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cyber hygiene practices are adopted. mas will soon issue a set of mandatory requirements on cyber hygiene that will apply to all financial institutions in singapore. they include basic things like : securing administrative accounts ; controlling network access at the perimeter ; installing security patches promptly ; installing anti - virus software on their systems ; and implementing multi - factor authentication for users who access confidential information over the internet. 8 / 10 bis central bankers'speeches in short, if we don β t get cyber security right, financial institutions will be constrained in how much they can leverage on technology. the second area financial institutions must address to ensure customer confidence is information security risk. information security is not the same as cyber security. information security is focused on protecting data, while cyber security is focused on protecting systems. they are however closely related. data leaks can occur when a system is not properly secured. in the financial ecosystem, information security risk is growing for two key reasons : one, more data are becoming digitised. the international data corporation has estimated that digital data will increase fivefold from 2018 to 2025. two, as banks begin to collaborate with fintech and bigtech players, customer data that was traditionally within the inner sanctum of banks will increasingly be shared with third party service providers. banks have to exercise care for the data they hold, as well as those that they have shared with third parties. this means : understanding at a granular level the data that are held, processed or shared ; assessing the criticality and sensitivity of all data sets ; putting in place targeted measures to safeguard data ; and taking swift recovery measures in the event of a data breach. besides their personal health data, people regard their personal financial data as most sensitive. financial institutions have a particular responsibility to safeguard this data. the third area to watch closely is risk from the misuse of data analytics and artificial intelligence. data analytics and artificial intelligence can help to uncover patterns which we are unaware of and to provide insights that we could not have gained from traditional analytical tools. but unless there is public trust that data analytics and artificial intelligence will be used responsibly, financial institutions will not get the social license they need to apply these technologies widely. to gain this trust, we must address four areas in data analytics and artificial intelligence : privacy of data. how do we safeguard the confidentiality of personal data? explainability of results. how do we minimise the β black box β syndrome? accountability for decisions. how can we hold humans ultimately responsible for decisions
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tharman shanmugaratnam : moneysense launches new programmes to reach more singaporeans speech by mr tharman shanmugaratnam, deputy chairman of the monetary authority of singapore, at the launch of the moneysense 2006 roadshow, singapore, 31 march 2006. * * * distinguished guests friends from ntuc and various community organizations ladies and gentlemen boys and girls introduction 1. i am pleased to launch the inaugural moneysense 2006 roadshow, which seeks to bring financial education to singaporeans from all walks of life. moneysense has done well 2. moneysense is on a roll. since its launch in october 2003, it has seen over 140 talks, seminars and workshops on financial education, attracting over 15, 000 participants. it has also published 16 consumer guides with a total circulation exceeding one million. 3. these achievements are results of collaboration between government, industry, community groups and our media partners. i encourage moneysense to build on and expand these strong partnerships, and bring financial education to even more singaporeans. 4. let me now touch on a few new programmes that moneysense has lined up this year. moneysense launches new programmes to reach more singaporeans moneysense 2006 roadshow 5. today's moneysense 2006 roadshow presents simple financial education messages and tips to adults and children through fun activities. a simple game of shooting basketballs into nets from different distances is used to highlight risk - return tradeoffs. there is also a supermarket contest to illustrate the importance of spending within your budget, plus a chef to show you how you can cook up a storm without spending a bomb. 6. there are plans to bring these activities to other parts of singapore, and several community centres are in discussions with moneysense. important role of media 7. the media is still the most effective channel for financial education. in the national financial literacy survey conducted by moneysense, 54 % of the respondents said they were interested to learn about financial education through mass media. 8. i am glad the local newspapers have been very supportive in running moneysense articles on a regular basis. the straits times, lianhe zaobao and berita harian have been doing so regularly for more than two years. other publications like today and smart investor have also begun to run regular moneysense columns. i would like to thank all of you for partnering us in this important effort, and i would like to see this continue. 9.
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lee hsien loong : financial sector liberalisation - going global speech by mr lee hsien loong, chairman of the board of directors of the monetary authority of singapore and deputy prime minister, at the monetary authority of singapore work plan seminar, held in singapore on 3 april 2000. * 1. * * introduction since 1997, while the asian region was undergoing a traumatic crisis followed by a sharp recovery, the international financial scene has not stood still. financial innovation has continued unabated, institutions are rationalising and consolidating, and transactions and services are rapidly going electronic and online. singapore has been directly affected by these global trends. it is as well that we pressed on with our financial liberalisation programme despite the crisis. mas and the industry have had a busy two years. it is timely now to take stock of what has been achieved, and map out the tasks ahead. our objective has been to open up the financial sector, progressively but decisively. we have aimed to allow market forces greater free play, get investors to take full responsibility for their decisions along with the outcomes, and shift mas β emphasis to setting the framework and upholding standards of integrity and supervision. ultimately, we aim to become a vibrant and dynamic global financial hub. how much of this vision have we so far realised? 2. financial sector reform - concrete changes we have made many concrete changes across the financial services industry. in banking, we have increased competition by introducing qualifying full bank privileges, issuing more restricted banking licences and providing greater flexibility for offshore banks. local banks have greater strategic autonomy and operational flexibility now that the limit on foreign shareholdings has been removed and several regulations revised. we have also opened up the stock market. the singapore exchange was the first in the asia - pacific to both demutualise and merge the cash and derivatives activities. sgx has made its listing requirements more flexible to cater to growth enterprises. we have loosened up rules on foreign listings in singapore dollars, reduced capital requirements for securities firms, and eased other onerous restrictions. by 1 january 2001, commissions will be completely freed up. access to trade on sgx, which is already being opened, will be fully liberalised a year later. in the debt market, we relaxed restrictions on borrowing s $, to enable foreign players to issue s $ bonds. we set up the approved bond intermediary scheme to encourage the origination, placement and management of debt issues in singapore. we also increased the issuance of
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philipp hildebrand : thoughts on asset management in switzerland summary of a speech by mr philipp hildebrand, member of the governing board of the swiss national bank, at the swiss funds association, berne, 28 march 2006. the complete speech can be found in german on the swiss national bankaβ¬β’s website ( www. snb. ch ) * * * summary asset management is an important source of earnings for banks in switzerland. the financial industry, in turn, is the largest sector in the swiss economy and of crucial importance for economic development. assuming that the world economy stays on its expansionary course, global assets will continue to grow strongly. moreover, the rapid increase in the volume of accessible information means that clients are often better informed. it is also giving rise to a broader product range and generating tougher competition and cost pressure amongst providers. these trends will bring about far - reaching changes in asset management over the medium term. money market, equity and bond investments managed on a moderately active basis often fail to pay the consistently above - average yield that would warrant their costs. they will probably lose ground to passively managed, inexpensive products. substantially better performance will be essential for the traditional products that remain. alternative investments, too, will benefit from the structural changes. however, this area will continue to be affected by the limited supply of exceptional portfolio management expertise. asset management in switzerland compares fairly well on an international scale in terms of performance and operational efficiency. however, the industry must lose no time in tackling the restructuring that is needed, particularly in the traditional segments. in the area of alternative products, switzerland has admittedly been successful in the fund of funds business. it is to be hoped that its financial industry will build on this success and become even more of a centre of excellence for alternative investments too.
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also, in some sense, preserved the obstacles to swift and orderly liberalisation of capital controls. if parliament had not passed the emergency legislation in october 2008, thereby ensuring that there was a functioning banking system and that domestic deposits were secure, if capital controls had not been introduced in november 2008, if we had not been so successful in repairing domestic balance sheets, if the economic recovery had been weaker and the rate of return on domestic assets had been lower, then the domestic assets of the old banks would have been worth much less, as would the offshore kronur. in this scenario, these positions might have exited iceland long since, at just a small fraction of the value they had just before the resolution of the old banks. instead, the domestic assets of the old banks amounted to 25 % of gdp and the stock of offshore kronur was estimated at around 15 % of gdp. it was clear that free exportation of these positions without mitigating action would have resulted in a new currency crisis, with potentially serious effects on financial stability. that was both economically and politically unacceptable. as a matter of fact, the population had been promised solutions to these problems entailing no negative effect on the exchange rate. the icelandic authorities have publicised three versions of their capital account liberalisation strategy : the first in 2009, the second in 2011, and the current one in june 2015. it was under the second strategy that the stock of offshore kronur was reduced through a series of auctions. that strategy, however, did not include a solution to the problem of the old banks. the split between the old and new banks was only finalised towards the end of 2010, and in any case, the old banks were largely exempted from the controls until march 2012. the current strategy is based on a guiding principle and a set of criteria that any proposed solutions would have to fulfil. if i explain these to you now, you will better understand what we have done to date and what is forthcoming. an overall guiding principle in the design of the liberalisation strategy was that it should entail comprehensive, cautious, and clearly communicated solutions, allowing the country to lift capital controls without undue risks to macroeconomic and financial stability. the strategy is comprehensive in the sense of mitigating, in a sufficient manner, the risk that excessive capital outflows would overburden iceland β s small foreign exchange market and inflict systemic negative externalities on the general public. in particular, it
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price indexation. the negative effect that further depreciation would have had on consumption and investment would therefore have been stronger than the stimulative effect on the traded goods sector. the latter effect comes with a lag in any case, and the real depreciation of about one - third, which had already taken place, was sufficient for that. second, a large fiscal deficit had opened up and had to be financed domestically, as the sovereign was cut off from foreign markets. the capital controls facilitated this. third, the capital controls gave monetary policy more scope to focus on the domestic economy, as interest rates would otherwise have had to be higher in order to defend the currency. fourth, the capital controls provided the shelter needed to restructure domestic balance sheets, rebuild the financial sector, and develop a better framework for economic and prudential policies that would be suitable for a postcapital controls environment. these stabilisation gains of the capital controls were greatest to begin with but have faded with time as balance sheets have been repaired and iceland has recovered. the economic costs of the controls work in the other direction : they increase over time as lost business opportunities accumulate, as support to domestic asset markets begins to feed bubbles, and as risk diversification in domestic balance sheets decreases. in iceland β s case, this was partly mitigated through the liberalisation of capital inflows in october 2009 and legislative provisions that authorise the central bank to grant exemptions from the capital controls, bis central bankers β speeches provided that the balance of payments effects are not negative. but that does not change the big picture. furthermore, the potential distortion stemming from the combination of free capital inflows and restricted capital outflows has materialised recently, as carry trade and other forms of capital inflows have increased following the announcement and subsequent execution of the resolution of the old banks in a manner that fully mitigated the negative balance of payments effect. this has created appreciation pressures that are not counteracted by outflows, as would have occurred under normal conditions. finally, in the long run, comprehensive capital controls are inconsistent with iceland β s membership of the eea and thus the eu internal market. you might then ask : why have we not just lifted the capital controls? this is where the twist in the tale comes in. the problem is that our own success in preserving icelandic asset prices and fostering the recovery of the economy has created the conditions for a stronger currency but has
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expected credit loss accounting standard, namely the international financial reporting standard 9 ( ifrs 9 ), has resulted in a deterioration in the quality of credit on bank books. furthermore, as persistently low domestic economic growth starts to page - 5 - of 9 have an increasingly tangible impact on the balance sheets of both households and corporates, credit quality may be expected to deteriorate further. during the course of 2018, the sarb undertook stress tests on six major banks to assess the resilience of the banking sector to hypothetical yet extreme macroeconomic shocks. the outcome of the 2018 common scenario stress test exercise suggests that, at an aggregate level, the south african banking sector would be able to withstand the possible materialisation of a confluence of the main financial stability risks. with respect to solvency, the banks were assessed to be capable of maintaining their capital levels above the minimum capital adequacy requirements, under the adverse macroeconomic scenarios considered. the sarb also discovered that no material risks were emanating from the liquidity positions of the six major south african banks. the sarb regularly conducts an assessment of the prevailing financial stability risks. these assessments are reported to the financial stability committee ( fsc ) and published biannually in the financial stability review ( fsr ). the risks identified since the second quarter of 2018, which currently form part of the sarb β s assessment, include : a deteriorating domestic fiscal position, exacerbated by, among other things, weak domestic growth, a poor revenue outlook, and the fragile financial positions of soes ; spillovers from weaker global economic growth ; the possibility of renewed and unexpected tightening in global financial conditions and the subsequent potential rapid repricing of risk ; and rising cyber - dependency and security risks attributed to the ever - increasing digital interconnection of people, systems and organisations. the identification and monitoring of financial stability risks, while important, would be rendered ineffective if we did not have the necessary tools at our disposal to mitigate the occurrence and / or the impact of these risks. over the past few years, the sarb has been actively developing a macroprudential policy framework, complete with tools and instruments. this past year, work continued to enhance the framework and the financial stability toolkit. page - 6 - of 9 there is a saying about the best - laid plans β of mice and men β. thus, while the sarb ultimately aims to mitigate systemic risks, it also needs to plan for potential
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an address by lesetja kganyago, governor of the south african reserve bank ( sarb ), at the ninety - ninth annual ordinary general meeting of the sarb shareholders south african reserve bank, pretoria 26 july 2019 global economic conditions the past year began with significant challenges for emerging markets, including south africa. in contrast to the synchronised pickup in economic growth of 2017, which had surprised most observers by its magnitude, the major economies began to display divergent growth patterns in 2018. while the united states ( us ) maintained a strong pace of growth amid a sizable fiscal stimulus and a buoyant labour market, the eurozone and japan lost some momentum. chinese demand felt the negative impact of earlier monetary and regulatory tightening. growth in world trade volumes also began to slow, a move that was exacerbated by a flare - up in trade tensions as the us slapped tariff increases on certain imports. this confluence of factors, together with negative current account and price developments in countries like argentina and turkey, resulted in downward pressure on emerging market currencies and fixed - income assets. this move was compounded by the appreciation of the us dollar, as investors anticipated a further normalisation of us monetary policy and a widening of interest rate differentials with other major economies. by early july 2018, the south african rand had depreciated by 12 % against the us dollar from its earlier peak of mid - february, a decline that extended to 25 % when the rand reached its trough in september 2018. so what has changed since then? page - 1 - of 9 some of the concerns about global growth that prevailed in mid - 2018 have proved accurate. business confidence, trade flows and economic activity have continued to lose momentum in most of the major economies. now that the impact of the 2018 fiscal stimulus has started to fade, the us is not immune to those trends. the trade tensions that sprang up more than a year ago remain unresolved, despite the june β truce β between china and the us that prevented an immediate tariff escalation. geopolitical tensions, especially in the middle east, are adding to a climate of uncertainty that weighs on business investment decisions globally. in this month β s update on the world economic outlook, the international monetary fund ( imf ) is projecting global economic growth of 3. 2 % this year, compared to a forecast of 3. 9 % a year ago. support for the global economy and financial markets, however, has come in the
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josef bonnici : an alternative model for banking in malta β a case for setting up a cooperative bank in maltese economic realities address by professor josef bonnici, governor of the central bank of malta, at the seminar on β cooperative banking β, valletta 27 september 2012. * * * honourable ministers, distinguished guests, ladies and gentlemen. as the previous speakers have shown, cooperative banks, though not often in the news, in these times perhaps thankfully, have a considerable presence in most countries, particularly, but not only, in european countries. indeed, data for 2010 show that in europe cooperative banks hold a market share of over 20 % of deposits and a similar market share for loans. their presence is particularly marked in france, where the three cooperative banking groups ( credit agricole, bpce and credit mutuel ) account for some 50 % of the market share for loans and 60 % of that for deposits. there is also a significant presence in italy, where they enjoy a market share of 34 % of deposits and 30 % for loans ; in germany, where they have a market share of 19 % for deposits and 16 % for loans ; in the netherlands, with a market share of 43 % of deposits and 30 % for loans ; and in finland, with a market share of 34 % for deposits and 32 % for loans. they include, apart from the well - known french banks already mentioned, such respected names as rabobank in holland and the raiffeissen banks in germany. cooperative banks also have a significant presence in south korea, japan, canada, morocco, mexico and brazil. so the question immediately arises : how come that no such institution has ever been set up in malta? after all one would have thought that the idea of cooperation and solidarity, and the spirit of the seven basic principles of the international cooperative alliance ( ica ) would have a strong appeal in malta. these seven principles consist of : voluntary and open membership ; democratic member control ; member economic participation ; autonomy and independence ; education, training and information of members and employees ; cooperation with other cooperatives ; and, especially, concern for the community. moreover, we do have cooperatives in other spheres of activity here, and these have been around for some time. indeed, the start of the cooperative movement in malta dates back to the later years of the 19th century ( around 1884 ), and the first form of legislation regulating cooperatives here β the cooperative societies ordinance 1946 β came into effect on 12th december
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net worth customers, and 66 sub - funds, with a total net asset value of lm1. 22 billion. the number of local collective investment schemes ( ciss ) stands at 14, with 52 sub - funds, and shareholders β funds total over lm0. 5 billion. the insurance sector has also been growing rapidly of late, with four new licences being issued during the first half of 2006. to date, there are 33 insurance principals registered in malta, 16 of them are foreign companies offering their services through insurance agents. passporting rights have been well availed of in this sector, too, and the total number of notifications for european insurance undertakings to carry on business in malta under the freedom to provide services directive now stands at 204. the other reflection i would like to share with you is inspired by an interview given recently by the ceo of mediterranean bank to a local economic magazine, in which malta was referred to as β a secure eu jurisdiction β. in this same context it was stated that β malta β s stability is an important part of its appeal as a banking location β. while such accolades are indeed welcome, they do not come entirely as a surprise. for when malta β s financial legislation was overhauled in 1994, and when eu legislation was later transposed in anticipation of eu membership, an intended by - product was indeed the incorporation of the highest international standards and best practices into maltese financial laws and regulations. this was accompanied by a strengthening of the institutional framework for the regulation and oversight of the financial system. in 2002 the malta financial services authority ( mfsa ) became the single regulator for financial services when it took over the responsibility for the banking sector from the central bank of malta ( cbm ). the bank then assumed responsibility for ensuring the stability of the entire financial system. a year later malta volunteered to undergo a financial sector assessment programme ( fsap ) by the imf and the world bank. after a thorough examination by a team of international experts, our financial system was certified as being healthy, well supervised in the context of a comprehensive legal framework, and strongly compliant with most of the relevant international standards and codes. we cannot, of course, afford to be complacent. a good reputation takes time and considerable effort to earn, but can easily be lost. it is the joint responsibility of the cbm and the mfsa, the credit institutions and the other financial service providers, and of all market participants, including the financial lawyers
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, it would be both dangerous and illusory to want to change the rules β rather, let β s respect them. but at the same time, we should consider the quality of public spending : in order to boost potential growth, in the long term, expenditure on investment and on our future are vital, including on education and training and, of course, new technologies. this is true of national budgets, but we could amplify the effect through a euro area investment budget. this budget could be used to finance, for the benefit of all countries, certain β common goods β such as digital technology, energy transition, security, and external border protection. finally, my third idea begins with a question : how to deal with stabilisation? in other words, how to deal with the shocks that can have a brutal effect on certain national economies? private risk 2 / 3 bis central bankers'speeches sharing through the capital markets union and the financing union that i mentioned earlier, is part of the answer. in the united states for example, the stock market is capable of absorbing around 40 % of a state - specific shock. but that is not enough and it is absolutely vital that we go further still. otherwise monetary policy may bear too much of the burden during a future recession, which would be dangerous β monetary policy should not be the only game in town. in the euro area, we therefore need better economic policy coordination. countries will continue to be responsible for their economic policies, but we can aim for a better collective economic strategy with more reforms in countries where they are needed and with more fiscal or wage support in countries with room for manoeuvre. this collective strategy could be supplemented by enhancing the european stability mechanism to transform it into a european monetary fund ; this would require that the scope of its actions be expanded to include a genuine crisis prevention role and that its governance be amended. otherwise, it would be a simple change of window dressing. * * to conclude, i would like to mention another reason why 2018 must be europe β s year : our international environment, with the prospect of brexit and the presidency of mr. trump in the united states. confronted with the challenges of globalisation, europe β s twofold message is essential. first, our common social model β die soziale marktwirtschaft β combines a high level of public service, relatively low levels of inequality and a strong intensity of social dialogue ; it is the ideal response to the debate on inequality
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need robust recovery and resolution arrangements for ccps, to preserve financial stability in all circumstances. before i leave you to discuss this complex issue, i would like to offer a few thoughts : β the cornerstone principle of resolution is always financial stability : this should be achieved through the continuity of ccp services when possible, but not at the expense of the financial survival of ccp members and clients. β the permanent cost of such a regime should be assessed carefully in order to preserve incentives in favor of central clearing. ccps already have properly sized financial resources and a sound business model that must be preserved. β resolution arrangements should balance predictability for ccp participants and flexibility for the resolution authorities, whose task to preserve financial stability in the most extreme circumstances should not be hampered. β and lastly, cooperation between authorities and consistency at the international level are key to ensure efficient resolution planning and resolution actions, and to avoid regulatory loopholes and arbitrage. this conference is indeed illustrative of the spirit for further international cooperation in this field. thank you for your attention. i wish you a very fruitful conference. bis central bankers β speeches
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risk on the largest payments flows β the ones most likely to threaten financial stability by bringing down the system if they failed. but that is not the only innovation that rtgs has delivered over the years. as the financial system has evolved, rtgs has been regularly updated, introducing a raft of new functions and risk mitigants to respond to changing demands. today, we are announcing that the bank has completed, or agreed steps that will complete, all the actions in response to the deloitte report 4 published in march last year following the rtgs outage in october 2014. looking forward, as we celebrate rtgs β twentieth birthday during 2016, it is again time to ask fundamental questions about the shape of the bank β s settlement operations. the way payments are made has changed dramatically in recent years, reflecting changes in the needs of households and companies, changes in technology, and an evolving regulatory landscape. the range of payment providers is growing rapidly. given the implications of these changes for the bank β s mission and for users, businesses and regulators, it is important that the bank consider how rtgs will need to evolve to meet and shape payments trends in the coming decades. that is why we are today announcing our plan to design a blueprint for a new heart that can support the future demands placed on the uk β s high - value sterling settlement system. in my remaining remarks tonight i want to do three things. first, set out some of the key drivers of change. second, explain some of the strategic questions we want to ask on the future role of rtgs. and, third, set out how we will go about developing a blueprint for a new high value payments system. either directly in the case of high - value payments made via chaps, or indirectly after netting in the case of retail payments made via the various private sector schemes. the deloitte report on the october 2014 rtgs outage can be found here : http : / / www. bankofengland. co. uk / publications / documents / news / 2015 / rtgsdeloitte. pdf. an update on the completion of the recommendations of the deloitte report can be found here : http : / / www. bankofengland. co. uk / markets / documents / paymentsystems / deliotteactions. pdf. bis central bankers β speeches evolution in the payments landscape much has changed in the uk payments landscape in the past twenty years. in particular, i want
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mr george talks about monetary policy in the united kingdom : the economic prospect text of the chancellor β s lecture delivered by the governor of the bank of england, mr e a j george, at hertfordshire university on 18 / 02 / 99. as you would expect of a central banker i will talk about monetary policy β under the title of β the economic prospect β. i will begin by explaining what it is that we are trying to do through monetary policy ; then i β ll describe how we β ve been doing, where we are now, and where we might be headed. what we are trying to do so let me begin with what it is that we are trying to do. in one sense that β s very easy to explain these days. the previous conservative government had already in 1992 defined the objective of monetary policy in terms of a target rate for retail price inflation. the new labour government, immediately on assuming office, similarly defined the objective in terms of an inflation target, but went an important step further. as soon as gordon brown became chancellor of the exchequer, in may 1997, he announced that he would no longer exercise his powers to set short - term interest rates, which is the heart of monetary policy, but instead he would set the inflation target, and delegate the achievement of that target to a new monetary policy committee to be established in the bank of england. this position was subsequently formalised in the new bank of england act which came into effect in june of last year. that act now defines the bank β s objective as β the maintenance of price stability, and, subject to that, to support the government β s economic policy, including its objectives for growth and employment β. under the act the chancellor tells the bank what precisely we are to understand by β price stability β and he has done this by setting a target of 2Β½ % for a particular measure of retail price inflation ( rpix β which is the rpi excluding mortgage interest payments ) ; and although the act provides for the chancellor to set the target each year, the expectation is that it is in practice set for the medium to longer term. that is the political decision. the task of achieving that target β the technical implementation of monetary policy β is then delegated, transparently and accountably, to the mpc. the government no longer has the power β as it had under the 1946 bank of england act β to issue directions to the bank in the field of monetary policy, except, in the terms of the new
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also see technology exhibition areas set up for leading currency industry suppliers to demonstrate their products and innovations in currency production, counting, sorting, authentication, recycling, branch automation, tracking & tracing, packaging, etc. the programme is expected to end with a page | 6 tour of the bank of ghana's new cash centre, which was commissioned in 2015. 14. to conclude, let me once again express my immense gratitude to the organizers and the secretariat for the hard work and diligence in putting this seminar together, not forgetting the various sponsors for their kind generosity. i hope that the outcome of the seminar series will provide cutting - edge policy strategies to strengthen currency management across the region. enjoy your stay in accra and please indulge in some shopping β most of our shops accept cash payments! 15. on this note, i declare the 2019 iccos currency conference dully opened. thank you. page | 7
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dynamic and iterative process, not a one - off exercise. it is a continuous cycle ; hence there should be genuine awareness, ownership and accountability for risks throughout the organization. lessons for banks from experiences elsewhere there is no doubt that ghanaian banks have many lessons to learn from developments in nigeria and in the west. the first lesson is that poor risk analysis can have a debilitating effect on banking operations. ignoring the dangers of credit, market, operational risks, even in a situation of high capital, can be problematic. banking is not simply deposit mobilization and lending. banking is about risk analysis and strategic deployment of funds to earn commensurate returns at minimal risk. it is not about bigger balance sheets or the fastest growing banks, although size and growth rate are important dynamics in banking. an area ghanaian banks will have to focus their attention is the need to increase their inhouse capacity for risk analysis in the emerging oil and gas sectors. this is because the two sub - sectors that created problems for the five banks taken over by the central bank of nigeria were in the oil and gas sector and the capital market ( specifically margin loans ). incidentally the affected banks were opening their books to these sectors for the first time. obviously, from the benefit of hindsight it is obvious that there was poor risk analysis of exposures to these sectors. i have heard the suggestion that the banks lacked expertise in these areas. my response is that it is not enough to place the blame on the lack of expertise. banks must invest in capacity building in risk management especially for emerging sectors of the ghanaian economy. as i suggested earlier, the culture of risk management is not well rooted in our banking system. boards of banks need to establish risk management functions at senior levels with direct reporting to a committee of the board to ensure that all risk aspects in the operations of banks are monitored and controlled. as banks in ghana grow bigger and go international because of the capital injection, they are likely to take on several risks that they have previously been unfamiliar with. banks β ability to manage cross border regulatory risks, currency risks, and other market risks will become critical going forward. for banks to be effective in the new environment, they have to restructure their targets to reduce unnecessary risk taking, and reduce the motivation for fraud. banks need to realize that high targets lead to higher risk taking which can result in higher profits but this may not necessarily result in better performance. undue risk taking, buoyed by unrealistic
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andreas dombret : " basel iii - are we done now? " statement by dr andreas dombret, member of the executive board of the deutsche bundesbank, statement by dr andreas dombret, member of the executive board of the deutsche bundesbank, at the institute for law and finance conference on basel iii, frankfurt am main, 29 january 2018. * * * thanks nicolas, it β s a great pleasure to contribute to this panel. and, on behalf of the bundesbank, i am happy to see that so many outstanding experts accepted our invitation. please let me start with a confession : i strongly support the basel iii finalisation package β in these times, a global minimum standard is a crucial ( and noteworthy ) success. it contributes to stabilising the global financial system and prevents regulatory arbitrage. when talking about basel iii, many banks or lobbyists may think : β things are never as bad as they seem. β of course, they are hoping for of a less strict implementation of the basel standards. but i have to say that i, in their stead, would not cherish these hopes. looking ahead, all basel committee member jurisdictions must do everything in their power to ensure full implementation. but as important as basel iii is, we should not forget what it was made for β and what not. the basel iii standards are, first, minimum standards for, second, internationally active banks. let me say a few words about the first point : since basel standards are minimum standards, a country may decide to set stricter requirements. the second qualification of the basel iii standard is that it is for internationally active banks. as such, jurisdictions are free to apply a different set of rules to smaller, only nationally active banks that pose no threat to international financial stability. in sum, then, we should focus on truly global aspects, like regulating globally active banks, while leaving it to nation states to carry out those tasks that they are better suited to take care of, for example the regulation of locally active banks. in this sense, let β s not forget the former governor of the bank of england, mervyn king, who said : β banks are global in life, but national in death. " to make one thing quite clear : there is no alternative to global standards, but within their implementation, we must not forget that a β one size fits all β approach does not always reflect national different banking systems. so, in sum : yes,
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we are done with basel, but we should lose no time and start implementing it. and one point is of crucial importance in my mind : after having implemented basel iii, we need a regulatory break β because, yes there is regulatory fatigue ; but do not get me wrong β this is no ticket for regulatory capture and deregulation. as tired as banks are of new regulation, as tired are we regulators of their ( often unsolicited ) lobbying efforts. in that sense, i clearly expect from the industry to adapt their business models to those new rules. the comparable positive reaction the stocks markets showed in face of the basel compromise is in my view a sign for the value of regulatory certainty β so let β s go for it. therefore, let me recall the objective of basel iii, which is to reduce rwa variability, and not to raise regulatory capital on average. we still strive for that objective in the implementation period that will follow. so, the answer to our leading question is : yes, we are done now with basel iii. therefore, all discussions about the outcome β or the desired outcome β are a waste of time. what we need to discuss is how to implement basel iii in a way that is as close to the agreed standards as possible, but, at the same time, also reflects national particularities. and when this is done, we can have our regulatory break to see how all the reforms interact with each other and whether they all work as they should. in the meantime, let β s stop complaining about a one or two percent higher output floor, but let β s start talking about the real stuff that may endanger our financial system. cyber crime is only one catchword amongst many challenges that lie ahead. 1 / 1 bis central bankers'speeches
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of global standards. i therefore wholeheartedly support regional outreach initiatives of international standard setting bodies such as the aci. asia, of course, is region of rising importance in the global context, particularly in terms of finance. whether it is the volume of foreign exchange reserves or the growth of foreign exchange turnover or the amount of savings that needs to be mobilised for promoting economic growth and development, asia is likely to occupy top position in the world, if it is not already there. the prospects of a strong relative shift of financial market liquidity into asia are clear, so is the need for upgrading professionalism in finance, hopefully at a pace that is commensurate with its increasing importance in global finance. it is therefore absolutely right for the first regional office of aci to be established in asia and, if i may add, for it to be established in hong kong, as the truly international financial centre in the region. on the choice of hong kong, we are of course grateful and feel honoured, and i as chief executive of the hong kong monetary authority and as honorary president of the treasury markets association offer the full support of the two organisations to the activities of aci and aci asia. thank you.
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toshihiko fukui : semiannual report on currency and monetary control ( bank of japanaβ¬β’s overall review ) statement of a speech by mr toshihiko fukui, governor of the bank of japan, concerning the bank's semiannual report on currency and monetary control before the committee on financial affairs, house of councillors, 10 may 2007. * * * introduction the bank of japan submitted its semiannual report on currency and monetary control for the first half of fiscal 2006 to the diet on december 12, 2006. i am pleased to have this opportunity to present an overall review of the bank's conduct of monetary policy. i. developments in japan's economy japan's economy is expanding moderately. exports have continued to increase due to the expansion of overseas economies. business fixed investment has also continued to increase against the background of high corporate profits and generally favorable business sentiment. the positive influence of the strength in the corporate sector has been feeding through into the household sector. as firms have been increasingly feeling a shortage of labor, the number of employees has continued to increase steadily and household income has continued to rise moderately. in this situation, private consumption has been firm. with the rise in demand both at home and abroad, production has been on an increasing trend and inventories as a whole have been more or less in balance with shipments. looking forward, japan's economy is likely to experience a sustained period of expansion with a virtuous circle of production, income, and spending in operation. the bank will, however, continue to pay close attention to developments in overseas economies, including the united states, as well as crude oil prices. on the price front, domestic corporate goods prices have recently been more or less at three - monthearlier levels. they are expected to increase in the immediate future mainly due to the rebound in international commodity prices. the year - on - year rate of change in the consumer price index ( cpi ; excluding fresh food ) has been around zero percent due to the drop in crude oil prices, but from a longer - term perspective it is projected to continue to follow a positive trend as the output gap continues to be positive. as for financial conditions, the environment for corporate finance has been accommodative. in the corporate bond and cp markets, the issuing environment has been favorable. the lending attitudes of private banks have continued to be accommodative. credit demand in the private sector has been rising. under these
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##l crisis. indeed, many banks were technically insolvent. a banking system in such a status would be difficult to support a sound economic development. such a reality buttressed china β s resolve to carry out reforms. in february 2002, at the second national financial work conference, plans were made to strengthen financial supervision ( later on in 2003 the china banking regulatory commission ( cbrc ) was established ). it was also decided to kick off a new round of reforms on the commercial banking sector, clean up bank balance sheets, and proceed with financial restructuring β measures designed to make major commercial banks to be financially healthy. over the next five years, china carried out a series of reforms on the financial institutions, including not only the commercial banks, but also the rural credit unions and other financial institutions, such as security firms and insurance companies. the decision to carry out reforms was the result of lessons learned, and it also laid a foundation for future development. just before the enron and worldcom cases were exposed in the united states, the chinese media had unveiled a fund scandal in its securities trading. in this case, some institutions were found of manipulating stock prices. the year 2001 also saw the yin guang xia case, which was similar to the enron scandal in that the listed company disclosed false information and engaged in unlawful trading in its stock. in 2003, a larger scandal of listed company broke out with the collapse of the de long conglomerate. following these incidents, china β s financial regulations and corporate governance standards were improved and toughened to counteract the misconducts by using complex corporate structures, which occurred in the de long case. china β s financial system is thus gradually improving its knowledge to deal with instability or turbulences of varying degrees. while it β s difficult to avoid mistakes completely, the key is to learn the right lessons, make improvements, and achieve substantive progress. a chinese saying goes like this β if you frequently suffer minor illnesses, you may be finally exempted from a major disease β. china must avoid at all costs the kind of disease that plagued japan β s economy through the 1990s and even into the new century. the mirror image in reviewing international financial instability or turbulences since the 1970s, we may have two observations. first, while many kinds of instability or turbulences afflict financial systems, only minority is created by the financial system itself. the majority reflects problems in the real economy β the so - called β mirror image β in financial sector. the real economy and
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2013 additional data series on fdi flows and stocks disaggregated by partner countries and activities were submitted. currently we are working on the establishment of new data warehouse system in the central bank that will contribute for improved data management in general, as well as enable the transmission of more demanding and detailed datasets in the future. in july 2012 we started with submission of a more detailed set of the external debt data to the world bank within the quarterly external bis central bankers β speeches debt statistics database in accordance with the requirements for sdds countries, thus being among the first countries in the region fulfilling the overall data requirements in this field. in addition, just recently, we have received the first annual report by the imf on data submission under sdds, that we joined in november 2011, with positive annotations of the overall data submission under this system. further improvement of our statistics, bringing it closer to the eu requirements, remains one of the key priorities of the central bank. just to summarize, in view of the global environment, the current macroeconomic performances of the macedonian economy are relatively favorable. anyway, just like in the previous years, the risks are still present and they are related to the expected recovery of the external demand, the sentiment on the global financial markets and the world prices development. continuation with the structural reforms is a key in eliminating structural bottlenecks and paving a way for sustainable growth and faster eu integration process. the nbrm will continue with regular monitoring and analysis of the developments in the economy and remain prepared, if necessary, to undertake appropriate measures to preserve macroeconomic stability. bis central bankers β speeches
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frederic s mishkin : systemic risk and the international lender of last resort remarks by mr frederic s mishkin, member of the board of governors of the us federal reserve system, at the tenth annual international banking conference, federal reserve bank of chicago, chicago, 28 september 2007. the original speech, which contains various links to the documents mentioned, can be found on the us federal reserve system β s website. * * * after the calm of the past several years, the events of this summer are a strong reminder that our increasingly globalized and sophisticated markets are still vulnerable to systemic risk. when we speak of systemic risk, we mean the risk of a sudden, usually unexpected, disruption of information flows in financial markets that prevents them from channeling funds to those who have the most productive profit opportunities. we have seen how systemic risk, when it becomes especially severe, can result in financial crises β the seizing up of financial markets β which can have potentially important economic consequences. we have also seen how governments, in their role as providers of emergency liquidity, can intervene to help put the financial system back on its feet and prevent a financial crisis from spinning out of control. 1 in mature industrial economies, domestic central banks have the credibility and the resources to play this role. around the world, central banks have injected liquidity and signaled that credit would be available to those institutions and markets that need it. at other times, as well, the federal reserve has acted successfully to prevent potentially devastating financial seizures : notably, after the stock market crash of october 19, 1987, and after the terrorist attacks of september 11, 2001. given the current focus on systemic risk, i would like to talk about an issue that i wrote about extensively before coming to the board of governors : financial instability in emerging - market countries. ( please note that my comments here reflect my own views and not necessarily those of the board of governors or the federal reserve system. ) the need for emergency liquidity assistance in times of financial instability is just as strong, and arguably stronger, in emerging - market countries, in part because their less - developed financial markets, weaker institutions, and lack of easily available information often make these countries especially vulnerable to systemic risk. such risk can be elevated and financial instability triggered by several factors : shocks related to weak domestic institutions and policies, swings in world commodity prices, contagion from other emerging markets, and, turmoil originating in the industrial countries. 2 developing economies have made great strides over the
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the firms can regain access to the credit markets. crucial to a country's successful resolution of a financial crisis is a commitment to necessary reforms and a refusal to go halfway. allowing weak financial institutions or practices to continue may encourage excessive risk - taking because participants have little to lose. because the continued presence of excessive risk diminishes confidence in the future health of the financial system, insolvent financial institutions must be shut down. limit moral hazard by encouraging adequate prudential supervision the funds provided by lenders of last resort may be used indirectly to protect depositors and other creditors of banking institutions from losses. this safety net means that depositors and other creditors have little incentive to monitor these banking institutions and withdraw their deposits if the institutions are taking on too much risk. as a result, in the absence of a strong system of bank supervision, banking institutions are encouraged to take on exposures that heighten systemic risk. to limit the moral hazard problem created by their acting as lenders of last resort, governments and institutions must make improved financial - sector supervision and regulation a high priority. the usual elements of a well - functioning prudential regulatory and supervisory system are adequate disclosure and capital requirements, limits on currency frederic s. mishkin, " asymmetric information and financial crises : a historical perspective, " in r. glenn hubbard, ed., financial markets and financial crises ( chicago : university of chicago press, 1991 ), 69 - 108. mismatch and connected lending, prompt corrective action, careful monitoring of an institution's risk - management procedures, close supervision of financial institutions to enforce compliance with regulations, and sufficient resources and accountability for supervisors. often, however, strong political forces resist putting these kinds of measures into place. this resistance has been a problem in industrialized countries ( it was, for example, an important factor in the u. s. savings and loan debacle of the 1980s ), 4 but the problem is far worse in many emerging - market countries. the political will to adequately regulate and supervise financial institutions can be weak because powerful special interests have prevented such oversight and because the underlying legal and political framework has often been too frail to counteract the special interests. another important element of financial regulation is that the owners, if not also the managers, of insolvent institutions should suffer significant losses in the event of insolvency. in emerging - market countries ( and sometimes in advanced countries, a prominent example of which is japan during the
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and the implementation of the automated clearinghouse, or ach system, in partnership with the private sector. this operational role has allowed the federal reserve to support the goal of a safe and efficient payment system throughout its history. it has also contributed to widespread public confidence in the nation β s payment infrastructure. at times, the federal reserve has taken extraordinary steps to ensure the payment system can function reliably. after planes were grounded on september 11, 2001, in the aftermath of the terrorist attacks in new york and washington, d. c., the federal reserve arranged alternative transportation for millions of checks that normally would have moved across the country by plane. the federal reserve also started giving immediate credit for all checks that it received. this provided a key source of liquidity for the payment system and temporarily caused the daily float held by the federal reserve to increase over 6, 000 percent. 7 after september medley, highways of commerce, 105, https : / / www. kansascityfed. org / ~ / media / files / publicat / highwasyofcommer / highwaysofcommerce. pdf? la = en. - 511, the federal reserve also took steps to improve the future efficiency of the nation β s check collection system by working with congress on the passage of the check 21 act in 2002. a safe and efficient payment system also needs to be accessible, because payment services are most valuable when you can pay anyone regardless of where balances are held. the ultimate success of any effort to modernize the u. s. payment system depends on adoption across the entire banking industry. therefore, in considering the federal reserve β s provision of payment services, congress took steps to try to ensure access to services across the country. as a result, congress specifically tasked the federal reserve with taking into account an adequate level of services nationwide when providing and setting fees for payment services. 8 the united states has a highly complex banking system with more than 10, 000 depository institutions spread over wide areas with differing payment needs. 9 over 4, 800 of those are community banks. 10 in many areas, particularly rural areas, community banks may be the primary providers of banking services for individuals and small businesses. community banks are, therefore, essential in ensuring access to safe and efficient payment services in towns, cities, and rural communities nationwide so that payments can move across the country regardless of geography β from here in the south, to the midwest, and coast to coast. the monetary control act of 1980
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means strengthening the regulations to ensure that a wide range of lmi banking needs are being met. it also entails promoting financial inclusion by, among other things, providing credit for activities in areas with unmet needs outside of assessment areas, such as indian country. additionally, we aim to create incentives for investment in minority depository institutions and community development financial institutions, many of whom are icba members. we know that banking has evolved over the past 25 years, so we also sought to update standards in light of changes to banking over time, including mobile and internet banking. lastly, we wanted to continue to promote community engagement to inform the examination process. our second major goal for the anpr was to provide greater certainty, tailor regulations, and minimize burden. the anpr seeks feedback on several approaches designed to make the rules clearer, more transparent, and less subjective. for example, the proposed metrics for the retail test and the community development test would provide more clarity and transparency on how bank ratings are determined. in talking with community banks, federal reserve staff and i also heard about the need for clearer standards and greater limitations on the size of assessment 1 / 2 bis central bankers'speeches areas β especially for small banks operating just in a portion of a large county or only making a few loans in a part of a county. the anpr offers ideas to provide greater clarity in response to these concerns. importantly, the anpr proposes to tailor cra to bank size and business model. in discussing cra reform with bankers and community organizations, it has been clear that there is a need for a tailored approach for small banks and better outcomes for rural communities. i am encouraged that the anpr offers ideas that advance these objectives. so let me say a bit more about the proposals in the anpr that are tailored to small banks. small retail banks could continue to have their retail lending activities evaluated under the current framework, or they could elect to be evaluated under the proposed retail lending metric. small banks that opt for the retail lending metric can also elect to have other activities considered. additionally, the anpr minimizes data collection and reporting burden by relying on existing data as much as possible, as well as exempting small banks from deposit and certain other data collection requirements. we also heard from stakeholders like icba that rural areas, and banks in rural areas, have particular needs. therefore, the anpr proposes providing incentives for banks in rural areas to participate in beneficial civic and other nonprofit activities ( e.
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philip n jefferson : opening remarks - 18th central bank conference opening remarks by mr philip n jefferson, member of the board of governors of the federal reserve system, at the 18th central bank conference on the microstructure of financial markets, board of governors of the federal reserve system, washington dc, 19 october 2023. * * * it is my pleasure to welcome you to the 18th central bank conference on the microstructure of financial markets. this is the first time that this event has been held at the federal reserve board, and we are very pleased to host the conference. before i begin, let me remind you that the views i will express today are my own and are not necessarily those of my colleagues in the federal reserve system. our guests include academics from a number of institutions, both in the u. s. and abroad ; fellow central bankers, including colleagues from the bank of england, the bank of japan, and the bank for international settlements ; and friends from across the federal reserve system and from several u. s. government agencies, such as the commodity futures trading commission ( cftc ), the securities and exchange commission ( sec ), and the u. s. treasury, including the office of financial research ( ofr ). now, since this is what you have gathered here to discuss, i do not have to convince this group of the critical importance of well - functioning financial markets for the economy. in my case, coming as a macroeconomist from the academic world to the federal reserve has only reinforced that conviction. market microstructure is important central bankers, regulators, and market participants ask a lot of financial markets. we want financial markets to be effective and efficient, and to aggregate and reflect all pertinent information. we rely on these markets to help us gauge how the economy is performing, to help us measure market expectations of monetary policy, and even to help us predict how the economy might evolve in the future. we want financial markets to be deep and liquid in good times, but also to remain deep and resilient when the economy is stressed. we want financial markets to be fair, so as not to favor certain participants. and central bankers, obviously, rely critically on financial markets for the implementation and transmission of monetary policy. as we have broadened our arsenal of policy tools over the past two decades and as markets have become larger, more complex, and more diverse, i would argue that it has become even more critical for us to
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are unlikely to want to hold onto a property whose value has depreciated significantly, and some borrowers β perhaps because they were put into an inappropriate loan or because personal circumstances have changed β cannot realistically sustain homeownership. however, if a foreclosure is preventable, and the borrower wants to stay in the home, the economic case for trying to avoid foreclosure is strong. because foreclosures impose high costs, including legal and administrative costs as well as the costs of leaving the property vacant for a possibly extended period, both the borrower and the lender often are better off avoiding foreclosure. moreover, it is important to recognize that the costs of foreclosure may extend well beyond those borne directly by the borrower and the lender. clusters of foreclosures can destabilize communities, reduce the property values of nearby homes, and lower municipal tax revenues. at both the local and national levels, foreclosures add to the stock of homes for sale, increasing downward pressure on home prices in general. in the current environment, more - rapid declines in house prices may have an adverse impact on the broader economy and, through their effects on the valuation of mortgage - related assets, on the stability of the based on servicer data from first american loanperformance. financial system. thus, finding ways to avoid preventable foreclosures is a legitimate and important concern of public policy. to determine the appropriate public - and private - sector responses to the rise in mortgage delinquencies and foreclosures, we need to better understand the sources of this phenomenon. in good times and bad, a mortgage default can be triggered by a life event, such as the loss of a job, serious illness or injury, or divorce. however, another factor is now playing an increasing role in many markets : declines in home values, which reduce homeowners'equity and may consequently affect their ability or incentive to make the financial sacrifices necessary to stay in their homes. on the principle that a picture is worth a thousand words, federal reserve staff, using detailed, county - by - county information on mortgage performance, have developed a series of " heat maps, " which summarize the incidence of serious mortgage delinquencies across the nation as well as some of the key drivers of loan performance. as the examples will make clear, the figures use warmer colors β orange and red β to
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higher. access to consumer credit has also become easier. the market in lending to households has expanded and matured. further progress must be made, however. both for home mortgages and for consumer credit, the interest rates charged by banks in italy are higher than the euro - area averages for similar transactions. the recent change in monetary conditions has led to a shift in the demand for mortgages from variable to fixed rate loans ; for the latter, the increase in interest rates has exceeded the european average. the new rules on covered bonds will enable banks to expand the range of funding instruments to finance long - term loans and reduce their costs ; this will have to be reflected in more favourable conditions for customers. data harmonized at european level show that italian banks β annual percentage rate of charge on consumer credit is still about one percentage point higher than the euro - area average, even though the gap has narrowed in the last few months. not all of the difference is due to risk factors or to the still limited development of the consumer credit market in italy. not even the entry of foreign intermediaries, which now account for more than one third of such lending, has proved a sufficient stimulus to competition. this must be strengthened, especially in distribution channels. according to data gathered pursuant to the law on usury, the interest rates charged by financial companies are higher still. furthermore, especially where small amounts are involved, rates vary widely even for transactions of the same type, such as personal loans, loans secured by wages and instalment purchases of consumer goods. this probably indicates insufficiently transparent contractual conditions and a pronounced segmentation of the market. the attention banks pay to customers and to their own reputation must be greatest when their contact with the customer is made through outside collaborators. it is necessary to check that each link in the chain leading to bank products charges commensurate fees, to assist in the fight against usury, and to act promptly in cases of suspected unauthorized banking or financial activity. the instruments are not lacking. brokers β terms and conditions are subject to transparency requirements. a bank employee who steers someone to an unauthorized person for banking or financial transactions commits a specific crime. certain characteristics of current account transactions that suggest usury have been made known by the italian foreign exchange office. the council of the european union has reached agreement on a new directive on consumer credit, which will be examined by the european parliament in the autumn. if approved, the directive will enhance consumer protection by providing for forms
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ignazio visco : islamic finance and the european challenge opening address by mr ignazio visco, governor of the bank of italy, at the ifsb forum β the european challenge β, organized by the islamic financial services board ( ifsb ) and hosted by the bank of italy, rome, 9 april 2013. * * * ladies and gentlemen, i am pleased to welcome you today to this seminar, organized by the islamic financial services board and hosted by banca d β italia on the subject of islamic finance. as you know, the main prescriptions relating to financial transactions in accordance with islamic religious law are the ban on paying interest and the prohibition of excessive uncertainty and speculation in contractual arrangements. this is predicated on the principle that profits should be generated from fully sharing in the business risk of an investment ( the so called β profit and loss sharing principle β ). the asset - backing requirement complements these prescriptions, providing for the link between each financial transaction and an identifiable underlying asset. a few weeks ago i gave a lecture on the financial sector after the crisis. on that occasion, it occurred to me that the renowned economist and philosopher β and eventually nobel laureate β amartya sen had given in these same rooms the first of our scholarly lectures entitled to the memory of our late governor paolo baffi. sen β s lecture was on β money and value : on the ethics and economics of finance β. it is of course an interesting and good read in these difficult days. but what i was most intrigued by was sen β s question : β how is it possible that an activity that is so useful has been viewed as morally so dubious? β there are indeed a good finance and a bad finance. while we may have some differences in ideas and perceptions on the goods and the bads, i think that what is most important is really to focus on the link between financial transactions and underlying assets, to conclude, with sen, that β finance plays an important part in the prosperity and well - being of nations β. indeed, it is crucial for sharing and allocating risk, especially for poorer societies and people. it is crucial for transferring resources over time and removing liquidity constraints. it is very important for fostering innovation and promoting economic growth. but it has to be certainly β ethical β and certainly transparent. an accurate measure of islamic financial services is difficult, due to the lack of official statistics. however, some private estimates assess the current size at about 1. 6 trillion dollars,
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funds as capital for investments in commercial agro - based enterprises. such a move coupled with proper record keeping can also facilitate easier access by members to government funds like the agricultural credit facility ( acf ). having set out the range of institutions supervised by the central bank ; i want to echo the benefits that the public accrues from dealing with only regulated financial institutions. regulated institutions are best placed to ensure safety of people β s savings because they are demanded to act diligently in accordance with the set laws and regulations ; offer a recourse to the regulator for consumer protection in case of complaints or irregular activity, and in the event of having to be closed and liquidated, there is a final recourse to the deposit protection fund for depositors in these regulated financial institutions. as such, the public should not be duped into dealing with unlicensed and unregulated financial institutions that are in many ways disguised schemes to defraud the community. members of the public should heed warnings or advice coming from agencies like bank of uganda regarding operations of certain investment schemes or institutions. in addition, the public should also take keen interest in physically inspecting the licenses of any institution that claims to be licensed by the bank of uganda or any other regulator. the licenses are supposed to be displayed in all the branches of these regulated institutions and whenever a customer is in doubt ; they should inquire from the regulators. the security agencies and other arms of government should also take a firm stand to wipe out the ponzi schemes and other unregulated financial institutions. otherwise, if we leave unregulated financial institutions to operate leading to public loss of funds, it could damage confidence in the entire financial system with dire consequences for the economy. third, permit me to speak briefly about the recent parliamentary proceedings related to our execution of the bank supervision and regulatory role. one issue that featured quite extensively in the discussions with cosase and in the media related to the speed of resolution of some of the financial institutions and the recommendations by some sections of the public to introduce strict 2 / 3 bis central bankers'speeches procedural guidelines with fixed timelines for the bank of uganda. i wish to draw your attention to a regulator β s perspective on that issue. the bank of uganda only intervenes in a financial institution when it has reasonable belief and evidence that continued operations of that institution pose serious risk of loss to depositors β funds. moreover, the dire condition of any institution that is the
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##es which can then be used as raw materials in agroprocessing industries ; ii ) to free up labour for employment in modern industries, and iii ) to create a rural market for the products of domestic industry. uganda formulated the plan for the modernisation of agriculture in the 1990s but this has not been implemented effectively with dire consequences for the performance of the agricultural sector. labour productivity in ugandan agriculture is among the lowest in the world. most of the smallholder food crop sector is characterized by subsistence farming, with no use of modern inputs. the strategic objective of agricultural policy should be to help uganda β s smallholders to adopt good agricultural practices, produce more output for the market and to start to use modern farm inputs. the first step towards agricultural modernization is an effective agricultural extension service which can reach the mass of smallholder farmers and encourage them, through technical advice and demonstrations, to adopt good agricultural practices. the returns to investing in modernizing smallholder agriculture are potentially huge. the combination of adopting good agricultural practices and low input technology could enable smallholders to double their yields, which would raise farm incomes and bis central bankers β speeches generate marketable surpluses. it is a mistake to believe that ugandan agriculture can be modernized by focusing on large scale commercial farms, rather than smallholders. given the structure of agriculture in uganda, which is dominated by smallholders, large scale farms are never likely to account for more than a small share of farm output. furthermore, yield per area of land in ugandan agriculture is inversely related to farm size ; hence replacing smallholder agriculture with large scale farms is likely to reduce total farm output. 3. accelerate the demographic transition the demographic transition plays a key role in economic development. no developing country has achieved middle income status and structural transformation of the economy without undergoing a demographic transition. a demographic transition entails a fall in the total fertility rate, which reduces the population growth rate and the pulls down the agedependency rate. uganda has only just begun its demographic transition. it has a total fertility rate of 6. 1 children per woman and so has one of the highest age - dependency rates in the world, at over 100 dependents per people of working age. many of the fast growing economies of developing asia have age - dependency rates of around 50, because they began their demographic transitions several decades ago. lower age - dependency rates are closely correlated with higher savings rates and greater real spending per person on human capital development, which is crucial for structural
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current issues we are considering in the context of our revised guideline. we hope to have something ready for consultation with the industry later in the year. while this may impose new obligations on ais, we will try to ensure that these are of a nature that wellmanaged institutions would adopt of their own accord. after all, in essence, they amount to no more than being sure that you really do know your customer.
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professional training and adherence to common set of professional ethical standards. getting this right will be an important piece in the puzzle towards building a world - beating sector here in hong kong. getting it right means raising competence and professional standards and, consequently, raising levels of trust and custom. to achieve that will take a full, team effort. so i very much welcome your input to developing these ideas further and flesh out the framework over the coming months. closing remarks at the outset of my remarks, i highlighted the banner headline indicating that we are β heading into a new era β. having journeyed this far, is this statement a fair one? given the opportunities i β ve outlined, i think the answer really should be β yes β. but if i β m cautious, i would have to say, β yes, if β : if we can rise to the challenges touched on earlier ; if we can capitalise on the great strengths and advantages of hong kong ; if we can invest in our people and our institutions to match the scale of the opportunities. if we can do that, i believe we can truly make this a transformative moment in the development of the banking landscape in hong kong. the prize for your institutions, your clients and for hong kong is great. i look forward to continue working with you so, together, we attain it. thank you. bis central bankers β speeches
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in this context, central banks have the clear duty of preventing the market from seizing up, with incalculable consequences for other financial players and more generally for the real economy. however, it should be borne in mind that the central banks β criteria for accepting assets as collateral for their refinancing operations are particularly restrictive and penalising, and comply with the traditional principles that i have just mentioned. in particular, the value of these securities must be at least equal to the amount lent and the accrued interest, after applying a haircut to take account of a possible decline in their market value during the repo. 4 ) why have the central banks responded differently as regards their monetary policy stance? as regards the central banks β response to the crisis, although they converged in their shortterm liquidity management methods, they nonetheless responded differently in terms of monetary policy. the underlying reasons for this divergence are both due to the nature of the shocks that the economies are facing and the mechanisms of their propagation to the real economy and to nominal variables. over the recent period, the industrialised economies have undergone three common shocks : rocketing real - estate prices at least in a number of countries, soaring commodity prices and finally the financial crisis triggered last summer. they have also experienced specific shocks : the real - estate crisis in the united states in a context of household overindebtedness, for example. in the latter case, the economic slowdown already underway since mid - 2006 and the expected consequences of the credit crisis on economic activity over the medium term has led the us monetary authorities to change their monetary policy stance. the very different situation in the euro area, where activity remained favourable, has led the ecb to keep its monetary policy stance unchanged in spite of the uncertainties generated by the financial crisis in a context also characterised by persistent inflationary tensions. 5 ) what lessons can we learn for the future? at the current juncture, financial turmoil is still affecting the markets. however, after more than nine months, i think it is already possible to draw first conclusions in three main areas : - first, the close co - operation between central banks on the one hand and between the supervisory authorities and central banks on the other hand seems, in my opinion, to be a determining factor for efficient crisis management. this point was indeed underscored during the recent work carried out by the financial stability forum. i must say in this respect that the french model of banking supervision, in which
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and, at the global level, we are far from having a network ( or set of interconnected networks ) that would support quick and cheap transfers of funds. second, and in close relation to the previous point, the dlt could help remedy the current limits of the existing wholesale market infrastructures. those wholesale infrastructures also have various shortcomings. since rtgs are not interoperable, correspondent banking is often the only solution to transfer fiat money across borders. however, correspondent banking is costly, and the perimeter of the aml / ctf and kyc checks is in some cases uncertain for the counterparties of a payment order. furthermore, for security reasons, the access to payment systems is limited to a certain type of entities ( mainly credit institutions, investment firms, ancillary systems, etc. ). finally, cross - border payments lack traceability. the dlt could also help improve current aspects of wholesale clearing and settlement mechanisms and facilitate in particular gross and simultaneous delivery - versus - payment processes, cross currency settlements and resilience and recovery from operational incidents. if the issues at stake are not the same in developed as in developing countries, the objectives of crypto - assets, and in particular stablecoins, are the same everywhere. they seek to shortcut central authorities and more generally financial intermediaries. however, they bring their own problems. 3 - indeed, it is quite clear that crypto - assets undergoing technical and economic trials bring about not only opportunities to improve our payment systems but also material risks which on the contrary might weaken them if unaddressed, both from an efficiency perspective and a safety perspective through the introduction of new sources of fragmentation, instability and fraud. as many central bankers have pointed out, today β s crypto - assets do not satisfactorily offer the qualities expected from a settlement asset to be used interchangeably with commercial bank money and central bank money, let alone to displace central bank money as the central reference of value, as the privileged settlement asset for wholesale transactions and as the last recourse settlement asset given its legal tender status. the reasons for this assessment are well known and documented and boil down to stressing that there are misnamed as Β« currencies Β» for three reasons : first, their value fluctuates enormously, preventing them from being used as units of account. for instance, the value of bitcoin ( not however representative of all crypto - assets ) went up
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. so it β s all the more important that productivity grows. and that makes reforms necessary. 3 / 5 bis central bankers'speeches often productivity improves because of innovations. but for that, it β s vital that innovations spread. this occurs, for instance, through competition : new businesses, which can produce better and at lower cost thanks to innovative methods, squeeze out older companies. the economist joseph schumpeter called this β creative destruction β. for that to happen, the environment has to be right. in many countries, for instance, entrepreneurs still have to overcome major bureaucratic obstacles simply to set up a business. once they have done that, they need capital and labour in order to grow. that brings us back again to flexible markets, which can react to new and changing demand. and finally, businesses need markets on which they can sell their products. in that context, it is important to complete the common european market. that applies particularly to the digital market, which is set to become even more important in the future. growth and prosperity ladies and gentlemen, we need reforms for the economy in the euro area to grow sustainably. hardly anyone questions that. but is that the end of the debate? will people regain confidence in europe and in the euro when the economy is growing again? i think growth plays an important role, but we also have to look beyond that. theodore roosevelt said : β the test of our progress is not whether we add more to the abundance of those who have much, it is whether we provide enough for those who have little β. translated into the language of economics, it means : we must not only pay attention to growth but also to the distribution of the wealth it generates. compared with other regions, income and assets in western europe have traditionally tended to be quite evenly distributed. but as in many other countries, inequality is rising β and has been for decades. there are many reasons for this, ranging from rising unemployment, a larger number of single parents, reduced spending on education through to steady de - industrialisation. rising inequality is a complex phenomenon. some people therefore seek to explain it in simplistic terms by referring, for instance, to globalisation or european integration. that β s how we then have a link between the distribution of wealth and criticism of europe, as i mentioned at the start my speech. and indeed, studies are showing that there is a relationship : increasing inequality provides fertile ground for euroscepticism. and inequality is not a
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covering the period to the end of october, the underlying money and credit expansion remains vigourous, even taking temporary factors into account, such as the flattening of the yield curve, the financial market turmoil and specific transactions associated with the restructuring of certain banking groups. therefore, monetary and credit developments continue to require very careful monitoring, not least with a view to better understand the response of the private sector to increased financial market volatility. thus far, there has been little evidence that the financial market turbulence since early august has strongly influenced the dynamics of broad money and credit aggregates. indeed, the expansion of loans to households and non - financial corporations has remained robust, which may suggest that the supply of credit has not been impaired. to develop a more complete view of the impact of financial market developments on bank balance sheets, financing conditions and money and credit growth, further data and analysis will be required. the ecb β s governing council stands ready to counter upside risks to price stability, in line with its mandate. against this background, on 6 december we decided to leave the key ecb interest rates unchanged. the governing council will monitor very closely all developments. in particular, for the recent increase in inflation to remain temporary, it is essential that the price and wage - setting behaviour remains unaffected by current inflation rates, so as to avoid the emergence of second - round effects. by acting in a firm and timely manner on the basis of its assessment, the governing council will ensure that such second - round effects and risks to price stability over the medium term do not materialise. to firmly anchor inflation expectations in line with price stability is even more important at times of financial market volatility and increased uncertainty. in this respect, the governing council will continue to pay great attention to financial market developments. monetary policy operations ladies and gentlemen, once the governing council has defined the monetary policy stance necessary for maintaining price stability in the medium term, in line with its mandate as defined by the treaty, the ecb has the responsibility to also ensure the smooth functioning of the segment of the money market that we influence. i should like to underline β once again β that these two responsibilities are clearly distinct and should not be mixed. since we last met in october, tensions continued to be observed and during the last period banks expressed concerns about their liquidity needs over the year - end. the new - year period is traditionally a period of scarce liquidity, as market activity is subdued and banks are preparing
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countries save to finance their deficits, growth is normally decreased a bit. after a few years, the countries can however reap the fruits of a more stable economy, in terms of lower inflation and higher growth. successful programs also have a positive effect on social policy in the countries. expenditure on education and healthcare in the poorest program countires increased by four per cent per capita between 1985 and 1998, and these areas now account for a larger share of the government budgets. countries with imf programs have seen more children in schools, increased literacy and access to clean water, and lower child mortality. swedish participation in the imf sweden is one of the creditor countries in the imf. in the board we share a seat together with the seven other nordic and baltic countries. as well as other country groups, we have an office in washington with representatives who work full time on pursuing our interests on the board. i worked at this office myself for over four years as nordic - baltic representative in the board. our board representatives receive guidance from their home countries on important issues and statements in the board are coordinated among our countries in advance. in sweden, the riksbank has the main responsibility for contacts with washington, but all issues are coordinated with the government offices where the ministry of finance is our contact. in certain cases, there is also consultation with the ministry for foreign affairs. the nordic and baltic countries are small on the board - our combined voting power is just over 3. 5 % of that of the imf as a whole. our opportunities to pursue policies on the board are in having sensible points of view on the proposals that are on the agenda and, together with other countries, trying to influence proposals so that they move in the direction we want them to. to some extent, we have an advantage in appearing independent on the board, since we represent neither the most influential creditors within g7 nor the large group of debtor countries. this means that our statements sometimes have more weight than our voting powers indicate. let me give three examples of issues where our countries have been actively involved in the imf. the first concerns the transparency of the imf. in sweden, we are accustomed to authorities publishing their decisions and their way of dealing with items. many international organisations on the other hand operate behind closed doors. however, the imf has become considerably more open in recent years, and today material on almost all activities is available, not least on the imf β s website ( www
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inflow to bridge the gap. in such a situation, the country can apply to the imf for a loan. a team of economists is then quickly put together and sent to the country to assess how severe the crisis is and what has to be done to regain control over the situation. together with the country β s government, the imf staff rapidly creates an economic reform programme that runs over a couple of years. the purpose of this programme is to establish confidence in the country β s economy and in this way turn the outflow of capital to an inflow, so that the country can regain balance in its payments. during the period that the country is undergoing the programme, it can also borrow limited amounts from the imf to assist in covering parts of its deficit. the imf β s lending is thus relatively short - term. it is often sufficient with loans with a three to five year term to restore balance in the foreign payments. in the case of developing countries, however, it has increasingly been seen that short - term instability often depends on deep - seated structural problems. examples of this type of problem are inability to collect taxes, inefficient bankruptcy legislation, widespread corruption and weaknesses in the banking sector. these types of issues are in the borderland between the mandate of the imf and the world bank and the two organisations collaborate in initiatives in this area. among other things, the imf and the world bank have certain types of loans which, in combination with economic reform programmes, are focused on building long - term, strong structures in poor countries. another type of structural problem is the unsustainable foreign debts burden that some of the most poor developing countries have to contend with. for a couple of years, the imf and the world bank have been working together in debt relief projects for these countries. in practice, this implies writing off parts of the debts. the debt relief goes hand - in - hand with economic reforms in the countries, aimed at decreasing poverty. in the longer term it is only through a responsible economic policy, focused on growth, stability and sound government finances, that these countries can avoid debts building up again. an important part of the imf β s work with debt management in the poor countries is therefore to strive for the resources that are released in the country are invested long - term and in a way that benefits all the population. research shows that imf lending and programs are successful. in the years a program is implemented, and the
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3d printing, drone and robotics industries. and ukraine accounts for around one - fifth of europe β s supply of wire harnesses for cars. [ 11 ] the war has already forced wiring plants in the country to shut down, causing some car manufacturers in the eu to halt production. the exportoriented agricultural sector has also been affected. perhaps most importantly, the war has exposed the vulnerability of europe β s energy supply. in 2020 the eu imported around 60 % of its energy, a reliance that has actually increased since 2000, despite a growing share of renewables in energy production. [ 12 ] and just four countries accounted for over 70 % of the bloc β s natural gas imports, with over 40 % coming from russia alone. these two factors have underlined that the earlier advance of globalisation largely relied on a β goldilocks β scenario of relative economic and geopolitical stability. however, economies could be subject to huge volatility if shocks were global and correlated, and if there were excessive dependencies on particular suppliers. so, many countries are now faced with the question of how to respond to these new vulnerabilities. the answer is not to withdraw within our borders and erect trade barriers. history shows that retreating from global trade comes with substantial costs. one study finds that the united states β self - imposed embargo on international shipping back in 1808 cost roughly 8 % of its gross national product. instead of restricting trade, we should work towards making trade safer. and there are signs that three shifts are taking place in world trade in response to this new global map. three shifts in global trade the first shift is from dependence to diversification. having learnt the lessons of the pandemic, firms are unlikely to remain dependent on relatively linear global supply chains. but that does not, in the first instance, mean that they will seek to deglobalise and reshore production. initially we are likely to see a greater focus on diversifying suppliers and stockpiling essential inputs. research finds that higher diversification can almost halve a supply shock β s negative impact on a country β s gdp. [ 15 ] and indeed, existing supply chains that were more geographically diversified helped to mitigate the effects of domestic shocks during the pandemic. [ 16 ] by contrast, greater supply chain concentration is found to increase economic volatility. this diversification trend is already underway. by late 2021 almost half of companies had diversified their supplier base, in contrast to just
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5 % that had implemented reshoring measures. [ 18 ] at the same time, companies moved away from relying on β just - in - time β supply chain management towards a β justin - case β approach. less than 15 % of companies were relying on β just - in - time β deliveries by the end of last year. however, diversification is likely to have limits β and this brings me to the second shift, which is from efficiency to security. in recent years we have seen a shift towards new industrial policies, mainly led by china and the united states, in which geopolitical biases are being introduced into strategic supply chains at the expense of efficiency considerations. the us administration has explicitly identified β friend - shoring β as a policy goal in its recent supply chain strategy. now, the war may prove to be a tipping point for europe and other regions too, making the alliances to which suppliers β countries belong more important. international firms will still face strong incentives to organise production where costs are lowest, but geopolitical imperatives might restrict the perimeter in which they can do so. for strategic industries such as semiconductors or pharmaceuticals, the very limited reshoring of supply chains we saw during the pandemic will probably change as a deliberate result of public policy. europe, for example, is aiming to double its share of the global market for semiconductor production to 20 % by 2030. but even industries that are not considered strategic are likely to anticipate the fracturing of the global trading order and adjust production themselves. a recent survey found that 46 % of german companies receive significant inputs from china. of those, almost half are planning to reduce their dependency on china. [ 22 ] in the united states, almost 40 % of members of the us - china business council have moved sourcing due to uncertainties about supply. for energy and critical raw materials, increasing security will require a different strategy. after all, these resources are distributed unevenly around the world, and cannot be substituted with domestic alternatives. regions will increasingly have to source their critical inputs from a smaller pool of potential suppliers that are deemed reliable and in line with their shared strategic interests. and they will need to do so in the context of a green transition that is making certain raw materials β like copper, cobalt and nickel β increasingly more important than others. a new geopolitical race to secure access to resources is therefore likely. achieving greater security will not come without costs, and this is why the third
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legitimacy and effectiveness has also progressed, granting a larger weight in their decision bodies to emerging economies, as well as expanding the representativeness of the financial stability forum and of the basel committee on banking supervision. the imf and the expanded financial stability forum are called to increase efforts in crisis prevention and responses. the g20 communique backed the calls for a broader international cooperation in several fronts, but let me remind you that the international community of central bankers and financial regulators have already developed strong cooperation ties. institutions as the bis with its regular meetings or governors and of senior central bank officials and experts or forums like the basel committees and the financial stability forum have been providing for years the necessary dialogue, exchange of ideas and information between us. i understand that other forums of economic authorities can replicate our own model of cooperation. regarding the imf, the discussion currently concentrates around its role and legitimacy. its role should focus on three main topics. the first is surveillance. it is very important that the imf becomes a key and integral part of the financial early warning system. the imf is vital not only in terms of forecasting, which is already regularly performed and published, but also in terms of surveillance of each country β s policies and specific warning indicators, aimed at detecting its growing unbalances. one of the points that, in my personal opinion, have complicated efforts to deal with the current financial crisis is that the whole focus of the imf during decades was to prevent crises in emerging markets. there is a different picture now, and is paramount that the surveillance done by the imf focus on every relevant economy and really works as an early warning system. the second topic, evidently, is international cooperation. and international cooperation requires that the imf and the financial stability forum work together to propose a new set of regulations β some of them were already discussed here today, and particularly regulation and supervision of cross - border transactions, which are not directly restricted to one national supervisory authority. the basel committee will most likely continue to be the focal point of conducting the implementation of the process. the third topic is the imf role in supporting emerging and developing countries, which have no financial conditions to address the effects of the financial turmoil on their economies. traditionally, the imf has focused on crisis generated in one specific economy or group of economies and in proposing policies to restore that country β s soundness. the problem that we are facing today is that some countries might have a sound policy but were affected by the
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the same rationale applies to inflows. if the exchange rate level that is intended to be defended is inconsistent with economic fundamentals, massive inflows can be created that will sooner or later appreciate the domestic currency in real terms. investors take advantage of a relatively cheap currency to enter capitals before the appreciation occurs, and get a significant capital gain. hence, within a framework of capital mobility, foreign exchange flexibility avoids one - sided bets over the exchange rate. furthermore, an inflation targeting regime with a floating exchange rate provides a good buffer to smooth the impact of changes in capital flow cycles. the same monetary policy reaction to a currency appreciation that reduces inflationary pressures, allows limiting the currency appreciation process by narrowing interest rate differentials. a second line of defense is a symmetrical opening of the financial account. many countries have approached financial integration by opening their economies to capital inflows, still holding on to their constraints to local capital outflows, especially from institutional investors. after a while, and as a reaction to massive capital inflows, restrictions on outflows are allowed to become less stringent. however, this is normally done too late and signals fear of capital inflows. in fact it can even reinforce the phenomenon, particularly when the exchange rate has reached unsustainable levels. having a well regulated and developed financial system is a requisite for properly accommodating exchange rate and capital movements. this is because it makes it easier to prevent exchange rate fluctuations from destabilizing financial conditions. currency mismatches have been at the origin of many banking crises in emerging economies. nonetheless, their financial systems β resilience to exchange rate fluctuations toward late 2008 and early 2009 showed that lessons were learned, and effects on banks β balance - sheets, that would have translated an external recession into a far - reaching financial crisis, were avoided. of course there were exceptions, particularly in emerging europe, where fragilities arose precisely because of the rigidity of their exchange rate systems and currency mismatches of their banks. another reason of the importance of having a well - functioning financial market is the distortions caused by exchange rate volatility on resource allocation. in order to minimize such effects it is prudent to develop an exchange rate hedging market allowing producers in the tradable sector to hedge against exchange rate fluctuations at least at one year β s term. in fact, evidence shows that hedging markets are more developed in economies with more flexible
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s ability to deliver stable inflation, but also raised a question about whether long expansions inevitably lead to destabilizing financial excesses. era iii, 2010 and after : monetary policy and the emerging new normal the third era began in 2010 as the recovery from the great recession was taking hold. my focus in discussing this era will be on a β new normal β that is becoming apparent in the wake of the crisis. i will fast - forward past the early years of the expansion and pick up the story in december 2015. 9 the unemployment rate had fallen indeed, as i noted at this symposium last year, inflation ran surprisingly low in the second half of the 1990s ( powell, 2018 ). this was an odd recession to classify. the collapse of the tech bubble was followed by several quarters of generally slow positive growth. regarding declaring the 2001 recession, the nber business cycle dating committee stated, β before the [ september 11 ] attacks, it is possible that the decline in the economy would have been too mild to qualify as a recession β ( nber, 2001, p. 8 ). ben bernanke ( 2012 ) surveyed the early years of the recovery at this symposium in 2012. - 6 from a peak of 10 percent to 5 percent, roughly equal to the median fomc participant β s estimate of the natural rate of unemployment at the time. at this point, the committee decided that it was prudent to begin gradually raising the federal funds rate based on the closely monitored premise that the increasingly healthy economy called for more - normal interest rates. the premise was generally borne out : growth from the end of 2015 to the end of 2018 averaged 2. 5 percent, a bit above the 2. 2 percent rate over the previous five years ( figure 2, panel a ). the unemployment rate fell below 4 percent, and inflation moved up and remained close to our 2 percent objective through much of 2018 ( figure 2, panels b and c ). that brings us to 2019. before turning to issues occupying center stage at present, i want to address a long - running issue that i discussed here last year : tracking the β stars β that serve as guideposts for monetary policy. 10 these include u *, the natural rate of unemployment, and r *, the neutral real rate of interest. unlike celestial stars, these stars move unpredictably and cannot be directly observed. we must judge their locations as best we can based on incoming data and then add an element of risk
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masaru hayami : the role of japan amid the changing international financial environment speech by mr masaru hayami, governor of the bank of japan, at the executive board of directors β meeting of the japan foreign trade council, held in tokyo, on 7 june 2000. * 1. * * introduction thank you for inviting me to the 263rd executive board of directors β meeting. it is a great pleasure to have this opportunity to address such a distinguished audience. it also brings back memories of my days as one of the council β s executive directors and vice chairman under chairman mimura. your invitation today allows me to be here again, for the first time in almost ten years since i left the council to become chairman of the japan association of corporate executives. knowing that many of you come from trading companies which are active globally, today i β d like to share my ideas from the viewpoint of the role of japan amid the changing international financial environment. 2. tensions generated by globalization having previously worked for the bank of japan for 34 years, i had a chance to work in the then foreign department, our london office and other positions related to the bank β s international activities. it was a great experience for me to attend important international meetings such as the bis and the then g5 meetings. then, two years ago, i returned to the bank of japan as governor. now, representing the bank, i have a chance to again take part in various international meetings. attending such meetings, i have noticed two things. first, the number of international meetings has multiplied over the years. in this context, of particular note is that the presence of emerging - market countries, particularly the asian economies, has also increased. one reason for this is somewhat paradoxical in that since the asian currency crises of 1997, there is a consensus that the economic and financial stability of emerging - market economies is crucial for global economic and financial stability. indeed, the rise in the number of international meetings and participants evidences the extent to which economies are becoming globalized. the second thing i have noticed is that various kinds of tensions have arisen as the market economy has become more globalized. i clearly recall ngo activists surrounding the wto β s ministerial conference in seattle last december. the imfc meeting, which i attended in late april on the day after the g7 meeting, was also the target of similar protests. how can it be that the imf, a pivotal contributor to the development of the liberalized market economy after
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. despite these arguments, almost all countries in the world have so far maintained the above - mentioned two - tiered system. this fact seems to prove that the advantages of the two - tiered system are still greater than its disadvantages. iii. it innovation and digitization of payment instruments digitized payment instruments under the two - tiered system, private entities, including banks, have developed a range of innovative payment instruments, incorporating the available technologies of the time. for example, credit cards and debit cards allow their users to make and settle payments by submitting instructions to transfer deposits held in banks. card users therefore do not have to carry around large amounts of cash. another example is electronic money. people can charge a certain amount in mediums of electronic money such as ic cards, and thereby avoid making small cash payments every day. electronic money has particularly developed in japan. furthermore, digitized payment instruments based on the liabilities of non - banks have developed along with the popularization of e - commerce. a typical example is paypal developed in the united states. the global expansion of cashless payments today with rapid it innovation, cashless payments, especially mobile payments, are growing on a global scale. i would like to point out two big changes behind this. first, the number of people using mobile phones or smartphones has sky - rocketed recently. since the birth of the iphone in 2007, smartphones have rapidly spread across the globe in just a decade. according to an estimate by the world bank group, around two - thirds of the 1. 7 billion unbanked adults in the world have access to mobile phones or smartphones. this change has promoted the rapid growth of mobile payments, especially in emerging and developing economies. in some countries such as china, the share of mobile payments is greater than that of traditional means of retail settlements. a mobile payment does not require bricks and mortar branches or atms to provide financial services. instead it uses digital information technology to reach out to emerging and developing economies and provide financial services globally through leapfrogging physical infrastructure. as such, digital technologies are also gathering much attention as a great instrument to promote " financial inclusion. " the other change is the global " data revolution. " indeed " fintech " can be understood as a financial aspect of the on - going data revolution. people around the world are creating a gigantic amount of data every second by using smartphones for sns posting, browsing websites and issuing location data through
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stephen s poloz : opening statement before the house of commons standing committee on finance opening statement by mr stephen s poloz, governor of the bank of canada, before the house of commons standing committee on finance, ottawa, ontario, 24 october 2016. * * * good afternoon, mr. chairman and committee members. senior deputy governor wilkins and i are happy to be before you today. it is our normal practice to appear before this committee twice a year to discuss the bank β s monetary policy report ( mpr ). we published our latest mpr last week and are happy to answer questions about it and other economic topics. however, i suspect you may also want to ask about the agreement with the federal government that was announced this morning, which renews our inflation - control framework for another five years. so, before we respond to questions, allow me to say just a few words on both topics, beginning with the mpr. since our last appearance, there have been two developments that led us to downgrade our outlook for the canadian economy. the first is a lower trajectory for exports. after a sharp decline in goods exports over five months, we had a rebound in july and august. but that was not enough to make up for the ground that had been lost. we worked hard to determine the reasons for this shortfall. about half of it can be explained by weak global trade and composition changes in us demand, but the rest is unclear. so, in our outlook, we now assume that longer - term structural issues, such as lost export capacity and competitiveness challenges, are responsible for the remainder. this assumption led us to reduce the projected level of gdp by the end of 2018 by about 0. 6 per cent, compared with our july projection. the second major factor behind our downgraded growth outlook is the federal government β s macroprudential measures to promote housing market stability. these measures are welcome because they will, over time, ease vulnerabilities related to housing and household imbalances. that is important because such vulnerabilities can magnify the impact of negative economic shocks. we expect the government β s measures will restrain residential investment by curbing resale activity in the near term and lead to a modest change in the composition of construction toward smaller units. we estimate that this will leave the level of gdp 0. 3 per cent lower at the end of 2018 than projected in july. given these developments, we cut our growth estimate for 2016 to
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would need to be recorded in our ledgers. in 2021 we introduced the option of an β omnibus account β [ 20 ] to facilitate the private sector development of such networks and there are private sector proposals in progress to introduce them [ 21 ]. another possibility would be for a tokenised ledger, including a distributed ledger, to be securely and instantaneously synchronised with our central real - time gross settlement system ( rtgs ). that is not possible today in our current rtgs. but we are now well advanced in the implementation of the next generation rtgs, which is scheduled to go live next year. this system will have much greater functionality including the potential for such synchronisation which we are now actively exploring with the london centre of the bis innovation hub. at present, given where we are on in the uk on the imminent implementation of a vastly more capable rtgs system these options look to provide a faster route to settlement of tokenised transactions in central bank money and are working with industry on how to best exploit the possibilities of the rtgs system [ 22 ]. but we will continue to remain closely engaged with all the options. as with retail payments, it is difficult to forecast now what will prove the more successful approaches. it is most likely that, as is not uncommon with technological development, a range of approaches will eventually be implemented and will co - exist. we have a variety of payment systems, both wholesale and retail, of different vintages operating in the uk today. i would guess that in the future, as new technologies take hold we will see both more innovation and more variety. changes in how we pay for things and what type of money we use is an exciting area of possibility for the fintech world. it is also a fundamental issue for the bank of england β as a regulator, as the provider of the central high value payment rails and the issuer of the highest quality, public money in the uk. we aim to be forward looking, developing both in developing the regulatory frameworks and in developing public systems and public money necessary so that safe innovation can flourish to the benefit of all. thank you. i would like to thank the following for their input to and helpful comments on these remarks : jyoti shah, louise eggett, laure fauchet, morgane fouche, adrian hitchins, jeremy leake, rajan patel, rachita syal and cormac sullivan for their assistance preparing these remarks. i
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technology to widen technical capacities. these measures would essentially reduce operational costs and improve the nation's competitiveness. in this more uncertain environment a stable exchange rate is a major competitive advantage. for an open trade - dependent economy, stability in the exchange rates accords significant advantage in enhancing trade and investment opportunities. by eliminating wide swings in the exchange rates, the pegged exchange rate regime has provided a stable environment for businesses to plan their investments and to undertake their operations. at the same time, stability of the exchange rate also provides an environment that facilitates continuous structural reform to improve malaysia's competitive position. it is through long - term structural adjustments rather than frequent adjustments in the exchange rate that a country can build a strong business foundation, improve efficiency and create the enabling environment that encourage competition and innovation. as a small open economy, malaysia does not have influence over the external factors that affect the economy. however, by working on strengthening domestic economic fundamentals, malaysia will be in a stronger position to manage and mitigate the impact of the volatility in the external sector. three elements are important in ensuring that an exchange rate regime continues to operate effectively. first, it needs to be well supported by the domestic fundamentals. second, there must be flexibility in domestic markets to enable the economy to adjust and absorb the impact from external volatility. third, increased competitiveness is achieved through efficiency and productivity gains rather than relying on currency depreciation. in respect to the conditions prevailing in malaysia, malaysia's strong economic fundamentals, with low rate of inflation, strong external balance, low level of foreign debt, strong reserves levels and strengthened banking sector have provided strong support for the pegged exchange rate regime. malaysia also has sufficient flexibility to undertake adjustments on all sectors of the economy to remain competitive. the diversified economic structure, the enhanced mobility of capital and labour has also provided malaysia with increased resilience to weather external shocks. malaysia also had the flexibility of policy to respond to the circumstances. in all cases, when an exchange rate regime has failed, it was not due to the regime itself, but due to the weaknesses in the economy and the financial system. having undergone significant transformation and emerging with a much strengthened set of fundamentals, the malaysian and regional economies are better able to absorb the volatility in the exchange rates. countries are also more cognizant of the costs of currency depreciation, particularly on confidence. as an example, comparing the response of regional currencies
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. to be quite clear, the federal reserve believes that strong capital is critical to the health of our banking system and we believe that basel ii will help us continue to ensure that u. s. banks maintain capital levels that serve as an appropriate cushion against risk - taking. as we have mentioned before, we will continue to use existing prudential measures to complement basel ii. for example, the current leverage ratio requirement - - a ratio of capital to total assets - - will remain unchanged for all banks, whether or not they are subject to the basel ii framework. also, supervisors will continue to enforce existing prompt - corrective - action rules in response to declines in capital. both the leverage ratio and prompt - corrective - action are fully consistent with basel ii. basel ii npr i will not try to summarize the npr here today. we want all of you to read it and come to your own judgments. i would, however, like to highlight a few key points. as you know, the u. s. basel ii npr is based on the 2004 framework issued by the basel committee and adheres to the main elements of that framework. but the u. s. agencies, just as their counterparts in other countries, have exercised national discretion and tailored the basel ii framework to fit the u. s. banking system and u. s. financial environment. for example, the u. s. agencies continue to propose that we implement only the advanced approaches of basel ii, namely the advanced internal - ratingsbased approach ( airb ) for credit risk and the advanced measurement approaches ( ama ) for operational risk. the u. s. agencies also included in the npr a timetable and set of transition safeguards that are more rigorous than those set forth in the 2004 basel ii framework. for instance, the u. s. agencies are proposing three transition floors, below which minimum required capital under basel ii will not be permitted to fall, relative to the general risk - based capital rules. the first transition period would have a floor of 95 percent, the second 85 percent, and the third 80 percent. part of the justification for implementing more rigorous floors stemmed from the lessons we learned from the fourth quantitative impact study ( qis4 ) conducted in the united states in 2004. as i have said before, qis4 was not intended to reflect the ultimate impact of basel ii on u. s. institutions - - particularly since it was not based on a complete proposal and bank inputs to qis
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ahmet ismaili : approximate market value and sale, and purchase prices of immovable properties opening speech by mr ahmet ismaili, governor of the central bank of the republic of kosovo, at the conference " approximate market value and sale, and purchase prices of immovable properties ", pristina, 27 october 2023. * * * dear mr bauer, director of the office of democracy and governance, usaid kosovo dear, mrs ober, head of usaid's property governance activity dear panellists dear participants it is with great pleasure that i address you with this introductory speech, underlining the importance of the appraisal of immovable property, which affects many dimensions and important aspects of society and is one of the key factors for the development and economic potential of the country. investments in construction for residential and commercial properties on average account for a significant share of the gross domestic product, therefore, the establishment of regulatory acts for the adaptation of international standards and best practices for the appraisal of immovable property is of special importance for the republic of kosovo. the financing of properties, residential and commercial facilities, but also of businesses depends a lot on the possibilities of immovable property mortgages, which directly affects the credit level of a country's economy. the quality of the collateral used, and especially the quality of its appraisal for an adequate coverage of the risk, has an impact on the stability of the financial system. the central bank of the republic of kosovo attaches special importance to the appraisal of immovable property from the financial sector, also through a comprehensive regulatory framework that is related to several aspects of this sector. therefore, the cbk has regulated the appraisal of immovable property through specific regulations that apply to banks, other lending institutions and insurers that rely on immovable property as collateral for any purpose. appraisal of immovable property and the quality of market value data have a significant impact on all the following aspects related to financial institutions, such as : presentation of the real state of financial statements of the financial institutions ; fair presentation of health indicators of financial institutions related to reserves for covering losses, solvency, and liquidity ; accurate presentation of the value of exposures, preparation and monitoring of the residential property price indices for macroprudential supervision ; 1 / 3 bis - central bankers'speeches proper presentation of issues related to the field of formalization of the economy and prevention of money laundering ; and the correct presentation of tax
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β s flagship industry, with future prospects looking very bright o fiji has been able to attract significant investment through this industry from major international hotel name brands o other supporting factors for this growing sector are : o β’ increases in airline seat capacity with air pacific introduction of low cost carriers development of new markets this industry has also spurred growth in other sectors like the wholesale and retail trade and building and construction strength 4 : strong and stable financial system o independent central bank o sound financial system o favourable report from the financial sector assessment programme conducted by the world bank / imf o financial intelligence unit has been set up o development of a real time gross settlement system strength 5 : sustainable political stability o 2 elections since 2000 and both were declared free and fair by international observers o formation of a multi party cabinet o strong investor and consumer confidence o affirmative action policies are addressing the needs and concerns of the marginalised and disadvantaged o clarification of the role of the military
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on four major areas : first, building hong kong β s international profile and forging closer ties with market participants in the middle east ; secondly, promoting market infrastructure and establishing policies conducive to the development of islamic finance ; thirdly, promoting talent and knowledge of islamic financial principles among market professionals in hong kong ; and fourthly, encouraging the development and launch of islamic finance products in hong kong. concluding remarks ladies and gentlemen, the potential for the growth of islamic finance is clear. the foundations for its development here in hong kong have already been laid. it is essential for all of us to look beyond the current global financial turbulence and treat the development of islamic finance as an investment in the future. with this in mind, i would like to encourage all of you, whether you are regulators, financial institutions or investors, to look critically at the opportunities that lie before us. islamic finance is a new asset class that has the potential to bring new economic growth to hong kong and the region given our wealth of knowledge in financial intermediation, our experience, and our agility in adopting innovative products. so let us work together towards building a stronger and stronger link and increasing cooperation with other global players to identify and capitalise on new opportunities. today β s holding of the islamic finance forum in hong kong is a significant step on a journey that is just beginning. i look forward to travelling this road with all of you. thank you.
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that are always occurring in our markets. for developing economies, like most of ours, the changes will bring their own sets of challenges and, as securities regulators, we need to ensure that we address these challenges while taking advantage of the benefits they offer. technology is playing a vital role in every aspect of financial activity globally and has transformed the securities industry. even in our region we are witnessing secondary market trading moving to electronic platforms. fiji witnessed this with our very own south pacific stock exchange just last year. brokerdealers are now using powerful computer systems and sophisticated applications to electronically send and receive market data, research reports and company information. for most markets and market professionals, the internet has enhanced communications networks. with all these benefits for the market players, we market supervisors are left with a bis central bankers β speeches definite need to upgrade our market surveillance techniques. i am pleased to note that the use of technology to aid in the supervision of market intermediaries will be a topic covered in this seminar. ladies and gentlemen, the globalisation of securities markets has had a significant impact on the nature and level of trading, as well as the provision of related services. as the desire and capacity for cross - border trading and cross - border services have increased, so has the need to ensure that involved parties are acting properly in performing their duties. proper surveillance of cross - border market professionals and regulated firms is critical to the maintenance of the integrity of securities markets. participants should also look forward to learning about, and sharing, various supervisory tools for cross - border supervision in the next few days. in line with the developments in securities markets, the nature of the products offered by the market, as well as recent failures of related industries, it is important for regulators to be mindful of real - time risks as well as perceived risks associated with the industry, its products and its players. i am pleased that the organizers have included risk - based supervision in the seminar program. we need to be always forward - scanning for likely risks in our own markets to enable us to effectively minimize or eliminate their negative effects. in terms of market conduct, when investors have confidence in the integrity of our markets, the economic benefits can be significant and are generally well recognised. conversely, the economic damage caused by market misconduct, such as insider trading and market manipulation, can also be significant. while it is commonly accepted that such adverse activity can result in a private loss for investors, the public cost, which is the harm to the integrity of
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plans of vulnerable countries must be corrected swiftly by structural fiscal improvements. with regard to the new provisions of the eu economic governance framework that recently came into force, it is crucial that all the elements be implemented rigorously. only ambitious policies to prevent and correct macroeconomic and fiscal imbalances will foster public confidence in the soundness of policy actions, and thus strengthen overall economic sentiment. the governing council welcomes the european council β s agreement to move to a stronger economic union, which was announced on 9 december 2011. the new fiscal compact, bis central bankers β speeches comprising a fundamental restatement of the fiscal rules together with the fiscal commitments that euro area governments have made, is an important contribution to ensuring the long - run sustainability of public finances in the euro area countries. the wording of the rules needs to be unambiguous and effective. the further development of the european financial stability tools should make the operation of the european financial stability facility and the european stability mechanism more effective. the swift deployment of these tools is now urgently needed. concerning the involvement of the private sector in financial assistance for indebted countries, we welcome the reaffirmation that the decisions taken on 21 july and 26 and 27 october 2011 concerning greek debt are unique and exceptional. to accompany fiscal consolidation, the governing council calls for the urgent implementation of bold and ambitious structural reforms. going hand in hand, fiscal consolidation and structural reforms would strengthen confidence, growth prospects and job creation. key reforms should be rapidly carried out to help the euro area countries to improve competitiveness, increase the flexibility of their economies and enhance their longer - term growth potential. product market reforms should focus on fully opening up markets to increased competition. labour market reforms should focus on removing rigidities and enhancing wage flexibility. we are now at your disposal for questions. bis central bankers β speeches
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mr macfarlane : opening address to the euromoney australasian capital markets forum opening address by mr i j macfarlane, governor of the reserve bank of australia, to the euromoney australasian capital markets forum, held in sydney on 14 march 2000. * * * i would like to start by thanking mr brady for his introductory remarks, and to say that, in our view, euromoney made a very sensible choice in scheduling a capital markets forum in sydney. it recognises the significance and growth potential of our capital markets, and the generally improved prospects for this region. i see a very impressive list of speakers and participants before me and i am sure there will be a lot of fruitful discussion over the next two days. the timing of the conference is interesting in that it comes at a time when we can safely say that the asian crisis is behind us and that, with a couple of exceptions, the outlook for this region is good. perhaps it was australia β s success in withstanding the contractionary effects of this crisis that encouraged euromoney to hold its conference here at this time. whether that is the case or not, i would like to take the asian crisis and its spillover to other emerging markets as the starting point for my comments this morning. i do not wish to go over the macro - economic issues because i have already done this before. i would instead like to ask what did we learn from this crisis that was of immediate relevance to capital markets? what are the implications for developed economies such as australia? my answer to the first question is that we learnt that, for a country to play in the international financial market place, it needs a very sound financial infrastructure. i do not wish to suggest that it was the lack of this which caused the asian crisis ( the cause lay elsewhere ), but it was this deficiency which made the crisis so deep when it occurred. by financial infrastructure, i mean : β’ the body of commercial law which covers everything from the concept of limited liability to bankruptcy provisions ; β’ the conditions under which entities can issue debt and equity ; β’ the body of competition law, trade practices law and securities regulation which ensures arm β s length dealing and limits related party transactions ; β’ the supervision of the banking system, including regulation of near banks such as finance companies and merchant banks ; β’ the provision of a safe payments system ; β’ the application of sound accounting standards ; β’ the existence of a court system which is capable of timely resolution of disputes
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banking authority ( eba ) was delegated to issue secondary regulation. the guidance on cyber resilience for financial market infrastructures was published by cpmi - iosco in 2016. to ensure its harmonized implementation within the euro area, the eurosystem has delivered a cyber resilience strategy that national supervisors must adopt to enhance the cyber resilience framework of financial institutions. however, regulation alone is not sufficient to protect the financial system from cyber risks. indeed, excessive reliance on regulation may even have undesirable side effects owing to the complex interactions between different regulatory levels, such as domestic versus international legislation or economy - wide versus sector - specific rules. hence, other forms of intervention are necessary, such as cooperation. the second pillar : cooperation owing to the existence of externalities, individual intermediaries may lack sufficient incentive to contribute to the supply of a common good β cyber security β that would generate benefits for their direct competitors as well. they may be tempted, therefore, to free ride on the action of other companies and to under - invest in security - enhancing projects. in this situation, central banks, as third parties entrusted with preserving financial stability, may act as a catalyst to stimulate cooperation, centralized cyber threat intelligence and information sharing initiatives. 3 at european level, the recent establishment of the european cyber resilience board ( ecrb ) under the eurosystem cyber resilience strategy is a valuable example of virtuous cooperation among public authorities, financial market infrastructures and critical service providers to enhance the cyber resilience of the european financial ecosystem. financial authorities may also leverage such cooperative initiatives to promote effective practices and tools for cyber risk assessment, including simulations and tests, which are difficult for individual firms to implement in isolation. this is a new paradigm, in which authorities and regulated entities work closely together, complementing compliance with a collaborative approach. this allows the authorities to gain a deep understanding of the level of cyber resilience achieved and of any additional initiatives required. the third pillar : promoting risk awareness the third pillar of action focuses on the human factor, as in cyber security people are still the weakest link. for example, the spread of cyber extortion ( ransomware ) β which is becoming one of the major threats to digital businesses β can be attributed to several factors. some are technical, 4 but the threat intelligence may support financial institutions in taking the right decisions to prevent cyber attacks, effectively protect their critical assets and respond appropriately in the event of
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the domestic growth outlook has deteriorated, not only due to developments in the euro zone and us, but intensified further by labour market instability. such actions as we have seen in the mining and agricultural sectors in particular, not only amplify wage pressures, but hurt output growth and export volumes, raise the prospects for even higher unemployment and aggravate the widening in the current account deficit. the third quarter gdp figures provided the first glimpse of the negative impact from the strike action, as growth slowed from 3. 4 per cent in the second quarter to 1. 2 per cent quarter - on - quarter. mining reflected a contraction of 12. 7 per cent, bis central bankers β speeches while manufacturing grew a paltry 1. 2 per cent. the negative impacts of the strike action on growth have not fully fed through and we are likely to see further weakness in the quarter ahead. both business and consumer confidence are far from robust and it is unlikely that the demand side of the economy will provide much support. the bank has lowered its growth forecast to 2. 5 per cent for 2012, improving to 3. 6 per cent in 2014 β with risks tilted to the downside. inflation forecasts on the other hand, have been adjusted higher and the risks are tilted to the upside. the forecast do not take into consideration the new cpi weights or the rebasing that will take place in january 2013, nonetheless, the cpi forecast was revised higher to 5. 5 per cent for 2013 ( previously 5. 2 per cent ), and the forecast for 2014 kept unchanged at 5. 0 per cent. the outlook for core inflation remains relatively benign, with a peak of 5. 0 per cent in the first quarter of next year and an average of 4. 8 per cent in 2013, dropping to an average of 4. 5 per cent in 2014. the combination of low global growth, domestic challenges further hampering the growth outlook, rising wage settlements, a weaker rand and higher current account deficit β makes for a very difficult combination of factors to consider when making policy decisions. olivier blanchard in 2006 presented a paper entitled β monetary policy ; science or art β. he said that monetary policy can pretend to be close to science if it can be conducted using simple and robust rules, however, monetary policy must be closer to art if it is frequently confronted to new, poorly anticipated and poorly understood, contingencies. in that case, each of these contingencies requires fast thinking and having to make decisions, not
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design was followed, and the banks were exposed to four adverse scenarios, including a protracted recession and a period of excessive financial market volatility. the results of the exercise confirmed that south african banks were adequately capitalised to withstand significant credit losses throughout the stress scenarios, even before taking into account any mitigating action by their management teams. after the brexit referendum, financial markets in emerging - market economies were exposed to significant levels of volatility. the south african reserve bank and national treasury have been monitoring these developments and their possible implications for south africa. in a subsequent statement, the minister of finance, mr pravin gordhan, reassured the public that the banking and financial institutions in south africa were well placed to withstand any brexitrelated financial shocks. the south african financial system, including the banks and the regulatory framework which governs them, is resilient and robust and this had been clearly demonstrated during the global financial crisis. furthermore, we are starting to see tentative signs that export - orientated and importcompeting sectors may be starting to benefit from exchange rate depreciation. the most encouraging sign has been observed in the vehicle industry, where shipments abroad increased by 20, 5 per cent ( in volume terms ) in 2015 while the first few months of 2016 have shown a continuation of this upward momentum. the merchandise trade balance has improved, with a cumulative deficit of r18, 7 billion in january to april compared with r32, 0 billion in the same period a year earlier. 4. how monetary policy adjusted to the situation some may ask : β isn β t there a risk that the consecutive interest rate increases implemented by the south african reserve bank over the past year may nip this recovery in the bud? β as i β ve mentioned earlier, we must appreciate that β policy space β in south africa has narrowed. i would, however, like to expand on the bank β s monetary policy stance and how it interacts with the business cycle. bis central bankers β speeches clearly, the situation that we have faced in the past couple of years β a combination of slowing real economic growth and accelerating price pressures β is not one that central banks particularly enjoy dealing with. demand fell short of potential and our estimates show that the output gap remained negative in 2015 and is likely to widen somewhat this year. yet inflation accelerated, driven by exchange rate depreciation and a number of supply side factors, including drought and electricity supply constraints. despite a slightly improved
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stephen s poloz : opening statement before the standing senate committee on banking, trade and commerce opening statement by mr stephen s poloz, governor of the bank of canada, to the standing senate committee on banking, trade and commerce, ottawa, ontario, 25 april 2018. * * * good afternoon, mr. chairman and committee members. senior deputy governor wilkins and i are pleased to be back before you today to discuss the bank β s monetary policy report ( mpr ), which we published last week. when we were last here at the beginning of november, we saw signs that the canadian economy was moderating after an exceptionally strong first half of the year. that moderation turned out to be greater and to last a bit longer than we expected. still, it is important to recognize that inflation is on target and the economy is operating close to potential. that statement alone underscores the considerable progress seen in the economy over the past year. the slower - than - expected growth in the first quarter reflected two main issues. first, housing markets reacted to announcements of new mortgage guidelines and other policy measures by pulling forward some transactions into the fourth quarter of last year. that led to a slowdown in the first quarter that should naturally reverse. second, we saw weaker - than - expected exports during the quarter. this weakness was caused in large part by various transportation bottlenecks. some of this export weakness should also reverse as the year goes on. so, after a lacklustre start to 2018, we project a strong rebound in the second quarter. all told, we expect that the economy will grow by 2 per cent this year, and at a rate slightly above its potential over the next three years, supported by both monetary and fiscal policies. the composition of growth should shift over the period, with a decline in the contribution from household spending and a larger contribution from business investment and exports. inflation should remain somewhat above the 2 per cent target this year, boosted by temporary factors. these factors include higher gasoline prices and increases to the minimum wage in some provinces. their impact should naturally unwind over time, returning inflation to 2 per cent in 2019. of course, this outlook is subject to several important risks, and a number of key uncertainties continue to cloud the future, as was the case in november. in terms of risks to the outlook, the most important remains the prospect of a large shift toward protectionist trade polices around the globe. i should be clear that our forecast already includes
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government stimulus measures. overall economic activities consequently improved, and i would like to thank all parties for their collective efforts. on the monetary policy front last year, a greater emphasis was placed on risks to growth, which justified the accommodative monetary policy stance throughout 2012. the monetary policy committee ( mpc ) lowered the policy interest rate twice by a total of 0. 50 percentage points. the first cut took place earlier in the year, and was designed to help speed up economic recovery after the severe flood. the last easing in the latter part of 2012 was intended to provide an additional cushion against the impact of global economic slowdown and to further bolster domestic demand to sustain growth momentum. these policy decisions were deemed consistent with keeping inflation within the target range, as well as maintaining the overall financial stability. in fact, the first joint meeting between the mpc and the financial institutions policy committee ( fipc ) took place last year, where the two committees shared their perspectives and information, as well as discussed in depth potential sources of systemic risk that could arise from economic and bis central bankers β speeches financial linkages. regarding capital flow policy and in collaboration with the ministry of finance, the bot continued to relax regulations to promote outward investment and foster more balanced capital movements. a clear lesson from the recent global financial crisis is that a good conduct of monetary policy alone does not necessarily guarantee a sound and stable financial system. as a result, central banks around the world have stepped up efforts to strengthen the supervision of financial institutions, improve risk management, and place a greater emphasis on monitoring systemic risks. last year, the bot introduced the basel iii capital regulatory framework with focus on improving capital quality, increasing capital base to provide cushion in the event of a crisis, and strengthening risk management procedures, especially in the realm of credit risks. these initiatives would further strengthen the stability of financial institutions, laying the foundation for stronger financial system and economy in the longer term. to increase the efficiency of the payment system, the bot has launched the imaged cheque clearing and archive system ( icas ), for bangkok and its vicinity since february 2012. in addition, the financial consumer protection center ( fcpc ) was set up to provide information about the bot, to receive consumers β complaints regarding financial services, and to offer financial education to the public, all of which have been well received. economic outlook in 2013 looking ahead, risks to growth have declined on the back of firmer, if moderate, global recovery, and robust
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asia that is well - adjusted and integrated into the world markets will add prosperity and stability to the world economy for years to come. see henry ( 2006 ) for a critical review of the literature on theory and evidence of capital account liberalization. references 1. abreu, d. and m. brunnermeier ( 2003 ). β bubbles and crashes β econometrica, vol. 71, no. 1, pp. 173 - 204. 2. aguiar, m. and g. gopinath ( 2007 ). β emerging market business cycles : the cycle is the trend, β journal of political economy, vol. 115, pp. 69 - 102, february. 3. bannier, c. e. ( 2005 ). β big elephants in small ponds : do large traders make financial markets more aggressive? β, journal of monetary economics, vol. 52, no. 8, november, pp. 1517 - 1531. 4. henry, p. b. ( 2006 ). β capital account liberalization : theory, evidence and speculation, β nber working paper 12698, national bureau of economic research, cambridge ma, november. 5. kose, a., e. prasad, and m. terrones ( 2005 ), β growth and volatility in an era of globalization, β imf staff papers, vol. 52, pp. 31 - 63, international monetary fund, washington d. c.. 6. lane, p. r. and g. m. milesi - ferretti ( 2006 ). β the external wealth of nations mark ii : revised and extended estimates of foreign assets and liabilities, 1970 - 2004 β, working paper wp / 06 / 09, international monetary fund, washington d. c. 7. parente, s. l. and e. c. prescott ( 1999 ). barriers to riches, third walras - pareto lecture, university of lausanne, switzerland, october.
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##cured bonds issued globally in 2020 originating here. and the market is growing rapidly β the outstanding volume of green bonds issued in the eu has grown almost eight - fold since 2015. environmental, social and corporate governance ( esg ) investment is also concentrated in europe. the assets under management of investment funds with esg mandates have almost tripled since 2015, and over half of bond funds are domiciled in the euro area. 7 in addition, the euro has taken the lead as the global currency of green finance. last year, around half of the green bonds issued worldwide were in euro. there is immense potential for this role to grow once the green transition takes off worldwide and we see a generational transfer of wealth to millennials who are bound to be concerned about the future. crucially, the green bond market has already achieved greater pan - european scale. holdings of green bonds within the eu have, on average, half the home bias of conventional bonds. and this means deepening the market is a different type of challenge. we do not need to undo the past β we need to create a new framework that did not exist before. so we have a real opportunity to build a genuinely european capital market from the outset. green capital markets could also act as a catalyst for the overall structural transformation of europe, ensuring that it happens both quickly and evenly across eu countries. these capital markets would not just add debt into the green finance mix, they would also add 2 / 4 bis central bankers'speeches equity, which β as ecb research demonstrates β typically leads to more green innovation and a faster reduction in carbon emissions. 8 and they could spark the take - up of digital technologies such as smart urban mobility, precision agriculture and sustainable supply chains, which are crucial to the green transition. 9 with their pan - european reach, green markets could also help all countries to access the capital they need to finance economic transformation β not only those with the most sophisticated financial markets. that would support convergence within europe, enabling capital to flow to regions that are currently lagging behind in the transition to a more sustainable economy. in order to build momentum, the β public sector dimension β should be part of the picture. the issuance of green bonds by governments will be key to funding major infrastructure projects, which in turn helps create a pipeline of projects for the private sector to invest in. as part of the next generation eu fund, the european commission will shortly be placing β¬225 billion of green bonds, making it
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lending ". even if it is exaggerated, this impression is not good for anyone : not for the banks or their image ; not for the housing sector, as it can discourage borrowers ; and not for the overall economic assessment. the excessive β halo β around housing loans no doubt prevents us from focusing on other necessary levers for action in the sector : the supply of land ; the proliferation of regulatory standards ; and overlapping tax incentives and subsidies of a complexity unrivalled elsewhere in europe. progress is being made around these different issues but i would like to examine two questions with you here this morning : β’ hcsf ( haut conseil de stabilite financiere - high council for financial stability ) standards are an easy and recurring target for criticism, but - do we need to say it again? - the hcsf was created not by the banque de france but by french national law, namely the 2013 banking law. over the last few years, it has unanimously achieved its mission of mitigating risk amid the continuing and exceptional increase in household indebtedness, and the marked deterioration in loan maturities and debt servicing costs. moreover, its standards are not restrictive these days as banks have the capacity to lend more thanks to all of the flexibilities provided by the hcsf's decision within the 20 % flexibility margin. the total flexibility of 20 % for the main criteria β debt service to income page 10 of 12 ratio and loan maturities ( currently set at 35 % and 25 years maximum, respectively ) β was only used up to 14. 3 % on average over q3 2023. more specifically, the 6 % flexibility on buy - to - let investments is only being used up to 2. 6 %. making greater use of these flexibility margins rather than challenging them is the best way for banks to lend more... provided of course that they maintain the volume of compliant loans : we will take care to ensure that longer, riskier loans do not replace safer loans. that said, as stated in its press release of 26 september 2023 iv, the hcsf will examine possible new technical adjustments provided they do not lead to an increased risk of overindebtedness. β’ the bank rejection rate should not increase for similar levels of risk. this rate is not measured in a precise manner, however there is a widespread impression that it has risen. but if we go back to the assessment i made in the first part of my speech
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set out in basel ii thus aims to ensure that securitisation transactions now have their own economic reality, rather than seeking regulatory arbitrage as was sometimes the case under basel i. based on two fundamental principles β first, the actual nature of risk transfer and second, the significant nature of these transfers β the treatment of securitisation in basel ii applies not only to banks acting as originators and investors but also as sponsors. this treatment also takes account of the many specific mechanisms in this type of transaction, such as early amortisation clauses and credit enhancement. lastly, it introduces a requirement for regulatory capital to be tailored for certain off - balance sheet exposures, particularly liquidity facilities associated with these transactions, which under basel i were generally exempted of any capital charge. second, by reinforcing the link between the capital base and the risks actually incurred, basel ii encourages banks to improve their systems for managing these risks as well as their due diligence procedures. beyond reminding banks of the basic caution required when extending credit, this encouragement is all the more useful in that banks now often play a role in securitisation transactions for which the underlying assets, for example housing loans, may be initiated by unregulated entities, that are not always accountable for their risk analysis and pricing. in other words, the weaker the discipline surrounding the granting of a loan the stronger banks β diligence procedures needs to be. thirdly, basel ii gives banks and supervisors a vital tool, pillar 2, with which to assess the risk profile of institutions and in particular to take account of certain risks that are sometimes difficult to quantify but whose impact can be great. by way of example, i shall merely mention refinancing risk and reputational risk. pillar 2 thus enables banks, through the determination of the level of economic capital and supervisors, via for example an increase in capital requirements, to ensure that all of the risks incurred are appropriately covered. fourth, basel ii sets out to promote stress tests as one of the tools for managing and assessing risks. this is very important in dealing with the turmoil like that we are currently experiencing. basel ii stipulates that the stress tests conducted by banks must incorporate the effects of a large increase in credit and market risks as well as those of a rise in liquidity risk. the aim is to ensure that banks hold sufficient capital to absorb severe shocks. fifth and last, basel ii aims to substantially reinforce transparency and market discipline.
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mark carney : summary of the latest monetary policy report opening statement by mr mark carney, governor of the bank of canada, at a press conference following the release of the monetary policy report, ottawa, 23 october 2008. * * * good morning and thank you for joining us. before i discuss today's monetary policy report, which reflects the bank of canada's latest thinking on the economy, i would like to say a few words about the global financial crisis. we realize that this has created a great deal of uncertainty and stress. we understand the severity of the situation, and we are taking action to address it. these problems originated outside of our borders, and the primary solutions to correct them must take place there as well. that is why we are working so closely with our international colleagues and why the g7 plan of action is so important. many international banks need substantial additional capital, and efforts to provide this capital are now under way in earnest. in canada, our financial system is sound, and our financial institutions are already well capitalized. we are nonetheless affected by global developments. that is why the bank of canada has taken extraordinary measures to provide liquidity. this will aid the ongoing functioning of our financial system during this time of stress, and we will continue to provide additional liquidity for our financial institutions as long as conditions warrant. it is important to remember that canadian monetary policy remains firmly focused on the bank of canada's mandate to maintain low, stable, and predictable inflation. we know through long experience that this is the best way to promote the economic and financial wellbeing of canadians. let me turn to today's monetary policy report. in it, we note that three major interrelated global developments are having a profound impact on the canadian economy and making the outlook for growth and inflation more uncertain than it was at the time of the july monetary policy report update. first, the intensification of the global financial crisis has led to severe strains in financial markets. the associated need for the global banking sector to continue to reduce leverage will restrain growth for some time. second, the global economy appears to be heading into a mild recession, led by a u. s. economy already in recession. third, there have been sharp declines in many commodity prices. the bank expects growth to be sluggish through the first quarter of next year, then to pick up over the rest of 2009 and to accelerate to above - potential growth in 2010 supported by improving credit conditions
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becoming increasingly relevant. we are an inflation - targeting central bank, and we target total cpi inflation β calculated using a basket of goods and services that represents what canadians typically buy. but parts of the overall cpi basket are sometimes highly volatile in ways not related to broader price pressures β this can be the case for gasoline and food prices. that β s why policy - makers like to look at what we call β core β inflation to gauge persistent price movements. core inflation provides a sense of the underlying trend in total cpi inflation and relates more closely to the balance between demand and supply in our economy. in practice, there are different ways to measure core inflation. traditionally, central banks in many countries have measured core inflation by excluding volatile components like food and energy. 1 the drawback of these exclusionbased measures is that the components that are volatile can change over time β something we have experienced in a big way in the last couple of years. we continue to monitor various exclusion - based measures of core inflation, but since 2016, the bank has focused on three more - statistical measures of core inflation. cpi - median and cpi - trim strip out whatever is volatile at the time. the third measure, cpi - common, is based on a statistical technique that captures the 1 cpix is an example of an exclusion - based measure of core inflation. it excludes eight volatile components of the cpi and the effects of changes in indirect taxes. the bank of canada used cpix as its primary measure of core inflation from 2001 to 2016. - 7common component in the price changes across many goods and services. this captures the idea that inflation reflects a general increase in prices. we use three measures of core inflation because no single measure is best. depending on the circumstances, one may be a better indicator of inflationary pressure, and their diversity is their strength. with inflationary pressures as strong as they are, all three measures have risen. they currently range between 4. 8 % and 5. 7 % ( chart 5 ). what they are telling us is that even after taking out components in the cpi that are volatile or don β t reflect generalized changes in prices, inflation is running about 5 %. that β s too high. we can also see that our core measures have yet to decline meaningfully even though total cpi inflation has come down in the last couple of months. going forward, we will be watching our measures of core inflation closely for clear evidence of a turning point in underlying inflation. chart 5 :
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they will face in severe but plausible scenarios and then demonstrate how they will remediate any disruption in a timely manner. the experience gained from this testing can then inform how firms monitor risks to their operational resilience and increase the maturity of their overall processes. policy interactions for the recent march 2022 deadline, firms had to meet the first two of these elements, namely identifying the ibs and setting impact tolerances. looking ahead to the next key deadline, which is in 2025, firms will have to prove that they are able to remain within the impact tolerances that they have set out, and this is where the assurance gained from high quality testing will be key. i would also like to highlight the interaction of these expectations with the pra β s outsourcing and third party risk management policy2, which was published at the same time as the policy on op res. my former colleague lyndon nelson gave a speech last year3 setting out how the approaches in the two policies complement each other. in his remarks he very clearly stressed that whilst firms can outsource services, their boards and senior management cannot outsource their ultimate accountability and responsibility for their resilience. our op res policy further emphasises this point. the identification of ibs, determining the maximum tolerable level of disruption to those services and taking measures so that firms can remain within those tolerances under severe but plausible scenarios, means firms and their boards need to assess in detail the dependencies that they have on other parties. 2. our initial supervisory assessment of firms β progress having provided a brief summary of the policy, i wanted to share some initial feedback on the progress that uk banks and building societies ( firms ) have made in meeting our expectations. we are still at a relatively early stage in our analysis and engagement with firms, with it being less than a month since we have received the initial responses from firms. so i want to emphasise that this initial feedback will be preliminary, and we won β t at this stage be able to say what β best in class β looks like for each aspect of the policy. however, there are some important 2 / 6 bis central bankers'speeches themes that are already emerging from our review of the board - approved lists of ibs and impact tolerances which we received. findings on important business services identification on ibs, our current view is that firms have generally made positive progress against our expectations for identifying these services. this is good to see and reflects well on the
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njuguna ndung β u : increasing the level of financial inclusion in kenya remarks by prof njuguna ndung β u, governor of the central bank of kenya, at the african rural and agricultural credit association ( afraca ) international exposure visit to kenya, kenya school of monetary studies, nairobi, 5 may 2014. * * * mr. saleh usman gashua, the secretary general, afraca ; mr. isaac awuondo, group ceo, commercial bank of africa ; distinguished participants ; ladies and gentlemen : it is my honour to extend a warm welcome to all of you to nairobi and specifically to the kenya school of monetary studies ( ksms ). i note with satisfaction the continued partnership that the african rural and agricultural credit association ( afraca ) and ksms have established. as afraca aspires to promote quality financial services to the rural and agricultural communities in africa, it is complemented by ksms β s vision of being a world class research based capacity building institution for the financial sector in africa. ladies and gentlemen : in an effort to confront poverty, that currently afflicts more than 1 billion people in the world, most of whom are in the developing countries, financial inclusion has been seen as one of the channels that can significantly reduce poverty sustainably. this is because access to financial services by the poor provides a safe haven for their savings and widens their economic opportunities through savings - investment cycles. however, in africa and other developing countries in asia and latin america, 90 % of the population do not have access to financial services. closer home, 80 % of the adult population in sub - saharan africa do not have access to financial services ( cgap, 2011 ). in this regard, for the world and africa in particular to catapult the efforts to reduce poverty, concerted action to increase access, uptake and use of financial services should be rolled out. ladies and gentlemen : several reasons have been put forward to account for the low level of financial inclusion in africa. key among these reasons are poverty, irregular income flows, high levels of financial illiteracy, high financial costs, social and cultural beliefs, and underdeveloped financial markets. acknowledging the important role that financial inclusion plays in economic development, none of the cited barriers to financial inclusion is insurmountable. what is required is for financial service providers, the government and its agencies as well as the consumers to jointly contribute in eliminating the barriers
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assets, the increase was of the order of 1 pp between these dates, to 5. 8 %. the increase in capital has meant a notable extension of absorption capacity for the losses that will emerge as a result of the growth of bad debts that the crisis will cause. almost half this total amount of capital is in the form of buffers above the regulatory minimum level. these may be released, as i will explain later, as part of the prudential response to the crisis should it prove necessary. the amount involved - some β¬90 billion could cover a volume of losses equivalent to almost twice the current volume of doubtful loans in the system, i. e. approximately 8. 2 % of the total credit to the resident private sector. as i said, the risks to financial stability have been mitigated by the various economic policy measures adopted. in particular, these measures should provide for more benign developments in npls by directly supporting the financial position of households and firms and through macroeconomic stimulus. moreover, the aforementioned absorption capacity for losses arising through npls is strengthened when the positive effect of credit moratoria and of the government - approved programme of guarantees for firms is taken into consideration. in the case of temporary moratoria set in place both by the authorities and by banks themselves, these should help enable those households most affected by the crisis to face this critical period with greater peace of mind. at the same time, they provide for containment of npls in the short run and, foreseeably, also in subsequent phases, provided that a portion of these more vulnerable households can gradually regain their habitual levels of income. three clarifications are, in any event, called for regarding the general situation of the financial sector and the potential impact of the crisis on it. first, the figures for the 2020 decline in gdp reflected in the macroeconomic scenarios i have outlined would entail the biggest economic contraction in spain for a single year in recent history. they also exceed the assumptions of any stress test performed on the banking sector in the past. this will give rise to an increase in the npl ratio, albeit on what is still an uncertain scale. on banco de espana estimates, a 1 pp decline in gdp has, on historical averages, given rise to a 0. 7 pp increase in the npl ratio. that said, the scale of the decline in output projected at present is very high, which might give rise to a proportionately greater effect. it is also true that
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it is a matter of concern that the country continues to make only slow progress in areas such as β innovation β and β business sophistication β, both of which are expected to be key to meeting future developmental objectives. furthermore, it should be acknowledged that, even when the changes have been significant, they are not all negative. in particular, it is encouraging that there is significant progress in the β goods market efficiency β category, where the rank has improved markedly, from position 93 in 2008 to 68, although it is a deterioration from last year β s rank of 58. this can be seen as a reflection of the early gains from recent initiatives to improve the business climate. since bis central bankers β speeches these reforms remain work - in - progress, we should be able to maintain momentum so that further advances can be anticipated with some degree of confidence. the report further indicates that the decline in the overall ranking is concentrated in five areas. these are : infrastructure, macroeconomic environment, health and primary education, labour market efficiency, and technological readiness. i have decided to focus on only three of these pillars, in part because the lacklustre rankings are glaring for the three - year period to - date. first, β infrastructure β : the steep decline from 52 in 2008 / 09 to 92 is worrying, especially at a time when government spending in this particular area has been so extensive. hopefully, this investment will soon bear fruit when the beneficial externalities of upgraded roads and improved electricity supply unfold. nevertheless, this serves as a timely reminder of the importance of both investment and adequate provision for maintenance. this includes a contribution by both the public and private sectors, and is especially important if we are to overcome the constraints associated with land - locked economies. second, β macroeconomic environment β : the decline in the ranking is even more pronounced than that of β infrastructure β, from 22 in 2008 / 09 to 82. i would, however, suggest that this probably exaggerates any underlying deterioration. i have reason to believe that this assessment is driven largely, if not entirely, by recent trends in the fiscal budget which, as you very well know, has registered substantial deficits in recent years, and this is coupled with an accumulation of public debt. we can take comfort in the fact that the government has initiated a medium - term programme of fiscal consolidation which, all things equal, should help reverse the deficit. indeed the relatively small decline from last year β s ranking of 74 indicates that this may
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eddie yue : opening remarks - launch ceremony for project ensemble sandbox opening remarks by mr eddie yue, chief executive of the hong kong monetary authority, at the launch ceremony for project ensemble sandbox, hong kong, 28 august 2024. * * * good afternoon everyone, and a warm welcome to you all to the launch ceremony of the project ensemble sandbox. today's event marks a significant milestone in our journey towards creating a dynamic and innovative digital asset ecosystem in hong kong. i don't think it's an overstatement to say that we are living through a transformative era in the financial industry. the rise of digital money and new technologies is reshaping the financial landscape. the central bank community has responded with its own innovation efforts around central bank digital currencies, or cbdcs, which have the potential to underpin the new digital economy. since 2017, the hkma has been at the forefront of research and innovation on cbdcs, with projects like mbridge, which has recently reached the minimum viable product ( mvp ) stage, and e - hkd, which will commence its phase 2 pilot programme shortly. but we recognise that cbdcs will not, and should not, be the only force driving innovation. tokenisation, which like cbdcs often rides on blockchain technology, also provides the foundation for innovative pilots looking at how financial transactions can be conducted through the tokenisation of commercial bank money and both financial and real - world assets. tokenisation has the potential to make financial transactions more efficient, more transparent and less costly, and may represent the future of finance. today, i would like to outline the role that the ensemble sandbox is intended to play within the hkma's broader vision of cultivating a dynamic digital asset ecosystem in hong kong. project ensemble we launched project ensemble in march this year with the aim of supporting and advancing the development of the tokenisation market in hong kong. at the core of project ensemble are two key elements : collaboration and the sandbox. as the establishment of the architecture community shows, the project brings together industry participants, regulators and innovators to shape the future of digital assets. meanwhile, the ensemble sandbox is a new financial market infrastructure that facilitates the full life cycle of a tokenised asset transaction : from the creation and trading of tokenised assets, through payment and settlement using tokenised commercial - bank deposits, to final interbank settlement through cbdc issued by the hkma. 1
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which has proved essential to growing our global financial business and underscores our legacy of innovation in financial infrastructures. however, to remain competitive in an ever - evolving landscape, we must continuously build upon this rich heritage. as financial technology takes centre stage in the future of finance, we invite you to join us in showcasing hong kong's innovative mindset and ability to conduct pioneering work in the tokenisation market. by doing so, we not only reinforce hong kong's status as a premier international financial centre, but also create an environment for new business opportunities, talent and expertise. our commitment to innovation will continue to draw global players and skilled professionals to our city, fostering a vibrant digital asset ecosystem. together, we can position hong kong as a leader in the financial technology revolution, ensuring that we remain at the forefront of the global financial landscape. thank you. 3 / 4 bis - central bankers'speeches 4 / 4 bis - central bankers'speeches
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β in its broadest sense as it relates to these risk measurement and management processes is essential to the effectiveness of these processes. finally, i want to raise some issues around accounting and disclosure of risk. if there is a single theme to my remarks today, it is simply this : keep improving, refining, and innovating in risk management. although basel ii is a remarkable achievement, and the subject of this conference, don β t let your best practices be limited by what basel ii does or requires. indeed, one of the more desirable aspects of basel ii is that it anticipates that it can evolve with best industry practices without creating a new framework. the designers have not intended to build a straitjacket, and the policymakers have insisted on this characteristic, which my colleague vice chairman ferguson has referred to as basel ii β s β evergreen β aspect. enterprise - wide risk management within financial institutions, the better and greater focus on risk measurement has helped to bridge the gap between the perspective of the traditional credit risk officer and that of the β quant. β this is no small accomplishment, and a significant advance in credit culture. if you will pardon my use of stereotypes, historically the credit risk officer has been the fellow who always says β no β because it is the conservative thing to do, while the financial modeller has been the proponent of active - trading strategies that fulfil the promise of a data - mined efficient frontier that has been estimated to several decimal places of precision. the logic of risk and return in a competitive marketplace, as measured by return on economic capital that is founded in empirical analysis, has provided both sides with a common language and set of standards. it is not unusual anymore to hear chief credit officers describe their appetite for risk in terms of risk - adjusted return on capital ( raroc ) or monitor current spreads on credit default swaps to look for market signals on borrower credit quality. with better credit cultures and improved tools, institutions can also measure and evaluate more objectively the results of their business strategies and use that information to enhance future performance. they can decide how much risk to take, rather than letting their risk profile be the consequence of other decisions. the evolution of interest rate risk management in the united states is a great illustration of how an enterprise - wide approach can help institutions customize products that better serve customers, set prices to reflect risk exposures and attain profit targets, and ensure that corporate earnings contributions are met. thirty years ago, bankers
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. as you know, once an organization gets lax in its approach to corporate governance, problems tend to follow. we have some experience in that regard. some of you may recall the time and attention that management of us banks devoted to section 112 of the federal deposit insurance corporation improvement act, which first required bank management reports on internal controls and auditor attestations in the early 1990s. then the process became routine, delegated to lower levels of management and unresponsive to changes in the way the business was being run. unfortunately, for organizations with weak governance, trying to change the culture again to meet sarbanes - oxley requirements is taking an exceptional amount of senior management and directors β time - time taken away from building the business. the challenge, therefore, is not only to achieve the proper control environment at one point in time, but also to maintain that discipline and, indeed, ensure that corporate governance keeps pace with the changing risks that you will face in the coming years. one weakness we have seen is the delegation by management of both the development and the assessment of the internal - control structure to the same risk - management, internal - control, or compliance group. it is important to emphasize that line management has the responsibility for identifying risks and ensuring that the mitigating controls are effective - and to leave the assessments to a group that is independent of that line organization. managers should be expected to evaluate the risks and controls within their scope of authority at least annually and to report the results of this process to the chief risk officer and the audit committee of the board of directors. an independent group, such as internal audit, should perform a separate assessment to confirm management β s assessment. credit risk management the evolution of a portfolio approach to credit risk management has followed a path similar to that of asset - liability management. it began in the late 1980s, in the aftermath of serious credit - quality deterioration. models and databases on defaults and credit spreads have since become more sophisticated, and loan review committees have evolved into committees that consider more broadly the various aspects of portfolio risk management. as a result, loans are priced better to reflect their varying levels of risk, they are syndicated and securitized to mitigate lenders β risk, and credit derivatives have been created to limit credit - risk exposures that are retained. on that last topic, i would be remiss not to draw your attention to a recent consultative paper on credit - risk transfer issued by the joint forum in october. this
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opening remarks bot β s policy direction on fintech development bangkok fintech fair 2018 : sme and consumer financial solutions dr. veerathai santiprabhob governor of the bank of thailand monday 19 march 2018 bank of thailand learning center distinguished guests ladies and gentlemen swasdee krub, a very good morning to you all. welcome to the inaugural bangkok fintech fair and welcome to the bank of thailand learning center. this learning center was first opened to the public in december of last year. it is not only bangkok β s newest learning center and public library but also an open space for individuals and entrepreneurs to collaborate and exchange ideas. so, it is fitting that our very first bangkok fintech fair is held at this venue. over the next two days, we will be joined by some of the top minds from thailand β s fintech and financial industry as well as regional and global leaders in financial innovation. the main discussion panels will present various issues surrounding fintech ecosystem with the focus on sme financial solutions, retail payments, and technology infrastructure ; the cybersecurity room, which is in the library, will underscore the importance of cyber - awareness and highlight key security issues, ranging from emerging threats to defensive strategies ; and the technology talk room and various presentation booths all over the venue will showcase some of the latest technologies and initiatives thailand β s fintech and financial industries are working on. 1 - 7 ladies and gentlemen, on the program, this morning i am supposed to talk about bank of thailand β s policy direction on fintech development. before i do so, i would like to take a step back and focus on three key words, which i believe are imperative for formulating financial sector policy for thailand and the region as a whole. these three key words are productivity, immunity, and inclusivity. first, an emphasis must be placed on productivity as uplifting productivity is a critical requirement for long term growth of an economy. for one, at current stage, many countries in our region are facing structural transformation of aging workforce. shrinking workforce can dampen long term growth prospect. we must become more productive in order to increase output level and improve standard of living of our people. productivity is also needed to boost competitiveness of businesses as expanding global trade network and emergence of large e - business platforms have introduced new competitors into our business landscape. moreover, roles of banks could be challenged as sharing financial platforms gain prominence in the modern economy, and new fintech firms
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of these solutions lead to lower cost of financial services, greater financial access, and greater opportunity for the public. ultimately, β fintech β can help unlock massive potential of our people and businesses and be a powerful tool for thailand and developing countries to improve on productivity, immunity, and inclusivity of the financial system as well as for the whole economy. ladies and gentlemen, the theme of our very first bangkok fintech fair focuses on smes and consumers, because these two groups face various challenges and can benefit greatly from the adoption of fintech. for thailand, smes represent the majority of firms and make up over 80 percent of total employment. many smes struggle to gain access to finance and payment services, which, on one hand, can be attributed to poor financial health due to loss of competitiveness. on the other hand, many smes lack the financial management skills and collateral needed for funding, and their 5 - 7 cost of finance remains high. meanwhile, the thai public is facing big hurdles of low long - term savings and high household debts, with thailand having household debt to gdp ratio amongst the highest in the region. many households lack access to efficient and low - cost financial services, be it the deposit, payment, insurance or loan products. these people need to be better served by our financial system to be able to unlock their potential, improve standard of living, and ensure their financial security as they age. despite many challenges, i am delighted that exciting developments and initiatives are taking place in thailand and around the region using fintech to address these problems. allow me to highlight some of these initiatives. we have : accounting service applications for smes and start - ups on cloud platforms online mortgage refinance portals that help select the best refinancing option for mortgage clients real - time and low cost cross - border money transfer and remittance platforms biometric verifications for e - kyc to facilitate remote access to financial services machine learning using alternative data such as social media for credit scoring real - time invoice financing through common supply chain platform standardized qr code for e - payments, which has reached nearly 1 million merchants within six months after exiting from the bank of thailand β s regulatory sandbox ; and last but not least promptpay, a real - time payment infrastructure that has facilitated electronic payments for over 39 million registered ids in thailand 6 - 7 these are just some of the solutions available for smes and consumers in our market. to this end,
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efficient. i would now like to declare this workshop officially open. bis central bankers β speeches
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##igate the conflicts of interest in financial institutions and avoid negative externalities, governments impose prudential regulations, such as minimum capital adequacy requirements for banks, and mandate a public agency to supervise financial institutions and enforce the regulations. but we also recognise that statutory bank regulation and supervision by a public agency such as the bank of uganda cannot be expected, on its own, to guarantee the sound management of banks. moreover, excessively heavy handed regulation, although it might protect depositors, can also stifle innovation and risk taking in banks, which would be detrimental to economic development. in a market economy, the onus for sound management, including the proper management of risks, must lie with the banks themselves. bank regulators cannot be a substitute for bad bank managers. as such good corporate governance is an essential complement to good bank regulation and supervision. the financial institutions act, 2004, includes a framework for good corporate governance in financial institutions, which is supplemented by a set of corporate governance regulations which were issued by the bou in 2005. uganda β s corporate governance regulations for financial institutions were influenced by the guidelines published by the basel committee on banking supervision, based at the bank for international settlements, which is responsible for formulating global standards for bank regulation and governance. the corporate governance regulations for deposit taking financial institutions in uganda focus on four key themes : i ) the fiduciary responsibilities of the board of directors ; ii ) the importance of independent oversight of bank management ; iii ) the priority which must be attached to risk management ; and iv ) the need for independent audit functions. these are also themes which receive emphasis in the king iv report, which i believe should be viewed as a complement to the corporate governance requirements which are already in place for the ugandan financial sector. the king iv report also includes features which, although not specifically covered in our own corporate governance regulations because they fall outside the ambit of prudential concerns, are nevertheless relevant for financial institutions as well as non financial corporations ; these include the importance of corporations establishing responsible and transparent tax policies and organisation wide remuneration policies. the king iv report should help to strengthen standards of corporate governance both in the financial sector and in the non financial corporate sectors of our economy. thank you for listening. prof. emmanuel tumusiime mutebile governor
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as 0. 4 percentage points higher per year during 2003 - 2008 if the government β s target to halve sick leave is achieved. this means that the number of hours worked will increase by 0. 8 instead of 0. 4 per cent a year. public finances would then be improved by sek 45 billion, which could be used for reforms - or for repayments on the central government debt and thus create increased scope for future borrowing. if immigrants participated in the working force to the same extent as swedes, it would provide a further contribution to the number of hours worked of 0. 1 percentage points a year. monetary policy and wage formation the labour supply thus comprises a problem both in the long term and closer to hand. if this cannot be resolved through structural measures that increase the labour supply - e. g. through less sick leave being taken, increased working hours per employee or by labour force immigration - the riksbank may be forced to subdue demand in the economy by raising the interest rate. the labour market β s ability to manage wage formation will be tested as early as next year, when actual growth is supposed to be in line with potential growth. of course, we do not believe that resource utilisation will put any great pressure on prices and wages so soon, but as economic activity strengthens, greater demands will be made on social partners to show restraint. the municipal workers β union β s demand for relative wage changes could also entail a problem in terms of potential contagion effects. wage costs are expected to increase this year by just over 4. 5 per cent, which is higher than the swedish economy can manage in a longer perspective. if the social partners do not succeed in accommodating the municipal workers β union β s wage demands, there is a risk of increased inflation. another challenge for wage formation is the government β s employment target, which entails 80 per cent of the working population having a job. achieving this requires reforms to increase the labour supply. moderate wage demands could hasten the adaptation to the higher rate of employment. the explanation for this is that in a small, open economy like sweden, the profit share of the value added is determined by international conditions and the prevailing production technology. in the short term, the labour market situation and negotiating strength can affect the relative profit shares and wage shares in the economy, but in the long term a high rate of wage increase will only lead to lower employment and production without affecting real wages and profit
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gordon thiessen : the economic situation in canada and the prospects for inflation opening statement by mr gordon thiessen, governor of the bank of canada, before the house of commons standing committee on finance, ottawa, on 16 may 2000. * * * mr chairman, and members of the committee : it is always a pleasure to appear before you. since other parliamentary business precluded my appearance before you last fall, i especially welcome this opportunity to discuss the economic situation in canada and the prospects for inflation. last week, we released our 11th monetary policy report. since our november report, the canadian economy has outperformed expectations. bolstered by vigorous external and domestic demand, canada β s economic expansion strengthened in the second half of 1999 and into early 2000. the buoyant us economic picture, combined with canada β s high levels of business investment and solid employment gains, augurs well for continued strong growth in canada. given the strong momentum of demand, the bank of canada has raised its projection for growth in 2000 to a range of 4 to 4. 5 %. the trend of inflation in canada over the past six months has been lower than expected and is among the lowest in the industrial countries. nevertheless, pressures on capacity will likely intensify through the year. consequently, we expect the trend of inflation, as measured by the consumer price index excluding food, energy, and indirect taxes, to rise gradually to close to the middle of our 1 to 3 % inflation - control target range. to keep this core rate of inflation steady near 2 %, some deceleration in economic expansion or a more rapid increase in productivity and production capacity will be required during 2001. when it comes to the production capacity of the economy, there is currently even more uncertainty than usual. the lower - than - expected rate of core inflation would suggest that conventional measures may be underestimating the economy β s capacity to produce goods and services without adding to inflationary pressures. while the conditions that would permit an increase in productivity growth and in capacity have improved substantially in recent years, there has so far been no significant hard evidence of such an increase. this makes judging the balance between aggregate demand and supply in the economy an even greater challenge than usual for monetary policy. the other main risks to canada β s economic outlook include the possibility that the momentum of aggregate demand from the us economy will continue to be stronger than expected and the likelihood of a buildup of inflationary pressures in the united states spilling over into
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gertrude tumpel - gugerell : the future of reserve currencies speech by ms gertrude tumpel - gugerell, member of the executive board of the european central bank, at the saint petersburg international economic forum, saint petersburg, 6 june 2009. * * * ladies and gentlemen : it is my pleasure to participate in this panel of distinguished experts. in particular, i am pleased by the fact that the organisers have gathered around this table both officials from international organisations, central banks and sovereign wealth funds as well as representatives from the academia and the private sector. we are here to discuss a topic which to some may appear as a technical issue for reserve managers but which is indeed broader as it may have repercussions on the global economy and the international monetary system. let me focus in my remarks on the future of reserve currencies on three aspects of the issue. first, i will describe how we assess at the ecb the use of the euro in foreign reserve portfolios. secondly, i will briefly recall the available evidence on the use of the euro in foreign exchange reserves with a focus on recent developments during the global financial crisis. finally, i would like to share with you some general reflections on the key characteristics of international reserve currencies. in general, the international use of currencies is a market - driven process which is determined by independent decisions of private agents and public entities. the ecb takes a neutral position on such matters, i. e. it neither promotes nor hinders the international use of the euro or other international currencies. in the context of reserve currencies, history has shown that the currency composition of global foreign exchange reserves has often evolved very gradually and might be subject to considerable inertia stemming for example from anchor currency and liquidity considerations by central banks reserve managers. can we underpin such considerations also with data for the ten years following the introduction of the euro? the only reliable source on the currency composition of foreign exchange reserves at the global level is imf data which cover only around two thirds of total reserves and do not include assets managed by sovereign wealth funds. let me therefore use this opportunity to encourage more central banks and sovereign wealth funds to disclose such information β on a confidential basis β to the imf. the central bank of our host country, the bank of russia, even publishes the currency composition of its reserves in its annual report and i would like to thank the colleagues for this important russian contribution to greater
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council decided to maintain at its last meeting of 6th october. the financial crisis has required the ecb to go beyond the standard interest rate policy. let me now turn to the three market segments, i have mentioned earlier : the interbank market ; the covered bond market and the sovereign debt market. interbank market the sub - prime crisis made itself felt in interbank markets at the beginning of august 2007 when overnight rates started trading at unusually high spreads to the mro rate. this reflected some banks β perceived need to hedge against adverse liquidity risk. the collapse of lehman then transformed the money market tensions into a full - blown crisis as a vicious circle of increased liquidity and credit risk brought interbank trading to a virtual halt. money markets meanwhile became extremely segmented according to specific bank names : the uncertainty surrounding holdings and values of mortgage - related financial products shut specific counterparties out of the interbank market. in the sovereign crisis, segmentation is arguably an even more significant problem, as it occurs normally by jurisdiction. banks generally exhibit home bias in their public debt holding : as a result, counterparties β ability to trade cross - border in the interbank market becomes increasingly correlated with the perceived riskiness of their sovereign. in response to the segmentation of interbank markets, the ecb adopted several measures which essentially replace the missing intermediation in the interbank market by increasing intermediation through the central bank : first, the fixed - rate full allotment policy ; second, bis central bankers β speeches ltros with 6 - month and 12 - month maturity ; third : foreign currency operations ; fourth : a further broadening of the collateral framework. let me take them in turn. while the money market tensions in august 2007 were addressed with a few fixed - rate full allotment tenders with overnight maturity, with effect from 15 october 2008, we introduced the fixed - rate full allotment policy in all our refinancing operations for the different maturities. under fixed rate full allotment counterparties have their bids fully satisfied, against adequate collateral, and on the condition of financial soundness. the fixed rate full allotment policy has proven a very efficient way of offsetting liquidity risk in the market by ensuring banks β continued access to liquidity. it is also a very flexible tool, as counterparties can themselves control the amount of liquidity they demand. thus, a falling demand for liquidity can be seen as a sign of normalisation. the
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the world has changed. today the eu counts 27 members and 19 countries have adopted the euro. the addition of croatia and bulgaria will soon bring the latter number up to 21. along with this impressive progress, there was of course a significant loss : the u. k. opted out of the single currency from the start and has more recently exited the eu altogether. we continentals may regret those decisions but we respect them. we β ll miss great british architects of our projects, like former chancellor sir kenneth clarke, whom i can personally testify to how much he contributed. what we do sometimes regret is when britain β s vibrant debate on european issues verges on schadenfreude in relation to our own projects and ambitions. take, for instance, sir william cash, a long - standing conservative member of parliament, who at a debate on euro membership in 1997, insisted that β the euro would be extremely weak β and that β we are heading for disaster. β fourteen years later, in 2011, bill cash wrote that β the euro with its one size fits all approach and the uniformity demanded by the eu simply cannot work... the survival of the euro itself is in question due to its structural shortcomings and the inherent workings of monetary union. β well, here we are, more than a decade later, and the euro is still alive and kicking. not only has the euro survived, but it is recognised and used globally, including outside its own borders as both a store of value and a means of trade. the single currency has also proved remarkably stable, with inflation averaging 1. 7 % since its inception in 1999, compared with 4. 9 % during the two decades before. the euro has therefore helped to protect the purchasing power of european citizens, which has increased by 15 % since 1999. page 3 sur 9 moreover, the euro is not simply an elite project as is frequently charged. it is also a popular success ; it inspires trust which is the core value of a currency. the latest standard eurobarometer poll conducted in spring 2021 reported that 79 % of the population in the 19 countries using the euro believe that having the currency is good for the eu. that β s up from 66 percent a decade ago. even wellknown nationalist politicians, including in my own country, have dropped or backed - off their anti - euro stances because they have concluded that the policy is an electoral dead - end. obviously as governor of the banque de france and
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, a quick implementation of this european recovery fund is an economic must. this innovation, while still a one - off, could also imply lessons for the economic and monetary union, which from the start has lacked a permanent fiscal capacity at supranational level for macroeconomic stabilisation in deep crises. either we succeed in designing β at end β credible and coordinated countercyclical rules for national fiscal policies, or we should think about some 4 / 5 bis central bankers'speeches central fiscal capacity, reversible in its use, controllable in its size, but effective through the cycle. this should be one area of discussion in the β european momentum β which the crisis has initiated. thank you for your attention. 1 article 3. 3 of the treaty on the european union. 2 article 127. 5 of the treaty on the functioning of the european union. 3 the monetary policy strategy review : some preliminary considerations, speech by christine lagarde, president of the ecb, at the β ecb and its watchers xxi β conference, 30 september 2020 4 www. banque - france. fr / sites / default / files / medias / documents / 2020. 05. 25 _ sep _ en _ cl. pdf see blanchard & summers ( 2020 ), automatic stabilizers in a low - rate environment, aea papers and proceedings, vol 110, may. 5 / 5 bis central bankers'speeches
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mr meyer discusses the new challenges for monetary policy identified at the jackson hole conference remarks by mr laurence h meyer, member of the board of governors of the us federal reserve system, before the department of finance lecture series, university of missouri, columbia, missouri on 12 october 1999. * * * each year in late august, for the last 23 years, the federal reserve bank of kansas city has hosted a conference where central bankers from around the world tackle issues relevant to the setting and implementation of monetary policy. they are joined by academics, former federal reserve governors, and private - sector economists. a core group returns every year and contributes a particularly strong sense of camaraderie. the lure of the conference is the extraordinary combination of an excellent choice of topics, a high level of formal presentations and discussions, the opportunity to engage in a series of more informal conversations over coffee, at meals, and on hikes, and to do all this in the shadow of the tetons. i told tom hoenig, the president of the kansas city fed, that when i was considering whether or not to accept the nomination to join the board of governors, the deciding factor was the prospect that, by doing so, i would receive a lifetime perk of an invitation to the jackson hole conference. the themes are always interesting, but i found this year β s conference particularly stimulating β so much so that i decided to use the presentations and discussions at jackson hole as the organizing framework for today β s lecture. the title of this year β s conference was β new challenges for monetary policy. β the papers described both the emerging consensus about the objectives and strategies underlying the conduct of monetary policy and highlighted a number of new challenges. in the first section of today β s lecture i will outline the framework and identify the objectives of monetary policy, describe the operational procedures used to conduct monetary policy, and discuss the strategy for carrying out monetary policy to achieve those objectives. a number of participants at the conference suggested that there was an emerging consensus about the appropriate strategy β specifically, flexible inflation targeting. then i will turn to the new challenges for monetary policy identified at the conference. each is illustrated by current or recent experience around the world. first, does a low - inflation environment β and specifically the possibility that nominal interest rates might decline to zero in such an environment β constrain the effectiveness of monetary policy, and if so, how can monetary policy adjust to maintain its effectiveness? second, how should monetary policy respond to movements
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one step further. under a currency board, the threat remains that the government will abandon this arrangement and devalue the currency or let it float. dollarization increases the commitment of a country to a fixed exchange rate. under dollarization, a country uses dollars for its domestic currency. it therefore faces dollar interest rates, although these rates will not necessarily be the same as those prevailing in the united states. once again it has given up independent monetary policy. the advantage of this regime is that it might reduce risk premia that remain in domestic interest rates under a currency board that reflects the risk that the currency board might be abandoned. of course, a country could reverse dollarization as well, but the costs of such a move would be very great. at the jackson hole conference, eichengreen and hausmann presented a discussion of the choice between flexible and very fixed exchange rates for small open economies. they suggested that a problem that besets many such economies is that, because of weak institutions and a failure to pursue sound policies, neither the government nor private citizens can borrow long - term or abroad in their domestic currency. the result is dangerous portfolio mismatches β long - term projects are financed with short - term debt and / or domestic projects are financed with foreign currency loans. in either case, the government and private citizens are subjected to the risks of unexpected changes in short - term interest rates and / or to the risks of a change in exchange rates. a currency board or dollarization arrangement, in such a case, might reduce the risks associated with such mismatches. as a result, the country might be able to reduce its risk premium, lower its vulnerability, and increase its access to long - term and foreign finance. in my view, the underlying problem, however, is often the mismatch between the speed with which an emerging market economy participates in the global economy and the speed with which its institutions and policies adapt to global norms. the best choice over time would appear to be to develop robust domestic institutions and pursue sound policies, including a disciplined monetary policy, and adopt a flexible exchange rate regime. an increased reliance on foreign direct investment relative to short - term portfolio capital might also be desirable. the real question is how to get there from where many emerging market economies find themselves today. there are, i believe, many advantages to a flexible exchange rate regime. it avoids the problem of choosing the right level at which to fix the exchange rate. it allows exchange rates
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financial security. 1 / 4 bis - central bankers'speeches in addition to broad - based outreach, i would also like to emphasize the opportunity that financial education provides to advance our shared goal of financial inclusion. today, i will discuss three important aspects of the fed's inclusion efforts that helps to inform policies and practices designed to advance financial access and capability : access to a banking account ; the availability of responsible small - dollar lending products for short term financial needs ; and expanded reach of financial initiatives to indigenous and native communities to more effectively assist in providing access to the broader financial economy. we have made significant progress in providing greater access to bring the unbanked into the insured depository space. our research gives us insight into the success of recent efforts to expand access among unbanked populations. for example, the federal reserve's survey of household economics and decisionmaking ( shed ) showed in 2021 that 94 percent of adult survey respondents have a bank or credit union account, and the federal deposit insurance corporation's 2021 national survey of unbanked and underbanked households found that 95. 5 percent of all u. s. households were banked, which is the highest level since the survey began in 2009. 2 the fed's shed survey shows similar results. from 1989 to 2019, the percentage of u. s. adults with bank accounts rose from 85. 6 to 94. 5 percent. this is also true in the increased number of bank accounts owned by members of minority groups over the same time period, especially for black and hispanic consumers. black adults increased bank account ownership from 56. 7 to 86. 8 percent and hispanics increased from 63. 5 to 89. 5 percent. though these surveys show significant improvement over the past decades, there is still further progress to make. in fact, our shed survey data helps to identify characteristics of those who may choose not to use a deposit account or do not have access to one. the most recent survey results show that income and education may also play a factor - among the respondents, 24 percent of adults who have not earned a high school diploma and 17 percent of adults making less than $ 25, 000 a year did not own a deposit account. we also know that there are many factors that may lead consumers to choose not to engage in the banking system, whether from a distrust of the banking system or prior mishandling of a banking relationship being an impediment to account ownership. these broader gains in the number of consumers
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. telephone communication expanded, and digital electronic computing came into use. taken together, these advances allowed an ever - broadening set of products to be traded internationally. in the policy sphere, tariff barriers - which had been dramatically increased during the great depression - were lowered, with many of these reductions negotiated within the multilateral framework provided by the general agreement on tariffs and trade. globalization was, to some extent, also supported by geopolitical considerations, as economic integration among the western market economies became viewed as part of the strategy for waging the cold war. however, although trade expanded significantly in the early post - world war ii period, many countries - recalling the exchange - rate and financial crises of the 1930s - adopted regulations aimed at limiting the mobility of financial capital across national borders. several conclusions emerge from this brief historical review. perhaps the clearest conclusion is that new technologies that reduce the costs of transportation and communication have been a major factor supporting global economic integration. of course, technological advance is itself affected by the economic incentives for inventive activity ; these incentives increase with the size of the market, creating something of a virtuous circle. for example, in the nineteenth century, the high potential return to improving communications between europe and the united states prompted intensive work to better understand electricity and to improve telegraph technology - efforts that together helped make the trans - atlantic cable possible. a second conclusion from history is that national policy choices may be critical determinants of the extent of international economic integration. britain's embrace of free trade and free capital flows helped to catalyze international integration in the nineteenth century. fifteenth - century china provides an opposing example. in the early decades of that century, the chinese sailed great fleets to the ports of asia and east africa, including ships much larger than those that the europeans were to use later in the voyages of discovery. these expeditions apparently had only limited economic impact, however. ultimately, internal political struggles led to a curtailment of further chinese exploration ( findlay, 1992 ). evidently, in this case, different choices by political leaders might have led to very different historical outcomes. a third observation is that social dislocation, and consequently often social resistance, may result when economies become more open. an important source of dislocation is that - as the principle of comparative advantage suggests - the expansion of trade opportunities tends to change the mix of goods that each country produces and the relative returns to capital and labor. the resulting shifts in the structure of production
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durmus yilmaz : financial education and awareness β challenges, opportunities and strategies speech by mr durmus yilmaz, governor of the central bank of the republic of turkey, at the international conference on financial education and financial awareness : challenges, opportunities and strategies, istanbul, 10 march 2011. * * * distinguished minister, esteemed participants, esteemed guests and members of the press, welcome to our conference on financial education and financial awareness. as you know, these concepts have progressively come into prominence in both developed and developing countries in recent years. after a brief conceptual introduction, i will continue my speech by talking about the financial education in turkey and efforts of the central bank in this respect. distinguished participants, financial education has always been an important concept in terms of allowing individuals to manage their budgets, arrange incomes and expenditures, manage their investments and savings effectively, and protect themselves from possible losses. with the increased variety and complexity of financial products in today β s world, this issue is becoming even more important for both individuals and the financial system. on the back of globalization, the liberalization trend in economies, the easing of restrictive regulations in the financial sector and the liberalization of capital flows at international level since the early 1980s, more and more individuals participate in financial markets as investors in many countries, primarily in developing ones. in this framework, financial education assumes greater importance in terms of minimizing financial risks for those who do not have sufficient experience of capital market instruments. financial awareness supports a more rational decision - making process for individuals by improving their literacy against financial risks. increasing financial literacy will contribute to the more efficient functioning of financial markets, enhancement of financial stability and consequently the social welfare by increasing productivity in the overall economy. therefore, financial education assumes importance not only for individuals but also for giving depth to the financial system and improving market efficiency. parallel to increased financial literacy, the volume and variety of information sought by individuals from financial institutions will also increase. this will, in turn, lead to more transparency in financial markets. besides, consumers β demands for products and services that meet their needs will enable the development of creative, innovative and competitive financial products and services in financial markets. moreover, financial education will lead to an increase in the individuals β propensity to save and create a more efficient social security system. higher rates of savings will have favorable effects on investment and growth and contribute to economic development and financial stability. i would like to especially underline that financial education is not an
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abstract concept. as a matter of fact, we clearly witnessed the close relationship between financial education and financial stability in the recent global crisis. i believe that the awareness created by this crisis can be interpreted as an opportunity, as highlighting financial education will be beneficial for policy - makers, individuals and financial markets. in turkey, many institutions carry out projects with regard to financial education as a part of their responsibilities. in order to get the expected benefit from financial education programs, individuals β financial education needs that arise in different phases of their lives should be well identified. it is of great importance that financial education programs are devised in a way to meet these needs ; and the effects of these education programs are assessed in order to reshape future needs accordingly. bis central bankers β speeches due to the relationship between financial stability and financial education i have just mentioned, the central bank of turkey attaches special importance to the issue of financial education as other central banks do. as you all know, the cbt law lays down the primary objective of the central bank of turkey as maintaining price stability ; whereas taking measures to ensure stability in the financial system are stated among the main duties. in this respect, the cbt considers financial education from the viewpoint of financial stability. with our biannual financial stability report and other studies and announcements that we share with the public, we strive to raise awareness as regards the financial risks borne by households. meanwhile, we have recently accelerated our efforts on the international platform regarding this issue. the cbt is a member of the international network on financial education ( infe ) established under the auspices of the organization for economic cooperation and development ( oecd ), one of the leading organizations for financial education. within the scope of this platform, the cbt became one of the fifteen members of the national strategy on financial education subgroup, which was established in 2009. similarly, the cbt applied to join the studies of the financial inclusion subgroup under this platform ( established in february 2011 ) and also for membership in the task force on financial consumer protection that was established at the oecd. the central bank of turkey also contributes, via data collection and surveys, to international studies on financial access. within this framework, the cbt supports studies carried out by the consultative group to assist the poor ( cgap ) conducted in collaboration with the world bank. moreover, the cbt β along with other related public institutions β contributes to the efforts of the global partnership for financial inclusion ( gpfi ) initiated
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absorber - and sporadic interventions in the foreign exchange market, monetary policy has been supported by other policy tools. the strengthening of fiscal policy in recent years has been of crucial importance, given the pernicious effects that weak fiscal positions can have on inflation expectations, interest rates and the exchange rate. efforts spanning over several decades to strengthen the financial system have also been instrumental, as the latter has allowed an efficient transmission mechanism for monetary policy and a sharp increase in interest rates without significant adverse side effects on banks or other financial institutions. despite the fact that some ground still needs to be covered on the road to bringing inflation back to target, and the remaining important risks, the results obtained thus far are encouraging, especially in light of the magnitude of the shocks that have affected our economy. inflation has been on a downward trajectory over the course of 2018, with headline figures falling from 6. 77 percent at the end of 2017 to 4. 65 in june of this year, consistent with the banco de mexico β s projections. furthermore, long - term inflation expectations have remained stable, although at around 3. 5 percent. on the other hand, the recent materialization of some upside risks may imply a revision of the period over which inflation is expected to converge to the 3 percent target. it is worthwhile to highlight that economic activity has not been significantly see banco de mexico ( 2018 ) : β banco de mexico modifies its monetary policy communication strategy β, press release, 30 april. affected by the monetary policy stance, as evidenced by the 33 consecutive quarters of positive annual gdp growth recorded as of early - 2018, and expectations of an output gap around zero during this year and the next. to conclude, let me say a few words about nafta, that may contribute to understand why this is at present one of the main sources of uncertainty for the mexican economy. even though the economic integration of the mexican, canadian and us economies had been underway well in advance of the enacting of this agreement in 1994, and while some have argued that said process would have continued even in absence of nafta, 7 the key role it has played in the acceleration, deepening and widening of the linkages among its member countries over the nearly 25 years it has been active is indisputable. naturally, the main channel through which nafta has boosted the region β s integration has been trade. in fact, by 2017, the value of merchandise traded between the three member countries had nearly quadrupled
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relative to the levels registered in 1993, while bilateral trade between mexico and the united states showed a six - fold increase during the same period. in light of the above, it comes as no surprise that, with an 80 percent share of the total, the united states is the main destination for mexico β s exports, while mexico is the second largest foreign market for us goods, surpassed only by canada. taken together, us exports to both mexico and canada amount to over one third of that country β s shipments to the rest of the world. notwithstanding the breadth of the us - mexico trade relationship that may be depicted by the above figures, a more detailed look at the data reveals some additional features that are worth highlighting. mexico is among the top 2 export destinations for 27 us states, a figure similar to that of the states that count mexico as one of their 3 main sources of imports. texas, for instance, is not only the main destination for mexican exports within the us, but also overall, as it accounts for nearly 22 percent of all mexican sales abroad, a figure significantly above those for countries such as canada ( 2. 8 percent ), germany ( 1. 7 percent ) and china ( 1. 6 percent ). conversely, mexico β s imports from texas are greater than those from china, and we buy more from california than we do from countries such as japan, germany and south korea. see hufbauer, gary et al. ( 2005 ) : β nafta revisited : achievements and challenges β, institute for international economics, october. the region β s economic integration that has come about as a result of nafta goes far beyond the free international flow of goods and services. it could hardly be argued that this is just a case of three separate economies trading finished goods among them. on the contrary : they are producing many of those goods together, specializing in different stages of the corresponding production processes through the implementation of cross - border supply chains that enhance their competitiveness, both individually and jointly, in markets abroad. therefore, as in other regions of the world, intermediate goods in north america cross borders multiple times before reaching final consumers. an input - output analysis of the productive activity in mexico and the united states shows that, in both countries, around 20 percent of the total value added generated domestically by these countries β manufacturing sectors is destined to activities abroad immersed in global value chains ( gvcs ). 8 by including protective rules and procedures for cross border investors, as well as
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to promote its transformation. there is certainly much to be done. but, to conclude on a positive note, i wanted to highlight the incredible pace at which initiatives are moving and changes are being introduced. let me give you two examples. first, the ngfs was created barely two years ago, but in this very short lifespan it has managed to publish two comprehensive reports, guidance for central banks β investments and, not least, its membership has surged from 8 to 51 members and 12 observers. the second example is rather obvious : just look at the composition and topics discussed on this panel today. they would have been quite unthinkable two years ago. thank you very much. 5 / 5
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the european authorities involve a further reduction of fiscal imbalances in 2015 and 2016. in this respect, public deficit targets are set to 4. 2 % and 2. 8 % for 2015 and 2016, respectively. despite the additional efforts shown in the most recent budgetary information ( up to november 2015 ), the fulfilment of these targets is not without risks. to tackle these risks it will be important to ensure a strict implementation of the budget, both at the national and the regional levels and, if the need arises, to be ready to take the appropriate corrective measures within the framework of european union fiscal governance. but the challenges should not cloud the fiscal consolidation effort already made. this can be easily seen in the structural primary balance β s evolution, which turned around from a deficit of 5. 2 % of gdp in 2010 to an estimated surplus of 0. 6 % of gdp for 2015, according to the latest european commission figures. it is worth remembering that the bulk of this adjustment was made through a severe economic recession and under very stressed conditions in a fragmented eurozone financial market. several legal reforms to ensure budgetary discipline and sustainability have contributed to these developments. among those i would highlight the 2011 constitutional reform which enshrined the principles of budgetary discipline and fiscal sustainability the maximum legal status ; the 2012 law on budgetary stability and financial sustainability which sets these principles in spanish legislation ; and the creation in 2013 of a new independent fiscal responsibility authority. pension reform the recent pension reform aims at achieving financial sustainability of the social security system. it provides automatic mechanisms to absorb the challenges originated by the foreseen gradual ageing of the population and those from adverse developments in the economy. the most important change has been the establishment of a new mechanism for calculating the annual revaluation of pensions and the introduction of the so - called β sustainability factor β from 2019 onwards. the revaluation formula sets an annual pension increase based on the system β s budget constraints, replacing the previous mechanism in which this increase was linked to changes in the cpi. the sustainability factor is an automatic mechanism linking the initial retirement pensions to life expectancy. the spanish financial system now, i will briefly comment on several issues relating to the current situation of the spanish banking system. after experiencing a severe crisis, far - reaching reforms have been implemented in the spanish banking sector. these reforms can be summed up along three significant lines : an bis central bankers β speeches intense restructuring process in terms of size and capacity
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setting up of private refineries ; diversify the economy away from primary products and away from crude oil and natural gas ; improve other key economic and social infrastructure ; and sustain the subsisting democratic governance. the global environment for development has changed quite significantly in recent years, with the rapid growth in world trade, capital flows and information and communications technology. nigeria can benefit from these changes by providing a more conducive investment climate in the country. 6. conclusion the prospects for growth in nigeria are very bright going by the achievements recorded during the last ten years and the current reforms in the various sectors. however, for nigeria to consolidate these economic gains and move higher in the frontlines of growth and development, it must deepen reforms that improve human capital, promote high - quality public infrastructure, and encourage competition. the pillars to sustain this consolidation must include a firm fiscal policy, transparent fiscal operations, development - oriented monetary and exchange rate policies, strengthening of the financial sector and strict adherence to the rule - of - law and respect for the sanctity of contract as well as commitment to fighting corruption and corrupt practices. in all of these, nigeria has opportunity for progress. we must break away from the past to deliver a new nigeria that the future generations of nigerians would be proud of. our electoral process must not only be credible, but must be seen to be credible, since robust economic performance necessarily requires a robust political environment to happen. i thank you all for your attention. references 1. ajakaiye, d. o ( 1990 ) inter - industry linkages in the nigerian economy 1973 β 1977, niser monongraph series no 2 niser, ibadan. 2. central bank of nigeria annual report and statement of accounts, cbn, abuja. 3. ernest c. a. ndukwe : telecommunications as catalyst for a modern industrialized nigeria. 4. felix o. ayadi, et al : structural adjustment, financial sector development and economic prosperity in nigeria. 5. harrod, r. f. and e. d. domar, ( 1946 ) β capital expansion, rate of growth and employment β, econometrica, 14, april. 6. mankiw, n. g. ( 2001 ) ; principles of microeconomics ( 2nd edition ), fortworth : harcourt collegepublishers. 7. national bureau of statistics ( nbs ) 2010 issues. 8. ncema : structural adjustment programme in nigeria
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: technical proposal. 9. ndekwu e. c ( niser ) : the financial system β s role in resource mobilization and investment : analysis of financial deepening in the nigeria β s financial sector. 10. oresotu, f. o. ( 1992 ) : interest rates behaviour under performance of financial reforms - the nigerian case β, cbn economic and financial review, vol. 30, no. 2, 109 β 129. 11. sen a. ( 1999 ), development as freedom, new york : anchor books ( see chapters 1 β 3 ), pp. 36 β 37. 12. shabbir cheema, g. ( april, 2004 ), β from public administration to governance : the paradigm shift in the link between government and citizens. β paper presented at the 6th global forum on reinventing government, with a theme, towards participatory and transparent governance, 24 β 27 may 2005. 13. united nations development programme, deepening democracy in a fragmented world, new york, human development report 2002. 14. united nations development programme, governance for sustainable human development : a undp policy paper, new york, undp, 1997. 15. united nations development programme, corruption and governance, new york, undp, 1997. 16. victor e. d. β governance and challenges facing the nigerian economy : is jonathan the answer β. 17. _ _ _ _ _ _ ( 1992 ) β growth, structure and linkages in the nigerian economy β in obadan m. i. and ajakaiye d. o. ( ed ) nigerian economic development, national center for economic management and administration ( ncema ), ibadan. 18. zayyad, h. r. : privatization and commercialization in nigeria.
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system. risks do not stop at national borders, and neither should our [UNK] to address them. the work of the financial stability board in promoting global standards and facilitating dialogue among regulators is invaluable in this regard. in the case of ccyb it is a crucial task to ensure a better understanding about the appropriate balance between the macroprudential and the resilience approach. we have a unique opportunity today to share the experiences and perspectives of [UNK] fsb members with macro - prudential policies and how their institutional arrangements facilitated their implementation and coordination with other regulatory measures. but before we delve into that, we will ο¬rst hear from our keynote speaker, rodrigo coelho, on the role that institutional coordination arrangements can have in enhancing the application of both macro - prudential and micro - prudential policies to foster ο¬nancial stability, particularly on the implementation of the ccyb and pillar 2 requirements. i encourage all of you today to engage deeply in the discussions that lie ahead. this meeting is an opportunity to learn from each other β s experiences motivated by our common goal of strengthening the resilience of the ο¬nancial system. thank you, once again, for your participation. i wish you all a very fruitful rest of the day.
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banking, insurance and asset management services in botsw ana, namibia and zambia. in botsw ana, the bank β s financial position has grow n steadily since commencement of operations, in 2006. total assets increased from p268 million in june 2007 to p4. 6 billion in june 2017 ; lending increased from p197 million to p3. 2 billion in june 2017 ; w hile deposits grew from p188 million to p3. 9 billion in june 2017. the bank has, therefore, in a relatively short period, mobilised approximately p4 billion w orth of financial resources. these resources have been productively employed and distributed, in the form of loans and other credit facilities, to support real economic activity in diverse sectors across botsw ana, including consumption spending. as a regional bank and being relatively new, it is expected that the bank and its design of products w ill continue to be w ell aligned to contemporary domestic market requirements. notably, for the area around maun, this branch of bank gaborone is invariably expected to support the various facets and business value chains in the tourism and agricultural sectors associated w ith this region. in this w ay, bank gaborone w ould be contribut ing to sustainable economic activity and inclusive grow th in this part of botsw ana. it is w orth pointing out that the tourism industry, of w hich maun is a significant player, accounted for 3. 9 percent of the country β s gross domestic product ( gdp ) in 2016, through industries such as hotels, restaurants, travel agents, airlines and other passenger t ransportation services. the same industries contributed 2. 6 percent to total employment in 2016. it is therefore expected that the provision of additional or enhanced financial services, in the form of transactional accounts, savings products, credit ext ension, payments and other banking services offered by bank gaborone, as w ell as other players of course, should help sustain the contribution of the tourism sector to gdp. in turn, this should foster economic diversification and broad - based private sector development, both of w hich are critical for endurable economic grow th and raising living standards of our people. to the maun residents and north west community, in general, w e should recognise that the maun branch of bank gaborone is a business that needs a good and durable customer base in order for it to be profitable and sustainable.
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broader than that. non - bank financial entities such as investment funds, insurance companies and pension funds also take on risks and can amplify the wider financial cycle. so it is more important than ever that macroprudential policies are broadened to cover these non - bank financial entities as well. financial stability and macroprudential policy in the economic and monetary union the euro area β s ongoing economic recovery faces renewed global headwinds that are weighing on the economic outlook. uncertainties related to the rising threat of trade protectionism, vulnerabilities in emerging markets and geopolitical factors, including those related to brexit, make the economic environment more challenging. 3 in this environment, the ecb β s accommodative monetary policy is necessary for inflation to remain on a sustained path towards levels that are below, but close to, 2 % over the medium term. 4 at the same time, the environment indicates that risks to economic growth are tilted to the downside. 1 / 6 bis central bankers'speeches this reinforces the need to strengthen the balance sheets of our financial and non - financial firms to withstand any shocks that may occur. fortunately, banks have done exactly that over the last decade. capital ratios of euro area systemic banks increased from 10. 4 % at the end of 2010 to 14. 3 % by the end of last year ( in terms of common equity tier 1 ). this increase has been facilitated by the general recovery, supported by the ecb β s accommodative monetary policy, and is a reaction to increased market pressures and additional macroprudential requirements. indeed, macroprudential policy aims to maintain a strong and stable financial system. it has become a crucial complement to the ecb β s monetary policy which is geared towards achieving price stability. while the current accommodative monetary policy is supporting the economic recovery, it may generate undesired side effects in the form of excessive risk - taking. macroprudential policy can counter these excesses with its targeted toolkit. by imposing additional requirements, it can restrain lending to excessively risky borrowers or create the necessary loss absorption capacity in specific sectors or countries. institutional set - up of macroprudential policy within european banking supervision this more targeted application of macroprudential policy to individual countries is also reflected in its institutional set - up. national authorities are first in line to counter emerging systemic risk in a timely manner by deploying the available
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estate holdings. their exposure to these assets has reached almost 10 % of total investment and is expected to rise further. 14 as some of these assets are highly illiquid, the portfolio shift towards these assets may also increase insurers β liquidity risk beyond credit risk. but this is only one example, where the credit risk on non - banks β balance sheets is coupled with liquidity risk. in fact, liquidity risk is particularly an issue for some bond and equity funds that invest in less liquid assets, while offering shortterm redemptions to their investors. these funds are vulnerable to sudden changes in investor sentiment, so - called β run risks β. some recent cases were a reminder that investors in less liquid funds might indeed run if they fear deterioration in asset quality or liquidity. 15 while recent instances happened in a generally stable market environment and did not have systemic repercussions, liquidity problems might have been larger in an adverse market environment and with many funds affected simultaneously. if anything, the liquidity mismatches observed in bond and equity funds call for greater scrutiny of market practices and a possible review of the regulatory framework to ensure the sector β s resilience also in stressed market conditions. more generally, through increased risk - taking and leverage, non - banks may currently be contributing to the cyclical under - pricing of risks and the amplification of asset prices. if these risks were to unwind in a disorderly manner, this could lead to funding flows drying up and affect the funding conditions of the real economy more broadly. moreover, distress in the non - bank sector could spread to the banking sector as well, due to the strong links between the two. for instance, euro area non - banks hold over one quarter of bonds and shares issued by euro area banks. i have argued in the past that, from a regulatory perspective, we need to establish at least two lines of defence for evolving risks. first and foremost, the non - bank financial sector needs to have solid prudential standards. but this will not be sufficient if risks evolve more broadly and across institutions. we will also need an extension of the macroprudential toolkit to the non - bank financial sector, in order to provide the authorities with the means to address risks at system level. while the macroprudential framework for banks is relatively well developed and provides authorities with tools to address cyclical and structural systemic risks, the framework for nonbanks is still in its infancy and
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however, limiting credit and liquidity losses in the case of failure may not be effectively ensured by using these mechanisms, because they were not designed to take into account the special nature of credit institutions. second, even if a well - designed special bank resolution or insolvency regime is in place in a particular country, this does not guarantee that cross - border banks can also be dealt with effectively. a cross - border crisis situation involves several national authorities, of course, each having different mandates regarding when and how they can intervene. even more importantly, these authorities may have different objectives to pursue, but are in all cases accountable to national taxpayers and depositors. bis central bankers β speeches third, and closely linked to the previous two points, the lack of private financing arrangements also poses a significant barrier to effective resolution. even the best resolution framework needs some funds to finance the measures. however, as long as strong interlinkages exist between supervisory and crisis management policies on the one hand and fiscal policies on the other, cooperation will be hard to ensure among national authorities. as an alternative, there are many possible forms of private financing : one could use the funds of the deposit guarantee scheme, set up an ex ante resolution fund, or ensure that the creditors contribute to recapitalisation. the bottom line is that the lack of such a means ultimately undermines the effective implementation of resolution measures. initiatives at the global level work at the international level to address these issues is ongoing and there are some promising developments. the financial stability board β s ( fsb ) new standard, β key attributes of effective resolution regimes β, adopted by the g20, is a point of reference for the reform of our national resolution regimes. these key attributes aim to enable authorities to resolve failing financial firms in an orderly manner and without exposing the taxpayer to the risk of loss. this initiative addresses all the three shortcomings that i have just mentioned. the fsb standard contains a comprehensive list of tools and powers which every national resolution authority should have. this means that they aim to improve the national regimes, while at the same time providing for convergence. the fsb key attributes also strengthen, in my view, the group resolution concept, by envisaging that recovery and resolution plans also have a global perspective. making the national supervisors and resolution authorities plan together how the problems of their groups could be handled would already be a big step forward. in that context, the authorities will also be asked to take into consideration the effects
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. 6 % respectively ) in 2015 and are expected to remain in positive territory also in 2016 ( 1. 5 % and 1. 7 % respectively ). the greek authorities, following the enactment of the required fiscal measures and the expected completion of the first review at the eurogroup of 24 may, should promptly shift their focus to implementing the reforms in goods and services markets, taking action to tackle the problem of banks β npes and giving new impetus to the privatisation programme. such actions will have a positive effect on international markets β assessment of greece β s prospects and put in motion a virtuous circle, signalling a definitive exit from the crisis. today, there are big opportunities for greece that should not be missed. to give one example, china, in an effort to rebalance its growth model, wants to invest abroad. one of the countries it wishes to invest in is greece. i do not only mean investment in infrastructures and networks, but also in other sectors of the economy, such as industry and finance. to exploit these opportunities, we must appropriately adjust our growth strategy and adopt an extrovert growth model relying, among other things, on privatisations and the utilisation of public real estate, with a view to making greece a growth hub in the broader region. and, above all, we must have the will to attract foreign investment and not to miss once again the opportunities opening up before us. bis central bankers β speeches
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and productivity of the arab and ultra - orthodox sectors ; otherwise, not only will we not remain in place, but we will even widen the gap vis - a - vis the advanced economies. for example, in educational achievements, already today there is some gap between israel and advanced economies, and it can be assumed that the arab and ultra - orthodox sectors are themselves at some gap vis - a - vis the general population in such achievements. the implication is that under current conditions, the increase in labor force participation of these sectors will be reflected in the addition of employees whose productivity is low to the workforce. the data indicate that in recent decades, the gap between israel and advanced economies in output per hour has remained. among the factors in this phenomenon are an unfriendly business environment, as reflected in international indices such as the doing business index, the problem of low competitiveness in specific industries, and a low rate of investment which leads to insufficient capital stock. looking at per capita gdp, as well, indicates that we have not closed the gap in recent decades. although we have seen more rapid growth of our per capita gdp in recent years, in light of the relatively moderate negative impact of the crisis on israel β s economy compared with other advanced economies, we clearly don β t want to hope for a continued contraction of the gap between israel and other advanced economies based on the this factor. the two demographic trends that i discussed β the decline in the share of the working age population, and the increase in the share of sectors with relatively low bis central bankers β speeches employment rates β are expected to deduct 1. 3 percentage points from the annual growth rate. in this regard, i of course noted the improvement, which is still slow, in the employment trends in the arab and ultra - orthodox sectors. the aging of the population is expected to lead to a sharp decline in the ratio of number people of working age to the number of the elderly, from 5. 5 today to 3 in 2050. the meaning of this is that there will be a need to increase the allocations for old age allowances, on healthcare expenditure, nursing care, and such, in order to maintain the current level of these allowances and services. poverty is another issue with which we will need to deal. in recent years there has been a trend of increase in the poverty rate among families with workers, while the stability in the general poverty rate is the result of an increase in the share of families with one
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high and rigid reserve requirements, and replaced it by daily, weekly and monthly auctions of monetary loans and deposits of commercial banks with the central bank. in the last two years we are gradually replacing these monetary auctions with treasury bills which will be our main instrument for conducting monetary policy vis - a - vis the market as a whole. judging from the results, the outcome is rather satisfactory : β’ israel enjoys price stability. β’ the foreign currency market functions smoothly, with relatively narrow spreads and low volatility. at the background, the central bank watches the market but does not intervene and the shekel, the domestic currency, is fully convertible. β’ the foreign currency position of the israeli economy is positive : the current account is roughly balanced ; fdi and portfolio investment started to go up again in the wake of the rebound in world financial markets ; and foreign exchange reserves held by the central bank are ample. to sum it up : the decision to regard the exchange rate as a policy instrument or let it be a marketdetermined variable is an integral part of the general strategy of macro - economic policy. in our case we let it be determined by the interbank market and used the short - term interest in its stead. a final word on the financial relations among mediterranean countries. while the potential for intraregional trade does not seem to be large at this stage, there seems to be some scope for furthering financial ties, especially under the auspices of the european central bank : β’ one example can be joint missions and consultations to review the stage of development of various financial markets. β’ another example, based on the trend toward a flexible exchange rate regime, is a framework for collaboration among central banks to promote the stability of the financial system and open information channels among supervision authorities. β’ a third example deals with the sequencing of liberalizing the capital account in connection with changing the exchange rate regime. the initiative of bank of italy and the european central bank should, therefore, be seen as a successful beginning. this is the most suitable forum to discuss and strengthen financial ties between the eurosystem and mediterranean central banks.
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jean - claude trichet : hearing at the economic and monetary affairs committee of the european parliament introductory statement by mr jean - claude trichet, president of the european central bank, at a hearing at the economic and monetary affairs committee of the european parliament, brussels, 30 june 2011. * * * dear madam chair, dear honourable members, it is a pleasure to be back in parliament and your committee for our regular exchange of views. once again, our meeting comes at a time when important decisions are being taken but also pending. of particular concern is the conclusion of the legislative procedure on the economic governance package. je tiens tout d β abord a saluer les efforts continus du parlement europeen et du conseil afin de rapprocher leurs positions sur le paquet de gouvernance economique. le conseil des gouverneurs aurait souhaite que le conseil europeen du 24 juin dernier fasse un geste d β ouverture envers le parlement europeen sur ce dossier. le principal point de desaccord β l β extension de la majorite qualifiee inversee dans le volet preventif du pacte de stabilite et de croissance β est d'une importance cle. la zone euro a urgemment besoin d'un cadre de gouvernance economique renforce et ambitieux. la crise actuelle demontre, de maniere irrefutable, s β il en etait encore besoin, les consequences nefastes de politiques budgetaires et economiques malsaines. deshalb ist es unerlasslich, zu einer ambitionierten einigung zu kommen. in der aktuellen lage ware eine einigung besonders begruΓenswert, um deutlich zu machen, dass die richtigen lektionen aus der krise gezogen werden. let me now turn to the economic and monetary developments in the euro area since our previous meeting in march, as well as the two topics you have asked me to focus on, namely fiscal consolidation and monetary policy on the one hand, and sovereign debt developments on the other. i. economic and monetary developments let me first turn to the economic and monetary developments in
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financial regulation and transparency i will now expand on this morning β s discussion on β making markets work : liquidity and regulation β. apart from central bank and market initiatives, a number of measures in the field of financial regulation, which are intended to prevent another crisis on the scale of the one we have just witnessed, have been decided upon or initiated by various authorities. such measures contribute to structural changes in the institutional set - up of financial markets and are expected to restore market confidence and, ultimately, to support growth. yet the intended positive effects of regulatory measures have to be carefully weighed against their costs and unintended side effects. market participants point out that the regulatory measures must be consistent with one another. the speed of regulatory innovation should not mean that too little consideration is given to the impact one measure will have when taken in conjunction with others. also, consistency on the international level has to be ensured. very importantly, financial regulations should be designed and implemented carefully in order to avoid potentially adverse effects on market liquidity and price formation. for the ecb, efficient, resilient and liquid financial markets are a key prerequisite for the smooth implementation and transmission of monetary policy. the ecb therefore strives to ensure that regulatory reform initiatives do not impose restrictions which may hinder the efficient functioning of markets or impair their liquidity. formally, the treaty on the functioning of the european union assigns to the ecb an advisory role as regards proposed eu acts2, i. e. the ecb is consulted on proposed eu directives ( general framework legislation ). furthermore, delegated and implementing acts press release : ecb announces rescheduling of loan - level data reporting requirements for asset - backed securities, 27 november 2012. see articles 127 ( 4 ) and 282 ( 5 ) of the treaty. bis central bankers β speeches qualify as proposed eu acts, and therefore the scope of the ecb β s consultation also extends to such acts as well as to draft technical standards. 3 in addition, we continually exchange views with market participants, for example via our ecb market contact groups. 4 the regulatory debate has become a standard agenda item in those meetings. a number of regulatory measures target financial markets. let me focus in the rest of my speech on a very important regulatory initiative and on a concrete example : the review of the mifid ii and, specifically, the proposed price transparency requirements. the ecb also provided an opinion on the mifid ii proposal. 5 as
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bank amongst others of breaching a fundamental tenet of labour law relating to β equal pay for equal work β. the bank could have done without the strained industrial relations that resulted from this imbroglio. following the judgment of the supreme court ( see below ), this matter is now taking a different course. the latest development at the time of writing is that the bank has now been declared non - compliant by the labour tribunal. i shall come back to this in the next report. β the introduction of new technology and new work processes β as well as the need to change the competency mix at the bank to enable it to deliver effectively on its widening mandate β necessitated the introduction of a voluntary retirement scheme. fifteen long - serving officers of the bank opted to proceed on early retirement under the scheme. this will enable the bank to recruit extra staff with a different profile without increasing our head count. β well beyond the salary review exercise, it is my earnest resolve to channel more effort towards achieving operational excellence. we shall strive to align our business processes with international standards and best practices. we propose to implement a performance review system tagged to productivity. i believe strongly in periodically reviewing our scorecards. β we will also push for innovative approaches to manage and develop our people, fortify our management team, and continuously restructure in order to adjust to the requirements of an ever - evolving financial landscape. landmark supreme court judgment and fact finding committee pursuant to an enduring feud between a majority of ( external ) members of the board of directors of the bank and the executive management, the supreme court delivered a significant judgment in march 2010, finding in favour of management. β the supreme court clarified that the board β s statutory remit is to formulate general policy and not to be involved in the day - to - day administration of the bank. this judgment not only helps to clearly situate responsibilities but also paves the way for much healthier deliberations in the boardroom. β the year was also marked by the establishment of a fact - finding committee, chaired by a highly - respected retired chief justice, sir victor glover, kt, gosk. coming just after the supreme court judgment, the report of the fact - finding committee put paid to the smear campaign against the governor and confirmed that he had acted intra vires, without any abuse of power or authority as charged by his detractors. words of appreciation i wish to express my gratitude to dr the honourable navinchandra ramgo
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the proposal being based on the executive board β s historical behaviour rather than on the staff β s perception of what constitutes a well - balanced monetary policy is discussed by hallsten and tagtstrom in the article β the decision - making process β how the executive board of the riksbank decides on the repo rate β in sveriges riksbank economic review no. 1 2009 ( p. 78 ). if we members of the executive board consider that there are any special risks that should be examined, then simulations and sensitivity calculations are made for alternative scenarios. simulations are also regularly made with regard to illustrating the effects of conducting an alternative monetary policy. this part of the monetary policy decision - making process is important, as it provides a base for the executive board to be able to choose the decision alternative that appears to provide the best target fulfilment. the staff β s proposal for monetary policy is the most important base for the discussion at a longer meeting that includes a large number of analysts from the monetary policy department and the executive board, and which is normally held around two weeks prior to the monetary policy meeting. the financial stability department of the riksbank also plays an important role in the analysis work and therefore takes part in this meeting. the riksbank has always considered it important to monitor developments in the financial markets and in the swedish banks, and this has been particularly important in the forecasting work during the financial crisis. the executive board members β input is important at this meeting and may in particular affect the forecast for the repo rate. however, this has repercussions for the forecasting work as a whole, as the future repo rate affects most of the other variables in the forecasts. the executive board may also have views on other parts of the forecasts than the repo rate path, but the discussion usually mainly centres on what is a well - balanced monetary policy. at a shorter meeting that usually takes place the day after the large meeting, the members of the executive board have the opportunity to discuss the main scenario and give their views on it in a more limited circle. the executive board β s perceptions regarding the economy and thus monetary policy are then woven in with the other information in the monetary policy reports, including alternative scenarios and updates that provide background material for the monetary policy meetings. the forecasts and the monetary policy decisions the executive board β s priorities and perceptions the members of the executive board may have different perceptions regarding many different factors, which affect
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say i hate this expression of the sick man of europe. we all need a strong france. we need a competitive france and we need a france where competition lives together with solidarity. europe needs a strong france. in the euro area, growth forecasts are discouraging. the italy of matteo renzi is in recession. france is around 0. 4 %. what do you tell french people who are worried about the future? the ecb will continue to have a very expansionary monetary policy for an extended period of time until we see the rate of inflation going close to 2 % and that β s something that should be counted upon. but, at the same time, as i said before, proper structural policies and fiscal policies have to be in place. in france, a question comes back often : the mythical 3 % of deficit which was fixed in maastricht 22 years ago. this was in very different universe and europe. there were bis central bankers β speeches not 28 member states, didn β t go through a worldwide crisis with as much unemployment, the french people were not 65 million. will the time come for the europeans to re - evaluate, to revise the maastricht criteria that strangle them? well, i don β t think it would be proper for me to discuss changes in the treaty. that β s the task of our european legislators. but, for the ecb, it β s important to remind to all of us that rules are there to be respected and that β s the ground for trust amongst member states. these rules have been broken in the past and the result of it was not exceptional. many of our countries arrived in the financial crisis completely unprepared. what is the main danger, the main enemy of europe? well, the main enemy for europe is unemployment : youth unemployment and unemployment in general. but this is caused by a broader sentiment of lack of confidence in the future and lack of trust between member states, and we have to fight this. who? you or we? yes, for all of us. all of us have to fight against this lack of confidence, against this lack of trust. are there three or four words that symbolize your ambition for europe? first is investment. private investment, but also public investment. did you say it to ms merkel? i did say so in jackson hole. not to her, but to every country that has fiscal space. but the other thing that we have to remember
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stephen s poloz : making sense of markets remarks by mr stephen s poloz, governor of the bank of canada, to the canada β uk chamber of commerce, london, united kingdom, 5 november 2018. * * * introduction making sense of financial markets is supposed to be easy. stock prices, bond yields and exchange rates are all expected to behave in line with economic fundamentals. we know the reality is more complicated than that. yes, financial markets react to new information β in fact, they usually overreact. today β s overreaction becomes tomorrow β s retracement, and so on. it can be very difficult to reconcile high - frequency financial market action with slower - moving economic fundamentals. often this process of reconciliation is just a matter of time, since economic data arrive with a lag while financial markets live in the moment. but therein lies the essential problem : our view of today β s economic fundamentals is actually a forecast because the data have not arrived yet. if financial markets appear to diverge from those forecasted fundamentals, they may be telling us that our forecast is wrong. the fact that financial market prices are formed with the discipline that comes from putting real money on the line means that central bankers ignore them at their peril. to illustrate the difficulty, consider some of the market action we have seen in 2018. yield curves were on a flattening trend in the first half of the year, raising questions about whether they were pointing to slower economic growth ahead. at the same time, stock markets were on a steady march upward, which we would normally associate with a positive economic outlook. this fall, we have seen the reverse β higher yields and widespread stock market declines. while it may not always be possible to make sense of all this, the effort itself is generally worthwhile. today, i want to touch on some of the main points of our latest outlook, and offer some reconciliation of recent financial market action with that view. of course, there are always risks in trying to interpret what financial markets are saying. markets are not monolithic β their prices represent the average of a diverse distribution of views. moreover, markets evolve over time. still, we glean what we can from markets and use the information to cross - validate the signs we see in the economy. the economic outlook let us discuss the economic outlook briefly. the big picture is that the world has made considerable progress in shaking off the effects of the 2007 β 08
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among the advanced economies. as a result of the deep - seated recession prompted by the crisis, but also of the structural adjustment carried out since, the spanish economy has recorded current external surpluses in the past five years, which even exceeded 2 % of gdp in the 2015 - 2017 period, despite the strong pick - up in domestic demand during those years. external surpluses, which have been relatively unusual in previous recovery phases in the spanish economy, have been assisted, among other factors, by the gains in competitiveness arising from the containment of labour and financial costs. such gains have enabled companies to compete internationally on a better footing and to increase their exports. in particular, spanish unit labour costs relative to the rest of the euro area fell by 14 % from 2008 to 2018, thereby offsetting practically all the losses in competitiveness, measured by this indicator, built up during the previous expansion. this has been conducive both to across - the - board gains in share in international markets and to greater geographical diversification towards markets with high growth potential. as a result, goods exports rose from accounting, in real terms, for 19 % of gdp in 2009 to 28 % in 2018 ; exporting firms as a proportion of total spanish companies grew sharply as from 2009 ; and the number of regular exporting firms has increased in the past five years by 31 %, with a notable increase in destinations such as asia and north america. likewise of note is that this period of growth has been accompanied by significantly buoyant investment in equipment. specifically, from 2013 to 2018, this aggregate increased in real terms by almost 34 %, compared with the cumulative 14. 4 % increase in gdp over the same period. hence, the weight of this component in gdp stood in 2018 above 10 %, the highest figure for the past three decades. further, this improvement in productive investment has been across the board in terms of productive branches, and notably sharper than that recorded in the euro area as a whole, a development closely linked to the competitive gains and to the intensification of spanish firms β export orientation in recent years to which i referred. the other investment component, that linked to construction, has undergone a most significant adjustment in the past decade. this means that, in 2018, following several years 4 / 7 of recovery, this gdp component was still at around 16 % of its pre - crisis level. the downscaling of investment in housing entailed a decline in its weight in gdp to levels
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close to 5 % in 2018, in line with spain β s peers, compared with 12 % pre - crisis. the reduction in housing investment activity came about in parallel with a decline in house prices which, despite the growth observed in recent years, remain in real terms some 32 % below the nationwide levels observed in 2007, albeit with some cross - regional dispersion. all these developments better position this sector to support economic growth, as indeed has been the case in 2018. the weight of non - residential construction, for its part, has also diminished considerably, largely reflecting the impact of the reduction in public - sector investment spending. beyond these improvements, as i stated in my introduction the spanish economy remains prone to certain vulnerabilities and faces significant challenges, which i shall now set out. first, despite the notable above - mentioned reduction in private debt in recent years, on the latest available data for 2018 q3 the negative net international investment position ( iip ) of the spanish economy stood at 81 % of gdp, and that of gross external debt at 168 % of gdp, levels that are high in relation to other advanced economies and which mark a factor of vulnerability for the economy as a whole. the reduction in the iip to less vulnerable levels will require running current account surpluses for a prolonged period. the continuation and deepening of the gains in the economy β s competitiveness posted in recent years should, along with healthier public finances, contribute to entrenching a sustained path of external surpluses. closely related to the foregoing point, the second factor of vulnerability of the spanish economy is that arising from the imbalance in public finances. the sectoral breakdown of the net iip shows how, since the onset of the crisis, the general government β s net liability position has increased notably, with the liabilities position of the monetary financial institutions and the rest of the resident sectors declining. despite the considerable reduction in the budget deficit relative to gdp from its peak of 11 % in 2009 to 23. 1 % in 2017, spanish public finances continued to evidence a high level of structural deficit ( estimated by the european commission to be 3 % of gdp, the highest in the euro area ) and of public debt, which currently stands at around 98 % of gdp. against this backdrop, it is worth bearing in mind that maintaining a very high level of public debt over a prolonged period may not only hamper economic growth but also lessen the stabilising capacity of fiscal policy in
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jackson hole ( kansas city : federal reserve bank of kansas city ), pp. 185 - 288. 15. see gauti b. eggertsson and michael woodford ( 2003 ), β the zero bound on interest rates and optimal monetary policy, β brookings papers on economic activity, no. 1, pp. 139 - 211. 16. i am grateful to hess chung of the federal reserve board for drawing to my attention the general point made in this paragraph. 17. see robert j. barro ( 1974 ), β are government bonds net wealth? β journal of political economy, vol. 82 ( november - december ), pp. 1095 - 1117. 18. see joseph e. gagnon ( 2016 ), β quantitative easing : an underappreciated success, β policy brief 16 - 4 ( washington : peterson institute for international economics, april ). 19. i draw here on notes provided by michael kiley of the federal reserve board. 20. in woodford β s and wicksell β s analyses, natural values are those that would prevail in the absence of nominal rigidities. 21. see, for example, katharine neiss and edward nelson ( 2002 ), β inflation dynamics, marginal cost, and the output gap : evidence from three countries, β unpublished paper, bank of england, july ; rochelle edge, michael kiley, and jean - philippe laforte ( 2008 ), β natural rate measures in an estimated dsge model of the u. s. economy, β journal of economic dynamics and control, vol. 32, pp. 2512 - 35. 22. see, for example, figure 1 in janet yellen ( 2015 ), β the economic outlook and monetary policy, β speech delivered at the economic club of washington, washington, d. c., december 2. 23. see thomas laubach and john williams ( 2003 ), β measuring the natural rate of interest, β review of economics and statistics, vol. 85, pp. 305 - 25. bis central bankers β speeches
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stanley fischer : ( money ), interest and prices β patinkin and woodford speech by mr stanley fischer, vice chair of the board of governors of the federal reserve system, at β a conference in honor of michael woodford β s contributions to economics β, cosponsored by the federal reserve bank of new york, columbia university program for economic research, and columbia university department of economics, new york city, 19 may 2016. * * * the footnotes can be found at the end of the speech. i am grateful to hess chung, rochelle edge, william english, michael kiley, thomas laubach, matthias paustian, david reifschneider, jeremy rudd, and stacey tevlin of the federal reserve board for their advice and assistance it is an honor for me to speak at the opening of this conference in honor of michael woodford, whose contributions to the theory of economic policy are frequently a central part of the economic analysis that takes place in the policy discussions at the federal reserve. the main story i want to tell today is about the quality of michael β s major book, interest and prices ( henceforth mwip ). i will start with his predecessors, beginning as michael does in his interest and prices with wicksell. 1, 2 i shall quote key points from and about wicksell β s interest and prices ( henceforth kwip ), and following that, from patinkin β s money, interest, and prices ( second edition, 1965 ) ( henceforth mip ), which are relevant to mwip, michael woodford β s interest and prices ( 2003 ). wicksell β s interest and prices 1. inflation. the subtitle of wicksell β s interest and prices ( kwip ) is a study of the causes regulating the value of money and its opening paragraph emphasizes the problem of inflation : changes in the general level of prices have always excited great interest. obscure in origin, they exert a profound and far - reaching influence on the whole economic and social life of a country. wicksell follows this opening by discussing the difference between the ability of the economic system to adjust to changes in relative prices and to changes in the general level of prices. in the latter case, adjustment can no longer proceed through changes in demand or through a movement of factors of production from one branch of production to another. its progress is much slower, being accomplished under continual difficulties, and it is never complete ; so
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ravi menon : securing good jobs in a growing financial industry remarks by mr ravi menon, managing director of the monetary authority of singapore, at the inauguration of bnp paribas β asia pacific campus, singapore, 7 march 2014. * * * alain papiasse, deputy chief operating officer and head of corporate and investment banking, bnp paribas group, eric raynaud, chief executive officer of bnp paribas asia pacific, distinguished guests, ladies and gentlemen, good afternoon. i am delighted to join you today to celebrate the opening of bnp paribas β new asia pacific campus here in singapore. it is a truly impressive campus, skilfully combining the charms of a colonial heritage building with state - of - the - art facilities and technologies. a significant move the opening of this campus in singapore is significant for a few reasons. β’ first, it demonstrates bnp paribas β firm commitment to strengthening the capabilities of its staff in asia. this is bnp paribas β first corporate training centre outside of france. β’ second, it shows strategic foresight. bnp paribas took the decision to invest in this campus three years ago, when it was facing a very challenging economic environment with the eurozone gripped by crisis. β’ third, it reflects in a way a broader story of the continued importance of asia to european banks. after almost two years of stagnation, european bank lending to asia has started to rise again. in the area of trade finance for example, recent data shows that european banks are increasing their trade finance activities and have even regained some market share in singapore. three dimensions of a successful finance professional the financial industry in asia and singapore will continue to grow and generate good jobs. β’ in 2013, singapore β s financial sector grew by 11 %, against an overall gdp growth rate of 4. 1 %. growth was supported by increased activities in areas such as corporate transaction banking, trade finance, fund management, private banking and re / insurance. β’ last year, a total of 4, 500 jobs were created in the financial sector, most of them in higher value - added activities. the demand for highly qualified finance professionals will only grow in the coming years. to take advantage of this opportunity, our finance professionals must acquire three things : β’ depth in core competencies β’ cross - functional adaptability β’ asian knowledge and expertise first, depth in core competencies. jobs in the financial industry are becoming more complex, requiring deeper knowledge,
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competencies as they progress in their career, across different job roles and levels. β’ through this framework, we aim to build a strong pipeline of singaporean talent and leaders in finance, so that our people can avail themselves of the opportunities that a growing financial industry will create. second, our industry associations are playing an important role in supporting talent development within specific sectors. β’ the life insurance association of singapore, for instance, is working with the singapore college of insurance, to develop a talent framework that provides structured training and development opportunities for insurance professionals. β’ the general insurance association of singapore is running a global internship programme which seeks to provide undergraduates with hands - on experience at insurance firms overseas. third, we have in singapore, fortunately, a strong academic and intellectual climate or platform to deepen specialisation in finance. bis central bankers β speeches β’ we have world - class universities such as insead and university of chicago based here, who will collaborate with this campus to design programmes to offer highquality, specialised courses in banking and finance. β’ we have research centres such as the centre for asset management research and investments and edhec conducting specialised research in areas relevant to the financial industry. β’ we have training providers such as the wealth management institute and risk management institute organising programmes and conferences to further thought leadership in areas of finance. bnp paribas β asia pacific campus is a welcome addition to singapore β s ecosystem to build human capital in finance for the future. conclusion this is an exciting time to be in the financial industry, notwithstanding the challenges it has gone through since the crisis. it is also an exciting time to be in asia. but to seize the opportunities in asian finance, we need a deep pool of highly skilled and trusted professionals. i thank bnp paribas for growing with singapore, and for being a strong partner with mas in our efforts to develop talent and capabilities. i am confident your strong presence in singapore will serve you well as you continue to extend your asian footprint. bis central bankers β speeches
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comply with the new international standards on antimoney laundering issued by the financial action task force ( the fatf ). this pressure will be filtered down to individual financial institutions, businesses, and government agencies to implement measures to meet the revised international standards. next year will be critical for fiji in this area. the reserve bank, the fiu together with the national anti - money laundering council will look at how we can adopt the revised requirements of the international standards. we will be relying on the private sector to assist us. the private sector β s contribution in conducting a national risk assessment will be critical. bis central bankers β speeches international scrutiny 2015 ladies and gentlemen, with international obligations, comes international scrutiny. an assessment of fiji β s anti - money laundering framework is scheduled for 2015. a review team of various experts will be visiting us, and to assess how effective we are with our efforts to comply with the international standards on anti - money laundering. this will be quite a comprehensive review. each of us, the private sector, regulatory authorities, law enforcement authorities, and many other departments and agencies of the fijian government will need to show that fiji remains a committed global partner in the fight against money laundering. we need to send a clear message that fiji β s financial system remains safe and we are taking all necessary measures to make life difficult for criminals to launder their proceeds of crime. last year in 2012, we had five successful money laundering cases. capacity building and training for our law enforcement officials remains a priority. fiji β s national coordinating body, the national anti - money laundering council, has embarked on a review of our existing aml measures that is expected to identify gaps in all the key areas, such as, customer due diligence and suspicious transaction reporting requirements, investigation and prosecution of money laundering offences, tracing proceeds of crime and gaps in networking and information exchange. a strong compliance by fiji would mean that our financial system is well regulated and is safe and sound. this will lead to more investor confidence and strengthen the reputation of fiji β s financial system. it will also mean that we are ready to investigate sophisticated financial crimes, such as, fraud and corruption. forfeiture of criminal and unexplained wealth would take us closer to a crime - free and corruption - free fiji. therefore, compliance with the international anti - money laundering standards is not optional. it is vital for the economic welfare of fiji. collaboration this conference also discussed the need for collaboration and networking and how it
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has contributed towards building an effective anti - money laundering environment in fiji. collaboration with our international and domestic partners is vital in combating money laundering. it is through collaboration we can find many opportunities for sharing knowledge and expertise. collaboration between the private sector and law enforcement authorities is vital for the purpose of investigating money laundering. inter - government agency collaboration is also needed to prevent overlapping and contradicting regulatory requirements. collaboration with foreign counterparts and partners enables synergy in roles and functions. conclusion in concluding, let me say that the reserve bank of fiji is pleased to have been able to support and sponsor the national anti - money laundering conference in the last 4 years. together, we will continue to fight money laundering, fraud, corruption and other crimes in fiji. i take this opportunity to express our sincere appreciation to our chief guest, the director of public prosecutions, and mr christopher pryde. our gratitude also goes to madam nazhat shameem for her support and contribution to this conference and past conferences. bis central bankers β speeches also, to our other distinguished speakers and panellists for sharing their insights and knowledge on this very important topic of β detecting money - laundering β. i thank fiu director buksh and his team for putting together this event. finally, i thank each and every one of you for making this conference a success through your attendance, valuable contribution and active participation. i now have the pleasure of declaring the 2013 national anti - money laundering conference officially closed. vinaka vakalevu bis central bankers β speeches
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use of another country's currency ( " dollarization " ), or a full monetary union. pegged exchange rates that can be adjusted ( that is, revalued or devalued ) have been the most widely used anchor since the second world war. they were the prevailing order under the bretton woods system, which was established after the war and lasted until the early 1970s, when it finally collapsed in the face of increasingly open financial markets, large capital flows, and u. s. expansionary policies. the problem with a fixed, but adjustable, exchange rate is that it does not guarantee that the value of the currency relative to other currencies, and thus its purchasing power, will not rise or fall. for example, the currency could come under downward pressure if it is pegged at a level that is out of line with the country's economic situation ( say, because of large and growing fiscal deficits and debts ). should the markets then begin to question the authorities'commitment to the peg, domestic and foreign investors would scramble to get out, triggering a currency crisis. there is no shortage of such examples in recent history : repeated episodes in latin america since the 1980s, crises in europe in 1992 and 1993, and in southeast asia and russia in 1997 β 98. because pegs have proven problematic, a more realistic approach would involve adopting one of the more rigid fixes. i will have more to say about this later. but let me move on now to the third option for an explicit monetary policy anchor β inflation targets.... targeting inflation among a number of industrialized countries that, like canada, are operating a floating currency, there has been a tendency over the past decade to adopt explicit inflation targets as the anchor for monetary policy. the same tendency is now evident among a growing number of emerging - market economies that have recently moved to flexible exchange rates following the collapse of their pegged rates. the objective is to consistently maintain low and stable inflation, while the flexible exchange rate helps the economy to adjust to shocks. why inflation targets and how do they work to guide monetary policy? in such a framework, the central bank targets the rate of inflation β say, 2 per cent β several quarters ahead. then, based on its judgment of the current and projected strength of demand relative to the economy's production capacity, as well as the implications for future inflation relative to the target, it will take action now β because of the long lags involved
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stephen s poloz : summary of the latest monetary policy report opening statement by mr stephen s poloz, governor of the bank of canada, at the press conference following the release of the monetary policy report, ottawa, ontario, 22 january 2014. * * * good morning. tiff and i are pleased to be here with you today to discuss the january monetary policy report, which the bank published this morning. before we take your questions, allow me to note the highlights of the report. β’ inflation in canada has moved further below the 2 per cent target. this is due largely to significant excess supply in the economy and heightened competition in the retail sector. the path for inflation is now expected to be lower than previously anticipated for most of the projection period. β’ the bank expects inflation to return to the 2 per cent target in two years or so, as the effects of retail competition dissipate and excess capacity is absorbed. β’ the global economy is expected to strengthen over the next two years, rising from 2. 9 per cent growth in 2013 to 3. 4 per cent in 2014 and 3. 7 per cent in 2015. β’ the united states will lead the way, helped by diminishing fiscal drag, accommodative monetary policy and stronger household balance sheets. the improving u. s. outlook is affecting global bond, equity, and currency markets. β’ growth in other regions is evolving largely as projected in october. β’ global trade growth plunged after 2011, but is poised to recover as global demand strengthens. β’ in canada, economic growth improved in the second half of 2013. however, there have been few signs of the anticipated rebalancing towards exports and business investment. β’ while we are doing more work to understand the wedge between the level of canadian exports and that of foreign demand, this remains difficult to explain. we are therefore taking a conservative approach to our forecasts for exports, and assuming the wedge will remain. β’ that said, the u. s. recovery is becoming more broad - based, including higher investment spending by companies, and that, as well as the recent depreciation of the canadian dollar, should help to boost exports. this, in turn, should lead to stronger business confidence and investment here in canada. β’ meanwhile, recent data have been consistent with the bank β s expectation of a soft landing in the housing market and a stabilization of household indebtedness relative to income. β’ real gdp growth is projected to pick up from 1.
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##dc. 1 / 3 bis - central bankers'speeches e - hkd pilot programme today's event marks the commencement of the e - hkd pilot programme, which is a key component under rail 2. it is a tremendous opportunity for the hkma to work with the industry to consider different use cases and design choices, and co - create new payment functionalities and infrastructures that could add value to society. we look forward to this public - private partnership in shaping the future of money in hong kong. we will follow an iterative process for the pilot programme. each iteration will last for about a year and it will help enrich our perspective and refine our approach to a possible implementation of e - hkd. given the already vibrant retail payment landscape in hong kong, we understand clearly that the decision to implement e - hkd would very much depend on whether it can make payment more efficient and convenient than the existing payment methods and whether it can unlock new business opportunities. this is why the experiences from the pilot programme would be crucial in informing our policy decision. selected pilot programme participants i am very excited to see that the pilot programme has attracted immense industry interest. 16 companies have been selected to participate in the first batch of the pilot programme for 2023. these participants, some in groups, will work on 14 pilots which will span across six major categories, covering programmable payments, " dual offline " payments, and other new developments with the use of blockchain technology, such as settling web3 transactions and tokenised assets. these innovative use cases proposed by the industry truly open our eyes to new possibilities of what central bank money can do, and how e - hkd can potentially benefit the general public and businesses in hong kong. we will invite selected participants to come on stage shortly to give a brief overview of their proposed use cases. we also aim to share the key learnings of the pilot programme at the hong kong fintech week in november this year. i trust that the outcomes and insights gained from each of the above pilots should help enrich our perspective and refine our focus and priority of the pilot programme in subsequent years. cbdc expert group besides the pilot programme, the hkma is also fostering closer government - industryacademia collaboration on cbdc research. we plan to form a cbdc expert group to bring together leading professors from local universities, who will come from different fields, such as computer science, business and law. i am glad to tell you
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currency. notwithstanding the encouraging developments over the past years, the capacity of the regional bond markets is still limited compared with the huge infrastructure and other financing needs of the region, resulting in heavy reliance on bank financing. much work still needs to be done, including but not limited to expanding the issuer and investor types, gradual liberalisation of barriers to entry of non - resident investors, promoting financial infrastructure linkages, improving corporate disclosure and transparency, more standardisation in legal and governance terms, to name a few. policymakers will have a key role to play in facilitating market developments and removing market impediments in the process. and we hope to see adb, the region β s long - standing partner in promoting bond market development, to further its efforts and cooperation with governments in the region on this front. thank you. bis central bankers β speeches
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##lining possible avenues for regulation. this document is open for consultation on the acpr website and we encourage industry stakeholders to provide their input. 2 ) the challenge of international coordination for an effective and global regulatory framework that being said, these regulatory issues are global, which means that we need to ensure that national regimes are consistent with each other in order to avoid any risk of regulatory arbitrage. to this end, we need to speed up international work under the aegis of the fsb. highest priority should be given to the finalisation of the fsb recommendations on stablecoins and other crypto - assets, in cooperation with other international standard - setting bodies ( cpmi, bcbs, fatf ). the second priority should be to regulate the interconnection between the traditional financial system and the crypto - asset market in a secure way. the timely and faithful implementation of the basel standards on the prudential treatment of banks'crypto - asset exposures, published in december 2022, will be key from that perspective. the development of crypto - asset based services in banks must take place within a prudent framework that limits the risks for financial stability. consequently, the enforcement of prudential standards should strictly take into account the developments of interconnections between crypto - assets and regulated entities, such as banks. lastly, two new issues will require a global regulatory response. defi is the first one : its use of public blockchains and its global reach make it difficult to allocate 3 / 4 bis - central bankers'speeches responsibilities and impose strong regulatory requirements such as in mica. but the fsb is working on it : it has already published a report on defi's vulnerabilities and policy work is in progress. second, we need to address challenges raised by worldwide crypto conglomerates. the fsb has also initiated work on this type of crypto - asset service providers to identify and monitor the risks associated with the concentration of their activities. to conclude, let me just stress that it is not clear to me what is going to be the future of the crypto ecosystem and the shape that the financial landscape will eventually take as a result. market forces will decide. but what is clear to me is that, for the crypto ecosystem to overcome the confidence crisis it is currently facing, and to develop on a sustainable basis, a confidence prone regulatory and supervisory framework is needed. central banks have an important role
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the role of the monetary policy committee to navigate the right settings for monetary policy to achieve our mandate for low and stable inflation and contributing to maximum sustainable employment. this is our best contribution to the ultimate purpose of the reserve bank, which is to enable prosperity and wellbeing of all new zealanders : toitu te ohanga, toitu te oranga. along the way, we need to steer our way through uncertainties and threats to our mandate from the evolving economic environment. our least regrets approach is one tool to navigate these judgements. a least regrets approach to uncertainty : hawks, doves and the white heron ( he kotuku ) references bannister, g, finger, h, yosuke, k, siddharth, k & loukoianova, e ( 2020 ) β addressing the pandemic β s medium - term fallout in australia and new zealand β, imf working paper, 2020 / 272. brainard, w ( 1967 ) β uncertainty and the effectiveness of policy β, american economic review, 57 ( 2 ), pp 411 - 25. caggiano, e castelnuovo and g nodari ( 2018 ) β risk management - driven policy rate gap β, economics letters, 171, pp 235 - 238. conway, p ( 2000 ) β monetary policy in an uncertain world β, reserve bank of new zealand bulletin, 63 : 3, pp 5 - 15. evans, c, gourio, f, fisher, j., & krane, s ( 2015 ) β risk management for monetary policy near the zero lower bound β brookings papers on economic activity, spring 2015, pp. 141 - 219. evans, c ( 2019 ) β on risk management in monetary policy β, federal reserve bank of chicago speech. ferrero g, pietrunti, m & tiseno, a ( 2019 ) β benefits of gradualism or costs of inaction? monetary policy in times of uncertainty β, bank of italy temi di discussione, 1205. greenspan, a ( 2004 ) β risk and uncertainty in monetary policy β, federal reserve board speech. hawkesby, c ( 2020 ) β covid - 19 and the reserve bank β s balance sheet β, reserve bank of new zealand speech, delivered on 20 august. kaminska, i ( 2014 ) β what β s with the doves and hawks β, video published by the financial times, available at http : / / www.
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β. in practical terms for the esrb this means finding the right balance in issuing warnings and recommendations. too few warnings entail the danger of missing systemic risks. conversely, too many warnings could be missed by the addressees. 5. sixth and seventh sybilline book : taking into account the global economy the sixth message of the sibylline books might read as follows : β be aware of relevant developments outside your own region. β financial stability is a systemic and a global phenomenon. and as is well known global imbalances play an important role. the savings glut is seeking safe and high yield assets. and global players can help to solve the current crisis in europe. sometimes, international investors ask me, β why should we buy bonds from sovereigns in crisis if their european partners are unwilling to do so to a larger extent? β my answer is β look, the european partners have to be aware of moral hazard implications, because they are players in the european political game, β the game, which is reminding us of the story of the purchase of the sybilline books. investors outside europe need not take into account moral hazard implications. they can and should buy such bonds because they have confidence in the long - term sustainability of the fiscal position of the countries in question, and because they are interested in portfolio diversification. progress in the various countries can be seen in ireland, for example, but also in italy, where the new government is going to implement fiscal measures. they can build on what is essentially a sound economy. therefore, my seventh and last message is this : β european sovereigns deserve more confidence than markets are currently willing to give them. β these are seven of the possible messages of the lost or burned sibylline books. the remaining messages may be β known unknowns β or β unknows unknowns β. thank you. bis central bankers β speeches
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bubble were to burst. this suggests that limiting the overall increase in leverage throughout the system could have reduced the risk of a bubble and the consequences if the bubble were to burst. turning to the second issue of how to limit and / or deflate bubbles in an orderly fashion, the fact that increases in leverage are often associated with financial asset bubbles suggests that limiting increases in leverage may help to prevent bubbles from being created in the first place. this again suggests that there is a role for supervision and regulation in the bubble prevention process. for example, it might be appropriate for the federal reserve β working with functional regulators such as the sec ( securities exchange commission ) β to monitor and limit the buildup in leverage at the major securities firms and the leverage extended from these firms to their clients and counterparties. whether there is a role for monetary policy to limit asset bubbles is a more difficult question. on the one hand, monetary policy is a blunt tool for use in preventing bubbles because monetary policy actions also have important consequences for real economic activity, employment and inflation. on the other hand, however, there is evidence that monetary policy does have an impact on desired leverage through its impact on the shape of the yield curve. a tighter monetary policy, by flattening the yield curve, may limit the buildup in leverage. 1 whether it would be more effective to limit leverage directly by regulatory and supervisory means or via monetary policy is still an open question. but it is becoming increasingly clear that a totally hands off approach is problematic. i also believe we could have done better in our supervision of the large complex commercial banking organizations. for example, the recent reports issued by the senior supervisors group ( ssg ), which is composed of regulators from five major countries, indicated that the banking regulators both here and abroad should have been tougher in the assessment of the quality of management, of governance, and in terms of these banks β risk management there is a growing body of economics literature on this issue that links monetary policy to leverage. see, for example, tobias adrian and hyun shin, manuscript in preparation for the forthcoming handbook of monetary economics, volume 3, currently circulated as federal reserve bank of new york staff reports, no. 398, october 2009. capabilities. 2 we should also have pushed harder for better management information systems and more simplified corporate organizations and structures. we should have done more to identify best practices in terms of risk management, liquidity, capital, and compensation and pushed harder to force the laggards
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the results of the survey, and the subsequent research, gave valuable information. it pertains to information on the nominal and real wage rigidities, and the way the corporate sector adjusts bis central bankers β speeches its balance sheet in response to different shocks. all of this supports the understanding of the monetary policy transmission and calibrating economic models that incorporate heterogeneous agents. one of the lessons from the crisis was that not many central banks had enough granular data on the corporate sector. as mentioned, granular data serve as an important analytical tool for assessing the potential vulnerabilities in the economy, and thus as an important input in the monetary and financial analysis of the central bank. we recognized the importance of the corporate sector data quite early, in the context of detected financial stability risks in particular. aggregate balance sheets of the macedonian corporate sector have been transmitted from macedonia β s central registry to the central bank since. yet again, it was recognized that the aggregation loses information, and a more disaggregated approach should be employed. since 2014, as a central bank, we have an access to the individual balance sheets of all the corporate entities in the economy. the granularity of the data allows for a closer look at the behavior of the firms in different sectors, their performances, their leverage, structure of their sources of financing, the potential vulnerabilities which might cumulate in different sectors, with different implications for the economy in general. all of this is valuable information, not affordable by using the aggregates only. i would still like to emphasize that for small economies, as the macedonian, the usage of micro data on a regular basis for monetary policy purposes is not an unknown practice. given that, we are small and open economy, with a strategy of de facto fixed exchange rate, where in depth scrutinization of the external sector data has been a practice with a long tradition. the incoming data on external sector is analyzed on aggregate and sectoral level, but also some of the micro data on individual companies is being monitored on a monthly basis. this pertains mainly to some of the traditional sectors with relatively large weight in the total export, like the metal industry. given its importance, and at the same time its large exposure to external shocks, regular monitoring of the individual data provides first signals for potential vulnerabilities. even more, as the economy is undergoing major structural changes, particularly in the export sector, the regular monitoring of the
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of a firm β s capital adequacy that is complementary to regulatory capital ratios, which reflect the firm β s performance to date. although we view this new approach to capital assessment as a significant improvement over previous practices, we are aware that the true test of this new regime will come only if another period of significant financial or economic stress were to materialize - which is to say that we will not have a strong test of the effectiveness of stress testing until the stress tests undergo a real world stress test. the same comment, mutatis mutandis, applies to the overall changes in methods of bank regulation and supervision made since september 15, 2008. the dodd - frank act requires the fed to conduct a supervisory stress test for bank holding companies with $ 50 billion or more in total consolidated assets, and for nonbank financial companies designated by the financial stability oversight council ( fsoc ) for fed supervision. bis central bankers β speeches third, supervisory stress testing has been on the leading edge of a movement toward greater supervisory transparency. since the scap, the fed has steadily increased the transparency around its stress testing processes, methodologies, and results. before the crisis, releasing unfavorable supervisory information about particular firms was unthinkable - for fear of setting off runs on banks. however, the release of the scap results helped to calm markets during the crisis by reducing uncertainty about firm solvency. indeed, only one of the 10 firms deemed to have a capital shortfall was unable to close the identified gap on the private markets. our experience to date has been that transparency around the stress testing exercise improves the credibility of the exercise and creates accountability both for firms and supervisors. that said, too much transparency can also have potentially negative consequences, an idea to which i will turn shortly. with the benefit of five years of experience, the fed is continuing to assess its stress testing program, and to make appropriate changes. examples of such changes to date include the assumption of default by each firm β s largest counterparty and the assumption that firms would not curtail lending to consumers and businesses, even under severely adverse conditions. as part of that assessment process, we are also currently seeking feedback from the industry, market analysts, and academics about the program. supervisory stress testing is not a static exercise and must adapt to a changing economic and financial environment and must incorporate innovations in modeling technology. work is currently underway on adapting the stress testing framework to accommodate firms that have not traditionally been subject to these
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to improve our monetary policy communication. conclusion to conclude, let me summarise the messages the mpc would like people to hear about monetary policy. we are not slamming the brakes on this economy, but we are easing off the accelerator, moving towards a more balanced or neutral interest rate setting. we do not want to slow the economy down too much, and we are cognisant of the many challenges facing domestic producers and consumers. at the same time, we also do not want to join the large group of countries in the world today which took low inflation for granted, kept policy too loose for too long and ended up way above their targets, to the great unhappiness of almost all citizens. it is a delicate balancing act, and as an independent central bank operating an inflation - targeting framework, we aim to deliver moderate interest rates and low and stable inflation over time in our policymaking decisions. thank you. page 8 of 8
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benny b m popoitai : opening speech - pacific financial intelligence community plenary opening speech by mr benny b m popoitai, acting governor of the bank of papua new guinea, at the pacific financial intelligence community ( pfic ) plenary, port moresby, 16 november 2022. * * * good morning ladies and gentlemen. it is an honour to open this pacific financial intelligence community plenary this morning and i would like to begin by welcoming our international visitors : the heads of the fius of our pacific island nations and the delegations from each of the countries represented here today. i would like to open this plenary in a manner that i hope may set the tone for the next two days and indeed provide a direction of sorts for the work that is to come over the coming months and years for this financial intelligence community. pfic was established out of the need to tackle common challenges faced in our region and the need to share information and collaborate. these similar challenges range from politics, economics and financial crime types, to name a few. our region, like much of the world, finds itself at time that appears may be a crucial juncture. the relative order and stability that much of the world has enjoyed in the time since the end of the second world war has been significantly challenged by recent events. the power tussles, tensions in various quarters of world and the resurgence of global inflation and the rising costs of energy and food, have all changed the way in which we view the world, in a very, very short space of time. the lesson i believe that all of us here in this room should take from the last few years is that resilience and trust must be built within our own pacific region, by us. we cannot rely on the us or europe to provide international stability in the way that we perhaps once thought. the stability and harmony in our region cannot be left to others outside of our region to decide. we must build resilience among our pacific countries in a deliberate and systematic way ; based on the common interests we share. we must act with urgency and we must place trust in each other - as individuals, as well as nations, to achieve this. a key feature of what confronts our region us is the blurring of geopolitics, organised crime and corruption in our region. this blurring presents problems that no single country on its own can successfully address. confronting these issues will require a level of cooperation that is, i
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raghuram rajan : competition in the banking sector β opportunities and challenges talk by dr raghuram rajan, governor of the reserve bank of india, at the annual day lecture of the competition commission of india, new delhi, 20 may 2014. * * * good evening. shri ashok chawla, distinguished invitees, our friends from the press, and ladies and gentlemen : it is a great honour to be invited to deliver the annual day lecture at the competition commission of india. competition is the life force of a modern economy β it replaces dated and inefficient methods while preserving valuable traditions ; it rewards the innovative and energetic and punishes the merely connected ; it destroys the stability of the status quo while giving hope to the young and the outsider. true competition eliminates the need to plan, for as gravity guides water through the shortest path, competition naturally guides the economy to the most productive route. healthy competition is not just the best way to grow but also the best way to include all citizens ; what better way to get needed services to a poor housewife than to encourage providers to compete for her money? what better way to uplift a member of a backward community than for private employers to compete to hire her for a good job? healthy growth - inducing inclusive competition does not, however, emerge on its own. without intervention, we get the competition of the jungle, where the strong prey on the weak. such competition only encourages a certain kind of winner, one who is adapted to the jungle rather than the world we want to live in. in contrast, healthy competition needs the helping hand of the government ; to ensure the playing field is level, that entry barriers are low, that there are reasonable rules of the game and clear enforcement of contracts, and that all participants have the basic capabilities such as education and skills to compete. governments have historically found it difficult to ensure such healthy competition because intervention has to be just right. governments typically are tempted to go beyond intervening to create a fair competitive environment, and instead have turned to determining winners and losers themselves. this typically has not worked out well. with this caveat, the creation of a healthier, more competitive environment in india could be the government β s most important contribution to sustainable economic growth in india over the medium term. and the competition commission will be a central player in this endeavour. whether in questioning existing government monopolies or the excessive market power of private players, you will be a key institution in the
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banking business away from regular commercial banks. we can debate this issue for a long time, or we can experiment by allowing a few payments banks and monitoring their performance. the rbi proposes to discuss further steps with stakeholders in this regard. if payments banks are successful, they will allow us to steadily reduce some of the obligations we impose on commercial banks. for instance, as payments banks hold government securities for liquidity purposes, we can reduce the quantity of government securities we ask commercial banks to hold as part of slr. while on the issue of bank obligations, there is an area where they do seem to be at a disadvantage vis - a - vis other financial institutions β in the raising and lending of long term money. this becomes especially important for infrastructure, where banks can be essential in early stage construction financing. since construction lasts for 5 β 7 years, banks should be able to raise long tenor money for these purposes. but if they raise such money today, they immediately become subject to crr and slr requirements, and any lending they do attracts further priority sector obligations. to the extent that banks raise long term bonds and use it for infrastructure financing, could we relieve them of such obligations? this will immediately put them on par with other financial institutions such as insurance companies and finance companies in funding long term infrastructure. the priority sector obligation will probably be necessary for some more time in a developing country like ours, though we need to deliberate more on what sectors should constitute priority as the economy develops. but even without entering this potentially contentious debate, can we allow banks to fulfil existing norms more efficiently? for instance, if one bank bis central bankers β speeches is more efficient at rural lending, can it over - achieve its obligations and then β sell β its excess to another bank that is an underachiever? we are examining such possibilities. finally, we have had only limited success in achieving inclusion when it is seen as a mandate. banks sometimes open branches in remote areas but the officers that staff them do not really reach out to the local population ; banks open no - frills accounts but many lie dormant. the reality is that if the mandate is unprofitable, banks will find ways to avoid them. not all forms of inclusion can be made profitable, but we should give banks the freedom to try new approaches, perhaps drawing in other institutions that can traverse the last mile to the underserved where necessary. the rbi will come out with new relaxations on business correspondents shortly.
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amadhila is highly skilled and qualified to address the gathering on issues of macroeconomic management and the nexus between fiscal and monetary policies. i would now like to call upon the right hon. prime minister of the republic of namibia to address this opening session of the 57th ccbg meeting. i thank you. 2 / 2 bis - central bankers'speeches
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for our monetary policy to have the intended effect, the transmission channel must be effective. that is why we have started a dialogue with the commercial banks to ensure that the transmission mechanism works effectively. there are some who suggest that our actions in this regard are irresponsible. they accuse us of causing financial instability. they also accuse us of chasing away potential investors. let me assure you that, as a regulator of the banking sector, we are well aware of our responsibilities. in carrying out our responsibilities, we will always do so in the best interest of namibia. after all, financial stability is one of our main objectives and we take our responsibilities seriously. let me now return to the main topic for tonight. in less than five months we will celebrate our 20th independence anniversary. twenty years is an appropriate period to take stock of our achievements since independence and to reflect on the way forward. our 20th anniversary as a sovereign nation is also symbolic in the sense that we will be exactly 20 years away from the target date of vision 2030. according to v2030, in twenty years from now we want to be a prosperous and industrialized nation ; and we want to enjoy peace, harmony and political stability. more specifically, the vision states that namibia will be an upper income country. that means that we should have a per capita income of at least us $ 17, 000 and unemployment of below 5 percent. let us therefore pause for a moment and ask ourselves whether we are on track towards meeting these noble objectives. to be sure, we certainly have achieved a lot in the last twenty years and we have every reason to celebrate our achievements. it is not an overstatement to say that we have been the envy of many countries in the sub - saharan african region. our achievements can be grouped under three categories, namely political, macroeconomic, and social. political stability is an indispensable condition for sustainable economic development. without political stability economic development is simply not possible. we should be proud that in a relatively short time we were able to establish a stable and mature democracy. we have managed to build strong institutions, including independence of the judiciary, good governance and protection of property rights. in just a few days from today, namibians will for the fifth time go to the ballot boxes for the presidential and national assembly elections. i would like to wish all the political parties taking part in the elections good luck. indeed we have reason to celebrate. as to macroeconomic stability we have equally been successful
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it is now called, is to ensure that the income from our oil and gas resources will also accrue to future generations. the fund is the nation β s family silver. it is no longer held in norges bank β s vault, as it was during the periods of the silver and gold standards. the fund is invested in fixed - income securities, equities and real estate across the world. when norges bank had finished collecting the silver tax around 1820, the bank β s silver holdings came to somewhat more than 50 grams per inhabitant, which is the equivalent of about one silver spoon. the value of the fund has just recently exceeded nok 5 trillion, or about nok 1 million per inhabitant. chart : return on fund accounts for one third of its total value the fund β s results have been favourable. since 1998, the cumulative return on the fund has been close to nok 1 800 billion, which is more than a third of the fund β s total value. so far, our nation has earned a solid return on its investments. quite paradoxically, low growth and low interest rates abroad are probably the main factors behind the solid performance of the fund over the past two to three years. chart : annual return on the gpfg since the end of the 1990s, a persistent fall in yields has driven up government bond prices. in recent years, the unconventional monetary policy measures of the world β s major central banks have contributed to even lower interest rates and higher prices for equities and other bis central bankers β speeches securities. this has resulted in above - normal returns on the fund β s investments. but today there is no longer room for a considerable fall in interest rates and equity prices have risen to fairly high levels. chart : return consists of two elements our measure of final return includes both capital gains and direct cash flows, which comprise dividend and interest income. the market value of the fund and its investment returns will therefore swing in tandem with equity and bond prices. this may draw a veil over the progression of the fund β s underlying earnings. in the long run, it is the fund β s cash flow that makes a permanent contribution to our national income. the fund β s cash flow is therefore a good cross - check for measured capital returns. chart : cash flow from the gpfg and petroleum revenue spending over the fiscal budget the cash flow presently matches the actual level of petroleum revenue spending over the fiscal budget β of about 3 percent of the
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ΓΈystein olsen : management of the government pension fund global ( gpfg ) introductory statement by mr ΓΈystein olsen, governor of the norges bank ( central bank of norway ), before the storting β s standing committee on finance and economic affairs, oslo, 30 april 2013. * * * please note that the text below may differ from the actual presentation. charts in pdf i would like to thank the chairman and thank you for giving norges bank the opportunity again this year to report on the management of the government pension fund global ( gpfg ). chart : changing the regional allocation the investment strategy of the gpfg builds on its specific features, purpose and our perception of the functioning of financial markets. the gpfg is a large fund and features a long investment horizon. the objective of investment management is to preserve the longterm international purchasing power of the gpfg. in 2012, the investment strategy was changed. as a result, investments in emerging markets have increased. just over 10 percent of the overall portfolio is now invested in these markets. chart : increasing investments in real assets the allocation to equities was increased to 60 percent between 2007 and 2009. when the allocation to real estate reaches 5 percent further ahead, the gpfg's allocation to real assets will make up two - thirds of the overall portfolio. the long - term expected return on real assets is higher than on nominal bonds. the risk is also higher, but the long - term investment horizon puts us in a solid position to carry that risk. the key to realising the higher return is to adhere to the strategy also in times of heightened uncertainty, as we did through the financial crisis in 2008 and 2009. an official framework for rebalancing back to a set allocation to equities has now been established. this will help ensure that this strategy is carried out during the next period of high volatility in financial markets. chart : lower costs management costs for equities are higher than for fixed - income securities. the cost of managing many small shareholdings is higher than managing a few large ones, as is the cost of managing investments in emerging markets in relation to developed markets. overall management costs as a percentage of the gpfg have nonetheless fallen over time. we have exploited its size to realise economies of scale. in the past few years, costs have been reduced also in krone terms. this is partly due to reduced use of external managers. costs
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decade, itself caused by the preceding decline in the neutral rate of interest. the counterpart to the faster mortgage growth wasn β t higher consumption but a transfer of financial wealth to those trading down the housing market ( largely from younger to older people ). and, to complete the circle, the decline in the neutral rate of interest, from extremely high levels in the early 1990s, makes a given quantity of debt more affordable. i β m not claiming that higher debt involves no extra risk at all. one could also conceive, in principle, of a housing market that involved much less of it. suppose that, instead of putting deposits in mortgage - issuing banks, we all had equity investments in companies that owned residential housing β and that, instead of owning the houses ourselves, we were simply tenants of these corporate landlords. that would be a β model β with no mortgage debt at all. but it β s not immediately clear it would make net wealth any higher, housing any cheaper or, for that matter, the macro - economy more stable. 8 returning to the real world, regulators would rightly be concerned if mortgage debt started growing rapidly again, especially if it was accompanied by other signs of loosening credit supply and greater risk - taking. it was in response to early signs of this sort that the fpc decided in 2014 to cap the share of new mortgages banks were allowed to issue at high multiples of a borrower β s income. however, the fact that the level of uk mortgage gearing is higher than it was a generation ago, or that it β s lower than in the netherlands, is of less significance. and the aim of the 2014 measures was not to reduce in fact we know that under certain conditions, originally set out by modigliani and miller ( 1958 ), it would make no difference to anything β this is just an extension of their famous result concerning corporate finance ( which i also mention below ). as it happens the uk has moved slightly in this direction of this β model β ( if that β s not too grand a word ) over the past few years. one of the reasons mortgage debt is lower than a decade ago, relative to income, is that the share of owner - occupiers has fallen and more people rent ( it β s also true that the share of equity in the housing market has risen a little ). but that hasn β t made for cheaper housing overall. while the share of income going on mortgage interest has declined
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for putting losses in the largest firms in the world not just onto shareholders but onto their unsecured, uninsured creditors rather than onto taxpayers. i would expect that over time to lead to adjustments in the business models and organization of the most significant firms in the world. what β s more, on the whole, i think they will welcome that. 5. capital markets the next element of the reform programme is capital markets. too much of the reform debate has probably revolved around banks, both in response to this crisis and in response to earlier crises. we live in a world where financial intermediation does not just go via banks and insurance companies, but it goes via capital markets and the vast array of institutions, investors and issuers that the capital markets encourage into existence. i will highlight just two key changes on this front. one, there is a determination that a lot more otc ( over - the - counter ) derivative activity will go through central counterparties, rather than being settled bilaterally. this can have enormous benefits in terms of laying down standards for collateralisation, valuations, and ensuring transparency of what is going on in those markets. there is a residual question about how much of that activity should go via exchanges or via other trading platforms. that β s something which i doubt will be completely resolved this year. i think it will remain part of the g20 and the fsb agenda going into next year. but it is a very important part. another key element of changing capital markets is much greater transparency around, and much reduced reliance on, credit rating agency ratings. one of the problems in global capital markets has been that too many investors and banks have given up on reaching their own view on borrowers and on instruments, but have effectively subordinated their own judgment to the judgment of credit rating agencies. the fsb is sponsoring and leading work in order to reduce the extent to which credit rating agency ratings are inscribed into, or embedded in the regulatory fabric of our capital markets. 6. incentives the sixth thing is incentives. the issue that gets most attention here is compensation or pay, on which the fsb issued a code. the essence of that is that more pay should be deferred. i would add that perhaps part of deferred compensation should be in the form of a debt contract, so that the managers and workers in large firms eventually become creditors of the firm and so they themselves have the same risks as other debt holders. that works only if we
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key determinants of inflation : inflation expectations and the amount of slack in the economy. 3 maintaining a nominal anchor helps stabilize inflation expectations, which in turn means that rises or falls in inflation tend to be highly correlated with economic slack. thus, stabilizing inflation also helps to stabilize economic activity around sustainable levels. to see further how this process would work, consider a negative shock to aggregate demand ( such as a decline in consumer confidence ) that causes households to cut spending. the drop in demand alan greenspan ( 1988 ), statement before the committee on banking, finance, and urban affairs ( 746 kb pdf ), u. s. senate, july 13. two other important factors are import prices, which are determined by world market prices and exchange rates, and relative energy prices, such as the price of oil. however, a central bank has no control over world market or relative oil prices, and so adding these factors into the analysis does not change the basic conclusion here. leads, in turn, to a decline in actual output relative to its potential, that is, the level of output that the economy can produce at the maximum sustainable level of employment. as a result, future inflation will fall below levels consistent with price stability, and the central bank will pursue an expansionary policy to keep inflation from falling. the expansionary policy will then result in an increase in demand that raises output back up to potential output in order to return inflation to a level consistent with price stability. for example, during the last recession the federal reserve reduced its target for the federal funds rate a total of 5 - 1 / 2 percentage points, and this stimulus not only contributed to economic recovery but also helped avoid an unwelcome further decline in inflation. in other cases, a tightening of the stance of monetary policy is needed to prevent an " overheating " of economic activity, thereby avoiding a boom - bust cycle in the level of employment as well as an undesirable upward spurt of inflation. a strong commitment to price stability helps reduce fluctuations in employment and output in other ways. first, when inflation expectations are well anchored, a central bank will not have to worry that expansionary policy to counter a negative demand shock will lead to a sharp rise in expected inflation β a so - called inflation scare β that will then push up actual inflation in the future. thus, a strong commitment to a nominal anchor enables a central bank to be more aggressive in the face of negative shocks and therefore to prevent
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. the bank frauds are primarily deposit related, advances related and services related. of these, the deposit related frauds which used to be big in number though not in size, have been on the wane, thanks to the improvements in cheque and payment processing, usage of technology and tightening the provisions of the negotiable instruments act. the advances related frauds continue to be the major concern for banks, especially because of their size and far reaching implications to their financial soundness and integrity. a special variety of frauds, which are increasing in number and in terms of speed, are the cyber frauds. yet another special type relates to trade or documentary credit related, special because of cross border implications. 7. when we discuss about bank frauds, we will not discuss about bank frauds committed by third parties which can suitably be classified as thefts. these types include cyber frauds committed by tricksters, or techsters. for our discussions, we will include bank frauds committed by some connected parties like the depositors, the borrowers, the users of bis central bankers β speeches bank services or by their own staff, their outsourced agencies, their vendors, their agents like assayers, valuers, auditors, etc. root cause of financial frauds 8. financial frauds, more specifically the advances related frauds, occur because of breach of contract and trust. it could be because of the pledged or mortgaged assets are compromised or divested off ; or the documents are forged ; or the funds availed are diverted or siphoned off ; or the documentary credits like the letters of credit or guarantees are misused, etc. 9. the root cause of financial frauds can be reduced to one single phenomenon. it is failure to know its somebody β i. e. failure to know its customer, or failure to know its employee, or failure to know its partner / vendor. bankers β response to frauds 10. what the fraudsters do not understand is the systemic response of banks when they have been tricked into facing the consequences of frauds. the bankers β reactions include withdrawal from lending, being risk averse, losing confidence in documentary credit, excessive collateralisation or documentation, demands on personal guarantees, collapse of need based lending systems like mpbf, tandon and chore committee norms, etc. these are in addition to the bankers β efforts to recoup the losses through higher interest rates and charges. the three ky principles
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slide 5 ). these correlations were sometimes not easy to detect simply because, contrary to headline inflation, underlying price pressures are often moving through the global economy at varying speeds, as it takes time for changes in supply and demand in one country to affect prices elsewhere. of course, such correlations say little about the ultimate source of the shock, and hence the appropriate policy response. in an integrated global economy, inflation may co - move across economies for two reasons : either because of common shocks that hit all countries simultaneously, even if not symmetrically, such as the oil shocks of the 1970s, or because of idiosyncratic or regional shocks, such as the asian financial crisis of 1997 or the euro area sovereign debt crisis of 2012, that are large enough to affect output and prices worldwide. today, we are seeing both forces at work. household wealth from accumulated savings boosts corporate pricing power the common shock relates to the impact of the pandemic on global household wealth and firms β pricing power. strict lockdowns across virtually all countries allowed households around the world to accumulate huge amounts of involuntary excess savings. in the united states, these amount to about usd 2. 7 trillion, or 16. 9 % of annual disposable income in 2019. in the euro area, this figure is β¬ 900 billion, or 12. 4 % of annual disposable income in 2019. to a considerable extent, these savings stem from the forceful fiscal policy response to the crisis. in the euro area, for example, furlough schemes have helped keep many people in employment, protecting labour incomes, while us households benefited from generous stimulus cheques ( slide 6, left - hand side ). although excess savings are distributed unequally both across and within economies, they have visibly boosted corporate pricing power by generating an environment in which consumers worldwide are both more willing and more able to tolerate price increases. 3 / 8 bis central bankers'speeches this can be seen in two ways. one is through the particularly strong price dynamics in contact - intensive services industries. restaurants, cinemas and other service providers are increasing their prices as economies reopen ( slide 6, right - hand side ). in the euro area, these sectors are currently the main drivers of services price inflation, which is at its highest level in 20 years. these catch - up effects are not happening simultaneously across economies, as social contact restrictions are being removed at different speeds. but they are happening in most advanced economies because fiscal policy has
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in crisis times, the demand for cash surges even higher. at mid - march this year, the weekly increase in the value of banknotes in circulation almost reached the historical peak of β¬19 billion. 4 the ecb β s debate on cbdcs is therefore mainly analytical. whether and when it becomes more of a policy debate will largely depend on the preferences of households. we are always willing to innovate in the form of money and payment services that we provide. if, for instance, people voiced a preference tomorrow for plastic or polymer banknotes rather than the traditional paper ones, we would happily accommodate them. in the same vein, we closely follow technological developments and reflect on the type of money and payments that are best suited to the needs of an increasingly digital economy. the lack of a concrete β business case β for a cbdc at present should and does not stop us from seriously exploring the optimal design of a cbdc so that we will be well prepared should we ever 1 / 4 bis central bankers'speeches take a policy decision to issue a digital currency. to this end, we have set up a task force on a cbdc within the eurosystem. let me give you a preview of our deliberations, starting with different design options. legally solid despite fancy design? most of the money issued by central banks is in fact already digital, albeit not called cbdc. this is true for the bulk of the money issued through our wholesale credit operations with our counterparties. at present, access to the central bank balance sheet offers the possibility to access digital central bank money. what could change in the future is the scope of the parties eligible to access our central bank balance sheets. indeed, this lies at the heart of the discussion on cbdcs. a wholesale cbdc, restricted to a limited group of financial counterparties, would be largely business as usual. however, a retail cbdc, accessible to all, would be a game changer. so a retail cbdc is now our main focus. setting up a cbdc would require a solid legal basis, in line with the principle of conferral under eu law. one key consideration here is whether a retail cbdc could and should have the same legal tender status as banknotes and coins. in practice, legal tender status implies that a cbdc would have to be usable at any location and under any condition, possibly even offline. without legal tender status, the legal basis would need to be clarified
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and banking 43, pages 1399 β 1421. bis central bankers β speeches alleviated the funding constraints of banks extending loans to smes by accepting such loans, and asset - backed securities ( abs ) backed by pools of loans, as collateral in its monetary policy operations. the banco de portugal has been proactive in implementing these measures. additional credit claims alone account for around 15 percent of total collateral posted by portuguese banks with the ecb, and help to generate a large collateral buffer. the ecb will support a revival of the abs market in the euro area, which would help smes to benefit from the improving financing conditions. let me also point out that the restructuring and strong capitalisation of banks is an important condition for restoring the smooth provision of credit to euro area corporates and households. i turn now to the issue of confidence and this allows me to close the circle and go back to the high unemployment costs observed so far. high uncertainty related to falling disposable income and increased unemployment has pushed up the precautionary savings of households. high uncertainty has also kept household confidence low, despite government actions going in the right direction. in this environment, lower prices would improve the purchasing power of households and reduce uncertainty. confidence will be boosted if governments make sure that the burden of the adjustment is equally shared and not distorted by privileged groups and vested interests. the way forward : going structural thanks to the actions of the eu governments and the ecb, and with imf support, signs of stabilisation in the euro area have been increasing in recent months. this provides an opportunity to make further decisive steps forwards. in stressed countries, governments have initiated reforms which are unprecedented in their ambition and scope. there has been an increase in the implementation of politically sensitive reforms in many areas, including public administration, health and pension systems, education, judicial systems, competition frameworks, industrial relations, labour markets, energy markets, network industries, service sectors and in the regulated professions. this list will sound very familiar to you as the portuguese adjustment programme is covering all these areas. the reforms are consistent with the goals set by the european union in 2000 in its lisbon strategy, but at the time there were no incentives to act on these commitments. such reforms, if well designed and fully implemented, will reorient the engines of growth towards high - productivity sectors and enable companies to thrive in the single market and in the global economy. studies based on general equilibrium models have confirmed that the long -
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2003 u. s. securities & exchange commission ( sec ) decision allowing mortgage asset based securities ( abs ) to be used in repurchase agreements ( repos ) and the subsequent changes in 2005 to the u. s. bankruptcy law, excluding repos from bankruptcy processes thus rendering them a β safe haven β. the crisis and the expansion of finance as in past cases, the recent financial crisis had its origins in excessive leverage and excessive credit or debt creation in the financial system as a whole. these excessive imbalances were not considered a risk by the economic thinking of the time. as credit expanded and assets grew, the share of the financial sector in total gdp increased exponentially. in europe, this led to strong growth of some important universal banks. in the euro area, total bank assets represented 116 % of gdp in 1985 but increased to 219 % in 2000 and to 1 / 11 bis central bankers'speeches 320 % in 2008. already in 2002, the assets of the 12 biggest banks in europe represented 64 % of gdp and as bayoumi states in his recent book, β they were already becoming too big to fail β. 1 in the u. s., the increase in finance was mostly due to the expansion of the so - called β shadow banking β sector. in 2007, total assets in the shadow banking sector equalled the level of total bank assets. figures concerning non - banks β involvement in credit intermediation are also remarkable : the size of euro area investment funds more than tripled from 2007 to the present, from 13 % of total banking assets to the present 41 %. profits are a further indicator of the sector β s expansion : in the u. s. financial sector profits climbed from 8 % of the non - financial firms β profits at the beginning of the 1980s to a peak of 68 % in 2003, hovering around 30 % in the past few years. 2 the expansion of the financial sector was not enabled by savings invested in the capital of financial institutions but mostly by a redefinition of risk capital and its endorsement by regulators. on the eve of the crisis, a few significant european banks had a leverage ratio ( equity over total assets ) of just 1. 5 % to 2 % while capital ratios were well above the regulatory minimum of 8 %. the β magic β of internal models to calculate risk weights in regulatory capital explains the difference, although the low leverage ratio meant that a loss of 3 % of total assets would wipe out banks β capital. the
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% in the first quarter of 2005, confirming that the underlying growth dynamics remained subdued in the first half of 2005. at the same time, the most recent survey indicators have, on balance, supported the view that economic growth could improve in the second half of this year. looking further ahead, conditions continue to be in place for positive fundamental factors to influence the outlook and for economic activity to pick up beyond the short term. on the external side, ongoing growth in global demand and improvements in euro area price competitiveness should support euro area exports. on the domestic side, investment should benefit from the exceptionally low level of both nominal and real market interest rates prevailing across the entire maturity spectrum, as well as from the robust growth of corporate earnings and ongoing improvements in corporate efficiency. consumption growth should gradually rise, broadly in line with expected developments in disposable income. this picture is consistent with the most recent ecb staff projections, which envisage euro area real gdp growing at rates of between 1. 0 % and 1. 6 % in 2005 and between 1. 3 % and 2. 3 % in 2006. compared with the june projections, the ranges projected for real gdp growth have been adjusted slightly downwards. for 2005, this mainly reflects slight downward revisions of past data, while for 2006 this reflects the projected effects on disposable income of increases in oil prices. this outlook for economic activity is subject to a number of downward risks, relating mainly to higher oil prices, low consumer confidence and concerns about global imbalances. in particular, the potential further dampening impact of oil prices on the outlook for growth is being monitored very closely. oil prices have continued to rise, increasing considerably since the beginning of the year, and developments in futures prices suggest that market participants expect the current tightness in oil markets to persist. obviously, the situation has been further complicated by the tragic effects of hurricane katrina. all our thoughts are with the people of the city of new orleans and all affected neighbouring areas and we are touched by the wave of global solidarity helping them to cope with 1 / 3 their immediate needs. at the same time, it remains difficult to assess the full extent of the damage and the period of time necessary for its repair. normally, despite the significant wealth destruction resulting from such storms, the economic impact at the national level is limited to the short term and is increasingly offset by the positive impacts of rebuilding activity. at the moment, we consider that the global impact will most likely remain limited
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approximately 11 billion euros. how possible is a third bailout program and if so, what form could it take? in the details of triggering the omt program, there is a distinction between a precautionary credit line and an emergency credit line. how could a third bailout program take place? β this discussion is also premature. the current program runs until the end of next year. this is more or less one and a half year to go. we have to make this program a success. as regards the future, there is a clear paragraph in the november 2012 eurogroup statement which i already referred to. it says that the european partners commit to provide assistance to greece during the life of the program and beyond if greece has not regained capital market access and implements fully the adjustment program. this is public and it is nothing new. it is true that the debt level of the country will be elevated for years to come and this means that full market access will be challenging. you touched upon two different issues. the first issue is that the country β s budget has a fiscal gap for the years 2015 β 2016 and the second issue is that we have a financing gap of the existing program in the second half of next year. these two issues have to be dealt with under the current program. completely separate are the necessary conditions for an omt program β you must be in a situation in which you are regaining full bond market access and you must have an esm program, either a fully fledged or a precautionary program and there has to be an appropriate imf involvement. so, it depends on whether the country is in a situation in which it can have the possibility of regaining full market access β. bis central bankers β speeches we know that the greek government is preparing to go to the bond market very carefully. could this be helpful? β any use of a precautionary line would assume that you can cover as a country all your financing needs from the capital markets. otherwise, the program is more than precautionary. and one has to assess very carefully when a country can access capital markets. in my personal view, there are at least two preconditions. one is that the country has reached a primary surplus and second that it has returned to positive real growth. tapping capital markets is a challenge and it will remain a challenge β. you have been following the greek crisis since 2010. three years later, what would you say about the progress athens has made in
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ardian fullani : overview of albania β s latest economic and financial developments speech by mr ardian fullani, governor of the bank of albania, on the monetary policy decision - making of the bank of albania β s supervisory council, tirana, 27 february 2013. * * * today, on 27 february 2013, the supervisory council of the bank of albania reviewed and approved the monthly monetary policy report. based on the latest monetary and economic developments in albania, and following discussions on their future outlook, the supervisory council of the bank of albania decided to keep the key interest rate unchanged, at 3. 75 %. the supervisory council deems that the monetary conditions are adequate to comply with the medium - term inflation target, providing the necessary monetary stimulus to boost domestic demand. let me now proceed with an overview of the economic developments and key issues discussed at today β s meeting. * * * annual inflation was 2. 7 % in january. higher food prices were the major contributor, about 75 %, to inflation formation. in this regard, unprocessed foods, which recorded double - digit growth rates, contributed the most to this formation. the prices of the other consumer basket items fluctuated narrowly, maintaining their low contribution to inflation. in the macroeconomic aspect, inflation was formed by the presence of spare production capacities, while supply - side shocks were absent. the slow growth of production costs and low profit margin for businesses were reflected in low core and headline inflation rates. in addition, the stable exchange rate, anchored inflation expectations and low monetary expansion contributed to maintaining price stability. the albanian economy is estimated to have grown below its potential in 2012. recent economic and monetary data confirm, overall, our earlier assessment for the presence of a negative output gap. on the demand side, economic growth was driven mainly by net exports growth, whereas domestic demand is estimated to have provided low contribution. data on trade in goods during the fourth quarter show that exports increased 12 % and imports fell 9. 5 %, year on year. subsequently, the nominal trade deficit narrowed 20. 1 %, in annual terms, boosting aggregate demand in this quarter. on its side, domestic demand remains weak, due to consumers and businesses hesitation to consume and invest. lending standards continue to be tight as banks are more prudent about lending. budget expenditure fell about 0. 3 %, year on year, owing mainly to contracting capital expenditure. collected revenue was also downward, eventually reducing the budget deficit by 1. 2 % compared
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. the bank of albania will continue to implement a stimulating monetary policy for as long as inflationary pressures will remain weak. stimulating monetary conditions support aggregate demand growth and full utilisation of production capacities, creating, therefore, the premises for complying with the medium - term inflation target. bis central bankers β speeches
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financial system, and moderate credit growth are expected to mitigate the impact of inflationary pressures on market interest rates. there is also good reason to expect a strong external position this year. dollar inflows, primarily from ofw remittances and investments, are expected to continue to come in. with healthy inflows, the exchange rate is poised to remain broadly stable in the course of the year. the continuing challenges to monetary and banking policies while economic performance appears to be on track, we remain watchful of the potential risks and challenges to the economic outlook. these risks include the following : ( 1 ) volatility in world oil prices ; ( 2 ) a build - up of excess liquidity in the financial system ; ( 3 ) possible exchange rate volatility due to excess liquidity ; and ( 4 ) adverse shifts in the public β s inflation expectations. in the face of these challenges, the public can count on the bsp to make sure that these risks do not endanger our path to economic progress. the bsp will stay committed to its mandate of promoting low and stable inflation. the bsp is also committed to strengthening the financial sector through continued structural reforms. foremost of these measures is the clean - up of banks β balance sheets of non - performing assets. the clean - up will help spur credit and investment activity and create the basis for more sustainable growth in the medium term. other key financial reforms will be focused on : ( 1 ) improving the bsp β s supervision technology and capacity ; ( 2 ) aligning prudential regulation of the banking system with international standards and best practices ; ( 3 ) strengthening corporate governance standards and market discipline mechanisms ; further developing the domestic capital market ; and ( 5 ) enhancing the payments system. efforts are also underway for the implementation of basel ii accord and adoption of international accounting standards by local banks. these initiatives are designed to bring local banking practices in line with internationally accepted standards. in the area of capital market development, the bsp will continue its active collaboration with other government agencies and the private sector for the completion of much - needed market infrastructure to enhance system integrity and overall market confidence. we will likewise pursue further enhancements in financial information to guide investor decisions. a key effort in this area is the establishment of credit rating agencies. we are also working closely with congress on the establishment of a centralized credit information system to help private enterprises secure better access to credit, reduce borrowing costs, as well as minimize the risk exposure
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amando m tetangco, jr : the philippine economy - the continuing challenge speech by mr amando m tetangco, jr, governor of the central bank of the philippines, during the 57th inaugural meeting of the management association of the philippines, manila, 24 january 2006. * * * introduction during the bsp β s annual reception for the banking and business community last tuesday, i had one principal appeal to our friends. to make the best of our circumstances, achieve progress in our own spheres, so that in the end, the whole nation will be better off. distinguished officers and members of the management association of the philippines led by 2005 president mon paterno and 2006 president evelyn singson, colleagues from the bsp and the government, distinguished guests, friends, ladies and gentlemen, good evening. map β s theme for this year, β call to action : country above self β, happens to be in accord with my tuesday β s appeal. we are all convinced that the must - do list for the philippines is long, some of the items are structural while some would require streamlining of policies. any and all efforts to address this must - do list are therefore quite crucial. the next best thing to do is precisely this β take action in your respective spheres of influence. as captains of industries β described by media as movers and shakers of our economy β you can truly generate tremendous benefits for our country and our people. ladies and gentlemen, what you have selected as guiding theme for this year is exactly the mindset we want filipinos to have : country above self. if you can widen the reach of this message to cover as many filipinos as possible, then you would be a part of a chain that seeks to improve the nation. now, let me share with you some positive news on the economic front which give us reason to be more confident about our future. 2005 a most challenging year by most accounts, 2005 was a very challenging year for the philippines. we had to contend with high oil prices, rising global interest rates, lower farm output, and non - economic tremors. yet our economy, as measured by gdp, continued to expand. sure, it wasn β t at the pace we aimed for, but our economy proved its resilience once again. the expansion in economic activity was achieved amid an easing inflation environment. inflation has continued to ease since the second half of 2005, supported mainly by the softening prices of food and oil, and to some
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forward to those efforts. 2 / 2 bis central bankers'speeches
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travel, to name just a few. the demand for a virtually infinite array of impalpable values is, to a first approximation, insatiable. understandably, today β s efforts to create new values for consumers concentrates on these impalpables, which offer the highest potential value - added relative to costs in physical resources and human effort. unbundling the particular characteristics of each good or service facilitates maximizing its value to each individual. some individuals place more value on, and are willing to pay more for, style y rather than style x, whereas others prefer x. producing both x and y enhances overall consumer well - being. fifty years ago, only x was feasible. this striving to expand the options for satisfying the particular needs of individuals inevitably results in a shift toward value created through the exploitation of ideas and concepts - - or, more generally, information - - from the more straightforward utilization of physical resources and manual labor. thus, it should come as no surprise that, over the past century, by far the largest part of the growth in america β s real gross domestic product is the result of new insights and, more broadly, new information about how to rearrange physical reality to achieve ever - higher standards of living. the amount of physical input into our real gdp, measured in bulk or weight, has contributed only modestly to economic growth since the turn of the century. we have, for example, dramatically reduced the physical bulk of our radios, by substituting transistors for vacuum tubes. thin fiber optic cable has replaced huge tonnages of copper wire. new architectural, engineering, and materials technologies have enabled the construction of buildings enclosing the same amount of space, but with far less physical material than was required, say, 50 or 100 years ago. most recently, mobile phones have become significantly downsized as they have been improved. as it became technologically possible to differentiate output to meet the increasingly calibrated choices that consumers now regularly make, the value of information creation and its transfer was expanded. hence, it is understandable that our advanced computer and telecommunications products have been accorded particularly high value and, thus, why computer and telecommunications companies that successfully innovate in this field exhibit particularly elevated stock market values. breakthroughs in all areas of technology are continually adding to the growing list of almost wholly conceptual elements in our economic output. these developments are affecting how we produce output and are demanding greater specialized knowledge. we could
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developments in overseas economic activity and prices ; developments in the situation surrounding ukraine and in commodity prices ; and the course of covid - 19 at home and abroad and its impact. in this situation, it is necessary to pay due attention to developments in financial and foreign exchange markets and their impact on japan's economic activity and prices. meanwhile, japan's 1 / 2 bis - central bankers'speeches financial system has maintained stability on the whole. although attention is warranted on, for example, the impact of the tightening of global financial conditions, the financial system is likely to remain highly robust on the whole, mainly because financial institutions have sufficient capital bases. regarding financial risks from a longer - term perspective, while there is a possibility that prolonged downward pressure on financial institutions'profits may lead to a gradual pullback in financial intermediation, the vulnerability of the financial system could increase, mainly due to the search for yield behavior. although these risks are judged as not significant at this point, it is necessary to pay close attention to future developments. ii. conduct of monetary policy next, i will explain the bank's conduct of monetary policy. japan's economy is on its way to recovery from a downturn caused by covid - 19 and uncertainties for the economy have been extremely high. on the price front, the year - on - year rate of increase in the cpi is projected to decelerate to a level below 2 percent from fiscal 2023. given such developments in economic activity and prices, the bank will continue with monetary easing, aiming to firmly support japan's economy and thereby achieve the price stability target of 2 percent in a sustainable and stable manner, accompanied by wage increases. thank you. 2 / 2 bis - central bankers'speeches
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economic outlook for overseas economies continues to require attention, given that there are some uncertain factors including geopolitical developments and their economic implications. on the domestic side, stock prices are weak. hence, careful monitoring is required of progress in the resolution of the nonperforming - loan problem and its effects on stock prices, corporate finance, and the economy. on the price front, import prices are on a rising trend with some fluctuations, reflecting developments in overseas commodity prices such as crude oil. domestic corporate goods prices have been declining gradually due to the rise in import prices and the improved supply - demand balance in materials industries, despite the continued fall in machinery prices. consumer prices and corporate services prices have also been declining gradually. looking at the conditions influencing price developments, import prices are projected to be firm for the time being due mainly to developments in crude oil prices. although the low levels of inventories will this report is based on data and information available at the time of the bank of japan monetary policy meeting held on february 13 and 14, 2003. the bank β s view of recent economic and financial developments, determined by the policy board at the monetary policy meeting held on february 13 and 14, 2003, as the basis for monetary policy decisions. support prices to some degree, the overall condition of supply and demand is expected to continue exerting downward pressure on prices while domestic demand continues to be weak for a while. moreover, factors such as the ongoing technological innovations in machinery and the streamlining of distribution channels will continue to exert downward pressure on prices. under these circumstances, domestic corporate goods prices are likely to continue a gradual decline for the time being. the pace of year - on - year decline in consumer prices is expected to become somewhat slower. this is because the year - on - year change in prices of petroleum products is expected to become positive, and medical costs are projected to rise from april due to public insurance reforms. as for the financial environment, the outstanding balance of current accounts at the bank of japan is recently moving at around 20 trillion yen, as the bank provides ample liquidity. under these circumstances, in the short - term money markets, the overnight call rate continues to hover at very close to zero percent. moreover, longer - term interest rates continue to be at low levels as a whole. yields on long - term government bonds declined further in late january and are recently moving in the range of 0. 8 - 0. 9 percent. yield spreads between private bonds ( bank
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smartphone, which can benefit consumers both in cities and in remote areas. moreover, the ever - expanding universe of new financial services means there are a number of choices and solutions available to fulfill different needs, especially those currently underserved. ladies and gentlemen, as financial technology can help unlock massive potential of our people, it is now up to us, the leaders and policymakers, to play an important role of β the catalysts, β to pave way for greater adoption of financial technology. on this point, i believe there are at least four key areas that catalysts like us must act together : 3 / 5 first, we must encourage common standards of technologies or platforms to avoid market fragmentation. having common standards would improve competition and innovation, as they allow easy access for all players, especially small innovative players. a good example of the common standards is the standardized qr code for electronic payment here in thailand, where banks and non - banks can apply the common standard to their applications. the result of which was the remarkable speed of adoption of qr code for payment ; in less than one year since its launch, qr code payment is accepted by over 2 million merchants all over thailand. more importantly, financial institutions within the region have already taken advantage of the interoperability of the qr code by applying the common standard in their applications for cross - border transactions with their partners. we are certain there will be many similar partnerships in the future. second, we must establish basic and open digital financial infrastructure so that further innovation can emerge to serve a wider range of consumers. open infrastructure enables service providers to build value - added services on top at low cost. for instance, e - payment services were created based on our promptpay infrastructure, such as bill payment and request - to - pay features. these, in turn, have helped facilitate e - payments for merchants and consumers and improved the overall e - commerce business landscape. even charitable organizations are able to take advantage of the open - platform with e - donation. meanwhile, the adoption of electronic payment through a common infrastructure can further create the data essential for information - based lending or for banks to improve on their risk models. third, we must facilitate greater convergence of rules and regulations within our region to make sure that existing regulations do not impede advancement of financial connectivity. efforts are being made in this area. asean central banks are working on initiatives under the asean banking integration framework to make banking regulations more cohesive, aiming at achieving greater consistency
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investment activity is subdued. the central bank's judgement remains that the domestic banking system is resilient to this downturn. in residential housing, an ongoing deficit in supply continues to drive prices domestically, and around 52, 000 new homes per annum could be needed to meet demand. despite these imbalances, there are no signs of excessive risk taking in mortgage credit, while aggregate mortgage credit growth remains moderate. more broadly, the irish economy is growing strongly and modified domestic demand is expected to grow in 2024 and 2025 at a faster pace than at the time of the last review. however as international investment and multinational enterprises ( mnes ) are central 1 / 2 bis - central bankers'speeches to the domestic economic model, driving a significant share of growth, public finances and employment, ireland is particularly exposed to global developments at a time of increased geopolitical and geoeconomic risk. moreover, with an economy performing at or above capacity, expansionary fiscal policy risks aggravating domestic pressures. irish households and businesses have been supported by a growing economy, but are also exposed to global shocks. households have weathered the period of higher interest rates, with the amount of income spent on debt repayments remaining stable. this follows a substantial decline in interest expenses in the decade after the global financial crisis ( gfc ). however, a shock to international trade could have knock - on effects for the labour market here, as well as the performance of domestic firms. irish small and medium - sized enterprises ( smes ) have shown resilience, but there are pockets of risk, for example with insolvencies rising in the accommodation / food and other services sectors although we have continued to observe employment growth in these sectors. domestic bank profitability has likely reached its cyclical peak, following strong growth over the last couple of years. however the banking sector is resilient and is well - placed to withstand any softening in profits. against this backdrop, we are maintaining an unchanged policy stance for macroprudential capital buffers. the counter - cyclical capital buffer ( ccyb ) rate remains at 1. 5 per cent. the central bank's mortgage measures aim to ensure sustainable lending standards and evidence suggests the measures continue to meet their objectives. recent developments in new mortgage lending show a shift towards lti and ltv limits, but the share of new lending in the most risky categories is contained. borrowing levels relative to incomes continue to be materially lower than in the early
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17. 11 what should emdes do? in my view, the adage β there are no easy answers but there are simple answers β seems to apply, underscoring the appropriateness of looking at what we have learnt from the past and putting into practice the lessons from episodes such as the gfc. indeed, most of the conclusions derived from these experiences remain valid today, i. e. strong macroeconomic foundations, solid financial systems, flexible policy frameworks and a firm basis for sustained growth are the best antidote to an adverse external environment. in fact, the current episode of volatility is once again showing that rather than looking for magic formulas, countries should concentrate on meeting these requirements. furthermore, the need to adhere to this path is far more evident at present, since the complexities of external conditions, if anything, are likely to accentuate in coming years. having said this, it is also clear that the responsibility for overcoming the current difficulties, and more generally for ensuring a healthy evolution of the world economy, does not lie on emdes only. in fact, we should bear in mind international monetary fund ( 2018 ) : world economic outlook, april. world bank ( 2018 ) : global economic prospects, june. that the challenges faced by the world economy today are mostly a result of actions undertaken in aes. indeed, these countries have a fundamental responsibility in ensuring that their monetary policies are properly implemented and communicated ; in avoiding inadequate fiscal - monetary policy mixes ; in adopting any measures needed to increase productivity and the potential for growth ; in properly taking into consideration the international repercussions of their policy actions in the monetary and other fronts ; and in leading by example to continue with the push towards a more integrated world economy. in the face of financial turmoil resulting fundamentally from policy measures in the aes, like the current one, it could hardly be argued that the implications of such actions should not be exaggerated.
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remarks by javier guzman calafell, deputy governor at the banco de mexico. panel on β end of qe and rising interest rates : implications for advanced and emerging market economies β. ubs 24th reserve management seminar. thun, switzerland, june 26, 2018. 1 i am very glad to have the opportunity to participate in another ubs reserve management seminar. i thank the organizers for their kind invitation. over the several years that have followed the outburst of the global financial crisis ( gfc ), emerging market and developing economies ( emdes ) have been able to sustain a satisfactory pace of expansion, with 2018 expected to record the third consecutive year of accelerating activity. the expansion of emdes has been partly nurtured by the aggressive relaxation of monetary policy stances in the advanced economies ( aes ), which implied a significant easing of external financial conditions, as evidenced by the vast amounts of international funds made available to emerging markets at historically low costs. for instance, bond spreads on emde sovereign debt were around 137 basis points lower in 2010 - 2018 than in the years preceding the gfc. given the prolonged period over which such a situation was sustained, as well as the magnitude of the adjustment needed to accommodate the surge in global liquidity, it comes as no surprise that this phenomenon has given rise to a gradual, albeit significant, buildup of vulnerabilities in the global economy and financial system. in fact, since the early stages of this process, warnings the views and opinions expressed in this document are the sole responsibility of the author and do not necessarily represent the institutional position of the banco de mexico or of its board of governors as a whole. have been made about its likely pernicious effects on the performance and stability of emdes and their financial markets, including through the potential acceleration of domestic credit cycles and appreciation of local asset prices ( notably exchange rates ) beyond what fundamentals would suggest. thus, challenges have emerged as this process is reversed. since the onset of the global market correction of mid - april this year, the accumulated portfolio flows ( in both equity and debt ) of foreign capital to emerging markets have been negative. portfolio flows exiting emdes amounted to usd 17. 1 billion over the 40 - day period that followed the start of the event, a figure comparable in magnitude to that observed in the equivalent period after the 2013 β taper tantrum β and the 2016 us presidential election ( usd 18. 7 billion and usd 18. 8 billion, respectively ).
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and cultural diversity. graduating from roytec sets you apart in your community. it says that you can make a difference in the world. be conscious that as a roytec graduate you have the potential to do something significant and important. you should be aware also that you have the opportunity to be leaders and innovators, and an obligation to help shape your community for the better. oft times, leadership is not what is commonly thought. when i say leaders, i don β t necessarily mean politicians or ceos, or church leaders or anything of the kind. the demands on leadership will be with you all your life as parent, supervisor in your office, member of the pta, neighbor or resident in your community. with leadership goes responsibility to those who you lead and to the broader community, be it your neighborhood, your village, your church, or your club. after all, these situations provide an opportunity for you as the leader, to give back. now i know that at times community involvement would be difficult, as you also have to juggle family and career but i encourage you to make the effort. i am sure that you will find it worthwhile. in addition to looking out for the less - fortunate your new status requires you to understand the real imperatives of being a quality citizen in our still - evolving democracy β and by that i mean one who is attuned to and has an opinion on the public issues that affect the society, and who is prepared to stand up and be counted, if and when the need arises. i notice that a significant proportion of the graduands are women and some of you will need to strike a balance between career objectives and family. it is a major challenge but the balance is worth struggling for since the breakdown of the family is at the centre of so many of our societal ills. let me conclude this speech by acknowledging that graduates almost always remember their graduation ( at least they have photographs of it ) but they almost never remember anything from their graduation address. i put the question to my kids and, as i expected, they remembered little or nothing. interestingly enough i remembered something from my graduation speech almost forty years ago and it was this β education makes us what we are β. that theme stuck with me not only because it sounded profound, but because my personal experience proved it to be true. i do believe that education has made me, as a person, as a professional and as a member of the community. and
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distinguished journalists, media representatives, i am very honored with your presence today to mark together the completion of a successful year for the central bank of the republic of kosovo and the financial system of kosovo. the cbk, through its activities, has continued to provide a stable financial system and support the country's economic development. part of our success is also communication with the media which play an important role in informing the public about developments in the country's economic system. transparency with the public and communication with the media is of particular importance, and during this year we have greatly advanced cooperation in this field. we consider that this year we have had effective communication with the media providing the necessary information and clarifications at all times. * * * now, let me present to you a summary of the most important developments in the financial system and economy of the country during 2019, of course with the most recent data available. * * * according to preliminary assestments, economic growth for year 2019, is expected to be around 4. 2 %, an increase largely supported by the growth of investment and improvement in net exports. a similar pace of economic growth, according to the cbk forecasts, is expected in the next year. the average annual inflation rate until november 2019 has increased by 2. 8 %, compared to the 0. 9 % rate in the same period last year. the increase in inflation rate this year is mainly a result of rising food prices. * * * banking sector continued this year as well with high credit growth, improving conditions for private sector access to credit, and increased financial sustainability. at the end of october 2019, banking sector loans reached 2. 98 billion euros. annual credit growth remains high at an annual rate of 10 %. deposits continue to be the main source of financing for faqe 1 nga 5 the banking sector, the amount of which amounted to euro 3. 75 billion during this period, which represents a very high annual growth of 16 %. this high deposit growth, among other things, reflects the high public confidence in the banking sector. interest rates on loans continued downward trend, decreasing to 6. 5 % from 6. 6 % as they were in the same period last year, thus, reflecting continued improvement in market conditions, and facilitating access to bank financing. financial health indicators continued to show a high level of sustainability of this sector in all aspects. it should be particularly emphasized very good quality of the loan portfolio with a rate of nonper
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reserve bank of philadelphia β s website at https : / / www. philadelphiafed. org / surveys - and - data / real - time - data - research / survey - of - professionalforecasters. - 5led to sharply rising goods prices ( figure 4 ). the most notable example here is motor vehicles. prices soared across the vehicles sector as booming demand was met by a sharp decline in global production during the summer of 2021, owing to shortages of computer chips. production remains below pre - pandemic levels, and an expected sharp decline in prices has been repeatedly postponed. many forecasters, including fomc participants, had been expecting inflation to cool in the second half of last year, as the economy started going back to normal after vaccines became widely available. 3 expectations were that the supply - side damage would begin to heal. schools would reopen β freeing parents to return to work β and labor supply would begin bouncing back, kinks in supply chains would begin resolving, and consumption would start rotating back to services, all of which could reduce price pressures. while schools are open, none of the other expectations has been fully met. part of the reason may be that, contrary to expectations, covid has not gone away with the arrival of vaccines. in fact, we are now headed once again into more covid - related supply disruptions from china. it continues to seem likely that hoped - for supply - side healing will come over time as the world ultimately settles into some new normal, but the timing and scope of that relief are highly uncertain. in the meantime, as we set policy, we will be looking to actual progress on these issues and not assuming significant nearterm supply - side relief. the policy response as the magnitude and persistence of the increase in inflation became increasingly clear over the second half of last year, and as the job market recovery accelerated beyond see the minutes of the june 2021 fomc meeting, which are available on the board β s website at https : / / www. federalreserve. gov / monetarypolicy / fomccalendars. htm. - 6expectations, the fomc pivoted to progressively less accommodative monetary policy. in june, the median fomc participant projected that the federal funds rate would remain at its effective lower bound through the end of 2022, and as the news came in, the projected policy paths shifted higher ( figure 5 ). the
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as under current law, the insured bank would have to be the survivor of the merger. 9. a. restore board's authority to determine that new activities are " closely related to banking " and permissible for all bank holding companies ( matrix no. 137a ) amendment would restore the board's ability to determine that nonbanking activities are " closely related to banking " under section 4 ( c ) ( 8 ) of the bhc act and, thus, permissible for all bank holding companies, including those that have not elected to become financial holding companies. bank holding companies would still be required to become a financial holding company to engage in the types of expanded activities authorized by the glb act - including full - scope securities underwriting, insurance underwriting, and merchant banking activities - - as well as any new activities that the board determines under the glb act are " financial in nature, " " incidental to a financial activity " or " complementary to a financial activity. " b. allow bank holding companies to engage in insurance agency activities ( alternative to item 9. a. ) ( matrix no. 137b ) alternative amendment would allow all bank holding companies, including those that have not elected to become financial holding companies, to act as agent in the sale of insurance. currently, bank holding companies that do not become a financial holding company may engage only in very limited insurance sales activities ( primarily involving credit - related insurance ). however, most banks are permitted to sell any type of insurance, either directly or through a subsidiary. the amendment would rectify this imbalance by permitting all bank holding companies to act as agent in the sale of insurance. insurance agency activities involve less risk than insurance underwriting and other principal activities. bank holding companies would continue to be required to become a financial holding company to underwrite insurance ( other than credit - related insurance ). 10. shorten the post - approval waiting period for bank mergers and acquisitions where the relevant banking agency and the attorney general agree the transaction will not have adverse competitive effects ( matrix no. 6 ) amendment allows the responsible federal banking agency, with the concurrence of the attorney general, to reduce the post - approval waiting periods under the bank merger act and bhc act from fifteen days to as few as five days. the amendment would not alter the time period that a private party has to challenge a banking agency's approval of a transaction for reasons related to the community reinvestment act. 11. repeal certain
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republic at the end of 2014, which led to early elections in 2015 and to the unfortunate negotiations of the first half of 2015. these, in turn, led to the signing of the third adjustment programme, capital controls, another bank recapitalisation round and two years of economic stagnation. seventh, political economy deliberations in the euro area also played their part in delaying the recovery of the greek economy. the eurogroup decision of november 2012 to grant further debt relief was put off for several years and was implemented only in june 2018. this undermined the growth prospects of the greek economy and prolonged the duration of the crisis. last, but not least, when the greek crisis broke out, the emu lacked the tools to avert and contain the crisis ( see katsimi and moutos, 2010 ). the eu fiscal rules ( stability and growth pact β sgp ) failed to avert the soaring public debt, and there was no monitoring and control over macroeconomic imbalances. moreover, euro area crisis management and resolution tools were practically non - existent due to moral hazard concerns. instead, the ecb stepped in to contain the spillover risk to the rest of the euro area. 2. significant progress has been made since the beginning of the debt crisis despite the missteps and delays, significant progress has been made since the beginning of the sovereign debt crisis in 2010. the implementation of a bold economic adjustment programme has eliminated the root causes of the greek crisis ( see stournaras, 2019a, 2018a, b and malliaropulos, 2019 ). it is particularly worth noting that : β’ the fiscal adjustment was unprecedented, turning a primary deficit of 10. 1 % of gdp in 2009 into a primary surplus of 3. 9 % of gdp in 2017. β’ the current account deficit has been reduced by more than 12 percentage points of gdp since the beginning of the crisis. β’ labour cost competitiveness has been fully restored and price competitiveness has recorded substantial gains since 2009. 2 / 8 bis central bankers'speeches β’ a bold programme of structural reforms was implemented, covering various areas, such as the pension and healthcare systems, goods and services markets, the business environment, the tax system, the budgetary framework and public sector transparency. meanwhile, the role of the bank of greece was pivotal in the restructuring and the recapitalization of the banking system as well as in the enhancement of its corporate governance. today, banks β capital ad
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issue subordinated debt and the government announced that it will subscribe to these issues for eur 10. 5 billion. it is expected that such support will boost their capital position and as a result ensure these banks to keep up their lending to the economy. did the french banks really need such a boost to their solvency and capital? setting aside dexia, the answer is not really. dexia was very specific : because of its large exposure to us monoline risks, public recapitalisation was absolutely necessary. by contrast, all the other french banks, without exception, have sufficient own funds, be it in terms of prudential requirements or in comparison with their peers from other developed countries. public recapitalisation is not aimed at making up for faults or weaknesses. rather, it is to anticipate potential problems. circumstances are indeed exceptional ; even the soundest and most profitable banks cannot take it for granted that they will be able to tap markets to meet their funding and capital needs. as long as such uncertainty pervades and markets continue to fail, it is the public authorities β duty to protect the credit system and safeguard the financing of the economy. the macroeconomic outlook it is fair to say that the public opinion is worried about the economic consequences of the financial crisis. i understand these concerns. yet, i do not totally share them. let me explain. when attempting to understand the situation we are facing, it is tempting to look at the past and draw lessons by mere analogy. indeed, some sort of an intellectual vogue is flourishing, which contends that, in light of past experiences, any banking crisis is bound to have severe adverse economic consequences. you have those, the optimists, who predict a swedishtype of crisis. and you have those, the pessimists, who allude to japan's " lost decade ". if referring to the past is of any use, it is precisely to learn from past errors. as a result, any comparison is bound to be misleading. not only is today β s economic situation critically different. it is also addressed very differently. let me insist on one key difference, which has to do with policy reactions to the crisis. they have been extraordinarily rapid, massive and vigorous. we have learnt from past crises, especially from the long adjustment japan has been through after the burst of the asset price bubble in the late 80s. let me also mention that macroeconomic policy instruments are available and could
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financial stability review, may. [ 28 ] heider, f., saidi, f. and schepens, g. ( 2019 ), β life below zero : bank lending under negative policy rates β, review of financial studies, vol. 32, no 10, pp. 3728 - 3761 ; darracq paries, m. et al., op. cit. [ 29 ] adrian, t. and liang, n. ( 2018 ), β monetary policy, financial conditions, and financial stability β, international journal of central banking, vol. 14, no 1, pp. 73 - 131 ; schnabel, i. ( 2020 ), β covid - 19 and the liquidity crisis of non - banks : lessons for the future β, speech at the financial stability conference on β stress, contagion, and transmission β organised by the federal reserve bank of cleveland and the office of financial research, 19 november. [ 30 ] schnabel, i. ( 2020 ), β how long is the medium term? monetary policy in a low inflation environment β, speech at the barclays international monetary policy forum, london, 27 february. 24 november 2020 slides related topics coronavirus monetary policy policies price stability central banking strategy review inflation euro area interest rates banking sector uncertainties economic development disclaimer please note that related topic tags are currently available for selected content only. european central bank directorate general communications sonnemannstrasse 20, 60314 frankfurt am main, germany tel. : + 49 69 1344 7455, email : media @ ecb. europa. eu website : www. ecb. europa. eu reproduction is permitted provided that the source is acknowledged. media contacts copyright 2020, european central bank https : / / www. ecb. europa. eu / press / key / date / 2020 / html / ecb. sp201124 ~ bcaebee7c0. en. html 13 / 13
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lorenzo bini smaghi : europe, the united states and the new challenges to the global economy speech by mr lorenzo bini smaghi, member of the executive board of the european central bank, at a conference organised by the council for the united states and italy in venice, venice, 11 june 2010. * * * it is a pleasure to attend this workshop, and especially to have an opportunity to consider relations between italy β as well as europe more generally β and the united states. i must admit to having felt, in recent months, a growing frustration to hear it claimed at conferences and to read in articles that the transatlantic relationship is in crisis and is disintegrating β irredeemably. i won β t go into the arguments put forward by those who hold this view, but i would rather report on how far it is from reality β at least from the perspective of those working in an institution responsible for the conduct of economic policy. the starting point of my analysis is the common challenge we face, which is to restore sustainable growth after the deepest economic and financial crisis of the post - war period, against a background of great global change. this challenge has been approached by europe and the united states mainly through three lines of action : macroeconomic policies ; financial market reform ; and relations with the other major players in the world economy. i would like to examine these three factors, indicating where perspectives and transatlantic action converge. let β s start with the economic situation. i won β t dwell on describing europe β s economy, particularly that of the euro area, or the us economy. both started to grow during last year, at a pace that looks faster in the us, as is typically observed in this phase of the cycle. domestic demand seems stronger on the other side of the atlantic, thanks to the dynamism of private consumption, which for now remains subdued in europe, where exports are the main engine of growth. the main risk factors underlying the recovery are the same for the two areas, namely : uncertainty about whether growth can be self sustained, without relying mainly on the policies aimed at stimulating demand which have been put in place by most industrial countries in response to the crisis ; turbulence in financial markets, which has shifted to sovereign risk ; unemployment, which remains high, although it seems to have peaked ; the situation on the capital markets, particularly the soundness of banking systems in the aftermath of the economic and financial crisis, and their ability to provide adequate credit to the economy
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the budget, i caution that the government should consider slowing the pace of increase in expenditure, which grew by 33. 8 percent in the march quarter of 2006, from the levels in the corresponding period in 2005. the government should direct funds to priority development areas identified in the medium term development strategies ( mtds ). in this respect, i have stated that the government should consider using windfall revenue from mineral taxes for early retirement of some of its foreign debts. the major risk to the current macroeconomic stability remains the fiscal operations of the government in 2006 and 2007. i would point out that the fast pace of growth in lending and high level of liquidity in the banking system introduces further vulnerability to the economy. they also provide new challenges to the bank of papua new guinea in closer surveillance of the financial system and management of monetary policy. in this regard any major fiscal slippages by the government, or fall in commodity prices could lead to loss of macroeconomic stability. i stress that the government β s adherence to the parameters of the mtds, that is consistent with the mtds, is vital for sustained macroeconomic stability and promotion of economic growth. reforms to remove impediments to conducting businesses in png saw the removal of the majority of the exchange control regulations. it is one year since we introduce the liberalization and we have not notice any stress on the foreign exchange system. financial sector reforms undertaken at the beginning of this decade ( in 2002 ) are bearing great returns. the banking sector asset quality has improved, likewise finance companies. the other financial institutions under the central bank supervision also are performing very well. the superannuation industry continues to report improvement and good results. likewise work to improve the life insurance industry is continuing. the savings & loan society movement the savings and loan societies movement, which is currently comprised of 21 active societies, has grown in terms of their asset base and membership. over the past six ( 6 ) years, the total assets in the movement have grown from k126 million to over k332 million. the total membership has significantly grown from 120, 775 in december 1999 to 152, 438 members by the end of 2005. the movement, more particularly provincial based societies such as the east new britain s & l society, is an ideal vehicle to reach and promote savings into the rural population. the movement plays an important role in the financial system in promoting thrift to its members and more importantly in extending the monetization of the png
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economy into the rural sector, so that the rural population participates meaningfully in economic development. savings and loan societies complement other financial service providers such as banks and financial institutions in providing basic savings and loans products to members. the difference between the movement and other financial institutions is that savings and loan societies operate on the principle of mutuality. that is the members are the owners of the societies, where each member has an equal say on the election of directors to the boards of the societies. they also have a direct say in the distribution of profits. challenges the movement has faced many challenges in its evolution over the years. the bank in its supervisory role has observed serious weaknesses in areas of governance and management. we have seen and dealt with directors and managers who have conflict of interest when making decisions that were not in the best interest of members. we have also dealt with infightings between directors and managements and also between supervisory committees and boards members. in its supervisory role, the bank has increased its enforcement efforts to ensure that the societies are constantly in compliance with directives and regulations so that the bad experiences of the past do not repeat themselves. in many cases where such instances have occurred, the bank has not hesitated in suspending or removing board members, managers and / or supervisory committee members from those societies. other challenges which we have seen societies faced over the years were concerning operational difficulties in ensuring accurate and timely reporting of financial statements, lack of effective management of asset quality such as nonperforming loans, weaknesses in controls and risk management systems and more seriously fraud. directors, management and committeemen of the societies have a duty to continue the effort in educating members to save for the future and to borrow within the required limits. members must be educated to repay the loans that they borrow. legislative framework the growth experienced by many societies over the years has also resulted in most societies moving away from the traditional savings and loans business. many have now invested their surplus savings in other products such as in equities and government securities. in view of these developments and the challenges which i have just mentioned, i have established a working team within the bank which has started looking at reviewing the existing legislative framework with the view to reform the entire savings and loan societies industry and microfinance / microbanking businesses. the work of the working team is progressing and at this stage the bank is looking at securing funding for technical assistance to carry out the substantial work in improving the legislative framework. east new britain savings & loan society on
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area. in singapore, we established the corporate governance code for listed companies last year. mas has tightened corporate governance standards for local banks. we recently required auditor rotation for local banks, a policy which we had been considering for some time, even before the latest wave of accounting scandals. for insurance companies, we are currently working on a draft corporate governance framework. mas is consulting the industry and will issue guidelines for internal governance for local boards of directors, as well as guidelines for the roles and responsibilities of principal officers of insurance companies. the guidelines for internal governance will deal with the main responsibilities for the board, stress the importance of transparent and performance - linked compensation ; emphasise the need for the integrity of financial information ; encourage fair dealings with the members of the public who are policy - holders and urge insurers to engage in regular communications with policy - holders. life insurance companies are entrusted with the management of long term funds. we are considering more rigorous corporate governance requirements for life insurers. we intend to formally introduce and enforce the corporate governance framework for the insurance industry later this year. imposing risk - based capital requirements in a world of new and increased risks, appropriate levels of capitalization are necessary. insurers face mounting complexities, given the increased volatility of asset risks and the diversity of liability risks. in singapore, as in many other countries, the existing statutory framework of solvency and capital adequacy for insurers is essentially a " one - size - fits - all " approach. this is clearly no longer appropriate, since different insurers have acquired different levels of exposures to financial risks and developed different underwriting specialties. in banking, a risk - based capital approach is well - established. there are clear guidelines from the bank for international settlements, and a new standard is undergoing extensive worldwide consultation. for the insurance industry, the same level of regulatory consensus does not as yet exist. mas has formed two work groups comprising industry practitioners, representatives of professional associations and regulators to develop risk - based capital models for life and non - life insurance. besides refining the treatment of liability risk, we will also look at capital charges for asset risks. this will help to level the playing field between banks and insurance companies, and minimise opportunities for capital arbitrage. the new capital requirements should also provide an early indicator of financial weaknesses, and thus facilitate progressive intervention by regulators. these risk - based capital requirements will be introduced by end - 2003. raising professional standards in
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major insurers such as hih and independent, left businesses without essential insurance cover, and critical services without professional indemnity coverage. economic activity in these sectors might have ground to a halt, had the government not stepped in. but by stepping in, the governments created a new source of moral hazard. these issues have been extensively debated. the imf has concluded that the insurance industry, while not systemically critical, has taken up a definite systemic relevance. we need to understand better the nature of insurance companies'financial activities and their possible impact on global financial stability. in singapore, the supervisors of banks, insurance companies and securities houses are housed under one roof in mas. this has given us a head - start in dealing with current industry trends, with financial product boundaries blurring and insurance companies crossing over into banking and capital market territory. the pressure is on to bring integrated supervision to an even deeper level. singapore β s response in today's new risk landscape, mas aims to develop sound and efficient markets where risk can be effectively spread and mitigated. we need to make sure that best practices prevail in the management as well as regulation of insurance companies. strong players will make for a resilient industry. two years ago, singapore opened up completely the direct life and general insurance market. the earlier closed - door policy had insulated both local and foreign incumbents from competition and engendered complacency. creating an open and competitive environment was the first step to raising standards and strengthening resilience. since we opened up the industry, insurers in singapore have taken various measures to enhance their competitiveness. they have sharpened their business focus, moved into higher - value added and higher - growth areas and improved professional standards. this will stand our insurers in good stead to meet new challenges and opportunities. meeting new challenges and opportunities entering new growth areas globalisation of markets, advances in technology, changing demographics and socio - economic patterns are some trends that will result in new or changing needs for insurance protection and financial planning. insurers should hone their skills in these new areas and take advantage of emerging opportunities. one important opportunity is in health insurance, especially financing the health care needs of the aged. this is a challenge that is facing governments around the world. it is no different in singapore where the population is aging rapidly. health insurance can play a greater role in financing old age medical care than it now does. mas plans to introduce in 2003
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yi gang : speech - giving full play to finance and promoting more efficient and resilient economic development keynote speech by mr yi gang, governor of the people's bank of china, at the annual conference of financial street forum 2021, 20 october 2021. * * * ladies and gentlemen, dear friends, good afternoon! it gives me great pleasure to attend this year β s financial street forum. this time the theme is β economic resilience and financial accomplishments β. i would like to share with you my observations on this topic. first, the system and mechanism of socialist market economy is the source and fundamental guarantee for china β s economic resilience. in the socialist market economy, and under the leadership of the communist party of china ( cpc ), there are hundreds of millions of market entities with clear property rights. with hard budget constraints, these market entities work hard to create value for the society and provide products and services needed by the society. in this sense, each of them is competitive ; otherwise, they are already out of business. it is these market entities who fuel the unceasing development of china β s economy. when the economy reeled from external shocks, these market entities manifested strong resilience. they flexibly adapted their production and operation arrangements to prices, orders, workforce and raw materials. yet on many occasions, what they faced was more fierce market competition and even life - or - death stakes. therefore, with commitment to the cpc β s basic lines, we focus on the central task of economic development, adhere to the four cardinal principles, continue to reform and open up, and we make improvements to the socialist market economic system. in this way, fundamental guarantee is provided for continuously vitalizing market entities and enhancing economic resilience. the covid - 19 pandemic broke out in early 2020 and has lasted till now. and china β s success in responding to it is sufficient to demonstrate that our socialist market economic system is more resilient than any other economic systems in the world. in terms of financial policies, the people β s bank of china ( pbc ) launched monetary and credit policies in the amount of rmb300 billion, rmb500 billion and rmb1 trillion respectively last year to support market entities and rolled out another rmb300 billion worth of central bank lending in september this year, which were earmarked for the support of micro, small and medium - sized enterprises ( msmes ). under the socialist market
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decided in july 1989 to establish the financial action task force ( fatf ), in a bid to examine the cooperative results with respect to combating money laundering through banks and the financial system, to improve laws and rules in aml and measures, and to strengthen preventive aml measures through multi - lateral judiciary assistance. in february 1990, the fatf set out a set of forty recommendations on money laundering ( β forty recommendations β ). first, each country should criminalize money laundering of funds used in severe crimes. second, governments of all countries should strengthen financial supervision by urging financial institutions to develop and implement feasible internal aml control system and to fulfill the obligation of customer identification, record - keeping of customer information and transactions and detection and reporting of suspicious financial activities. third, governments should establish financial intelligence unit ( fiu ) responsible for monitoring unusual and suspicious transactions of funds, so as to achieve coordination and cooperation between appropriate ministries. fourth, countries should exchange intelligence on money laundering and conduct international cooperation in aml investigation, search and freezing of illegal funds and extradition of suspects. the forty recommendations by the fatf has become the most important guiding document in the current international aml sphere, promoting aml legislation in all countries and regions and development of the international aml system. after 9 / 11 terrorist attack, anti - terrorism is combined with aml. combating terrorist financing has become an important field of aml. aml and combating terrorist financing have become important issues of some international organizations and forums, occupying a significant niche in current international relation. after 9 / 11 terrorist attack, the us congress wasted no time in passing the usa patriot act, strengthening in an all - round way the rules for combating terrorist financing. the legislature of all countries and regions reacted to the movement quickly as well. besides some international conventions passed by the un with respect to combating terrorist financing, the fatf drafted specifically 8 more recommendations for combating terrorist financing in october 2001. the developed countries in europe and america have rendered aml and combating terrorist financing a focus of their foreign affairs, and have taken resolute measures to that effect. iii. the status quo of aml in china 1. aml legislation china β s criminal legislation with respect to aml almost synchronized with the international efforts. after the united nations convention against illicit traffic in narcotic drugs and psychotropic substances went into effect in 1988, china β s national people β s congress promulgated the decision on
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approximately 80 % β very rapid increase in welfare. some countries did even better : in poland and estonia corresponding increase in economic welfare 1 / 2 bis central bankers'speeches was approximately 170 %. research from the ebrd shows that the countries that joined the eu have also been better in ensuring that growth is inclusive. rapid economic growth in the region, integration with the older eu countries and convergence towards them has been an economic success story for the whole continent, showcase example of economic reforms yielding benefits that can be and are shared widely. many eu member countries that joined in 2004 are now integral parts of eu - wide production networks. i was happy to witness the arrival of the new member states and also new members to the european commission 1. 5. 2004 before moved to the bank of finland and to the ecb governing council in july of the same year. as we celebrate these achievements, we need to remember their prerequisites. global economy is full of sad examples of countries failing to catch up, failing to improve welfare of their citizens. if institutions are not stable and credible, and if the rule of law is not respected, then it is not possible to attract investments and not possible to ensure sustainable economic convergence in the longer term. in this regard performance of the countries in the region was helped by the european union, which was the anchor. it offered both economic assistance and also a model of democracy, which respected rule of law and separation of powers. while this model of independent institutions and rule of law has been successful, many see it now challenged in various parts of the world, and the issue is not unknown here, either. every country and every nation has her right to choose their political leaders and political tendencies. but membership in the european union, which is based on common values and respect of the rule of law, brings also its obligations. the question is : how to preserve the rule of law, how to preserve independence of public institutions, including central banks and financial supervisors, from undue political influence? economic literature and history tell how important the role of institutions is for sustainable economic growth. countries that are able to share increasing prosperity and, for example, ensure education opportunities are better placed to uphold functioning institutions in the long - run. however, countries with good economic performance are not immune to temptations of various degrees of populism. one type of populism is that establishment and the forces in power is challenged. this is a challenge everyone in power must accept and can be
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stated, i would like to clarify that the exploration of the potentials that the different regions have to offer and the identification of their level of use is also essential in terms of the banking system β s activity, in particular of the geographic expansion and financial intermediation. another major reason motivating the bank of albania to organize these meetings relates with the establishment of a more effective communication channel between the bank of albania and the public. we believe that the direct contact with various social groups in different geographic regions ( that is to each and every family ), in addition to the traditional means of communication, press conferences, monetary policy or financial stability reports, is a very efficient tool and frequently determinant. i would like to dwell today on some matters of interest to the entire audience. first i would like to make a brief outline of the bank of albania β s latest analysis of the economic and financial situation in albania : in brief, three are the main developments of greatest interest to the audience : with regard to the international developments, the economic and financial situation has been very complex in the last months. inflation has turned into a point of concern in most foreign economies, mainly driven by the high prices of raw materials, oil and food. in addition, economic activity in developed economies has experienced sharp turns. euro area economy is at present in front of many questions, while the us and some asian economies have shown slow rates of economic growth. credit crisis has caused many reputable international institutions to experience large financial losses and its contamination process is still present. recently, the two us mortgage giants, freddie mac and fannie mae, which were on the verge of collapse, were subject to an unprecedented and costly rescue plan designed by the us treasury department. all these issues have triggered uncertainties in the markets, causing the future forecasts to be more challenging and the participants β exasperation to peak. i would consider the immunity shown by our economy in terms of price stability as the most outstanding development. albania β s economic activity is progressing in line with our previous expectations. a few days ago, instat published the inflation figure for august 2008, according to which annual inflation marked 2. 5 %. following a 12 - month period of inflation rates standing at around 4 - 4. 5 %, in line with our forecasts, it is assessed that inflation will fluctuate in the next few months at around 3 %, which is our quantitative objective. worth to note, however, is that the risk for
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and in turn firms and industry associations have shown a willingness to engage in a serious dialogue to find practical, prudent solutions. this has helped supervisors to better understand the state of industry practice. where we have found these practices to be reasonable and appropriate we have tried to incorporate them into the revised framework in a sound manner. looking ahead, one of the benefits of this transparent process is that it has set the tone for discussions between banks and supervisors as industry practices evolve going forward. we have also greatly benefited from the dialogue we have maintained with our supervisory colleagues outside of the basel committee. i believe that it is in many countries β best interest to adopt the new framework when they are ready, so it is critical that supervisors in these countries be part of the basel ii conversations. the basel committee has established several mechanisms for heightened dialogue with our fellow supervisors, and we are fully committed to further enhancing this dialogue. principles versus rules a third lesson i have learned is that it is important to strike the right balance between principles and rules. of course, we want to ensure that banks apply principles in the same manner and that supervisors interpret them in the same way even in different jurisdictions. but while the temptation is to do this through ever more detailed rules, i am reminded of the words of the famous surrealist painter salvador dali, who said : β have no fear of perfection β you β ll never reach it. β we have learned from the basel ii process that adding detail to the rules does not guarantee a level playing field or equal application. the marginal utility of adding detail falls rapidly as you move ahead in a process such as basel ii, so we need more than detail and prescriptiveness. we need a bottom - up, cooperative approach that maintains a focus on principles of effective risk measurement and management. as we have moved into implementation, the committee has placed greater emphasis on principlesbased guidance, for example through the use of so - called basel committee newsletters. we have found that these newsletters, which clarify supervisory expectations rather than establishing more rules and making the framework more complicated, have been well - received. examples include recent committee guidance on the use of vendor products in the irb framework and the treatment of expected losses in an operational risk ama. in my view, such an approach to communication with the industry allows for a range of sound practices and encourages further work by both banks and supervisors, but does not β lower the bar β in terms of supervisory expectations for risk management and capital ade
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submitted in qis 5 was greatly improved over the data submitted in the previous qis exercises. this is certainly a positive development, and i hope banks continue to make strides in this area. what is important to keep in mind about qis 5 is that it represents a point - in - time view. we know that models and validations processes are still under development, just as banks are working to take into account the recent updates to the trading book regime and the guidance on incorporating economic downturn effects in lgd estimates. we cannot know the true impact of basel ii until it has actually been implemented, which is why we have built safeguards such as transitional floors into the framework. that is one reason the committee is placing so much importance on an effective basel ii implementation process, which brings me to my next point. implementation issues from the outset, one of the key objectives of both basel ii and, indeed, the current accord, has been to maintain a level playing field across jurisdictions. since experience has shown that this was difficult to achieve even under the fairly rigid basel i rules, the challenge will be even greater in the more flexible basel ii regime. one of the key lessons we have learned in this whole process is that having similar national rules, which are based on common international agreements, does not of itself create a level playing field. what is essential is how the rules will be applied. the success of basel ii will depend to a large extent on our ability to achieve greater convergence in our supervisory practices in implementing these rules. this will require a much higher level of cooperation among supervisors than hitherto. home country and host country supervisors will need to work closely with each other and with banks to provide effective supervision while minimising burden and duplication of effort. although changes in financial markets mean that these efforts would in any case be necessary, basel ii has raised the stakes. to promote convergence, the committee has established an accord implementation group, or aig, which is chaired by nick le pan, superintendent of financial institutions in canada and vicechairman of the basel committee. when the aig began its work, it quickly became clear that there was no β one - size - fits - all β approach to implementing basel ii. rather, implementation should be tailored to the specific circumstances of a bank and the jurisdictions it operates in. in this regard, one of the primary methods the aig uses to promote convergence is to encourage home supervisors of the 50 or 60 largest internationally active banks in
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longer needs to be as restrictive. in other words, it is appropriate to lower our policy interest rate. if inflation continues to ease, and our confidence that inflation is headed sustainably to the 2 % target continues to increase, it is reasonable to expect further cuts to our policy interest rate. but we are taking our interest rate decisions one meeting at a time. we don't want monetary policy to be more restrictive than it needs to be to get inflation back to target. but if we lower our policy interest rate too quickly, we could jeopardize the progress we've made. further progress in bringing down inflation is likely to be uneven and risks remain. inflation could be higher if global tensions escalate, if house prices in canada rise faster than expected, or if wage growth remains high relative to productivity. in assessing where inflation is headed, we will continue to closely watch the evolution of core inflation. we remain focused on the balance between demand and supply in the economy, inflation expectations, wage growth and corporate pricing behaviour. with that summary, the senior deputy governor and i would be pleased to take your questions. 2 / 2 bis - central bankers'speeches
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tiff macklem : release of the monetary policy report opening statement by mr tiff macklem, governor of the bank of canada, at the press conference following the monetary policy decision, ottawa, ontario, 5 june 2024. * * * good morning. i'm pleased to be here with senior deputy governor carolyn rogers to discuss today's policy announcement. governing council decided monetary policy no longer needs to be as restrictive and lowered the policy interest rate by 25 basis points to 4. 75 %. we've come a long way in the fight against inflation. and our confidence that inflation will continue to move closer to the 2 % target has increased over recent months. the considerable progress we've made to restore price stability is welcome news for canadians. since our monetary policy report in april, underlying inflation has continued to ease and economic growth has resumed. with the economy in excess supply, there is room for growth even as inflation continues to recede. let me provide a little more detail about these dynamics. after stalling in the second half of last year, economic growth picked up in the first quarter of this year. at 1. 7 %, growth was lower than projected in the april report. but consumption growth was solid at about 3 %, and business investment and housing activity also increased. in the labour market, businesses are continuing to hire workers. employment has been growing, but at a slower pace than the working - age population. this has allowed the supply of workers to catch up with job vacancies. elevated wage pressures look to be moderating gradually. inflation remains above the 2 % target and shelter price inflation is high. but total consumer price index ( cpi ) inflation has declined consistently over the course of this year, and indicators of underlying inflation increasingly point to a sustained easing. i'll highlight four indicators in particular : cpi inflation has eased from 3. 4 % in december to 2. 7 % in april our preferred measures of core inflation have come down from about 3Β½ % last december to about 2ΒΎ % in april the 3 - month rates of core inflation slowed from about 3Β½ % in december to under 2 % in march and april the proportion of cpi components increasing faster than 3 % is now close to its historical average, suggesting price increases are no longer unusually broadbased this all means restrictive monetary policy is working to relieve price pressures. and with further and more sustained evidence underlying inflation is easing, monetary policy no 1 / 2 bis - central bankers'speeches
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account deficit of around 1, 8 per cent of gdp. import volumes increased by 3, 3 per cent in the final quarter of 2003 while the physical volume of exports of goods and services increased by 2, 2 per cent. however, the trade surplus in february and march of this year improved as a result of an increase in exports with the 3 - month moving average ( seasonally adjusted and annualised ) of the trade surplus increasing from r17, 6 billion in january to r20, 5 billion in february. the moderate deficit on the current account is not an immediate cause for concern. at these levels the deficit is sustainable and has been comfortably financed through significant inflows on the financial account, which showed healthy surpluses in the final three quarters of 2003. the surplus in the final quarter amounted to r34, 6 billion. however, there is no room for complacency. it is well known that financial account reversals can occur very quickly, and if expenditure growth proceeds unchecked, the current account developments could prove to be unsustainable. the higher levels of domestic expenditure have been reflected in more buoyant money market conditions. most of the money supply aggregates have grown at a relatively robust pace. the average twelve - month growth rate for m3 in 2003 was 13, 0 per cent, and grew by 14, 9 per cent and 14, 0 per cent in february and march respectively. twelve - month growth in banks β total loans and advances to the private sector has remained at levels of around 12, 5 per cent since early 2003. growth in mortgage, instalment sale and leasing finance has been particularly strong over the past year. 4. recent labour market developments the unemployment situation in south africa remains a major source of concern. fortunately, quarter - to - quarter increases in employment were recorded on both the public and private sectors during the final two quarters of 2003, reversing the trend of the previous two quarters. from a monetary policy perspective, a concern of the bank has been the trend in wage settlements, which play an important role in the inflation process in south africa. central to the bank β s concern is the fact that wage settlements often tend to be set in a backward - looking manner. this acts as a constraint of the downward movement of inflation. the bank would like to see wages and prices being set on the basis of the inflation rate that is expected to prevail over the period for which wages are being set. although wage demands
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orderly manner, and the direction of change will not be one way. this change in perception is to a large extent a result of the improvement in the overall international liquidity position. although the bank has been engaging in limited purchases of foreign exchange reserves for the purpose of bolstering foreign exchange reserves, this should not be misinterpreted as intervention in the market in order to target a specific level of the exchange rate. south africa β s foreign exchange reserves are low by comparison with other emerging market economies, and this perception makes the rand vulnerable to speculative attacks. the bank β s objective is to build up foreign exchange reserves in a prudent manner, and in such a way that has a minimum impact on the exchange rate. the bank does not have a target for the exchange rate, and at this stage the bank does not have a target for foreign exchange reserves or a target for the rate of accumulation of reserves. as at the end of april 2004, gross reserves stood at us $ 10, 1 billion while the net reserves or international liquidity position was us $ 6, 4 billion. this can be compared, for example, to the position at the end of december 2002 when gross reserves amounted to us $ 7, 8 billion and international liquidity position was minus us $ 1, 6 billion. 6. inflation developments developments on the inflation front continue to be positive. cpix inflation slowed down from a peak of 11, 3 per cent in october and november of 2002 to move to within the target range of 3 - 6 per cent by september of 2003 and has remained there since. it reached a low of 4, 0 per cent in december 2003 before increasing to 4, 8 per cent in february and then fell back to 4, 4 per cent in march 2004. the achievement of bringing inflation down to within the target range can be attributed to a number of factors including the monetary policy response to the inflation shock of late 2001, positive base effects and the sustained recovery in the exchange rate of the rand. the decline in food price inflation, which had been a major factor driving inflation up in 2002, was also an important contributor to the decline in the inflation rate. the upturn in the inflation trend in the early months of this year was not unexpected and in line with the bank β s inflation forecast. the bank β s inflation forecast which is published in the latest monetary policy review, shows that cpix inflation is expected to rise gradually towards the upper limit of the inflation target range before
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technical platform. it guarantees a harmonised level of service for banks all over europe combined with one single transaction price for domestic and cross - border payments and is one of the best individual payment systems in the world. this system was developed and is operated by a β consortium β of central banks β the banca d β italia, the banque de france and the deutsche bundesbank β on behalf of the eurosystem. target2 securities will be a platform for the cross - border and domestic settlement of securities against central bank money. the development and operation of this system was assigned to the deutsche bundesbank, the banco de espana, the banque de france and the banca d β italia. following a review of the current eurosystem collateral management handling procedures, in particular, the correspondent central banking model ( ccbm ), the governing council decided to again develop a single platform, called ccbm2, allowing the eurosystem to manage collateral both for domestic and cross - border operations. work will be undertaken by the nationale bank van belgie / banque nationale de belgique and de nederlandsche bank based on their existing system. as you can see a range of different organisational models are explored to achieve maximum synergies, e. g. specialisation, attribution to one particular member of the eurosystem team, decentralisation and, when and where needed, pooling, which means that a group of central banks provides a service for the entire eurosystem. you will not be surprised that i would stress that in call cases it is important that the ecb ensures the coherence of the full team by exercising in an appropriate fashion its captainship. let me conclude by warmly congratulating the banque centrale du luxembourg on its 10th anniversary. i think i can say that both our institutions are looking back on a decade of challenges successfully mastered. during the ten years of the eurosystem β s existence, and in particular during the recent months of financial crisis, we have proven that the eurosystem functions well, even in periods of great stress. the eurosystem has passed the test of its first decade of existence. looking ahead, i am confident that with its unique architecture and a strong and enduring team spirit it is also prepared to tackle the challenges of the future. i thank you for your attention.
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from the measures that are still at an early stage of implementation. at the same time, uncertainty remains high and downside risks are still significant due to the continued fragile state of the global economy and geopolitical developments. we will closely monitor the evolution of the outlook for price stability. we stand ready to act by using all the instruments available within our mandate, if necessary, to achieve our objective. in particular, the ecb is ready for all contingencies following the uk β s eu referendum. investment in the euro area after the sharp downturn observed during the financial crisis in 2008 and the renewed decline during the european sovereign debt crisis, real investment in the euro area has now begun to recover. in particular, business investment has undergone a welcome recovery since 2013 and public and housing investment have recently broadly stabilised. despite these positive trends, the current level of investment is still unsatisfactory. the level of total real investment in the euro area remains more than 10 % below pre - crisis levels. therefore, further action is needed, including at eu level. the investment plan for europe is a welcome example. while we would support extending it beyond 2018, the success of the current plan also rests on its capacity to improve the investment environment, at both european and national level. only reforms in this area can guarantee its long - term effects. at eu level β and here the european parliament has an important role to play as colegislator β we should further deepen the single market, notably in the areas of energy, transport and the digital economy. we should also make full use of the potential of existing single market legislation by ensuring its complete and consistent enforcement. strengthening the european dimension of regulatory enforcement would help to lessen complexity, enhance the level playing field and reduce the fragmentation of product markets. in addition, we should act decisively to make the channelling of savings into productive investment more efficient. the banking union, including the ecb in its micro - and bis central bankers β speeches macroprudential role, has an important role to play in ensuring that banking markets efficiently allocate resources to the most productive investment opportunities across the euro area. progress on the capital markets union is also essential to develop a favourable environment for productive investment in the eu. it will help diversify the sources of funding needed to spur investment β notably for smes and long - term projects β by complementing bank financing with deeper, more developed capital markets. the legislative acts regarding simple, transparent and
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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, 3 december 2013. * * * the monetary policy report of december 2013 and the financial stability report of the second 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 am grateful for your invitation to present the vision of the central bank β s board on the recent macroeconomic and financial developments, its outlook and implications on monetary and financial policy. this vision is contained in detail in our december monetary policy report and our second - half financial stability report we are presenting now. the macroeconomic scenario has evolved along the trends described in the latest monetary policy reports. in the external scenario, growth is more balanced between developed and emerging economies than it was before the subprime crisis hit. international financial conditions are steadily normalizing, while the terms of trade are declining and approaching their trend values. in this scenario, the chilean economy will receive a milder boost from abroad than we saw in recent years. the less expansionary monetary policies in the developed world will be coupled with a rebound in developed economies that will favor not only these countries but the world economy at large. certainly, some countries have more reasons to worry than others about these adjustments in the world economy, because of their external and domestic vulnerabilities. meanwhile, the past and present volatility of the world will continue to affect our economy, but, while we are certainly not immune to what happens outside our borders, we feel we are on a good stand to deal with this transition. at home, output and demand are gradually decelerating and inflation is still low. our projections, which i will be reviewing shortly, indicate that in the short term the chilean economy will continue to expand somewhat below trend, affected by the normalization of the mining investment cycle and labor market conditions. we thus estimate a 4. 2 percent growth for this year and a 3. 75 to 4. 75 percent range for next. this 2014 forecast range is slightly less than what we were expecting in september. although these growth rates represent a slowdown from previous years, we see no obstacles ahead that could prevent our economy from resuming growth at closer
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46 % of cases, turnover does not come with wage improvements. this phenomenon is more present amont high - turnover, low - income workers. those staying in their jobs longer have significantly greater wage gains over time. in the long term, this phenomenon links wider wage inequalities with slower productivity growth, a topic that merits a more in - depth examination. the study goes on to review how the chilean labor market responds to economic fluctuations ( table 5 ). the analysis reveals that, in general, there are multiple margins for adjustment that allow to cushion macroeconomic shocks and moderate the effect on employment that would exist absent those margins. these include changes in the composition betwee salaried and self employment, changes in participation rates, high turnover and rapid transitions between salaried jobs, the creation of jobs in new firms, and wage flexibility in hired work. at the same time, evidence has it that the costs associated to such adjustment, both for the workers and for the economy β s aggregate productivity, can be significant. the results presented also have implications on how the shocks hitting the economy can affect the evolution of wages and inflationary pressures, information that is of particular importance for monetary policy. thus, despite the labor market β s capacity for adjustment, the weak periods entail important costs. in particular, the process of realocation to quality jobs and more productive enterprises, with the consequent impact on aggregate productivity and the workers β purchasing power, is diminished in the lower phase of the cycle. for some workers, especially those in the early stages of their working lives, the effects can be very persistent. these situations explain the need to have a wider toolkit with indicators to monitor the behavior or the labor market over the short term. in particular, it is useful to complement survey data with information from administrative data bases and traditional aggregates on occupation and unemployment with statistics on resignations, firings and hirings. anyway, the bcch has made progress on these matters. the evidence presented is largely based on ongoing research within the bank and it naturally supplements some of the main topics discussed in our 2017 trend growth report. it also attests to the generosity of multiple institutions that, through covenants, have cooperated by sharing this information, including the ine, the internal revenue service, the civil registry, the labor directorate and the ministry of education. final remarks before i conclude this presentation, i would like to mention the materialization of an initiative that we anticipated when we presented
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1 standard β - - that is, to hold enough liquid resources in all relevant currencies to make payments on time in the event of the default of the clearing member that would generate the largest payment obligation under a wide range of potential stress scenarios. more complex ccps and those with a systemic presence in multiple jurisdictions are encouraged to meet a β cover 2 standard. β the pfmi also provide guidance on the resources that qualify in meeting these requirements : cash held at a central bank or a creditworthy commercial bank, committed lines of credit, committed repurchase agreements, committed fx swap agreements, or highly marketable collateral that can be converted into cash under prearranged and highly reliable funding arrangements. there are two sets of risks involved here. first, where should ccps put their cash? as central clearing has expanded, ccps have had to deal with increasingly large amounts of cash margin. ccps can deposit some of these funds with commercial banks. but regulatory changes have made it more expensive for banks to take large deposits from other financial firms, and in some cases banks may be unwilling to accept more cash from a ccp. and many of the largest banks are also clearing members, which introduces a certain amount of wrong - way risk. a clearing - member default could be especially fraught if the defaulting bank also held large cash balances for the ccp. for this reason, ccps may prudently place limits on the amount deposited at a given institution. in order to diversify their holdings, many also place cash in the repo market. if it is available, the ability to deposit cash at a central bank allows for another safe, flexible, and potentially attractive option - - a subject i will return to later. second, how can ccps be assured that they will be able to convert securities into cash or draw on other resources in times of stress? the pfmi uses the words β committed β and β pre6 arranged β in describing qualifying liquid resources. indeed, the pfmi does not view spot transactions on the open market as reliable sources of liquidity during times of stress. the federal reserve has strongly supported this approach. liquidity plans should not take for granted that, at a time of stress involving a member default, lines of credit, repurchase agreements, or fx swaps could be arranged on the spot. committed sources of liquidity are more likely to be available. they also allow market participants and regulators to make sure that plans
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caleb m fundanga : strengthening and promoting the zambian private sector speech by dr caleb m fundanga, governor of the bank of zambia, at the celtel loan signing ceremony, lusaka, 12 december 2006. * * * managing director, celtel zambia plc senior government officials present chief executives officers of commercial banks and other financial institutions present management and staff of celtel zambia plc members of the press distinguished invited guests ladies and gentlemen it gives me great pleasure to join you today at this celebratory event for the celtel zambia plc usd105 million 5 - year, two - tranche, local and foreign currency syndicated term loan facility. undoubtedly this event marks a high - point for all those working at strengthening and promoting the zambian private sector. in this regard, this event clearly unveils and in so doing reveals the hitherto relatively unknown sophistication and ability of the zambian private sector and surely the coming of age of our nascent banking and financial services sector. ladies and gentlemen, it is gratifying to observe that the facility we are celebrating today was initially launched as a usd70 million facility but was subsequently raised to usd105 million following significant oversubscription. it is equally gratifying that of the usd105 million, usd86 million or 82 per cent was raised in zambian kwacha primarily from zambian commercial banks with some participation from international development finance institutions. this is a demonstration of the growing confidence in both zambian corporate borrowers and business climate by both domestic and international banks. as bank of zambia, we believe that the recent economic developments, such as, the attainment of single digit inflation for the first time in three decades in april 2006 and sustaining low - level inflation for nearly three consecutive quarters so far to november 2006 are supportive of this initiative. these developments also indicate that zambia is able to rally foreign private capital to improve the domestic financing limitations and support efforts of encouraging faster economic growth, private sector investment and exploitation of the country β s huge potential in various sectors. ladies and gentlemen, we also believe that events such as this complement the outcomes of government β s economic reform agenda which in part is aimed at strengthening our country β s creditworthiness as demonstrated by the attainment of the enhanced highly indebted poor countries initiative ( hipc ) completion point in april 2005. ladies and gentlemen, please allow me to elaborate. in order to strengthen and sustain our new status as a credit
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i framework, such as the firm β s correlation assumptions within and across portfolios and the rigor of its stress testing programs. finally, under pillar iii, supervisors will seek to ensure that accurate information about risks will be disclosed by banking organizations. areas of possible concern with basel ii procyclicality while i have emphasized the various benefits of basel ii for effective supervision and the preservation of financial stability, there clearly are some possible downsides of the new approach. concerns have been raised that the adoption of the new accord will have some destabilizing effects on the international financial system, and emerging market economies in particular. chief among these is the concern that basel ii will amplify procyclicality as basel ii adopters severely tighten credit standards in response to rising capital requirements in the event of deterioration of credit conditions. we do expect that minimum capital requirements will rise and fall in response to changes in the risk of a bank β s activities, just as the internal economic capital models currently used by banks reflect changing risk exposure by changing capital levels. by itself, this will mean that, even with some changes the basel committee made over the years to lessen the effect, some procyclicality still remains. however, the procyclicality debate should include not only whether capital requirements will rise and fall with economic cycles, but also whether the new requirements provide useful signals to banks, supervisors, and market participants that will lead them to take appropriate action in response to a changing economic environment. with more gradations in the basel ii framework, banks, supervisors and the marketplace will have an early warning signal when credit quality deteriorates and when it improves. a more risk sensitive measure should give bank managers accurate signals to adjust lending policies in a more gradual manner early in cycles, dampening severe contractions or expansions in lending. with its emphasis on planning and risk analysis, the new accord will require banks ( and their supervisors and rating agencies ) to think more systematically about the level of capital needed during upturns in order to weather downturns. herding behavior another concern that some have raised is that the uniformity imposed by basel ii in calculating capital requirements will result in homogeneous assessments of risk, which in turn will amplify herding behavior in the market place. the new accord does set requirements for bank risk management by requiring certain types of inputs, and it does set the correlation factors for asset types, but it does not mandate that all banks must have
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probably curb debt - financed investment. the question is whether this will eliminate the lowest priority investments. in the long run, we are dependent on long - term investment. interest rate changes may therefore have adverse effects in norway that do not occur in other countries. β this stands in contrast to the current view, as expressed by norges bank β s delegating authority, the ministry of finance : 2 β the new guidelines for economic policy also imply that monetary policy has been given a clear role in stabilising economic developments. this means that the scope for manoeuvre in monetary policy should be used if the outlook for the economy changes. β in the 1950s and 1960s, a strong belief evolved that the economy could be controlled and steered in the desired direction. this optimistic view gradually lost favour in the face of developments. the way in which economic policy is oriented today reflects the experience gained and the lessons learned in the 1970s and 1980s. 3 economic policy at that time was marked by coordination, control and regulation. important elements were : β’ fiscal policy oriented towards full employment see jahn, gunnar, alf eriksen and preben munthe ( 1966 ) : norges bank gjennom 150 ar ( a history of norges bank ). in norwegian only. norges bank β s printing works, oslo. cf. report no. 1 ( 2003 - 2004 ) to the storting, national budget for 2004. ministry of finance, oslo. hermod skanland is in the process of completing β doktriner og ΓΈkonomisk politikk β ( doctrines and economic policy ), which provides a very interesting discussion of post - war economic policy. β’ credit regulation within limits specified in a separate credit budget β’ channelling of loans through the state banks β’ regulation of capital movements β’ low nominal interest rates stipulated by the government authorities β’ a fixed, though adjustable, krone exchange rate β’ use of price regulation β’ an active business policy through state ownership and state grants and subsidies the use of price regulation was particular to norway. the following description is by petter jakob bjerve : 4 β a characteristic of postwar norwegian economic policy, compared with policies in other countries in the west, is that prices have largely been directly set by the authorities, while wages and other income have been determined by the market and by market organisations. with the high level of employment that the government sought to achieve in the 1970s, inflation was probably lower with price regulation than it would have
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one takes precedent over the other. we believe this transparency about the balanced approach the fomc takes has served us well over the past decade when high unemployment called for extraordinary policies that entailed some risk of inflation. the review of our current framework will be wide ranging, and we will not prejudge where it will take us, but events of the past decade highlight three broad questions. three questions the first question is, β can the federal reserve best meet its statutory objectives with its existing monetary policy strategy, or should it consider strategies that aim to reverse past misses of the inflation objective? β under our current approach as well as that of most flexible inflation - targeting central banks around the world, the persistent shortfalls of inflation from 2 percent that many advanced economies have experienced over most of the past decade are treated as β bygones. β this means that policy today is not adjusted to offset past inflation shortfalls with future overshoots of the inflation target ( nor do persistent overshoots of inflation trigger policies that aim to undershoot the inflation target ). central banks are generally believed to have effective tools for preventing persistent inflation overshoots, but the for a discussion of this terminology and references, see english, lopez - salido, and tetlow ( 2015 ) and clinton and others ( 2015 ). - 6effective lower bound on interest rates makes persistent undershoots more likely. persistent inflation shortfalls carry the risk that longer - term inflation expectations become poorly anchored or become anchored below the stated inflation goal. 10 in part because of that concern, some economists have advocated β makeup β strategies under which policymakers seek to undo, in part or in whole, past inflation deviations from target. such strategies include targeting average inflation over a multiyear period and price - level targeting, in which policymakers seek to stabilize the price level around a constant growth path. 11 these strategies could be implemented either permanently or as a temporary response to extraordinary circumstances. for example, the central bank could commit, at the time when the policy rate reaches the elb, to maintain the policy rate at this level until inflation over the elb period has, on average, run at the target rate. 12 other makeup strategies seek to reverse shortfalls in policy accommodation at the elb by keeping the policy rate lower for longer than these risks could be exacerbated if households and businesses expect monetary policy to be insufficiently accommodative because of proximity to the elb.
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for release on delivery noon est february 22, 2019 the federal reserve β s review of its monetary policy strategy, tools, and communication practices remarks by richard h. clarida vice chair board of governors of the federal reserve system at the 2019 u. s. monetary policy forum, sponsored by the initiative on global markets at the university of chicago booth school of business new york, new york february 22, 2019 i am pleased to participate in this year β s u. s. monetary policy forum, which, since its inception, has brought together policymakers, academics, and market participants to share ideas and perspectives on u. s. monetary policy. today i would like to discuss the broad review of the federal reserve β s monetary policy framework that we are undertaking this year. we will examine the policy strategy, tools, and communication practices that we use to pursue our dual - mandate goals of maximum employment and price stability. in my remarks, i will describe the motivation for and scope of this review and will preview some of the events we are planning as part of it. 1 the u. s. monetary policy forum is an excellent venue for this presentation. for more than a decade, it has focused attention and timely analysis on critical issues confronting the federal open market committee ( fomc ). its programs have drawn on the latest economic research and considered a range of views. similarly, the federal reserve β s review of its monetary policy framework will be transparent, will be open minded, and will seek perspectives from a broad range of interested individuals and groups, including academics, other specialists, and the public at large. motivation for the review the fact that the system is conducting this review does not suggest that we are dissatisfied with the existing policy framework. indeed, we believe our existing framework has served us well, helping us effectively achieve our statutorily assigned dual - mandate goals of maximum employment and price stability. nonetheless, in light of the unprecedented events of the past decade, we believe it is a good time to step back and assess whether, and in what possible ways, we can refine our strategy, tools, and i would like to thank etienne gagnon for his assistance in preparing these remarks. - 2communication practices to achieve and maintain these goals as consistently and robustly as possible. i note that central banks in other countries have conducted periodic reviews of their monetary policy frameworks, and their experience has informed the approach we are pursuing. as chairman powell has indicated, with the u. s
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finance made the world riskier? β, european financial management, 12, pp. 499 - 533. one example is the recently established new project and working group on transmission channels between the real and financial sector by the research task force of the basel committee on banking supervision. see the so - called cross report on β recent innovations in international banking β prepared by a study group of the central banks of the group of ten countries ( april 1986 ). it featured also a full chapter on β global integration of financial markets β. see for example ashcraft and schuermann ( 2008 ), β understanding the securitisation of subprime mortgage credit β, foundations and trends in finance, 2 ( 3 ), pp. 191 - 309, in particular the chart on β the seven β deadly β frictions of securitisation β. developed macro - prudential function would have to take into account innovations shaping instruments, institutions and processes in the financial system would go beyond regular financial stability analysis. on the basis of the above considerations, a key output of macro - prudential analysis would ideally be a periodical graduated ex ante risk assessment measuring the amount of risk in the overall financial system and its implications for the economy at large. this assessment would also estimate the overall degree of instability that could result if certain unexpected adverse events were to materialise, including scenarios of extreme shocks, ultimately also assessing the resilience of the financial system and of the economy in general. whereas macro - prudential ( and micro - prudential ) supervision is mainly concerned with extreme events such as financial crises ( β tail risks β ), the forward - looking approach required to prevent those extremes implies that careful assessments also be made in more tranquil times, establishing how far the system is from a crisis and which risks β if they were to materialise β could bring it closer to a crisis. what is needed to conduct such analysis and monitoring? the starting condition for implementing a comprehensive macro - prudential function is an adequate information basis. the first part of the information basis is a good system of continuous market intelligence, which gives a hands - on picture of current market developments and expectations through direct contacts. the second part consists of the regular collection of macro - prudential data and statistics, such as those relating to the macroeconomic environment, financial markets and related infrastructures, payment and settlement systems, regulated and unregulated intermediaries, non - financial corporations and households
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they can continue creating value beyond their home market in the future. in the field of financial services, in particular, there is currently a danger of hidden market access barriers being erected as part of the regulatory reform measures being undertaken in many countries. in this context, support should be given to the proposal by the brunetti group that agreements be negotiated with the countries whose export potential is greatest for the preservation of market access for swiss banks. 11 this might include reciprocal recognition of nationally defined regulations as equivalents, to the extent that this is possible. in the case of globally defined standards, care should be taken to ensure that these are actually be implemented by all the affected countries. this is the only way to guarantee that all market participants have a level playing field. conclusion ladies and gentlemen, i would like to close with the following observations. the swiss banking industry looks back over a great past. now, however, the banks are under pressure, both at home and abroad. state interventions and the actions of the banks themselves have, to some extent, reduced their popularity with the swiss general public and its politicians. meanwhile, the legal disputes with other countries have called the swiss banks β cross - border wealth management business into question in a fundamental manner. cf. state secretariat for international financial matters 2014, on the measures proposed in this respect. bis central bankers β speeches nevertheless, from an economic point of view, switzerland still has a major interest in a strong banking centre of international importance. however, great efforts are required to ensure that the swiss banking centre can remain successful in the global arena in the future. it is the banks themselves which are mainly challenged. they must ensure that their services provide customers with value added which is well above average. at the same time, their crisis resilience must be considerably above average and their business conduct and reputations far beyond reproach. in this respect, politicians can support the banks. however, industrial policies in the area of finance should be avoided. support for banks should rather come through the creation of an appropriate combination of business conditions. the emphasis should be on measures which strengthen the crisis resilience and reputation of both switzerland and its banking centre in the long term. in my view, this can be achieved if the tbtf issue is alleviated, switzerland β s stability in general preserved, and both the privacy of honest tax - paying bank customers and global market access for banks guaranteed. i believe that all players are aware of the major efforts that this requires.
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needs have traditionally been financed largely by government debt, asian governments are increasingly recognising that their own balance sheets cannot support the required scale of infrastructure development. thus, private sector participation is welcome in the region. 33. but public - private partnerships ( β ppp β ) in asia face not insignificant risks. ppp policies are not always well - defined, regulatory and legal systems are sometimes weak, and there are varying restrictions on foreign ownership. 34. robust legal frameworks and clear ppp policies need to be put in place. singapore has been supporting such efforts in partnership with multilateral agencies such as the world bank. 35. in 2009, we established the world bank - singapore urban hub to bring together singapore β s public agencies, research institutes, and private sector players to share experiences with developing countries, especially in areas such as water and waste management, land use planning, and urban development. to expand the urban hub β s infrastructure finance advisory work, an infrastructure finance centre of excellence ( ifcoe ) was launched last year. 36. the urban hub has also partnered the singapore cooperation enterprise β a platform that leverages on the public sector expertise of singapore. together, they have implemented six projects in indonesia, vietnam, china and mongolia. this includes helping these governments develop a regulatory and financing framework to prepare ppp projects for private sector investment. bis central bankers β speeches 37. regional governments have also introduced schemes to encourage private sector investment. for example, the indonesian ministry of finance has worked with the world bank to set up the indonesia infrastructure guarantee fund. this fund provides guarantees to the private sector against risks arising from government actions, so as to improve the creditworthiness and quality of ppp infrastructure projects. 38. a critical success factor for achieving asia β s infrastructure investment potential is a well - developed financial sector. asia needs financial markets that are deep enough to effectively intermediate its considerable savings pool and broad enough to provide a range of suitable instruments for risk mitigation. although asean has made progress on these fronts since the 1997 crisis, more needs to be done. these include strengthening legal and regulatory frameworks, increasing market access, harmonising cross border regulations, and raising the level of corporate governance. 39. asean has set in motion several initiatives. it has drawn up a scorecard to identify gaps in the development of bond markets. its capital markets regulators are working on initiatives to harmonise domestic laws, regulations, and practices. it has introduced the asean plus standards, which are disclosure
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12. third, asia β s strong recovery from the crisis has led to high rates of capacity utilisation and tightening of labour markets. this has prompted a gradual build - up in wageprice pressures. 13. i do not want to minimise the inflation risks in asia β no central banker would take a light attitude towards inflation risks β but i do want to put the issue in perspective. 14. some of the price pressures facing asia are no doubt structural. we can expect the relative price of food β and commodities in general β to increase over the medium to long term on the back of growing global demand especially in the emerging economies. likewise, capital will continue to flow from advanced economies to emerging economies, reflecting growth differentials and a shift in global portfolios towards higher yielding asian assets. these two factors will be a source of inflation bias in emerging asia over the medium term. 15. but a good part of the inflation in asia is also temporary. the pace of food price inflation and capital inflows into asia will moderate compared to the last two years. much of the recent food price increases reflect the impact of supply disruptions, and these are largely expected to be of a temporary nature. capital inflows are also unlikely to persist at the volumes seen in the last two years, as monetary policy settings in the advanced economies are normalised. 16. more importantly, policymakers in most asian economies are not behind the curve, or at least not anymore. central banks in asean are deeply cognisant of underlying inflation risks. they have either hiked interest rates or allowed the exchange rates to appreciate over time or done both. malaysia and thailand have raised policy rates by four and six times respectively since early 2010. key asean countries are also relying more on exchange rate appreciation to dampen import price pressures. bis central bankers β speeches 17. in singapore, mas preemptively tightened exchange rate policy as early as april 2010. subsequently, exchange rate policy was tightened in october 2010 and again in april this year. allowing the singapore dollar to strengthen has had a dampening effect on inflation in singapore, which would otherwise have been much higher. headline inflation has probably peaked in singapore and is expected to average 3 to 4 per cent this year. core inflation β which excludes private transport and accommodation costs β is expected to be 2 to 3 per cent this year. 18. asean policymakers have also been complementing monetary policy actions with macroprudential measures aimed at managing the inflation
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loi m bakani : financial system reform in papua new guinea address by mr loi m bakani, acting governor of the bank of papua new guinea, at the launch of the fincorp downscaling initiative closure meeting, 23 june 2005. * 1. * * acknowledgement chairman of fincorp mr kerengua kua, staff of fincorp and mcc. thank you for giving me the honour to address the launch of the downscaling initiative closure today. firstly, on behalf of the microfinance steering committee ( msc ) and the bank of png as an executing agent of the microfinance & employment project, i would like to acknowledge and thank those involved in initiating this downscaling program, namely ; the staff of mcc, the staff & management of finance corporation limited ( fincorp ), and last but not the least the 500 or so micro entrepreneurs under the liklik bisnis finance loan program. this is another milestone in the development of microfinance in png, with a product provided based on mutual trust. 2. introduction let me congratulate you all for the success in running and expanding this program for one year now. like all other developing countries, png is constantly challenged to provide solutions as to how best it can wrestle the problems associated with poverty and lack of employment opportunities. png β s 5 million population of which 80 percent live in the rural areas have been denied development opportunities because of unfair or uneven distribution of the country β s financial resources & limitation in infrastructure developments. lack of serious attention to the declining state of infrastructure has forced many of the rural dwellers to migrate to the urban centres in search of employment opportunities and services of urban dwellings. with lack of education and entrepreneurial skills, many could not find jobs and had to resort to crime and other illegal activities as a means to survive. in addressing the lack of financial services to the rural population, the bank had agreed to be a party to the development of the microfinance sector, although is outside the core functions of the bank. we see this new development as an important milestone in the development of the financial system in png. this industry will complement the financial services provided by the existing financial institutions, but with different scope and mandate. we are encouraged by the huge interest in the microfinance sector as evidenced by the growth of the current two ( 2 ) microfinance institutions, namely, the wau microbank and the png microfinance limited
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result in excessive risk weights compared to the economic risks of securitisation tranches, particularly for retail and mortgage portfolios. β β this particular bank happened to incur $ 24. 7 billion in losses from cdos during the crisis. 5 β’ another bank wrote : β if adopted, the current proposal for securitisation will materially impair the ability of banks to distribute risk from their own balance sheets into the calculations of costs are based on laeven, l and f valencia ( 2013 ) using data from the banking crisis database and calculations of the bis and the riksbank. laeven, l and f valencia ( 2013 ) β systemic banking crises database β, imf economic review 61 ( 2 ), 225 β 270, imf. output losses are computed as the cumulative sum of the differences between actual and trend real gdp over the crisis period in relation to pre - crisis gdp. basel committee on banking supervision ( bcbs ) ( 2010 ) an assessment of the long - term economic impact of the new regulatory framework, august. the loss of output represents referred to represents the median cumulative discounted output loss reported by a number of academic studies assessed in the study, measured over the period from the peak to the end of the crisis. the output loss does not include permanent losses in gdp, i. e. where the gdp trend does not recover to the pre - crisis level. the bank stating this was merrill lynch. source : fcic. bis central bankers β speeches capital markets. β β this bank incurred usd 13 billion losses in q1 2008 and usd19 billion in writedowns on real estate and related structured credit positions. 6 i can assure you that there are many more similar examples to quote β the message being that the proposed reforms were overly restrictive, would damage the market and reduce activity. this illustrates that we need perspective when assessing the feasibility of reforms. to sum up so far : yes, there has been a strong regulatory reaction to the crisis, but as i see it, this is appropriate, given β the pre - crisis regulatory framework, β the costs crises give rise to, and β the efforts that the basel committee has made to mitigate risks of unintended consequences, the problem is that myopic observers tend to forget these aspects. are we there yet? remaining challenges? i would now like to change perspective slightly and ask, are we there yet? have our efforts done the trick, or are there still challenges to be tackled
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##interrupted service of critical functions and for insured depositors ; preservation of franchise value of the firm ; credibility of regime among financial institution counterparties, ex ante ; and, effective coordination and cooperation among jurisdictions in the event of a crossborder failure of an institution. one promising avenue is to embed contingent capital features into debt and preferred shares issued by financial institutions. contingent capital is a security that converts to capital when a financial institution is in serious trouble, thereby replenishing the capital of the institution without the use of taxpayer funds. contingent conversions could be embedded in all future new issues of senior unsecured debt and subordinated securities to create a broader bail - in approach. its presence would also serve as a useful disciplinary device on management since common shareholders would be incented to act prudently and avoid having their stake in the institution diluted away by the prospect of conversion. building resilient markets the third strategy to mitigate systemic risk is to enhance the resiliency of financial markets through initiatives to improve infrastructure and enhance transparency. continuously open financial markets are essential to a system that is robust to failure. keeping markets continuously open requires policies and infrastructure that reinforce the private generation of liquidity in normal times and allow for central bank support in times of crisis. the cornerstone is clearing and settlement processes with risk - reducing elements, particularly central clearing counterparties or β ccps. β properly risk - proofed ccps act as firewalls against the propagation of default shocks across major market participants. moreover, in the case of a single - participant default, a ccp β s standardized procedures can contribute to an orderly close out of that participant β s positions, eliminating the chance of a β fire sale β and reducing spillovers to other markets. for these reasons, the bank of canada has supported the development of a domestic ccp for canadian - dollar repos, which should be launched later this year. the bank is working with its domestic partners to develop similar infrastructure for over - the - counter ( otc ) derivatives markets. current g - 20 efforts to transfer trading of standardized otc derivatives to clearing houses have similar benefits. securities regulators and central banks have a shared interest in ensuring that the new infrastructure is properly risk - proofed. iosco recently provided helpful guidance for riskmanagement practices of central counterparties that clear otc derivatives products. 6 central banks look forward to the results of your consultations on this issue, which should serve to set robust standards to
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capital requirements so that incentives are appropriately aligned. liquidity can be enhanced by a number of strategies. more effective resolution processes will help ensure that markets are robust to the failure of participants, thereby promoting liquidity in more states of the world. measures to develop continuously open funding markets, such as ccps, should expand liquidity options, as will more effective securitization. central bank liquidity facilities should reinforce continuously open markets and, potentially, securitization reforms. securitization will also enhance liquidity options. most fundamentally, the more successful the market infrastructure and resolution agendas are, the lower the overall capital requirements for banks, and the more efficient the overall system. conclusion g - 20 leaders have mandated a series of reforms to put the global financial system on a more solid footing. these changes are radical, not incremental. a focus on efficiently reducing systemic risk is essential. this means ensuring that individual financial institutions are both stronger and less systemically important, more options for liquidity are available in all states of the world, and the sum of the reforms is self - reinforcing and market - driven to reduce systemic risk. these solutions are being developed through closer collaboration between regulators and central banks. iosco β s efforts are central to this effort. i thank you for your focus on this critical agenda and for your attention today. http : / / www. iosco. org / library / pubdocs / pdf / ioscopd318. pdf.
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