solutions β brevity, speed and convenience. the short attention spans of financial consumers are further constrained by an overload of information and misinformation. digital solutions that can efficiently deliver financial education to masses of people, while simultaneously providing capabilities to tailor knowledge and information to one β s personal circumstances ( such as through loan affordability calculators ), have gained increasing traction. however, the fact that digital interventions are more cost - efficient, accessible and scalable, do not automatically make them any more effective than more traditional interventions in the past that have failed to achieve a consistent and lasting impact in changing behaviour. we need to develop reliable insights into behavioural influences that may help or prevent consumers from making good financial decisions. this sounds simple in theory, but is as complex as an understanding of human psychology itself. as our understanding evolves, the solutions that work
|
jessica chew cheng lian : empowering financial consumers in the digital age welcoming remarks by jessica chew cheng lian, deputy governor of the central bank of malaysia ( bank negara malaysia ), at the bnm - oecd conference on β financial education and financial consumer protection in asia - pacific β, kuala lumpur, 11 december 2019. * * * as i made my way in to work this morning, i glanced through my smartphone to check on my monthly bills, how much pocket money my sons had spent over the week and on what. i also browsed for money changers offering the best exchange rates for my next trip. having all this information available to me literally at my fingertips would have been unthinkable years ago. today, i can organise my financial matters quickly and conveniently over a 20 - minute car ride to work! it is my great pleasure to extend a warm welcome to all delegates to kuala lumpur and to the conference on financial education and financial consumer protection in asia - pacific. we are delighted to co - host this event in collaboration with the oecd. at risk of repeating what many others have already acknowledged, let me say at the outset that financial education and financial consumer protection have never been more important, or more confounding, than in the digital age that is upon us. at stake is our ability to preserve public confidence in the financial system, and seize an unprecedented opportunity to come within striking distance of at least six of the sustainable development goals : no poverty, zero hunger, good health and well - being, quality education, gender equality and reducing inequality. this conference, themed β empowering financial consumers in the digital age β, aims to help us untangle and develop sensible responses to the myriad of issues associated with the rapid digitalisation of financial services. digital financial services adoption in asia - pacific the financial services industry has long been at the forefront of the digital revolution, benefitting from efficiency gains, cost savings and wider outreach. for traditional financial institutions, it has also been a matter of survival against an onslaught of highly innovative and nimbler competitors. in recent years, industry players β both traditional and non - traditional β have rapidly scaled up their use of technology to create better customer experiences by making financial products and services more accessible, flexible and competitive. as adoption rates rise, online banking, e - insurance and e - payments are quickly approaching a tipping point at which they will eclipse physical branches, atms and cash as conduits for
| 1 |
elizabeth a duke : addressing long - term vacant properties to support neighborhood stabilization speech by ms elizabeth a duke, member of the board of governors of the federal reserve system, at the federal reserve bank of new york, new york, 5 october 2012. * * * good afternoon. i want to thank the federal reserve bank of new york and the rockefeller institute for inviting me to participate in this important discussion of distressed residential real estate. the boom and bust in housing that is a hallmark of the recent economic cycle has resulted in an unprecedented volume of foreclosures that has, in turn, left us with an extraordinary level of vacant and distressed properties. even after the official end of the recession, home sales and house prices continued to decline for several years, and residential investment languished. 1 all of this has resulted in a slow recovery in housing, which is one of the primary reasons why our overall economic recovery has been so sluggish. in order to see the robust economic recovery we all want, we need to deal effectively with the large volume of vacant and distressed properties throughout the country. our housing crisis has many dimensions and will require a full spectrum of policy actions to restore health to the housing market, our economy, and most importantly, to neighborhoods and communities across the country. the federal reserve system has been active in studying various aspects of the crisis, bringing together community leaders and market participants to share experiences in forums such as this, and using data to identify areas of particular need. i have spoken in the past about credit availability, preventing foreclosures, converting foreclosed properties to rental properties, and strategies for neighborhood stabilization. today, i would like to focus on the problems posed by an elevated level of vacant properties. i plan to draw on research conducted by federal reserve board staff and would especially like to thank raven molloy, an economist in our macroeconomic analysis group, for her work in this area. as i will discuss later in my remarks, the effective use of data is a common theme among success stories in neighborhood stabilization. in the hope that the census tract data referenced in this speech might be helpful to others working to address vacancy problems, i plan to post our data on the federal reserve website along with this speech. 2 level and distribution of vacant housing since the beginning of this year, there have been signs of improvement in aggregate housing market conditions nationally. sales of new and existing homes have risen and home prices have turned upward. so far this year, house prices
|
capital is to be used from 2020 or 2025. one drawback of some of these funds β structures, such as the french fund, is that they are not financed through increased government saving, but in reality by borrowing. fund - based pensions the norwegian national insurance scheme is a pay - as - you - go system, where annual payments are financed by current tax revenues. the pension scheme for public employees is not fund - based either. an international comparison shows that pension obligations in norway are fund - based to a very limited extent. some other countries base their pension obligations on funds to a far greater extent. this applies for example to canada, the netherlands, the uk and the us. in these countries, fund - based occupational pension schemes account for a large portion of the pension system, in the public as well as the private sector. if we include the petroleum fund and the national insurance fund at current market values, the picture changes, and funds in norway are then higher than the oecd average. but even today, the level in norway is below that of the netherlands in 2003. long - term investment strategy the petroleum fund employs a very careful investment strategy, with broad diversification. large pension funds in other countries employ the same kind of strategy. like the petroleum fund, these funds are intended to secure future payment flows. the consequences of large losses over time would be severe. for pure pension funds, this would mean they would not be able to honour their obligations to their members. for the petroleum fund, it would mean that the state would have to find other ways to finance the costs of the age wave that we know is approaching. because of the prudence requirement, return requirements cannot be the same as for many private investors. it is important to remember that for every successful investor that achieves high returns, there are many other investors that have the same level of ambition and risk willingness, but a far 6 / 8 poorer track record and a history of insolvencies. the petroleum fund cannot run the risk of joining the worst group. some large institutional investors have tried to copy successful private investors. one example is kuwait, which for a period chose large strategic investments instead of diversifying more evenly. to our knowledge, the results were not positive. another example is the oil fund in the canadian state of alberta, where investments up to the end of the 1990s were partly influenced by political considerations and a large share of the capital was invested in local businesses. this resulted in far lower
| 0 |
to move to more innovative sectors. successful examples of such measures have been introduced in spain, ireland and other reforming countries. the process of private sector debt workout is also advancing. the ecb β s comprehensive assessment has accelerated the crucial step of acknowledging and provisioning for npls. what is now key is that, where necessary, those npls are further restructured through more efficient insolvency proceedings or removed from banks β balance sheets altogether. several countries have taken national initiatives to improve in - and out - of - court restructuring frameworks and establish asset management companies for npls. this could be supported at the european level by progressing with capital markets union, which should induce greater legal convergence and deepen markets for distressed debt. supporting the deleveraging process in these ways β by raising real growth and working out private debt β would provide further momentum to the recovery, while raising confidence in long - term growth prospects. but importantly, balance sheet repair also creates the preconditions to address definitively one of the euro area β s key institutional weaknesses : the incomplete banking union. a great deal of progress has been made in this area in recent years. with the single supervisory mechanism we now have a system of supervision that is less liable to capture or forbearance. the bank recovery and resolution directive provides a harmonised and predictable framework for private sector risk - sharing across the union. and governments are on the way to establishing a european public backstop for the single resolution mechanism. but if we are to complete banking union β notably in terms the backstop to the srm and establishing a common deposit guarantee scheme β legacy assets need first to be fully addressed. that is why balance sheet repair is pivotal. completing banking union also requires removing any remnants of the regulatory framework that implicitly support home bias. for example, how much national discretion is allowed in implementing rules ; how fungible are liquidity and capital across borders ; how regulations, such as those on loss - absorbing capital, affect the choice of subsidiaries versus branches β all these decisions will crucially shape the microeconomic incentives of banks to become european. and the macroeconomic consequences for the union are significant. conclusion to conclude, working through the aftermath of a financial cycle requires a comprehensive response. monetary policy will play its part for as long as needed, which means the full implementation of the asset purchase programme and, if necessary, adjustments to its size, composition and duration. and by meeting our objective, we support growth and inflation,
|
yves mersch : means of payments and smes β where are we heading? speech by mr yves mersch, member of the executive board of the european central bank, at the dinner debate, organised by the think tank etienne marcel, paris, 29 september 2015. * 1. * * introduction mr cohen - hadad, ( mr president ) ladies and gentlemen, no economy can prosper without healthy, competitive and flourishing small and mediumsized enterprises ( smes ). they are the foundation on which the european economy is built and constitute more than 99 % of all firms in the euro area. they employ more than two - thirds of the workforce and generate around 60 % of value added. according to recent research, smes accounted for around 85 % of total employment growth between 2002 and 2010 and have much higher employment growth rates than large enterprises. the financial crisis hit the financing of smes particularly hard. this explains why, in recent years, the ecb and the european commission have strongly emphasised measures that support both bank and non - bank financing of the european sme sector. these measures and policy initiatives include strengthening bank financing by facilitating longer - term financing and promoting healthier balance sheets. they also aim to diversify into non - bank financing via more efficient securitisation, better transparency and more efficient wholesale infrastructure. 1 this is why the ecb strongly supports the european commission β s initiative to establish a european capital markets union, which will allow businesses to enjoy a greater range of funding choices and help reduce the link between a firm β s location and its funding costs. however, there are other policies that have received less public attention in relation to the competitiveness of the european sme sector, one of the most important being integration and innovation in the retail payments market, particularly for payments in euro. this is what i will focus on tonight. 2. past achievements over the past years the public and private sectors have worked together to create the single euro payments area ( sepa ). regulatory measures and market developments have combined to remove the distinction between domestic and cross - border payments in euro. retail payments have become much faster, cheaper and more secure. instead of taking three to five days, euro credit transfers and direct debits are now executed within one business day, not only at the domestic level but also across borders. fees for cross - border euro transactions decreased to the same level as those for domestic transactions. last, but certainly not least, payments in general have become more
| 0.5 |
analysis can provide an important contribution to this work. although we now have better information about household debt, important pieces of the puzzle are still missing. the riksbank β s data collection was a first measure and there is no older, historical information on debts at the household level. and, as many others have said before me, we do not have any information on household wealth either. today, i intend to speak above all about the new results from the analysis of the riksbank β s data on the debts of individual β s and households and explain how these relate to other studies of household indebtedness. i also want to explain why the results should be viewed in the light of the vulnerabilities in the swedish financial system. let me begin, however, by saying a few words about why household debt is a cause of concern to the riksbank at all. international stakeholders, for example the imf, the oecd and the eu, have also been concerned. the risks associated with high household indebtedness have also been discussed at other central banks. the riksbank warned about these risks already prior to the financial crisis ( see, for example the speech made by stefan ingves on 4 october 2013 ). bis central bankers β speeches household debt can threaten sustainable growth the riksbank has long pointed out the risks associated with the development of household debt. when household debt is analysed, the debts are usually placed in relation to something else. as most households pay their borrowing costs using their current incomes rather than their assets, the debt ratio, that is debts in relation to disposable incomes, is often used as an illustrative measure of risk. 2 since 1995, the aggregate household debt ratio, that is total household debt as a percentage of disposable income, has increased from 90 to 174 per cent, and it is expected to continue to increase in the years immediately ahead. although the aggregate debt ratio has grown somewhat more slowly in recent years, it is still very high in an historical perspective ( see chart 1 ). chart 1. aggregate debt ratio per cent sources : statistics sweden and the riksbank this has led to the households becoming increasingly sensitive to shocks such as a loss of income, falling asset prices or rising interest rates. our primary concern is not that the households will cause the banks any major loan losses. as we have pointed out for some time, our assessment is that this risk is limited. however,
|
journal of central banking, 9 ( 1 ), pp. 3 - 39 and an isin - by - isin regression framework akin to d β amico, s. and king, t. b. ( 2013 ), β flow and stock effects of large - scale treasury purchases : evidence on the importance of local supply β, journal of financial economics, 108 ( 2 ), pp. 425 β 448. 8 to this end, for instance, an estimated term structure model is used following li, c. and wei, m. ( 2013 ), β term structure modeling with supply factors and the federal reserve β s large - scale asset purchase programs β, international journal of central banking, 9 ( 1 ), pp. 3 - 39. in this framework, yields are driven by three factors : the level and slope of the yield curve ( β yield factors β ) as well as a factor related to the central bank β s bond holdings ( β quantity factor β ). in quantifying the impact on bond yields, the model thus takes into account the effect of the central bank β s current and future expected bond holdings, including the impact of reinvestment. 9 euro area yields are proxied by the gdp - weighted long - term yield of the four largest euro area jurisdictions. the 10 - year yield impacts are obtained from a version of the li - wei ( 2013 ) model used at the federal reserve to 21 / 22 bis central bankers'speeches convert the soma portfolio of securities into yield impacts. impacts are shown for different app reinvestment scenarios, defined by the horizon indicated in the legend. the marginal impact of each additional year of reinvestment is given by the distance between the scenario curves. latest observation : february 2018. 10 praet, p. ( 2017 ), β maintaining price stability with unconventional monetary policy measures β, speech at the mmf monetary and financial policy conference, london, 2 october. 11 see the euro area bank lending survey, october 2017. 12 this chart shows the risk - neutral probability distribution function implied by two - year zero - coupon inflation options. these risk - neutral probabilities may differ significantly from physical, or true, probabilities. they are estimated on the basis of call ( β caplets β ) and put ( β floorlets β ) options with different strike rates on the ( threemonth lagged ) euro area hicp index excluding energy, food and tobacco, assuming black - scholes option
| 0 |
and how potentially difficult cross - border crisis management and bank resolution would turn out to be in the european context. but there were also very important elements missing from my list β elements that have turned out to be of major importance for the unfolding of the crisis and the reform agenda. key among them are the interaction between sovereign debt and banking fragility and the problem of big banks in small countries β of which my country, iceland, was a prime example and cyprus is the latest. i will expand on this shortly. the financial crisis and the policy responses to it, especially some of the drastic decisions taken in the heat of intense crisis management, have changed the structure of the financial sector and will do so more profoundly going forward. there are several reasons for this, such as the plain collapse and disappearance of financial institutions, the non - viability of certain business models and practices in the new environment, the need for the financial sector to shrink and deleverage after the real risks in this world had been revealed, the intended and unintended consequences of new prudential regulation, the coming effects of structural regulations that at least partly ring - fence insured deposits and payment systems from the β casino β. then there is the shrinking of cross - border banking through the retreat of banks see http : / / www. bis. org / speeches / sp081119. htm bis central bankers β speeches behind their national borders and the weakening and, in some cases, collapse of international financial centres in smaller countries. we can see where this is heading : towards a financial sector that is smaller, less leveraged, less complex, more fragmented, more regulated, and more national. some of that is inevitable, and some retrenching from the excess levels of finance in relation to the real economy is probably beneficial at this stage, both at the national and the global level. the risk, however, is that the process could go too far. yes, there are risks to financial globalisation, but there are also benefits. in order to reap those benefits, we need a safer framework for cross - border banking at the regional and global level and some ground rules for capital flows and capital controls. let me briefly turn my own country, iceland, into a case study of some of the issues involved. during the financial crisis, three small european countries that had relatively big banking systems but no apparent fiscal problems prior to the crisis have suffered very serious financial and economic crises. these are iceland
|
13 april 2023 monetary and fiscal dimensions of responding to multiple global shocks presentation at the 15th annual meeting of the oecd working party of parliamentary budget officials and independent fiscal institutions by rannveig sigurΓ°ardottir, deputy governor for monetary policy, central bank of iceland it is a pleasure to join you here to discuss the role and interaction of monetary and fiscal policy - a topic that deserves our full attention today in times of high inflation. the global economy had barely recovered from the financial crisis when it was hit again by two subsequent shocks that have had enormous impact on both monetary and fiscal conditions around the globe. i want to give you a snapshot of how the icelandic economy has weathered these shocks relative to other oecd economies, firstly, during the covid - 19 pandemic and subsequent supply - chain disruptions, and then, following russia β s invasion of ukraine, the ensuing energy and food crises. finally, i will discuss the role played by monetary and fiscal policies in response to these shocks. iceland was among the countries most severely hit by the global financial crisis ( gfc ). prior to the crisis, the country was uniquely vulnerable due to macroeconomic imbalances, including a large current account deficit, unfavourable net international investment position, highly indebted households and business sector, inflated asset prices, and an oversized and undercapitalized banking sector. iceland β s strength, on the other hand, was the relatively strong position of its public finances. this set iceland apart from several other countries that also suffered badly from the gfc, mainly because of vulnerability of public finances. in the aftermath of the crisis, the economy was rebalanced ; the current account transformed from a deficit to a surplus ; the international investment position changed from large net debt to significant net assets ; a major share of private debt was wiped out ; the banking system recapitalized ; and asset prices deflated. the economic consequence of the pandemic as a result of the rebalancing of the economy following the financial crisis, iceland β s economy was in a position of relative strength when the pandemic struck. the macroeconomy remained broadly balanced, despite a negative shock to exports in 2019. unemployment was low, private sector indebtedness relatively benign, inflation moderate and public finances had recovered significantly from the turmoil following the gfc. the human suffering from the pandemic was also less pronounced than in many advanced economies. iceland β s
| 0.5 |
of our 6 september interest rate announcement, the risks around the basecase projection are judged to be a little greater than at the time of the july update. the main upside risk relates to the momentum in household spending and housing prices, while the main downside risk is that the u. s. economy could slow more sharply than expected, leading to lower canadian exports. the bank judges that the risks to its inflation projection are roughly balanced. on 17 october, we left our key policy rate unchanged at 4. 25 per cent. the current level is judged, at this time, to be consistent with achieving the inflation target over the medium term. we at the bank will continue to pay close attention to the evolution of risks, as well as to economic and financial developments in the canadian and global economies.
|
david dodge : summary of the latest monetary policy report opening statement by mr david dodge, governor of the bank of canada, to the house of commons standing committee on finance, ottawa, 19 october 2006. * * * good afternoon, mr. chairman and members of the committee. we appreciate the opportunity to meet with this committee, usually twice a year following the release of our monetary policy reports. we were not able to meet last spring, so it has been a year since paul and i were last before this committee. we believe that these meetings help us keep members of parliament and, through you, all canadians, informed about the bank's views on the economy and about the objective of monetary policy and the actions we take to achieve it. when paul and i appeared before the finance committee last october, we noted at that time, that the global and canadian economies were continuing to grow at a solid pace and that our economy appeared to be operating at full production capacity. in our latest monetary policy report, which we released this morning, we judge that the canadian economy is currently operating just above capacity. while global economic growth is expected to be a little higher than previously anticipated, a weaker near - term outlook for the u. s. economy has curbed the near - term prospects for canadian exports and growth. the bank's outlook for growth in the canadian economy has been revised down slightly from that outlined in july's monetary policy report update. the bank's base - case projection now calls for average annual gdp growth of 2. 8 per cent in 2006, 2. 5 per cent in 2007, and a return to 2. 8 per cent in 2008. weakness in labour productivity growth has led the bank to lower its assumption for potential growth to 2. 8 per cent for the 2006 - 08 period. together, these factors imply that the small amount of excess demand now in the economy will be eliminated by mid - 2007. core inflation is expected to move a bit above 2 per cent in the coming months but return to the 2 per cent target by the middle of 2007 and remain there through to the end of 2008. lower energy prices have led to a downward revision of the near - term projection for total cpi inflation. total inflation ( which includes the temporary impact of the gst reduction ) will likely average about 1 1 / 2 per cent through the second quarter of 2007, before returning to the 2 per cent target and remaining there through to the end of 2008. as we noted at the time
| 1 |
especially for the euro area ( figure 12 ). figure 12 : nominal wage growth figure 12a : euro area figure 12b : ireland source : ecb and central bank of ireland. cpe is growth in compensation per employee ( cso ) ; negotiated wages is from the ecb - sdw ; ehecs wage growth is from the cso ; and iwgt refers to the β indeed wage growth tracker β ( see adrjan & lydon, 2022 ). these wage growth forecasts underpin the underlying ( core ) inflation projections, for both ireland and the euro area. if wage growth turns out to be weaker, then we may see a faster decline in core inflation than currently envisaged. if it turns out to be stronger, then the core inflation will prove stickier. how is it that core inflation is projected to decline, even in the face of historically high wage growth? the answer is that other factors are expected to exert downward pressure on core inflation over the projection horizon, falling input costs from non - labour factors as supply chains normalise, lower profit margins and rising labour productivity. to conclude, i want to outline what i see as the key risk factors around these wage projections. on the upside, i see two potential upside risks. one is a more resilient labour demand. and to monitor this i will be closely following both employment growth and job vacancy statistics. the second is inflation expectations β not something i have paid attention to in my speech today, but nonetheless important. the experience of the 1970s taught us the importance of inflation expectations for wage and price dynamics. in the euro area, expectations increased with the recent surge in inflation, although recent data points to a gradual return to our 2 per cent target for short - term consumer inflation expectations, and medium - term expectations remaining anchored around our 2 per cent target. the anchoring of medium - term expectations plays an important role in our projected disinflation path. on the downside risks to wage growth, i primarily see one : downside risks to economic growth itself. as we saw in the historical analysis of vacancy - unemployment dynamics, a longer and deeper slowdown could lead to a bigger increase in the unemployment rate, which will put downward pressure on wages. to monitor this, i will be paying close attention to monthly unemployment dynamics, softer indicators such as pmi employment expectations, and wage trackers, such as that developed at the central bank of ireland in collaboration with indeed
|
sharon donnery : the debt dangers remarks by ms sharon donnery, deputy governor of the central bank of ireland, at les rencontres economiques d β aix - en - provence, virtual, 2 july 2021. * * * the covid - 19 pandemic is a public health emergency that requires substantial state intervention to save lives. 1 there is broad agreement that the resulting increase in government debt to support public health, the economy and households was warranted. however, as we emerge from the worst of the crisis, the global debate on the appropriateness of elevated public debt levels has reignited. while i will briefly discuss the pandemic - related increase in government debt, my contribution will largely focus on public debt levels in the post - pandemic environment and over the longer term. let me begin by outlining the traditional criteria to evaluate the trade - offs of additional debt. these are important, as they will frame the debate. i will then turn to the irish experience and conclude with some views on the debate around assessing appropriate levels of public debt. in aggregate, increasing government debt is considered worthwhile if the rate of return on its use is greater than its cost of servicing. classic examples include government investment in infrastructure and education that boost economic growth potential. other public policy goals may justify an increase in government debt. these include the use of automatic stabilisers and / or discretionary fiscal measures to stabilise macroeconomic fluctuations. in addition, smoothing the impact of targeted changes in policy to ensure structural vulnerabilities, such as economic inequality, are addressed without the need for large and / or immediate adjustments to taxation and expenditure. higher debt, however, can limit room for manoeuvre in future downturns. when government budgets come under pressure, public investment often experiences the largest cuts. elevated debt increases sovereigns β exposure to fluctuations in financial market sentiment, especially those with shorter maturity structures. depending on its composition and how it is financed, large public expenditure programmes also have the potential to crowd out private investment. 2 the unprecedented scale of the pandemic - induced shock provides little room for doubt that the significant increase in government debt was justifiable, on economic grounds alone. accommodative monetary and fiscal policy, including in the euro area, has enabled the use of all available resources to minimise the economic damage and support those most in need. sectors with lower - income workers, for example, were disproport
| 0.5 |
inflation occurred first in germany but in the course of this year also in other member countries. the governing council of the ecb keeps a close watch on the development of perceived inflation not only because this is crucial to acceptance of the new currency but also because it may additionally have macroeconomic implications, such as matching rising wage demands. all in all, the euro cash changeover is an outstanding example of the eurosystem β s ability to cope with major challenges. iv at its last meeting, the ecb governing council discussed in depth the arguments for and against a cut in key interest rates. the rates were left unchanged, but we indicated that we would closely monitor the downside risks to economic growth in the euro area. after a rather mild recession in 2001, economic growth picked up remarkably only in the us. in all other major economies, slight growth was mainly driven by external factors. capacity adjustments - in particular in hi - tech businesses in major industrialised countries - are still taking place. therefore, investment prospects look clouded. the ongoing deflation in japan is due to persistent structural problems in the banking sector. recent announcements to reform the banking system have shed some light on possible solutions. as usual, however, it is harder to implement reforms than announce them. japan, however, is benefiting a little from fairly strong growth in east asian countries. recent data may point at least to an end of recession during the ongoing fiscal year. among the emerging markets, east asia and eastern europe have performed better than again - crisisridden latin america. the crises in argentina and subsequently in uruguay and brazil have proved not to be as contagious as earlier emerging market crises. financial markets are more aware of fundamental aspects nowadays. contagion is more limited. however, economic integration with the other side of the atlantic seems to be closer than ever. the devastating effects of september 11 were by no means confined to the united states. we realised that there have been major repercussions in the european economy, even though trade and financial flows reacted with a time lag and not as strongly. this psychological transmission channel is much faster than trade flows or even financial investments. the worsening of the business climate in the us is having an impact on german investment. in spite of high expectations early this year, the euro - area economy did not accelerate after the first quarter. among the reasons for this are oil prices, the considerable turbulences on financial markets and the looming threat of a military conflict. both factors
|
supervision at the institute for international economics - with my fellow doctoral students katrin assenmacher and susanne janeba - was indeed a time i fondly remember. as a thesis supervisor, manfred struck the right balance between freedom and direction, motivation and criticism, respect and provocation. almost every day during that time, we went to lunch together in the no - frills university canteen. this was the time to discuss progress in our academic endeavours. but manfred also had us apply our theoretical economic knowledge to practical topical issues and political questions. in fact, to him, such applications were not just brainteasers or amusing thought experiments. rather, economic thinking and research had to be both rigorous and of practical relevance. 1 / 7 bis central bankers'speeches drawing on both his impressive academic expertise and his excellent economic intuition, in the 1990s he repeatedly and prominently intervened in the public discussions surrounding the creation of the monetary union. all in all, i would characterise manfred as a β doctoral father β or as an advisor in the best sense of the word. i owe him my passion for monetary policy and my interest in the empirical facets of our profession. even after i left his institute for the imf, we never lost touch. over time, i gained a close and supporting companion during the subsequent steps of my career. in his straight - spoken way he remained an advisor throughout who, in a fatherly and friendly way, continued to challenge me, visiting me at the bundesbank with a multitude of charts and regression results, pointing out emerging issues or questioning traditional positions. i miss his clear voice in the debate, and i miss a friend. 3. central bank communication one issue we would have discussed for sure is how vital the communication has become for central banks. for a long time, central bankers did not attach any great importance to communicating monetary policy decisions. in the 1970s, when the first konstanz seminars took place, central banks still held the firm conviction that monetary policy makers must be tight - lipped and unpredictable. and the federal reserve, for example, did not begin communicating its interest rate target until 1994. forrest capie, the historian of the bank of england, provides a succinct example of how uncommunicative central bankers were at that time. he once recalled how the first press officer of the bank of england was instructed to β keep the bank out of the press and the press out of the bank ". the doctrine that
| 0.5 |
. therefore, it is essential to establish an effective framework for macroprudential supervision that will ensure both the systematic analysis of risks and the formulation of policies to address such risks. the state of the greek economy the economic slowdown has been less severe in greece than in many other european countries. however, this outcome reflects factors that, if left untreated, will reduce growth potential in the medium term. specifically, the performance of the greek economy during the crisis reflects the relatively - low level of openness and the deterioration of public - sector balance sheets from a position that was already worrisome prior to the onset of the crisis. a factor that has, however, supported the greek economy has been the soundness of its banking system. greek banks have been free of toxic assets and their exposure to the emerging economies of south - eastern europe has remained within manageable limits. a recent stress test conducted in close cooperation with the imf has reaffirmed the soundness of the greek banking system. the relatively - high growth rates experienced by the greek economy since its entry into the euro area reflect a catching - up process. to sustain a robust growth rate in the future, greece will need to address several key challenges, reflected in persistently very large currentaccount imbalances, high fiscal deficits, and worrisome debt levels. these imbalances are the result of structural rigidities, which have undermined competitiveness over time. to restore competitiveness and remove the imbalances, a dual agenda needs to be concurrently implemented : first, a multi - year program of fiscal consolidation, which can reduce risk premia and crowd - in private investment, raising the growth potential of the economy ; second, bold and wide - ranging institutional reforms in the public sector and structural reforms in product and labor markets, which can enhance productivity and raise the employment rate. only by undertaking these reforms will the greek economy be able to become more competitive and increase its growth potential and the prosperity of its citizens. the broad support received by the newly - elected government will greatly facilitate the implementation of the reform agenda.
|
george provopoulos : the state of the greek economy in light of the financial crisis speech by mr george provopoulos, governor of the bank of greece, at the annual meeting of the international monetary fund, istanbul, 6 october 2009. * * * the global economy is now emerging from its most severe crisis since the great depression of the 1930s. why was this crisis so severe? because the financial system was at its epicenter, the ramifications of the crisis were quickly transmitted to all sectors and countries. the effects of the crisis were magnified by a collapse in business and consumer confidence. history shows that financial crises are more likely to be followed by severe economic downturns when they are centered in the banking system and occur in the context of rapid build - ups of credit and fast - rising asset prices. this has also been the case with the present crisis. the policy responses to the crisis have been rapid, bold, and unprecedented. these responses reduced uncertainty and improved economic sentiment. with the global recovery in its initial stages, and economic activity still far below pre - crisis levels, it is too soon to begin withdrawing the stimulus measures. however, the formulation of a medium - term macroeconomic framework for the post - crisis period will be crucial. it will facilitate the achievement and maintenance of a sound fiscal position and enhance the ability of the monetary authorities to deliver price stability. it will also help foster financial stability. the challenge will be to choose the correct timing for the withdrawal so as to avoid : first, a premature unwinding of public interventions ; second, jeopardizing what has been achieved in stabilizing economic and financial conditions ; third, letting these measures continue for too long, at the risk of distorting incentives and damaging public balance sheets. safeguarding the sustainability of public finances will be a key objective in many advanced economies, the deficit and debt ratios of which have reached levels unseen in peacetime. the imf has played a key role in helping the global economy weather the storm. the tripling of imf resources has significantly increased the fund β s lending capacity, and the new sdr allocation has provided additional liquidity to the global economy. at the same time, the launch of the flexible credit line will add flexibility to the fund β s lending framework. the best way to manage a crisis is to prevent it. the present crisis has revealed that macroprudential factors play an important role in determining the size, nature, and propagation of systemic risk
| 1 |
. 5 % this year, before declining to 1. 3 % in 2014. these levels are historically very moderate, and remain in the lower part of the range of values that the ecb β s governing council has identified as consistent with the ecb β s quantitative definition of price stability. bis central bankers β speeches that said, inflation expectations continue to be firmly anchored in line with our aim of maintaining inflation rates below, but close to, 2 % over the medium term. and the risks to the outlook for price developments are expected to be broadly balanced. finally, monetary and, in particular, credit dynamics remain weak. the annual growth rate of loans to the private sector has remained well in negative territory ; and the pace of contraction has actually accelerated over recent period. certainly, weak loan dynamics can largely be explained by the current stage of the business cycle but we have to be attentive to alleviate structural and supply - side factor that may hamper credit provision. the significant improvement in the funding situation of banks since the summer of 2012 has partly offset supply - side restrictions. but it will be some time before the more permissive funding conditions faced by many banks will be turned into an active spur for credit creation. the strategy of euro area policy - makers against this background, how should policy - makers respond to the still fragile macroeconomic recovery? in my view, we need a three - pronged strategy : first, monetary policy has to remain consistently supportive of the baseline outlook and mitigate the risks that surround it. our price stability mandate is sufficiently precise to keep us concentrated on that mission. but preserving monetary accommodation is a necessary but not sufficient condition for the recovery to take hold. a second essential ingredient is that countries continue the adjustment of their domestic policies in a way that removes structural impediments to their economic potential and fosters long - term fiscal sustainability. monetary accommodation can accompany and facilitate such regime shift in economic policy. but we know it can never replace it. third and equally important, europe has to continue the reform process in its banking sector. sound finance is part and parcel of a dynamic economy and banks remain a major conduit of finance in the euro area. hence, we must establish conditions that align incentives of individual financial institutions with those of society. let me explain the measures that european policy - makers are taking in each of these areas : monetary policy ; fiscal and structural adjustment ; and banking reform. monetary policy let me start with monetary policy. as you know, the
|
mario draghi : the euro area economy β current prospects and challenges ahead speech by mr mario draghi, president of the european central bank, at the economic club of new york, new york, 10 october 2013. * * * ladies and gentlemen, i am delighted to be here with you today and i would like to take this opportunity to talk about what is happening in europe right now. as you know, the euro area as a whole is undergoing a process of fundamental reform. the overarching objective is to lay the foundation for recovery and more jobs, foster financial stability and fiscal sustainability and enhance international competitiveness for the benefit of all parts of the economy and wider society. reform will be a lengthy process but while it is far from complete, perhaps for the first time we are seeing signs of significant progress. national policy - makers in europe are able to focus a little less on short - term difficulties and a little more on their longer - term responsibilities to strengthen the resilience of their domestic economies while developing their growth potential. and the monetary policy that we at the european central bank ( ecb ) are implementing will accompany the reform process by maintaining the degree of accommodation that is most appropriate, given our economic outlook and the risks that surround it. the economic situation and outlook so let me start with an overview of the current situation and outlook for the euro area economy. recent data releases support our baseline outlook of a nascent economic recovery over the coming months. following six quarters of negative output growth, euro area real gdp rose by 0. 3 % in the second quarter of this year. although more recent data has pointed to a fairly slow start in the third quarter, survey - based confidence indicators give some comfort that the turning point in economic activity that we saw earlier in the year is not reversed. taken together, incoming information has confirmed the growth outlook from the september ecb staff projections. while these projections still see real gdp shrinking by 0. 4 % this year, a positive growth rate of 1 % is expected for 2014. but the pace of recovery is going to be subdued and uneven across countries for as long as it is meaningful for us to look into the future. the unemployment rate, currently standing at 12. 1 %, remains unacceptably high, and the risks around the outlook continue to be tilted to the downside. in keeping with the broad - based weakness in aggregate demand, underlying price pressures remain subdued as well. annual euro area headline inflation is projected to reach 1
| 1 |
at 8 % in 2013. more significantly, 2 in 3 kenyans have access to formal financial services. this is an impressive trend, which if replicated across africa will poise the continent for unprecedented growth. as regards agency banking, which was rolled out in 2010, 14 kenyan commercial banks and one microfinance bank have established agency networks. as at march 2014, the 14 banks had appointed 24, 645 agents, who have executed over 92. 61 million transactions valued at over kshs 498. 97 billion ( usd 5. 77 billion ) since 2010. ladies and gentlemen : in 2013, geospatial surveys to map financial access points were undertaken in kenya, nigeria, uganda and tanzania. the survey results indicate that kenya is ahead of the other countries in terms of financial access. this is evident through the following indicators : β’ 76. 7 % of the kenyan population is now within 5 kilometres of a financial service touch point as compared to 47. 3 %, 42. 7 % and 35. 1 % in nigeria, uganda and tanzania respectively. β’ kenya has 65, 353 financial service touch points as compared to 21, 206 ; 20, 229 and 17, 212 financial touch points in uganda, tanzania and nigeria respectively. β’ kenya has 161. 9 financial access touch points serving 100, 000 people as compared to 63. 1, 48. 9 and 11. 4 financial access touch points serving 100, 000 people in uganda, tanzania and nigeria respectively. kenya β s leadership position in financial access is mainly attributable to the positive development in the financial sector, introduction of mobile financial services and agency banking, which have taken financial services to the door steps of most kenyans. in addition, completing the financial infrastructure no doubt has driven its growth and dynamism. ladies and gentlemen : having appreciated the important role that financial sector development has on the economy, it is worth noting that the financial sector can live up to its expectation only when regulators assume more than a regulatory role. regulating an underdeveloped financial market will not contribute its fair share to economic development. as a result, regulators must balance their regulatory role with a developmental role. it is with this in mind that the concept of smart and better regulation as opposed to more regulation was coined. smart and better regulation is flexible and accommodative to innovative financial products, through which financial development is registered. bis central bankers β speeches ladies and gentlemen : having seen the diversity of activities in the agenda of your
|
francois groepe : the role of chartered accountants in south africa β s economic growth and development address by mr francois groepe, deputy governor of the south african reserve bank, at irba β s public practice examination function, johannesburg, 9 april 2013. * * * introduction i wish to thank the independent regulatory board for auditors ( irba ) for inviting me to speak and to be part of this auspicious occasion at which the top ten candidates in the most recent public practice examination ( ppe ) are honoured. allow me to extend my heartfelt congratulations to each of the top ten candidates. in the most recent world economic forum β s global competiveness report, south africa achieved a country ranking of 52nd out of 144 countries that were ranked, and beat stiff competition to be ranked number one in the following areas : β’ strength of auditing and reporting ; β’ regulation of securities exchanges ; and β’ efficacy of corporate boards. it is therefore evident that south africa β s auditing and accounting professionals are among the best in the world, and hence you should feel a deep sense of pride to be admitted to a profession, that is not only held in high regard in south africa but very clearly throughout the world. you are fully justified to feel proud to use the designation ca ( sa ) β and so do all of us gathered here today share in that pride. i wish, however, to remind you of a quote by john f kennedy, β to those whom much is given, much is expected. β as newly qualified chartered accountants many of you have had the benefit of good schooling and tertiary education. you have further benefitted from the investment in you and opportunities created for you by this society. this privilege imposes upon you a moral obligation to plough back into both, your immediate communities and our society at large by ensuring that you adhere to, and promote the high ethical and professional standards of your profession. i further wish to appeal to you to retain your sense of curiosity and eagerness to learn. the attainment of this qualification does not imply that you have acquired all there is to know. i would sincerely encourage you to continue on the path of learning, whether it is the pursuit of further formal qualifications or more informal modes of learning. i would also encourage you to broaden your knowledge base by studying other disciplines as it would add further depth and perspective to your analysis, understanding and knowledge of various issues, and therefore should improve the quality of solutions you develop for the ever
| 0 |
tax hikes ) is likely to be at around 0 percent for the time being, lower than that in the july 2015 interim assessment. after that, the rate of increase in the core cpi is projected to accelerate toward 2 percent as the underlying trend in inflation steadily rises and the effects of the decline in crude oil prices dissipate. although the timing of reaching around 2 percent depends on developments in crude oil prices, this is projected to happen around the second half of fiscal 2016, assuming that crude oil prices will rise moderately from the recent bis central bankers β speeches level. thereafter, japan β s economy is expected to gradually shift to a growth path that sustains such inflation in a stable manner ( chart 1 ). regarding my outlook for prices, let me first present an overall picture. although the mechanism of the price rises i assume is the same as that in the bank β s baseline scenario, my projections remain more cautious than the median of the policy board members β forecasts. the outlook throughout fiscal 2017 was revised somewhat downward. currently, my projection is that the rate of increase in the core cpi is likely to rise closer to around 2 percent β from the end of fiscal 2016 to early fiscal 2017 β β a delay of about a quarter from my previous projection of β toward the end of fiscal 2016. β let me explain my outlook in some detail. my projection for prices for fiscal 2015 is that the core cpi will be at around 0 percent. the slight downward revision from the july 2015 interim assessment is attributable to the decline in crude oil prices. also, the delay in the pace of the output gap improvement was taken into account as the actual output gap deteriorated in the april - june quarter. my projection for fiscal 2016 that the core cpi inflation will rise to a little over 1 percent is rather cautious compared to that presented previously. this reflects ( 1 ) the remaining effects of the drop in energy prices, ( 2 ) a delay of about a quarter in terms of the timing for the output gap to turn positive, and ( 3 ) a delay in the timing for inflation expectations to begin rising owing to a slower pace of increase in prices. thereafter, the rate of increase in the core cpi will accelerate and reach around 1. 7 β 1. 8 percent, or rise closer to around 2 percent from the january - march quarter of 2017 ( the peak of the front - loaded increase in domestic demand ) to the april - june quarter ( the period most likely to see an opportuni
|
those of firms. households tend to perceive that prices are always rising and they always keep positive inflation expectations even under a mild deflationary phase or a very slight inflationary phase ( chart 5 ). this suggests the presence of an upward bias in inflation expectations. on this point, i have delivered several speeches abroad in the past and have suggested that the scale of upward bias appears to be generally greater in japan than in europe and the united states. 2 given the past long - standing stagnant wages, households appear to have formed an expectation over time that future wages will always decline. this has led households to anticipate tighter budgets, and such strong defensive action has resulted in a larger upward bias in their inflation expectations. in this environment, it is important for households to form a perception that wages will increase steadily and that such an increase will continue ; indeed, wages are currently improving moderately. in addition, at present, a further monetary policy action is unnecessary given that current sluggish movements of the core cpi caused by a decline in energy prices are temporary, and that a decline in production costs and the resultant improvement in corporate profits might enhance the opportunity for firms to raise wages more readily. based on these five viewpoints, it is time to closely monitor whether prices will exhibit a rising trend under the current accommodative monetary easing environment. if such a path toward price rises does not materialize at all, the bank β depending on the causes β may consider some adjustments with regard to the monetary policy. this brings me to the end of my speech. thank you very much indeed for your kind attention. for recent speeches, see sayuri shirai, β monetary policies in a diversifying global economy : japan, the united states, and the asia - pacific region, β remarks at the panel discussion organized by the federal reserve bank of san francisco, bank of japan, 2015, and sayuri shirai, β unconventional monetary policies of the bank of japan and european central bank, β remarks at the panel discussion at the bruegel annual meeting, bank of japan, 2015. bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches
| 1 |
i thought i would focus my remarks today on some aspects of australia β s finances. in particular, i want to deal with three questions that often come up when i talk to analysts and bankers from overseas. these are : are australian households over - geared? does australia have too much foreign debt? and do australian banks rely too much on foreign wholesale funding? before i move on to these questions, i should note that, in my experience, foreigners never ask about government debt in australia, or corporate debt for that matter. it is not hard to understand why, as both government and corporate debt in australia are low by international standards. household debt let me then start with household debt. the reserve bank monitors developments in household debt very closely as they have significant implications for the economy. glenn stevens summarised the bank β s view on this last week when he noted that, while households had coped well with current levels of debt, it would not be wise for there to be further big increases in household indebtedness. as you know, household debt has risen significantly faster than household income since the early 1990s. at that time, households on average had debt equal to half a year β s disposable income ; by 2006, debt had risen to around one and a half years β income. since then, however, the ratio of debt to income has stabilised ( graph 1 ). most of the rise was due to housing debt, including debt used to fund investment properties. other household debt, which includes credit card debt, car loans, margin loans and so on, has not changed much relative to income over the period. the current household debt ratio in australia is similar to that in most developed countries ( graph 2 ). 1 significant exceptions are germany and france, where the ratios are lower, at around one year β s income, and the netherlands, where the ratio is much higher β almost 2Β½ years β income β due to the tax incentives for households to stay geared up. all countries have experienced rises in household debt ratios over recent decades. clearly, therefore, the forces that drove the rise in household debt ratios were not unique to australia. the two biggest contributing factors were financial deregulation and the structural decline in interest rates. one of the consequences of financial deregulation was that the availability of credit to households greatly increased. up to the 1980s, the various controls on the financial sector meant that the ability of households to obtain credit was constrained. even obtaining a housing loan
|
d ) investment plans for all industries and enterprises for fiscal 2020 was negative. given that the impact of covid - 19 has been expanding after the release of the tankan, downside risks to business fixed investment have been significant, mainly in the face - to - face services industry. with regard to the substantial decline in the real gdp growth rate for the april - june quarter of 2020 and the pick - up for the subsequent quarter, it seems that japan's recovery lacked momentum compared with that in the united states and europe ( chart 3 ). a comparison shows that domestic demand components, such as business fixed investment and private consumption, have been relatively weak in japan compared with those of the united states in particular ( chart 4 ). the relative weakness in private consumption in japan could be attributable to the fact that there is a large population of seniors, who remain strongly vigilant against covid - 19. such weakness in business fixed investment could be because japanese firms have not been as active as u. s. firms in making digital investments. in my view, the lack of momentum in economic recovery in japan is due to various challenges it has been facing for a long time. i will return to this later. b. price developments let me move on to price developments. the year - on - year rate of change in the consumer price index ( cpi ) for all items less fresh food, or the core cpi, has been negative since spring 2020, when the impact of covid - 19 intensified ( chart 5 ). its recent decrease is partly affected by the past decline in crude oil prices and a discount on hotel charges through the " go to travel " campaign - - the government's program to promote domestic tourism. these factors are likely to eventually push up the cpi, mainly through a rise in the purchasing power of consumers. it is becoming increasingly important to clearly identify and examine demand trends of individual items composing the cpi baskets and information gained through interviews with firms and individuals, instead of focusing solely on the fact that the core cpi has been negative. for instance, the december 2020 opinion survey on the general public's views and behavior shows that the proportion of respondents who answered that prices have gone up compared with one year ago and of those who answered that prices would go up one year from now were both about 60 percent. less than 10 percent of respondents answered that prices would go down for the same question ( chart 6 ). based on the survey results and other information, price
| 0 |
be tiering in order to gain support for such a measure? we are not the only game in town, and we should not be. let me repeat the need for structural reforms. this is necessary for sustainable growth, and would give a boost to the competitiveness of many countries in the euro area. using fiscal space is another possibility for some countries. rate cuts are part of standard monetary policy tools, so it β s something that you should certainly think about before you consider non - standard measures like app. but overall, we have to assess whether these instruments are needed to support the transmission channel and what kind of impact and side effects they would have. 1 / 3 bis central bankers'speeches but first, i would like to see the september data and whether additional measures are needed to maintain price stability in the medium term. i would also like to assess what kind of impact these measures could have. let us not forget that we already have a very accommodative monetary policy. lending to households and firms is still high, according to the july figures ; investments are still ongoing in spite of the uncertainties. do you have a view on how low into negative territory the ecb can go? we need more analysis on what kind of impact and costs and benefits rate cuts would have. we need to look at potential side effects, for instance when would bank customers start to keep cash at home? and you asked about tiering. well, for this we need more analysis too. what is the net burden on banks and are mitigating measures necessary? the banks always bring up the gross burden, but they also benefit from the negative interest rate. so we have to consider all aspects before taking a decision. would you support more closely linking the state - dependent leg of forward guidance to inflation expectations? to plot a more explicit rate path should certain inflation conditions be met at a given point in time. i β m sceptical to link forward guidance solely to inflation expectations. could you envisage circumstances in which existing tltros could be repriced, in order to make them more attractive to banks? that might be, yes. we can use different tools : a change in forward guidance, tltro, rate cuts, the mitigating measures for rate cuts, depending on whether the data shows a need for them, their impact, costs and benefits. but overall, i don β t see the need for a huge package. recent ecb communications have consistently stressed that
|
. 5 poi, physical point of sale and mobile and e - commerce. 6 ecb ( 2020 ), β ecb welcomes initiative to launch new european payment solution β, press release, 2 july. 7 ecb ( 2020 ), β ecb takes steps to ensure pan - european reach of instant payments β, press release, 24 july. 8 ecb ( 2020 ), β ecb welcomes initiative to launch new european payment solution β, press release, 2 july. 2 / 2 bis central bankers'speeches
| 0.5 |
too low for too long may encourage excessive risktaking in some markets. this may spur the creation of asset bubbles and have repercussions on financial stability. we can see why monetary and macro - prudential policies need to be properly aligned. in striving for price stability, the ecb needs to keep an eye on the possible effects of currently deployed or planned macro - prudential policies. likewise, from a macro - prudential perspective, the current and expected future course of monetary policy needs to be taken into consideration. for this reason, we would support different institutional arrangements for macro - prudential decision - making within the ssm than those that are foreseen for micro - prudential. in the latter case we have always argued for a clear separation of functions between the ecb as monetary policy - maker and supervisor. for macro - prudential decision - making, however, we see it as important that the governing council is more closely involved. but beyond these considerations, one may ask, when the ssm is operational, what role should monetary policy play in financial stability directly? you will recall the discussion after the lehman failure about whether central banks should do more to β lean against the wind β. with a close - to - optimal macro - prudential framework in place, should monetary policy leave financial stability out of sight? in my view, the answer should be no. there are two reasons why it is important that the central bank remains alert to financial stability issues, even though its primary objective will remain to secure price stability. first, the ecb β s policy analysis for price developments can contribute to financial stability surveillance. here, i have in mind our monetary analysis, which focuses on money and credit developments. exaggerated dynamics in such aggregates can help identify dangerous trajectories that could threaten financial stability. we will have to reflect, once the ssm is operational, on how best to have the broader financial stability assessment benefiting from tools or insights from the monetary analysis. by doing so, we have to be examine closely β first β how structural changes in securisation markets influences the information stemming from monetary analysis, and β second β that analyses and policy goal are closely related and should not be mixed. second, in most of all cases the actions necessary to maintain price stability and those required to maintain financial stability are fully aligned. if, however a conflict arises between these two objectives, it is clear that ecb β s mandate leaves
|
patrick honohan : ireland β s eu - imf programme β delivering what it says on the tin address by mr patrick honohan, governor of the central bank of ireland to the european commission dg - ecfin conference, dublin, 10 january 2014. * * * accompanying charts can be found at the end of the speech. introduction the eu - imf programme of financial support for ireland, negotiated in november 2010 and with the final tranches of lending being completed about now, delivered what it said on the tin. amid turbulent market conditions, it provided a safe harbour into which ireland was able to retreat, in order to clarify its ability and determination to deal with the severe financial problems that had so destructively erupted during the global financial crisis in september 2008. those problems had their origin in the property bubble that had already begun to deflate a little earlier, and which had not only generated the huge latent banking losses that have been so much discussed, but also incubated severe fiscal and macroeconomic imbalances. the key to the return of market confidence to the extent that now exists has undoubtedly been rigorous adherence to fiscal goals. over the three years, a continuation of the momentum of fiscal adjustments already initiated in 2008 has brought the public finances back within striking distance of eu norms. the debt - to - gdp ratio has reached a peak and is on target to fall in the coming year. economic growth, albeit modest, has returned on a broad front ; both full time and part - time employment have been growing for many months now. residential property prices in the capital have bounced back a little from their lows of two years ago, and have on average been broadly stable in the rest of the country also for some months. later i will speak a bit about how far the economy is nevertheless away from where we need it to be. but it cannot be denied that, reflecting both policy and general economic conditions, market confidence in irish creditworthiness is higher than at any time since well before the greek crisis developments of may 2010. it was not always obvious that this restoration of market confidence was going to work out. the imf staff appraisal of the initial programme proposal in december 2010 emphasised that the risks were high. and, after the programme began, the euro area slipped into a second dip recession which had its effect in slowing the irish recovery. the cumulative change in gdp, consumption and employment over the three years may have been as much as 2 percentage points lower than
| 0 |
, vol. 2016, n. 8, central bank of ireland. keller a. ( 2013 ), β the possible distributional effects of the loan - to - value ratio and its use as a macro - prudential tool by the european systemic risk board, journal of international banking law review. 28, 7, pp. 266 - 270. Εaszek, j., augustyniak, h. and olszewski, k. ( 2015 ) β fx mortgages, housing boom and financial stability β a case study for poland ( 2005 - 2015 ) β, nbp working paper series, vol. 1, n. 243, narodowy bank polski, pp. 87 - 103. lewis v. and roth m. ( 2019 ), β the financial market effects of the ecb β s asset purchase programs β, journal of financial stability, vol. 43, august, pp. 40 - 52. montalvo, j. g. and raya, j. m. ( 2018 ), β constraints on ltvs as a macroprudential tool : a precautionary tale β, oxford economic papers, vol. 70, n. 3, pp. 821 - 845. neagu, f., tatarici, l. and mihai, i. ( 2015 ), β implementing loan - to - value and debt service - to - income measures : a decade of romanian experience β, occasional papers, n. 15, national bank of romania, november. thiemann m., stellinga b. ( 2022 ), β between technocracy and politics : how financial stability committees shape precautionary interventions in real estate markets β, regulation & governance, john wiley & sons australia. tzur - ilan, n. ( 2017 ), β the effect of credit constraints on housing choices : the case of ltv limit β, discussion paper series, no 2017 / 03, bank of israel, february. visco, i. ( 2014 ), β the challenges for central banks β, central banking. visco, i. ( 2015 ), β eurozone challenges and risks β, central banking.
|
to have started to overvalue property in order to lower ltv figures on loan applications. 14 completing the legal toolkit the current legal framework harmonises capital - based macroprudential measures. it establishes definitions and parameters, as well as rules and procedures for the allocation of responsibilities between national and european authorities. such measures are subject to a system of eu - level surveillance and, in some cases, authorisations. that system was set up at the very beginning of the european macroprudential experience. national authorities initiate the procedure for national measures. within the euro area, the ecb reviews them and may β top them up β ( i. e. make them more restrictive ), while it has no power to β level them down β. 15 the ecb has defined and published the procedure that it follows when reviewing the national measures. 16 a differentiated impact was observed in israel ( tzur - ilan, 2017 ) for the segment of the population investing in housing ( but not for primary residence ), with a sharp reduction in the value of houses bought after different ltv limits were imposed on different categories of buyers ( first - time buyers, non - first - time buyers and investors who own two or more homes ). similarly, in ireland ( kinghan et al., 2016a and 2016b ), the introduction of differentiated ltv caps had heterogeneous effects based on borrower income. see for instance cerutti et al., 2017 ; ahuja and nabar, 2011. tzur - ilan, 2017. bentzen et al., 2018. acharya et al., 2018. montalvo and raya, 2018. article 5 ( 2 ) ssm regulation ( council regulation ( eu ) no 1024 / 2013 of 15 october 2013 conferring specific tasks on the european central bank concerning policies relating to the prudential supervision of credit institutions, oj l 287, 29. 10. 2013, p. 63 ). regulation of the european central bank of 16 april 2014 establishing the framework for cooperation within the single supervisory mechanism between the european central bank and national competent authorities and with national designated authorities ( ssm framework regulation ) ( ecb / 2014 / 17 ), articles 101 - 105 ( oj, l 141, 14 may 2014, p. 1 ). in contrast, bbms are not harmonised in the relevant legislation. they are thus left to national discretion, in terms of both
| 1 |
of banks that are β too big β or β too interconnected β to fail. if we are committed to a market - based system, the financial system of the future must expose financial institutions of all sizes and structures to the ultimate test of the market place. the very definition of a market economy is that it must allow for failure as a sanction of excessive risk taking or managerial incompetence. in the event that large, systemically relevant financial firms face the threat of failure in a next crisis, the financial system of the future must allow for their orderly resolution. such a system needs to ensure that failure of a large bank does not have serious negative consequences for the provision of financial services to the real economy. there are several possible routes to achieve this goal. we need to examine all the available options with an open mind. the optimal policy is likely to combine different elements. as i explained in the introduction to this speech, here in switzerland the problem of β too big to fail β is particularly pronounced. accordingly, the finma and the snb are jointly evaluating different avenues. the two big banks are now closely involved in this work. we welcome their active engagement. at the international level, the fsb and its member bodies are also addressing this problem at the request of the g20 leaders. ladies and gentlemen, it is imperative that a real solution to this problem be found. at the forefront of our efforts to mitigate the β too big to fail β problem must be an internationally agreed and orderly process to allow for the wind down of large, systemically important financial institutions in the event of a severe crisis. obviously, there are many technical and legal problems that have impeded any meaningful progress in reaching international coordination in this matter. but what has been missing is a bold and international political commitment to put in place a framework for the orderly resolution of large cross - border financial institutions. provided we have such an unequivocal commitment, solutions will eventually emerge. needless to say, we must accept the reality that different national resolution regimes will continue to coexist. let me be very clear on this : a full - fledged global resolution regime is a noble but seemingly unrealistic goal. we should not conclude from that, however, that the framework for cooperation across countries cannot be improved. one possibility is to work towards mutual recognition arrangements of compatible national resolution regimes. recognising other resolution regimes helps each nation to adapt its own structures and processes in order to reduce friction
|
than monetary policy. legislative and constitutional steps are necessary and they are currently under way. it is important to have them in mind because they may hold a few surprises. 3. the political process 3. 1 first stage : demonetisation of gold the first stage, which aims at demonetising gold, is already well under way. the demonetisation of gold required two legal adjustments : β’ β’ a revision of the swiss constitution a revision of the current coinage act. on 18 april 1999, the swiss voters approved a total revision of the constitution. in this revision, the requirement that a certain percentage of banknotes be backed by gold was removed. the abolition of this requirement constitutes the first step in the dismantling of the old order based on the gold standard. the new constitution will enter into effect on 1 january 2000. in the course of the next few months the swiss parliament will debate on the revision of the federal coinage act, which will henceforth be known as the federal law on currency and payment instruments. the coinage act vested the right to fix the gold parity of the swiss franc in the federal council. in future, no reference will be made to a gold parity. in this respect, too, one of the chief characteristics of the gold standard will disappear. parliament is expected to pass the new federal law on currency and payment instruments before the end of this year. the law will enter into force in spring 2000 unless, in the meantime, 50, 000 citizens would request for a referendum on the subject. if a referendum is to be held, it would probably take place in autumn 2000. to my mind, however, the probability that signatures will be collected for a referendum is slight indeed. i am fairly confident that the new law will enter into effect in spring 2000 without delay. by the time the law on payment instruments will be in place in early 2000, gold will have been demonetised. the snb will be allowed to evaluate its gold holdings at their market price, and a revaluation surplus will appear on our balance sheet. technically, the snb will also be able to buy or sell gold on the market. 3. 2 second stage : transfer of excess reserves the recently revised constitution and the new federal law on currency and payment instruments are not sufficient as a legal basis for allowing the national bank to transfer excess reserves for external use. a special constitutional basis must be created for this purpose and then specific legislation will have to allow the realisation of concrete
| 0.5 |
, and for their contribution in preparing and organizing joint conferences, seminars and training programs. one of the essential outcomes resulting form this liaison is the participation of ( soca ) officials in the third annual conference of your esteemed committee in al - aqah, fujairah on 27th & 28th december 2005, which addressed : " the transfer of currencies thorough land, sea, and air borders of the uae. ( soca ) officials have also attended the joint seminar between the uae and the uk regarding : " encountering money laundering " which was held on 16th & 18th march 2006 at the central bank in abu dhabi, during which a memorandum of understanding has been signed between the anti - money laundering & suspicious cases unit at the central bank and the serious organized crimes agency ( soca ). your excellencies, ladies & gentlemen, the uae attaches great importance to the issue of international and regional cooperation. one of our priorities is to familiarize officials at the competent authorities in the uae with the experiences and techniques applied by friendly countries in the area of combating money laundering and terrorist financing. my fellow members of the national anti - money laundering committee are doing a remarkable and important job in this respect. ladies & gentlemen, during today's joint seminar, which is attended by the executive director of the serious organized crimes agency ( soca ) and the accompanying delegation, members of the committee shall present working papers focusing on the regulations and measures for combating money laundering, terrorist financing and financial crimes in general, covering all sectors of financial, economic and security activities in the uae. these working papers will underscore uae efforts, highlight the legal frameworks and practical applications by the competent authorities in the uae, and illustrate the achievements made so far by the uae in this respect. officials from the serious organized crimes agency ( soca ) shall also present a working paper on the new measures applied in the uk for combating money laundering and terrorist financing. ladies & gentlemen, the topics which would be addressed during today's seminar reflect the determination of both the uae and the uk to enhance and consolidate cooperation & coordination between the two countries and with the international community, contribute to the international efforts aimed at combating money laundering and terrorist financing, and assume an effective role in this domain. in conclusion, i would like to wish success to all participants. thank you for your attention.
|
choongsoo kim : time for a new central banking paradigm speech by mr choongsoo kim, governor of the bank of korea, at the 2010 annual bank of korea international conference, seoul, 31 may 2010. * * * honorable fellow governors, excellencies, distinguished guests, ladies and gentlemen, it is a great pleasure for me to welcome you to the 2010 bank of korea international conference, which is also being held in celebration of our bank β s 60th anniversary. i wish to express my profound appreciation to all of you for attending. let me also take this opportunity to express particular gratitude to our esteemed speakers, presenters and discussants, and to our conference orgaruzers. the theme that we have selected for this year β s conference is the changing role of central banks. this is one of the most critical issues that the recent global financial crisis has led us to consider. the global financial crisis and changing beliefs the recent global crisis has shaken many of our beliefs about economics and economic policy. prior to the crisis, many of us talked about the so - called β great moderation, β believing that macroeconomic volatility had declined substantially in most advanced economies over the past two decades. the declines in volatility of output and inflation were regarded as a remarkable economic achievement, which we attributed to improvements in macroeconomic, including monetary, policy. many of us also assumed that risk management at financial institutions had improved greatly. but now we feel differently. occurring as it did in such an optimistic environment, the sudden outbreak of the crisis has very seriously challenged our confidence in macroeconomic management and financial regulation. it has motivated us to carefully evaluate what went wrong, and what we must do to avoid any future recurrence of such a destructive calamity. the crisis has also directed attention to a number of particularly salient issues for central banks, among them new challenges for monetary policy, the central bank β s role in financial stability, and management of volatile capital flows. i would like to discuss these issues a bit more now. challenges for monetary policy first of all, bitter controversy over several key components of monetary policy has arisen, out of central banks β dealing with the crisis. central banks β monetary policies have of course evolved over the years. in the mid - 1970s, a large number of advanced economies adopted monetary targeting, to address the high inflation at that time. as the relationship between the monetary aggregates and inflation subsequently grew less stable, however, monetary targeting
| 0 |
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.