text1
stringlengths 1
3.21k
| text2
stringlengths 1
3.21k
| label
float32 0
1
|
|---|---|---|
. and so, canadians'expectations for inflation have become firmly anchored around 2 per cent. this climate of low, stable, and predictable inflation has helped to smooth out the ups and downs in the economy and to create the best possible environment for longer - term economic growth in canada. inflation and the economic outlook let me now give you the bank of canada's views on the state of the canadian economy and the outlook. first, a bit of history. following the 11 september 2001 terrorist attacks in the united states, the bank of canada, like other major central banks, moved quickly and aggressively to cut its policy interest rate to shore up confidence. that dramatic monetary policy action helped a great deal. by the spring of 2002, it became evident that our economy hadn't been knocked off track by the events of 11 september. indeed, evidence was starting to build that the economy was growing faster than its production potential, taking up the remaining small amount of economic slack. so, we raised our key policy rate three times between april and july, by a total of three - quarters of a percentage point. but by late last summer, we were seeing the effects of financial headwinds, geopolitical uncertainties, and continued weakness in the global economy. these factors remained in play through the autumn. as a result, we refrained from raising interest rates, even though inflation was accelerating. our initial analysis was that this increase in inflation would be temporary. however, both core and total cpi inflation remain well above target. this reflects the impact of higher - than - expected prices for crude oil and natural gas, continuing increases in auto insurance premiums, and price pressures in certain sectors, such as housing, food, and some services. the higher inflation also suggests an underlying firmness in the price - setting environment. in other words, relative price increases wouldn't be pushing up trend inflation if there was not sufficient demand. indeed, final domestic demand - especially household spending - has remained robust. however, economic growth in canada moderated in the final three months of 2002, largely because of weaker exports - most notably, a decline in automotive shipments to the united states. even with this slowing growth in the fourth quarter, upward revisions for previous quarters leave the level of economic activity slightly higher than we had been monitoring. in fact, canada's economy remains near full capacity. let me list some of the indicators that support this view : high industrial capacity utilization ; near record - high labour force participation rates
|
is obviously too early to say the final judgments, july and august cpi data indicate that vat increase is reflected in the prices to a smaller degree than previously expected, and, probably more importantly, there is no sign that underlying inflation trend would have accelerated due to the tax increase. i find it important to emphasize in this context that monetary easing in hungary is also conditional on the evolution of global risk appetite. we have learned during the crisis that risk premia can be extremely volatile. it is therefore essential to have a robust strategy, to be prepared to cope with potential unfavorable shifts in risk perception. to this end the monetary council has decided to follow a gradual approach in reducing the interest rate. despite of the dominance of good news of the last few months becoming complacent at the current juncture would be a great mistake. we are perfectly aware that still a lot has to be done in hungary to finally reach a sound, sustainable fiscal and external position, characterized by dynamic growth and low inflation and well functioning financial sector. monetary policy of the magyar nemzeti bank has a clear objective : price stability. this does not mean that we are narrowly looking only at inflation forecasts, but rather, in a broader context, we want to contribute to longer term predictability in the hungarian economy. i am convinced that price stability cannot be attained and maintained without longer term predictability. to this end we will be focusing on managing risks to stability and sustainability, risks that we expect to be with us for a protracted period of time. thank you for your attention!
| 0 |
expenses in excess of revenues. its business model is now financially sustainable, as it ensures solid income generation to bear future needs. coverage of direct and indirect costs of lending, including expected loan losses, is achieved while maintaining loan terms well below market rates. higher rates on loans that tie up the bank β s capital for longer periods of time will help prevent scarce longterm funds from being diverted to operations that are better served by shorter term loans. the needs of the poorest and most vulnerable are the principal claim on ibrd resources. accordingly, we favor the establishment of a framework that explicitly takes it into account, with adequate consideration of preservation of the real value of the ibrd β s capital over time. higher terms for clients with larger capacity will help accomplish the mission of supporting the neediest. financial sustainability does not ensure efficiency in resource utilization. we encourage management to continue fostering efficiency and monitoring it by means of sound indicators. the β voice β of the global economy we remain committed to a shareholding review that fully reflects the changing reality of the global economy and strengthens the bank β s development mission, as agreed to at the 2015 annual meetings. the dynamic formula provides a necessary anchor to ensure, over time, adjustment towards an equitable voting power in the ibrd. we also look forward to a review of the ida voting rights arrangements, which ida deputies agreed to discuss at the upcoming mid - term review of ida18. concerning the share allocation rule for the ibrd selective capital increase ( sci ), we believe ad hoc solutions and arbitrary thresholds should be avoided as much as possible. we agree on the use of unallocated shares β as a one - off measure β to limit extreme cases of under - representation. this will reduce the need for additional scis in the future. today β s proposed arrangement for the ibrd is far from optimal, as we will presumably need several scis to bring shareholding closer to the dynamic formula β s outcome. as for the ifc, we recommend moving its shareholding towards that of the ibrd. hence, we support the proposed sci, in which shares are allocated to countries with ifc shareholding below their ibrd shareholding, after converting retained earnings into shares. although some concerns remain regarding the size of the capital package and its bias toward the general capital increase, we recognize that the overall outcome will further strengthen both the financial sustainability and the operational capacity of the ibrd and ifc. this will bring the discussions that
|
have taken place since our meeting in lima to fruition. with these goals in mind, we recognize that negotiations have been intense and complex, and represent a valuable effort by all parties, including management. in the spirit of compromise, we are prepared to join the emerging consensus and to ensure the world bank group remain fully legitimate vis - a - vis its diverse stakeholders.
| 1 |
on economic reform. during such a period, monetary and exchange rate policies should provide for sufficient flexibility and should take account of the specific circumstances of the country concerned. for instance, given the current levels of inflation, it may be wise for some countries to maintain a crawling currency peg for the time being. for other countries a stronger commitment β a fixed peg or a currency board β may be more appropriate. before accession, this can only be a unilateral decision. only after joining the european union can new member states participate in erm - ii, as indeed they are expected to, assuming that a credible peg against the euro can be established at that time. preconditions for stable monetary relations of course, linking the currency to the euro cannot be a substitute for conducting stability - oriented macroeconomic and structural policies. rather, any formal link to the euro should be preceded by policy measures which make the intended currency link a credible one. given today β s importance β 4 β of capital flows to exchange rates, such policy measures should also cover areas that are important to capital flows. allow me to say a few words on the approach towards capital movements. undoubtedly, hot money is a hot issue at the moment. restrictions on capital flows have proven less than effective in times when investor confidence turns sour. introducing controls to limit capital outflows in the middle of a crisis is doomed to fail. they may afford some temporary relief, but when people want to get their money out of the country, they will succeed in doing so in the end. what remains is long - term damage to investor confidence. liberalizing the capital account further is the more promising route. adequate sequencing of short - term capital inflows may be required in order to gain time for adjusting the domestic financial sector to the competitive pressures that follow from capital liberalization. it should be realized, though, that such an approach should go hand in hand with an improvement of supervision and a strengthening of the financial sector. this should be high on the policy agenda in eastern europe. there has been considerable progress on capital liberalization in these countries and it is expected that, under oecd rules, capital movements will be free of restrictions pretty soon. the major challenge now is to ensure that the restructuring of the financial sector keeps pace, an area where there is still much to be done. it is well - known that in the communist past many banks used to be a part of, or closely related to, the central bank. in
|
##bs ) of all eu member states. the eurosystem is composed of the ecb and the 11 ncbs of those member states which have adopted the euro. the six members of the ecb β s executive board and the governors of these 11 ncbs together form the governing council. this is the eurosystem β s highest decision - making body, which, among other things, has adopted the eurosystem β s regulatory framework. in my speech today, i will elaborate upon how the ecb, but also the community legislator, national legislators and market participants have struggled with the same question which hugo de groot already addressed in his days in another context : in view of the introduction of the euro, where is, on the one hand, unification of law desirable and where may, on the other hand, national differences continue to exist? or, to remain closer to the title of my speech : where, and to what extent, has the euro acted as a catalyst for legal convergence, and where is further convergence appropriate? as a preliminary remark, the introduction of the euro and the globalisation of the world β s financial markets are clear incentives for a development towards β one market, one currency, one law β. there are, however, at least two important impediments for such law to emerge in the near future. first, there are the community law principles of subsidiarity and proportionality. subsidiarity requires that the community legislator only adopts legislation if this is necessary to achieve the community β s objectives. proportionality requires that the type of legal act to be adopted be proportionate, ie not too heavy, in relation to the objectives to be achieved. second, the eu consists of as many different legal systems as there are member states, although there are, of course, similar types of legal systems of common orientation ( roman law, anglo - saxon law or the scandinavian systems ). recognition of the peculiarities of such legal systems in accordance with the principles of subsidiarity and proportionality leads automatically to legal diversity. in addition, for the eurosystem it is also important to mention that system - related tasks are executed in a decentralised fashion through the ncbs in their respective jurisdictions. for example, with regard to the eurosystem β s single monetary policy, the ecb β s decision - making bodies decide on such policy, but the ncbs execute monetary policy operations in their respective jurisdictions. all in all, a system
| 0 |
challenges. micheal ainley, ali. mashayekhi, robert hicks, arshadur rahman and ali ravalia. november 2007. predominantly hanafi school, bahrain, dubai and abu dhabi pursues maliki school, saudi arabia and qatar relies on hanbali school ). rather than pursue harmonized views, each faith developing its own applications adds to the cost of transaction, introduces doubts on viability of islamic finance given the split opinions, and confuses the public that basically relies on scholars endorsement of products and business. these differences along with different interpretations of shariah scholars at the boards or as advisors within the banks, if significant, further carry the risk of sharia arbitrage which carries complications for regulators. reaching consensus and shared / harmonized guidance among scholars of different beliefs and faiths and evolving more unified institutional mechanism for adoption of common shariah standards and ensuring proper enforcement through effective internal controls for their compliance would let the industry grow and compete on level playing field. flexible and simpler interpretation of the basic tenets at the level of scholars would enhance public acceptability. 12. finally, keeping these macro considerations aside, islamic banks being late starters do face a real challenge of competing with a well established conventional industry. furthermore, full - fledged islamic banks as per their licensing requirements have to confine themselves to islamic businesses and products, while conventional banks with islamic windows have inherent advantage as they can compete more aggressively offering both conventional and islamic businesses. different approaches to licensing are debated to have implications for competitiveness of industry whereby there is an argument put forward that in interest of fostering healthier competitions banks should be allowed to choose what they offer without imposition of licensing policy constraints. 3 to propel islamic industry allowing dedicated islamic banks is a well accepted course as long as regulators do not shield or provide preferential treatment to these institutions but creates a level playing field in regulatory and supervisory oversight. next stage of development 13. competitiveness of islamic finance in future would depend on how government and regulators perceive and nurture future development of islamic finance and address the issues highlighted above and develop institutional, regulatory and supervisory frameworks and their effective enforcement. in the next stage of islamic finance development, there is need for more substantive work on islamic finance in the areas of : ( i ) standardization of contracts and documentation which would reduce transaction costs and risks of litigation. ( ii ) development of dispute resolution mechanism for sharia compliance matters as regulators will not be in a position to resolve these
|
. s. growth. finally, price adjustments through exchange rate adjustment, by encouraging exports and making imports more costly, could play a role in current account adjustment. i must emphasize that, no matter how the u. s. external imbalance is narrowed, the level and composition of demand, both in the united states and abroad, would have to change. such a change, in turn, would require adjustments of relative prices. in the united states, to accommodate increases in exports relative to imports, changes in relative prices would be needed to shift production toward internationally traded goods and services and to shift consumption toward nontraded goods and services. by the same token, adjustment by our trading partners to a reduction in the u. s. current account deficit would require both an increased domestic demand to maintain the overall level of economic activity and an adjustment of relative prices to raise the share of nontraded goods in production and of traded goods in consumption. the prospect of a correction in the current account is often portrayed in ominous tones, a dark storm cloud looming on the economic horizon. yet, the economic adjustments i have just described are both feasible and, properly managed, need not lead to undue distress, either in the united states or abroad. after the dollar correction of the mid - 1980s, for example, economic activity in the united states continued to expand as the growth of domestic demand eased but was replaced by strong contributions from net exports. during that period, analogous adjustments helped to maintain economic performance among our trading partners. the pace of gdp growth in the foreign g7 economies, weighted by u. s. exports, increased from about 2 - 1 / 2 percent during 1982 - 84 to nearly 4 percent in 1985 - 87 as greater domestic demand growth compensated for weaker performance in net exports. u. s. current account adjustment could, in fact, be associated with quite favorable scenarios for the global economy. for example, the rise in foreign productivity growth that i touched on earlier could work through several channels to narrow the u. s. trade deficit as funds were attracted abroad. strong domestic demand among our trading partners would likely outweigh any drag resulting from appreciation of their currencies, while u. s. exports would benefit from both a change in relative prices and stronger foreign growth. of course, the financial press frequently points to less - favorable scenarios, including the so - called disorderly correction, that is, a rapid fall in the dollar that engenders a steep falloff in u. s
| 0 |
and practical experience gained. a long childhood lies ahead. but at the same time, much has already been achieved. over the past few years, we have set up a macroprudential framework for europe. we have defined objectives, developed tools and set out how different policy areas interact. let us have a closer look at how macroprudential policy works in europe. a core concept of macroprudential policy is the financial cycle, that steady succession of ups and downs, of booms and busts. and each time the cycle turns, each time boom goes bust, everyone runs for the exit. market participants sell the assets concerned, and prices tumble ; investors incur losses, as do the banks which financed their investments. this shock might even hit banks which were prudent enough not to participate in the boom. the financial system is so interconnected that even they cannot escape contagion. and as goes the financial system, so goes the real economy. credit dries up, growth drops off and everyone suffers. 1 / 6 bis central bankers'speeches this story is a bit simple, of course. still, it allows us to define two goals of macroprudential policy : first, make the financial system as a whole more resilient. second, dampen the cycle of booms and busts. in very general terms, this is what macroprudential policy aims to do in europe. the tools of macroprudential policy reflect these objectives. some of them focus on increasing the resilience of market participants. take, for example, the countercyclical buffer. it requires banks to set aside more capital in upturns to make them more resilient. once the downturn sets in, banks can draw on the buffer, which helps them absorb losses. furthermore, having to set aside more capital in an upturn makes it more costly for banks to grant loans. this might, as a positive side effect, dampen excessive credit growth and hence the cycle. likewise, reducing capital requirements in a downturn may help to spur lending. other tools focus on the general resilience of the financial system, going beyond the financial cycle. various capital buffers have been designed for that purpose. there is, for instance, the systemic risk buffer, which can be applied to all banks or to specific groups of banks. it aims to make banks more resilient to structural risks that affect the entire system. and then there are
|
conscious. i admit that this is a bit more philosophical than macroprudential policy, but the basic idea remains the same : the whole is more than the sum of its parts. thank you for your attention. 6 / 6 bis central bankers'speeches
| 1 |
judge by looking at the section which is visible above the surface. this is in my view a useful metaphor, because as the crisis gradually unfolded, a chain of unexpected problems came to the surface and vulnerabilities that were previously underestimated became apparent. let us consider first the tip of the iceberg, namely the liquidity crisis. tensions in money markets erupted in august 2007 when the us mortgage market, which was at the epicentre of a complex network of financial derivative products held globally, started to un - ravel. liquidity in interbank markets worldwide dried up as market participants became paralysed by uncertainty. the key problem was that counterparty risk β which had hitherto remained bis central bankers β speeches limited β suddenly increased in great proportions because the distribution of risk exposures to us subprime mortgage markets was markedly opaque. this led some market segments to partially freeze and others to close completely. this is where the second layer of the iceberg comes onto the stage. the collapse of lehman brothers in the autumn of 2008 triggered an exceptionally abrupt re - pricing of risks globally. it led to a very significant intensification of the financial crisis ; to a temporary freeze in trade financing and a global trade decline ; to a curtailment of credit and domestic demand ; and, ultimately, to a severe decline in global demand and output. the main channels through which the crisis was transmitted internationally are now relatively well understood, although the extent and strength of the interconnectedness was quite surprising in real time. activity corrected most in countries where credit was booming prior to the crisis, with large current account deficits, high external debt and highly leveraged financial sectors, in particular. 1 in the euro area, a channel of particular importance was the fact that some banks had tapped us wholesale funding markets in large amounts to finance their activities. 2 some of these banks were in addition as heavily involved as us banks in the production of allegedly riskfree securities, such as asset - backed commercial paper, that aimed to meet the needs of us money markets funds. 3 they were severely hit when these markets froze. moreover, although the euro area β s current account was broadly balanced, it still had significant gross external assets and liabilities vis - a - vis the us, which acted as a powerful conduit of the crisis. challenges became more intricate still when the third layer of the iceberg β the sovereign debt crisis β surfaced towards the end of 2009. risk re - pricing intensified
|
growth and to foster job creation in an environment of high unemployment. we are now at your disposal for questions. bis central bankers β speeches
| 0.5 |
sabine lautenschlager : euro cyber resilience board for paneuropean financial infrastructures introductory remarks by ms sabine lautenschlager, member of the executive board of the european central bank, at the third meeting of the euro cyber resilience board for paneuropean financial infrastructures, frankfurt am main, 28 june 2019. * * * it is a pleasure to welcome you back to frankfurt. as you may know, i recently became responsible for market infrastructures and payments at the ecb. as this includes the ecb β s work on the cyber resilience of financial market infrastructures ( fmis ), i have taken over benoit cΕure β s chairmanship of the euro cyber resilience board for pan - european financial infrastructures ( ecrb ). i would first like to thank benoit for his contribution in establishing the ecrb and for this opportunity to continue the excellent work on cyber resilience at european level which he has personally driven forward. six months have passed since our last meeting in december, during which time, all of us β whether on behalf of a public or private financial infrastructure, a supervisor or an overseer β have been busy enhancing the cyber resilience of our respective financial infrastructures and of the financial sector as a whole. but cybercriminals have been making progress too, and they remain persistent and relentless in their pursuits. as widely reported in the press, a major cyber incident occurred at a significant bank earlier this year, seriously affecting the real economy in a specific european country. this publicly known incident reminds us of the debilitating impact a cyberattack can have on our financial system. so the need for continued vigilance, work and collaboration in this field is imperative. you will recall that β in december 2018 β the ecb published its cyber resilience oversight expectations1, a tool meant for both fmis and overseers. these expectations contain detailed best practices for implementing the cpmi - iosco cyber guidance2 and are now being followed by fmi operators at national and european level. overseers are working with their respective fmis to ensure that they do what is necessary to enhance their cyber resilience. i am also pleased that the world bank has recently embraced our cyber resilience oversight expectations with a view to boosting the cyber resilience of fmis in developing and emerging countries under its mandate, and consequently promoting global harmonisation. last year, the euros
|
place within seconds ; the system development and innovation within financial markets makes it possible to transact from anywhere in the world 24 hours a day, seven days a week. blockchain technology blockchain technology, another example of the recently trending phraseology, enables the ordering ( grouping ) of various transactions in an inexpensive decentralised manner by making use of a number of servers. these transactions are not only limited to near - real - time payments but can also include financial market transactions and information relating to the settlement thereof. blockchain has the ability to reduce transaction costs, as it takes away the requirement for intermediaries and is completely decentralised. bis central bankers β speeches blockchain is still in its infancy and while regulators and markets are still trying to get to grips with the concept of bitcoin, newer or more innovative technologies are already on our doorstep. 3. cybersecurity the developments in cyberspace are a cause of concern for regulators, financial market participants, business and informed consumers. with the interconnectedness of systems and the ease of internet access, regulators need to understand the cyber - threats that the financial system is exposed to. nearly every week one reads about the latest victim of a cyberattack, and the targets range from banking systems through consumer information held by retailers to social media facilitators and even governments. the rapid developments in technology and the cyber - world have opened the doors to a new and uncharted frontier. companies and countries alike are trying to get to grips with this latest threat and to find ways in which to mitigate the risk while protecting their information and reputation at the same time. governments, central banks, financial service providers and companies are expanding their cyber - protection capabilities. this means there is a growing demand for the limited technical skills available in this environment. the focus is, however, not only on prevention. in responding to security breaches, one has to respond with agility and speed while trying to limit the damage done and importantly to ensure continuity of service. conclusion in conclusion, i would like to revisit the idea of a β game changer β. a game changer can be the discovery of something as small as a molecule or the invention of something that transforms the way in which we communicate, like mobile telephony. the way in which one looks at game - changing innovations will alter the way in which one sees the world and will affect one β s strategies and business plans. game change
| 0 |
vitas vasiliauskas : real estate taxation and macroprudential policy welcome remarks by mr vitas vasiliauskas, chairman of the board of the bank of lithuania, at the macroprudential policy conference " real estate taxation and macroprudential policy ", vilnius, 2 july 2019. * * * good morning, ladies and gentlemen : it is my pleasure to join you today at this already - traditional conference, and to thank you all β speakers, panellists and participants β for gathering to discuss this very timely topic. i would also like to express special thanks to our keynote speakers β professor klaas knot, president of de nederlandsche bank, and henrik braconier, chief economist at sweden β s finansinspektionen, who delivered the keynote speech yesterday. regretfully, i was not able to be here when you began discussing the interlinkages between real estate taxation and macroprudential policy instruments, and shared country experiences in residential real estate taxation. still, today β s agenda promises us another intensive day with engaging discussions and, hopefully, some helpful answers. dear colleagues : in welcoming you all today, i hardly need to list the benefits of macroprudential policy and its instruments. i am sure that macroprudential policy works β especially as a preventive tool. let β s take current lithuania as an example. the economy is growing, but we do not observe economic agents β creditors and borrowers β acting irresponsibly ( what we had prior to the financial crisis ). i believe that other countries experiences, the esrb framework and the policy instruments prove, if not the effectiveness, than at least their potential. it is worth noting that we still lack clear evidence on the interactions of various macroprudential measures with other policy areas. this is true, despite the fact that macroprudential policies have been gaining recognition and use among policymakers in many countries. in fact, data shows that the usage of macroprudential measures increased persistently in the immediate post - crisis years. this trend is evident in both advanced and emerging market economies, albeit to a different extent. in my opinion, measures directed at affecting crediting in the economy are effective tools with an impact on the economic cycle β especially in the low interest rate environment. we consider current timing to be appropriate to deepen our understanding of the links between macroprudential and other policies, as policy makers need to
|
credit boom, it is better to use other tools than monetary policy to influence indebtedness among households and developments on a specific market, such as the housing market. in the case of sweden, one can claim that the repo rate has for several years been set higher than is strictly justified by inflation and resource utilisation. 4 but household indebtedness was not explicitly mentioned as a reason until the repo - rate decision in october 2012. the repo rate had then been gradually cut from 2 per cent at the end of 2011 to 1. 25 per cent in september 2012. in october 2012, the repo rate was then held unchanged and household debt was for the first time treated as a factor in the monetary policy deliberations, both in the monetary policy report and the press release on the repo - rate decision. however, the repo rate was cut further, to 1 per cent in december 2012. it then remained at this level for one year, until december 2013, despite low inflation and an inflation forecast that had been revised down substantially, as well as unemployment that seemed stuck at around 8 per cent. in december 2013, the repo rate was cut further to 0. 75 per cent. during the period between december 2012 and december 2013, i felt that the consideration given to household indebtedness was preventing the further repo - rate cut that i considered justified. others also lean, but under different circumstances we in sweden are far from alone in feeling that rising indebtedness driven by rising house prices poses a threat to financial stability. other central banks have also given explicit consideration to such threats when formulating their monetary policy. of those countries that are comparable with sweden in the sense that they are developed economies with inflation targets, norway, canada, australia and new zealand are the ones that can be said to have conducted a monetary policy that to some extent leans against the wind. sweden does however stand out in that inflation has been clearly below the target in recent years, at the same time as unemployment has been relatively high. 5 policy update published in april 2013 states that the monetary policy conducted β is expected to stimulate economic developments and inflation at the same time as taking into account the risks linked to households β high indebtedness β. an article in the monetary policy report published in july 2013 presents a conceptual framework for taking into account financial imbalances in the monetary policy assessment. for a review and categorisation of various points of view
| 0 |
strong corporate governance and risk management practices will be given greater regulatory flexibility. whilst it is recognised that the regulatory framework should foster efficiency and competition, this has to be balanced with the objective of attaining soundness and preserving the stability of the financial system through the promotion of sound risk management practices. commensurate with the diversity and complexity of products and services, the financial landscape of the future will require the continuous upgrade of the risk management practices with improvements in the governance standards and enhancing of information management systems. the rationalisation exercises aimed at maximising cost efficiency and reaping benefits of group synergies has led to the emergence of more complex group structures of more diversified financial conglomerates. in relation to this, a holistic and integrated regulatory approach is being adopted to ensure that the activities of these financial conglomerates do not introduce excessive risks to the financial system. risk management standards are applied across the group and safeguards have been introduced to ensure risks are efficiently managed with necessary infrastructure for an overall view of the risk exposures within the group. fostering a customer - centric culture encompasses fair and equitable dealings with customers to engender greater trust and loyalty among customers and serving customers in good faith by extending products and services that are appropriate to their financial requirements and circumstances. greater innovation must therefore be complemented by higher levels of service quality. greater attention on excellence in customer service requires continuous investment in staff development, which will be a vital part of the process. harnessing the technology to deliver distinctive customer experience that combines the right mix of convenience and value is also an essential part of the process. in addition, adequate emphasis and resources need to be accorded to protecting customers'privacy and safeguarding their interests. in order to make a quantum leap forward, it is vital to continuously invest in human intellectual capital so as to create a pool of talent, skill and expertise that will drive the performance of the financial system. skilled individuals are needed to be able to deliver high value - added products and services, adopt advanced business practices and have the necessary competence to build confidence in the financial market and trust of the consumer. initiatives have been taken for putting in place specialised training organisations as part of the infrastructure for the development of highly skilled workforce for the financial sector. the international centre for leadership in finance is now in its 3 rd year of operations and more recently the international centre for education in islamic finance was established to meet the increased demands of islamic finance professionals, both in the domestic and international markets. the programmes
|
charles i plosser : restoring central banks after the crisis speech by mr charles i plosser, president and chief executive officer of the federal reserve bank of philadelphia, at the conference of the global interdependence center / bank of france, paris, 26 march 2012. * * * the views expressed today are my own and not necessarily those of the federal reserve system or the fomc. introduction i am delighted to be here today in this beautiful city and to have the honor to serve on such a distinguished panel with friends and colleagues. david kotok has been the guiding force behind the gic conferences over the past several years. he and his team at the gic never fail to gather an interesting and knowledgeable group of people to discuss important topics on truly global issues. so, i want to thank him and the gic for their efforts and contributions. i also want to thank our hosts, christian noyer and the banque de france. i am going to take a little different tack on the subject matter of this gathering. rather than focus on what new orthodoxy we should take away from the financial crisis, i want to argue that we need to restore some of the old orthodoxy. david did suggest that he wanted to have a conversation on important issues, so i intend to be somewhat provocative in an effort to stimulate such conversation. as usual, i want to stress that my views are my own and not necessarily those of my colleagues in the federal reserve system. i will focus my remarks on two related topics that have emerged as a consequence of the crisis. the first is the relation between monetary policy and fiscal policy. the second topic involves the role of a central bank β s balance sheet as a policy tool. these are issues that i believe are of fundamental importance to the role of central banks in our economies. the relationship between monetary and fiscal policies let me begin by sharing some thoughts on the appropriate relationship between monetary and fiscal policies. in the wake of the financial crisis and the ensuing recession, many countries around the world responded with a significant increase in government spending. some of this increase came about through what economists call automatic stabilizers. but there has also been a dramatic expansion in budget deficits attributable to deliberate efforts to apply fiscal stimulus to improve economic outcomes. this expansion in government spending has been very significant in the u. s., but it has also occurred in other countries. so what does this have to do with monetary policy? well, it turns out
| 0 |
thank and applaud you. palakpakan po natin ang lahat ng respondents and partners ng bsp! thus, today, the inflation environment remains benign while bank lending continues to expand. this enabled the philippine financial system to avoid the credit gridlock which paralyzed other financial markets overseas. meanwhile, our external position remains healthy, with a balance of payments surplus, and gross international reserves reaching record levels of roughly $ 48. 4 billion in june 2010. in particular, the data you share with us β through the cross border transactions survey, foreign direct investment survey, and coordinated portfolio investments survey β allowed us to derive sound baseline estimates critical in enhancing compilation of our external accounts and in calibrating well - anchored balance of payments projections. these projections are vital in estimating forecasts for inflation and in crafting our monetary policy formulation. let us thank our respondents with a round of applause! at the same time, remittances from overseas filipinos coursed through banks have been hitting unprecedented levels and helped raise our international reserves to record high figures as well. this was made possible by our banks who have efficiently handled the billion dollar remittances of overseas filipinos. in effect, your reliable service provides significant benefits not only to our hardworking overseas filipinos and their families but to our economy as well. let us give our banks a well - deserved round of applause. we also thank all our partners who have joined us in our economic and financial education programs as we push for a better - informed public. your unqualified support and cooperation are valuable to the success of the bsp β s economic and financial education programs. let us give our partners in our education programs a big hand! once again, ladies and gentlemen, we at the bangko sentral ng pilipinas thank and congratulate all of you for being our active partners. you have empowered us to craft and implement responsive policies that promote balanced and sustainable growth of our economy. growth that empowers and improves the quality of life of filipinos. moving forward, all we have to do is to act as a single force and move forward as one. henry ford once said : β if everyone is moving forward, then success takes care of itself. β ladies and gentlemen. today, therefore, let us commit to work more closely together and act in solidarity to be a single force and to move forward as one so that we can achieve the change we need, sooner rather than later. maraming sal
|
will be an improvement. but beyond looking at how local regulators have transposed basel agreements into domestic regulations, the committee has also begun examining whether the framework ( s ) are producing consistent outcomes. ultimately, what counts is that the capital ratio calculated and reported by individual banks provides a meaningful and comparable representation of their capital strength. differences in regulation, or their application, can undermine the regulatory framework by making it more difficult for bank depositors, counterparties, investors, shareholders and supervisors to have confidence that reported capital ratios serve their intended purpose. in this context, some concerns have been recently voiced that banks are not calculating risk weighted assets consistently. the committee has, in fact, been investigating this issue for much of the past year. this work has examined the calculation of risk weights in both the banking and the trading books. as with our country assessments, we will publish the results of both studies. the preliminary results of the trading book are most advanced, and will be published very shortly. the analysis is based on two sources of data : public disclosures by banks and a hypothetical test portfolio exercise in which 15 large, internationally active banks have participated from nine basel committee jurisdictions. i will not pre - release the detailed results today, but the headline messages are that : at least, fascinating for regulatory aficionados. see c goodhart, the basel committee on banking supervision, a history of the early years 1974 β 1997, cambridge university press, 2011 the level 2 reports on the european union, japan and the united states can be found at the website of the basel committee ( www. bis. org / bcbs / index. htm ). bis central bankers β speeches β’ there is a material variation in risk weights for trading assets across banks ( after adjusting for accounting differences and for differences in the riskiness of different bank portfolios ) ; β’ certain modelling choices seem to be major drivers of the variation in risk weights ; and β’ the quality of existing public disclosure is generally insufficient to allow users to determine how much of the variation in reported risk weights is a reflection of underlying risk taking, and how much stems from other factors ( eg modelling choices, supervisory discretions ). in thinking about these results, it needs to be borne in mind that the objective is not to achieve zero variation. if we wished to achieve that outcome, we could simply force all banks onto the standardised approach to capital adequacy and remove any modelling options. but the standardised approach β while an ostensibly consistent methodology β
| 0 |
β striking the right balance in policies and institutions in the euro area β speech by klaas knot, at econopolis β twain talks brussels, 20 september 2017 good morning all, thank you for inviting me here to speak about economic policy in the euro area in the spirit of mark twain. in the instructions to this twain talk, the organizers asked me not to focus too much on socalled β known knowns β. this is an easy task for a central banker in current times. in recent years, we have faced many unprecedented policy challenges. and we have had to implement policies that reached well beyond what we considered conventional before the crisis. yet, by doing so, central banks have played an important role in stabilizing the economy. as a consequence, we now face a much improved economic environment. today, i will give you my views on the way forward for the euro area against the backdrop of this improved outlook. acknowledging there are still many unknowns along the way, i will stress that the time has come to rebalance our economic policies. away from non - standard monetary policies to addressing the structural and institutional factors that have been holding back growth. monetary policy during the crisis first, however, let me quickly talk you through how we got to where we are now. since the onset of the financial crisis in 2008, it has not been an easy ride for the euro area. we have seen drastic adjustments in three different macroeconomic sectors : the financial sector has had to repair its balance sheets. the private sector has been in a deleveraging mode for nearly a decade. and governments have also had to make major fiscal adjustments. these deleveraging efforts have been holding back growth. as a result, over the past decade, economic policy in the euro area has mainly involved crisis management and stimulating demand. partly owing to limited fiscal space in many euro area countries, monetary policy at times became the only game in town. even after policy rates had been brought down to zero, central banks have proved creative in finding ways to fight the economic problems caused by the crisis. in this environment, the ecb had to take far - reaching measures. we have substantially lowered our main policy rates, even into negative territory, to stimulate consumption and investment. moreover, several non - standard monetary policy measures were taken to bolster the transmission of low policy rates in the face of persisting market tensions. in 2015 there were serious concerns that the euro area could slide into a deflationary spiral,
|
and supervisors are all sensitive to attempts at greenwashing. the legal risks associated with greenwashing are significant. and so not living up to a climate commitment may lead to litigation risk that could have significant financial consequences. to illustrate the significance of this risk, the total number of climate change - related court cases worldwide has more than doubled since 2017 and is growing. so the climate - and nature - related risk to which financial firms like yours are exposed may be considerable. the recent good news is that the dutch environmental agency for the first time has indicated that the netherlands seems to be on track to reach its target of a 55 percent decrease in co2 emissions by 2030 β as compared to 1990. if we work really hard. and we won't be done with the netherlands delivering on its climate ambition only. the transition to a carbon - neutral society, in harmony with nature, is, simply put, the world's biggest challenge and should be a top priority around the globe. governments are in the lead here, through regulation, adequate pricing of carbon emissions, and encouraging the financing of innovative, sustainable investment. as a central bank we have supported this transition with research, advice and by bringing key players together to facilitate sustainable finance where we can. as a supervisory authority we also have a responsibility. a responsibility to make sure that financial institutions manage climate - and nature - related risk. because ignoring these risks is no longer compatible with sound risk management. that's where my focus lies today. over the past years we have been active in bringing these risks to your attention. initially by sharing with you what we consider to be good practices and other suggestions for dealing with climate and environmental risks. think of the ecb and dnb guides on climate - related and environmental risks. think of the basel committee principles for the effective management and supervision of climate - related financial 2 / 4 bis - central bankers'speeches risks. and the ecb has urged banks to analyse climate and environmental risks and integrate them into their business models, governance, risk management and disclosures. but despite all efforts i must say i am concerned about the pace and the amount of action in the financial sector. yes, financial institutions have made meaningful progress in accounting for climate and environmental risks. some banks have shown they acknowledge the materiality of climate risks in their portfolios. the same holds for pension funds. and they have made progress in including these risks in their risk management frameworks and processes. also, around 50 banks
| 0.5 |
the rules are written, and how well they are interpreted and enforced. the legislation also sets up a new consumer bureau to address the gaps in unregulated and under - regulated financial firms, including mortgage finance companies, payday lenders and credit card issuers. its success will depend on whether it can appropriately identify those institutions exploiting those gaps and bring them into accepted standards of behavior. if the new bureau merely directs its resources to the already heavily regulated community banks, its beneficial effects will be minor. a targeted implementation program is critical if the consumer is to experience the hoped - for benefits. the legislation primarily hoped to address the public β s concerns about too - big - to - fail institutions β that is, those that are so large and interconnected that they will be bailed out by taxpayers no matter what risks and bad decisions they make because they are too β systemically important β to be allowed to fail. whether or not too - big - to - fail is addressed by this legislation depends on the leadership at the regulatory agencies when the next crisis occurs. the law now requires that the fdic take into receivership an institution that is designated as β in default or danger of default β for which the regular bankruptcy process would have systemic consequences. the process for taking this action is complex, requiring multiple regulatory parties to agree, the treasury secretary making the final determination with the president β s concurrence, and a court ruling that the action isn β t arbitrary and capricious. this will be an incredible challenge for the regulatory agencies. recent experience tells us that time is of the essence in a national liquidity crisis. it will be extremely difficult in practice to designate the largest institutions as insolvent, take them over and liquidate. the simple truth is β too - big - to - fail β will not go away easily. our largest institutions, even after their poor performance during this last crisis, remain financially and politically powerful institutions. it gives me pause, for example, that after the recent devastating experience of the global banking crisis, regulatory authorities are already backing off initial attempts to strengthen international capital requirements for these largest banks and financial firms. the basel committee just announced an agreement to establish for our largest global banks a tier 1 capital - to - asset ratio of 3 percent. this is a 33 - to - 1 leverage ratio. bear stearns entered this crisis and failed with a 34 - to - 1 leverage ratio. it leaves a small cushion for error and is a level
|
six months, and if history is any guide, we should see these increases accelerate over the course of the year. i would also note that our manufacturing survey points to expected gains in production and capital spending, which will contribute to improving job growth. even so, with the number of people out of work and the growing numbers of new job entrants, it will be some time before we see the unemployment rate well below 9 percent. given the immediate levels of slack in the economy, core inflation will remain modest in the near term. however, given the degree of monetary and fiscal stimulus in place in the economy currently, inflation should move higher over the medium and longer term, depending on what further steps are taken in these policy areas. also, the risk of further disinflation or outright deflation is small and, with an improving economy, should only decline further in the coming months. it is also noteworthy that long - run inflation expectations even now remain above 2 percent and should exert upward pressure on inflation during the course of the recovery. there are, of course, risks to the outlook. first, i am concerned about what might happen to the economy if we fail to deal successfully with our long - run fiscal challenges. the budget deficit is the largest we have seen, as a share of gdp, since world war ii. with these large budget deficits, total federal debt outstanding is almost $ 14 trillion, or about 94 percent of gdp. moreover, projections of deficits and debt show the federal debt will continue to increase, suggesting that fiscal policy is unsustainable and must be changed soon. as we have seen elsewhere, the reaction of interest rates and exchange rates to unsustainable fiscal policy can be sharp and disruptive. while specific recommendations on fiscal policy are not the purview of the federal reserve, i would urge serious consideration of proposals that have been offered by several groups, including the simpson - bowles deficit reduction plan. these are reasonable starting points for addressing the intractable problem that may have very serious ramifications for future monetary policy. a second concern i have is the consequences that will follow when we combine our current fiscal projections with a highly accommodative monetary policy. in essence, the federal open market committee ( fomc ) has maintained an emergency monetary policy stance in a recovering economy and has continued to ease into the recovery. i believe these actions risk creating a new set of imbalances, or bubbles. importantly, such
| 0.5 |
adrian orr : we are not alone with monetary policy comment by mr adrian orr, governor of the reserve bank of new zealand, 28 august 2019. * * * it was clear that even in the remote mountain region of the us state of wyoming we were among the crowd. the annual august kansas federal reserve β s summit of many of the world β s central bankers vividly highlighted our commonality. inflation has been low and stable, and many labour markets are near their peak loading. new zealand included. independent central banks have successfully achieved their inflation goals, promoting economic wellbeing. yet, there was no vigorous back patting. there were mostly furrowed brows. a slowing global economic outlook, increasingly prompted by pockets of volatile politics, is keeping the world β s central bankers busy. in response to the economic chill, central banks around the world have lowered interest rates β often to record lows β to promote investment and spending. they continue to pursue their mandated low inflation goals. that β s our job. we aim to keep inflation low and stable and contribute to maximum sustainable employment. this is the best we can do as a central bank to promote economic wellbeing. we have the one main instrument β the interest rate lever or price of money β and we use this tool with our best view of what β s on the horizon. we provide forward guidance on our expected activity, but remain flexible to incoming data. monetary policy remains as effective as ever, and for small open economies like new zealand, the exchange rate plays a significant additional role in competitiveness. our research gives us confidence that even at these low levels of interest rates, monetary policy remains as effective as ever at providing timely economic stimulus. as the governor of the swedish central bank noted β those who think that monetary policy is losing its vigour should think of the alternative. higher interest rates over recent times would have meant we undershot our inflation and employment goals, have significant weaker activity, and a rising domestic exchange rate β until it was unsustainable. but there are natural limitations to what central banks can achieve with their tools, and if operating alone. global integration, productivity and technology, governments β fiscal and regulatory policies, changing demographics, consumer preferences and climate, and unanticipated events β including political volatility β play the dominant role in long - term prosperity. central banks operate within this context and need all policy levers working. my colleagues at the summit were very humble as to our influence over long -
|
the debt and mortgage - backed securities issued by fannie mae and freddie mac do not. by comparison, marketable treasury securities outstanding outside the government total $ 2. 8 trillion. however, holding debt issued by fannie mae or freddie mac in the fed's portfolio, to the exclusion of other private assets, would, in my view, reinforce the market perception of the special status of federal actually, the fed rarely sells assets outright from its portfolio. most open market operations aimed at withdrawing reserves are done with temporary operations. agency debt. this would increase the subsidy that already exists in this market, potentially further distorting the allocation of credit and resources. any decision to move in this direction, therefore, might be best linked to a broader decision to change the federal reserve act to allow the federal reserve to hold private debt in its portfolio. in that case, federal agency debt could be treated symmetrically with high - grade commercial paper and corporate bonds. similarly, mortgage - backed securities insured by fannie mae or freddie mac should not be treated differently from other highly - rated private debt. of course, holding only federal agency debt, mortgage - backed securities issued or guaranteed by the federal agencies, and other similarly highly - grade private debt would still distort credit allocation by favoring high - grade over other private debt - - but it would dilute the federal agency advantage. federal agency debt and mortgage - backed securities issued or guaranteed by the federal agencies also could be held as part of a wider range of private debt. the fed holds foreign sovereign debt today in order to earn interest on its foreign exchange holdings which it acquired in the course of interventions over the years. the question here is whether the fed should also carry out open market operations by buying and selling such debt. the effect of doing so would be essentially the same as a foreign exchange intervention. this raises a host of questions about the suitability of such operations. it first raises a question of whether such operations would have to be coordinated with the treasury, given that both the treasury and the federal reserve are authorized to intervene in foreign exchange markets and routinely coordinate their interventions. second, buying and selling foreign sovereign debt would have a direct effect on the countries whose assets we were buying or selling and could interfere with their domestic policies. though these considerations weigh against holding foreign sovereign debt in the permanent portfolio, such debt could be used as collateral for dollar - denominated repurchase agreements with dealers. such transactions would not change the currency composition
| 0 |
of the world implicitly assumes that the equilibrium real rate is stable over time, whereas in fact it will move about. 6 sometimes the central bank will need to change its policy rate simply in order to maintain unchanged monetary conditions ( as proxied in the literature by r minus r star ). in the same vein, if near - term inflation expectations rise or fall, our nominal policy rate may need to change just to leave the actual short real rate unchanged. in other words, we can fix only one thing β the short nominal rate β but what any particular level of bank rate means for monetary conditions will depend on short - run inflation expectations and on the equilibrium real rate needed to balance the economy. both will likely have changed materially in the face of the cost and credit shocks. what our bank rate will mean for monetary conditions will depend on how it relates to the panoply of other interest rates on financial contracts. in fully efficient markets, the risk - free see neiss, k and nelson, e ( 2001 ) β the real interest rate as an inflation indicator β, bank of england working paper no 130. rate is a fully satisfactory summary statistic ; other rates fall into line through arbitrage, with differences reflecting risk premia. more practically, it can typically be assumed that the rates charged on private sector loans are maintained at fairly stable spreads relative to the riskfree yield curve ( ie given the expected path of the policy rate ). and, related to that, it can also typically be assumed that the degree of credit rationing in the economy is broadly constant over time. obviously, neither of those things is true at present. the most unusual, and stretched, circumstances lie within the global financial system itself. the premium on unsecured interbank lending has risen ( chart 1 ) ; and growth of such lending has slowed. this reflects a desire to hoard liquidity in a hazardous environment ; and heightened aversion to taking on unsecured credit exposures for term maturities. banks are, in consequence, deleveraging 7 their balance sheets. broadly, they can do so in two ways β raise extra capital, or shrink ( the pace of growth in ) their balance sheets. both have been underway. the balance sheet shrinkage is reducing the supply of credit to households and firms. but there is differentiation across the banking industry, according to size and strength. in that environment, spreads on corporate bonds are higher. many corporate and household lending rates have been
|
ewart s williams : the importance of adequate capitalisation in the insurance industry remarks by mr ewart s williams, governor of the central bank of trinidad and tobago, at the signing agreement between guardian holdings limited and international finance corporation, port - of - spain, 1 december 2010. * * * i wish to congratulate guardian holdings limited on the consummation of this very significant relationship with the ifc. this new partnership should not only strengthen ghl β s balance sheet, but should redound to the benefit of the public by increasing the availability of insurance products to markets that are not currently well - served and in this list, i include, small businesses, micro - finance institutions and agribusinesses. over the past several months the insurance industry has been overrun by a chorus of bad news involving institutions in which the central bank has intervened. unfortunately, even with its potential for contagion, the current turmoil obscures an insurance industry with tremendous strengths and resilience. the subsidiaries of the guardian holdings group are an integral part of this structurally strong and resilient insurance sector. since its establishment in june 1996, the guardian holdings group has blossomed into an integrated financial services entity, covering life, health, property and casualty insurance, pensions and asset management. ghl has spread its wings throughout the english and dutch caribbean and is now listed on both the trinidad and tobago and jamaican stock exchanges. guardian life, the flagship company of the group is a major player in the life insurance sector accounting for 38 per cent of the market β s contract liabilities. guardian general has become the region β s largest indigenous property and casualty insurance company. as the largest general insurance company in trinidad and tobago, guardian general holds 26 per cent of market share and 21 per cent of total assets of the sector. among the many best - practices adopted by ghl is the annual review by a. m. best to assess the financial strength of its insurance subsidiaries and to ensure that the companies are in a position to meet their obligations to policyholders. in june 2010, a. m. best gave a rating of a β ( excellent ) for the financial strength of both guardian life and guardian general. according to best, the excellent rating reflected ghl β s improved balance sheet, the decline in total debt and lower intangibles following the write - off of goodwill related to its european property and casualty operations, and its adequate level of risk adjusted capitalization. in the case of ggil,
| 0 |
- has always been very fiscally responsible because they know that they can finance a big part of the debt of the government by issuing pesodenominated bonds. indeed, around 80 percent of our debt is domestic debt, and much of that is longer than two years. in summary, what you have is the financial and banking conditions of the philippines that are consistent with long - term growth. no shortcuts. no boom and bust. we try to keep growth as steady as possible and to make sure that the banks are strong so that the economy will be supported by price stability, financial stability, and the payment system that we support. thank you very much. 4 / 4 bis - central bankers'speeches
|
announced an end to quantitative easing and markets started to price in first increases of boj interest rate. this may expose some emerging markets, which have weak fundamentals to a change in investors β sentiment, may lead to the depreciation of local em currencies and a significant drop in market liquidity. 11 some risks are also related to the changing structure of our financial markets. since the second half of 2004, the liquidity of offshore spot zloty market has increased significantly and average daily turnover reached almost usd 1 billion. in addition, high nominal values of single transactions between non - residents contribute to a segmentation of the zloty foreign exchange market. this phenomenon is even more visible in the case of the zloty option market. at the same time the consolidation of the polish banking sector, transfer of treasury operations to parent banks and very limited amount of polish banks β capital, which determines the scope of risk they can take, limits the liquidity of the domestic market. in the future, financial market for instruments denominated in zlotys could become even more segmented and therefore less effective in absorbing different kinds of risks. 12 this process will accelerate with our accession to the eurozone. experience of some emu members, e. g. finland, indicates that emu membership will be accompanied by a visible contraction of the domestic market. 13 the introduction of the euro will change banks β internal organisation of risk and liquidity management. treasury activities will be centralised on a multi - country group level and proprietary trading will be transferred abroad to head offices. this process might be accelerated by the already observed transformation of subsidiaries into branches of foreign banks. domestic outlook let me turn to domestic outlook of the polish economy. the nbp projection released in april - which assumes unchanged interest rates at 4 percent - points to economic growth within the range of 4. 5 to 5. 5 percent in the years 2006 - 2008 and inflation gradually returning to 2. 5 percent target sometime in 2008. the statement issued after the april monetary policy meeting stated, and i quote 14 : β the council maintains its assessment that with large probability inflation will in 2006 q2 and maybe q3 remain below the inflation target mainly due to short - term factors. if the developments in the economy were consistent with the april nbp inflation projection, then the current level of the reference rate of the central bank would support a gradual return of inflation to the target over the projection horizon and would also be condu
| 0 |
. our operational resilience expectations help in this regard. but we also want to see firms working together on market disciplines towards operational resilience in the financial sector. a good example is critical thirdparty providers, a subject on which hmt published a policy statement. [ 3 ] in the new world, relationships with critical third - party suppliers are becoming as important as the relationships with large financial counterparties that international banks had established over many years. that is a sign of the rising prominence of operational vs. financial matters in that new world β less of an afterthought. so your ceos may need to start making different types of phone calls. the financial sector can also work together on the development of extreme and multidimensional systemic stress scenarios, and assessing the impact of shocks from one firm to another. we are arguably now still in the foothills of this new digital era. ahead of that, international banks must frontload the implementation of operational resilience policy. surely a mere sliver of the earnings of the last decade should be more than enough to cover that investment. and boards must make sure they understand the risks from new technology and that operational resilience becomes part of the fabric of their decision making. this means, before entering materially into crypto assets, adopting artificial intelligence ( ai ), introducing the cloud ; or entering third - party relationships, international banks active in the uk must complete their operational resilience homework. so that they are prepared for this new tide. towards waters in which safe havens will probably be quite sought after and attractive β so there is an opportunity here for banks and their franchise. climate the two issues i have discussed so far, namely how the new world might threaten firms β financial and operational resilience, obviously have the potential to crystallise in the very near future. the last issue i will touch on today may appear to some as somewhat longer - term, but it is fast approaching and will change the environment we operate in. that is climate change. over the last couple of years markets have exhibited a number of features which arguably give us a foretaste of some of the future consequences of climate change, depending on how the climate transition pans out. here, i am thinking of the disruption to world energy and commodities markets, global supply chain problems and, most recently, the threat of food insecurity. it would be easy to attribute each of these issues to specific triggers, such as covid or
|
michael c bonello : central bankers β view of the new challenges speech by mr michael c bonello, governor of the central bank of malta, at a conference entitled β the challenges for central banks in an enlarged emu β organised jointly by the european community studies association ( ecsa austria ), research institute for european affairs ( ief ) and oesterreichische nationalbank, vienna, 20 - 21 february 2004. mr bonello was a panelist on the discussion regarding β central bankers β view of the new challenges β. * * * when ten countries, including malta, join the european union ( eu ) on 1st may, they will assume the status of β member states with a derogation β, meaning that they are exempt from the stricter rules of emu. this may seem to imply that the transition to emu is thereby rendered easier, but a careful examination of the conditions attached to the process reveals that the policy issues involved are anything but straightforward. this is particularly true of a small open economy like malta β s in which macroeconomic policy is strongly conditioned by the external environment, but which has nevertheless succeeding in reconciling a hard currency peg with relative exchange rate stability for over thirty years. malta has a population of only 400, 000. its nominal gdp of β¬4. 5 billion, or less than 0. 1 % of that of the eu, translates into a per capita income which is around 69 % of the eu average. market services, including tourism and finance, account for nearly two - fifths of gdp, while manufacturing contributes almost a quarter. given its size and lack of natural resources, it is not surprising that malta has one of the most open economies in the world, with imports and exports each almost as large as the gdp. the eu is malta β s main trading partner, accounting for over two - fifths of exports and two - thirds of imports in 2003. it is an even more important market for the tourism industry and is a major source of capital investment. for malta, therefore, the prospect of being anchored in the relative safety of the world β s second largest economy and of using that economy β s currency represents a considerable advantage. perhaps the foremost benefit of euro area membership is being able to share in the credibility of a europe - wide monetary policy. this will not only mean reduced exchange risks and less uncertainty for economic operators, but also the elimination of the risk premium on the maltese lira. the resulting reduction in interest rates
| 0 |
working life, up to at least age 55 to supplement their retirement income. this is a great opportunity and challenge for the trust industry to design product choices that conform faithfully to the laudable objective of this new law. further, the improving economic prospects also set the stage for progressive liberalization of our foreign exchange regime to allow for greater flexibility in overseas investing. this should provide professional fund managers the necessary room to maneuver the diversification of their portfolios and to access a richer variety of qualified assets β¦. for the benefit of their customers. ladies and gentlemen. the reform agenda must be pursued vigorously β¦. if we are to secure the opportunities. at the financial market level, the bsp is closely collaborating with key market players through their respective industry associations, as well as with our fellow regulators particularly the sec β¦.. to achieve more transparent and investor - friendly markets. it is in this context, that we welcome the recent launch of the new government securities benchmark system that can promote fair price discovery, more effectively. we expect the trust industry to work within this new system so we can achieve full transparency and comparability of performance. the new benchmark should also assist in properly valuing debt securities and other financial products like derivatives, repos, as well as securities borrowing and lending arrangements β¦ and thus promote their acceptability to the market. as the galaxy of available domestic capital market assets expands and the market deepens β¦. it is the trust industry that will be a clear winner. we are also working hard to constantly improve the payments and securities settlement systems. it is basic that we aspire to fully achieve efficient dvp settlement in all securities transactions β¦. in line with global standards in the area. this is critical to both investor protection and market stability. we also need to work closely to reform the trust industry itself. in that spirit, we are devoting dedicated resources at the bangko sentral β¦ through our newly formed trust supervision group β¦ to work closely with toap. their priorities include ( 1 ) basic trust department operating standards ; ( 2 ) risk management guidelines ; ( 3 ) trust department rating system ; ( 4 ) specialized examination procedures ; and ( 5 ) improvements to uitf regulations. at a more fundamental level, we are also reviewing the basic governance arrangements of the trust department β¦. as an entity within the bigger banking organization β¦. to minimize potential conflicts of interest, while preserving natural business synergies. this includes a closer look at the composition of the trust
|
committee and a clearer articulation of their duties and responsibilities for good governance. also in scope are the qualifications of trust officers and the proper definition of their duties and responsibilities. the basic operating standards are designed to ensure consistency in the administration and operation of trust and other fiduciary business and investment management activities to better promote investor protection. the standards cover significant areas of trust operations and set forth the minimum array of procedures β from account acceptance to termination, aimed at further professionalizing business conduct across all practitioners. on the other hand, the risk management guidelines will be formulated to identify, manage, and control specific risks in the trust business. in tandem with the basic standards, the risk management guidelines will enjoin trust entities β total adherence to the cardinal principles of prudence and utmost care. a rating system for the trust unit β¦ analogous to the camels rating system for bank proper.... is being formulated to independently assess their performance, given their special fiduciary responsibilities. to tie everything up, new specialized examination procedures are being drafted for trust operations β¦. to basically align these with the risk - based approach and to incorporate compliance with the basic standards and risk management principles. finally, the uitf regulatory framework will be reinforced to cover the following : ( 1 ) improved certification program for uit marketing personnel ; ( 2 ) additional guidelines to standardize uit performance reporting for marketing purposes ; ( 3 ) enhanced risk disclosures and client suitability profiling ; ( 4 ) updating of major template documents like the declaration of trust to incorporate amendments to the regulatory framework ; and ( 5 ) corporate governance structure of uits such as the possible separation of trustee and fund manager functions or alternatively, the strengthening of present combined function arrangement β¦. as these matters have evolved in global best practice. ladies and gentlemen. all these trust reforms are building blocks that should help us nurture a truly competitive and dynamic trust industry that is responsive and supportive of a growing economy. this we owe to our country and our people. let us therefore take heart that even as we continue to face challenges β¦ the opportunities ahead give much promise, especially to those who will adhere faithfully to the tenets of good governance. remember : fairness, accountability and transparency. on this upbeat note, i greet you all β¦. aloha! thank you all and good evening.
| 1 |
downturn with repercussions for the entire global economy. steering interest rates were cut all around the world, including in sweden. nevertheless, inflation continued to rise. a cold winter in europe, problems with the swedish apple harvest and poor fishing catches led to rising prices on fruit, vegetables and fish during the autumn. it is obviously easy to get caught up with details and fail to see the underlying changes. however, we could see even more clearly that the rise in inflation was not merely due to transitory factors, but entailed a broad rise primarily in domestic prices. this could be connected with the fact that secondary effects from the higher energy and food prices had made a greater impact in the consumer channel. another important factor was that wage growth, despite the weaker development in demand, became even more problematic. within many industries, for instance, construction, retail trade, banking and insurance, as well as the public sector, wages rose considerably during 2001. at the end of 2001 / beginning of 2002, there were signals from confidence indicators that economic activity might have reached its lowest level in the usa and also sweden and some optimism regarding the future began to spread. the effects of the terrorist attacks appear to have been limited, although some sectors were hit very hard. to sum up, we can conclude with the aid of this slide ( oh 1 the riksbank β s forecasts for gdp 1999 - 2003 ) that the year 2001 entailed constant downward adjustments in the growth forecasts. at the same time, we can conclude the opposite with regard to the inflation forecasts ( oh 2 inflation forecasts 1998 - 2002 ), which we have been forced to revise upwards again and again. if we are right that a recovery is now beginning both in sweden and abroad, we can conclude that the economic downturn was one of the mildest of the post - war period, partly as a result of resolute stabilisation policy. however, the slowdown in sweden and the rest of the world during 2001 was unexpectedly severe in relation to the forecasts made in 2000. the fact that forecasters miss turning points in the economic cycle is not unique to this particular downturn, but quite a common phenomenon. i will return to the current situation, but first a look back in time. historical patterns are repeated is it possible to learn lessons from history? both yes and no. if one studies economic slowdowns over the past three decades, one can see that they differ considerably both
|
rising because the increase in global demand and growth is higher than was assumed, or is the political uncertainty in the middle east the most important factor? what is the resource situation within the economy? a price rise that occurs when resource utilisation is on its way down can lead to a rapid and profound decline. rising oil prices in a situation with strained resources can lead to a spread effect, with a general rise in prices within the economy. we can thus have a higher inflation rate at the same time as this can have a subduing effect on production and employment. if monetary policy were to be aimed in every situation at using interest rate hikes to eliminate the effects of oil price rises on inflation, it could lead to a deterioration in production and employment. if transitory effects on inflation are expected to abate without spreading to other prices or affecting inflation expectations, there may be good reason to leave the repo rate unchanged. a gradual adaptation of monetary policy directed at achieving the inflation target a couple of years ahead allows us to take into account employment and growth. that is why the riksbank β s policy is based on achieving its inflation target of 2 per cent one to two years ahead. acts of terrorism, wars and natural disasters increase uncertainty it is important to observe that knowledge of the effects of monetary policy is not complete. the purpose of the deviation interval is to make clear that deviations are probable, while our ambition is to try to limit them. in practice, monetary policy is governed in such a way that we make forecasts for inflation one to two years ahead. if the forecasts for this time horizon are higher than the inflation target we raise the repo rate, and if they are lower, we cut the rate. so what do we think we can affect through monetary policy? to put it simply, the repo rate affects other swedish market rates ( the interest rate channel ), the banks β lending to the general public ( the bank channel ) as well as other asset prices, such as share prices, and the exchange rate ( the exchange rate channel ). the size of the impact made by a change in the interest rate on households β mortgages or on share prices varies over time. monetary policy can also have an effect via households β and companies β expectations of the future. an inflation target of 2 per cent shall act as a kind of nominal anchor for expectations regarding the future development of inflation and thereby affect pricing, rates and wage - setting. when it comes to
| 1 |
which will take the total sum bought to Β£325 billion. to give you some context, that represents about a fifth of the annual output of the united kingdom and around a third of the total stock of uk government debt in issue. why did we decide to inject further monetary stimulus into the economy? and how likely is it to be effective? we started quantitative easing in march 2009 in the aftermath of the collapse of lehman brothers, as the uk economy was undergoing its deepest post - war contraction. bank rate was almost as low as it could go and further stimulus was necessary to put a floor under demand and get the economy growing again. all told we bought Β£200 billion of gilts during that initial phase of quantitative easing. quantitative easing essentially involves trading one liability of the state β gilts β for another β monetary claims on the bank of england. we aim to buy mainly from non - bank private financial institutions, such as pension funds and insurance companies, not from the bis central bankers β speeches banks, as is sometimes erroneously claimed 1. when we buy a gilt, we simply credit the bank account of the seller with an appropriate sum. if the seller were indifferent between holding the gilt and holding the associated bank deposit, that is where things would stop. but because deposits tend to yield less than gilts and assets such as corporate bonds and equities, the seller is likely to want to buy some other asset instead. the consequence is upward pressure on the prices of a whole range of assets, including corporate bonds and equities. that increases the availability, and reduces the cost, of finance to corporates. it also boosts the value of people β s wealth, which should encourage more spending. as i noted a moment ago, we aim to acquire the gilts from institutions other than banks. but as a by - product of the purchase, banks will find that they have both more customer deposits and an increase in their claims on us ( what are known as bank reserves ). that may encourage them to increase their lending, though in the particular circumstances prevailing during and after the financial crisis, we expected this effect to be quite weak. that is in line with the observed weakness in bank lending over the past three years. our analysis of the first phase of quantitative easing suggests bond yields were around one percentage point lower than they would otherwise have been. and uk equity prices rose 50 % during the programme, though only a small part of that is likely to be down to quantitative easing
|
joachim nagel : the current economic situation welcome words by dr joachim nagel, president of the deutsche bundesbank, at a club evening of the international club of frankfurt economic journalists, frankfurt am main, 21 november 2022. * * * 1 words of welcome ms schreiber, many thanks for your kind invitation and warm introduction. i am very pleased to join the ranks of the bundesbank presidents who, starting when the euro was introduced back in 1998, have been invited by the international club of frankfurt economic journalists to meet with its members for an exchange of views and ideas. like my three predecessors, ernst welteke, axel weber and jens weidmann, it is very important to me to communicate and interact with media representatives. in times of high inflation, it is all the more necessary to explain and contextualise what pushes inflation higher and how effective monetary policy measures are. as journalists, you have a particularly important role to play here as the link between an institution such as the bundesbank and the general public. that's because, in turn, communication with the public is key to the effectiveness of monetary policy and of economic policy in general. a current example is the proposal put forward by the gas price commission. unlike a price cap, the gas price brake does not distort price signals at all. however, for the full effect of the gas - saving incentives contained in this brake to be felt, the general public needs to correctly understand them. communicating in an accessible way with the outside world helps to create trust β and trust is an indispensable foundation for monetary policy. christine lagarde summed it up well recently. : " if people don't understand what i'm saying, how can they trust me? after all, today people don't trust someone only because the person expresses herself or himself in a complicated way " 1 your reporting makes a significant contribution to helping us achieve our monetary policy objectives. the way in which you explain and give context to this complicated subject matter helps your audience understand it. but we central bankers and economists also need to take care to express ourselves in a way that can be clearly understood. accessible communication fosters public trust β and that is what the success of our monetary policy measures hinges on. it is precisely this confidence in our ability and our determination to ensure price stability that will be vital in the coming months β because challenging times lie ahead. and the ecb governing council will have to continue
| 0 |
, together with the outline of the revision, to thereby seek the users β opinions, which the bank believes is invaluable for the improvement of the statistics. this paper describes the revision in some detail, including changes in sectoral classification and expansion of transaction categories, and explains the new types of information obtainable from the revised flow of funds accounts. improvement of statistics often involves a trade - off between users β convenience and reporting burden. improvement of the flow of funds accounts is no exception. although the intention is to make full use of existing statistics in producing the accounts, the reporting burden may be increased in some areas. this paper will also be useful in evaluating the costs and benefits involved in the revision of the flow of funds accounts. the framework for restructuring the boj - net funds transfer system introduction in december 1996, the bank of japan published a consultation paper that outlined its plans to restructure the funds transfer system of the bank of japan financial network system ( boj - net ). the bank plans to abolish designated - time settlement and make real - time gross settlement ( rtgs ) the only settlement mode by the end of the year 2000. the paper also drafted the main features of rtgs after the restructuring, and the bank requested comments and suggestions from current account holders with the bank of japan ( boj account holders ), the operators of private clearing systems, and other interested parties. overall, the bank β s proposal was strongly supported, and the bank received a number of constructive comments and suggestions on its proposal. on the basis of its december proposal and the comments and suggestions received, the bank released on april 1, 1997 a framework for abolishing designated - time settlement and making rtgs the only settlement mode in the boj - net funds transfer system.
|
benoit cΕure : euro interest rate benchmark reform : achievements and remaining challenges opening remarks by mr benoit cΕure, member of the executive board of the european central bank, at the annual dinner of the working group on euro risk - free rates, frankfurt am main, 26 february 2019. * * * good evening and welcome to the first annual dinner of the working group on euro risk - free rates. on this very day one year ago, the working group on euro risk - free rates held its first meeting in frankfurt, hosted by the ecb. looking back, your achievements have been impressive, almost on a par with the challenges that lie ahead. in its short existence, the working group has recorded two prominent achievements. the first is the choice in september 2018 of the ecb β s overnight rate as the new euro risk - free rate. this decision provided clarity to market participants and planning certainty for the transition towards more robust benchmarks in the euro area. it also brought the euro area closer in line with other currency areas in preparing for new benchmarks. the second achievement is that, at the roundtable on euro risk - free rates in november 2018, the working group took a major step in reaching out to stakeholders and raising awareness of its activities. sound communication and transparency are vital for spreading awareness about the transition to risk - free rates beyond a small circle of informed parties. by getting the message across to a more diverse audience, the working group lends more legitimacy to its recommendations and does as much as it can to promote market consensus. this first roundtable was a successful exercise in this regard. in time, i would expect such open communication to play a pivotal role in the transition to more robust interest rate benchmarks. besides these two very concrete achievements, i know that a great deal of work on building a consensus has been going on behind the scenes in the various sub - structures of the working group over the past year. reaching agreement on recommendations that reflect the views of such a wide variety of institutions is not an easy task. over the course of last year, the working group and subgroups members held no less than 80 teleconferences and seven working group meetings, which give some idea of the work that went into aligning views within such a tight time frame. i would like to thank all of you, including the team supporting the working group chair, for your contributions, as well as the secretariats of the ecb and the european securities and markets authority for
| 0 |
yourself the question β how would the financial system have fared if covid had hit in 2007? β to appreciate the importance of the resilience that has been built up over the last decade. combining a financial crisis with a health and economic crisis would have been profoundly damaging. the building society sector has of course been a very important part of this picture. with more than 25 million members and an average cet1 ratio of more than 26 %, the building society sector was well placed to weather the storm from a financial resilience perspective, extending more than Β£66 billion of new loans in 2020 and offering a peak of more than 300, 000 payment deferrals to customers in financial difficulty. from an operational perspective, societies also adapted quickly to lockdowns and home - working arrangements, with almost all society branches continuing to serve their members through the pandemic. but the disruption caused by covid - 19 has shown why it is critically important for firms to identify the key services they provide and invest in their resilience. societies β like all of 1 / 5 bis central bankers'speeches us β have witnessed an acceleration in technology innovation over the last year. continuing to build on these developments and incorporating them into operating models will be important, both for the sector β s operational resilience, but also for serving the evolving needs of the sector β s members. as we sit here today, the outlook looks better than we might have expected a year ago. but a considerable amount of uncertainty remains, not least as many of the bridging measures put in place by the authorities begin to roll off. though it may now look less likely, additional financial and operational pressures may still be on the horizon, and we will be monitoring that closely. but in the meantime i thought it might be worth us raising our sights a little and having a look at some of the regulatory issues that lie on the other side of the bridge : strong and simple, leverage, mrel and mortgage floors. strong and simple i β ll start with strong and simple. avid followers of my speeches β of which i am regularly assured there are at least three across the country, one of whom is robin β might recall that in november last year i gave a speech titled β strong and simple β. indeed, it turns out that robin is such an avid reader of my speeches that he has themed this entire conference day as β strong and simple β! i β m not quite sure what to make of that
|
still behind the curve. finally, year 2000 assessment must also evaluate the level of financial resources available to developing countries to successfully complete a readiness program, and funding to constituents for year 2000 initiatives should receive a high priority. closing remarks as i indicated at the outset, the federal reserve views year 2000 preparations with great seriousness. we have placed a high priority on the remediation of date problems and the development of action plans that will ensure business continuity for the critical financial systems we operate. while we have made significant progress, and are on schedule in validating our internal systems and preparing for testing with depository institutions and others using federal reserve services, we must ensure that our efforts remain on schedule and that problems are addressed in a timely fashion. much remains to be done. we intend to be as prepared as is humanly possible, and believe that most u. s. banking institutions will be, as well. so will the central and private banks of various other countries. but we would be greatly comforted if this were the outlook for every nation, and for every industry. at this time, that is not the prospect. let me close by urgently requesting your concern and assistance.
| 0 |
of western balkan countries as regards economic indicators, in light of a common area and its future challenges. the first prize is awarded to borana angjeli, an ma student of marin barleti university in tirana for her dissertation β pension systems β. drawing on results from a survey to employees close to their retirement, the thesis points out some of the shortcomings of the pension system in albania and makes recommendations on changes to the actual pension scheme, in line with european principles, without being a heavy burden for the state budget. thank you! bis central bankers β speeches
|
information from the bank of albania, whose decisions were covered professionally. the media has been active also in promoting reflection by stakeholders. media has supported bank of albania policies, forestalling dissemination of uncertainties amongst the public. the self - adjusting attitude has been another important element in media β s activity. the alarming effect has been cancelled successfully by thorough analysis of news items, providing nuances of the truth beyond excesses and speculations. a fresh example of this responsible behaviour is the eur / all exchange rate fluctuation at the beginning of december this year. some β panic β was caused amongst the public by earlier media reports and analysis, which were later considered by the media itself as an unreal exchange rate volatility. dear participants, at the conclusion of my address today, i would like to draw your attention on a consolidated annual publication of the bank of albania β our calendar 2012, the jubilee year of the 100th anniversary of albania β s declaration of independence. calendar 2012 features a cycle of contemporary works of art, which elegantly combine traditional and modern elements. this artistic ingenuity provides a varicoloured and loyal depiction of the long and toilsome journey of the bank of albania and the lek through good and bad days, times of war and peace, subtle and radical changes. these fellow travellers have always succeeded in renewing and strengthening their shared foundation, which is your trust and confidence. this thread sews together in this calendar, art and the bank of albania, as two components that create, uphold and promote values. the calendar is an artful portraying of our central banks traits such as stability, independence, confidence, transparency and financial literacy, which nourish our dream of a common european future. this future rests in our hands like a golden globe of prosperity and happiness. bis central bankers β speeches thanking you for your attention, allow me to announce the winners of the best diploma awards for 2011 : the third prize is awarded to ardit azizaj, an ma student of the new york university in prague, for his dissertation β what albania β s possibilities are, in future, regarding the world division of labour? β his dissertation focuses on the impossibility of a country to transform its economy successfully from a poor and centralised to a developed economy. the second prize is awarded to ledia sulejmani, a student of the university of tirana for her dissertation β economic developments in western balkans, future challenges. β her dissertation describes distinctions and characteristics
| 1 |
alan greenspan : jackson hole conference - reflections on central banking remarks by mr alan greenspan, chairman of the federal reserve board of governors, at a symposium sponsored by the federal reserve bank of kansas city, jackson hole, wyoming, 26 august 2005. * * * in the spirit of this conference, i asked myself what developments in the past eighteen years - both in the economy and in the economics profession - were most important in changing the way we at the federal reserve have approached and implemented monetary policy. the federal reserve system was created in 1913 to counter the recurrent credit stringencies that had so frequently been experienced in earlier decades. as lender of last resort, we had a mandate that, at least viewed from today's perspective, was limited. we did not engage in systemwide open market operations until the 1920s. and as recently as the 1950s, the framework within which those open market operations were formulated was still being developed. credit was eased when the economy weakened and tightened when inflation threatened, but largely in an ad hoc manner. as a consequence, the federal reserve was perceived by some as often accentuating, rather than damping, cycles in prices and activity. importantly, however, the surge in prices that followed the removal of wage and price controls after world war ii and again after the korean war kept monetary policymakers wary of the threat of inflation. but concern that the monetary restraint of the 1950s had led to unnecessarily high unemployment persuaded the federal open market committee to adopt a more stimulative policy stance in the mid1960s. those actions appear to have been predicated, in part, on an acceptance of the then - prevalent view that a long - term tradeoff existed between inflation and unemployment. 1 subsequently, however, the experience of stagflation in the 1970s and intellectual advances in understanding the importance of expectations - which built on the earlier work of friedman and phelps - undermined the notion of a long - run tradeoff. 2 inflation again became widely viewed as being detrimental to financial stability and macroeconomic performance. and as the decade progressed, a keener appreciation for the monetary roots of inflation emerged both in the profession at large and at central banks. indeed, the insights from the work of friedman and schwartz a decade earlier gained greater prominence in the realm of practical policy. 3 these events, both economic and intellectual, significantly influenced the tool kits employed by macroeconomists inside and outside policymaking institutions. the large - scale macromo
|
deal - i thought i might do a ph. d. in philosophy at one point, when i was studying philosophy at oxford university and at the universitaΒ© cheikh anta diop de dakar in senegal. but economics turned out to be my purpose and my passion. economics is the fundamental toolkit i use to find answers to the multitude of questions swirling around my head at any given moment. i see economics at work in everyday life and know how foundational it is to every society and community's success. there is a passage from an alice dunbar - nelson poem - because why quote the rest when deltas are the best - that goes : how few of us in all the world's great, ceaseless struggling strife, 2 / 7 bis - central bankers'speeches go to our work with gladsome, buoyant step, and love it for its sake, whate'er it be. delta's dedication to learning and public service gave us an advantage in considering the mission that would occupy our lives. we thought about the change we could make and the influence we could have. we did the advanced calculus that measured the goodness of trouble against the enormity of student debt payments. we knew we wanted work - whether a professional calling or life's work - that, as soror alice said, we loved " for its sake. " while i do not always have a buoyant step, and " gladsome " is probably not the first word i would use to describe myself, i do love my work for its sake, which is a tremendous gift. and i was drawn to delta, because i wanted to be surrounded by people who would use their talents and passions to improve the lives and well - being of all people in the world. why am i bringing this up today? i am sticking to the assignment : deltas embracing the past and shaping the future. we are here to commemorate our founders, our forebears, and the ties that bind us. to celebrate the ways that delta's esteemed history brought each of us through its doors, and how membership helped to shape who we are and who we are yet to become. and delta, along with other divine nine organizations, can be key to shaping the future of economics. diversity is critical to any profession, but particularly to those - like economics - that tend toward the homogenous. or those - like economics - that affect people's daily lives. as policy
| 0.5 |
benjamin e diokno : the philippines beyond survival - becoming an economic outperformer post - pandemic speech by mr benjamin e diokno, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the general membership meeting bmap, 26 october 2020. * * * mr. miguel angelo villa - real, current president of the bank marketing association of the philippines ( bmap ), directors and officers of the bmap, distinguished colleagues from the banking industry, fellow speakers, guests, ladies and gentlemen, good morning to all of you! my presentation is divided into three parts. first, i will discuss philippine macroeconomic updates. second, i will talk about how the country β s banking sector is faring. and third, i will share insights on where we see the domestic economy is headed post pandemic. first, on macroeconomic updates. at this point, i can report that the worst is over. while we β re not out of the woods yet, there has been progress as the economy gradually opens up from the strict lockdown in march to june to less stringent quarantine measures. we β re learning to live with the virus. now, we β re at an inflection point. for instance : the purchasing managers β index ( pmi ) moved past the growth threshold of 50, settling at 50. 1 in september. foreign direct investment ( fdi ) net inflows likewise sustained its uptrend in july 2020 ( latest data ), registering an increase of 35. 2 percent year - on - year to us $ 797 million. the unemployment rate improved from a record high of 17. 7 percent in april β which was the height of the lockdown β to 10 percent in july. contraction of imports slowed down from 65. 3 percent in april to 22. 6 percent in august. and, the decline in exports eased from 49. 9 percent in april to 18. 6 percent over the same period. major indicators suggest that financial markets are responding well to our policy responses. yesterday, the psei reached 6, 941. 19. the strength of the philippine peso remains market - driven and supported by sound macroeconomic fundamentals. the peso opened at p48. 40 / us $ 1 today. the peso is the strongest currency in asia. the peso β s strength was supported by positive market view given the country β s
|
take for the succeeding chapters. capital market development : the overarching objective ladies and gentlemen, while we have already covered much ground, there is still much more that needs to be done. in the end though, all our actions towards protecting minority shareholders nurture a culture of cooperation and symbiotic partnership among stakeholders. in turn, all that will eventually converge to the development of our capital market. this is explicit in sharephil β s vision and it remains one of the country β s overarching priorities. but, if we look inwards objectively, it will become clear that there remain key challenges ahead of us as we reach for the goal of a more developed capital market. capital market actions require β big β changes whose ramifications are even β bigger β and more widespread. the β big change β here is that we are looking out for those who participate in this market but who will otherwise not have the collective position to instigate needed corporate reforms. this is about molding the corporate culture so that it is not about the majority versus the minority, but one of collective action on what needs to be done. β faith to the investor β. this is your core value. this is what makes sharephil a market mover β one who is willing to work with others while at the same time be passionate in pursuing and enacting change when and where needed. thank you very much and good afternoon. bis central bankers β speeches
| 0.5 |
such speculative flows are volatile by nature, they can impair the orderly functioning of the financial markets. when investors exit from securities markets abruptly in a herd, stock and bond prices get affected, and when investors take the redemption proceeds out of the country, the exchange rate gets affected. should the central bank intervene to stabilize the forex market, the resultant tightened liquidity can affect the money markets. thus, speculative flows affect all financial markets β the securities markets, the forex market, the money market and the credit market, with contagion spreading from one market to another rapidly. if not contained, these swift developments can threaten financial stability and lead to output and employment losses. managing capital flows 5. surely, capital flows are important to meet the investment needs of emes. problems arise when the flows are largely in excess of the economy β s absorptive capacity and also when they are highly speculative in nature. emes have responded to managing the adverse macro impact of volatile capital flows through a variety of policy actions. stylistically, these can be categorized into three options. the first option is to do nothing ( exchange rate option ) in which case the exchange rate will appreciate. the second is to allow the flows to come in but intervene in the forex market ( reserve accumulation option ). the third option is to deploy capital controls. typically, emes have adopted a mix of all the options. let me briefly discuss the implication of these options. the option of exchange rate adjustment 6. the most straight forward option for the central bank is to allow flows to come in without any intervention. however, when capital inflows are large, this can lead to currency appreciation unrelated to fundamentals and trigger a β dutch disease β syndrome. experience has shown that a flexible exchange rate system is prone to overshooting, and this has engendered the β fear of floating β among many countries. the option of reserve accumulation 7. the second option for a central bank, confronted with a surge of capital flows, is to intervene in the foreign exchange market to dampen disorderly movements of the exchange rate. this will result in accumulation of foreign exchange reserves and release of additional liquidity into the system. if left unsterilized, the additional liquidity so generated in the system will have potential inflationary implications. typically central banks have sterilized the flows, either partly or fully, using a variety of tools including open market operations, tightening the access of banks to the discount window,
|
is not yet complete and differences in views / perceptions / experiences need to be accommodated. within this advisory role, even - handed treatment, in the sense that sources of volatility and potential vulnerability are given as much emphasis as the issue of capital controls, is important. conclusion 25. in its january 28, 2010 issue, the economist said, β capital, like water, tends to flow around such obstacles ( taxes ). try to dam its movements at one point, and slowly but remorselessly, it will find its way around. β to learn to β dam β the flows so that the benefits of capital flows exceed their costs remains an intellectual and policy challenge for emes.
| 1 |
with an unemployment rate close to 24 %. the fact that the average loan - tovalue ratio stands at 62 %, with only 3 % of mortgages with an ltv above 100 %, and the widely rooted wish in spanish society to own one β s own house explain why the mortgage portfolio is, in fact, the least risky of all spanish deposit institutions β credit portfolios. conclusions i could talk a good deal more about what we have done in spain to tackle and resolve the problems of our banking system. but i believe it would be much more interesting to listen to your concerns and worries and try to allay them. i shall thus conclude that the steps taken by the spanish government and parliament on fiscal consolidation, labour market reform and pensions system reform, along with the changes i have explained to you in relation to savings banks and the strengthening of banking solvency, should β little by little, since confidence takes some time to pick up β afford us greater recognition by international investors. recently, in fact, we have seen how our sovereign spread has been converging more towards the core euro area countries, distancing itself from those economies with bigger challenges outstanding. our firm commitment to transparency, to the rigorous valuation of assets through a clear provisioning system and our significant increase in capital requirements should contribute to fully dispelling doubts about the current situation of spanish banks and their medium - term prospects. thank you for your patience. i am at your entire disposal to respond to your questions. bis central bankers β speeches
|
of activity, and new lending in particular, decreased, and the high profitability of spanish deposit institutions seen so far, began to be eroded. the impact of these developments was uneven, impacting with greater force those banks that had most grown in the expansion and, in particular, a group of savings banks that had concentrated a significant portion of their lending portfolio in financing real estate developers. expectations about house prices, which had started to lose momentum in 2006, changed and prices began to fall, in a much more unfavourable macroeconomic setting and with financial institutions much more cautious about extending credit given the rise in bad debts and provisions, and the tightening of funding conditions. in view of these problems, the government and the bank of spain began to take decisive measures to tackle this β classic β crisis based on credit to the real estate market and to the abrupt change in cycle, as well as to the changes in the markets. firstly, to address the uncertainty on funding markets, a programme was set up that would allow banks to issue debt with the backing of the state and the ecb started to inject liquidity allowing full allotment. secondly, the fund for the orderly restructuring of the banking sector ( frob ) was created in 2009. with the frob we anticipated the need to equip bis central bankers β speeches ourselves with an instrument to carry out a far - reaching restructuring of the savings bank sector. the scale of the savings bank restructuring process has been huge. of the 45 previously existing savings banks, only 17 remain. the aims of the process were very clear. first, to take advantage of the concentration processes to restructure assets and correct the excessive fragmentation of this sector. second, to reduce the excess capacity in the savings bank sector. the adjustments are between 10 % and 25 % in the number of offices, and between 12 % and 18 % in staff. third, to reinforce the viability of the new institutions ( resulting from the mergers of several savings banks ) with the resources and the management capacity of the savings banks best placed to lead each of the concentration processes. finally, to ensure in the medium term that the lower number of institutions and the diminished capacity will allow a reasonable level of profitability in step with the risks incurred for the remaining institutions. to round off the adjustment, the legislation governing savings banks was also amended in an attempt to make the management of these institutions more professional and, most notably, opening them up to market discipline and to the possibility
| 1 |
financial stability can be national or even sub - national, and hence affected by the failure of a local bank. we were talking about the alternative resolution - liquidation, but the criticism may be extended to the no - bail - out principle underlying both. the international monetary fund has suggested a β financial stability exemption β, whereby it is explicitly recognized that the srm is meant to deal with idiosyncratic events and that the existing arrangements could not solve system - wide crises. 9 imf ( 2018 ). prudential supervision has been micro for decades, if not centuries. the macro - prudential perspective is relatively new and still little understood and not widely adopted around the world. we all know that there can be a tradeoff between micro and macro policy objectives in the financial system. 10 for instance, if we want to protect macro financial stability, we may contemplate bailing out a bank with taxpayers β money, but if we want to avoid any moral hazard at the micro level, we have to rule out as far as possible the involvement of taxpayers in rescuing banks. a balance must be found between these conflicting objectives. 5. conclusions let me conclude. in an incredibly short timeframe a comprehensive framework for banking supervision and crisis management in the euro area has been designed and put in place ; thousands of experts are working together to achieve common goals ; methodologies, tools and resources have been pooled in order to benefit from the best national practices ; cooperation between the centralized hubs ( in frankfurt and brussels ) and the national authorities has been fruitful, even in the case of disagreement. last but not least, banks in the euro area are now stronger than 10 years ago. this positive experience shows that the challenges ahead can be successfully addressed in a pragmatic way. banking supervision needs to be constructive, not destructive. this is always true, but in the euro area today it needs to be constantly remembered. prudential rules and practices should be strict but proportionate, and they should always keep the playing field level. we should also take into account the competitive conditions between our banks and banks outside the euro area. we live in times of rapid change in the way financial business is conducted around the world. the application of technology to banks and other financial companies is revolutionizing the market. 11 supervisors need to look forward as visco ( 2018a ). cgfs ( 2018 ), panetta ( 2018 ), visco ( 2018b ). much as they can.
|
. since the production and distribution of goods and services are essentially driven by state orders and rationing, finance amounts to little more than a system for record keeping. while there are pro - forma payment transfers among state - owned enterprises, few if any actions are driven by them. payment arrears, or even defaults, are largely irrelevant in the sense that they are essentially intra - company transactions among enterprises owned by the same entity, that is, the state. under central planning there are no credit standards, no interest rate risks, no market value changes - - none of the key financial signals that determine in a market economy who gets credit and who does not, and hence who produces what and sells to whom. in short, none of the financial infrastructure that converts the changing valuations of consumers and shifting efficiencies of capital equipment into market signals that direct production for profit is available. but it didn β t matter in the soviet - bloc economies. few decisions in those centrally planned systems were affected by the lack of a developed financial system. regrettably, until the berlin wall was breached in 1989, and the need to develop market economies out of the rubble of eastern europe β s central planning regime became apparent, little contemporary thought had been given to the institutional infrastructure required of markets. in the west, that infrastructure had developed pragmatically, interacting with, and facilitating the evolution of, the markets themselves. in the years immediately following the fall of the berlin wall, many of the states of the former soviet bloc did get something akin to a market system in the form of a rapid growth of black markets that replicated some of what seemingly goes on in a market economy. but only in part. black markets, by definition, are not supported by the rule of law. there are no rights to own and dispose of property protected by the enforcement power of the state. there are no laws of contract or bankruptcy, or judicial review and determination again enforced by the state. the essential infrastructure of a market economy is missing. black markets offer few of the benefits of legally sanctioned trade. to know that the state will protect one β s rights to property will encourage the taking of risks that create wealth and foster growth. few will risk their capital, however, if there is little assurance that the rewards of risk are secure from the arbitrary actions of government, or street mobs. indeed, the presumption of property ownership and the legality of its transfer must be deeply embedded in the
| 0 |
even higher interest rates down the road and a more pronounced slowing of the economy. given the outlook for inflation, we continue to judge that the policy interest rate will need to rise further. as the effects of tighter monetary policy work through the economy, we will be assessing how much higher interest rates need to go to return inflation to target. 1 t. chernis and c. luu, β disaggregating household sensitivity to monetary policy by expenditure category, β bank of canada staff analytical note no. 2018 - 32 ( october 2018 ). looking ahead going forward, our primary focus will be to judge how monetary policy is working to slow demand, how fast supply challenges are resolved, and most importantly, how both inflation and inflation expectations respond. let me discuss each in turn. on the demand side, we β ll be keeping a close eye on how global developments and commodity prices affect our exports and business investment as well as how this translates into pricing decisions. as higher inflation and interest rates constrain household budgets, consumer spending should moderate in both goods and services. however, we know canadians have accumulated extra savings during the pandemic, so there is a risk that consumer spending has more momentum than we expect, making inflation more persistent. as labour demand eases from excessive levels, pressure on wages and prices β and therefore inflation β should also recede. and of course, we will continue to monitor the adjustment in housing activity and prices. on the supply side, unexpected global events could further disrupt supply and push prices up even more. we β ll be watching to see if supply disruptions are improving, especially in hard - hit sectors such as motor vehicles. will improvements to global supply bottlenecks continue? and how quickly will this translate into easing of supply constraints and lower costs for canadian firms? similarly, the bank will continue to monitor a broad set of indicators to see if labour shortages are subsiding. finally, as demand and supply come back into balance, we will examine how inflation and inflation expectations respond. this includes looking at the nearterm momentum, in particular that of our measures of core inflation, to assess how broad and entrenched pricing pressures are. meanwhile, survey results will help us see if the short - term inflation expectations of consumers and firms are coming back down. this will be an important sign that monetary policy is working and that canadians are beginning to feel some relief. given the lag between changes to interest rates and their impact on inflation β and
|
you that the digital economy is a promising way to raise trend growth and overall living standards. we cannot be satisfied, though, if some of the potential gains are left on the table, because many people will be left behind and important markets will be virtually uncontestable. it does not have to be this way if we choose a road for policy that effectively manages the 5 / 7 bis central bankers'speeches downsides of innovation without stifling it. of all the areas where we could develop and implement a better strategy, here are my top three : ( i ) develop a dynamic workforce with the skills to match the jobs, and encourage more labour force participation ; ( ii ) keep market power in check, particularly the power that comes from control of consumer data, to encourage competition and limit monopoly profits ; and ( iii ) manage the growing operational risks associated with the digital services that are provided by a concentrated set of firms to systemically important financial institutions. we will need to judge wisely when it is best to use public policy tools to manage risks and when to let private enterprise work its magic. we β ll need to work together and in the field to inform these judgments. i am confident that, together, the g7 will show leadership and will build with the private sector a shared sense of responsibility for the future. i would like to thank gurnain k. pasricha, lori rennison and eric santor for their help in preparing this speech. 1 the data for this calculation are taken from m. roser and e. ortiz - ospina, global extreme poverty ( 2018 ). poverty is defined as a consumption level below int $ 1. 90 per day, adjusting for price differences and inflation. 2 see international monetary fund, world economic outlook, chapter 3, β understanding the downward trend in labor income shares, β april 2017 ; and g. michaels, a. natraj and j. van reenen, β has ict polarized skill demand? evidence from eleven countries over twenty - five years, β review of economics and statistics 96, no. 1 ( march 2014 ) : 60 β 77. 3 according to mckinsey & company, 46 per cent of tasks could be automated in the united states using current technology. in canada, the share is slightly lower ( 42 per cent ). see c. lamb, β the talented mr. robot : the impact of automation on canada β s workforce, β brookfield institute, june 2016. 4 data
| 0.5 |
zdenek tuma : education in the czech republic - the case of the missing generation speech by mr zdenek tuma, governor of the czech national bank, on the occasion of graduation from the emba programme at cmc graduation school of business, prague, 4 december 2004. * * * in recent years i have heard many strong statements about knowledge based economy. today β s graduation is obviously an excellent opportunity for yet another speech on this issue but i fear it would be too general and therefore β empty β. instead, i would like to contribute with my personal experience and observations. we have almost forgotten that 15 years ago there were not any czechs nor slovaks educated in modern economics or business. economic programs were focused on central planning and marxist theory of socialism before 1990. nobody - with one exception - was allowed to study abroad since the 1960s. when my friend martin kupka returned from geneva in 1989 from his studies, he brought the textbook on macroeconomics by dornbusch and fischer. he told me : β we should translate it into czech β. at the same time, another group was working on the translation of β economics β by paul samuelson. later on, we translated the textbook on corporate finance by brealey and myers. in other words, we started from scratch. it had two - though interrelated - aspects. first, we had only limited knowledge about what economics and business programs should look like. and second, there were no people with well - founded experience on how to run and lecture these programs. there was a generation problem - one generation was - and still is - missing. where we stand today and how we have coped with those drawbacks? there was no magic solution but i dare say that today we have almost overcome the problem of missing generation in economic education and that we have been closing the gap between us and the developed world fast. i see three important factors which contributed to this development. on the first place i would put the new generation of young and strongly motivated people. they created enormous pressure on those who with their limited know - how - started to prepare new economic courses. this is my second point in this respect that there was a learning - by - doing process of creating new courses, mostly designed along the recent trends in economics and business education. despite the fact we did not have any experience with these courses, we roughly knew which direction to go. last but not least, the czech education system received a
|
strong support from abroad, both in terms of visiting lecturers and money. in some cases, these two aspects were interconnected, and completely new programs were gradually built up. among all, let me name center for economic research and graduate education, us business school prague and cmc graduate school of business. i can offer another illustration of how far we have gone. i have been with the czech national bank for six years. but as an academician i was in contact with the central bank already at the beginning of 1990s. at that time, the staff was struggling with very basic issues : a new statistics and data on the newly born market economy, ways how the economy should be analysed and what kind of theory or model should be applied etc. the czech national bank was receiving a lot of help from the foreign central banks and international institutions. today, we are at the level of state - of - art and we do not receive but provide foreign technical assistance. we assist directly to a number of countries as well as our experts are invited to imf missions around the world. and yet our staff is based primarily on people educated in the czech republic. i consider it as a good signal that we have reached significant achievements in economic education and that the problem of missing generation will soon cease to exist. i can only hope that we will continue with this process of catching up and that cmc will keep contributing to it. what can i wish to you personally? let me recall my recent visit to the bank of israel on the occasion of its 50th anniversary. we were having lunch with the finance minister benjamin netanyahu and we discussed necessary fiscal reforms. mr. netanyahu said that for pushing reforms through, one needs three things : the vision, the will and the political power. i can only add that combining these ingredients - the vision, the will and the power of knowledge - form the leader, regardless whether we talk about politics, managements, or science. having in mind education and network you have gained 1 / 2 during the emba course you have the best assumptions to succeed. i wish you all the very best in your further professional carriers. 2 / 2
| 1 |
of the factors affecting the appropriate real policy rate. for example, see http : / / bankunderground. co. uk / 2015 / 08 / 11 / an - estimate - of - the - uks - natural - rate - of - interest /. all speeches are available online at www. bankofengland. co. uk / publications / pages / speeches / default. aspx β an abstraction ; like faith it can only be seen by its works. one can only say that if the bank policy succeeds in stabilizing prices, the bank rate must have been brought into proper line with the natural rate, but if it does not it must not have been. β in the period since the uk recovery gathered pace in 2013 and the august inflation report this year, bank rate was at Β½ % and the stock of qe unchanged. uk headline inflation over that period was of course affected by externally generated disinflation pressure from the sudden and very substantial drop in energy prices. but over that period, the average of a range of measures of domestically - generated inflation in the uk fell from around 2 % to Β½ % at the end of 2014 β it has since recovered but only to nearly 1Β½ % which is considerably below its pre - crisis average of 2Β½ %. over the same period, pay increases averaged around 2 % β despite the fastest drop in unemployment in 40 years. output growth picked up briefly to over 3 % but has now fallen back to nearer 2 %. and a small output gap probably persisted over the period. the mpc β s 2 % inflation target is for uk cpi as a whole not for domestically generated inflation. but if we want to get a cross - check on where monetary policy was relative to where the natural rate might have been over this period, we can observe that monetary policy was not able to get domestically generated inflation to the inflation target over the policy horizon. in other words, far from being exceptionally loose, policy with hindsight may even have been a little tight. if this is right and the natural rate is currently slightly negative, how can that low level be explained? the great shocks that hit the economy after the crisis have surely dissipated. what are the headwinds now pushing the natural rate down? there are i think three interesting candidate explanations for this. the first is that there are still strong demand headwinds pushing the natural rate down. these include fiscal tightening, weakness in the global economy, restoration of credit spreads to more
|
accounting for around 2Β½ % and term premia, which are much harder to estimate, are probably around 0 %, which leaves a trend rate of around zero. the natural rate of interest ( r * ) the second concept of the interest rate i want to look at today is the natural interest rate. the natural rate of interest is quite an old concept, first posited by knut wicksell at the end of the 19 th century as the rate of interest at any given time that keeps the price level stable. wicksell argued that if the market rate exceeded the natural rate, prices would fall ; if it fell below, prices would rise. the economics discipline then went on an intellectual journey over the 20 th century, first largely abandoning the natural rate concept in favour of keynes β advocacy of fiscal policy for demand management and then returning to monetary policy, albeit in the form of the famous quantity theory of money. by the start of the 1990s, however, the difficulties of targeting the growth in monetary aggregates were clear and central banks turned to interest rates as the principle instruments of policy. nowadays, we tend to think of the natural rate not so much as the rate that would hold prices stable at any given time but, given frictions in the economy and lags in the impact of monetary policy, as the interest rate that will close the output gap over the monetary policy horizon. however, unlike the trend real rate, the natural rate is a shorter - term concept. the trend real rate as we have seen is determined by slow - moving structural factors that determine the underlying balance of the supply of savings and the demand for investment. but the interest rate necessary to offset the impact of unexpected outcomes β shocks β hitting the economy can vary significantly around the trend real rate over an economic cycle. over the economic cycle, the natural rate will lie below the trend real rate when the economy needs stimulus to offset a negative demand shock and above it when demand needs to be reined in. the actual monetary policy rate, bank rate in the uk, may well deviate from the natural rate β for example, if there are so - called β trade - off inducing shocks β. these are best thought of as shocks that would still move inflation away from target even if we were to perfectly match demand and supply. such shocks include a all speeches are available online at www. bankofengland. co. uk / publications / pages / speeches / default. aspx shock to the exchange rate
| 1 |
shocks, hicp inflation has been above - and sometimes significantly above - 2 % for quite some time. but inflation always bounced back following these shocks and today the outlook for price stability is once again favourable. a second related point i would like to mention is the medium - term orientation of our policy. as a central bank, we only affect prices with long lags and we cannot steer trends in prices with high precision. our focus on the medium term helps to avoid overly ambitious attempts to fine - tune inflation developments. you might ask what β medium term β means exactly. it is certainly not a fixed time horizon, as some have argued. experience in recent years has taught us that flexibility in this respect is very important. from this point of view, the ecb β s monetary policy strategy is different from pure forms of inflation targeting. this leads me to my third issue, which is that one cannot simply rely on a single inflation forecast to conduct monetary policy successfully. experience suggests that it can be very misleading to summarise the assessment of medium - term inflationary pressures in one single figure, even when a measure of statistical error is attached to it. unfortunately, monetary policy is not so simple and the repeated significant forecast errors by all major institutions over the last few years provide evidence of this. indeed, i agree with alan greenspan who once said that central bankers should be less reluctant to admit that they sometimes do not know. instead of relying on a single forecast, our monetary policy strategy emphasises this fundamental uncertainty. our strategy builds on several forecasts and indicators and includes a cross - check of the information from the economic analysis, which is relevant from the short to medium - term perspective for inflation, with that from the monetary analysis, which is important for the medium to long - term outlook. in this respect, the fourth point that i would like to discuss today is that over the last few years we have seen that monetary analysis is not only an important, but also a complex business. i have no doubt that inflation is a monetary phenomenon over the long term and that we are right in attributing a prominent role to monitoring monetary developments in our monetary policy strategy. a fifth point i would like to make is that it was difficult to gauge the effects of global interdependencies when we began to conduct the single monetary policy. what we have learnt, in particular, is that global linkages go well beyond the international trade channel, which was traditionally considered to be the main,
|
if not the only channel through which economic shocks were transmitted. moreover, more shocks - such as those associated with the introduction of new technologies and those of a political nature - have increasingly become global in nature. related to this - and this is my sixth point - we have learnt that sharp asset price fluctuations may be very important for shaping economic trends. in recent years we have witnessed extraordinary developments in capital markets. initially, exceptional optimism about potential output growth and talks of a β new economy β drove stock prices to sky - high levels. the β new economy β euphoria was sowing the seeds of less positive developments even before it actually burst. it seems to have been accompanied by a rising short - termism of corporate managers, which in turn was accompanied by corporate malpractice and also pushed firms to over - invest, especially in the it and telecommunications sector. the subsequent large fall in equity prices and the revelation of corporate malpractice had a series of negative consequences, including an increase in leverage ratios of non - financial corporations, a decline in the value of collateral, increases in risk premia, and certain firms experiencing difficulties in obtaining external finance. all of this may still be part of the reason for the weak consumption and investment activity, and thus the slow pace of economic growth in the euro area that we are now observing. to cut a long story short : monetary policy obviously has to take into account the public and financial market sentiment in assessing the risks to price stability over the medium term. central banks must monitor financial market developments very closely in order to figure out what the consequences are for the outlook for price stability over the medium term, but they must not target asset prices. finally, and this is my last point on monetary policy, i would like to stress that effective communication is an all - important requirement for successful monetary policy. however, as we have learnt over the last five years, it is no easy business. i am sure you will appreciate that communication is particularly difficult in the context of the euro area, with so many different traditions and languages. over time, we have seen a significant improvement in public understanding of our communication of our monetary policy strategy and our monetary policy decisions. evidence of this is that our monetary policy decisions have been very predictable, as reflected in money market indicators, which i rate as a highly positive development. indeed, we want to be, and we have to be, well understood in order to be effective in our policy. and, as you were
| 1 |
policy. of course, it is not difficult to put up with this additional burden when the structural change takes the form of a decline in the nairu and an increase in trend productivity growth. it would not be easy for monetary policy to turn such good fortune into poor macroeconomic performance. but the uncertainties about the nature and degree of structural change confront policymakers with the task of striving to realize the benefits of a decline in the nairu and an increase in trend growth while trying to avoid the inflationary consequences of overtaxing the new limits. recent work on signal extraction models and on the implications of noisy observations provides some important guidance about how to adjust the strategy of monetary policy in the face of the new uncertainties. this conference provides a timely opportunity to assess what we have learned and how it might be applied to monetary policy today, as well as to point to areas that may deserve further exploration. references brainard, w : β uncertainty and the effectiveness of policy β, american economic review, vol. 57 ( 1967 ), pp. 411 - 25. estrella, a, and f mishkin : β rethinking the role of nairu in monetary policy : implications of model formulation and uncertainty β, in j b taylor, ed., monetary policy rules. chicago : nber and university of chicago press, 1999. orphanides, a : monetary policy evaluation with noisy information, finance and economics discussion series no. 1998 : 50. washington, d. c. : board of governors of the federal reserve system, november 1998. rudebusch, g : β is the fed too timid? monetary policy in an uncertain world β, mimeo, federal reserve bank of san francisco, april 1999. sargent, t : β discussion of β policy rules for open economics β by lawrence ball β, in j b taylor, ed., monetary policy rules. chicago : nber and university of chicago press, 1999. smets, f : output gap uncertainty : does it matter for the taylor rule? bis working paper no. 60, november 1998. svensson, l, and m woodford : β indicator variables for monetary policy β, mimeo, princeton university, february 2000. swanson, e : β on signal extraction and non - certainty equivalence in optimal monetary policy rules β, mimeo, board of governors of the federal system, march 2000.
|
growth of money dramatically. interest rates rose sharply with the banks β prime interest rate exceeding 20 %. the u. s. economy fell into a deep recession. inflation began to recede steadily. remarkably, despite the vigorous recovery that followed after 1983, inflation remained relatively subdued at 4 %. it reached a temporary floor of 2. 5 % by mid - 1992. as we revisit this dramatic moment in monetary history, we need to remember that it occurred against the backdrop of nearly 15 years of disillusion regarding the ability of activist β keynesian β economic policies to guarantee low inflation and full employment. from 1965 onwards, inflation had been on the rise and unemployment surged in the 70 β s, following the first oil shock. in the beginning of the 80 β s, it appeared that fiat money was inherently prone to cause periodic bouts of inflation and that there was little one could do about it. ( see annex for graph 1 ) since 1979, the global monetary environment has evolved dramatically. achieving and maintaining price stability has become the undisputed guiding principle of a vast majority of the world β s central banks. price stability ensures the signalling power of prices, thus bolstering the efficiency of the market mechanism. by preserving purchasing power, it facilitates long - term planning and induces long - term investments. price stability also prevents social injustices from emerging between debtors, workers and retirees. finally, price stability minimizes tax related distortions linked to the interaction of inflation and the tax code. 1 see martin feldstein ( 1983 ) : β inflation, tax rules, and capital formation β, chicago : university of chicago press. the determined focus of monetary policy on price stability has contributed to anchoring the public β s inflation expectations at low levels. the increasing scepticism of the 1960s and the 1970s about monetary policy β s ability to fight inflation has given way to confidence that prudent, consistent and forward - looking monetary policy can contain the destructive forces of inflation. global inflation figures suggest that such confidence is largely justified. in the industrialized world, inflation declined from 12 % in 1980 to 1. 4 % in 2002. 2 in the developing world, the decline of inflation has been even more remarkable with yearly rates tumbling from an average of 31 percent in the early 1980s to currently under 6 %. 3 along with a significant decline in inflation, volatility of economic growth has fallen everywhere. both in the u. s. as well as in germany, the
| 0 |
that while the recent experience may have made us a bit more confident about detecting bubbles, it has not resolved the problem of doing so in a timely manner, nor has it shown that small - to - modest policy actions will reliably and materially dampen speculation. an extra policy reaction to changes in asset prices thus still remains questionable. the second frontier to be mentioned tonight is related to the monetary policy implementation, current situation on the money market and financial stability of the banking sector. for years the monetary policy implementation was not an issue and central banks were able to tighten the short - term money market interest rates such as for instance 3m pribor closely to the key policy rate. unfortunately, this changed in august 2007 for the us interest rates when the 3m libor for the us dollar denominated funds started to deviate significantly from the federal reserve target for funds. a year later following the second round of the financial crises that peaked during the bankruptcy of lehman brothers also the czech short - term money market rates started to elevate well above our policy rate, the two week repo rate. quoted from speech of vice chairman donald l. kohn : β monetary policy and asset prices revisited β at the cato β s institute 26th annual monetary policy conference, washington, d. c., on november 19, 2008. what we know is that all these movements were caused by principal uncertainty among the commercial banks worrying about their solvency and financial stability. the banks were not sure among themselves about to what extent they were hit by the collapse of the market with asset - backed securities and consequently about their counterparts β ability to stay in the business over a longer period than one day. central banks reacted and extended the money market operations in order to narrow spreads between the market rates and key policy rates. for instance, the czech national bank introduced a new liquidity providing repo operation despite the fact that the money market as a whole operates with huge surplus and on average the czech national bank has to withdraw roughly 400 billions czech crowns from the money market to be able to control the market interest rates. while introduction of this new operation made the money market participants less nervous, unusual spread between the market rates and the key policy rate still persists. this is not only the case of the czech economy or other central european economies but we observe the same also in the eurozone. commercial banks operating in the eurozone are willing to borrow around 250 billions euro from the european central bank paying the key policy
|
times a year. statistics was one of the first areas in which such co - operation was established. this is entirely logical, since without the creation of a basic statistical framework it would not have been possible to communicate on monetary policy matters. among the most important outcomes was a creation of monetary survey. this survey made it possible to compile monetary and credit aggregates. one of the preconditions for influencing the money supply was to establish what is known as the β monetary base β. the ongoing liberalisation process meant that it was no longer important to divide the balance of payments statistics into koruna and foreign currency transactions. this classification was replaced by a standard breakdown into transactions between residents and non - residents. numerous statistics linked with regulation were gradually abolished as individual areas of economic activity were liberalised. these examples merely illustrate how the central bank β s entire statistical system was rebuilt from scratch. let me now move on to the more recent past. in 1999 we began to co - operate closely with european institutions. the main topics included monetary and banking statistics, balance of payments statistics and more recently also financial accounts, government financial statistics and general economic statistics. the development of statistics was influenced by a need to standardise each area to ensure compatibility between the eu member states and the candidate countries. hand in hand with these contacts, we began to work much more closely with the czech statistical office. in the area of statistics the czech statistical office is the natural and closest partner of the czech national bank, since these two institutions are the major producers of statistical information in the czech republic. the czech statistical office conducts a far wider range of statistical surveys, providing aggregate information on the national economy, territory, climate, environment, population, elections and other areas of life and activity of our country. the czech national bank is above all a user of economic statistics and collaborates most closely in this area. as both a user and a partner, we can affirm that the quality of the office β s statistical output has increased immensely over the transformation period. examples include the publication of national accounts according to international standards and the compilation of data on the government debt and deficit. the czech national bank focuses mainly on monetary and banking statistics and balance of payments statistics. the harmonisation of the monetary statistics with european standards was recently completed in both main components balance sheet statistics and interest rate statistics. monetary and credit aggregates and interest rates are now methodologically comparable with the data of other eu member states. speaking of harmonisation, i
| 0.5 |
denis beau : staying the course through stormy weather - confidence to support innovation speech by mr denis beau, first deputy governor of the bank of france, at the fintech r : evolution 2023, paris, 19 october 2023. * * * ladies and gentlemen, first of all, i would like to start by thanking the france fintech association and its president alain clot for inviting me to participate again in this major event for the french fintech ecosystem. the current environment is clearly less conducive to fundraising for start - ups. this turbulence in the fintech ecosystem reflects the recent deterioration in the economic and financial environment. indeed, the euro area economy has been affected by an unprecedented series of shocks. these shocks, associated in particular with russia's unjustifiable war in ukraine and the lockdown in china, have resulted in a slowdown in growth and an acceleration in inflation. however, in france, this phenomenon, known as " slow - flation ", has not yet turned into " stagflation ", or a recession. according to our most recent projections, economic activity in our country should grow at a moderate rate in 2023, before recovering in 2024 and 2025. in other words, the central scenario of our projection is that the french economy will gradually recover from inflation without falling into recession, even though the economic slowdown will be marked. although times are gloomy, there is every reason to remain confident about the medium - term outlook. and i would like to tell you this morning that trust is built day by day, on the one hand by consolidating the foundations to strengthen the resilience of the ecosystem, and on the other hand by anticipating the future to develop an efficient and innovative financial sector based on sound fundamentals. * * * i / consolidating the foundations means preparing as well as possible for the many operational risks that fintechs face, and which will be subject to more stringent regulation in the near future. 1 / cyber risk is a good example of such risks, and of the need to be prepared. the european financial sector is increasingly being targeted by cyber - attacks, and cyber risk has become the greatest operational risk for financial companies. in this context, the european digital operational resilience act ( dora - published in december 2022 ) aims to strengthen the resilience of the sector ; it will apply to all financial entities as from january 2025. in addition to the current
|
requirements for good governance of the information system, institutions will have to carry out regular operational resilience tests and report major incidents. 1 / 4 bis - central bankers'speeches despite many new elements, dora reinforces a principle that is as old as it is fundamental : financial institutions remain responsible for their risks. they therefore need to remain in control of the entire subcontracting chain, regularly audit their it service providers, and establish exit strategies. the adaptation period for dora is short, so we need to work together to prepare ourselves. for institutions, this means reviewing all existing service contracts, renegotiating some of them, and undertaking as quickly as possible the work required to produce the new reports, in order to finalise compliance with dora before january 2025. for its part, the acpr will continue to interact with the financial community in order to identify any operational difficulties that may arise. in this respect, i would encourage you to take part in the new public consultation on the dora implementing texts, which is due to be held before the end of the year. 2 / as regards digital assets, the gradual entry into force between december 2023 and december 2024 of the markets in crypto - assets regulation ( mica ) will naturally steer the necessary consolidation work. my main message here is that we need to anticipate the entry into force of mica. for players planning to issue stablecoins, anticipating means contacting the acpr, and i invite them to do so now. you can apply for electronic money institution ( emi ) status, which will allow you to start issuing digital assets as soon as mica comes into force, within a secure framework. this is especially important as there will be no transitional phase here : as of 30 june 2024, the provisions of the regulation relating to token issuance will apply immediately. second, to current crypto - asset service providers ( casps ) and to those planning to provide such services in the future, i say that it is time to apply for authorisation. this would enable most of the mica provisions to be met in advance. above all, in a context recently affected by increased bankruptcies, this is the best way to restore consumer and investor confidence. 3 / also with regard to crypto - assets, we need to consolidate measures to combat money laundering and the financing of terrorism ( aml / cft ), particularly in view of the entry into force of the european transfer of funds regulation ( t
| 1 |
greater broadening and institutionalization of such inter - central bank cooperation, to ultimately help establish a global financial safety net. in this respect, east asian countries β inauguration this march of chiang mai initiative multilateralization, a multilateral currency swap arrangement covering all asean + 3 members, is a mark of significant regional progress. i am delighted to note as well the recent agreement, at south korea β s initiative, to discuss global financial safety net improvement during this year β s g20 summits in toronto and here in seoul. establishment of such an international institution is of course by no means easy. for it to be effective, several salient problems need to be resolved, including the β stigma β effect on countries needing assistance, on the one hand, and moral hazard on the other. strengthening of macroprudential regulation is also likely to help emerging market economies manage volatile capital flows. even if individual financial institutions are rational, their behavior can generate negative externalities. indeed, as i have mentioned, foreign capital flows to emerging market economies tend to be procyclical, heightening the need for countercyclical policy measures through which these countries can cope with such procyclical flows. macroprudential regulation can be a significant help in this respect, by changing financial institutions β incentive structures in ways that internalize the negative externalities caused by their own activities. it is, of course, important to prevent the possibility of regulatory arbitrage in response to our strengthening of macroprudential regulations, and for this international cooperation is very much required. all of these issues should of course be discussed in harmony with our efforts to build a better international financial architecture. and at this moment, i think the g20 may provide the ideal forum for effective international cooperation to this end. concluding remarks i have until now briefly discussed some major challenges that central banks face in overcoming the global financial crisis and afterwards. before closing, i would like to call attention to one final point. in our efforts to search for a new paradigm for central banking, we will naturally develop new economic models and theories. in this regard, one very important lesson from the recent crisis is that such models and theories must face up to reality. the real world does not always work in the way economists would like it to work. and when we face such a situation, it is the theories that need to be twisted, and not the facts that they are supposed to be helping us understand. especially, we should always keep in
|
economy. dear members of the bank of korea! for the bank of korea to meet the expectations of the public and remake itself as a policy institution with exceptional expertise amid a rapidly changing economic environment, we need to achieve commensurate organizational change and innovation. in this endeavor, based on the consulting results from an external professional institution and a wide range of staff opinions, we are drafting a medium - to long - term plan to innovate our administrative and personnel management system, which includes a roadmap for implementing organization - and personnelwide innovation. i hope that this upcoming plan will be successfully finalized and will play a pivotal role in pursuing innovation in the future. to make our efforts come to fruition, it goes without saying that continued careful attention and participation of staff, the main agent of innovation, is essential. my fellow members of the bank of korea! over the last two years, we have all done our utmost for the recovery and stabilization of our economy amid the unprecedented covid - 19 pandemic. even under these difficult policy circumstances, the so - called β permanence of uncertainty, β the bank of korea was able to faithfully undertake its duties. this was made possible thanks to the very best efforts of our staff to fulfill their duties and responsibilities. this year will likely be another challenging one for our economy in terms of both the domestic and external environment. i would like to ask all staff to remain vigilant and faithfully fulfill their roles and responsibilities. i hope that this year will be the last year of the pandemic. as we greet this new year, i want to wish you all the very best of health and good fortune. thank you. 3 / 3 bis central bankers'speeches
| 0.5 |
of these issues. the current problems in argentina have served as a catalyst to refocus the attention of the international community on what was needed " to increase the predictability and reduce the uncertainty about official policy actions in the emerging markets. " the g - 7 action plan identifies the key elements of a successful framework for crisis prevention and resolution, and how these elements fit together to help align incentives for debtors and creditors. first, it recognizes the need for limits on official lending. second, it recognizes the need for rules in loan contracts to allow a cooling - off or standstill period and prevent small groups of creditors from blocking a reasonable restructuring deal. the plan also encourages the imf to continue its important work to find some mechanisms for sovereign debt restructuring analogous to domestic corporate bankruptcy procedures, such as chapter 11 in the united states and the companies'creditors arrangement act ( ccaa ) in canada. the g - 7 countries have pledged to work with borrowers and creditors to make sure that these ideas can be effectively put into practice. clearly, a lot more needs to be done, including work on operational and legal issues. but let us not lose sight of why this work is important. the action plan, by helping to reduce the incidence of financial crises and to better resolve them when they do occur, will create conditions that encourage sustained and sustainable growth of private investment in emerging - market countries, thus helping to raise their living standards. concluding thoughts to conclude, considerable progress has been made in defining the elements of a strategy to reduce the incidence of crises in the future. when it comes to crisis management and resolution, the international community is still hard at work. many issues on how to put in place a framework for promoting orderly debt restructuring remain outstanding. but significant progress is being made. the stakes are high β not only because of the economic costs, but because of the social costs and the human suffering caused by financial crises. and, in an increasingly integrated world, more than ever, we are all in this together.
|
flowing to low - level duplicated constructions and over - investment sectors, the people β s bank of china has encouraged and guided the commercial banks to increase credit support to the agriculture sector, small and medium - sized enterprises, consumer demand and job creation. in the meantime, constructions of corporate and individual credit information registration systems were strengthened and legislation related to promoting consumer credit was further improved. moreover, administrative rules on small - amount guarantee loans for unemployed workers was enhanced and loan approval procedures were simplified to encourage banks to increase loan support to those qualified labor - intensive small businesses in which certain proportion of job vacancies are filled by laid - off workers. rapid growth of the chinese economy and the following austerity measures taken by the government recently has aroused wide concerns of the international community. some people are worried the chinese economy may lose control and head for persistent overheating while others are concerned about the destabilizing effects a hard brake on the chinese economy may bring to the world economy still on the course of recovery. here, i would like to assure our friends that the chinese government remains crystal - clear about the current economic situation and is taking timely, prudent and appropriate measures to address the problems. some measures have already started to take effects, and we are fully confident that existing problems in the current process of economic development will be resolved and the good growth momentum will be maintained without ups and downs. iii. sequenced gradual reform of the rmb exchange rate regime like the overall economic reform, china β s foreign exchange rate system reform is also a gradual and sequenced process. before economic opening up, management of foreign exchange earnings and expenses was centralized and rmb exchange rate was decided and adjusted solely by the government. after 1979, enterprises were allowed to retain foreign exchange earnings and a foreign exchange swap market was established to form dual exchange rates in china, namely the official exchange rate and the swap market exchange rate. with foreign exchange system reform introduced in 1994, foreign exchange purchase and sale was required to be effected through the banking system and a nation - wide inter - bank foreign exchange market was thus put into place, leading to the formation of the so - called managed floating foreign exchange rate system based on market supply and demand of foreign exchange. such a system has since remained unchanged. the rmb exchange rate has been allowed to fluctuate since 1994. during 1994 - 1997, the rmb appreciated from 8. 7 yuan per us dollar to 8. 3 yuan per us dollar.
| 0 |
who point to the ecb variant of pragmatism, as well as by those who think the interest rate should be lower and who see the fed's pragmatism as their ideal. this is a debate which in essence is based on misunderstandings. the constraints within which the riksbank works, allow a monetary policy which is both flexible and pragmatic. we can certainly extend our target horizon, monitor risks of problems in the financial sector or act early in order to avoid major subsidence in the economy further ahead. but this places requirements on us to motivate our actions clearly and substantially. it is, therefore, in this context β by setting very high standards as regards clarity and openness β that we beg to differ. in essence, i think that demands made on us that we should be more pragmatic in some general way β and not keep to our way of reasoning with a target, with guidelines, etc. β are meaningless. less clear principles for policy in combination with reduced transparency regarding, for example, the reasons for making decisions, will hardly lead to a policy which will be more successful in the future. many years'experience in the vicinity of economic policymakers suggests to me that the opposite is more probable. among the most important things one can do in this type of work is to try to build up clear processes which contribute to decision data, based on good economic analyses, being produced in a systematic way. and that this decision data is subjected to as wide an examination as possible. i am convinced that our ambition to be as clear and open as possible has served us well. starting with a numerical, symmetric objective and a guiding rule, in the way that we have done, we have been forced to think through every question with which we have been confronted in a more precise manner. this has resulted in our gradually increasing our understanding in a way which i think would hardly have been possible otherwise. certainly it is not yet over, and in this context, future developments will place new demands on us and impose further intensification and exactitudes. there is also a connection between transparency in relation to the outside world on the one hand, and internal work on the other. in getting rid of secrecy we were able to introduce a more realistic debate on monetary policy. this has allowed sharper and more specific criticism from outside, something on which we thrive. in addition, i think that decision making should be made in a way which contributes to
|
##rona trading given how the krona market functions in practice, there may be tendencies to give this type of factor too much weight as an explanation for the development of the exchange rate. more than 90 per cent of the krona trading is between different financial actors, and the majority of the krona trading is not in sweden but in major financial centres abroad. for example, almost 50 per cent of all krona trading takes place in london. there is nothing special about the krona here β that is the way it is for many currencies. but the point is that the vast majority of trading takes place between financial actors abroad. 1 / 4 bis - central bankers'speeches this is different from how the foreign exchange market is usually described in our economics textbooks. there, the description of the market is often based on trade flows that create supply and demand for the krona. in itself, this is also an important element in foreign exchange trading in practice. but if one looks at the flows of capital in the krona market, there are more often flows with other purposes : diversification of large funds'portfolios, hedging against losses due to exchange rate fluctuations and even pure speculation in how the krona will vary. for example, there may be strategies where investments are chosen based on the trend in the krona's movement and that the trend β recently a weakening β will continue in the future. the consequence of this is that trading in the krona is largely driven by purposes that do not necessarily place so much emphasis on the " fundamental " value of the krona. during periods, the exchange rate of the krona may therefore vary in a way that is difficult to explain by macroeconomic developments. economic research has branches that address this and try to explain why, for example, investment strategies that should not be profitable in efficient markets can still be so. and also why the capital flows that result from such " non - fundamental " currency trading can drive exchange rates. 2 the focus is then often on the microstructure of the foreign exchange market, where banks are market makers and act as intermediaries between buyers and sellers of currency. for example, as the market works, it may matter which actor initiates a foreign exchange transaction, and both the ability and willingness of intermediaries to take currency risk may have an impact on the way exchange rates move. in practice, this means that the krona exchange rate will function not only as a " shock absorber
| 0.5 |
distributed already had to be addressed back then. the following principles were set : the profits should first be used to build up the snb β s equity capital and pay a modest dividend to shareholders ; and any remaining profit would go to the public sector, with at least two - thirds accruing to the cantons. while this still essentially applies today, the modalities regarding distributions and building up equity capital have been adjusted over time. i will look at the current solution in more detail presently. the reason why the dividend payments to shareholders are limited, and why the profit distributions accrue to the confederation and the cantons, is that the snb β s profits are not the result of how its share capital is used. instead they stem much more from its monopoly on issuing legal tender. the snb generally incurs only minor costs in issuing banknotes and page 2 / 7 handling sight deposits, since manufacturing notes costs only a fraction of their nominal value and sight deposits ordinarily do not bear interest. conversely, the snb for its part mostly does achieve a positive return on the assets it receives in exchange for the banknotes and sight deposits. the snb thus generates profits on average over the long term. however, against the backdrop of very low yields and high upward pressure on the swiss franc, it cannot be taken for granted that the snb will achieve a profit. i will come back to this point in due course. generating profits is in any case not our aim. the federal constitution and the national bank act are quite clear in this respect. they state that we must as an independent central bank pursue a monetary policy that serves the overall interests of the country. conducting a monetary policy that ensures price stability while taking due account of economic developments is therefore our goal, rather than generating a profit or making it possible to pay a distribution. the snb β s monetary policy mandate always takes precedence. and there can also be times when we have to accept losses to perform this mandate. the snb β s total assets have multiplied since the outbreak of the financial crisis in 2008 ( slide 1 ). with this larger balance sheet, the earnings potential has increased in absolute terms, but so too has the risk of loss. in fact, given that a large part of the balance sheet growth is attributable to foreign exchange market interventions, the increase in risk exposure has been particularly strong. let me briefly explain why. when expressed in swiss franc terms, our
|
policy and documents on cooperation with our partners. while the first stage of our program with the imf defined the key task as " maintain macroeconomic, external, and financial stability, in order to strengthen 3 / 4 bis - central bankers'speeches ukraine's capacity on its way to victory ", the second stage focuses on recovery and reconstruction. these words are mentioned in the memorandum with the imf more than 80 times. to achieve this, it is important to switch from anti - crisis measures to forward - looking and balanced policy. for this purpose, we moved from the fixed rate to er managed flexibility. we are cutting our policy rate. gradually, we are easing the fx market restrictions and moving towards our strategic objective : return to inflation targeting. we are returning to normality, and i remain hopeful that we will continue on this path, despite the ongoing war. strong economic recovery requires revival of lending. this is why we prepare our lending revival strategy taking into account war realities, including the need to boost the defense of the country. in conclusion, i would like to emphasize that ukrainian experience shows, that despite the fact that the mandate of a central bank is clearly defined, new challenges make us look for the new ways to fulfill it, and these ways may vary. and the most important insight from the two years of the full - scale war is that we, as central bankers, should learn to take a broader perspective. today it is the 716th day of war in ukraine. during this time, there were 978 air raid alerts in kyiv alone. the number and magnitude of challenges have grown, and their impact extends beyond ukraine. i am convinced, that everyone present at this conference would agree. full - scale, cruel, destructive war of russia against ukraine aggravated the risks of global war, geopolitical fragmentation and deglobalization. it has disrupted the " metabolism " of the financial system. this challenge is global, and a risk to global security and global macrofinancial stability, now and in the future. 4 / 4 bis - central bankers'speeches
| 0 |
forecasts for 2013. all these favorable assessments and bright growth prospects were driven by the solid performance of the philippine economy across various indicators. let me cite four : robust and broad - based economic growth. the stronger - than - expected growth performance in 2012 was supported by broadening growth drivers. all major economic sectors advanced during the year. bis central bankers β speeches on the supply side, transportation, telecommunication, real estate, and construction business activities pushed the economy forward. meanwhile, on the demand side, growth was boosted by consumer expenditure and government spending. favorable inflation environment and well - anchored inflation expectations. i should point out that the increased activity has not caused the general price level to rise. inflation has generally remained low, and prospects appear to be equally subdued in terms of price. indeed, we expect this scenario of high growth - low inflation to be sustained going forward. sound and stable banking system. the strong economic performance is itself anchored on a sound and stable banking system. deposits continue to build up, allowing loans to similarly expand. much like inflation, our banks β capital adequacy ratio shows no sign of vulnerability. this encouraging situation supports our assessment that our banks are ready for the implementation of basel 3. we will roll out the capital adequacy framework of basel 3 in about nine months from today. robust external payments position. a robust external position completes our position of strength. whether we look at the overall bop position or its sub components, we see positive balances. remittances from ofs continue to bolster domestic liquidity while bpo estimated receipts continue to be a positive factor. all these eventually led us to a gir level that is just below us $ 84b. 2013 macroeconomic outlook the macro financial numbers provide us some momentum. nothing in the first quarter gives us reason to take pause. instead, the outlook continues to be encouraging. given available data, we expect growth to further accelerate but this time aside from the growth drivers in 2012, we anticipate a more pronounced contribution from the external trade sector. in addition, remittances from our ofs will continue to be a steadying factor. the bop is also seen to remain in surplus, which in turn will support an even higher level of international reserves. at end 2013, the gir is projected to reach $ 86. 0b. challenges to the economic outlook but while we expect the philippine economy to continue to show resilience, given its solid macroeconomic fundamentals
|
development of a strong industrial base in the country. with a well - represented industry sector, ffcccii could easily push for a roadmap toward a stronger and more diversified industry sector across various lines and regions nationwide. this project could certainly lend support to one of the government β s key concerns : employment generation in the domestic economy. 4. investment in human capital. i know that the ffcccii has been keen on pursuing programs and projects aimed at promoting education. these include construction of barrio schools and provision of scholarship programs to elementary and high school students in chinese - filipino schools. i encourage you to expand existing programs in this area. bis central bankers β speeches these are only a few of what i have in mind, but i am sure that the ffcccii could contribute a lot more in terms of programs and projects geared toward nation - building, on top of what the federation has already been doing in the past. bsp β s policy directions going forward ladies and gentlemen. we are seeing many positive developments but the agenda is definitely not done yet. we need to take a holistic view and pursue the prudential path towards financial stability. i realize that to many of you, financial stability may sound to be such a high - level objective that is detached from the ground. in reality, this prudential objective has a direct bearing on all of us. financial stability means that we will continue to set monetary policy with an inflation anchor that is consistent with the needs of the broader macroeconomy. in particular, the bsp sees interest rates remaining low over the policy horizon, given a manageable inflation outlook. foreign exchange inflows are expected to continue, although we see flows coming in at a slower pace than before. therefore we expect the peso to remain well - supported. financial stability also means a stable and sound banking sector that actively promotes inclusion, provides for non - traditional delivery channels of financial services, and protects the interests of the saving public. in particular, the bsp will continue with the banking reform agenda, including the adoption of basel 3 capital adequacy standards in january 2014. finally, financial stability must then mean that we have an efficient payments system that is responsive to the business needs of the community as well as in providing the needed market infrastructure for investors. conclusion ladies and gentlemen, the 2012 macroeconomic performance of the philippine economy has set a significant standard for the country. while challenges remain and continue to pose risks to the economy
| 1 |
data for both the historical and projection periods. core inflation is the fourβquarter percent change in the price index for personal consumption expenditures ( pce ) less food and energy. the shaded areas indicate periods when the slack is negative β that is, when labor markets are tight. projections are as in figure 2. source : congressional budget office ( the budget and economic outlook ) ; bureau of labor statistics ( retrieved from federal reserve bank of st. louis, fred ) ; bureau of economic analysis ( retrieved from federal reserve bank of st. louis, fred ) ; summary of economic projections, available on the board β s website at https : / / www. federalreserve. gov / monetarypolicy / fomccalendars. htm ; survey of professional forecasters ( retrieved from federal reserve bank of philadelphia realβtime data center ). figure 4. simple phillips curve relation inflation ( t ) = β b slack ( t ) + c inflation ( t - 1 ) + other ( t ) where inflation = core inflation ; slack = unemployment minus the natural rate ; other = unspecified factors including a regression error and constant term ; t, t - 1 = years of the observations. figure 5. evolution of estimates of the slope and persistence parameters of the phillips curve slope of the phillips curve persistence of inflation annual annual 1. 2 1. 2 1. 0 1. 0 0. 8 0. 8 0. 6 0. 6 0. 4 0. 4 0. 2 0. 2 0. 0 0. 0 note : panels show estimates of coefficients b and c from the equation inflation ( t ) = - b slack ( t ) + c inflation ( t - 1 ) + other ( t ), where inflation is core inflation and slack is the unemployment gap, both as in figure 3. all data are annual, and each point is the estimate for a rolling 20βyear sample ended at the date shown on the horizontal axis. shaded areas represent 70 percent confidence intervals. the data are through 2017. source : bureau of labor statistics ( retrieved from federal reserve bank of st. louis, fred ) ; bureau of economic analysis ( retrieved from federal reserve bank of st. louis, fred ) ; congressional budget office, the budget and economic outlook ( retrieved from federal reserve bank of st. louis, fred ) ; christopher erceg, james hebden, michael kiley, david lopezβsalido, and robert tetlow ( 2018 ), " some implications
|
- neighbor ; in other words, they do not undermine exports from emes. in recent decades, some emes have successfully pursued an export - led growth strategy, and policymakers in those economies have sometimes expressed concern that their exports will be unduly restrained as accommodative policies in the advanced economies lead their currencies to appreciate. however, as shown in chart 4, although eme currencies bounced back from their lows during the global financial crisis β when global investors fled from assets they perceived to be risky β for many emes real exchange rates have moved sideways or have even declined over the past two years. some of this weakness may reflect the foreign exchange market intervention and capital controls that policymakers used to staunch the rise in their currencies. but even if advanced economy monetary policies were to put upward pressure on eme currencies, the consequent drag on their exports must be weighed against the positive effects of stronger demand in the advanced economies. according to simulations of the federal reserve board β s econometric models of the global economy, these two effects roughly offset each other, suggesting that accommodative monetary policies in the advanced economies have not reduced output and exports in the emes. 10 indeed, this view seems to be supported by recent experience, as the u. s. current account balance has remained fairly stable since the end of the global financial crisis. over the longer run, advanced economy policy actions that strengthen global growth and global trade will benefit the emes as well. a particularly important consideration regarding spillovers from accommodative monetary policies in the advanced economies is the extent to which such policies contribute to financial stability risks in the emes. because many emes have financial sectors that are relatively small, large capital inflows may foster asset price bubbles and a too - rapid expansion of credit. these are serious concerns, irrespective of the relative importance of monetary policies in the advanced economies in driving these flows. while the picture is a mixed one and some markets show signs of froth, indicators of financial stability do not seem to show widespread imbalances. 11 for example, eme equity prices, shown in chart 5, plunged during the global financial crisis, rebounded thereafter, but then generally flattened out or even declined. there are exceptions, of course, such as indonesia, whose stock market soared until earlier this year. but in aggregate, eme stock prices remain below their pre - crisis peak
| 0 |
reduce the amount of liabilities that roll off in less than 30 days. deposits which are deemed to be subject to high run - off rates and those which are callable within 30 days will be more expensive for banks. banks are therefore working towards converting many of these less stable deposits into a more stable deposit base. for example, retail and sme deposits are deemed to be β stickier β than institutional deposits. part of this transition is being induced by price signals : interest rates offered on new or existing deposit products which are deemed to be more stable are rising relative to interest rates on products deemed to be less stable. these types of changes appear to have accelerated recently as we draw closer to the implementation of the lcr and probably still have some way to run. to date, we have seen only a few banks offer notice of withdrawal accounts to customers. these accounts require the depositor to provide the bank with 31 days or more notice of a withdrawal ( obviously 31 days is one day longer than the 30 - day liquidity stress period ). interest rates offered on these accounts are among the higher rates offered in the deposit market. it may be that we see a broader move to these types of accounts or changes in terms and conditions on existing accounts through the course of next year. we have also seen a fall in the growth of term deposits relative to transaction and at - call deposits over the past few years. in fact term deposits as a share of banks β funding has been falling while transaction and at - call deposits have been growing strongly. part of this is because a flattening of the yield curve has made investors less inclined to invest in longer term deposits. but in part it is because under the lcr, some transactional and operational deposits are subject to lower run - off rates than deposits that are largely attracted by higher interest rates. indeed, there has been some indication that banks have been transitioning depositors into deposit products treated more favourably under the lcr. but banks are not limited to just changing their deposit offerings. we could see them look for more opportunities to package retail deposits with other products as the deposits of customers that also have other relationships with the bank are deemed to be more stable under the lcr. so to conclude, the full implementation of the new liquidity regime in australia is imminent. from the beginning of next year, banks in australia will be fully subject to the liquidity coverage ratio. this has already had an impact on the pricing and nature of a number
|
is to have the banks hold more liquid assets. to address these circumstances, an important component of the liquidity regime in australia is the committed liquidity facility ( clf ) where, on the payment of a 15 basis point fee, banks will be able to obtain a commitment from the reserve bank to provide liquidity against a broad range of assets under repurchase agreement. 2 apra has recently determined that the total clf requirements of the australian banking system for 2015 amount to around $ 275 billion. 3 this amount was determined by first assessing that the amount of cgs and semis that could reasonably be held by banks without unduly affecting market functioning was $ 175 billion. the reserve bank provided this see apra ( 2014 ), β implementation of the basel iii liquidity framework in australia β, media release no 14. 03, 30 january, available at < http : / / www. apra. gov. au / mediareleases / pages / 14 _ 03. aspx > ; and debelle g ( 2012 ), β regulatory reforms and their implications for financial markets, funding costs and monetary policy β, address to the financial services institute of australia, 18 september. domestic market operations β the committed liquidity facility. see apra ( 2014 ), β apra finalises implementation of liquidity coverage ratio in australia β, media release no 14. 22. available at < http : / / www. apra. gov. au / mediareleases / pages / 14 _ 22. aspx >. bis central bankers β speeches assessment to apra. the clf amount is then simply the difference between this and the overall liquidity needs of the system. the banks that require a clf from the reserve bank sign a deed of agreement with us and pay their fee before the end of this year. then from the beginning of next year, the arrangement comes into effect. i have talked before about some of the impact on pricing in various markets of the new liquidity regime. 4 we have attempted to limit the impact on the price of cgs and semis, but necessarily, because the banks are holding more of these securities than previously ( graph 1 ), the price is higher ( and the yield lower ) than would otherwise be the case. graph 1 overall, the impact of the lcr on market pricing is relatively small. the larger changes have been around deposit pricing and the terms and conditions of deposits, which i will come to shortly
| 1 |
rodrigo vergara : the monetary policy report and the financial stability report presentation by mr rodrigo vergara, governor of the central bank of chile, before the finance commission of the honorable senate of the republic, santiago de chile, 1 july 2013. * * * the monetary policy report of june 2013 and the financial stability report of the first half of 2013 can be found at http : / / www. bcentral. cl. introduction mr. president of the senate β s finance commission, senator andres zaldivar, senators members of this commission, ladies and gentlemen, i appreciate your invitation to present our board β s vision on recent macroeconomic and financial developments, their prospects and implications for monetary and financial policy. this vision is contained in detail in our monetary policy report of june 2013 and our financial stability report of the first half of 2013. the macroeconomic scenario facing the chilean economy has undergone significant changes in recent months. output and demand decelerated and, although some moderation in their growth rates was expected and desirable, the first quarter brought a sharper adjustment than had been anticipated. on the external front, there have been significant developments in the composition of global growth, the trajectory of commodity prices and the evolution of global financial markets. from a medium - term perspective, recent developments point to a healthy normalization of the unusual international conditions that have prevailed for some years now, and their effects on our local economy. in the short term, however, these adjustments can lead to greater volatility in the real economy and financial markets as investment portfolios are adjusted to new conditions and spending plans are reviewed. i can responsibly say that our economy is well prepared to accommodate these changes in the international arena, emphasizing the contribution of our inflation targeting with floating exchange rate scheme, the strength of the fiscal accounts and the financial system as well as our sound external financing structure. all these elements allow us to be reasonably confident in dealing with the ups and downs of the external environment and mitigating its impact on the chilean economy and the welfare of our population. in the first quarter of 2013, output increased 4. 1 percent annually, 1. 6 percentage points less than it did in late 2012. on the expenditure side, the slowdown of investment stood out. part of this adjustment was expected, considering that a number of wide - ranging mining and energy projects are entering their final phase. there are also transitory elements relating to one - time imports of capital goods that are more volatile
|
the development process. while the maintenance of price stability has increasingly become the main mandate of most central banks, those in the developing countries are charged with the responsibility to promote economic development, in addition to the pursuit of the macroeconomic stabilization objective. central banks β direct role in the development process, especially in less developed economies, stems from the absence of efficient financial markets and institutional structures, which are pre - requisite for the effective transmission of monetary policy to the real economy. in addition, in the pursuit of the overall economic goals of the nation, the stabilization objective of the central banker often conflicts with the sectoral pursuits of the political authority. one thing all central banks, the world over, have in common is the maintenance of financial stability as a key factor influencing macroeconomic performance and efficient payments system. the legal framework and institutional arrangements vary widely country by country in the context of the act establishing the central bank. as we are all aware, a central bank is usually established by an act of parliament that clearly states its mandate. iii. the experience of the central bank of nigeria ( cbn ) the critical role of the cbn in the management of the nigerian economy has been made obvious by the provisions of the law establishing the bank. the core mandate of the cbn as spelt out in the cbn act of 1958 include : issuance of legal tender currency, banker and financial adviser to the federal government, lender of last resort to banks, maintenance of external reserves to safeguard the international value of the currency, promotion of monetary stability and a sound and efficient financial system. in order to discharge its responsibility efficiently and effectively, the bank must have credibility within and outside the country. towards this end, the act, with the subsequent amendments, goes further to establish a governance structure with an independent board with responsibility for policy formulation and administration of the bank, subject to periodic reports to both the executive and legislative arms of the government. although the original act mandates the cbn to promote monetary stability, it was in the 1999 amendment to the act that actually conferred discretionary powers on the governor, the board and management of the bank, in the formulation and implementation of monetary policy, especially the determination of the appropriate interest rate regime and exchange rate policy. in other words, the bank was granted instrument autonomy under the amendment to the act. in view of the destabilizing effect of monetary financing of government deficits, the acts specifies the limit of the cbn lending to government in terms of ways and means advances to the federal government
| 0 |
, depending on whether the levy is imposed ex - post or ex - ante. for instance, the proceeds raised by a levy can be destined to finance a dedicated fund to be activated in the future for the orderly winding down of distressed banks. the eu commission is moving forward in this area, with the aim of establishing a common framework for a levy in the eu member states. the imf is also finalising a report on this topic for the g20 summit later this month in toronto. in my view the discussion should be properly framed in the overall reform of the prudential framework, including the quantitative impact assessment of the various initiatives i mentioned earlier. such a careful assessment is warranted, inter alia, to avoid imposing an undue burden on the banking sector and, ultimately, hamper the flow of credit to the real economy. another important element of the basel reform package is the introduction of a range of measures designed to mitigate the inherent pro - cyclicality of the financial system. in this context, mechanisms that enhance prudent and forward - looking provisioning of banks as well as the building up of sufficient capital buffers in years of economic expansion that can be drawn down at times of stress, are all under consideration. overall, these measures aim at ensuring that the financial system functions as an absorber, rather than an amplifier of shocks, thus smoothing the volatility of the financial and real economic cycles. in setting up a more forward - looking provisioning framework, the basel committee works closely together with the accounting standard setters with a view to developing a sound operational framework for expected loss provisioning. in this context, let me mention as very important the collaborative efforts under way between the basel committee and the iasb to develop a revised expected loss model that proves operational. concerning measures on capital buffers, the basel committee set forth a proposal on a capital conservation buffer that would establish certain restrictions for undercapitalised banks with regard to the distribution of earnings in the form of dividends, share buy backs and bonuses. in addition, the introduction of a counter - cyclical buffering mechanism is also considered. it would require banks to build up additional capital buffers when excessive credit growth is identified in the economy. the last topic i want to pay some attention to is the role of central banks in financial stability. the experience of the financial crisis was not only an important trigger to set in motion supervisory and regulatory reform. it also drew attention to the need to develop
|
jose manuel gonzalez - paramo : reform of the architecture of the financial system speech by mr jose manuel gonzalez - paramo, member of the executive board of the european central bank, at the universidad del pais vasco, campus de leioa, bilbao, 21 june 2010. * * * i am very grateful to frank dierick for his contributions to this speech and to ines cabral and balazs zsamboki for inputs. ladies and gentlemen, i. introduction it is a pleasure to be in the city of bilbao, which hosts one of the finest modern art museums in spain and europe : the guggenheim museum. with its very distinct architecture, this museum is the city β s world - famous hallmark. much as i love the design of the building, however, i will talk today about another type of architecture, namely that of the financial system. and just like the guggenheim building, the current reforms of the financial system stir a lot of emotions. we are dealing here with a very broad topic but i will approach it like a tourist visiting the guggenheim museum. i will start by giving you a broad overview, describing the landscape as it were. i will briefly review the causes of the financial crisis and will run through the main initiatives that are on the plate of policy makers to prevent a crisis of such magnitude and severity ever recurring again. then i will turn to four eye - catching initiatives : first, the establishment of the european systemic risk board or esrb, a new body that will for the first time become responsible for macro - prudential supervision in the eu ; second, how policy makers are dealing with systemically important institutions ; third, the issue of procyclicality or the dynamic interplay between the financial sector and the real economy ; fourth and last topic to which i will pay some more attention is the mandate of central banks in the area of financial stability. let us now embark on our architectural walk! ii. causes of the current crisis much has been said about the root causes of the current crisis over the past three years. i will not expand on this topic but i will just mention specific factors β some of them of a macroand others of a micro - economic nature β which in my view were key in the run up to the crisis. in the two or three years before the crisis erupted, a constellation of factors, including very favourable macro - financial conditions combined with strong growth, low inflation, ample liquidity, exceptionally low volatility across virtually
| 1 |
thomas jordan : the swiss national bank β s monetary policy decision and assessment of the economic situation introductory remarks by mr thomas jordan, chairman of the governing board of the swiss national bank, at the media news conference of the swiss national bank, berne, 10 december 2015. * * * ladies and gentlemen it is a pleasure for me to welcome you to the swiss national bank β s ( snb ) news conference. i will begin by explaining our monetary policy decision and presenting our assessment of the economic situation. fritz zurbrugg will then speak about current developments in the area of financial stability. after that, andrea maechler will review the situation on the financial markets. finally, we will β as usual β be pleased to take your questions. monetary policy decision let me begin with the inflation forecast and our monetary policy decision. overall, the new conditional inflation forecast differs little from that of september. it indicates slightly higher inflation in the short term, and that inflation had already bottomed out in the third quarter. owing to a slight deterioration in the outlook for the global economy, mediumterm inflation is somewhat lower than predicted in september. for the current year, inflation is forecast at β 1. 1 %, a 0. 1 percentage point rise on last quarter. for 2016, we still anticipate an inflation rate of β 0. 5 %, and for 2017, the forecast is now at 0. 3 % instead of 0. 4 %. the conditional inflation forecast is based on the assumption that the three - month libor will remain at β 0. 75 % over the entire forecast horizon. despite depreciating somewhat in recent months, the swiss franc is still significantly overvalued. furthermore, inflation prospects have largely remained the same. we have therefore decided to maintain our expansionary monetary policy. the target range for the three - month libor is unchanged at between β 1. 25 % and β 0. 25 %, and interest on sight deposits at the snb remains at β 0. 75 %. the interest rate differential with other currencies, even following the european central bank β s ( ecb ) mild interest rate cut, is thus still markedly higher than at the beginning of the year. the negative interest rate makes the swiss franc less attractive, and continues to help weaken the currency. the snb also remains active in the foreign exchange market in order to influence the exchange rate situation, as necessary. the negative interest rate and our willingness to
|
financial stability, the exchange rate and the economic cycle. we will comment further on the sovereign money initiative in due course. ladies and gentlemen, thank you for your attention. it is now my pleasure to give the floor to fritz zurbrugg, who will present our financial stability assessment. bis central bankers β speeches
| 1 |
to 2017. unlike monetary policies, there has been far limited literature on how macroprudential measures should be calibrated with respect to changes in asset price levels. the complex dynamics underlying the property market in hong kong has made it very difficult, if at all possible, to develop an ex ante framework governing how the hkma should operate its macroprudential policies. so, what we have done is to tread extremely carefully in each round of adjustment. the hkma has established a cross - departmental committee to regularly review whether the prevailing macroprudential measures would need to be adjusted, taking into account a host of factors including the property price trend, transaction volumes, domestic economic fundamentals and the external environment. the committee is chaired by the chief executive of the hkma and comprises members coming from multiple functions including monetary management, banking supervision, research and macro surveillance. 1 / 3 bis central bankers'speeches 6. some commentators have criticised the hkma β s macroprudential measures as being ineffective because they have not been able to arrest the rising trend of property prices. this is a misunderstanding of the objective of the hkma β s macroprudential measures. the objective of the hkma β s measures is not to tame property prices. instead, they are aimed at strengthening the risk management of banks and thus safeguarding long - term banking stability. in this regard, it is worth noting that the average ltv ratio of new residential mortgage loans has been consistently lower than 60 % while the average debt servicing ratio of new mortgages has been consistently lower than 40 %, suggesting that the banking system has built in buffer to safeguard its resilience. 7. competition dynamics : mortgage products in hong kong are homogeneous, in the sense that from the mortgagor β s perspective it makes little difference which bank is offering the mortgage facility. there is therefore a strong tendency for banks to compete for market share by lowering their underwriting standards. with the macroprudential measures in place, however, banks can compete for mortgage business only in terms of pricing ( e. g. mortgage rate ). against a backdrop of rising property prices and a consistently low delinquency rate of mortgage loans, many banks tried to outcompete their peers by pushing down the mortgage rate to record low levels. we were concerned that the low mortgage rates banks charge might not be adequate to cover the potential credit loss if property prices were to correct sharply in the future. the hkma has
|
year since 2005 ; this is substantially higher than the yield available on other major government bond markets ( right - hand side of slide 5 ). in addition to these financial market advantages, china has strong economic fundamentals. at 40 %, china β s government debt ratio is much lower than that of many advanced economies. 6 furthermore, the credit quality of chinese central government bonds is high compared to that of other emerging economies, as is reflected in the ratings. foreign investors still enjoy only very limited access to the onshore chinese bond market, however, as the renminbi is not freely convertible and capital flows are still subject to controls. notwithstanding this, the chinese government has been working towards a gradual opening - up of its domestic capital market for several years now. as part of this, china β s central bank, the people β s bank of china ( pbc ), launched a so - called interbank market programme in 2010, enabling central banks, sovereign wealth funds and insurance companies to request an investment quota for the onshore chinese interbank bond market from the pbc. provided they do not exceed this quota, these entities may invest freely in the ( onshore ) chinese government bond market. more than 20 central banks β including those of france, austria, japan, australia and singapore β have now received a renminbi investment quota. in july this year, the snb signed a renminbi investment quota agreement with the pbc. the snb β s investment quota amounts to cny 15 billion ( in excess of chf 2 billion ). while this quota represents a very swiss national bank. 2013. 106th annual report. measured against a standard market index. imf. 2014. fiscal monitor october 2014. includes central and local government debt as well as governmentbacked debt. bis central bankers β speeches small proportion of our foreign exchange reserves, it allows the snb to gather some experience of this market. we intend to make use of this quota in the foreseeable future. according to the agreement, the snb is authorised to exchange currency at the pbc for renminbi up to a maximum amount defined in the quota ( slide 6 ). as in all global capital markets, bonds are traded overthe - counter ( otc ), in other words they are traded off - market via local investment banks or the pcb β s bureau in shanghai. approximately 90 % of all bonds are traded on the interbank bond market, and the remaining 10 % are
| 0 |
, the slope of headline inflation had a general tendency to decrease until 2011, after which it rebounded ( see the left - hand chart in figure 8 ). for core inflation the upward shift started earlier ( see the right - hand chart in figure 8 ). this is true for the euro area as a whole but particularly valid for some countries that experienced longer recessions and made greater efforts to reform their product and labour markets with an impact on nominal rigidities. figure 8 bis central bankers β speeches some variation is also visible in the estimates of the other parameters, with the weight on expectations increasing over most of the 2000s relative to the level of persistence, and the effect of the exchange rate, but not relative to the level of import prices in us dollars, which slightly increased over time. figure 9 the impact of the change in the central parameter estimates on conditional predictions is not negligible. indeed, estimating this model with constant and with timevarying parameters and feeding it with technical assumptions based on the june ecb staff macroeconomic projections for import prices, exchange rates and the measure of slack ( i. e. the unemployment rate, as the gap is estimated endogenously within the model ), as well as for projected inflation expectations, yields a significantly steeper profile for inflation excluding food and energy over the next two - and - a - half years ( figure 10 ). the steepening of the phillips curve also helps improve its ability to fit the low inflation episode, together with the use of measures that indicate wider negative slack and short - to medium - term survey inflation expectations. figure 10 bis central bankers β speeches conclusions inflation dynamics since the great recession have shown signs of instability that have led to a sequence of systematic forecast errors. the two puzzles of β missing disinflation β and successive β excessive disinflation β triggered a surge of new research around the phillips curve and its possible demise, which seems to have been prematurely foretold. there is an important common factor in inflation in the advanced economies that helps explain national inflation dynamics. the current phase of low inflation, aside from commodity price developments, is significantly influenced by negative demand shocks both at the global and national level. in particular, the recent low inflation in the euro area was largely triggered by domestic demand weakness, which probably led to a larger degree of economic slack than was predicted by the usual methods. the phillips curve seems to survive the recent reassessment and is still a valid tool of analysis in the euro
|
##ommodative monetary policy stance and the measures adopted to improve the functioning of the financial system. however, the recovery in activity is expected to be dampened by the process of balance sheet adjustment in various sectors. in the governing council β s assessment, the risks to this economic outlook are still slightly tilted to the downside, while uncertainty remains elevated. on the one hand, global trade may continue to grow more rapidly than expected, thereby supporting euro area exports. moreover, strong business confidence could provide more support to domestic economic activity in the euro area than is currently expected. on the other hand, downside risks relate to the tensions in some segments of the financial markets and their potential spillover to the euro area real economy. further downside risks relate to renewed increases in oil and other commodity prices, protectionist pressures and the possibility of a disorderly correction of global imbalances. with regard to price developments, euro area annual hicp inflation was 2. 4 % in january 2011, according to eurostat β s flash estimate, after 2. 2 % in december. this further increase was broadly anticipated and largely reflects higher energy prices. looking ahead to the next bis central bankers β speeches few months, inflation rates could temporarily increase further and are likely to stay slightly above 2 % for most of 2011, before moderating again around the turn of the year. overall, we continue to see evidence of short - term upward pressure on overall inflation, mainly owing to energy and commodity prices. such pressure is also discernible in the earlier stages of the production process. these developments have not so far affected our assessment that price developments will remain in line with price stability over the policy - relevant horizon. at the same time, very close monitoring is warranted. inflation expectations over the medium to longer term continue to be firmly anchored in line with the governing council β s aim of keeping inflation rates below, but close to, 2 % over the medium term. risks to the medium - term outlook for price developments are still broadly balanced but, as already indicated in january, could move to the upside. currently, upside risks relate, in particular, to developments in energy and non - energy commodity prices. furthermore, increases in indirect taxes and administered prices may be greater than currently expected, owing to the need for fiscal consolidation in the coming years, and price pressures in the production chain could rise further. on the downside, risks relate mainly to the impact on inflation of potentially lower growth, given the prevailing uncertain
| 0 |
rate 15 basis points on average, subject to possible judgmental adjustments. armed with this information and their own actually, the taylor rule has the stronger implication that the nominal funds rate should rise more than one - for - one when inflation rises, implying an increase in the real funds rate as well ( this prescription is the so - called taylor principle ). the taylor principle seems likely to be a feature of any good monetary policy and thus provides an important guidepost for policymakers. for example, one proposal would have the federal reserve adjust the growth of the monetary base in response to current macroeconomic conditions ( mccallum, 1988 ). another would replace the output gap in the taylor rule with output growth, a variable that ( unlike the output gap ) can be measured directly without reference to unobserved variables like β fullemployment output β ( orphanides and williams, 2002 ). robust feedback policies may also be useful when members of the policy committee disagree among themselves about how the economy works, if such a policy seems likely to produce acceptable results in each of the competing models or frameworks. although the simulation - based literature described in the text has produced many valuable insights, it also has a number of shortcomings : first, in conducting simulation exercises, researchers of necessity can consider only a relatively small number of simple and highly stylized economic models out of the large universe of possible alternatives. thus, simulations cannot demonstrate conclusively that any particular simple feedback policy would be robust to the types of uncertainty actually faced by policymakers. second, although these analyses are predicated on the assumption that policymakers do not know the structure of the economy, they usually assume ( somewhat inconsistently ) that private agents not only know the true model but also know the central bank β s feedback policy, which allows them to form accurate policy expectations. allowing for symmetrical uncertainty on the part of policymakers and private agents is difficult analytically but might produce different results. third, in assessing competing policies, these analyses ( with some exceptions ) often ignore the possibilities that policymakers will learn from their mistakes, modify or abandon policies that are producing bad results, or take into account their uncertainty about the underlying economic structure when they form their policies. estimates of how strong inflation pressures are likely to be over the next few quarters, financial market participants should be able to forecast future values of the short - term interest rate, allowing them to price bonds and other financial assets more efficiently. because, under a simple feedback policy, private -
|
a neighbouring jurisdiction. islamic financial products need some level of harmonisation in terms of product features to gain mass acceptance. we at the central bank of bahrain are working with the international islamic financial market to set certain standards on some capital and money market products, but banks themselves could work more closely to establish common disclosure standards for the costs of financing. additionally, we at the central bank have noted the continuing need for high quality human resources within islamic banks. islamic banking has been growing so fast that it has been difficult for banks to find enough skilled or qualified staff. this is why the cbb has participated with islamic institutions in bahrain in setting up the waqf fund to provide financial and technical support in upgrading current training programs and introduce new ones. it is hoped that we will begin to see a larger number of financiers qualified in sharia β related subjects in the near future. such initiatives can only be to the benefit of islamic banking and i urge more institutions to participate in the funding and support of the fund and its works. i think at this point i should talk about governance challenges facing islamic financial institutions. a major issue which is growing in importance is sharia compliance and how to provide a satisfactory framework to assure investors and other stakeholders that the activities of the bank are within the permitted scope of sharia. islamic banks have various mechanisms to ensure sharia compliance in the products and activities of the institution. the first and most obvious body is the sharia supervisory board. this body produces judgements or fatwas on products or structures that the bank intends to provide. the next body is the internal sharia review function which performs post - facto reviews of the activities of a bank. the last body is the external auditor which, in addition to verifying the accounts of the bank, also checks to ensure that the bank correctly followed aaoifi sharia standards. there are differing perceptions about the respective scope of authority of these three bodies and therefore there is a need to reach consensus on the functions of these respective bodies. this is clearly an area where the institutions, sharia scholars and the standard setters need to agree upon what constitutes best practice and set an agreed set of standards. the next challenge is that of accounting standards. there are currently some 60 aaoifi accounting, auditing, governance and sharia standards. this body of work is testimony to the commitment and continuing efforts of aaoifi since its establishment in 1990 to the development of accounting and auditing standards for islamic institutions. however
| 0 |
. this, on its own part, provides new opportunities for providing reliable and high - quality services to ultimate customers. as part of my congratulatory address on the occasion of the opening of this forum, i will allow myself to pose a question, namely the question of the connection between the information and communications technologies management and sales management, or to put it more broadly β marketing. neither the new technological solutions nor the financial products developed based on them can sell themselves. and again i would use the payments services as an illustration. in the recent two years our joint efforts ensured the connectivity to target 2, the national system for euro - denominated payments, and its interface with major analogical systems in the european union. this provides much greater possibilities for payment intermediation at low bis central bankers β speeches cost. at the same time, these possibilities are almost in no way reflected in the banks β marketing and product strategies. other similar situations can be identified. endeavors are made to create a new product, but the efforts needed for developing the necessary infrastructure for its use and marketing, in spite of the efforts and investments made for the latter, may turn to be much greater, as is the case with mobile payments. i made this small aside comment with the intention to be useful, and not edifying. i am very well aware that the participants in this event are primarily managers and experts in the information and communications technologies. at the same time, it is a well - known fact that maintaining and developing the technological level of financial intermediation is owing to your efforts, but if you are to enjoy the results, you need the efforts of all your other colleagues, to which you are immediately connected. by way of conclusion i would like to underscore the progress i see achieved in the information and communications technologies, which is not trifling. i also feel that the ambitions are even greater. this is obvious even from the motto of the forum. so i wish you success in your work! thank you for your attention! bis central bankers β speeches
|
dimiter kostov : the world of finance is becoming more it address by mr dimiter kostov, deputy governor of the bulgarian national bank, banking department and fiscal services department, before the participants in the 14th financial it forum β the world of finance is becoming more it β, sofia, 19 april 2012. * * * ladies and gentlemen, on behalf of the bulgarian national bank, i have the honour to congratulate you with the opening of the 14th financial it forum. this forum has established itself as an annual opportunity to share experience and ideas, and to view the prospects opened to the financial sector by the information and communication technologies. these results are undoubtedly owing to the organizers of the event, but what is of no less importance is your interest to it. from the point of view of the business, times are still hard for financial intermediation. in the conditions of volatile international financial markets and an unstable economy, the bulgarian banking system is coping well with the challenges and remains stable. the levels of capital adequacy and liquidity remain high. irrespective of the increased impairment costs the banking system continues generating positive results. it is of no little importance, too, that in these conditions the banking system managed to preserve and even to slightly increase its loan portfolio. in the recent three years the economic activity in the country has contracted by about 3 percent, while the loan portfolio not only did not contract, but grew by about 8 percent. the results achieved indicate that in this difficult macroeconomic environment the banking system has not only preserved its reliability, but has continued to perform its economic role of financial intermediary. another positive trend is especially worth noting, prompted by this forum. banks are not focusing only on coping with current issues and obstacles. regardless of the difficulties, banks are putting much thought and effort into developing and implementing new business solutions and products based on the opportunities offered by the information and communications technologies. new solutions are sought not only in the area of good management of risks and business processes, but also in developing new services and sales channels. i would not allow myself to give examples from the experience of one or another bank. the forum will provide plenty of opportunities to find this out for yourselves. i will use as illustration of my words the payment infrastructure. the connectivity achieved by the operator of the main retail payment systems in this country in the past year, presently makes available to the bulgarian banks the so - called sepa connectivity to several thousand banks in the european union
| 1 |
cope with the asymmetric shocks which can sometimes affect any monetary union. the policies needed to make emu work are, at the same time, essential to reducing unemployment. a single currency does not call for uniform wage developments or uniform economic or social policies in general. on the contrary β where national or regional economic developments are different, this should be reflected in different policy responses and wage developments. moreover, different reactions to similar problems make it possible to learn from each other. the existence of a single currency and 11 fiscal authorities is a unique phenomenon. this can only work if the member states strictly apply the stability and growth pact, which calls for the reduction of government deficits to close to balance or to create a surplus in the medium term. in this way, room is created for letting the automatic stabilisers work in response to both asymmetric and symmetric shocks. such a fiscal policy is required not only for emu. it has its own merits. the ageing of the population calls for such a policy line independently of emu. the need for fiscal consolidation is not just the result of creating the euro, but would be a key element in any sound fiscal policy in the euro area. it remains to be seen whether the stability and growth pact goes far enough in compensating for the absence of one fiscal authority in the european union. we should be ready to learn from experience and adapt our institutional framework if and when the need arises. this applies, of course, in a more general sense. emu has been well prepared, but actually playing the game is always different from preparing the game plan, important as this may be. a good game plan is necessary, but not sufficient to win the game. while it is as yet unknown whether the stability and growth pact will be the last word on fiscal policies in the euro area, it is certain that a failure to adhere strictly to the pact would be a recipe for all manner of problems. the eurosystem has adopted a monetary policy strategy which is tailored to the unique conditions of introducing a new currency. our two - pillar strategy, with its emphasis on monetary developments and a broadly based outlook for price stability, takes into account that economic behaviour may change as a result of the introduction of the euro itself. in other words, it takes into account that the start of emu constitutes a structural break. this already indicates that after some time our experience with conducting monetary policy within this framework will have to be carefully evaluated. over time
|
week will likely paint a cautious assessment of global growth prospects and include downward revisions to growth forecasts. Δ slowing global growth is chiefly due to an elevated level of policy and geopolitical uncertainty, with ongoing trade tensions that continue to dent business sentiment and investment. these ongoing developments have important implications for the financial industry and we need to be vigilant and flexible to adapt and respond. regional developments : asean β grounds for optimism 7 Δ Δ within asean, the picture is rosier. according to the imf, the major asean economies are expected to continue outperforming emerging markets and developing economies as a whole, with projected gdp growth of about 5. 0 % annually for 2019 - 2020 [ 2 ]. asean has become one of the fast - growing regions in the world in the last few decades, and is home to eight of the world β s best performing developing economies [ 3 ]. looking ahead to 2050, it is projected that asean β with a population of close to 800 million people by then - could become the fourth largest single market, behind china, india, and the us [ 4 ]. Δ β’ in the next few years, growth in asean will continue to be driven by intra and extra - regional trade as well as strong investment flows, even as domestic demand will play a more important role. Δ β’ asean also has demographics on its side : we are for the most part a young region, with a rapidly growing middle class who is increasingly consuming higher value - added goods and services. β’ asian wealth accumulation is also growing quickly. assets under management in the asia pacific is expected to increase faster than any other region globally, almost doubling from 2017 to about us $ 30 trillion in 2025. this will result in increased demand for investment opportunities across a wide range of products like equities, fixed - income, and risk management tools. 8 Δ Δ these factors underpin the promising economic prospects in asean, with the corresponding need for regional enterprises to raise capital to support their growth. 9 Δ Δ looking ahead, these are opportunities to be harnessed both within asean and globally, and exchanges as well as clearing houses need to innovate and remain relevant to all stakeholders. Δ i will now speak about three key trends, the opportunities they present, and what mas is doing to support the singapore financial services industry in these areas. trend 1 : catalysing sustainable finance for growth 10 Δ Δ the first trend is growth in sustainable finance. this is increasingly an area of both
| 0 |
of monetary policy in overcoming inflation. that has reduced not just expected inflation, but also the inflation risk premium β the cost levied by lenders to protect them against uncertain price changes. but the decline in nominal yields has also been driven by a fall in real yields, which is the real return generated by the balance of saving and investment in the economy. a temporary period of policy rates being close to zero or even negative in real terms is not unprecedented by any means. over the past decades, however, we have seen long - term yields trending down in real terms as well, independent of the cyclical stance of monetary policy. the drivers behind this have been, among others, rising net savings as ageing populations plan for retirement, relatively less public capital expenditure in a context of high public indebtedness, and a slowdown in productivity growth reducing the profitability of investment. bis central bankers β speeches one study finds such factors can account for around 400 basis points of the 450 basis points fall in long - term real interest rates over the past 30 years. 1 the forces at play are fairly intuitive : if there is an excess of saving, then savers are competing with each other to find somebody willing to borrow their funds. that will drive interest rates lower. at the same time, if the economic return on investment has fallen, for instance due to lower productivity growth, then entrepreneurs will only be willing to borrow at commensurately lower rates. on both counts, it is structural factors that have lowered the real return on investment. and since we operate in a global capital market, this has exerted downward pressure on returns on savings everywhere. the role of asian economies in this story has been well - documented, for instance in the β global savings glut β thesis. 2 but today the euro area is also a protagonist. we have a current account surplus over 3 % of gdp, and our largest economy, germany, has had a surplus above 5 % of gdp for almost a decade. in the past, countries with such surplus positions may have been able to easily export excess savings towards countries willing to borrow them at higher rates. this would have prevented domestic interest rates from falling, as would otherwise have been the case. and that would have been good for the global economy as saving flowed from ageing, slower growth economies to those with younger demographics and higher investment needs. but in a world where real returns are low everywhere, there is simply not enough demand for capital elsewhere in
|
nout wellink : central banks as guardians of financial stability speech by dr nout wellink, president of de nederlandsche bank and president of the bank for international settlements, at the seminar " current issues in central banking ", on the occasion of the opening of the new office building of the central bank of aruba, oranjestad, 14 november 2002. * * * it is a great honour for me to deliver a speech on the occasion of the opening of the new office building of the central bank of aruba. this is an important milestone in the short history of this institution. since its creation in 1986, the relationship between the central bank of aruba and the nederlandsche bank has been very close. those of you who are familiar with the dutch weather will understand that this relationship is something we especially cherish during this time of the year. but there are many more reasons why our co - operation has always been fruitful, and will remain so in the future. indeed, although aruba and the netherlands have a different history and different traditions, our central banks have much in common. first of all, we both gave up much of our monetary autonomy a long time ago. the aruban florin has been pegged to the us dollar since its creation in 1986. likewise, the netherlands had pegged its currency to the deutsche mark since 1983. this fitted in a longer tradition of stabilising the dutch guilder vis - a - vis the deutsche mark since the demise of the bretton woods system in 1971. eventually, we gave up our own currency in 1999, to become part of the euro. a second common characteristic is that we are both small, open economies with a particular interest in a stable international financial system. while aruba is an offshore financial center, dutch banks, insurance companies and pension funds have invested a substantial part of their assets abroad. finally, a third similarity is that both our central banks have a broad range of activities. we are not only involved in monetary policy, but are also responsible for the prudential supervision of banks and some other parts of the financial sector. in this context, it is important to be open - minded organisations and to adjust to changes in the financial environment. seemingly, a new trend is that central banks increasingly present maintaining financial stability as their core task. a dozen or so central banks in the industrialised countries have launched a regular financial stability review, and financial stability is often given a more prominent place
| 0 |
that there are still hidden external uncertainties. we should continue to pay attention, stay vigilant and exercise our prudence. we should be well prepared to take on the risks and adverse effects arising from external environmental changes. they may inflict harms on our economy and financial system. as the financial regulator, amcm keeps supervising banks operating in the msar so as to maintain security and stability of the macao financial system. all along, our supervisory work has had the support and coordination of friends of the sector. as such, i duly represent amcm to express our candid appreciation to our practitioners for their support and cooperation and their incessant endeavour in maintaining the financial stability and healthy development of macao. looking forward, amcm will implement its duty in accordance with the legislations to maintain the stability and security of the system, continue to enhance the financial regulations to cope with the needs of market development and alignment with international supervisory requirements. on the other hand, it will prompt the industry to further develop by actuating its practitioners. it will actively participate in regional financial cooperation, particularly the deepening guangdong - macao financial cooperation, with a view to exploring wider business scope and higher innovative vision. in this way, we can further exploit our bis central bankers β speeches special features and competitive edges to realize our own growth and development while contributing to the continued stability and prosperity of the macao financial sector and promote appropriate diversification of the economy of macao. again, i duly represent amcm to wish you progress in the year of the snake, good health, prosperous business and happy family. thank you. bis central bankers β speeches
|
composition of our balance sheet will make it challenging to execute smoothly. there are now more than $ 2. 4 trillion of excess reserves in the banking system. these reserves are not inflationary until they are converted to money and flow out into the economy. but as market rates rise in an improving economy, banks will find it advantageous to begin to increase lending or acquire assets using their reserves. the challenge for the fed is to control the flow of reserves so that we can successfully maintain our 2 - percent inflation target. this may require raising interest rates more quickly than currently anticipated. we have the tools that would enable us to raise rates if we chose to do so. however, the fed may be subject to political pressures or pushback from various interest - sensitive sectors that could result in a more measured response than required. one of the consequences would be higher inflation. history suggests that the fed tends to be behind the curve when it comes time to tighten monetary policy, and in the current environment, that delay could prove to be more costly than when reserves are in limited supply. thus, it β s a matter of our will rather than our ability. conclusion in summary, i believe that the economy is continuing to improve at a moderate pace. we are likely to see growth of around 3 percent in 2014. prospects for labor markets will continue to improve gradually, and i expect the unemployment rate will continue its decline to 6. 2 percent by the end of 2014. i also believe that inflation expectations will be relatively stable and that inflation will move up toward our goal of 2 percent over the next year. bis central bankers β speeches on monetary policy, the reduction in asset purchases from $ 85 billion a month to $ 75 billion a month is a step in the right direction. i believe the economy has met the criteria of significant improvement in labor market conditions for ending the program and that further increases in the balance sheet are unlikely to provide appreciable benefits for recovery. even after the asset purchase program has ended, monetary policy will still be highly accommodative. the work of the fed, however, is far from over. monetary policy still faces considerable challenges as we seek to normalize policy. the task should be to return to a framework in which a market rate is our primary policy tool, to reduce the size of our balance sheet, and to restore our portfolio to all treasuries. the challenge will be to do so in a way that ensures that inflation remains close to our target,
| 0 |
legislation. second, the proposed mediation and coordination powers should promote further convergence of supervisory action and practices. in this context, i would like to highlight the crucial role of the new supervisory authorities in fostering consistent and effective approaches within the colleges of supervisors. the participation of their representatives in meetings of colleges should favour information exchange within and across supervisors β colleges. in addition, the establishment of common supervisory databases should enhance the efficacy of the supervisory colleges β action. third, in times of financial distress, the esas can be empowered to adopt decisions fostering a coordinated response by the national supervisory authorities. this can promote effective supervisory action in times of stress. as the financial crisis has shown, swift and smooth coordination among authorities is essential. the esrb let me say a few more words about the esrb. i expect the esrb to make a substantive contribution on two main fronts. first, the esrb will enhance the public sector β s ability to detect and assess systemic risk in the european financial system. this should be achieved by monitoring all components of the financial sector that have a systemic impact as well as the interplay between the financial system and the real economy. a sound understanding of the evolution of the linkages β the β interconnectedness β β between financial institutions, financial markets and financial infrastructures will be a key element for the successful fulfilment of the esrb β s mandate. second, the esrb will fill a gap which β as we know with hindsight β emerged in the run - up to the crisis. this gap consists of the difficulty of translating risk warnings into policy action by the competent authorities. i am confident that the recommendations of the esrb have the potential to foster adequate policy responses. i am aware that there is a wide debate about the scope and addressees of the esrb β s recommendations. in my view, the recommendations should primarily focus on the area of financial regulation and supervision and take a macro - prudential perspective. they should not address individual financial institutions. this is the competence of national supervisory authorities. but the esrb could recommend supervisory authorities to use supervisory tools under pillar ii. examples of such tools are loan - to - value ratios, which are measures of liquidity mismatch. work is ongoing in international fora to identify specific macro - prudential tools. the recommendations of the esrb could also identify systemically relevant components of the financial system or key parameters of measures to reduce the potential pro - cyclicality of regulatory requirements
|
country it was clear what the desired fiscal response should be. the ecb expanded its quantitative and credit easing instruments, as reflected by the strong growth of its balance sheet. this provided space to governments to increase fiscal spending, without triggering severe stress in sovereign bond markets. in fact, the aggregate discretionary fiscal stimulus in the euro area in 2020 has been estimated to be more than 4 % of gdp. by comparison, the global financial crisis prompted a discretionary fiscal stimulus of about 1. 5 % of gdp. i think this response to the covid crisis offers important lessons for the fiscal architecture in the euro area. the successful coordination of fiscal and monetary policy was in great part due to the enormity of the economic threat as well as its symmetric nature. from the outset it was clear that we needed an all - out response from both governments and central banks to shield households and firms from income loss and avoid irreversible damage to the economy. under these circumstances, policymakers decided to activate the general escape clause in the stability and growth pact. the activation of this clause temporarily lifted all restrictions on fiscal policy. this helped prevent undue procyclical fiscal consolidations, such as during the sovereign debt crisis. but shouldn β t an effective and concerted monetary and fiscal policy response also be possible under less dramatic circumstances than the covid crisis? and wouldn β t we be better off with a framework that allows for more effective macroeconomic stabilization policies without needing to have recourse to an emergency clause that in effect requires the suspension of all fiscal rules? and if the answer to both these questions is yes, how do we ensure that we maintain a balanced macroeconomic policy mix in the emu, during the current recovery phase and beyond? based both on theory and past experience, i think that, in order to make our monetary union more stable, we need a fiscal framework that enhances coordination between member states and allows for a better alignment of monetary and fiscal policy over the entire economic cycle. this requires sufficiently countercyclical fiscal policy also from a euro area wide perspective. not only in bad times or when persistently low interest rates limit the scope for conventional monetary policy. but also in good times, so that governments reduce debt levels to pay for stabilization policies in the future. repair the roof when the sun is shining, an integral element of countercyclical stabilization policy that often gets overlooked. an enhanced ο¬scal framework to ensure stability of the emu as a central
| 0 |
am also confident that, when the time comes, the fed will act to ensure that inflation remains firmly under control.
|
have shifted to competing institutions. retail internet banking and, for some smaller banks, atms, are examples. but the use of even these defensive investments has often yielded benefits for banks from greater fees and from lower costs resulting from reduced check processing. i would be remiss not to note the more - direct contributions of technology to increased productivity in banking, the same kind of improvements that have occurred throughout our economy. such gains are notoriously hard to measure in banking, but have visibly contributed to the improved profitability of banking. not all such gains have been cost reducing : some have increased cost, but have raised revenue even more by improving the variety and quality of banking services in ways for which customers are willing to pay. the increase in banks β fee income is not unrelated to improvements in technology. bank consolidation technology has also facilitated consolidation in banking by making it more efficient at the margin - or perhaps less inefficient - for firms to become larger, more geographically dispersed, and better able to manage multiple business lines. research at the federal reserve and elsewhere is consistent with other indications in the past decade or so of cost scale economies, or fewer diseconomies, and improved control by multibank holding companies over their bank subsidiaries. improvement in the ability of these organizations to make small business loans over a wider geographical area is striking. some of the consolidation of the past decade would not have been possible if the congress, led by the states, had not removed prohibitions on interstate banking and branching. the combination of the resultant geographical diversification with the product line diversification facilitated by technology and the removal of out - dated legal prohibitions, has, in my view, greatly strengthened the stability of our financial system. diversified banking organizations in most recent years have been able to absorb substantial losses in some lines or weak demand for some products without significant hits to capital or, in some cases, even to earnings. banking history as recently as the 1980s and early 1990s would have been quite different had our banking structure then been more similar to that of today. the recent consolidation of the banking system has been dramatic. excluding intra - bank holding company mergers, and including the approximate 100 announced but not yet completed mergers, about 2, 400 banking organizations have been absorbed by other banking entities since 1995. if all the mergers that have been announced are completed, the ten largest banking organizations in the united states will account for about 51 percent of all domestic banking assets, almost double their share in 1995. consolidation has
| 0 |
the maastricht treaty. they quite deliberately included in the treaty the famous convergence criteria in order to ensure that countries wanting to participate in the euro - area should have to demonstrate, before they were allowed to join, at least a minimum degree of sustainable economic convergence precisely in order to reduce the risk of divergent national monetary policy needs once the single currency is introduced. without that, the potential problems could be serious. the euro - member countries would have no possibility of adjusting either interest rates or their exchange rate independently, and they would have somewhat limited scope for independent fiscal adjustment because the stability and growth pact would constrain the size of overall public sector deficits. and alternative adjustment mechanisms - - such as the labour migration or fiscal redistribution that helps to alleviate similar regional problems within individual countries - - are not well developed at the level of europe as a whole - - nor are they likely to be, at least in the near future. so the risk is that the one size - fits - all interest rate could result in economic weakness and unemployment in some areas if the european central bank pursued a firm monetary policy or unwanted inflation in others if it were more accommodating. such divergent national monetary policy needs within the euro - area could result from differences in the cyclical position as between one country and another ; or from different fiscal positions, - 2although these, as i say, should be constrained by the stability pact ; or they could result from external shocks which had disproportionate effects on some countries as against others. they may be the more likely because europe starts from a position of generally very high levels of unemployment [ ranging from around 7 % in the uk, to around 10 % in germany, over 12 % in france and italy, and even more in spain on a consistent basis ]. i do not suggest that this urgent problem of unemployment can be directly addressed by differential macro - economic stimulus - - most commentators agree that it is rather the result of structural, supply - side rigidities and can only be effectively tackled by greater labour market flexibility. the worry is that the necessary structural changes will occur to varying degrees and at a different pace in different countries itself, resulting in different macroeconomic policy needs. this is why meeting the convergence criteria, in economic substance not just in some formal accounting sense, are crucially important. without genuinely sustainable convergence - - and i emphasise the word sustainable! - - serious tensions could emerge between different countries living with the single monetary
|
norman t l chan : a fascinating train journey speech by mr norman t l chan, chief executive of the hong kong monetary authority, at the cuhk ( the chinese university of hong kong ) business school master degree graduation ceremony 2015, hong kong, 21 november 2015. * * * professor michael hui, professor kalok chan, parents, graduates, ladies and gentlemen : 1. it is a great honour to be invited to attend today β s graduation ceremony. it is also a great pleasure to be back to cuhk, where i spent the most beautiful part of my life as a student. there were so many fond memories and i cannot tell you how much i have missed my campus life even though i have graduated for nearly 40 years. 2. my fellow graduates, today is a memorable and joyful occasion not only for you, but also for your parents, your family, your loved ones and your friends. you have all worked very hard and gone through many rounds of examinations and challenges before you can be here today on this occasion. you must feel very proud and wish to tell everybody that β i have made it β. my heartfelt congratulations to you all : you have made it. you have received a master degree that provides you with the knowledge and skills that are badly needed and sought after in the modern era of business and finance. so many of you may think that you have earned a train ticket for a smooth journey to the place you are destined to go : success. is it so? 3. i am not sure if i know the answer, but let me depict a different scenario for you to think about. let β s say you have a train ticket that would enable you to go through the admission gate of the train station and reach the train platform. when you are there you immediately realise that there are many trains waiting to depart. your ticket doesn β t really tell you which train you should board and the signs on the trains are not clear either. so you will have to decide which train you should get on, without knowing whether this particular train is indeed the right one that can take you to your desired destination. but this is not the worst part. when you get on the train, you find that there are already lots of people there and that there is no seat assigned to you. all the window seats have been occupied. so you have to struggle to find a seat for yourself. and this is not the end of the story. 4. after you have settled
| 0 |
the economy as a whole. this benefits all citizens on a daily basis, and even more so those who are not in a position to protect themselves against inflation. finally, inflation brings about an arbitrary redistribution of income and wealth. the more vulnerable groups in society typically suffer the most from inflation. they have a relatively higher share of their savings invested in cash and savings accounts, the real value of which is easily eroded by inflation. their limited access to financial markets leave them with little room to evade the β inflation tax β. in this respect, pensioners who have to live on their pension entitlements and savings accumulated during their working life constitute a group that is particularly vulnerable to inflation. price stability ensures that the real value of both pension entitlements and savings is maintained. the counterfactual is conducted in christiano, et al ( 2007 ), op. cit. see in particular the following speeches ( published on the ecb website ) : j. - c. trichet, β monetary policy and credible alertness β ( jackson hole, 27 august 2005 ) and β activism and alertness in monetary policy β ( madrid, 8 june 2006 ). today, the level of inflation in the euro area is below the threshold of our definition of price stability, of β less than 2 %, close to 2 % β, while medium and long - term inflationary expectations in the euro area are solidly anchored. against this background, the social benefits of price stability are often taken for granted. i should therefore like to stress here that the undesirable social and economic consequences of inflation, namely inefficient allocation of resources, high levels of interest rates, the regressive inflation tax, arbitrary redistribution of income and wealth to the detriment of the most vulnerable, and, last but not least, economic instability, lower growth and lower job creation, are the benchmarks against which one has to assess the social benefits of price stability. this is why a credible commitment to maintaining price stability is so important for the living standards of european citizens. and why our fellow citizens, according to all surveys, are so profoundly attached to price stability. i thank you for your attention.
|
force could therefore become a strong constraint on the growth potential of the euro area. β’ as for labour utilisation, over the past ten years, and despite subdued growth in the population of working age, there has been a strong acceleration in the number of total hours worked in the euro area. this stands in contrast to developments in the united states, where a small deceleration has taken place. 5 much of the euro area acceleration can be explained by enhanced labour utilisation over this period, and the main drivers of this to date can clearly be identified as improvements in participation and employment rates. however, despite this visible progress, there is room for further improvement with regard to the way in which labour markets work in europe. first, the employment rate in the euro area remains low by international standards. 6 second, the unemployment rate is still too high on average in the euro area and especially in certain countries. β’ as for labour productivity growth, from a longer - term perspective, developments in the euro area have been characterised by a sustained decline. this is in contrast with strong gains in labour productivity in the united states over the past ten years. 7 this acceleration in us labour productivity was triggered by advances in information and communication technology ( ict ) during the 1990s. a very favourable regulatory environment, continued investment in research and development ( r & d ), the ability to redesign management and organisational systems, and the relative ease of reallocating and retraining ( as well as shedding ) of workers, allowed us firms to benefit from ict investment and to achieve significant gains in productivity. developments in the euro area in the last few years suggest that the decline in labour productivity growth may have come to a halt, although at a very low level, estimates from international institutions project euro area potential output growth to be between 1. 8 % and 2. 0 % in 2009 ( european commission 1. 8 %, oecd 1. 9 % and imf 2. 0 % ). this analysis relies on the commonly used growth accounting framework that links real gdp ( y ) to the product of labour productivity ( l ), labour utilisation ( lu ) and working - age population ( wa ), i. e. y = lp x lu x wa. euro area working - age population growth was 0. 5 % over the period 1987 - 97 and 0. 4 % over the period 19982007. over these same two periods us working - age population growth was 1. 1 %
| 0.5 |
. 0 source : central bank of chile. table 1 domestic scenario ( variacion anual, porcentaje ) 2018 ( f ) jun. 18 report gdp mining gdp non - mining gdp domestic demand domestic demand ( w / o inventory change ) gross fixed capital formation total consumption goods and services exports goods and services imports current account ( % gdp ) ahorro nacional bruto ( % del pib ) gross fixed capital formation 1. 5 - 2. 0 1. 8 3. 1 1. 8 - 1. 1 2. 7 - 0. 9 4. 7 - 1. 5 20. 6 21. 6 2019 ( f ) sep. 18 report jun. 18 report 2020 ( f ) sep. 18 report jun. 18 report sep. 18 report 3. 25 - 4. 0 4. 0 - 4. 5 3. 25 - 4. 25 3. 25 - 4. 25 3. 0 - 4. 0 2. 75 - 3. 75 4. 1 3. 7 4. 5 3. 6 5. 2 6. 7 - 2. 1 20. 3 21. 6 4. 6 4. 1 5. 0 3. 8 4. 9 6. 2 - 2. 2 20. 3 21. 7 3. 9 3. 6 4. 5 3. 4 3. 4 3. 8 - 2. 5 20. 6 21. 9 3. 7 3. 7 4. 5 3. 4 4. 2 4. 4 - 2. 6 20. 5 22. 1 3. 5 3. 6 3. 9 3. 5 2. 5 2. 6 - 2. 6 20. 7 22. 2 3. 3 3. 7 3. 9 3. 6 2. 8 2. 8 - 0. 3 20. 5 22. 4 ( f ) forecast. source : central bank of chile. figure 6 us - china trade ( percent of each country's gdp ) 35 35 united states other imports chinese imports30 30 25 25 20 20 15 15 10 10 99 01 03 05 07 09 11 13 15 17 china other imports us imports 30 99 01 03 05 07 09 11 13 15 17 source : bloomberg. figure 7 nominal exchange rate and multilateral measures real exchange rate ( index, 2017 - 2018 = 100 ) ( index, 1986 = 100 ) mer - 5 oer mer 2003 - 2017 average tcr mer - x jul. jul. ( 1 ) dotted vertical line shows punteada corresponde al ci
|
percent to 3. 0 percent between march and june. the baseline scenario assumes that the economy will slowly regain strength towards the second half of this year, with annual expansion increasing towards the latter months of 2014. this projection assumes some degree of investment payback, given the costs of internal and external financing. the mpr has been lowered by 100 basis points over the past few quarters and, as already mentioned, long - term interest rates are at their lowest in recorded history, even below those that prevailed in the 2009 recession. also risk premiums have diminished. there is also the effect of net exports, part of which we saw in the first quarter, resulting from both higher prices in dollars and the reallocation of internal resources derived from the real depreciation of the currency. add that the developed world will perform better. finally, there is the impulse coming from public spending, particularly investment, because of the low budget execution of 2013. in the opposite direction point the aforesaid deterioration in business confidence and the downward revisions to the investment project agenda made by the chilean capital goods corporation for 2014. the 2014 current account deficit forecast is revised downwards mainly because of the foreseen deceleration in investment and a slight increase in savings because of lower private consumption. in the trade balance this is visible mainly in a downward revision to imports. accordingly, the baseline scenario includes a current account deficit of 2. 5 percent of gdp in 2014 ( 3. 6 percent in march ). the lower outlook for expenditure also implies that, at trend prices, the deficit will decline further, to 2. 2 percent of gdp ( 3 percent in march ) ( table 2 ). the forecast path for inflation rests on several assumptions. for one, in that the passthrough from the peso depreciation to prices will be in line with its historical pattern. in addition, the board uses as a methodological assumption that the real exchange rate ( rer ) will remain close to current values, as it is now within the range that is considered consistent bis central bankers β speeches with its long - term fundamentals. it also uses as a working assumption that nominal wages will be adjusted in line with productivity and the inflation target. the baseline scenario also uses as a methodological assumption that the mpr will follow a path comparable to that that can be inferred from the prices of financial assets outstanding at the statistical closing of this monetary policy report ( figure 8 ). the baseline scenario reflects the events that are
| 0.5 |
paul tucker : the state of the markets β four issues remarks by mr paul tucker, deputy governor, financial stability, of the bank of england, at the association of british insurers 2009 biennial conference, london, 9 june 2009. * * * many thanks for the invitation to be here today. the bank greatly values its relationship with the insurance industry. we are just immensely grateful for the intelligence you provide, as asset managers and insurers ; and for our constructive dialogue on policy issues. i have a few brief remarks on four broadly linked issues. the macroeconomic outlook and bank lending since the beginning of the year i have felt that it will take until late autumn at least to have any kind of a handle on broadly what type of outlook we face. my view on that hasn β t really changed. of course, over recent weeks near - term indicators, notably the business surveys, have improved a bit. confidence seems to have stabilised. and that has been most obvious in the financial markets, where the really good news is that firms on both sides of the atlantic have been raising funds in the equity and bond markets. but a sense of perspective is needed if those apparently small steps forward are not to be frittered away. inevitably the medium - term outlook remains highly uncertain, and the path back to anything like normality can only be gradual i β m afraid. in particular, for the moment it is unclear β as, i must say, it is bound to be at this stage β whether the financial system can generate the expansion of credit that will most likely be necessary to support recovery. the reopening of high - grade bond markets has definitely been encouraging. but in most countries, including the uk, bank lending remains subdued. it is hard to disentangle how much of that is down to weak demand, and how much to tighter supply conditions from the banks. i would just say this. i truly believe that it is in the interests of the banks themselves to ensure that businesses get the working - capital finance they need. while one can imagine, i suppose, individual banks being tempted to sit it out in order to deleverage their balance sheets in an environment that is obviously tougher for them, there cannot sensibly be free riders. if all banks were to adopt such a strategy, recovery might end up being anaemic at best, which would feed back into the banking system itself β increasing defaults and depleting banks β capital. not lending would
|
thereby mitigating, once again, the pass - through. so, exporters to the euro area are now able to recoup part of the margins they compressed during the downturn. the extent to which they are able to do so also depends on the degree of competition, a point made by rudi dornbusch back in 1987. the more concentrated market power is, and the less substitutable products are, the more likely firms are to increase their margins following exchange rate appreciations. this also means that the pass - through may well differ across industries. 9 these examples demonstrate that it is by and large the state of the economy that will determine the strength of the pass - through. monetary policy, for its part, is likely to influence the passthrough predominantly through its impact on the economy itself. and at the moment this support from monetary policy may be even more powerful than in the past. the reason is that, in the class of models used here, positive demand shocks are normally identified by assuming that short - term interest rates rise in response to higher growth and inflation. at the current juncture, however, the policy - relevant horizon β the β medium term β concept in our monetary policy strategy β is likely to be longer given the persistence of subdued inflationary pressures. our forward guidance on both policy rates and the app, as reiterated by the 6 / 14 bis central bankers'speeches governing council last thursday, reflects this assessment. this means that, compared with past demand shocks, policy will remain more accommodative for longer, thereby likely muting further the pass - through of any growth - driven exchange rate appreciation. and with the current recovery in the euro area being largely driven by domestic demand, euro strength may also have less of an impact on growth than, for example, after the great financial crisis. all of this suggests, therefore, that monetary policy never acts in isolation on the exchange rate and that, in periods of recovery, the positive confidence and stimulus effects of monetary policy are likely to offset, at least in part, the disinflationary effects of a stronger currency coming from expectations of tighter policy. of course, this also means that should the contributions of the different shocks driving the exchange rate change over time, then also our assessment of the impact on inflation will have to change β expansion or not. exogenous shocks to the exchange rate, if persistent, can lead to an unwarranted tightening of financial conditions
| 0 |
this worsening income inequality. notably, in the era of the fourth industrial revolution, now in progress, there are concerns that the number of unskilled jobs could decline rapidly. however, we cannot go against the flow of globalization and technological innovation. and in this regard, international organizations such as imf and world bank recommend that we should pursue β inclusive β growth, which ensures that many people can share the benefits of growth. more specifically, creating more jobs, increasing household incomes and expanding the social safety net are recognized as relevant policies for promoting inclusive growth. we can talk more about this topic during session two today, on β inclusive growth and employment. β another challenge that we must tackle is population aging, which is progressing rapidly now in many countries. population aging is likely to undermine economic growth as it reduces the labor supply and saps aggregate demand at the same time. for korea, in particular, as the pace of our population aging is rapid, but our preparations for it insufficient, the negative effects of population aging on growth seem likely to be substantial. in response to this, proper policy measures need 1 / 2 bis central bankers'speeches to be put in place, to ease the rapid drop in elderly consumption while we at the same time strengthen social support related to child birth and child care. the theme of our first session today was chosen to be β population aging β, which i think may suggest just how important and urgent this issue is. finally, we need to also address the issue of financial imbalances. since the global financial crisis, international efforts to ensure financial stability have strengthened, as seen in the introduction of global regulatory frameworks such as the basel iii accord and the otc derivatives market reforms. however, the financial imbalances in major emes have accumulated further, driven by greater household and corporate debt leverage in these economies. financial institutions have been seeking high - risk, high - return investments, in response to their worsening profitability due to the low interest rate environment. in korea, household debt is already at a historic high, and has been growing faster than incomes, so that it poses a major risk to financial stability. i hope that we will obtain valuable insights related to this tomorrow, in the special session led by the federal reserve bank of new york, on ways of securing financial stability and the role of monetary policy. so far, i have raised three policy issues β income inequality, population aging and financial imbalances. besides these, of course, there
|
guidance as an unconventional policy tool, to be deployed only in extraordinary times. some central banks routinely offer financial markets forward guidance about interest rates that is less specific. the bank of canada has done so at times in the past. back in 2005, for example, our interest rate announcements mentioned the need to lower the policy rate β in the near term β and β over the next four to six quarters. β the most complete form of this routine forward guidance is to publish a projection for the future path of policy rates. this is the practice of sweden β s central bank, for example. similarly, the us federal reserve publishes so - called β dot plots β to indicate how its federal open market committee views the likely future path of interest rates. offering routine forward guidance obviously makes it easier for financial market participants to predict the actions of the central bank. arguably, this makes markets more efficient by reducing uncertainty about future policy. however, this comes at a cost : by anchoring financial market expectations, forward guidance reduces the reaction of markets to economic news. in short, it suppresses the signalling role of financial markets. as canada recovered from the global financial crisis, the bank gradually moved away from the most definitive form of forward guidance to a softer form. by 2013, though, we were becoming increasingly uncomfortable with offering even soft forward guidance to markets. the economy was struggling to return to full capacity, and we could not fully explain why exports and business investment were weaker than our economic models were projecting. we wanted markets to appreciate the uncertainty we were facing, and were concerned that providing forward guidance was giving participants a false sense of certainty. therefore, during the second half of 2013 we gradually toned down the forward guidance that we were providing in our interest rate announcements. this had the effect of shifting the bank β s uncertainty back out into the marketplace, which caused some market volatility. by 2014, we had stopped providing routine forward guidance altogether. not everyone was happy about this. but 4 / 6 bis central bankers'speeches we have seen signs that financial markets have become more responsive to data surprises as a result, particularly over the past year. in other words, market signalling has become stronger. since 2014, we have begun drafting each interest rate announcement on a blank page. this is to avoid getting locked into repeating specific language that, when changed, can create big market disruptions. we choose the words that best communicate our expectations for the economy and monetary policy. our latest interest rate announcement at the end of
| 0 |
darmin nasution : indonesia β sustaining growth during global volatility keynote speech by dr darmin nasution, governor of bank indonesia, at a seminar, jakarta, 13 february 2012. * * * fellow speakers, distinguished guests, ladies and gentlemen : assalamu alaikum wr. wb. good morning and may god bless us all, to open my speech here today, i would like to invite you all to join me in expressing thanks and praise to god almighty who has blessed us again with the opportunity to come together here for this seminar. this seminar is held to have a better understanding on the improvement of macroeconomic management and banking regulation that indonesia has achieved following asian crisis in 1997 β 98, as documented in the new imf book titled β indonesia : sustaining growth during global volatility β. distinguished guests, ladies and gentlemen it has come to our common understanding that changes in the constellation of the global economy since the global financial crisis of 2008 and its aftermath had left a profound and widespread consequence. against the backdrop of lingering effects from the global crisis, significant challenges in managing an increasingly complex macroeconomic stability has risen considerably. external shock and uncertainties seem becoming a constant dimension that continually shadows us in the process of policy formulation and implementation. the problem is we do not know when, how big and through which channel the shock will happen. as we might be aware, the unprecedented global financial turmoil from 2007 to 2009 was a big shock to the global economy, and represented the deepest deterioration since the 1930s. thus far, indonesia β s economy has weathered the global storm well. indonesia has continued to record strong macroeconomic performance with sustained high economic growth. provided that many economies had negative growth in 2009, indonesian economy in that year still grew by 4 %, which was one of the highest in the region. in the following years indonesian economy continued improving with well - maintained macroeconomic and financial system stability. economic growth in 2011 was recorded at 6. 5 %, increased from the growth in 2010 at 6. 1 %. this strong growth was supported by strong private consumption and investment along with good export performance. looking forward in 2012, we believe indonesian economy would expand in the range of 6. 3 % β 6. 7 %. the main source of the growth is expected to come from domestic demand as investment activity gains momentum, owing to stronger economic fundamentals and improved business climate. the recent upgrades of indonesia β s rating by fitch and moody β s will help boost growth up to its
|
indonesia also implemented dual intervention strategy in the fx and government bond markets simultaneously. this strategy had stabilized both the currency and government bond price from further drop, while also increase the stock of government bond in bank indonesia portfolio for monetary operation purpose such as reverse repo. currently, we hold around rp 70 trillions of government bond. on the financial sector, our financial system stability has been well - preserved during the recent global turbulences. this goes back to more than a decade of repairs and improvement since the asian crisis 1997 / 1998 which has made our financial system, including the banking sector, more resilient and able to absorb instability risk as big as the 2008 and 2011 turmoil. the banking industry has been more resilient, as indicated by secure level of capital adequacy ratio ( car ) above the minimum level, reaching 16. 0 % at the end of 2011 and gross non - performing loans ( npls ) managed at comfortably safe level of 3. 0 %. nevertheless, i believe the role of indonesian banking sector and its efficiencies can still be further strengthen in supporting the economic development. last year, bank lending grew by 25 % dominated by productive loan such as investment loan ( 36 % ) and working capital loan ( 24 % ). despite this encouraging progress, the ratio of bank credits to gdp in indonesia is still very low, only standing at 30 %, well below other countries such as malaysia, thailand and china, which ratio has reached above 100 %. this is in line with bi survey which indicated limited role of banking as companies still rely more on internal fund. at the end, this condition reflects the remaining large potential for business expansion. distinguished guests, ladies, and gentlemen, the prevalent opinion points toward the improvement of macroeconomic management where indonesia has implemented a program of wide - ranging policy reforms, particularly since the 1997 β 98 asian financial crisis. as pointed out above, the source of indonesia β s resilience includes a prudent monetary and fiscal policy, a sound banking system, a large stock of international reserves, and a more flexible exchange rate. bis central bankers β speeches these underlying strengths allowed bank indonesia and the government to respond with standard β countercyclical β monetary and fiscal policies to mitigate the adverse impact of the global economic crisis. yesterday, at the board meeting we decided to cut bi rate further down by 25 bps to 5, 75 %. this kind of policy reaction contrasts sharply with past episodes such as the 1997
| 1 |
rates. euro area exports continue to profit from robust and broad - based growth in the world economy. domestic demand in the euro area is expected to maintain its relatively strong momentum, as employment growth continues to strengthen, supporting real disposable income. investment should remain dynamic, benefiting from financing conditions which remain favourable. this positive outlook is reflected in the latest macroeconomic projections of eurosystem staff who foresee average annual real gdp growth in a range between 2. 3 % and 2. 9 % in 2007 and between 1. 8 % and 2. 8 % in 2008. in the governing council β s view, the risks to this favourable medium - term outlook for growth are broadly balanced over the shorter term, while the balance of risks remain on the downside at medium to longer horizons. these relate mainly to external factors, notably potential protectionist pressures, possible further oil price rises, global imbalances and potential shifts in financial market sentiment. turning to price developments, annual hicp inflation was, according to eurostat β s flash estimate, 1. 9 % in may, unchanged from april but somewhat higher than expected a few months ago, in particular owing to increasing oil prices over recent months. looking ahead, the short - term profile of annual inflation rates continues to be determined largely by current and past energy price developments, as last year β s volatility in energy prices leads to significant base effects. against this background, the eurosystem staff projections foresee average annual hicp inflation of between 1. 8 % and 2. 2 % in 2007, slightly revised upwards compared with the march projections, and of between 1. 4 % and 2. 6 % in 2008. in the governing council β s view, risks to the outlook for price stability remain on the upside over the medium term. notably, these risks are on the domestic side. they relate mainly to emerging capacity constraints and, closely related, stronger than expected wage dynamics, which would pose significant upside risks to price stability. in addition, pricing power in market segments with low competition may increase in such an environment. it is therefore crucial that all parties concerned meet their responsibilities. wage agreements in particular should be sufficiently differentiated to take adequately into account price competitiveness positions, the still high level of unemployment in many economies and sector - specific productivity developments. cross - checking with the monetary analysis confirms the prevalence of upside risks to price stability at medium to longer horizons, given the continued strong underlying rate of monetary expansion in a context of
|
needs more reform progress ; but the situation is more differentiated and more promising than the black - and - white, rather gloomy picture often portrayed. the structural impediments to the euro area β s growth must be addressed by implementing appropriate structural measures. there are no alternative solutions and no β quick fixes β. the euro underlines the validity of this proposition as well as the need for systematic and determined efforts towards implementing the necessary reforms. as the euro area economy becomes more productive, flexible and competitive, its growth performance will improve, benefiting from both an enhanced capacity to produce as well as increased confidence that can boost investment and consumption. thank you for your attention.
| 0 |
3 ). the reforms also meant we were in a better position to face the current financial crisis. while png may not be directly affected by the global financial crisis, we will be if and when the financial crisis turns into a recession. already, the major industrialized countries are experiencing negative growth in economic activity. these countries include the united states ( us ), united kingdom ( uk ), germany, and japan. there is lower growth here in australia. besides china, these are the major markets for many of our exports. a slowdown in these countries would mean less demand for our export commodities, resulting in lower export revenue, and a reduction in government tax revenue. a lower reserve level means less funds available for the central bank to invest in and loss of income to the government ( see chart 10 ). in the private sector, lower export demand would mean companies would hold back on any expansion plans, save costs by reducing employment and may have difficulties servicing their loans. furthermore, foreign investors would delay any new investments in the country given the uncertainties. generally speaking, economic activity in the country would be lower ( see chart 4 ). for 2009, the government forecasted a growth in economic activity ( gdp ) of 6 percent. all this does not augur well for poverty reduction in png. less government revenue would mean the government has to reduce its expenditure ( see chart 5 ). this is the prudent fiscal response to a reduction in revenue. the alternative would be to borrow, domestically or externally, to make up for the revenue shortfall. this would however mean increasing the government β s indebtedness. so far, the government has succeeded in reducing its debt. the government β s debt to gdp ratio declined from 71 percent in 2001 to around 30 percent in 2008 ( see chart 6 ). a return to borrowing ( deficit financing ) would reverse this achievement, as well as passing on the burden of servicing the debt to future generations of papua new guineans. tying down financial resources for debt servicing means there is less money available to fund the provision of much - needed goods and services to the populace. if the government decides to reduce expenditure, this may mean cutting back on essential social services of health and education, and important infrastructure projects that would improve the livelihood of our people. the government has set aside the windfall gains from high commodity prices in 2007 and the first half of 2008 in various trust accounts for spending in the key priority areas of infrastructure, health, education
|
the size and liquidity of domestic financial markets as crucial. in this regard, efforts currently undertaken to further promote integration of financial markets ( with more than 40 measures to be adopted by eu institutions ) are likely to further attract international financial operators. larger and more liquid financial markets imply lower transaction costs, and make it more efficient for foreign agents to trade euro - denominated financial instruments, as well as to resort to the euro in the foreign exchange market. it is not the task of the ecb to try to influence directly the international investors β decisions regarding the currency in which they want to invest, borrow or lend. the international role of the euro will ultimately depend upon the market β s judgement. however, this neutral stance of the ecb should not be misinterpreted, as the increasing use of the euro is an issue of policy relevance to the ecb, and requires continuous monitoring. to sum up, the creation of the euro facilitates the deepening of the financial integration inside europe. moreover, the single currency has already had consequences outside the euro area, as the euro has rapidly become the second most used currency in the world. conclusions to conclude my speech, i will pre - empt the q and a session by first telling you β what will happen after february? β from 1 march 2002, not only will the euro be the sole legal tender in the euro area, but it will also become one of the main channels that should facilitate the future co - operation between the ecb and the pbc. while china will manage to sustain strong growth and to open further its internal market as part of the wto membership process, we expect the trade and financial ties between china and the eu to grow even stronger. i attach great importance to the relations between the ecb and the pbc, and i am very confident that such relations will flourish over time. β xie xie β
| 0 |
in retirement ages over a longer time. so, structural changes can happen. it is not the job of monetary policy to prevent such changes, but rather to ensure that they do not have negative consequences for monetary stability, such as dislodging inflation expectations. on this point, it is worth remembering that an important reason why we have a positive rather than zero inflation target is to enable such changes in relative earnings to happen in a world of downward nominal wage rigidities. i started by quoting friedman and schwartz, and so i will end by doing the same. they emphasised the need to distinguish a change in price ( or wage ) levels from a persistent increase in the rate of change [ 3 ]. in my view, drawing this distinction is a crucial issue that we will be dealing with for some time. and of course, since it involves predictions of the future, for policymakers the task will not be easy. in conclusion, the yards will be hard i β m afraid, and we must stick to the task. the hard yards β speech by andrew bailey | bank of england i am grateful to nishat anjum, jamie bell, justin beresford, ben broadbent, alan castle, pavandeep dhami, jonathan haskel, andrew hauser, karen jude, catherine mann, dave ramsden, fergal shortall, sophie stone and silvana tenreyro for their assistance in helping me prepare these remarks. 1. milton friedman and anna jacobson schwartz, β a monetary history of the united states, 1867 - 1960 β, princeton university press, 1971, p. 493 2. the furlough scheme, meanwhile, has pulled down measured average wages. the scheme has helped workers stay attached to their jobs but generally at lower pay than usual. but the compositional effect has more than offset this. 3. milton friedman and anna jacobson schwartz, β a monetary history of the united states, 1867 - 1960 β, princeton university press, 1971, p. 498 andrew bailey governor, bank of england sign up for latest updates the hard yards β speech by andrew bailey | bank of england
|
really works. to subscribe to our investment service please send Β£5000 by return β. quite what our president, as the former deputy chairman of the financial services authority, would make of this scheme i do not know. but it illustrates vividly that the interpretation of ex post outcomes depends critically on understanding the ex ante process which generated those outturns. another example shows that it is not just lay people who find statistical inference difficult. experts of all kinds do too. the advent of dna profiling in the 1980s led to the use of match probabilities in criminal cases. the jury is told that the probability of finding a match between the sample taken from the scene of the crime and the dna of the defendant is, for example, only 1 in 500, 000. that is sometimes taken as evidence that the probability of the defendant being innocent is also only 1 in 500, 000. such an inference is incorrect. in a city such as london where there might be about 5 million people who could have committed the crime, around ten people would have dna that matched the relevant sample. hence, in the absence of any other evidence, the probability that the defendant is guilty, far from being overwhelming, is only one in 10. of course, in practice other evidence is usually available. but this incorrect statistical reasoning has swayed enough cases to be given its own name - the prosecutor β s fallacy. 11 the cases of sally clark and angela cannings, both convicted and imprisoned for the alleged murder of their own children, show the desperate consequences of the false use of statistics to create a presumption of guilt to resolve the cause of apparently inexplicable events. both women were convicted by juries which had in all likelihood been influenced by the assertion that the probability of two cot deaths in the same family was extraordinarily low. that assertion was based on the assumption that cot deaths in the same family were independent events, a view for which there was see, for example, thompson and schuman ( 1987 ). no scientific evidence and which is a priori implausible. 12 the assumption of independence was crucial to the prosecution evidence against sally clark that the odds of two cot deaths in a family such as hers were 1 in 73 million and so would be expected only once a century. given the complex and conflicting medical evidence, it would not be surprising if that striking and simple statistic had played a role in helping the jury come to its conclusion. in fact
| 0.5 |
finance. since the global financial crisis, the islamic finance institution has grown at double digit rates, outpacing growth of the conventional sector. based on islamic financial services industry stability report 2016, the global islamic financial services industry has reached an overall total value of usd1. 88 trillion in 2015. 5. despites those achievements, the industry still suffers from certain technical flaws namely relatively low operational efficiency, availability of full range of financial products to entertain the customers, and appropriately designed regulatory bis central bankers β speeches framework. in most instances, these lacks are associated with the low quality of human capital involved in the development of islamic finance industry. poor promotion strategy that leads to misperception in understanding islamic economic and finance results in unnecessary burden to the industrial development program. i am of a view that we should pay more attention on improving low quality of human resource. 6. this unfortunate phenomenon has been a common fact in many countries including indonesia. the lacks of adequate number of universities, available high quality reading material, and dedicatedly designed curriculum have prevented the industry from achieving progressive developments. we realise that the quality of human resources cannot be developed over night. this requires very deep and comprehensive analysis and implementation program. in order to maximise its benefits, the human capital development program should be able to cover all segments in the society besides the level of education. the organization of this seminar that is aimed at exchanging information is very important and timely. 7. allow me to offer three basic ingredients that can be adopted when developing human capital in islamic economic and finance. first is β link and match β. the universities that offer islamic economic program should be able to provide teaching materials that has relevance to the current challenges. the graduates produced by the educational institutions, formal as well as vocationals, should be ready for fierce competition and understand all the requirements demanded by the market. the combination between islamic economic specific and fluency in general knowledge is very important. second, technology based development program. now is era of digital technology. there so many development and invention by young entrepreneurs using information technology. in area of financial technology ( fintech ), many startups provide financial services with lower cost and easier requirements. some startups also begin using islamic finance as their business model. in my views, the graduates of should acquire certain level of knowledge in the area of technology considering that the financial industry has become technologically intensive. failure in acquiring certain level of technology would fail the economic agents in winning the competition. third, establishing solid platform
|
jean - pierre roth : real estate crisis in the united states β similar risks in switzerland? summary of a speech by mr jean - pierre roth, chairman of the governing board of the swiss national bank and chairman of the board of directors of the bank for international settlements, at the banque cantonale vaudoise, lausanne, 9 june 2008. the complete speech can be found in french on the swiss national bank β s website ( www. snb. ch ). * * * in the past few months, developments in the mortgage and real estate markets have attracted increasing attention. europe, and switzerland in particular, have been indirectly affected as a result of commercial bank activities in us mortgage markets. over the past few quarters, the european real estate market has also been affected, with a number of countries experiencing a downturn in prices similar to that in the united states. by contrast, other countries, such as switzerland, have seen real estate prices rising at a steady pace. in some respects, what the united states went through is a classical property crisis of the type that switzerland experienced in the early 1990s. however, the us real estate crisis spilled over to encompass the international financial markets, endangering their stability and prompting the intervention of several central banks. these events confirm the importance of sound real estate market developments for the economy. it is important to recognise that the swiss mortgage and real estate markets are very different from their us counterparts. developments in the swiss housing market have been relatively steady, despite the strong demand pressures discernible in certain regions. at present we do not detect any obvious signs of a speculative bubble that might culminate in a sudden fall in prices. the main explanations for the rise in real estate prices in the past few years have been higher expectations and good financing conditions. around lake geneva the pressures on the limited available space and the fast growth in the residential population have acted as special stimulants. thus there have been no speculative developments as witnessed at the end of the 1980s. now that the business cycle has peaked in switzerland, it is very likely that we will move into a phase of more moderate price increases.
| 0 |
trade execution and price discovery in fx https : / / www. mas. gov. sg / news / speeches / 2021 / riding - the - growth - momentum - in - asia 3 / 11 12 / 02 / 2021 " riding the growth momentum in asia " β keynote speech by ms jacqueline loh, deputy managing director ( markets & development ), β¦ during asian trading hours, a move that will bring about better execution, lower cost of trading, and greater transparency for market participants. key global and regional sell - side and buy - side players, as well as e - trading platforms, have anchored their regional pricing and matching engines here, and have seen early successes. global liquidity providers that have completed the set - up of their pricing and trading engines in singapore provided feedback that trade - fill ratios have improved, from about 80 % to near 100 %. notably, when fx market volatility reached multiyear highs in march last year amidst the covid - 19 pandemic, the robust e - trading infrastructure in singapore was able to tide regional market participants over the storm, with relatively good execution. we seek to enhance singapore β s value proposition as a full - service international fund management and domiciliation hub. the variable capital companies ( vcc ) framework provides fund managers with a wider suite of investment fund vehicles and potential cost savings from centralising fund management and domiciliation activities, whilst providing new business opportunities for fund managers, service providers and fund advisors. the vcc has seen strong industry adoption, with close to 200 vccs set up in its first year, for a diverse range of traditional and alternative investment strategies. in the bond markets, singapore β s strong ecosystem of buy - side and sell - side institutions, alongside professional service providers, provides a robust gateway for international capital to be channelled to asian borrowers. to strengthen our value proposition as asia β s leading bond centre and building on the success of the asian bond grant scheme [ 10 ], we launched the global - asia bond grant scheme [ 11 ] in 2020, which defrays issuance - related expenses for companies with an asian nexus. in particular, a new funding tier for jumbosized issuances was introduced, with a doubling of the maximum grant amount from s $ 400, 000 to s $ 800, 000 per issuance for these issuances. in insurance, we aim to be a global capital for asian risk transfer, [UNK] a wide spectrum of risk financing solutions that
|
half of 2021. the world bank forecasts global growth at 4. 0 % this year ; with growth in east asia at 5. 9 %. asean economies are expected to expand by 5. 0 % in 2021, also surpassing the performance of regions beyond asia. 4. there are however, still considerable uncertainties on the horizon. these include the course of the pandemic, progress on vaccination, the possibility of governments mistiming the withdrawal of policy support, and the evolution of us - china trade and investment relations. 5. the pandemic is also likely to have lasting economic [UNK] beyond 2021, including postponed investments, the negative impact of sustained job losses on human capital, global supply chain reconfigurations that emphasise resilience over [UNK], and high public and private debt levels. these [UNK] will further threaten potential growth in economies globally. 6. however, asian economies are poised to overcome these challenges. our growth model which comprises deep international integration, investment in human capital, and sound economic governance has helped us weather past crises and will continue to serve us well. the digitalisation of the regional economy also [UNK] immense opportunities. it is facilitating the growth of emerging industries such as e - commerce and expanding access to the vast east asian market for non - traded goods. 7. in the medium term, asia β s outlook is positive. in the next five years, the imf projects 5. 2 % average annual growth for the region, compared to 3. 2 % for the rest of the world. by 2025, asia β s share of global gdp is expected to reach 38 %, up from 26 % 20 years ago. financial markets in asia β sharing the growth story 8. asian financial markets have grown in tandem with the asian economic growth trajectory. the region β s equity markets account for about 40 % of global equity market capitalisation, doubling its share over the last 20 years ; the growth of asia β s bond markets has been phenomenal, with annual issuance volume rising 9 - fold [ 6 ] in 20 years, and accounts for about a quarter of annual global bond issuance volumes today ; https : / / www. mas. gov. sg / news / speeches / 2021 / riding - the - growth - momentum - in - asia 2 / 11 12 / 02 / 2021 " riding the growth momentum in asia " β keynote speech by ms jacqueline loh, deputy managing director ( markets & development ), β¦ capital inflows to
| 1 |
benjamin e diokno : one team, one goal - resilient partnership towards inclusive economic growth speech by mr benjamin e diokno, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the 2019 awards ceremony and appreciation dinner for bsp stakeholders in region iii, subic, zambales, 13 september 2019. * * * good afternoon, everyone. it is with great pleasure that i welcome all of you to the 2019 awards ceremony and appreciation dinner for bsp stakeholders in region iii. i am pleased that the bsp has been recognizing the invaluable contributions of its partners in central banking for the past 16 years now. the growth in the number and scope of awards given reflects the dynamic support and cooperation you have extended to the bsp β s various initiatives and advocacies, which are all geared toward improving the life of every filipino. i cannot overemphasize the value of your support as the bsp continues to navigate the country β s economic landscape. by working as one team, we have entered this year from a position of strength and with renewed optimism. based on the country β s economic performance, the gross domestic product ( gdp ) grew by 6. 2 percent year - on - year in 2018 and remained firm at 5. 5 percent in the first semester of 2019. on the production side, economic growth was propelled mainly by the robust performance of the services sectors. broad - based expansion in household consumption and government spending reinforced growth on the demand side. meanwhile, january to august 2019 inflation readings have averaged 3. 0 percent, well within the announced target range of 2 to 4 percent of the national government. last august, inflation slowed down to 1. 7 percent. the external position of the philippines is reflective of an economy driven by solid macroeconomic fundamentals and firm growth prospects. the country β s balance of payments ( bop ) position for the first seven months of the year posted a surplus of us $ 5 billion, a turnaround from the us $ 3. 7 billion bop deficit recorded in the same period last year. the surplus may be attributed partly to remittance inflows from overseas filipinos during the first six months of the year, and net inflows of foreign direct investments during the first five months of the year. sustained inflows of foreign exchange are expected to continue to support the peso. in the first six months of the year, net
|
inflows of foreign direct investments ( fdi ) reached us $ 3. 6 billion. meanwhile, foreign portfolio investments ( fpi ) reversed to net inflows of us $ 5. 3 billion in the first semester of 2019, from us $ 708 million net outflows in the same period last year. personal remittances for january to june 2019 totaled us $ 16. 3 billion, higher by 2. 9 percent than the us $ 15. 8 billion level recorded in the same period last year. this was achieved despite increasing global efforts to de - risk banks and tighten regulations of money transfer operations. the country β s gross international reserves ( gir ) continue to serve as an ample external liquidity buffer. preliminary data shows that the country β s gross international reserves ( gir ) rose to us $ 85. 6 billion as of end - august 2019. at this level, the gir can cover up to 7. 5 months β worth of imports of goods and payments of services and primary income. the country β s external debt remained manageable. 1 / 3 bis central bankers'speeches external debt as a proportion to the country β s gdp increased to 24 percent in the first semester of 2019. despite this moderate uptick, external debt - to - gdp has remained below 25 percent since 2016. our financial system remains sound and continues to effectively intermediate funds to productive sectors, thus promoting economic growth. in the first semester of 2019, banks β balance sheets exhibited steady growth in both assets and deposits. asset quality also remained stable while capital adequacy ratios stayed well - above international standards. banks maintained dominance in the financial sector, with universal and commercial banks ( u / kbs ) accounting for about 91 percent of banks β total resources. in terms of the number of head offices and branches / agencies, non - bank financial intermediaries have the widest physical network, consisting mainly of pawnshops. from this position of strength, the bsp remains committed to continually uphold the highest standard of excellence in crafting policies to maintain price stability, promote a strong financial system, and foster a safe and efficient payments and settlement system. the ability of the bsp to deliver on its mandates depends significantly not only on its commitment, but also on its credibility, supported by its dynamic engagement with its stakeholders. indeed, we can rightfully say that credibility is a major part of the institutional capital of the bsp as the country β s central bank. thus,
| 1 |
are closely interconnected via payment and settlement systems handling large values. moreover, the financial institutions use the same data centres, network service providers, etc. consequently, it is important that all key links in the chain are very strong. page 3 of 5 the danish financial supervisory authority and danmarks nationalbank have examined the cyber resilience of 15 of the largest and most important financial sector participants. although a survey of this type is subject to certain caveats, our conclusion is that, overall, cyber resilience is at a reasonable level β but there is room for improvement. the risk of unauthorised access to or sabotage of important it systems calls for it security measures that perhaps received little attention previously. traditionally focus has been on severed cables, power outages or software errors. we still need to take these factors into account, but cybercrime poses new questions and requires new answers. it is important to remember that attacks to computer systems are not unintentional. there are criminal minds at work, and they are constantly fine - tuning their methods. so the threats are changing all the time. this means that an attack may actually be difficult to detect in time. our survey shows that the individual sector participants are working with these challenges, but it also shows that the highest levels of security and protection against cyberattacks have generally been achieved by organisations with a cyber strategy which has been approved by the board of directors. in other words, a strategy laid down by top management has helped to ensure focus on these issues throughout the organisation and to target efforts. interconnectedness and the resultant interdependence between virtually all sector participants mean that information - sharing and collaboration are essential if we are to stem the tide of attacks that will undoubtedly come in the future. first and foremost, i would like to emphasise that collaboration is necessary β especially in situations where there is a potential threat to financial stability. that is why we have established the fsor β the financial sector forum for operational resilience. page 4 of 5 the fsor is a forum for collaboration between authorities and all key financial sector participants [ chart 5 ]. its task is to implement " joint measures to ensure financial sector resilience ". the focus is on preventing failures, but also on handling them if they, nevertheless, occur. the ambitious vision for this collaboration is that we should be best in class in europe when it comes to counter the threat from cybercrime. the first specific initiative was the
|
large - scale test of the financial sector's crisis response plans conducted the week before last. it really put the sector's ability to work together and coordinate efforts in the event of an extensive cyberattack on critical systems to the test. it was an educational experience. we all learned a few lessons and came home with knowledge that we can use in our further efforts. and fortunately it was only a test. but if it becomes necessary, we are ready. it is better to activate the crisis response one time too many than one time too few. one of danmarks nationalbank's tasks is to ensure that the danish economy is robust. an important element of a robust economy is a financial sector with a robust infrastructure. there is more work to do for the whole sector, but focus must be on the efforts made by the individual sector participants. thank you for your attention. page 5 of 5
| 1 |
welcome address by bank of greece governor yannis stournaras at a formal dinner in honour of jean - claude juncker, former president of the european commission and former prime minister of luxembourg 18 / 05 / 2022 - speeches on the occasion of his election as honorary member of the academy of athens. it is a great pleasure and privilege for the bank of greece to welcome president jean - claude juncker, on the occasion of his election as honorary member of the academy of athens. we welcome a great european statesman and a great friend of greece. a man who has contributed so much to greece staying in the eurozone in 2012 and 2015, as i have witnessed first - hand in these difficult years, first as minister of finance and then as governor of the bank of greece. a statesman who, during his long years of service in senior government positions both in luxembourg and at european institutions, proved to be one of the staunchest champions of european integration and one of the strongest leaders who handled successfully the crises that the eurozone faced over the last several years. a visionary leader who contributed enormously to the creation of our common currency, the euro, who strongly believed in it since its inception and fought hard to ensure its stability throughout these years. born in luxembourg, a country in the heart of europe, our dearest jean - claude realised at a young age that the future of europe lies in the close cooperation of its member - states and mainly in the gradual integration of national policies and rules. having left his mark on his country β s politics, he rose to top positions in the european union and, in this capacity, worked hard on european integration. he is one of the great europeanists, following in the footsteps of helmut kohl and francois mitterrand, with his firm conviction that european integration is the only way forward and that this path is irreversible. president juncker was one of the most consistent and influential advocates that greece could solve its fiscal problems within the eurozone, rather than outside, as some sadly wanted at the time. he strongly resisted the idea that greece should be sacrificed like iphigenia to allow the fleet to sail. this was due not only to his expressed love for greece and its heavy cultural heritage, but mainly to his strong belief in the european values and in the basic principle of keeping the eurozone together. he fervently defended greece β s place in the european family, by deeply understanding and recognising the efforts that the
|
greek people had made to preserve the country β s hard - won place. i believe this is his greatest contribution, as far as we greeks are concerned. we owe him a lot. last, but not least, i want to thank prime minister kyriakos mitsotakis, who came here tonight almost directly from his flight back to greece from his trip to the united states, in order to honour our guest, president jean claude juncker. thank you.
| 1 |
renminbi is a global good, consistent with london β s historic role. but rest assured that the bank will act in a manner consistent with our domestic responsibilities. as my colleague andrew bailey said last week, our risk appetite for foreign branches will largely be determined by whether their activities in the uk are covered by credible recovery and resolution plans. 15 as always, renewing globalisation and building resilience go hand in hand. 5. conclusion after perhaps the worst financial crisis in the ft β s long lifetime, it is reasonable to expect financial services will again grow in importance. the process of financial deepening in emerging markets is only beginning. in europe, there is a strong case for greater reliance on robust financial markets relative to weakened banks. the uk stands to benefit because of london β s place at the heart of the global financial system. properly structured, this creates investment opportunities for british savers, reinforces trading ties for uk firms and improves access to credit for the real economy see the fsb β s β policy framework for strengthening oversight and regulation of shadow banking entities β, http : / / www. financialstabilityboard. org / publications / r _ 130829c. htm. nevertheless, there can sometimes be a case for such action, and the bank will be considering what it should stand ready to do and in what circumstances. clearly the bank should not support any market that would otherwise be unviable. but we have, for example, intervened in the corporate bond market, buying and selling bonds to maintain the market during the crisis until it again became self - sustaining. see http : / / www. bankofengland. co. uk / publications / pages / speeches / 2013 / 687. aspx. bis central bankers β speeches across this country. london β s international markets in turn provide a valuable service to the global economy. these benefits, on both sides, will be greatest as part of an open, integrated global financial system. the bank of england β s task is to ensure that the uk can host a large and expanding financial sector in a way that promotes financial stability. only then can it be both a global good and a national asset. to those ends, we are working to complete the jobs of making banks more resilient and tackling too big to fail. we are making markets more robust in order to turn the shadow banking system from a source of risk to a pillar of resilience. and we are changing how we
|
to achieve them is by establishing a stable financial system. of course, there are judgements to be made on what constitutes financial stability, but those are not judgements that should be a product of murky compromises with other objectives. the assessment of the failures of monetary policy in the 1970s should stand as a clear guide as to why we must establish a strong understanding of financial stability as the driving public policy objective for the financial system. the absence of a consensus for low inflation in the 1970s as an objective of public policy led to β and i will tell you the source of this assessment at the end β policy making which lacked the courage and conviction to do what was needed to achieve an objective which in itself was not always accepted as necessary. policymakers did not persist with actions when criticised ( criticism will of course happen ), they tended to give too much weight to perceived political constraints and too little weight to the cost of failure to achieve the objective of policy. they talked tough, but didn β t match their words with bis central bankers β speeches actions, and their actions in response to criticism tended to be of the β do something β variety. and the result was? a policymaking process and institutions with low credibility in the eyes of the public, a very dangerous place to be. now, i haven β t made this up, you can read it in one of the best accounts of the failings of monetary policy in the 1970s, the history of the federal reserve by allan meltzer. the reason for drawing this point out is that if the reforms are to work, we must have a clear consensus that financial stability is a goal which will enable other things that improve the welfare of the public to be achieved more easily. so, what does this mean for important aspects of the regulation of the financial system? for microprudential supervision, the proposal is based on the so - called twin peaks model which separates prudential supervision ( one peak, to be in the pra ) from conduct of business and consumer and investor protection ( the other peak, to be in the consumer and markets authority ). one of the very important features of this approach is that it doesn β t mean one peak is less important than the other, that is not a consequence of financial stability being a necessary condition for good conduct of business. rather, it should enable each regulatory body to be focussed on its own objective, because it requires different skills and experience to undertake the two peaks. of course, great attention
| 0.5 |
strategies in a manner that avoids risks associated with early or late implementation. yet, while we are responding to the pandemic, we remain laser - focused busy in pursuing further reforms to improve our conduct of monetary policy and financial sector supervision. 1 / 3 bis central bankers'speeches on the monetary front, for instance, the bsp started issuing its own debt securities in september last year. this increases bsp β s set of tools to manage liquidity in the economy, consistent with our price stability mandate. with the bsp at the forefront of efforts to digitize the philippine economy, we launched the digital payments transformation roadmap last year which is expected to help propel boost economic growth. we also recently issued frameworks for enhanced risk management, and the creation of digital banks β all of which help further strengthen and enhance the financial system. moving to the latest updates on prices, external accounts and the banking system. on price stability, latest estimates by the bsp showed that inflation will average 4. 2 percent this year, a little above the high end of the 2 to 4 percent target range. but inflation will return to within target band next year at 2. 8 percent. the elevated inflation seen over the past three months is transitory ; it is due to weather - related disturbances on the supply of key food items, the effects of african swine fever, as well as higher global oil prices. the department of finance, the department of agriculture, and the department of trade and industry are implementing measures to ease the impact of supply - side pressures on inflation and thereby prevent them from spilling over as second - round effects. meanwhile, demand - side pressure remains subdued. the bsp β s monetary board is of the view that prevailing monetary policy settings remain appropriate to support the government β s broader efforts to facilitate economic recovery. the bsp, nonetheless, stands ready to use the full range of its instruments, as appropriate, to ensure that the monetary policy stance continues to support the bsp β s price and financial stability objectives. on the external front, we continue to have adequate buffers against shocks. as of end - february, gross international reserves continue to be hefty at us $ 105 billion. our external debt remains prudent at 27. 2 percent of gdp. remittances from overseas filipinos remain resilient. after contracting by 0. 8 percent in 2020, it is expected to rebound by 4 percent this year. we expect surpluses in the current
|
francois villeroy de galhau : the challenge of an efficient european economic governance as a contribution to a prosperous global community speech by mr francois villeroy de galhau, governor of the bank of france, at the emerging markets forum, paris, 11 april 2016. * * * dear friends and distinguished guests, let us take the long view. this forum, thanks to michel camdessus and harinder kohli, is a rare opportunity to discuss what the global economy and its governance might look like two generations from now. in a moment, we will argue about global megatrends and alternative scenarios. with so many distinguished participants from emerging market economies and specialists of the international monetary system in the room, i would like to speak today as a european. as i see it, the european perspective is relevant in this forum for at least three main reasons : β’ regional integration may be one of the megatrends : how it will affect the delicate balance between sovereignty and international cooperation is a question that the eu has been mulling over since its inception. β’ many of the global and coordination challenges we are facing have been confronted over the course of european integration, and are still at the core of the debate : economic spillovers and externalities, monetary stability, and effective governance. β’ a strong europe is all the more necessary in a multipolar world, as a β balancing power. β by 2050, the divide will no longer be between emerging and advanced economies, but rather between who was prepared and who wasn β t. ideas to enhance european economic governance are not new. mobilization and implementation have proved tricky however : this is what i would like to focus my remarks on speaking of the motivations ( i ) and then of the concrete tasks of a euro area finance minister ( ii ). i. why we need a β full coordination β institution in the euro area we know there is deep political resistance to sharing fiscal resources and sovereignty, as well as euroscepticism. the sad example of the refugee crisis illustrates how european countries so far have displayed little solidarity to find a common solution. this is why we need to make the economic case for a stronger governance of the euro area : it is not a theological issue and not solely a political one either. this discussion is not about β more brussels β, it is very concretely about more growth and jobs in europe. clearly, monetary policy cannot be a substitute for economic policy coordination or the lack of reforms. for that reason alone central bankers
| 0 |
. c., 10 april 2014. bis central bankers β speeches the crisis. 5 the situation had long required bold institutional reforms to the design of monetary union and we should praise the european commission for having quickly prepared proposals for a banking union in 2012. the banking union must be instrumental in resolving the crisis in my view, the banking union must be instrumental in resolving the crisis and unravelling its legacy. it is the crucial node to secure both financial integration and stability. the reason is clear. in the euro area, about 75 % of the real economy β s financing needs still originate from the banking sector. what is more, banks are crucial counterparties in the broader system of financial intermediation. therefore, the importance of establishing the single supervisory mechanism and creating a level playing field for all banks across europe cannot be overemphasized. 6 a relevant part of this endeavour is the comprehensive assessment of bankΒ΄s balancesheets that will precede the beginning of the supervisory tasks by the ecb / ssm. aiming at completing the balance - sheet repair of the banks subject to the ssm it will improve their capital and solvency position. in spite of the recent credit negative behaviour being mostly the result of lack of demand, the enhanced robustness of banks will overcome remaining credit supply restrictions that could hamper the recovery. this process of repairing the banking system is only one part of the challenge policymakers face in europe. the other, more fundamental part is to build a safer and more resilient financial sector that serves the real economy. this is ultimately the objective of the next phase of banking union : building a single european supervisor via the single supervisory mechanism ( ssm ). there are four ways in particular i expect the ssm to make a difference to banking in europe : by improving the quality of supervision ; by creating a more homogenous application of rules and standards ; by improving incentives for deeper banking integration ; and by strengthening the application of macro - prudential policies. the ssm should create the conditions and incentives for deeper integration of the european banking market, which should in turn make the euro area less vulnerable to fragmentation. barriers that existed in the past to deeper retail banking integration, for example opaque supervisory approval procedures, will no longer be relevant with a single european supervisor. the substantial compliance costs that came from having to observe different sets of rules and interact with several different authorities should also be reduced. at the same time, the benefits of cross - border integration should
|
stockholdings. concluding remarks while i have been talking about the challenges for japanese financial institutions, the recent crisis left various lessons for the regulatory and supervisory authorities as well as central banks. in relation to ensuring financial system stability, one lesson might be that β it is important to gauge with a sharp distinction between micro - level risks, such as risks of individual financial institutions, and risks of the financial system as a whole. β by taking that point into account, the importance of the so - called macroprudence β which aims at accurately gauging the risks of the financial system as a whole, with due recognition of the relationship between economic activity, financial markets, and financial institutions, and taking necessary policy responses β has been increasingly recognized on a global basis. in that regard, the bank of japan has been, from a standpoint of conducting monetary policy, monitoring a wide range of economic and financial developments at home and abroad and making in - depth research and analyses, as well as striving to improve infrastructure, including financial markets and the payment and settlement system. in addition, the bank has been gauging business conditions of individual financial institutions through on - site bank examination and off - site monitoring, and information and perspectives obtained through such processes have been utilized in gauging the condition of the financial system as a whole and in risk analyses, and published in the financial system report. also, the bank took measures such as purchases of banks β stockholdings and provision of subordinated loans aiming at ensuring the stability of the financial system as a whole. the bank has thus been making various efforts on the macroprudence front. nevertheless, such efforts are only half done. for example, gauging macro risks is still not sufficient. from a viewpoint of strengthening macroprudential analysis, the bank has been trying in the financial system report to broaden analyses to businesses other than banks, for example, insurance companies, to gauge macro financial imbalances, and to expand stress testing, but those efforts still remain at a stage of trial and error. in addition, the bank is aware that, even if the macro risk is properly gauged, it still remains as a future challenge to examine what specific policy measures would be desirable to address the risk. the bank will, including the responses to the challenges i have mentioned, continue with the efforts to ensure stability of the financial system.
| 0 |
luis de guindos : redesigning europe's financial landscape speech by mr luis de guindos, vice - president of the european central bank, at the 6th frankfurt conference on financial market policy, frankfurt am main, 14 december 2018. * * * it is a pleasure to be here today. as you know, there is a long tradition of the ecb participating in safe conferences here in frankfurt. the second conference in 2014 was already dedicated to β banking beyond banks β acknowledging important changes underway in the european financial landscape. 1 indeed, this was a prescient choice of topic given the growth of the non - bank sector, which has continued unabated ever since. in a recent speech2, i also highlighted the rapid growth of asset management in the euro area and at the global level, and the impact this is having on the structure of the euro area financial sector. in fact, in 2008, total assets held by investment funds made up just 15 % of banking sector assets. in 2017, these assets had grown to 42 % of total banking sector assets, amounting to β¬12 trillion. as the non - bank sector continues to grow, so does the need to ensure that our supervisory and regulatory framework is fit for purpose. at the same time, banks still play an important role in many areas of europe β s financial system, notably in the financing of small and medium - sized enterprises ( smes ). so a healthy banking sector remains crucial to financing the economy, and despite the progress made in improving the resilience of european banks, some legacy issues from the crisis continue to weigh on the system. this has two implications for strengthening the financial pillar of economic and monetary union ( emu ), which will be the topic of my speech today. first, we need to shore up the banking sector further by thoroughly completing the reform agenda that emerged in response to the crisis. this means taking the remaining steps to complete the banking union β in terms of both risk reduction and risk - sharing. second, we need to facilitate the growing role capital markets and the non - bank sector can play in financing economic growth in a sustainable and resilient manner. this requires boosting the capital markets union ( cmu ) agenda while ensuring that authorities are equipped to face the new challenges of a changing financial landscape. this will require the fragmentation of european capital markets to be overcome and the macroprudential toolkit to be extended beyond the banking system to cover, in particular, the
|
data be developed by the regulators or by the market? how is customer data protection being ensured, and what commercial arrangements might arise from owning that data? when dealing with such large data sets, what measures are in place to detect, respond to and recover from cyberattacks? addressing these and other open questions is important in moving the fintech dial forward. in south africa, numerous fintech firms applied for our regulatory sandbox process to trial new open banking models. to make progress within this space, we require incumbents and fintech firms to work together to shape our policy thinking and policy stances. any unaddressed solutions will possibly continue to see fintech firms using methods that may pose an increased operational risk. the solutions of open application programming interfaces ( apis ) are therefore pressing. the industry should actively engage with fintech firms on this long - standing matter. we also need to learn from jurisdictions that have already traversed this path, and modestly take from their emerging lessons. conclusion allow me to conclude. the south african regulators recognise the role they can play in addressing these access challenges. the ifwg aims to demystify the regulatory landscape, provide space for safe experimentation, and actively advance innovation. we do this through the innovation hub, launched earlier this year, and its three facilitators : the regulatory guidance unit, the regulatory sandbox and the innovation accelerator. page 8 of 9 since launching the innovation hub, we have received nearly 100 queries in the regulatory guidance unit and over 50 applications to the regulatory sandbox. these numbers show just how vibrant and dynamic the south african fintech ecosystem is. most importantly, though, they are a positive sign of increasing access to regulators and rule - making for fintechs, which enables us to hear more of those divergent and new voices. in addition, the innovation accelerator is a space for us to drive both internally oriented and market - facing innovation initiatives. we focus particularly on those initiatives that address the challenges faced, and have the potential to deliver benefits across the regulatory and broader financial services landscape. we currently have eight initiatives under the accelerator, looking at important topics such as digital platforms, cryptoassets, financial markets innovation, open banking, non - traditional data and big tech in fintech. what makes this unique is that regulators are journeying along to co - create an understanding of the major issues facing fintechs, including co - developing policy stances. the fintech phenomenon is here to stay,
| 0 |
country - specific recommendations, or csrs β issued under the european semester β should be given similar importance. csrs provide guidance to member states on how to address reforms and macroeconomic 3 / 5 bis central bankers'speeches imbalances. they have a broad focus on fiscal - structural policies, framework conditions, and labour and product markets. in light of persistent imbalances, the track record in csr implementation remains poor. over the past five years, most csrs were, at best, only partly addressed by member states. this is unsatisfactory, especially as the economic recovery provides a favourable environment for reform. at the same time, member states should agree on broad - based and balanced institutional reforms to facilitate better collective outcomes. these dimensions β action at the national and supranational level β should be seen as complementary. improving the crisis management framework at the supranational level would make emu more resilient. in this regard, the ecb welcomes the commitment to strengthen the esm made at the recent euro summit. moreover, the euro area would benefit from a common stabilisation function. such an instrument could provide macroeconomic support in the event of euro area - wide recessions, thereby maintaining convergence and reducing the burden on monetary policy. however, such a fiscal instrument should not undermine incentives for member states to pursue sound policies at the national level. conclusion growth in the euro area economy is solid and broad - based. the underlying strength of the economy continues to support the sustained adjustment of inflation towards our objective. following strong growth rates in 2017, the recovery in the euro area has slowed down in 2018, however. the duration of the current expansion, which began in 2013, is still below the historical average. its amplitude, the percentage gain in gdp relative to the trough, is also low by historical standards. at the same time, downside risks to growth, notably related to the threat of protectionism and the rise in trade tensions, remain prominent. the outlook for us monetary policy moves and vulnerabilities in emerging markets add to the overall uncertainty, as does the limited progress on the brexit discussion. solidifying the institutional architecture of emu is essential in order to foster cohesive economic performance without fragmentation or excessive imbalances. monetary policy has played the key role since the financial crisis but cannot remain the only game in town. we now need action in other policy areas β notably fiscal policy and structural reforms. there is
|
precautionary savings. the investment outlook remains solid on the back of improving profitability and favourable financing conditions. according to the july bank lending survey, credit standards for loans to enterprises and households have loosened further. moreover, net demand for all types of loans has increased and is expected to grow in the next quarter too, supporting loan growth. in spain, credit standards for new loans eased across all segments. while net demand for loans to enterprises remained unchanged, it increased for loans to households. we are therefore confident that the underlying strength of the euro area economy will continue to support the sustained convergence of inflation to our aim in the medium term. according to the flash estimates, hicp inflation edged down to 2. 0 % in august from 2. 1 % in july, mainly reflecting higher energy prices. on the basis of the latest oil futures prices, headline 1 / 5 bis central bankers'speeches inflation is expected to hover around the current level for the rest of the year. although measures of underlying inflation remain generally muted, they have risen from previous lows. looking ahead, underlying inflation is expected to pick up towards the end of the summer, supported by our monetary policy measures and strengthening domestic price pressures, which are sufficiently robust to counter the downward pressure from the euro β s appreciation in 2017. domestic price pressures have gradually risen on the back of the ongoing economic expansion, the resulting absorption of economic slack and rising wage growth. in particular, the tightening in labour markets supports the pick - up in nominal wage growth both across countries and sectors. non - wage domestic cost pressures and the stronger pricing power of domestic firms are further contributing to higher prices. moreover, domestic producer price inflation for non - food consumer goods increased further in june, with the year - on - year growth rate at its highest level since late 2012. services producer price inflation has been on an upward trajectory since the second quarter of 2016. against this backdrop, the ecb β s governing council carried out a thorough assessment of price and wage pressures and the inflation outlook at its meeting in june of this year. monetary policy stance the governing council carefully reviewed the progress achieved towards a sustained adjustment in the path of inflation, guided by three criteria : convergence, confidence and resilience. for convergence, headline inflation should be on track to reach levels consistent with the governing council β s inflation aim of below, but close to, 2 % over the medium term. in line with this criterion, the june eurosystem staff projections see headline
| 1 |
sabine lautenschlager : interview in the wall street journal interview with ms sabine lautenschlager, member of the executive board of the european central bank, in the wall street journal, conducted by mr brian blackstone, mr christopher lawton and mr hans bentzien on 7 march 2014 and published on 10 march 2014. * * * wsj : the financial markets interpreted thursday β s ecb decision to keep policy unchanged as suggesting the bar is high to additional stimulus. is that an accurate assessment? the correct interpretation is : we β ll act if it is necessary. but there was no strong reason to act : last week we, the governing council, found our baseline scenario broadly confirmed. we β re receiving some positive signals from incoming data, for example economically with a modest recovery trend and financially with improving funding conditions for banks. moreover, inflation expectations are still firmly anchored in the medium term. wsj : but inflation is way below the ecb β s target. when assessing the current inflation rate you always have to take into consideration all underlying reasons. there are some global factors to take into account. the drop in energy prices has a very strong impact, for example. structural reforms that are being implemented in member states of the euro area influence prices too. the output gap we acknowledge by our forward guidance : interest rates will remain at the present level, or even lower, over a longer period of time and well into the recovery. wsj : the u. s. central bank has reacted more aggressively to disinflation risks. is the ecb being complacent? even by your own forecasts inflation will only be 1. 7 % by the end of 2016. i reject it if someone says we are complacent. we will act should we observe rising concerns about medium - term price stability. and we were not complacent in the past. we used standard and non - standard measures to implement a very accommodative monetary policy stance. we not only cut rates and moved to a fix rate full allotment mode but also introduced ltros and changed the collateral requirements, so that a wider range of assets became acceptable in our portfolio. beyond that, i don β t think you should compare the situation in the euro area with the u. s. or japan because the underlying factors are different. wsj : mario draghi mentioned thursday a catalogue of options including facilitating the abs market, funding for lending
|
and liquidity constraints, particularly in dollars, have prompted certain groups to deleverage. it has undertaken an in - depth analysis and published studies on developments in household credit as well as the reallocation of households β financial investments, particularly between bank savings products and insurance savings products. ii ) 2011 β and this is my second point β was a year that saw the reinforcement of the methods used in prudential supervision. it was above all the year in which the process of merging banking and insurance supervision was completed. having been set up in the midst of the crisis that we are going through, the acp continually reviews the methods it uses to deal with new challenges. on the one hand, the traditional activities of on - and off - site inspections have been enhanced by taking the best procedures and practices from each of the two sectors, leading to improved quality and comparability in the assessment of the situation of the different institutions being inspected. during the year, the acp thus developed a more cross - functional mode of operating, thereby responding to the intention that led the government to merge the former authorities in 2010. the acp β s college has set out priorities for the supervision of each of the two sectors in a coordinated manner, and the acp has set up an autonomous and cross - functional research directorate. on the other hand, in line with international and european initiatives, the acp β s supervisory methods are complemented by the β stress test β approach to ever more complex scenarios and by the monitoring of the systemic nature of certain institutions. organised by the european authorities ( the eba for banks and the eiopa for insurance companies ) and the basel committee respectively and implemented concretely in france by the acp, these approaches supplement the individual supervision of banks and facilitate the macroprudential supervision of the financial system. the acp β s supervision methods have also fully taken on board its remit with respect to consumer protection, which is an essential condition for maintaining consumer confidence in the french financial sector. the acp β s mandate is to promote, in coordination with the amf β the report of our joint unit will be presented to you shortly β the sound conduct of market players β commercial practices bis central bankers β speeches without hampering responsible financial innovation that is suited to each category of customers. in 2011, the acp thus took a whole range of measures, of which i will only mention the main ones. the acp has put in place a system for monitoring
| 0 |
fout! onbekende naam voor documenteigenschap. a green light to lead us on the path of economic recovery contribution by frank elderson during a satellite event of the 11th edition of the petersberg climate dialogue : financing climate ambition in the context of covid19 29 april 2020 frank elderson participated in the virtual petersberg climate dialogue side event β financing climate ambition in the context of covidγΌ19. in his contribution he pointed out three ideas that he thinks are important in order to shape our thinking in terms of recovery measures that should be taken. fout! onbekende naam voor documenteigenschap. it is a great honour for me to be on this distinguished panel and to join this wonderful conference. no doubt, at this moment the first priority of governments is halting the spread of the covid - 19 virus. that having been said, the climate crisis has not just suddenly disappeared. the droughts, the floods, the fires, the famine, the refugees, biodiversity loss : unfortunately they are all still there. at this moment, all around the world, unprecedented stimulus packages are being implemented to keep economies afloat. these amounts run into billions and trillions. the priority is to of course limit the economic impact of the pandemic crisis unfolding in front of us. that said : are we going to blindly return to our brown past? are we going to massively invest in what will, to a large extent, turn out to be stranded assets? if you allow me to put it even more bluntly : are we, in ill - directed attempts to restore the old economy, going to continue to destroy the planet by locking in a 3 degree scenario? are we going to squander the very last chance we might have to avoid catastrophic climate change? of course we should not, of course we must not. and after this conference, i hope and trust we will all say : of course we will not. in that vein, i would like to point out three ideas that i think are important in order to shape our thinking in terms of recovery measures that should be taken. the three concrete ideas i would like to share are : think about public investments. the links that should be made with the climate agenda that is already there. we should frontload already identified green investment programmes such as the ec green deal and the climate agreement in the netherlands and many other programmes that are already there. we should make sure
|
monitored framework for risk appetite and highly assertive risk management. search for yield has intensified competition in the market for leveraged finance. the result is that the terms for borrowers have become more favourable β ultimately, that increases the risks for the lender. we as supervisors take a close look at the credit quality of borrowers as measured by their level of leverage. lending to highly leveraged counterparts may entail significant risks. and in the euro area, we observe that the leverage of corporate borrowers has increased. in 2014, 35 % of transactions arranged by significant institutions actually refinanced borrowers at an increased level of leverage. moreover, we as supervisors are not always impressed by the quality of loan contracts. some loans contain only limited obligations for borrowers, for instance with regard to payment terms. particularly when refinancing or renewing commitments, banks might be inclined to accept the removal of covenants in order to preserve existing commercial relationships. we as supervisors also care about returns. banks are taking on risks ; but do they gain adequate returns? well, over the entire credit cycle, they may not necessarily earn more returns because there are other factors at play. today, fierce competition is one of the factors that depress returns despite the increase in risks ; it might prompt some banks to reduce fees in order to increase their market share. and tomorrow, the credit cycle might reverse and bis central bankers β speeches default rates surge. such a scenario ultimately raises the issue of default - recognition methodologies. and last but not least, there is also the reputational perspective. by acting as underwriters in leveraged - finance deals, banks also distribute a certain amount of exposure. in 2014, around β¬50 billion of leveraged - loan exposures were distributed. nevertheless, from a reputational perspective and to avoid potential mis - selling practices, the quality of the distributed assets is of the essence. and currently, 21 % of exposures retained by banks are covenant - lite, against 74 % of those that they distribute. to sum up : banks appear to be increasing their exposure to the growing market for leveraged finance. the leverage levels of borrowers are increasing, while constraints on loan contracts are being removed. as i said earlier on, there is no such thing as a free lunch, and ultimately, it is the task of risk managers to ensure that the price is adequate β risk and return have to remain in balance. among other things, this requires forward - looking risk
| 0 |
muhammad bin ibrahim : the money services business industry in malaysia keynote address by mr muhammad bin ibrahim, deputy governor of the central bank of malaysia ( bank negara malaysia ), at the malaysian association of money services business ( msb ) annual dinner 2015, kuala lumpur, 25 april 2015. * * * terima kasih kerana menjemput saya pada malam ini untuk bersama meraikan majlis makan malam persatuan perniagaan perkhidmatan wang malaysia yang diadakan buat julung kalinya. saya amat berbesar hati dengan kehadiran tuan - tuan dan puan - puan sekalian yang mewakili hampir keseluruhan penggiat industri pada malam yang bermakna ini. ia jelas menunjukkan sokongan padu dan komitmen daripada saudara dan saudari untuk terus merealisasikan aspirasi untuk membina sebuah industri yang moden, progresif dan berdaya saing. i feel only a short time ago that i had officiated the official launch of the association. since then the industry has made significant progress on many fronts. standards have been raised, business conduct modernised and the structure of the industry has changed significantly. in many ways the achievements by the industry had exceeded our expectations. i would like to believe that the regulatory reform instituted over the last few years was the catalyst that had transformed the money services business industry. we have seen very encouraging results. but these transformations would not be possible without the vision and shared commitments provided by the association and the industry players. as a collective effort, the regulator and the industry had instituted various measures to establish new norms and values that were designed to enhance the integrity and professionalism of the industry. the measures that were prescribed made good business sense. an industry that inspires confidence, trusts and exudes high degree of professionalism would instil credence among the general public, a prized virtue that would expand business opportunities. from the regulator perspectives, a highly organised and disciplined money services business industry will easily withstand the higher level of scrutiny of regulatory requirements by both domestic and international bodies. i would like to commend the association in the strong leadership it has demonstrated in leading a number of key initiatives
|
8 / 15 / 2019 risks to the outlook | speeches | rba speech risks to the outlook guy debelle [ * ] deputy governor keynote address at the 14th annual risk australia conference sydney β 15 august 2019 today i am going to talk about some of the key risks around the outlook for the australian economy. statement on monetary policy i will draw on the material published last week in the august. on the global side, i will discuss some of the implications of the trade and technology disputes between the us and china. on the domestic side, the key risk for some time has been the outlook for consumption. i will highlight some of the main uncertainties that are likely to affect that outlook. beyond the near - term risks for the economy, climate poses a material risk for the economy and financial markets over a longer horizon. finally, given the audience, i will remind you of an actuality, not a risk, that you need to be prepared for ; namely the cessation of libor, the key interest rate benchmark in financial markets. trade and technology dispute the trade dispute between the us and china has been with us in its current form for almost two years now. the direct effect of the tariffs that have been imposed to date on global growth has not been all that large, though the impact on particular businesses has been significant. rather, the larger impact has been the uncertainty generated by the dispute. that uncertainty takes two forms : uncertainty about the size and incidence of the tariffs and uncertainty about how, and even if, the technology dispute will be resolved. on the tariff side, the prospect of a 25 per cent tariff is a firstorder consideration in determining whether to invest in a new factory or new machinery and where to locate that investment. it is plausible that the effect of the technology dispute will be larger than that of the tariffs. the technology dispute raises the possibility that any business involved in the technology production chain will have to choose between east and west rather than selling into a global market. https : / / www. rba. gov. au / speeches / 2019 / sp - dg - 2019 - 08 - 15. html 1 / 10 8 / 15 / 2019 risks to the outlook | speeches | rba the uncertainty as to how the dispute will play out on both the trade and technology fronts means businesses are waiting to see how the uncertainty resolves rather than invest. it is too risky to commit to a multi - year project or buy a large piece of plant if the economics
| 0 |
very much hope and believe that negative deposit rates are a temporary phenomenon worldwide and not a permanent feature of normal monetary policy. when potential growth picks up and inflation rises, they will be a thing of the past. now, however, this instrument is being tried in many countries because normal interest rates are close to zero and central banks are faced with the problem that the real equilibrium interest rate is negative and inflation is so low. neither development was created by central banks, but they are trying to overcome them. which isn β t easy. do you not feel simply overwhelmed as a central banker every now and then? there have been calmer times for central bankers, i guess. is β helicopter money β one of the tools available to the ecb, i. e. the idea that a central bank prints money and gives it directly to the public? the original idea of helicopter money refers to the direct financing of public expenditure. that is not an option for us. that is not something that we are considering. as president draghi has said on this topic, the treaty on the functioning of the european union prohibits direct financing of governments in the euro area. isn β t there a great danger that the ecb β s stance undermines the necessary adjustments in the economy, as the cheap money makes balance sheet adjustments unnecessary or keeps unviable banks and businesses alive? some critics warn that the ecb is ultimately creating β japanese conditions β. that is certainly not the case. of course, no policy is completely β clean β β there are always side effects. but the responsible authorities must stick to their given target. for us, it is an inflation rate that is below, but close to, 2 %. we do not ignore the consequences of our actions. but we must also fulfil our responsibility and others have to fulfil theirs. that also applies to potential risks to financial stability resulting from current monetary policy β basically, a task for macroprudential supervision, not monetary policy. the federal reserve ( the us central bank ) has increased its key interest rate for the first time after seven years of a policy of zero interest rates. does that make the ecb β s job easier or more difficult in the long term? both scenarios are possible. our task would be more difficult if bond yields in the euro area were to increase along with us interest rates in the medium term, but that is not likely. what is likely, however, is that the interest rate increase will have an impact
|
on emerging market economies. that may lead to a further dampening of growth in these countries, which is already weakening. that would make it harder for us. in contrast, it would be easier if, for example, the β lift off β ultimately leads in the medium term to an increase in the foreign currency price of us exports. that would help to normalise inflation worldwide. some observers fear turbulence in the financial markets as a result of the almost unprecedented divergence between the monetary policy of the federal reserve and the ecb. i don β t see any particular source of risk there. everyone understands that both central banks are reacting to their domestic situations β to growth, employment, inflation. and both history and theory clearly show that when countries ensure equilibrium in their national economy, that is positive in the end for the equilibrium of the global economy as a whole. so you don β t share the concerns that the dollar β s appreciation could turn out to be stronger than expected, with negative consequences for the united states and emerging economies? it is nearly impossible to predict exchange rates. bis central bankers β speeches the biggest impact of qe appears to be on exchange rates. the ecb has therefore been accused of pursuing, at least indirectly, a policy of depreciation. we do not have any sort of target for the exchange rate. we have spoken about the ecb β s mandate and target. would you consider it meaningful to review both of these in the future, as you did in 2003? no central bank is changing its inflation target at the moment and we are not considering anything like that either. i do not see any need to engage in such a discussion now. president draghi said at the start of december that, in the future, the governing council will have to take into account the fact that inflation has been well below 2 % for a long time. this reminded some of the idea of price - level targeting, whereby if a target is missed, that shortfall must be made up for later. is a rethink on the horizon? that is certainly one of the over - interpretations which i mentioned earlier. i would never agree to price - level targeting. that is also not a consideration for us. during the financial crisis and the euro area debt crisis, the ecb has continually gained more power and become a political player. what will be the consequences of this in the long run? i don β t agree with your assumption that we have become more political β that is simply
| 1 |
5 ] and thanks to sound regulation and supervision in the wake of the global financial crisis, banks have benefitted from stronger capital and liquidity buffers in recent years. that stands in sharp contrast to 2007 - 08, when banks β weak balance sheets intensified the impact of the global fallout. this robust starting position explains why, when the pandemic arrived, banks were able to be part of the solution in tackling the crisis, and not part of the problem. [ 7 ] but given today β s weakening economic outlook, there are no grounds for complacency. it remains important that banks make adequate provisions and undertake prudent capital planning. they should be attentive to credit risk and remain alert to potential flaws in their internal models as the risk environment evolves. banks also have a key role to play in contributing to resilience by having good visibility of near - term liquidity risks and concrete plans to tackle them ; strong cyber defences ; and the ability to withstand fire sales and the associated mark - to - market hit on assets held on their balance sheets. if not managed properly, these are all types of risks that are particularly likely to amplify and propagate shocks through the financial system. but building resilience cannot stop at banks : non - banks also play an increasing role in the financial system. the share of non - bank finance in overall credit from financial institutions to the real economy has increased from around 15 % to roughly one quarter since 2009. [ 9 ] if such alternative sources of finance are to work reliably, these institutions must be resilient to shocks too. the esrb has identified several vulnerabilities among non - bank financial institutions and has asked legislators to address them. [ 11 ] one such example concerns money market funds ( mmfs ). mmfs are intricately connected to the rest of the financial system, including banks. when the pandemic hit in march 2020, mmfs experienced acute liquidity strains. this reflected a structural liquidity mismatch at the heart of their operations, with mmfs offering on - demand liquidity to investors while investing in more illiquid assets. recent turmoil in the uk bond market again highlighted the importance of mmfs as cash management vehicles in the context of liquidity vulnerabilities. the esrb issued a recommendation last december aimed at addressing structural vulnerabilities in mmfs. swift legislative action on this front is vital, to allow non - banks
|
of the euro area, in particular with respect to the basic allocation of responsibilities in relation to budgetary policy, which remains in the hands of the national authorities. there is no need to have a single budgetary policy in the euro area. no need for a so - called transfer union. however, national budgetary policies have to be conducted in a framework which is consistent with a single currency. we need a leap forward in the governance underlying the economic policies conducted in the member states of the euro area. we should therefore concentrate our efforts on strengthening discipline first and foremost in euro area countries since they share the common currency, making use of the provisions of the treaty β notably article 136 β which has been inserted into the treaty precisely because the member countries of monetary union require enhanced economic governance. whatever is decided for the euro area could conceivably also apply to the rest of the union, but the discussion among all 27 member states should not water down what is necessary for the euro area. the second point is that the institutional framework can be strengthened within the current treaty, exploiting to the extent possible secondary legislation. there is no need for a treaty change to achieve the large part of proposals which are required and that we have put forward. there is also no time. as i mentioned previously, the doubts raised by financial markets about the ability of the system to become more resilient need to be answered quickly. if these answers are linked to a long and uncertain ratification process, doubts will spread again. let me now turn to the discussions which have taken place so far on the three main building blocs of the reform. on the subject of reinforced fiscal governance, a first step forward was made on 7 september, when the ecofin council endorsed the new framework of the eu semester as had been proposed by the commission in its communication of 12 may. better fiscal governance requires changes both at the national and european level. at the national level, the ecb supports the establishment of national fiscal frameworks that set out minimum requirements for compliance with eu fiscal and statistical rules and that in particular would promote more independence in the national fiscal assessment, high - quality standards, a medium - term orientation and an effective coverage of all general government finances. at the eu level, the ecb favours a strengthening of the fiscal framework around the five following measures : 1. more streamlined and hence more effective procedures in the assessment of fiscal developments ; 2. reversal of the burden of proof, making it more difficult for the council
| 0 |
##ably triggers calls for more action to be taken by the authorities that shoulder the responsibility to navigate the economy through these troubled waters. to address these calls, one needs to take a sober look at the root causes of this crisis. most of the stressed euro area economies β and certainly the ones that are finding it most difficult and painful to adjust β have suffered from a chronic loss of competitiveness while being members of the monetary union. the erosion of their competitiveness has meant that these economies started running large current account deficits and some of them have accumulated large external debt positions. in some cases the expanding external debt was driven by increasing public sector indebtedness. imprudent fiscal policies were masking the private sector β s lack of competitiveness in an effort to shield and even improve living standards. in other countries it was the banking sector β s leverage that increased fast. this in turn reflected a strong increase in lending to domestic firms and households. in these cases the lack of competitiveness was triggering a shift of the economies towards domestic consumption and activities shielded from international competition, such as the housing sector. on top of that, banking supervision and regulation did not always mitigate the destabilising tendencies. there were cases when banks were not induced to develop sufficient capital and loss buffers in good times. the way out is to restore competitiveness. and the way to do this in the context of a monetary union is to pursue with determination an ambitious structural reform agenda. such an agenda comprises a number of national measures to make sure that the functioning of product and labour markets is fully compatible with participation in monetary union. one specific aspect is to fight vested interests that hamper competition, structural weaknesses of productivity and to allow, where needed, the nominal adjustments to play out. based on a comparison of central banks β simplified balance sheets as defined in the article entitled β recent developments in the balance sheets of the eurosystem, the federal reserve system and the bank of japan β, ecb monthly bulletin october 2009, pp. 81 β 94. bis central bankers β speeches and such an agenda also comprises a number of european measures to fully complete the single market especially in the area of services and to allow for higher labour mobility within the euro area. since the crisis started considerable progress has been made in making structural reforms in euro area countries, particularly those under an eu / imf programme. and the painful measures taken are starting to bear fruit. in greece, ireland and portugal current account balances have improved
|
, april 8, 1989, www. nytimes. com / 1989 / 04 / 08 / business / the - new - look - to - bankers - hours. html. their employer. today, the ach operates with important roles for the private sector and the fed, is available nationwide, and constitutes a vital piece of infrastructure supporting earlier access to funds and reliable settlement of payments. 5 moving to 24 / 7 real - time settlement today, our payment system is again at a crossroads. there is a growing gap between the transaction capabilities we need and expect in the digital economy - - fast, convenient, and accessible to all - - and the underlying settlement capabilities. consumers and businesses increasingly expect to complete transactions with a simple keystroke, swipe, or tap. if i want to split a restaurant tab with my friends, i can use an app on my smartphone. but my friends have to be signed up for the same app to receive the payment, and they may have to wait for confirmation that the funds have moved from the app into their bank accounts before they can use the funds outside the app. similarly, if i want to make a purchase from a vendor online, all i have to do is upload my payment information and touch a screen to complete the purchase immediately. but that payment in turn may not be immediately available to the seller. while we are seeing a growing demand for payments to be as instantaneous as the apps on our smartphones, in reality, under the hood, these payments currently rely on a patchwork of systems that can result in inefficiencies and delays, as well as uneven access. to meet the expectations of our 24 / 7 app economy, there is a growing demand for broadly and nationally accessible faster payments that make funds available immediately. faster payments would allow according to the federal reserve payments study 2016, in 2015, the ach system was used for 23. 5 billion payments, totaling $ 145. 3 trillion in value. see www. federalreserve. gov / paymentsystems / files / 2016 - paymentsstudy - 20161222. pdf. consumers and businesses to send and immediately receive payments at any time of the day, any day of the year, and provide recipients the ability to use their funds anywhere they choose. 6 nascent faster payment services are emerging to address this demand from individuals and businesses for the capability to manage their finances more efficiently in real time. these faster payment innovations are striving to keep
| 0 |
that the fluctuations in economic activity would vary the size of an output gap, creating pressure up or down on inflation while see fujiki, hirakata and shioji [ 2012 ]. another cross - country inspection based on a broader sample, including developing countries, does not detect positive correlation between inflation and population growth in the 2000s and in earlier periods likewise. see kimura, shimatani, sakura, and nishida [ 2010 ]. bis central bankers β speeches attracting or discouraging immigration that amplifies variations in population. that hypothesis, however, appears to be impertinent in some countries including japan where the impact of immigration on the total population is extremely small and thus can be disregarded. on that ground, business cycle fluctuations have had a minimal impact on demographic changes. a closer look at the case of japan confirms the increasingly positive correlation between inflation and population growth since the 1990s ( chart 16 ). that would reflect the momentum towards real income creation being undermined by population aging. as i have discussed, repercussions of the bubble - burst, the rapid aging and stagnation of productivity have been underway in japan. against the backdrop, the real per capita gdp growth rate has remarkably declined from somewhere around four percent back in the 1980s to almost one percent these days ( chart 17 ). with the yet - to - accelerate population aging well envisaged for the foreseeable future, the decline in the real gdp growth rate could undermine the medium - to long - term expectations for potential growth, giving rise to a lower permanent income of households. the decrease in potential growth, which effectively means a stagnant supply capacity, gives rise to a lower permanent income. on the flip side, the corresponding contraction in aggregate supply would offset such decline in aggregate demand. simultaneous changes in aggregate demand and aggregate supply keep the price level unchanged. i reemphasize the fact, however, that the public had long remained by and large unaware of the dangers created by demographic changes but, over time, the awareness has slowly been phased in. along with such gradually phased - in public awareness, yet - to - materialize declines in gdp growth have also been factored in, precipitating today β s decrease in aggregate demand and all the forward - looking responses have come into play behind japan β s deflation. 5 in the meantime, the real per capita gdp growth rate in most of american and european advanced economies has declined to japan β s neighborhood range
|
the hong kong monetary authority, of the apec compendium of sound practices to facilitate the development of domestic bond markets. this comprised a comprehensive list of recommendations covering topics such as government involvement in the market, level playing fields, consistent tax policies, sound regulation, clarity of responsibilities, transparency, robustness and efficiency of market systems, and so on. crucial though these considerations may be for the foundation of sound markets, they are, by and large, just the basic tenets. even when they have all been observed or put into practice, there is no certainty that active debt markets will emerge. in other words, whilst these may be a set of more or less necessary conditions for market development, they are unlikely to prove sufficient. however good the infrastructure may be, it is the issuers, investors and financial intermediaries which eventually determine whether there is a active market or not. here in hong kong the debt market has grown significantly in the recent past, and the increase in issues by non - financial corporates has been encouraging. but we cannot escape the fact that we are still a relatively small market and that, despite the increases in primary issuance, secondary activity remains subdued. β so β, people ask me, β what is the hong kong monetary authority going to do about it? β in fact i am not particularly comfortable with the implied presumption that we should be the first port of call when any problems or deficiencies are identified. thus, while i should like to take this opportunity to explain what we are in fact doing or intending to do, i want also to indicate what, in my view, we cannot or should not do. we are involved in the working group established by the securities and futures commission to review hong kong β s laws and regulations relating to offers of securities. over the years, several of the procedures have become outdated or have failed adequately to accommodate market innovations. in some instances they are an obstacle to bond market development. there are some complex legal and administrative issues here, which will take time to address. the next step in the process is likely to be the issuance by the sfc of a consultative paper. another area which we are looking at is taxation. we acknowledge that there are serious anomalies in the current arrangements for taxing interest income in hong kong but, given the uniqueness of hong kong β s overall tax structure, and the conflicting aims of retaining international competitiveness on the one hand and preserving fiscal revenue on the other,
| 0 |
liu guiping : on leveraging the financial market to achieve the goal of carbon peaking and carbon neutrality speech by mr liu guiping, deputy governor of the people's bank of china, at the 13th lujiazui forum, shanghai, 10 june 2021. * * * distinguished guests, dear colleagues, ladies and gentlemen, good afternoon. peaking carbon emissions before 2030 and achieving carbon neutrality before 2060 is an important decision made by the cpc central committee with comrade xi jinping at its core after due deliberation. to implement the decisions and arrangements of the cpc central committee and the state council, the people β s bank of china ( pbc ) has put green finance on its priority list for the 14th five - year plan period and even a far future. the theme of this session is β leveraging the financial markets to achieve carbon peaking and carbon neutrality β. it is a very meaningful topic, and i β d like to share with you my views on it. first, we should be more proactive, both in mind and in action, in promoting green and low - carbon transition. we should have a holistic and in - depth understanding of the β 30 Β· 60 β goal. different from developed countries, china is still in the process of rapid industrialization and urbanization, its economy will maintain medium to high - speed growth for quite a long period, and its per capita demand for energy will keep rising. therefore, we are facing great pressure in carbon emission reduction. as estimated by international organizations and research institutions, the peak of carbon emissions in china will be over 10 billion tons while that in the u. s and the eu stands at 5. 7 billion tons and 4. 4 billion tons respectively. we only have 30 years to achieve carbon neutrality after reaching the peak of carbon emissions, far less than the europe and the u. s, who have 50 β 70 years. peaking carbon emissions and reaching carbon neutrality don β t mean we will sacrifice the economic growth, the national wealth or the people β s well - being. instead, it means that we should achieve high - quality development, make it comprehensive, coordinated, and sustainable, while reducing carbon emissions, and that we should strike a balance between ecological conservation and economic and social development in a thorough and rational way. in the decades to come, green and low - carbon transition will be at the core of our economic activities and become the central logic guiding the decisions for investment, production, consumption, and circulation.
|
. otherwise, it could divert attention from more important areas. in my opinion, the most fundamental crisis prevention measure is the promotion of economic growth and social development. the international community should reach a consensus on this and take effective steps to achieve economic growth for the whole world, particularly for the developing countries. since the late 1990s, international financial crises have occurred frequently and the crisis countries have found it difficult to access financing on the international financial market, thus posing a threat to global financial stability. the imf should actively consider using the existing financing facilities for increased support to crisis countries. meanwhile, it needs to actively promote a quota increase and the general allocation of special drawing rights. in particular, the imf needs to complete the special one - time allocation of sdrs as soon as possible to strengthen the capacity of member countries to withstand crises. in addition, the establishment of a new equitable and reasonable international economic and financial order remains one of the basic means of crisis prevention. therefore, the imf needs to continue to examine the flaws in the existing international monetary system, reform the irrational international financial architecture, and gradually establish a new international monetary system that genuinely reflects the basic features of economic globalization, fully reflects the interests of the many developing countries, and provides institutional safeguards for the sustainable growth of the global economy. in this process, widespread participation of the developing countries is needed. iii. crisis management : sovereign debt restructuring establishing a fair and reasonable sovereign debt restructuring method is important both for crisis prevention and resolution, and for private sector participation. in the last two years, the imf has conducted much valuable research on the issue of sovereign debt restructuring. while this work deserves affirmation, the existing options still have certain flaws. the automatic stay mechanism of the sovereign debt restructuring mechanism ( sdrm ) would be favorable to ensuring the smooth conduct of restructuring negotiations. however, since it would widely involve the revision of the laws of all countries and amendment of the imf articles of agreement, i β m afraid that it would hardly be achievable in the short term. it would certainly not be easy to ensure the independence and fairness of the dispute resolution forum, not to mention the many technical problems that still need to be solved. the collective action clause ( cac ) cannot solve the collective action problem for multiple sovereign debts, which is one of the major reasons for the emergence of the statutory approach, i. e., the sdrm. in addition, the cac impact on the bond iss
| 0.5 |
last but not least, i am also aware that if inflation comes down it will happen only β thanks to the tough fiscal stance of the government β but if it remains high it will be β due to the not restrictive enough monetary policy β. but i do not care about the comments, only results! however, i do get more than annoyed when instead of appreciation i hear accusations from some government representatives that did not do their fair part and, in addition to that, even criticize the central bank for being hyperactive! recently i have been hearing a lot of tenuous criticism of the national bank of serbia regarding bank privatisation. let me set it clear : i / we did not cause the interruption of the saa talks with the eu, i did not contribute to the substantial increase of both usd and eur yields on serbia β s debt, nor did i say that serbia does not need a new imf arrangement. these are the crucial reasons that may prompt a bank to come or not to come to serbia, and not reserve requirements on short - term foreign borrowing up to two years! i definitely communicate differently with the industry compared to my predecessors. i do not like oneon - one meetings and do not give oral promises ; neither do i suggest to general managers what they need to do! i have no problems admitting that some events between the commercial banks and the national bank of serbia could and should have been avoided. but this is transition and do not underestimate the role of the journalists that love to create headlines! last but not least, the exchange rate. β more float and less management β has been emphasized and carried out by the national bank since september last year. the events of the last days of 2005 and the recent week are just a proof of the need to hedge foreign currency positions β the sooner the better. the exchange rate is not even mentioned among the 3 goals the national bank of serbia should pursue! it will take some time to enter the eu, and thereafter the eurozone, so we do not have an alternative. the central bank will not allow excessive daily fluctuations either way, but the rate is being increasingly determined by the market! so do not fall into the β good old serbian β habit : all gains from depreciation are, so to say, normal extra profit and are automatically pocketed, while in the case of appreciation the blame is on the central bank! if you are gambling, you cannot accuse the casino of losing your money! i would like
|
envisaged in our projection. as regards developments in the international environment, uncertainty remains regarding risk premium movements, which may affect capital flows and exchange rate trends. movements in risk premium will also be largely affected by future compliance with the budgetary framework. in this regard, conclusion of a precautionary arrangement with the international monetary fund is a step in the right direction as it contributes to macroeconomic stability. if fiscal policy adheres to the planned framework, there will be scope for monetary policy to respond more strongly to the disinflationary impact of slackening economic activity. * * * over the last six months, responding to diminishing inflationary pressures, the national bank of serbia lowered the key policy rate, by a total of 2. 5 percentage points to its current level of 10. 0 %. based on the inflation projection presented today and its underlying risks, the executive board of the national bank of serbia judges that the key policy rate is more likely to be lowered further in the coming period than raised or kept on hold. the executive board confirms its previously expressed confidence that year - on - year inflation will continue to fall and that its return within the target tolerance band is likely in the first quarter of the next year. bis central bankers β speeches
| 0.5 |
operates under a governmental mandate declaring that the long - term objective of monetary policy is to maintain the domestic and international value of its currency. the european central bank ( ecb ) operates its regime under authority delegated by the treaty establishing the european community, with the primary goal of price stability established by the treaty. lessons are more diffuse from the last wave of countries to adopt inflation targeting. brazil's adoption of inflation targeting in 1999 was preceded by a presidential decree. hungary and poland adopted inflation targeting following parliamentary acts stipulating that price stability was the main objective for the central bank. but in two cases, mexico and the czech republic, the central bank moved to inflation targeting on its own. in the czech republic, subsequent legislation enshrined price stability as the main objective of the central bank, but not in mexico. although these regimes differ from one another, there is at least some governmental involvement in all but the mexican case. the level of involvement ranges from new zealand's explicit governmental guidance to other, much more flexible arrangements that give the central bank fairly wide latitude in establishing target ranges, choosing indexes, and choosing time periods over which to meet the price stability objectives. there may also be a correlation between governmental involvement and the strictness of the inflation - targeting regime. involvement has been the greatest in the strictest regime, new zealand, and is noticeably less in the more flexible regimes. the united states the main country that has not adopted inflation targeting is the united states. although academic economists and many others have for years been urging the federal reserve to adopt inflation targeting, legislators have shown very little interest in the issue. congressman jim saxton of new jersey, chairman of the joint economic committee, has introduced an inflation - targeting bill several times, but the bill currently has no cosponsors and has not been reviewed recently in committee hearings. previous inflation - targeting bills have fared no better. this lack of congressional momentum could be interpreted as lack of congressional support for inflation targeting, or it could merely reflect a more neutral absence of strong opinions. given the absence of firmer congressional guidance, the federal reserve has continued to operate under the full employment and balanced growth act of 1978. this act directs the fed to " promote effectively the goals of maximum employment, stable prices, and moderate long - term interest rates. " should these goals be in conflict, it is up to the fed to resolve the problem. to say the least, the u. s. approach is a rather
|
problem, but there could be at least a political awkwardness to such a situation. the federal reserve is responsible for many controversial policies - sometimes its approval or disapproval of bank mergers is controversial, sometimes its safety and soundness supervision is controversial, and sometimes its consumer protection regulations are controversial. at any point, some observers and some politicians are likely to be upset at the fed for one reason or another. were the inflation rate temporarily outside the target band, even for good economic reasons, the mere existence of inflation targets could be another excuse for tension between the fed and the congress. there is almost always at least potential tension between the fed and the congress, and both sides have learned how to handle it. but at least some danger lies in introducing new possibilities for tension. none of these supposed political costs of inflation targeting are certain, all could be readily handled, and it is at least possible that only vague congressional support for inflation targeting would ultimately be necessary. but we should recognize that same clarity of inflation targeting that has generally proved advantageous in other countries contains at least the seeds for potential disagreements in the united states. conclusion all debates about whether the united states should adopt inflation targeting are fairly amorphous, balancing speculative theoretical considerations and imaging hypothetical situations. given the good inflationary performance of the american economy in the past decade, the question of whether to adopt inflation targeting has never been an all - out do - or - die issue. the most that pro - targeters have been able to claim is some possible benefits ; and anti - targeters, some possible costs. in this amorphous debate, the political questions are perhaps the most amorphous of all. but surely it is relevant that, in other countries that have adopted inflation targeting, the parliamentary governments have generally been strong supporters, whereas in the united states administration and congressional support has ranged from weak to non - existent. this lack of support could well change as the administration and the congress became more familiar with inflation targeting and, in particular, the possible flexibility of the regime. but if it does not change, or if it takes the form of inappropriate targets for other macroeconomic objectives, it becomes a definite impediment to the adoption of inflation targeting by the united states.
| 1 |
gent sejko : main challenges facing statistics welcome address by mr gent sejko, governor of the bank of albania, to the joint bank of albania - european central bank regional statistical seminar, tirana, 13 june 2018. * * * dear participants! it is a pleasure for me to be here today and open the regional seminar on central bank statistics. on behalf of the bank of albania, i would like to thank the european central bank for coorganising this seminar in tirana. also, i would like to welcome all representatives of central banks from the region and beyond, and all the participants in this seminar. the series of regional statistical seminars, organised by the ecb, provides an important forum for exchanging views on statistical requirements, formulating policies and discussing most recent developments on central bank statistics - related issues. we are all aware that having reliable, adequate, and timely data is a key element for decision making. ten years on, after the latest financial crisis, the fundamentals of the global economy, the architecture of the global financial system and the decision - making process are set on a constant restructuring process. the statistical function faces similar challenges. while the economies, markets and institutions develop, pressures mount on statistics to β follow the trend and pace β of such development. the emergence of the so - called β information gap β is inevitable in a fast - changing world, but our duty as statistical agencies is to increase speed up efforts to close this gap as soon as possible. * * * in the following, i would like to focus on the main challenges facing statistics, especially those that are pivotal for the successful realisation of the central bank functions. overall, the crisis revealed the need for richer and more effective statistics, to serve both the monetary policy and the macro - prudential policy. like never before, it is necessary for us to be informed and analyse economic data on several dimensions and at a granular extent. the financial sector β s growth and complexity highlight the importance of safeguarding financial system stability, as an essential element of central bank functions. the objective of financial stability has existed since the very establishment of the central bank institution. but, in the last decade, there is a clear focus on identifying potential threats to financial system stability, and constant attention on minimising them. likewise, achieving and maintaining price stability through monetary policy has changed. economic and financial analyses realised in central banks are becoming increasingly dependent on complex models, which enable a simultaneous analysis of the
|
not have been achieved yet despite all these favorable developments and achievements. our fight against inflation still continues. it should not be forgotten that this is a long and challenging process as confirmed by the inflation figures of 2006. when we consider the deterioration that inflation brought about both in economic and social life, we see that this fight is indispensable and significant ; that it is one of the determinant factors in shaping the future of an economy, a society, a country on solid foundations. distinguished guests, now, let me briefly mention the developments in inflation in 2006, the basic reasons leading to divergence from the target and the applications of the monetary policy within this process. 2006 has been a year during which supply shocks, seasonal conditions and external factors were determinant on inflation. as of the beginning of 2006, an upward trend in inflation was observed especially in the first seven months and the annual inflation went up to 11. 7 percent in july. the leading factor driving the inflation upwards in this period was the soaring unprocessed food product prices as of the end of 2005 due to the unfavorable weather conditions. annual rate of increase in the prices of this group became 21. 8 percent in july. fluctuations in the markets and depreciation of the turkish lira due to the negativities in the global liquidity conditions and the increase in uncertainty perceptions regarding our country during the mayjune period led to an increase in the prices of commodities priced in foreign currency besides imported goods and affected inflation figures unfavorably. another important factor that was influential in the first half of 2006 was an accelerated increase in the prices of crude oil and other commodity prices in the international markets. this increase, accompanied by the depreciation of the turkish lira led to a rise in domestic energy prices and so played a key role in increasing the inflation figures. a slow - down in price increases has been observed as of august due to the decrease in the prices of gold and oil in the international markets, stabilization in the financial markets with the re - appreciation of the turkish lira and the effect of the decisiveness in the fight against inflation over expectations. nevertheless, inflation remained high due to the sustained upward trend in the unprocessed food products, ramadan - based effects and the belated reflections of the depreciation experienced in the turkish lira following that date. looking at the end - year inflation in the main expenditures groups, we see that the annual inflation remains
| 0 |
and even in terms of expanding our collateral framework which, from the outset, was already a very comprehensive collateral framework. it has been a big challenge. one of our challenges is that we had to take decisions very rapidly at the level of the governing council. and we again proved that, thanks to teleconferencing, in one hour and a half or two hours we could make a full judgment and take a decision. we had to test the capacity to have such teleconferences at very short notice, in order to be sure that we could confront any new situation. we had a large number of teleconferences with the governing council. you see there β¦ [ points to telephones on table ] if the situation were to demand now that we had in one hour and a half a teleconference with the governing council, we will then indeed have a teleconference in one hour and a half. the full continent would be there. that β s very impressive, because this would mean all members of the governing council from ljubljana to helsinki and from lisbon to dublin. ft : and as you say, an exceptional crisis, a global crisis. how much worse would it have been without the euro? trichet : it is very difficult to reconstruct history with new assumptions. but my memory of what we experienced together in the old days is certainly that we would have had a situation which would have been very difficult, because on top of all of these global challenges that are without precedent, we would have had to cope with the intra - european tensions, the equivalent of the intra - erm 1 tensions, and that would have been demanding. there is no doubt from that standpoint that the enormous challenges we had at the level of the euro area as a whole were, very fortunately, not the result of intra - euro - area tensions, and that is something which is important. ft : and that would have put the single market at risk? trichet : and that would have put the single market at risk, sure. not only have the central banks had to cope with exceptional situations. governments were called upon to take action in various forms, and the fact that europe is a union of sovereign states means that a lot of decisions implying taxpayers β money or risks to taxpayers are taken at the level of governments and parliaments. hence there is a constant need to ensure that we maintain the single market and its level playing - field, and that we do not
|
##ance sector, the bank does not at all compromise its primary roles and responsibilities. all licensed financial institutions, including microbanks and licensed microfinancial institutions are expected to fully comply with the regulatory and prudential requirements of the bank. protection of public deposits and stability of the financial system are at the centre of the bank β s objectives. for these reasons, we continue to enforce good governance in both the board and management level, through the β fit & proper β tests for those involved. the bank will not go easy on licensed institutions that are found to be violating the provisions of the various acts that empower it or the prudential standards and directives of the bank. challenge : translating rhetoric into reality we can make speeches, write policies and attend conferences to address the needs of the informal and semi - formal sectors but if these are not translated into reality, those that are supposed to be helped will continue to remain in their backwardness. this is a challenge, not only for the government but, for all stakeholders to consider. the png - adb microfinance project is spear - heading the microfinance development in png. i welcome and encourage the pacific participants to interact with your png counterparts to learn and get as much information as possible from this conference to help you develop your microfinance sectors. acknowledgement i would like to acknowledge the contributions of our development partners through the project. one of the components of the project is the microfinance competence centre ( mcc ). i would like to thank the team members of mcc for organizing this conference and inviting participants from the pacific region to attend. closing in closing, i believe this conference opens up the way for all to share information and ideas to address the common problem of poverty alleviation and rural development through microfinance. in this respect, i wish you all success in your deliberations over the two ( 2 ) days of the conference. thank you very much.
| 0 |
peter praet : housing cycles and financial stability β the role of the policymaker speech by mr peter praet, member of the executive board of the european central bank, at the european mortgage federation β s ( emf ) annual conference 2011, brussels, 24 november 2011. * * * i would like to thank nicola doyle, petra lennartsdotter and balazs zsamboki for their contribution to the preparation of this keynote speech. introduction housing markets have certain characteristics that intrinsically link them to financial stability. house price collapses can have systemic consequences. we know this from the current crisis and we know this from past crises. this fact raises a number of important questions for policymakers. do asset price bubbles exist? if they do, how do we identify them? should we react in the same manner to all asset price bubbles? should we treat housing price bubbles differently? we know the cost of not reacting to house price bubbles, but what is the cost of over reaction? if we react, how do we react and who reacts? these are all important questions and one could easily devote an entire speech to each of them. instead, i β ll try to touch lightly on all of them. do asset price bubbles exist? this may seem like a strange question to ask in light of the recent experiences in the us, ireland and spain. but, there is no consensus among economists that asset price bubbles actually exist. if one takes the narrow definition of a bubble used by researchers then β in order to identify a bubble β policymakers need to prove that, given the information available at the time, investors behaved irrationally. this is an impossible task, even ex - post. some well reputed economists have argued that all famous historical asset price bubbles β from the dutch tulip mania of 1634 to 1637 to the new economy boom of the 1990s β can be explained by fundamentally justified expectations about future returns on the underlying assets. therefore, even though the booms were large and ultimately costly they were not considered excessive or irrational and, therefore, were not bubbles. so there was no need to react? i β m not trying to argue here that asset price bubbles don β t exist, i believe they do. but while the costs of dangerous house price bubbles are clear, their identification is not. even if one feels certain that a bubble exists, it β s impossible to prove and there will many who will say you are wrong ( this time it is different ). the systemic
|
housing markets monetary policy and financial stability ( subsequently updated ), february. clark, a. and a. large ( 2011 ), macroprudential policy : addressing the things we don β t know, occasional paper series, no. 83, group of thirty, washington. drudi, f. et al. ( 2009 ), housing finance in the euro area, occasional paper series, no. 101, european central bank, march ecb ( 2003 ), structural factors in the eu housing markets, european central bank. garber, p. ( 2000 ), famous first bubbles : the fundamentals of early manias, massachusetts institute of technology. girouard, n., m. kennedy, p. van den noord and c. andreΒ΄, ( 2006 ), recent house price developments : the role of fundamentals, oecd working paper, no. 475, organisation for economic co - operation and development. imf ( 2004 ), β when bubbles burst β, world economic outlook, 61 β 84, international monetary fund, april. pastor, l. and p. veronesi ( 2004 ), was there a nasdaq bubble in the late 1990s?, working paper, university of chicago. reinhart, c. and k. rogoff, banking crises : an equal opportunity menace, working paper series, no. 14587, national bureau of economic research, december. bis central bankers β speeches
| 1 |
timothy f geithner : reflections on the changing global economy remarks by mr timothy f geithner, president and chief executive officer of the federal reserve bank of new york, at the 46th aci financial markets association world congress, montreal, quebec, 4 may 2007. * * * good morning. i am pleased to be able to join you today. and it is a privilege to be here today with canada's accomplished central bank governor, david dodge. there are few people in central banks or in governments around the world today that have presided over as far reaching and successful a set of macroeconomic policy reforms as has david dodge. i want to offer some reflections about the challenges managing macroeconomic policy in a more open and integrated world economy. and i want to say something about how the international monetary system, and the current framework of exchange rate regimes, might develop in the coming years. for the past century or more, choices about exchange rate regimes have played an important role in economic outcomes across countries. from the gold standard of the late 19th and early 20th centuries through the bretton woods system and the episodes of exchange rate cooperation among the g5 and the g7 in the 1980s and after, the desire to achieve exchange rate stability was a major preoccupation of policymakers. the economic damage inflicted by the disastrous competitive devaluations among the major economies in the 1930s had a profound influence on thinking during much of the postwar period. and for governments and enterprises around the world today, the aversion to large fluctuations in exchange rates remains strong. as the world has become more open to trade and more closely integrated, this sensitivity to exchange rate variability has intensified. and yet, experience suggests that resisting variability makes the adjustment to changing economic conditions more painful. in an increasingly open world economy, the ability to cope with change becomes more important, and for a large fraction of the world economic, exchange rate flexibility is a necessary condition for sustained favorable economic performance. changes in fundamental factors such as productivity growth and the inevitable shocks to demand and supply require changes in relative prices, both domestically and internationally. a flexible exchange rate regime makes it easier for relative prices to move rapidly and effectively in the appropriate direction, and this generally eases the cost of that adjustment. even in a fixed rate regime, this adjustment in response to changing circumstances will ultimately have to take place, of course. but if relative prices cannot adjust through the exchange rate, domestic output and employment will have to bear the brunt of
|
recession was shallower and shorter than the average of the past helped limit the scale and scope of losses to financial institutions. the forcefulness of the monetary policy response and the large fiscal stimulus provided by the tax cuts and expenditure increases played a significant role in limiting the depth of the downturn and in helping to bring about the recovery. it is significant that the yield curve has been steeper and stayed steep longer in this latest recession than in the previous one. and, finally, the stronger microeconomic fundamentals of the u. s. economy - the shift to just - in - time inventory management, the speed of innovation in the u. s. economy, and other factors that seem to have reduced the amplitude of the business cycle and improved the flexibility and resilience of the u. s. economy in response to shocks - have also contributed to financial stability. changes in the nature of financial intermediation have also played a role in improving the overall resilience and performance of the u. s. financial system that was evident in this latest period of economic recession and financial stress. four different types of changes are particularly important. β’ innovation in financial technology continues to expand the opportunities for financial institutions to separate and distribute, and to manage and hedge, different types of risk. β’ the increasingly greater role played by the capital markets in the financial intermediation process relative to banks - both relative to the past and compared with most other major economies - has improved the capacity of our system to handle stress. loans and securities held by commercial banks today account for less than 20 percent of overall u. s. credit market debt, roughly two - - thirds of their 1975 levels. β’ the increases in the sophistication of risk management techniques and enhancements to risk management processes have delivered substantial improvements in how banks and other financial institutions actually manage risk in practice. banks, for example, have aligned their pricing of credit products much more closely with credit risk. β’ the increased scale of cross - border financial intermediation, the growing role of securitized financial instruments in those overall flows, and the growth in the size and breadth of financial institutions with global operations may also mean that, as shocks are transmitted more rapidly, they are diffused more broadly. these are positive developments, and they are likely to be enduring. but they have come with new challenges for those of you who manage financial institutions and for those of us charged with supervision and market oversight. the overall return on these changes will depend on
| 0.5 |
through investor's screening mechanism, given the current geostrategic risks. finally, we remind you that addressing cyber risks requires close cooperation between different authorities, with an emphasis on the state authorities responsible for cyber security at the state level. the cbk remains committed to coordinating and sharing information with other regulators, relevant public authorities such as those for data protection, consumer protection, competition and national security institutions. at the same time, also in the international aspect, with international institutions, regulators of the countries of the region, other institutions, with the aim of coordination and a more stable platform to successfully face these risks and achieve our objectives. we wish you fruitful discussions in the following panels, and we welcome the recommendations resulting from these professional discussions. thank you! 3 / 3 bis - central bankers'speeches
|
enterprises. and the idea is that through these programs, through these projects, through these windows, to change the structure of the economy in the country. in order to have as many manufacturing enterprises. in this way, i believe that kosovo would address the two challenges it has consistently faced, namely unemployment and the high trade deficit. for the end, thank you very much, i wish you good work, health and success.
| 0.5 |
temporarily volatile items in order to grasp the trend behavior of prices. they often are utilized to project future prices owing to their relatively high predictive power. the difference is that the core cpi always excludes the same items that tend to show high volatility from the consumption basket weight. in contrast, the trimmed mean looks at the price changes every month for each item of the cpi and eliminates a certain fraction ( e. g., 10 percent ) of the most extreme observations at both ends of the largest and smallest changes. thus, items eliminated each month could vary month to month. the bank uses the cpi for all items less fresh food, or the β core cpi, β in determining its medium - term outlook for prices in the outlook report. energy prices are included in the core cpi because they did not have a statistically significant impact on cpi movements in the long term. however, as a sharp fall in energy prices since the latter half of the previous year has amplified the volatility in the core cpi, it has become more important to assess the underlying trend in inflation in a comprehensive manner, not only with the core cpi but also with multiple indicators. as one such indicator, the bank has begun to release the β cpi for all items less fresh food and energy β on a monthly basis. while the rate of change in the core cpi has been at around 0 percent recently, that in the cpi for all items less fresh food and energy has risen to 1. 2 percent lately ( chart 3 ). moreover, the trimmed mean is increasingly becoming important since the indicator automatically removes highly volatile items every month β given that fluctuations in commodity prices and foreign exchange rates have amplified. the β 10 percent trimmed mean β has been rising moderately and is currently at 0. 6 percent, and this contrasts sharply with the declining trend observed about the same period last year. third, firms β pricing behavior with respect to sales prices has shown positive developments. to see this, let me plot the relationship between the actual sales price di and the rate of growth in projected domestic sales for fiscal 2015, according to the september tankan ( chart 4 ). the sales price di is calculated by subtracting the percentage share of firms responding that their sales prices are β falling β from the share of those indicating that the prices are β rising. β chart 4 indicates that a few sectors are positioned in the first quadrant ( positive territory for both the actual sales price di and projected domestic sales ). developments in sectors such as
|
securities analysts stimulating each other from different perspectives, β production of information β in the markets as a whole will be elevated both in terms of quality and quantity. what i especially expect is the β production of information β that contributes to exploring growing companies. although the growth potential of japan β s economy has been declining, if looked at individually, there are many firms with high profits and growth, and there will be further more potentially growing firms. finding out such promising investment opportunities one by one and nurturing them, while it seems a roundabout approach, will offer a potent breakthrough for eventually increasing growth potential of japan β s economy. second, maintaining full communication with firms. while the role of securities analysts is basically to provide investors with analysis on firms, cherishing connection with firms that are the subject of analysis eventually means that securities analysts will ask those firms their unique questions. namely, securities analysts can contribute to the process, in which firms constantly develop their business strategies while incorporating investors β perspectives. in other words, securities analysts play a valuable role as an interactive connecting point between firms and investors. third, playing an active role as global human resources. while currently a slowdown in emerging economies has become somewhat protracted, those economies have high bis central bankers β speeches growth potential in the medium to long term and, on the financial front, it is likely that especially asian securities markets will expand substantially. just like today β s conference, information exchange and interaction of people at a global level will become increasingly active in the future. in order to improve the attractiveness of japan β s securities markets and attract overseas investors, and also to utilize expanding overseas investment opportunities in the asset formation of japanese households, i expect securities analysts to play an active role with the key words β asia β or β global. β concluding remarks from the perspective of strengthening growth potential of japan β s economy, today i have talked about the importance of the role securities markets and securities analysts play. i think the aforementioned term β production of information β illustrates how financial business is a knowledge - intensive industry. in japan β s economy, in which the labor force has been declining in association with aging, increasing the growth rate of added - value per capita is a necessary condition for economic growth. if the typical knowledge - intensive industry of financial business enhances the ability of creating added - value and grows, it will itself contribute to strengthening the growth potential of japan β s economy. i have high hopes that securities analysts, while holding their strong intellectual curiosity and sen
| 0.5 |
flexible and market - oriented. fourth, significant steps have been taken to improve economic policy coordination. these measures included the strengthening of the stability and growth pact, the establishment of the european semester, stronger emphasis on macroeconomic imbalances and the fiscal compact. last but not least, crucial steps have been agreed to move towards the creation of a banking union. the single supervisory mechanism will start operating in november 2014 and agreement on the single resolution mechanism has been reached. these measures will bis central bankers β speeches work to reinforce the european banking system, reduce the negative feedback loops between banks and sovereigns and overcome fragmentation in eu financial markets, promoting growth. results and challenges ahead the european strategy to deal with the crisis is delivering results, as interest rate differences between core and periphery countries have been reduced, programme countries have regained market access and the banking sector has been strengthened. however, many challenges remain. a key characteristic of the euro area economic recovery is the continuing decline in loans to the private sector. the recovery is so far β creditless β at both the euro area as a whole and, in many cases, in individual countries. because the euro area economy is bank - based, bank lending is especially significant for companies and, in particular, for smes, which produce the bulk of goods and services and account for a large share of employment. consequently, the on - going credit contraction raises the question : can the recovery be sustained in the presence of negative loan growth? personally, i doubt it. looking ahead, there is a need to deal with limited potential growth in the euro area. to this end, euro area members are increasingly recognizing the need for joint efforts and coordinating national structural policies for growth and jobs, as reflected in the recent conclusions of the european council. today β s speaker klaus regling, as the first managing director of the european stability mechanism and chief executive officer of the european financial stability fund, has been at the centre of the euro area crisis. his career has spanned 35 years in senior positions mainly in the public sector. he worked at the imf in washington and jakarta ; he spent around 10 years at the german ministry of finance, working on preparations for monetary union ; he then moved to the european commission where he was director general for economic and financial affairs from 2001 to 2008. he is thus perfectly suited to address the issue of how we overcome the euro area crisis. bis central bankers β speeches
|
in partnership with greek firms penetrate these markets. thessaloniki, the second biggest greek port is expected to play a pivotal role in the economic integration of the southern - eastern european countries. the border of bulgaria, and of landlocked fyrom are about 80 kms from thessaloniki and for their respective capitals, sofia and skopje, thessaloniki is the natural outlet to the mediterranean sea. likewise, the southern provinces of serbia and parts of romania can equally be served efficiently by the port of thessaloniki, which, in addition has an interesting cultural life and a pleasant life style. the advantageous location of thessaloniki will become even more evident after the completion of the planned and partly financed by the eu of the north - south eu road and railway axes. the renewed optimism about the greek economy is now reflected in many areas. i wish to refer to the example of construction and housing. there was a widespread belief that construction would be the main victim of a slowdown in the post - olympics period. there was talk of a housing bubble and of a supply glut. indeed there was a construction slowdown in the immediate aftermath of the olympics and a levelling off of housing prices, but since last year we are seeing a renewed dynamism in this sector, unexpected in its degree. in addition to greeks, many more foreigners than in the past are building secondary residences in the greek islands and in the mainland. total credit growth at around 20 % annually and 30 % for credit to households since 2001 has been one factor underpinning strong private demand in recent years and has been fuelled by the low euro area interest rates. i fully accept that we should monitor developments in this area but we are far from becoming alarmed. greece is a country with a still relatively low household debt - to - gdp ratio β 38 % compared with 56 % for the euro area. the rapid credit expansion in this area reflects fundamental changes in the greek economy and has underpinned the transformation of a fragmented stagnant inward - looking banking sector into a dynamic modern banking sector with strong international competitive presence. the lifting of foreign exchange controls in the mid - 1990s and of household credit restrictions in 2001 as well as privatisations and the mergers between a large number of smaller banks since 1997 has created greek champions ( up to the second half of the 1990s almost 2 / 3 of greek banks were controlled by the state and were moreover, badly run, compared with about 15 % presently, which are managed by professionals ). the biggest 5 banks
| 0.5 |
emerging markets. in addition, it also implies more dedicated bond inflows into our market, possibly of a more lasting nature. another area of the bond market, which has seen significant issuance over the years, is that of the eurorand bond market. the demand for randdenominated bonds issued by highly rated nonresident institutions contributes positively to the value of both the rand and domestic bonds. the government debt consolidation process has allowed the cost of borrowing to decline markedly. sound debt management has been such that new issuance is spread across the maturity spectrum of the yield curve. the bond market has become a more appealing corporate finance tool and, as such, corporate listings have become more popular. since the very first listing of a corporate bond ( south african breweries ) in 1994, the corporate bond market has increased considerably in size. innovation in this sector has been impressive β from issuance of vanilla bonds to securitisations and commercial paper. not only do these innovations offer debt at lower interest rates than vanilla bonds, but also provide lower income groups with access to home mortgage finance. the introduction of inflation - linked government bonds in 2000 was a further significant innovation and is quite helpful in providing monetary policymakers and analysts with important information on inflation expectations through readings of the so - called breakeven inflation rate. whilst much has been achieved, there are still many opportunities and challenges ahead. non - government bond issuance has increased sharply ; however, banks continue to account for the bulk of this issuance. in addition, the buy - and - hold approach to corporate bonds and inflation - linked bonds, in particular, renders these segments of the bond market relatively illiquid. the municipal bond market is still in a developing stage but can certainly contribute to enhancing the breadth and depth of the domestic bond market. finally, the significant amount of infrastructure spending planned for the next few years is likely to boost the supply of corporate bonds and therefore increase liquidity in this market. the corporate bond market has increased in size from accounting for 5 per cent of the total bond market at the end of 2001 to almost 30 per cent today. this increase in corporate sector issuance was mainly due to the reduction in the supply of government bonds, lower financing costs and an upbeat corporate sector. in 2006, net issuance in the nongovernment sector amounted to r41, 0 billion ( excluding securitised assets ). net issuance emanated mainly from the corporate sector, with only
|
the universal exchange corporation ltd ( unexcor ) serving as the clearing house. the rule book and the principles underlying the operation of the market were approved in march 1996 and besa was licensed ( and started ) to trade on 15 may 1996. some major developments subsequent to this time include the introduction of electronic trading, matching and settlement ; the immobilisation and later, dematerialisation of bonds listed on besa, the development of a series of total - return indices for government and corporate bonds and the development of a more refined yield curve. since the late 1990s, the south african bond market has increased in depth and sophistication. developments include the introduction of inflation - linked bonds, floating rate notes, a strip programme ( an acronym for separate trading of registered interest and principal ), retail bonds and municipal bonds. the corporate bond market has also grown substantially from net issuance of more than r10 billion in 2001 to net issuance of almost r70 billion in 2006. see jacobs, aj ( 1988 ). the south african bond market. report by the committee appointed to examine the market for public sector securities. may. the development of the corporate bond market has been assisted by the decline in issuance of government bonds, a low interest rate environment β at least in relative terms -, mergers and acquisitions, the narrowing of spreads and improved liquidity. significant also has been the expansion of the regional dimension of this market with the raising, by the mauritius commercial bank, of r350 million β the first inward - listed bond to be raised by a nonresident in south africa. regarding sophistication, it is the case that the role of the sarb has changed. in the past, the sarb served as an underwriter and then as a market - maker, quoting two - way prices in the secondary bond market. these activities ended in 1998 when the government adopted a system of regular, weekly, pre - announced auctions. a panel of 12 primary dealers β all being banks β was appointed to participate in the auctions which were, and still are, conducted by the sarb. 2 3. the current conjuncture the introduction of the global bond index emerging markets ( gbiem + ) by jp morgan, which tracks changes in emerging - market local - currency bond prices, has been particularly helpful to south africa, given that most of the country β s debt is denominated in local currency, contrary to the practice in most other
| 1 |
christopher j waller : economic outlook speech by mr christopher j waller, member of the board of governors of the federal reserve system, at the center for financial stability, new york, 19 november 2021. * * * it is a pleasure to speak today at the center for financial stability, and i look forward to our conversation. let me take the next several minutes to speak about the continued improvement of the u. s. economy, recent inflation data, and their implications for monetary policy. 1 i will also discuss the federal open market committee β s ( fomc ) recent decision to begin reducing monthly purchases of securities and how incoming data may affect the pace of tapering. finally, i will address issues concerning the size of our balance sheet. let me start with my views on the economy. since i last spoke on the subject exactly a month ago, the basic shape of my outlook hasn β t changed : the economy continues to grow and add jobs at a strong pace, making steady progress toward the federal reserve β s goal of maximum employment. new data shows that employment gains were better than first reported in august and september and were back to a strong level in october. but we also have learned that supply constraints β both bottlenecks and labor shortages β are having a larger and more persistent effect on the economy. due to a combining of those supply constraints with strong demand, inflation pressures are becoming more widespread and may last longer into 2022 than i thought they would. these factors haven β t dented my optimism that the strong recovery will continue but they have raised the risks that supply constraints may limit job gains and output growth, and that inflation may complicate the fomc β s management of monetary policy in 2022. these factors weighed on output growth in the third quarter, which was down considerably from the three months before but which i expect will rise again to a strong rate in the fourth quarter. the explanation for the downturn is the same story we have all been living through since march 2020 : the ups and downs of the pandemic. the delta variant and supply chain problems threw the economy off its very strong growth track in the third quarter, but i anticipate it will return to that path in the fourth quarter, as society continues to learn how to manage the disease and everimproving treatments reduce the likelihood of death and hospitalization. assuming another damaging covid - 19 variant does not arise this winter, i expect gross domestic product ( gdp ) to resume its robust
|
comes to alter reinvestment policy. as securities holdings declined, so did reserves in the banking system. in mid - september 2019, upward pressures emerged in funding markets as reserves dropped to about $ 1. 4 trillion or 6. 6 percent of gdp at that time. most thought the fed β s balance sheet could be reduced further. in fact, the median of the respondents to the june 2019 primary dealer survey conducted by the federal reserve bank of new york indicated reserves could fall to $ 1. 2 trillion. 3 but, the underlying level of reserves wanted by financial markets seemed to be more than we anticipated. in response to the emerging pressures at that time, the fed stopped redemptions and instituted a number of actions over a few days that boosted reserves to at least the level seen in early september of that year. 4 with this experience in hand, we will need to proceed with caution with future securities redemptions. that said, clearly today β s balance sheet is elevated, and we can decrease our holdings. should we drain reserves too quickly, we have a new tool to help correct this action should our pace of runoff prove to be too fast again. the standing repurchase agreement facility provides a backstop in cases where demand for liquidity is more than the fed otherwise thought. counterparties can come to the facility and obtain financing for their treasury securities. of course, i do not anticipate reducing reserves to a level where this tool would be used, but it is nice to know that, as we move forward, we have an additional support available to us that we did not have in 2019. to close, i have outlined how i see the economy evolving and mentioned several policy steps in the future that underly that outlook. the tapering of our asset purchases has started and should continue over coming months. then the fed will turn to normalizing other aspects of monetary policy as the economy continues to recover from the severe covid shock we encountered last year. i believe that policy may need to pivot to a faster taper based on incoming data that i will be monitoring. 1 these views are my own and do not represent any position of the board of governors or other federal reserve policymakers. 2 see fernando m. martin ( 2021 ), " how widespread are price increases in the u. s.? " on the economy blog, 4 / 5 bis central bankers'speeches october 19 3 in june 2019, the median of the respondents to the survey of primary dealers indicated a $
| 1 |
and the interest rates for the real sector have constantly been around 14 to 15 percent. therefore, lately, the serbian central bank stabilized the exchange rate, too. large economies like turkey or poland can afford a floating exchange rate, but small economies cannot. it is much better to have a fixed exchange rate and disciplined policies. a few weeks ago you said that a reduction of the budget deficit to the level that does not increase the public debt should be considered. what did you actually want to say? i gave the same or similar statement a few times in the past. and it is not very different from what competent ministers think and say. in 2008, after the outbreak of the global economic crisis, we had a large room for fiscal support, because we had a low public debt, previously we had no budget deficit and the fiscal policy significantly supported the economic growth in the period when private consumption and external demand were shrinking. but in the past four years, the level of government debt increased to 34 percent of gdp. although it is still a moderate level, a gradual reduction of the budget deficit to a level that will stabilize the level of public debt should be considered. what is the level of budget deficit that is optimal for macedonia? there is no clear limit as to that level. any limit we set might be a mistake. it depends on a number of factors β what is the economic growth in the country, at what interest rate we are borrowing, what is the creditors β trust in our economy. therefore, you cannot set a limit and say that if we exceed that level, then the situation is very bad. generally, when economic growth is slower there is a room for fiscal stimulus and higher deficit, and when economic growth is faster, there is no need for fiscal stimulus and the deficit should be minimized. isn β t the maastricht criterion that level? the maastricht criterion of three percent for the budget deficit is set as a criterion in the euro area. it does not mean that macedonia should meet that level. perhaps in periods when fiscal stimulus is needed. in the next period for macedonia, perhaps the level of budget deficit, which would stabilize the public debt, is even lower. bis central bankers β speeches what is the limit that the government debt must not exceed? there is more room for the government, but that room will slowly be used up. therefore fiscal consolidation should start to be considered, in order to avoid a situation of starting with the fiscal consolidation after this room
|
decisions. according to some estimates, by 2025, 463 exabytes of data will be created each day globally. this means huge generation of data that can blur the official statistical information making it difficult for people to read and understand it. obviously, to bring statistics closer to the public we need to place further focus on aspects such as putting numbers in perspective so that they can be easily understood by the wider public, language simplification, that sometimes is not an easy task for experts that are used to statistical taxonomy, segmentation of the audience ( communicate not only to financial analysts and journalist, but to the broader audience, although through different channels ), as well as creation of relatable content that considers what matters to the public and at the same time is educational and entertaining4. along those lines, the national bank, recognizing the importance of communication, engages in quite an array of activities. at the end, i feel that it is appropriate to conclude my address with the motto of the european statistics day 2021 " statistics, a vaccine to protect democracy and combat the virus of disinformation ". 1 " survey of national statistical offices ( nsos ) during covid - 19 ", world bank and the united nations statistical division ( unsd ), brief, july 6 2020. 2 biancotti c., borin a., cingano f., tommasino p., veronese g., " the case for a coordinated covid - 19 response : no country is an island ", 18 march 2020 3 prof. dr frau - meigs d., " societal costs of fake news in the digital single market ", university sorbonne nouvelle, paris, france, european parliament's committee on the internal market and consumer protection, january 2019 4 nunes l. m, colaco a., marques r., oliveira m., " when reaching is no longer enough : 8 tips to engage with central banks'data users ", banco de portugal, isi, 63 world statistics congress, 2021 3 / 3 bis - central bankers'speeches
| 0.5 |
andreas dombret : international cooperation is the answer β shaping the regulatory and supervisory architecture speech by dr andreas dombret, member of the executive board of the deutsche bundesbank, at a reception to welcome ms jenny kilp, bundesbank representative in south africa and financial attache at the german embassy in pretoria, pretoria, 29 august 2016. * * * ladies and gentlemen, thank you, ambassador streicher, for hosting this event here at the german embassy in pretoria. i am more than pleased that governor kganyago and deputy governor mminele is here today. thank you for your remarks, governor. deutsche bundesbank today introduces, with ms jenny kilp, its first representative to south africa β and the african continent as a whole. the step marks the beginning of a frequent exchange of information on financial and monetary policy issues, the aim being to allow each country to better understand the other β s economic and financial interests and to facilitate cooperation in international fora. by expanding its representative network, the bundesbank pursues the goal of being present in the main industrialised and emerging countries and of following developments in almost all g20 countries, either directly or indirectly. in this sense, south africa has been something of a white spot on the bundesbank β s map of representative offices and representatives at german embassies, given the growing role played by the country and the african continent at large in international economic and financial policy. the bundesbank recognises the economic importance and potential of the continent and of south africa in particular by delegating ms. kilp to pretoria. ladies and gentlemen, international cooperation is the answer to a world that has been growing together ever closer for decades. the world in which we live has become rather small. and in a small world, every policymaker in every country must be aware that his or her decisions can influence other countries as well. this holds especially true for financial sector : financial markets in particular have become integrated to such a degree that a small distortion at one end of the world can quickly spread and affect the entire system. we as central bankers and banking supervisors have adapted to these developments by cooperatively harmonising regulation and supervisory practices across the globe, step by step. the evolvement of the basel accords since the mid - 1970s is one of the most prominent outcomes of this process. in 2007, the financial crisis shook up financial markets and challenged governments, central banks and supervisory authorities worldwide. and from the beginning
|
launched the extensible business reporting language ( xbrl ) project that will simplify data collection and reporting by banks and other regulated institutions while also facilitating in - depth and timely analysis at the bank. we have continued with process re - engineering and organisational restructuring to deliver on our extended mandate, to meet new challenges, and to incorporate new technology. in addition to the intelligence, compliance, and enforcement section mentioned earlier, we also set up a specialised unit for reserve management to serve as the nucleus for a middle office and risk management division which we created just after the period covered by this report. we re - jigged the economic research division and tasked it with developing our forecasting and modeling capacity to support our expected move to an explicit inflation targetingregime. none of these moves would have been possible without recruiting new staff, with the requisite experience, at an appropriate level in the bank β s hierarchy. already a technologyintensive industry, banking will become a battlefield for still more disruptive technologies in future. an ageing staff, with dated skills and outmoded work habits, will be hard - pressed to cope with the emerging challenges facing the regulator. we placed considerable emphasis on upgrading our in - house skills and recruiting new blood. we opened our doors to regular graduate interns two years ago. we followed it up this year by launching a graduate trainee programme which will allow the bank to spot potential new recruits, enhance its professional competence, and rejuvenate its workforce. the rupee goes polymer last august, the honourable prime minister launched our very first polymer bank notes, which have been in circulation since then. i am happy to say that two of the three polymer bank notes have received international recognition. the rs25 polymer bank note and the rs500 polymer bank note were shortlisted for their state - of - the - art security features at the international association of currency affairs 2014 technical excellence in currency awards. our rs25 bank note came out 2nd in this contest. i am pleased to say that our efforts to adhere to the highest standards in all business areas have paid dividends. words of appreciation i have always been guided by my sens du devoir in discharging the immense responsibility entrusted to me by the prime minister to lead the central bank of the country in the midst of challenging times for our economy and our people. it has not been an easy ride. my task would have been still more difficult, had i not received the support of the staff of the
| 0 |
implications. deposits, as all forms of money, perform the dual function of means of payment and store of value. the key to prevent undesirable effects without sacrificing the benefits is to design the digital euro in such a way that it is used primarily as a means of payment and not as a store of value. we are working on two main fronts to achieve this goal. first, we are developing quantityand price - based tools β including effective limits to the amount of digital euro individual users can hold and penalising remuneration on individual users β digital euro holdings above a certain threshold β to limit bank disintermediation. second, we are implementing a frictionless integration of the digital euro infrastructure with bank deposits through funding and defunding services of digital euro holdings. in this way, users will not need to transfer large amounts of their liquid savings from bank deposits to digital euros in order to use the cbdc for their daily activities. the strong involvement of the private sector is a key success of digital euro. in fact, a public digital currency can benefit from experience and best practices in the market as well as the end user orientation of supervised intermediaries which eurosystem neither has nor intends to cover. given those considerations, the external stakeholders engagement in the construction of the project is crucial and, therefore, it has been intensified. a structured process has already been undertaken with the involvement of the euro retail payments board, through a number of dedicated sessions to receive feedback from the market on the most important points of the project. this dialogue is in addition to the work of the market advisory group ( mag ), a group of 30 senior business professionals with proven experience and a broad understanding of the euro area retail payments market experts, which was established at the start of the investigation phase, and is playing an important advisory role for the eurosystem by bringing in the industry's point of view. in particular, the mag places great emphasis on the value that a digital euro could bring to all the players who are part of the euro area's diverse payments ecosystem. digital euro needs to be adopted by people for a central bank to be able to achieve its objective. thus the possible issuance of a cbdc must take in duly consideration not only the financial system ( the supply side ) but also the potential users. on this point the eurosystem has always in mind that : to be accepted, a digital euro should provide a benefit to users. a research (
|
improve international payments. they can make use of the fact that retail users have direct claims on central bank money to simplify the monetary architecture. however, design features matter for their overall impact in the cross - border context and whether cbdcs will serve the broader public interest. the multi - currency dimension is also a relevant aspect for the digital euro. the experience already garnered by the eurosystem within the target services context clearly suggests that building a multi - currency ledger comes certainly with some costs, but implies as well a number of significant benefits, such as harmonization, interoperability, flexibility and even potential cost savings. in addition, it is worth highlighting that the possible provision of a digital euro also involves the european commission and it is also potentially relevant for eu countries that are not part of the eurozone. for this reason, it seems also important to consider the needs, expectations and concerns of those countries. iii. favor a pan - euro area reach while promoting of a level playing field when looking at the euro area case we have an additional opportunity. as stated in the eurosystem β s retail payment strategy, one of the mail goals is to support the creation of a pan - european solution for retail payments at the point of interaction ( poi ), covering physical shops and e - commerce. there is currently no european solution for those payments, which still highly rely on international card schemes and β for e - commerce β on global big tech providers. the digital euro, if issued, could enable the achievement of this important goal, by ensuring a pan - european reach. this would be a key element, as emerged within the focus groups, the ability to β pay anywhere β. indeed, the respondents from all countries and different identified groups perceive this as one of the most relevant features of a digital euro. the payment segments identified as a β priority β in the initial releases of the digital euro ( ecommerce, point - of - sale, person - to - person and payments from or to government institutions ) would help addressing the criticalities associated with the currently limited pan - euro area retail payment solutions. in addition, there is also the competition issue in the payment sector. usually private players tend to dominate and create positions of competitive advantage by exploiting the benefits of the network effect. the formation of these dominant positions can develop rapidly and create risks of market abuse behavior. a cbdc could therefore be a benefit as it could improve an efficient and competitive payments market, reducing the possibility for
| 1 |
banks have to rethink their activities fundamentally. i mention here digitalization, which is a very big challenge for the banks. it has the potential to change the business model fundamentally. the interest rate is not a favourable factor, but it is one of the factors. and as long as you have a positive impact on the economy from negative rates, you have better growth, fewer npls, so we have seen positive factors for banks. the problem for bis central bankers β speeches banks is not 2016, it is the medium term, if the situation becomes persistent and the business model is not adjusted, then profitability becomes a major issue. the staff projections don β t include the impact of the new measures. what will be the impact on inflation and growth of the package? the measures we took should bring us close to the 2 per cent target at the end of 2018. but don β t forget, the measures we take like the app are supposed to remain in place as long as inflation has not reached a sustainable adjustment in the path of inflation. it must be sustainable. we are not yet there. in the forward guidance we said : we expect the interest rates to be low or lower for an extended period of time, and well past the horizon of our net asset purchases, which currently have an horizon to at least march 2017. can i ask you about what β s left in the toolbox? could we see β helicopter drops β? there has been a lot of skepticism recently about monetary policy, not only in delivering but in saying β your toolbox is empty β. we say, β no it β s not true β. there are many things you can do. the question is what is appropriate, and at what time. i think for the time being we have what we have, and it is not appropriate to discuss the next set of measures. but in principle the ecb could print cheques and send them to people? yes, all central banks can do it. you can issue currency and you distribute it to people. that β s helicopter money. helicopter money is giving to the people part of the net present value of your future seigniorage, the profit you make on the future banknotes. the question is, if and when is it opportune to make recourse to that sort of instrument which is really an extreme sort of instrument. there are other things you can theoretically do. there are several examples in the literature. so when we say we haven
|
peter praet : interview in la repubblica interview with mr peter praet, member of the executive board of the european central bank, in la repubblica, conducted by mr ferdinando giugliano and ms tonia mastrobuoni on 15 march 2016 and published on 18 march 2016. * * * can you explain why you took such a big package of measures last thursday? you have to put these decisions in the context of heightened risks to our price stability objective. external shocks, mainly originating from emerging markets, high market volatility and the crucial need to avoid second - round effects warranted a strong and comprehensive package to counteract these adverse forces. we don β t have a gloomy assessment of the economy, domestic conditions have improved, financial conditions have clearly improved. but it is still very fragile, and external shocks can easily trigger a vicious circle, with further downward pressure on inflation. we wanted to ensure that this did not happen, in line with our mandate. it was decided by the vast majority in the governing council, that we had to act very forcefully to ensure an even more accommodative monetary policy stance. what can be said about the composition of the measures? we discussed the pros and cons of the different measures. on the negative deposit rate : it is clear that it served us very well in the past, it has been quite efficient in easing financial conditions, including the exchange rate, as a natural by - product of differences in the monetary policy stance in the major currency areas. as we proceeded on the path of negative interest rates on our deposit facility, it was also clear we had to look at the impact on the profitability of the banks. banks are very important for the monetary transmission mechanism, so you have to look at what is the impact of the package on the banking sector. against this background, we decided in favour of a package which still made use of changes in the ecb interest rates but increased the weight of measures aimed at credit easing. since the markets had already anticipated three cuts in the deposit rate this year many money markets traders had to turn their positions. however, with a little bit more time to scrutinize and digest the complex package, markets and analysts finally tuned again. were you surprised by the strength of the market reaction? i expected that the short end was going to be repriced but that the rest of the package would dominate. looking through some volatility
| 1 |
worldwide, including the banque de france which represents the eurosystem, and a large group of private financial firms. a necessary step towards such a global infrastructure could be to build regional unified ledgers β one of which would be european. ii. artificial intelligence : a high priority area starting from now let me now turn to artificial intelligence ( ai ), which has gained widespread public attention thanks to exponential leaps in its performance over the last few years β especially generative ai. for sure, there is still more " talk than walk ", and the " ai hype " could be followed by some disappointment. that said, this is a typical example of an innovation where central banks would be mistaken to wait until they have gained absolute certainty. earlier this year the imf ventured a preliminary estimate : almost 40 % of jobs around the world ( and up to 60 % in developed economies ) may be affected, with ai acting either as a substitute to or as a complement to labour. 3 one striking feature is that while the automation enabled by previous innovations had thus far concerned only simple or routine tasks, ai may also impact highly - skilled jobs. however, according to a recent report coordinated by anne bouverot and philippe aghion in france, 4 only 5 % of jobs are at risk of being fully replaced. as pointed out in an imf paper co - authored by daron acemoglu5, one of the key challenges is to make sure that a " human ai " complements humans instead of replacing them. the pioneering european ai act6, which is expected to be adopted in the coming weeks, is designed specifically to foster trustworthy ai in europe and beyond. and we should be careful not to repeat the mistakes of the past : an excessive concentration of ai players would be detrimental on many levels. this danger may 2 / 4 bis - central bankers'speeches increase further if too few ai models lead to a loss in information diversity and to misalignment between human cognition and ai algorithms. 7 here again, for central banks, learning by doing is of the essence. today we at the banque de france have already deployed ai in several different areas. to give a few examples, we use machine learning to help detect fraud in transactions with the french treasury that are managed by the banque de france ; " neural networks " help staff analyse the probabilities of default of non - financial corporations in our proprietary rating system ; and natural language processing tools enhance analytical capabilities within
|
the issue, publishing a number of vital reports. it is not my role to decide when or how we go about it, but i firmly believe our country needs to take a dispassionate look at the way it saves. savings are one of our foremost resources and they are in abundant supply ; business investment is one of our foremost needs. we mustn β t miss out on this opportunity in the current context of low interest rates. thank you for your attention and please feel free to ask any questions. bis central bankers β speeches
| 0.5 |
country, as happened in the past year. the continued integration of south africa in the world financial markets will force a greater use of the versatile major driving force of globalisation, and that is electronic communication. the emergence of a global electronic network for trade ( e - commerce ), financial transactions ( epayments ) and money transactions ( e - money ) makes the retention of exchange controls on current account or capital transactions virtually impossible. thirdly, will the process of financial globalisation continue, and will it provide further stimulus to the expansion of financial markets? it is true that globalisation played havoc with the world financial markets last year and created many macroeconomic hardships, particularly in the emerging markets of the world. it is also true that there is some backtracking by certain countries from the process of globalisation. it is also true that the integration of the world financial markets is a process that is irreversible. south africa β s attitude is therefore not to withdraw from globalisation, but rather to learn from the lessons of the past, and to adapt more effectively to the vicissitudes of this new world financial environment. in the final situation, south africa with its low domestic savings rate and urgent requirement for the expansion of its production capacity, needs foreign investment to finance economic development in the interest of all the people of this country. the process of globalisation brings with it growing competition amongst the approximately thirty countries that have now been grouped together as the emerging markets of the world. investors, mainly from the industrial countries, have many options on where they can invest their funds. south africa came through the financial turmoil of the past eighteen months relatively well. the banking sector stood up to the strains without any major mishap, the financial markets continued to function effectively, and the macroeconomic adjustments were painful but nevertheless less severe than in most of the other affected countries. perhaps our fiscal and monetary policies were not as bad as local critics perceived them to be. the final assessment is now being made in the global markets. some foreign investments are beginning to flow back into south africa. since the beginning of this year, non - residents have again increased their holdings of south african bonds by almost r4 billion. the world financial markets are returning to a situation of more stability. serious efforts are now being made at the multinational level to improve the architecture of the world financial system. after the turmoil of the past eighteen months, a period of sobering consolidation will at this stage have a saluta
|
a lecture by lesetja kganyago, governor of the south african reserve bank, at the unisa graduate school of business 30 august 2017 balanced and sustainable growth : the role and mandate of the sarb good evening, ladies and gentlemen. the mandate and role of central banks is a hotly debated topic in many countries around the world. in south africa, we tend to engage in this debate through rhetoric rather than facts. in our article published on 2 july, we set the basis for a more informed discussion. 1 i would like to open the next chapter in that dialogue tonight. let me start by asking : why does our money have value? why can you exchange it for goods and services? the money is not backed by silver or gold or platinum. it is not backed by land. it is not pegged to another currency, such as the dollar or the pound. it works because of trust β trust in a promise made in the constitution, which gives the south african reserve bank ( sarb ) a very specific job : β to protect the value of the currency in the interests of balanced and sustainable economic growth in the republic. β today, i will explain how we go about doing that job. while there are questions of constitutional principle in recent debates about the sarb [UNK] s mandate, i would prefer to give you the economic argument for what we do. independence needs to be earned ; it is not enough for it to be kganyago, lesetja. β why low inflation is the best way to stimulate economic growth [UNK]. the sunday times, 2 july 2017. page 1 of 17 enshrined in the constitution. the economic argument is crucial for assessing our effectiveness β and for understanding why the sarb should be independent. there is no distinction, and hence no choice to be made, between protecting the value of the currency and attending to the socio - economic well - being of south africans. destroying the value of the rand through inflation, reducing what it purchases in terms of daily sustenance, would be of no benefit to anyone. the recent report by statistics south africa shows that our tragic rise in poverty coincides with a time of rising inflation and weakening growth, between 2011 and 2015. 2 while we are happy to discuss alternatives to policy targets and to the way in which we now make monetary policy, the case for the existing framework is very strong ; our own experiences and those of other countries overwhelmingly support it. our monetary policy framework has helped us to achieve
| 0.5 |
, with its 2. 4 billion active users, has seen a rise in travel - related hashtags and influencer collaborations. # travel was one of the most popular hashtags on the platform. statista reported that by the end of 2020, around 40 percent of worldwide travellers were under the age of 33, emphasising the importance of platforms like instagram and tiktok in sharing experiences. recommendation : these statistics highlight the transition from traditional travel planning methods to a more digital, integrated, and interconnected approach. therefore, we must embrace technology. an online presence is no longer optional, it β s a matter of survival! engage with visitors through social media, offer online bookings, and encourage online reviews. 5. building resilience amidst global challenges with the unforeseen challenges like the covid pandemic, the data indicates that the industry is somewhat resilient, as we were able to rebound relatively quickly. however, it did take two years and we are not yet back to peak levels, and so we need to further strengthen that resilience. arrivals in 2022 : distance from 2019 levels cuba montserrat bermuda percentage above 2019 arrivals cayman islands british virgin islands dominica st. vincent & the grenadines belize anguilla barbados bahamas grenada saint lucia suriname antigua & barbuda cancun recommendation : develop contingency plans based on data - driven scenarios. this will ensure that we are not just reactive, but proactive in our strategies. guyana jamaica aruba martinique curacao dominican republic percentage below 2019 arrivals puerto rico st. maarten us virgin islands - 80 % - 60 % - 40 % - 20 % 0 % 20 % 40 % 60 % 80 % 6. finally, data analytics requires data! as we chart a course towards an even brighter future, the importance of comprehensive, accurate, and timely data is paramount. i urge each one of you to prioritise and enhance the quality and breadth of the data you provide not only to the bhta but to the other data collection agencies. we ( the collective 3 | page agencies ) are poised to harness the power of data analytics to better understand, predict, and support the sustainability and growth of our industry. your collaboration in this endeavour not only aids in tailoring policies for our collective success, but also fortifies our commitment to maintaining barbados as a premier and sustainable tourist destination. together, through informed decisions, we can shape the trajectory of our cherished tourism
|
a new stage of developing a liquefied natural gas project as well as a gas condensate project. the outcome is high demand for gas exploration licenses and many new companies have commenced exploration work. the investment incentive and tax regimes are considered very competitive and favourable. the areas with great potential are in tourism specifically eco - tourism, agriculture, and small to medium sized manufacturing. these are the least developed sectors and the ones that badly need entrepreneurial initiatives and skills. these are the industries that in the long run will provide the back bone of economic growth and income generating opportunities and employment for the great majority of the population. in our thirty one years of independence we have had, fourteen years of stable low growth up to 1989, ten years of very difficult times up to 1999, following the bougainville crisis. this lost decade was characterized by gross mismanagement of the economy that resulted in an almost default on our foreign currency liabilities in 1994, which forced us to float the kina our national currency, the sandline affair in 1997 of hiring mercenaries to fight on bougainville, an almost second default in 1998 to 1999, the combined effect of a very severe drought, the asian financial crisis and the world economic slowdown exacerbated by continued gross mismanagement of the economy. we were very fortunate that in mid 1999, a new government was formed, that undertook some major reforms. it took four years to stabilize the economy, re - establish the confidence of the public, and realising that the constitutional changes introduced to the political system through the integrity of political parties act, will result in political stability. we are experiencing for the first time a government which lasted a full term of five years. these developments assisted by very high commodity prices of oil, copper and some of the agricultural exports like rubber, resulted in a very stable macroeconomic environment, of fiscal surpluses, low inflation, low interest rates, an appreciating exchange rate and fast accumulation of foreign exchange reserve. i am not going to bore you with numbers, but just as an indication, our foreign currency reserves increased from around us $ 300 million to us $ 1. 5 billion in three years, and the increase is continuing. inflation and interest rates are lower than in australia. economic activity as measured by gdp growth is around 4 percent in recent years. for a low income developing country it is very low. to ensure that the great majority of the population is benefiting from the mineral boom we have to
| 0 |
world has changed. however, it is a fact that activity at the beginning of the year is at a higher level than we envisaged a few months ago. on the other hand, this has been compounded by an increase in the oil price. political tensions in the middle east have again put pressure on this price, thus affecting domestic prices. the effects of a higher oil price can be interpreted at least twofold, with opposing implications for monetary policy. on one hand, in a situation of tight output gaps β as is the case of many emerging economies, chile among them β an increase in the price of energy may exacerbate domestic inflationary pressure, making the dynamics of inflation more complex and demanding great care when assessing the evolution of the inflation trend. on the other hand, in the face of existing risk scenarios, an increase in the oil price also has a negative effect on world activity. if we take into account the fragile state of households, businesses and governments in the developed world, a higher price of energy may further weaken their position and lead to a more lasting and deeper economic fragility. bis central bankers β speeches a third factor that has added difficulty to monetary policy management is a renewed concern over capital flows towards the emerging world. the change in investors β mood has made them look for other markets in which to invest, and has led to a widespread appreciation of emerging countries β currencies. as usual, this has rekindled a debate that was present in our discussions a year back, as to the convenience of implementing measures to avoid currencies from appreciating. last year several emerging economies, among them chile, intervened their exchange markets using different mechanisms. this year some emerging economies have continued to do so. clearly, the discussion as to the convenience or not of performing such actions remains unresolved. the first thing to bear in mind is that in small open economies, all efforts to persistently keep the exchange rate at levels beyond margins aligned with the fundamentals, particularly at overvalued levels, are not sustainable and may eventually generate higher inflation. we are convinced that a floating exchange rate regime is the most appropriate one for the chilean economy, as it facilitates macroeconomic and external accounts adjustments. nonetheless, certain circumstances may lead the central bank to intervene in the forex market, either to maintain an adequate international reserve position or to respond to overreactions of the exchange parity beyond its long - term fundamentals. however, there are
|
costs associated to this type of intervention. a first cost is that it may create confusion as to the objective of the monetary authorities : inflation or the exchange rate. in our case, we have dealt with this through transparent mechanisms whereby we anticipate the amounts and terms of interventions, and by maintaining a flexible exchange rate. in addition it has always been clear that the exchange rate is not an objective and the main goal of the central bank is price stability. a second cost is of a financial nature. foreign reserves are invested in highly liquid and secure instruments of developed countries, whose interest rates are lower than those of domestic instruments used to finance their acquisition. conversely, the benefits of having these reserves are the enhanced security they provide in case of an abrupt cut of external financing. these benefits are hard to measure, but it is reasonable to expect that they will decline as the availability of reserves increases, as has been occurring in chile since 2008. allow me to express some final thoughts. final thoughts news during these last weeks have led us to a scenario in which the effects of the deteriorating external situation that we forecast some time back are not evident and in which inflationary pressures stemming from a higher cost of energy have resurfaced. hence, if a few months ago it was clear that the most likely scenario for monetary policy in emerging economies was a further loosening, today it is much less clear so. compounded to it is the renewed influx of capital flows towards emerging economies and the resulting appreciation of our currencies. against this backdrop, managing monetary policy has become more complex. today, our assessment continues to be that the crisis in the developed world will sooner or later affect the performance of our economies. it is possible that the impact will be less than what we thought some time ago, but to assume that nothing will happen does not seem sensible. nonetheless, the difficulties involved in measuring the actual impact makes me very cautious in measuring the impulse required by each economy to offset the effects of the external scenario. today, prudent monetary policy management has to be prepared for all kinds of scenarios and to adapt the amount of stimulus applied according to needs established on a case by case basis. as i said a moment ago, activity we see today is at a level above what we bis central bankers β speeches forecast a few months back. in fact, in our latest monetary policy meeting we decided to maintain the monetary policy rate at 5 % for a second month in a row. the current situation in developed economies
| 1 |
banks have opened branches. 10. one of the more recent reforms is the licensing of credit reference bureaus. the credit information sharing mechanism is now fully operational and as a result we expect to subsequently see a reduction in costs as banks pass the resultant benefits to their customers. 11. as a researcher, i would like at some point in future when doing my economic analyses on the kenyan economy, to find a very significant β obama effect β on kenya β s growth and development. that β obama effect β together with a renewed political leadership able to undertake political and social reforms supported by a superior law β the constitution β will be noticed in our econometric studies in future. but this will only be realised if all of you in this room and elsewhere scale - up your investments in kenya. finally, distinguished guests, ladies and gentlemen, i conclude by wishing you fruitful discussions. thank you.
|
rates ( 0. 7 % in 2011 ; projections : 0. 5 % in 2012 ; 2. 0 % in 2013 ). this turnaround would not have been possible without ireland β s biggest asset : a talented, well - educated workforce. this strength is maybe most clearly reflected in the fact that the export sector has continued to attract foreign investment in the midst of one of the worst crises to hit the world economy in the last century. structural reforms true, structural reforms are helping to restore competitiveness and flexibility, and ireland, allin - all, benefited from a much more flexible labour market than, for example, greece or spain. it is true that some of the structural reforms will take time to show full effect, but their capacity to improve the situation for ordinary citizens should not be underestimated. just to give you some examples : the market for legal and medical services is currently being deregulated and made more competitive. this is something that will lower prices for irish consumers, expand activity and increase employment. in the labour market, an important overhaul of employment contracts has been announced. this should lead to a more modern and flexible system to align wages to productivity in particular sectors or firms. this will improve prospects for domestic firms to hire staff. a long way to go β¦ but we must remain honest with ourselves : even though considerable progress has been made, we still have a long way to go before the situation normalises. house prices have continued to fall. the domestic economy remains fragile. and there is still considerable work to do on fiscal and structural reform. this is of course very demanding for irish households who have already seen their disposable income and wealth decline a lot over recent years. it is thus important that also the relatively rich and wealthy carry a fair share of the adjustment burden. worst of all, perhaps, is the fact that a large portion of the population is currently out of work. this makes job creating structural reforms so important. the deep recession, high levels of public spending, a narrow tax base and the burden of supporting the financial sector have all have put stress on the fiscal position of the state. as a result, the fiscal deficit has surged. the government has therefore rightly embarked on a path of progressively cutting expenditures while taxes have had to be increased. but here there are no easy solutions either. whether inside or outside a monetary union, fiscal consolidation would be required, in the best interests of the country. put simply, a government cannot for long periods
| 0 |
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.