text1
stringlengths 1
3.21k
| text2
stringlengths 1
3.21k
| label
float32 0
1
|
|---|---|---|
july 2023. 4 fsb and ngfs, " climate scenario analysis by jurisdictions : initial findings and lessons ", november 2022. 5 mckinsey & company, " the net - zero transition : what it would cost, what it could bring ", january 2022. 6 / 6 bis - central bankers'speeches
|
term climate - economy relationships, short - term scenarios serve three functions : they are better suited for analysing abrupt and adverse shocks that subside in the medium term. they can better capture potential non - linear impacts of climate shocks. they can provide more granular insights on the transmission channels across economic sectors. second, we will work to better understand the implications of climate change for monetary policy. we will : work on an analytical approach to bring climate considerations into monetary policymaking ; and explore what central banks are doing to protect their monetary policy operations portfolio from climate - related risks. blended finance next, the ngfs'work on blended finance. while climate finance flows have grown over the last decade, they still lag far behind what is needed to meet the paris agreement goals. we are more than 35 % short of the annual investment of us $ 9. 2 trillion5 that would be required to get to net zero by 2050. one key impediment is that many sustainability or transition projects are not quite bankable ; their return profile is not commensurate with the risks that investors face. this challenge is further exacerbated in emdes, as they face fiscal constraints and limited access to private capital. to mobilise the necessary capital for marginally bankable green and transition projects, we need blended finance. blended finance is about partnership and synergy across multiple players. governments, development finance institutions, and philanthropies could provide concessional capital β in the form of grants, limited guarantees, and debt or equity at below - market rates of return. multilateral development banks can provide technical assistance β in the form of project development expertise, capacity building, and institutional support. this combination of concessional capital and technical assistance will reduce project risk and improve bankability. 3 / 6 bis - central bankers'speeches this can in turn catalyse multiples of private commercial capital to finance these transition projects. the scaling of blended finance requires collective action from the entire ecosystem of stakeholders. we need to adopt an ecosystem of solutions approach that encompasses partnership across a diverse set of institutions. this is what motivated the ngfs'work on blended finance. the ngfs is proud to launch today a technical document on scaling up blended finance for climate mitigation and adaptation in emdes. the document sets out guiding principles and policy recommendations for scaling up blended finance, and how each key stakeholder in the ecosystem can step up. let me outline some of the key recommendations
| 1 |
stephen s poloz : fireside chat remarks by mr stephen s poloz, governor of the bank of canada, at the greater vancouver board of trade economic outlook forum, vancouver, british columbia, 9 january 2020. * * * introduction good morning, everyone, and happy new year. it is great to be here in vancouver for the board of trade β s economic outlook forum. this part of the event has been billed as a fireside chat. and, while i am happy to share the bank of canada β s observations on the economic outlook, i very much hope that i will get the chance to hear from you β business leaders who are making real decisions with real money every day. at the bank, a large and talented team uses state - of - the - art economic models and reams of data to forecast economic growth and inflation. but just as important is what we learn from talking to canadians. so i look forward to hearing about what is on your minds for 2020. the bank will announce its next interest rate decision and publish a monetary policy report with updated economic projections in a couple of weeks. to help set the stage for our discussion today, let me set out four key areas that are top of mind for the bank. global trade policy developments the first is the evolution of global trade policy. this has been a pressing concern for the past three years. the impact of protectionist actions, and uncertainty about what might come next, continues to hold back exports and investment globally. on the surface, there has been some improvement on this front lately, although it remains to be seen whether this will lead to a recovery of trade and investment. the canada - united statesmexico agreement is close to being ratified, and that will remove one big source of uncertainty for many canadian companies. and the united states and china have agreed to stop raising tariffs and to roll back some of them. but a lot of damage has been done ; this year, we estimate that global gdp will be around 1 percent lower than it would have been without the trade conflict. this loss will likely be permanent, even if growth resumes from that lower level. plenty of uncertainty remains around the implications of the us - china agreement for canadian exports and around whether any more of the new tariffs can be rolled back. some are concerned that the next step will be for the us administration to take similar trade actions against the european union. it is understandable that companies are reluctant to make big investments in this setting. experience tells
|
that high inflation, large government deficits, slower productivity growth, and lower commodity prices have tended to complicate canada β s economic situation over the past 25 years. but as i said at the beginning, much of the greater sense of difficulty and concern that canadians have felt in the 1990s has to do with the after - effects of the strong medicine we have had to take to turn our economic performance around. the success we have had so far in this regard bodes well for our future. canada β s inflation rate has come down dramatically, averaging less than 2 per cent since 1992. and there are now agreed targets between the bank of canada and the government of canada to keep inflation low and stable in the future. more importantly, canadians have come to expect continued low inflation and to build that expectation into their plans. the federal government and most provincial governments now have balanced budgets or are running surpluses. the total government debt - to - gdp ratio, which peaked at 70 per cent in 1996, has since fallen to 63 per cent. with present prudent fiscal policies, it should continue to decline steadily. future gains in productivity are difficult to predict. certainly, our improved inflation and fiscal situation, together with the low interest rates that they have made possible, provide the best climate for fostering productivity that we have had in a long time. moreover, canadian businesses have undergone major restructuring during the 1990s in response to increasingly competitive world markets. business investment has been rising smartly recently and more firms have been adopting new production technologies. it is also interesting to note that, after eight years of economic expansion, productivity growth in the united states has picked up, rather than falling off as usually happens at this stage of the cycle. tight labour markets seem to have encouraged a record level of investment in that country and more efficient use of technology than before. while the pickup in canadian investment in machinery and equipment has lagged somewhat behind that in the united states, new technology is not the exclusive preserve of our u. s. neighbours. so i hope that in canada, too, we will see a similar payoff from the adoption of new technology and a comparable improvement in productivity. as for commodity prices, there has already been some turnaround this year, but a firmer recovery requires a strengthening world economy β in particular, a turnaround in japan and the rest of asia. the other point to note in this connection is that the relative importance of commodities in the canadian economy has declined. the share of
| 0.5 |
% recorded in 2008. almost all key sectors of the economy recorded positive growth except for restaurants and hotels which saw negative growth due to lower tourist and business travel arrivals during the financial crisis. annual overall inflation slowed down, reverting to single digit level of 9. 9 % in december 2009 from the 16. 6 % recorded in december 2008, and was in line with the original end - year target of no more than 10 %. this outturn was attributed to the decline in both annual food and non - food inflation. in the external sector, zambia β s external position showed remarkable improvement as reflected in the build - up of gross international reserves to 5. 1 months of import cover in 2009 from 2. 1 months of import cover in 2008. zambia β s overall balance of payment position is expected to remain favourable in 2010 due to the rebound of copper prices on the international market as well as the expected increase in copper production as some mines increase production to full capacity and the resumption of production at some mines. the rebound in the international price of copper in the second half of 2009 and the return of foreign portfolio flows resulted in an appreciation of the exchange rate of the kwacha by 4 % at the end of the year. however, fiscal performance in 2009 was weak, mainly due to the global economic crisis, which reduced domestic revenues. despite this, government remained within the programmed domestic financing for the year. ladies and gentlemen, the financial sector has remained resilient despite the adverse effects of the recent global financial crisis. currently, the zambian financial sector is characterised by high liquidity levels, reflecting tighter lending standards in the wake of the lessons from the global financial crisis leading to marked decline in private sector lending. as a result, the demand for the relatively risk free government securities has increased causing a decline in yield rates on government securities. the decline in government securities yield rates and relatively low inflation experienced since the beginning of the year should contribute to a decline in banks lending rates and thus stimulate borrowing by the private sector. ladies and gentlemen, the critical role the accounting profession plays in enhancing economic development cannot be over - emphasized. one of the most important role the profession plays in any organization is to provide accurate, reliable and high quality financial information which communicates an organization β s operating results, its overall health, as well as raise the transparency of its various operating activities. the other role is the audit function, both internal and external, which provides independent assurance of the information produced by accountants
|
will be how to translate the findings from new data into concrete policy implications. after all, the micro evidence has to add up to policy advice for monetary policy which is a macro policy with a rather limited set of instruments. therefore, in some cases, other policies β such as macro - prudential, fiscal or structural policies β could be more appropriate for tackling the challenges that new data reveal. thank you for your attention. 1 liquidity - constrained households are indeed unable or unwilling to borrow against the future rise in income that the promise of low rates underpins ( kaplan et al. ). according to lenza and slacalek, the effects of qe and unconventional monetary policy on income via lower unemployment ( benefiting the poor ) are more significant than the effects of high prices for financial assets ( benefiting the wealthy ). 3 globalisation is another structural phenomenon that has the potential to influence our thinking about monetary policy β a view the bis often emphasises β and which could also have implications for what data to monitor. as claudio borio from the bis suggests, many of the issues surrounding digitalisation could apply in a somewhat similar way for globalisation as well ( i refer to his β through the looking glass " speech from 2017 ). 4 / 4 bis central bankers'speeches
| 0 |
rasheed mohammed al maraj : bahrain country showcase speech by his excellency rasheed mohammed al maraj, governor of the central bank of bahrain, at the bahrain country showcase, dubai, 14 may 2007. * * * your excellencies, ladies and gentlemen : good morning. assalam alaikum wa - rahmatullahi wa barakatuh it gives me great pleasure to welcome you all here today, and to open this bahrain country showcase event. bahrain, of course, has a long history as a financial centre, including a global profile as a centre for islamic finance. but bahrain has much more to offer than simply its experience and credibility β however important these factors are, of course. many developments have also quietly been taking place in recent years, and i am pleased that we have an opportunity such as this one to publicize just some of the features that continue to make bahrain a thriving financial centre. for whilst regional competition has undoubtedly grown significantly β and by the way this is something that i welcome, as benefiting the region as a whole β it is also true to say that bahrain has continued to thrive as an international financial centre. this is something that perhaps doesn β t attract the publicity that it ought to, but is perhaps understandable β news organizations look for what β s new, more than for what β s stayed the same. before i hand over to my colleague from bahrain financial services development, part of bahrain β s economic development board, to highlight the key features of bahrain β s financial services sector, let me just say a few words about current regulatory developments. bahrain has progressed quite dramatically in recent years, in terms of regulation. the bahrain monetary agency β long - established as the country β s central bank and highly respected banking regulator β became a single regulator in 2002, when it was also given responsibility for supervising the insurance sector and capital markets. last year saw the culmination of this process, with the introduction of new legislation and the creation of the central bank of bahrain as the successor organization to the bma. parallel to this process of institutional reform has been an unprecedented period of development and consolidation in terms of our regulations. starting in 2004, we introduced a system of comprehensive rulebooks, containing all our regulations in easily accessible format, to improve communication and transparency. and we introduced new regulatory frameworks for insurance and investment business firms, in 2005 and 2006 respectively. now, we are working on updating our capital markets rules. the first element
|
of this is our new rules on collective investment undertakings, which will underpin bahrain β s position as the region β s leading funds centre, by introducing β for the first time β regulations specifically geared for expert funds and other alternative asset classes, such as hedge funds. collectively, these initiatives have aimed to ensure that bahrain maintains its leading role as a financial centre, in terms of responding to evolving market demands. i am pleased to say that these efforts were positively acknowledged by the imf last year, in their financial sector assessment review of bahrain. but we are not complacent, and we will be continuing to develop our regulations in light of market needs and evolving standards. on this note, let me now turn to my colleague from the edb, shaikh mohammed bin khalifa al - khalifa, who will present in more detail bahrain β s financial sector.
| 1 |
jean - claude trichet : interview with die welt interview with mr jean - claude trichet, president of the european central bank, conducted by jan dams and martin greive on 7 october 2011. * * * welt : mr trichet, at the time you took up office, did you think it conceivable that you would be dealing with such a serious crisis in the currency union? jean - claude trichet : even before the outbreak of the financial crisis, the ecb warned that it was highly likely that there would be major corrections in the financial markets. however, the fact that the crisis would call into question the whole economic and financial strategy of all developed economies was not quite so foreseeable. you have had to take harsh criticism of your crisis management from germany. how disappointing is that for you? that reminds me of a goethe quote : β against criticism a man can neither protest nor defend himself ; he must act in spite of it, and then it will gradually yield to him. β the ecb must accept the criticism. the only thing that matters is that we are faithful to our primary mandate and take our decisions fully independently. it is about precisely that that increasing doubts are being expressed. under your leadership, the ecb has lost its independence because it has financed hard - up euro area countries by printing money. this criticism is completely inaccurate. we are fiercely independent of governments and pressure groups. all our decisions are made fully independently by the 23 members of the ecb β s governing council. and we are totally devoted to our primary treaty mandate of price stability. we have delivered price stability over 13 years with an annual inflation rate of 2. 0 % for the euro area as a whole and 1. 55 % for germany. this is better than any time over the previous 50 years. for the last four years we have been experiencing the worst global crisis since world war ii, and not surprisingly it is hampering our monetary policy transmission. that is why we have had to take some non - standard measures but with caution and prudence. with our decisions since the outbreak of the crisis, we have reacted appropriately to the market failures in the financial markets. we have lived up to our responsibilities. the two german members of the ecb β s governing council, axel weber and jurgen stark, both resigned because they could no longer support the buying up of government bonds. jurgen is a very good european and a very close friend. over the last 18 years he
|
have to be inflexible and oppose any pressure group. under your leadership, the ecb has risen to become europe β s secret government. is it not deeply undemocratic when representatives of an unelected institution like the ecb can dictate austerity plans to an elected government like italy β s? we do not dictate anything to anyone. we do not replace any government. we do not take any political decisions. we are only giving messages to governments individually, and to the eurogroup as a whole. this has always been our task since the setting - up of the ecb. do you not think it was appropriate for us to tell the big countries in 2004 that they should not weaken the stability and growth pact? bis central bankers β speeches almost all experts agree that europe must come closer together. how do you imagine the europe of the future? i would make a distinction between the immediate future, and β after a change in the treaty β what i would call β tomorrow β and the β day after tomorrow β. immediately we must apply completely and rigorously the new governance which has just been approved by the parliament and the council. β tomorrow β we must have the possibility to impose decisions on a country that is not applying the recommendations and, in so doing, is putting the system as a whole in danger. and β the day after tomorrow β we should have a significantly stronger political union with an executive branch and, in this executive branch, a european finance minister. he would be responsible for surveillance of fiscal and economic policies, for the monitoring of the financial sector and for the representation of the european economy in international institutions. at the end of the month, your term of office comes to an end and you will step down after years as president of the ecb. what headline would you like to read over your period in office? despite successive oil shocks and the global crisis, the ecb governing council has delivered greater price stability than in the previous 50 years to 332 million fellow citizens. do you already know what you are going to do with your spare time in future? i have not made any specific plans, because i am concentrating fully on my last weeks in office. my greatest privilege will surely be that i will have more time for reading, for meditating on the present history of europe and to spend with my four granddaughters : eleonore, diane, anna and marie. bis central bankers β speeches
| 1 |
##ity needs, such as debt moratoriums and temporary lay - off assistance, and to facilitate their access to new financing, such as loan guarantee programmes. central banks deployed a wide array of emergency liquidity facilities and new asset purchase programmes, as well as funding facilities to support the essential role of banks in financing the real economy. with this objective in mind, bank supervisors used the flexibilities embedded in regulation and accounting standards so as to increase banks β headroom to absorb losses. these actions have achieved their short - term objectives, setting the stage for the subsequent recovery. the multi - front policy response to the covid - 19 crisis has prevented the drying - up of liquidity and avoided an immediate credit crunch that could have led to a large wave of defaults, warding off a deflationary spiral with probable profound economic and financial stability consequences. unlike other crisis episodes, in which credit crunches have been a problem, the policy mix has contributed to banks acting as part of the solution to the crisis, rather than as amplifiers of the initial shock. interventions have been devised in the spirit of close and constructive cooperation. g20 finance ministers and central bank governors, together with the major international organisations, worked in close contact, participated in several scheduled and unscheduled ( virtual ) meetings and exchanged information on a continuous basis. as mandated by leaders in march, a list of key principles and commitments for a coordinated response to the crisis was laid down under the saudi presidency. the action plan was endorsed in april and updated in october, coherent with the idea that β as a β living document β β it must regularly take into account ongoing developments and our progressive understanding of health and economic challenges. a vital part of the plan is the support provided to low income countries in the form of free resources for addressing the health crisis. through the debt service suspension initiative ( dssi ), by mid - october official creditors suspended debt - service payments of about 5 billion dollars from 46 countries who requested it. multilateral development banks committed additional resources to the value of 75 billion dollars to eligible countries. a common framework was endorsed last week to facilitate an orderly debt treatment of dssi - eligible countries, and is now being submitted for the approval of leaders. these initiatives will remain under the lens of the italian presidency, as part of a broader effort to deal with debt - related issues, enhance global financial safety nets, and improve mechanisms for financing development. * * * the policy response to the global economic jolt
|
antonio fazio : the relationships between currencies and gold speech by mr. antonio fazio, governor of the bank of italy, at the world gold council international conference β the euro, the dollar and gold β, held in rome on 17 november 2000. * * * 1. β if a gold standard had never existed, it might be necessary to invent something of the kind β. this quotation from a monograph by dennis robertson ( money, 1928, p 122 ) refers to one of the positive aspects of the gold standard : that of shielding central bankers from pressures to increase the money supply. after the first world war the return to gold was in fact the overriding objective of economic policymakers, in order to ensure monetary stability. the economic disequilibria produced by the war were so pronounced, however, that they made it hard to re - establish the gold standard. the cost, in terms of welfare, imposed by inflation, rising public debt and war reparations was so high that it prevented the rapid return to gold. the genoa conference of april 1922 laid the foundations for an important innovation : the creation of the gold exchange standard, under which gold was flanked by convertible currencies and central banks were granted greater autonomy ; this was to be used to stabilize the value of gold, through international cooperation. however, the new system did not enjoy the same credibility as the earlier regime and, at the same time, failed to leave the monetary authorities sufficient room for manoeuvre. culturally still under the influence of the gold standard, the monetary authorities were in any case little inclined to cooperate and tended to accumulate gold reserves, thereby exerting powerful deflationary pressure on the economy. the monetary disorder of the thirties created the need for a new reform, which was implemented after the second world war with the bretton woods agreements. the suspension of the dollar β s convertibility on 15 august 1971 officially cut the link between legal tender and gold - an epochal change after more than 2, 500 years during which money had always been based explicitly or implicitly on a precious metal, prevalently gold. 2. the abandonment of a monetary system hinging directly or indirectly on gold was a consequence of the severe economic disequilibria that developed between the two world wars. the advances made in monetary theory also exerted a powerful influence. ricardo provides us with a clear indication of the main objective of the gold standard : β to secure the public against any other variations
| 0.5 |
banks. what is special about central banks? as policy institutions, central banks have objectives and responsibilities that differ from the financial institutions operating on a commercial basis. to enable the central banks to fulfil their responsibilities, they also have special powers β especially the monopoly of issuing currency and 1 / 7 bis central bankers'speeches reserve money. we should resist the temptation to use the special characteristics of central banks as excuses for not having to implement the best risk management techniques developed elsewhere. the risk management standard and techniques of " ordinary " banks should serve as an obvious starting point when discussing risks. there are differences, but they have to be justified in each case. how do the risks come about? central banks take on balance sheet risks as a result of their investment activities ( as in holding foreign reserves ), their monetary policy operations, and from time to time as providers of lender of last resort credit to their counterparts. as investors, central banks have traditionally been conservative. this means that when faced with trade - offs between risk and return, central banks have traditionally tended to favour assets with very low credit risk even if the expected returns from such investments have been modest. traditionally, central banks have also preferred very liquid, short - term investments. these choices have been clearly visible in the way foreign exchange reserves are usually invested. as policy makers, central banks influence market conditions and market prices in a unique way. this is the task why central banks exist today, and why they are able to conduct monetary policy. the ability, and indeed the obligation, to steer the money markets in order to deliver macroeconomic stability adds an important extra twist to the risk management problem : the central bank is not just price taker in the financial markets, it is a price maker too. this is one of the features that make them special as investors and lenders. one may see it as a sort of paradox that central banks, in making policy, themselves seem to create and control much of the risk they themselves bear as investors and creditors. however, the central banks do not actually have arbitrary powers to steer the interest rates or other market prices. they are mandated to exercise their monetary policy powers to pursue specific pre - set goals : the policy objectives for which they are accountable. in the eurosystem for instance, price stability is the overriding objective. therefore, although the actions of the central banks may have an impact on their financial risks, these actions are taken with the requirements of monetary ( and financial ) policy in view
|
i remember, how big a role was given to design. i am happy to hear that jorma vennola, the designer whose style we all know, is here with us. and fourthly, an important focus of oras was on internationalization. all in all, it was also important to learn that a family company can grow fast when it is growthand innovation - oriented and profits are retained in the company to finance growth. generally, the sentiment in finland was gradually turning more international in the 1980s. the finnish companies started to go international not only by establishing new sales units, also by making acquisitions to enlarge their market shares. a number of family - owned companies followed this path. oras was among them. it was not possible to maintain the high pace of growth by a company mainly based in finnish markets. they had to seek growth from abroad. also the drivers for economic growth were changing in the 1980s : according to professor matti pohjola, up until the mid - seventies investment of physical capital was the main driver of productivity and growth in finland. it was only from the end of 1970s onwards, when human capital, like investments in education and r & d started to dominate. one of the trends of the late 1970s and the early 1980s was that the baby boomers were increasingly entering the top positions in business and politics. in oras, the new generation was also taking the lead, as pekka paasikivi was nominated as the new ceo of oras in 1979. bis central bankers β speeches 1990s in summer 1990 i moved with my family moved to brussels. when we arrived at zaventem airport, we were welcome by oras faucets in the toilets. later i went to see a football match in anderlecht. in the stadium we saw a small billboard of oras : the red color and a faucet was easy to recognize. later we understood that to win market shares was not as easy. when we left brussels in 2004, the faucets were in the news. the cartel case on faucet market had just been opened. oras was not part of the cartel of a number of european companies. they were severely fined by the european commission a few years later. the domestic depression of the 1990s was deep in finland. high interest rates and the later devaluations of markka hit many companies and bankruptcies went up. the collapse of trade with the soviet union had its important role.
| 0.5 |
hong kong and taiwan ) grew by an average of 14 % p. a., and now exceed our exports to the us. these exports range from integrated circuits, disk drives, scientific measuring instruments, oil and chemical products to food and beverages. in services too, china β s rising affluence offers great opportunities to southeast asia. china is one of the fastest - growing sources of tourists to thailand, malaysia and singapore. a growing chinese middle - class will want high - quality healthcare and education services. and wealthy chinese β whose numbers are already not insignificant β will need more sophisticated financial services. in manufacturing, china is rapidly expanding into activities previously carried out in southeast asia. but that does not mean that southeast asia will revert to agriculture and primary production. attractive as china is to investors, it will not soak up all manufacturing investments, nor will it out - compete all other countries in every industry and every product. more likely, southeast asia and china will complement each other in an international division of labour, for example, with southeast asia providing the components and intermediate processing, and factories in china doing the final assembly for the chinese market. the desire of mncs to diversify their investments beyond one or two countries will also promote such an outcome. for our part, singapore is actively positioning itself to benefit from china β s growth. when chinese vice president hu jintao visited singapore recently, he proposed four areas for increased bilateral cooperation : high - tech industrial sectors, the economic development of china's western provinces, helping chinese enterprises to exploit international opportunities, and the training of personnel and exchange of talent. officials from both countries are pursuing these ideas. to help chinese companies go international, singapore has mooted the idea of setting up a base in singapore to help chinese companies market their products to the region and beyond. we are actively facilitating singapore business ventures interested in china, providing market information, office space and consultancy services, and maintaining business networks. we have also launched an asian business fellowship programme, to develop a talent pool with operational experience, and network and market knowledge in china. politics & security second, southeast asian governments must tackle the security problems resolutely and decisively. terrorism is not unique to southeast asia. it is a global problem, originating in the middle east, and spreading to every continent. southeast asia cannot be immunised against the terrorism virus. the large muslim populations in the region are a natural host which extremist islamic groups will exploit for concealment and
|
will act because they know that the objectives of the terrorists are totally beyond the pale. these are not innocent political dissidents exercising their democratic rights. they are ruthless fanatics, quite willing to destroy innocent lives in order to create civil strife and animosity between communities and countries, shake confidence in southeast asian economies and their legitimate governments, and weaken the basis of the states. they cannot succeed, but they can cause great harm in trying. provided the governments respond vigorously to the extremist threat, they can contain the problem and gradually restore confidence to the region. access to markets third, southeast asian economies need to boost external demand by strengthening their access to the major developed markets. in the short term, there is little we can do about the cyclical downturn. but for the longer term, favourable and assured access to key trading partners will allow southeast asian countries to maximise benefits from free trade and globalisation, and make themselves more attractive to investors. one basic approach is to promote multilateral trade, and contribute to a successful outcome of the doha development agenda of the world trade organisation ( wto ). but we need to complement the multilateral approach with bilateral free trade agreements ( ftas ) with our key trading partners. this is why singapore is actively pursuing an fta strategy. we have concluded ftas with new zealand, japan, and the european free trade area ( efta ), and hope to conclude agreements with the us and australia very soon. singapore β s aim is not just to boost our own trade links with our fta partners, but also to catalyse broader economic engagement between asean and its trading partners. this is indeed happening. after new zealand concluded its fta with singapore, australia and new zealand proposed starting a closer economic partnership agreement with asean. last year, asean and china agreed to set up an asean - china fta within 10 years. weeks later, prime minister koizumi of japan proposed a japan - asean comprehensive economic partnership, to be modelled on the japan - singapore bilateral agreement. similarly, we hope that the us - singapore fta will become a model for a usasean fta in the longer term. these link - ups show that asean is not turning inwards and away from the global economy, and will give asean a valuable edge as an investment destination. singapore β s economic restructuring : philosophy & initiatives given this bracing environment, singapore is at a turning point in our economic development. the whole landscape has changed. we
| 1 |
extremely difficult situation for the past several years, it appears that overall stability has finally been restored thanks to various measures. for example, in overseas markets, the difficulty that japanese banks faced in raising funds around the beginning of last year and the japan premium, which was the extra cost that they had to pay, have largely subsided against such background as the injection of public funds into major banks in march 1999. at international meetings like the g10 central bank governors meeting at the bis, which in fact i attended a few days ago, we have seldom heard any concern or criticism about financial system stability in japan. in addition, the ratings of japanese banks, mainly those that have announced merger and consolidation plans, have begun to be upgraded. and yet, it is true that there exist a number of agendas that we have to tackle to further strengthen financial stability, as evidenced by the recent collapse of sogo department store. today, i would like to talk about the need to strengthen the capital base, one of the most important agendas over the medium to long term. among many issues regarding the capital base, the first is the capital structure of japanese banks. the risk - based capital adequacy ratio of internationally active japanese banks was 11. 8 % at the end of march 2000, out of which tier 1 capital was 6. 6 %. in the case of us money center banks, the capital adequacy ratio was 13 %, and tier 1 capital 8 to 9 %. it should be noted that in the united states, there has been no injection of public funds and deferred tax assets corresponding only to income for the following year are included in tier 1 capital. if we calculate the tier 1 capital of internationally active japanese banks according to the us standard, it would decline from 6. 6 % to the 4 % level. indeed, there is clearly a big difference in the capital structure between major japanese banks and us money center banks. in other words, there exists a difference, significantly larger than what is observed, between japan and the united states in terms of the strength of banks β capital position. under such circumstances, japanese banks need to strengthen capital base by increasing its key element. furthermore, from the viewpoint of achieving multiple targets including not only the strengthening of capital base but also a reduction in capital cost and an increase in return on equity, banks should work toward the redemption of high - cost capital and an increase in internal reserves through higher profits. the second issue is how to
|
network to reduce operational costs. for this, we need to take full advantage of the progress of information technology, which requires enormous investment. in this regard, whether or not one has sufficient capital to be able to finance such investment is the key to success. banks that plan mega - mergers emphasize business areas such as investment banking, project finance, global cash management and networking in asia as their primary strategies. in these business areas, major banks in the united states and europe have already constructed a fairly solid business foundation. particularly in such business areas as global cash management and global custody, japanese banks need huge investment and technology to compete with banks in the united states and europe. the key to success in these business areas is investment in information technology and sufficient capital. as i just described, strengthening the capital base and pursuing the efficient use of capital seems a typical case of β easier said than done β. nevertheless, when we look back at the recovery of us banks from the banking crisis in the early 1990s, we observe the following virtuous circle. first, banks β profitability improved thanks to restructuring. then, their ratings were upgraded, which led to a reduction in capital cost and fund - raising costs. such cost reductions contributed to higher profitability. using increased profits, banks amortized high - cost capital by, for example, purchasing back preferred stock. higher profits increased internal reserves, return on equity rose and ratings were further upgraded. these processes continued. efficient use of capital means that we need to select targeted business areas and concentrate resources on these selected areas. this reminds me of the fact that mr john reed, chairman of citicorp, decided to abolish its investment banking section. in the mid - 1990s, return on equity in the investment banking section was as high as 13 %. nevertheless, citicorp pursued its chosen strategy by abolishing the investment banking section and transferring all human and physical resources in it to the consumer banking section. there were various criticisms about citicorp β s decision, but it turned out to be successful. this episode shows that it is ultimately the decision of top management to achieve the strengthening of capital base and efficient use of capital. there are five months remaining before we enter the 21st century. we strongly hope that in the coming century japanese financial institutions will be internationally competitive and provide the best financial services on a global basis thanks to the efforts of all those concerned in the management of financial institutions. we at the bank of japan will continue to
| 1 |
shares in domestic and foreign markets partly because of the strong real krone exchange rate. in the face of major restructuring as a result of shifts in the international division of labour, it is a disadvantage for norwegian business and industry that costs are high. reports from norges bank β s regional network confirm the picture of an expanding economy. in the august / september round of interviews, our contacts throughout the country reported continued growth in all the main industries. in region east, the rate of growth in manufacturing is somewhat lower than earlier this year, while growth in the building and construction sector is increasing. residential construction is still driving activity in this sector. although commercial building activity now appears to be picking up in other parts of the country, this does not as yet apply to region east. business sector demand for services is rising. the market for commercial services and it and telecommunications services is showing marked improvement. the retail trade sector reports rising demand, particularly for consumer durables such as cars and furniture. our contacts in services and retail trade report a moderate increase in investments in the year ahead. signals from the regional network indicate that employment is continuing to increase in the building and construction sector, while manufacturing reports a slight decline. employment in the service sector is rising for the first time since the network was established in october 2002. directorate of labour figures show that unemployment has fallen most in region south and region east since the beginning of 2004. in region east, an important sector is commercial services, accounting for close to 15 per cent of employment. it is in this sector, in addition to manufacturing, that unemployment has fallen most on a nationwide basis. since july, oil prices have varied between usd 34 and 52, the highest nominal levels recorded. measured in real prices, oil prices are nonetheless clearly lower than the levels recorded in the beginning of the 1980s. in contrast to earlier periods of sharply rising oil prices, the main reason behind the current rise in oil prices is a surge in demand and limited excess production capacity. growth in oil demand has been particularly strong in regions where production is relatively energy - intensive, such as china and other non - oecd countries. china alone accounts for about 1 / 3 of global growth in oil demand this year. moreover, there has been a marked reduction in excess production capacity in opec countries. small production problems have therefore affected prices more than would otherwise have been the case. in the short term, oil prices constitute the greatest risk to the outlook for the global economy. high oil prices
|
course of spring 2005. the contribution from the exchange rate to inflation will then gradually become slightly negative. there are prospects that inflation will reach the inflation target towards the end of the projection period. there is uncertainty surrounding the projections. the projections are partly based on our analysis of relationships in the economy, the exchange rate assumption and the forward interest rate assumption. we can give some indication of the uncertainty surrounding the projections on the basis of historical deviations between projected and actual price developments. based on these calculations, inflation at end - 2007 is projected with a probability of 50 per cent to be between 1. 75 and 3. 25 per cent. consumer prices may show erratic variations from one month to the next. these fluctuations may be due to temporary conditions. at other times, they may reflect more lasting changes. when the figures deviate from our projections, more observations are therefore needed before an assessment can be made of whether inflation is in line with the projections. the projections in the inflation report are based on the assumption that the interest rate moves in line with financial market expectations. this implies that norges bank maintains the key interest rate at the current level in the period to summer 2005, with a gradual increase thereafter. it is the executive board β s assessment that the projections seem to provide a reasonable balance between the objective of increasing inflation and at the same time avoiding excessive growth in output and employment. the projections imply a sight deposit rate in the interval 1ΒΌ - 2ΒΌ per cent in mid - march 2005. uncertainty as to the effects of previous monetary policy easing and the unusually low interest rate level imply, on the one hand, that we should exercise caution with regard to further interest rate reductions. on the other hand, the prospect of continued low inflation for a period ahead implies that wide deviations from projected economic developments would be required before interest rates should be increased. the prospect of continued low inflation in norway also implies that we should lag behind other countries in setting interest rates at a more normal level. at its monetary policy meeting on 3 november, the executive board decided to leave the sight deposit rate unchanged at 1. 75 per cent. at this meeting, the executive board did not see any clear alternatives to leaving the interest rate unchanged. in reaching its decision, the executive board has weighed the objective of bringing inflation back to target against the risk that output growth may eventually be too high.
| 1 |
however, the rapid increase in the volume of financial flows was accompanied by a rise in their volatility, which represents a new source of risk. the sudden withdrawals of international capital have played a major role in triggering and spreading financial crises over the past fifteen years. this is the main concern of the french presidency of the g - 20 and it appears crucial to me to examine it, not only from the narrow perspective of the management of capital flows, but also from the wider perspective of global liquidity. indeed, the increase in global imbalances is not confined to current account positions. in addition to the growth in net international capital flows, the very sharp rise in gross positions in international portfolios, not exclusively but largely linked to the accumulation of foreign exchange reserves by the major emerging economies, is one of the most significant developments of the past few years. the striking synchronisation of the recent economic crisis across the major economies is certainly in large part a result of this. bis central bankers β speeches in any case, the issue of the appropriate level for the supply of safe and liquid international assets and the international monetary and financial system best able to provide this has yet to be resolved. as you know, this issue is at the heart of france β s presidency of the g - 20. the second major topic is international economic and financial coordination and i will briefly touch on its two main components. the first component concerns the framework for strong, sustainable and balanced growth. this initiative has been given wide media coverage since its adoption at the g - 20 summit in pittsburgh in september 2009. however, i am inclined to think that it has sometimes been distorted and that its scope has been underestimated. this initiative is indeed a promising and ambitious one : promising as it could be the impetus for genuinely enhancing international economic cooperation through the combination of economic policies taking greater account of externalities and structural reforms, in order to achieve the jointly defined global objectives. ambitious, of course, as it involves countries making explicit commitments on measures to be taken and discussing the outcomes with their peers, as part of what is known in g - 20 jargon as the mutual assessment process ( map ). under the korean presidency, whose efficacy and vision i would like to praise, an initial exercise resulted, in late 2010 in seoul, in the adoption of a detailed country - by - country action plan and the commitment to tackle more specifically the global imbalances identified by the indicative guidelines. far from me the idea of
|
be compatible with their independence or even with their mandates to ensure price stability? bis central bankers β speeches the reform of the international monetary system will be the central theme of the last session that will take the form of a roundtable chaired by martin wolf. i am particularly grateful to bill white for accepting the difficult task of drawing a summary of our symposium which is bound to be both dense and captivating. i would like to hand the floor to axel weber to chair the first session, and, once again, i would like to thank all the eminent personalities who have agreed to participate in this symposium. bis central bankers β speeches
| 1 |
instead, joint liability must be predicated on two basic principles. one is the unity of liability and control. as long as control rests with nation - states, liability must rest there, too. this is important to avoid promoting excessively risky business models that threaten financial stability. moreover, no incentives should be created to build a bloated financial industry in individual countries that is way out of proportion to the size of the real economy. the other principle that must be observed is taking the appropriate steps in the right order. the logical sequence requires, first, further moves towards european control, which in turn necessitate democratic legitimacy and accountability. bis central bankers β speeches i am firmly convinced that all concrete proposals must be informed by these considerations and guided by these principles. moreover, many important details remain to be clarified. these remaining uncertainties have perhaps contributed to the intensity of the recent public debate on this topic. in a situation marked by uncertainty it can even happen that one or two economics professors sign both a petition and the corresponding counter - petition. and this does not even have to be a contradiction if the two countervailing positions depart from different assumptions concerning the principles and the details of their implementation. one of the questions regarding a possible pan - european banking supervision regime that still needs to be clarified is the range of countries that will be subject to it : should it cover all eu member - states or only the euro - area countries? given the interlinkages between financial institutions throughout the eu and against the background of the single market, i see merits in integrating all eu member - states in a european supervisory structure. this would strengthen the single market, it would be consistent with the single rule book, and it would help to create a level playing field. taking this logic further, it would make sense in principle for all banks to be supervised by this european authority. in line with the principle of subsidiarity, the european supervisory authority could then delegate the supervision of systemically unimportant banks to national authorities, subject to the proviso that such banks could then be brought back into the fold of european supervision on a case - by - case basis. i believe a europe - wide prudential regime would definitely benefit from the operational involvement of national supervisory agencies. such involvement, in fact, may well be essential. a key issue for central banks is the precise nature of their involvement in european banking supervision. there can be little doubt that they ought to play a role, given their
|
the driver to take him to his destination. to his amazement, the cabdriver tells him : β i would love to take you there but cannot, i β m afraid β. β why not? β, he asks, flabbergasted. β there is a local bye - law that says a taxi has to be here at all times. β β but a taxi is here. β β ah yes, but if i take you home, there would no longer be a taxi waiting here. that would violate the bye - law. β this is what can happen with statutory minimum requirements. only capital in excess of the minimum requirements is available to truly and independently absorb business risk. in an actual crisis, it is only this capital that can be used to buy the time needed, for instance, to write down impaired assets, adjust portfolios or restructure business units. in an ideal world, of course, such buffers should be built up before systemic events occur. that is the rationale behind capital cushions. they provide a certain breathing space before institutions are forced to unload risky assets and curb their lending. if the buffers are too small, however, the pressure to deleverage during a shock can become overwhelming and cyclical movements may be amplified. this is where public capital assistance comes into play. in theory, it provides a counterweight and reduces deleveraging pressure. getting the basics right : aspects of a european system of banking supervision the reality can be much rougher, however, for a euro - area country that is struggling to cope with the close interlinkages between the sovereign debt crisis and the banking crisis. the stability of the banking sector is then called into question because the country is no longer regarded as being fully capable of resolving its banking crisis unassisted. for such cases, the efsf has clear rules according to which other euro - area countries can step in to help that country. the affected country remains the partner for the donor countries β assistance. by providing such assistance, the donor countries are already taking on considerable risks. extending this risk - sharing role, as is being proposed in connection with a banking union β in the form, for example, of a european restructuring fund or a european deposit insurance scheme β would necessitate far more extensive intervention in countries β national sovereignty and in their fiscal and economic policies. i hope you will agree with me that joint liability must not be allowed to be introduced covertly through the back door.
| 1 |
de france. the guarantee is granted for a fee, so that the beneficiaries pay costs corresponding to normal market conditions and also with a view to protect taxpayers β interests. second, the law also creates a state - owned company empowered with eur 21 billion and entitled to subscribe to banks β subordinated debt issues or preferred shares. as you know, six banks have issued subordinated debt and the government subscribed to these issues for eur 10. 5 billion. such support boosted 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 the belgo - french bank dexia, the answer is β not really β. 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 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 private sector strategies to overcome the crisis cover several aspects. first, i would like to mention the initiative to create a compensation scheme with a central counterparty for credit default swaps ( cds ). this initiative from the private sector is strongly encouraged by public authorities given its importance for financial stability. regarding institutions themselves, different proposals are on the table which relate to their business model and risk profile, to governance and risk management schemes and to disclosure and communication policy. in terms of risks profile, two main models are intensely discussed. under the first one, universal banks that benefit from diversified sources of profits were better off during the crisis. by contrast, specialised financial institutions, especially those heavily engaged in investments activities, suffered significant losses. i have already mentioned the case of french banks. in the same vein, the interest of deutsche bank for postbank in germany stems from the same logic : to diversify sources of funding and of profitability. conversely, the other model
|
experiences problems, this may then have serious repercussions for the financial system and, ultimately, the real economy. however, traditional supervision has not sufficiently taken into account the risk of financial problems becoming contagious. monitoring those risks is also a rather different process to monitoring the risks in an individual institution. traditional regulation and supervision have also found it hard to handle the tendency to rollercoaster behaviour of the financial sectors. in good times, there is almost always a tendency to expand lending and to ignore the risks this entails. however, when the downturn comes, the same players tend to run for the exits at the same time, which serves only to according to the analysis, a monetary policy designed such that housing prices continued to rise in accordance with the trend in the period 2000 - 2004 would have entailed a repo rate around 8. 5 per cent, an inflation rate of β 4. 3 per cent and a level of gdp growth of β 0. 6 per cent in 2007, that is in the year before sweden was hit by the global financial crisis ( see claussen et al., 2011 ). monetary policy is also ineffectual if one wants to counteract contagion risks due to the size and complexity of the banks and their exposures to each other. bis central bankers β speeches make the downturn worse. a vicious circle arises when a credit crunch leads to lower production and lower employment, which in turn feed back into in the financial sector by making loan losses even higher. this type of feedback effect between the financial system and the macro economy is not the province of traditional financial supervision either. this is where the concept of macroprudential policy comes in. quite simply, financial supervision must be complemented by a much broader approach. this broader approach is usually referred to as macroprudential policy. at the european level, the efforts to develop a framework for macroprudential policy have resulted in the formation of the european systemic risk board ( esrb ). this body, in which the riksbank is represented, will be responsible for overall macroprudential policy for the financial system in the eu. the esrb β s tasks include identifying and ranking systemic risks. when such systemic risks are discovered and are deemed to be significant, the esrb should issue warnings and, when appropriate, recommend that corrective measures should be taken. when necessary, the esrb will make these warnings and recommendations public. a so - called comply
| 0 |
have to bring three objectives of the basel reform package into alignment. first, we wish to reduce excessive fluctuations in the calculation of risk - weighted assets by internal models ; second, we wish to hold onto risk sensitivity ; and third, the new rules must not lead to any significant increase in the currently applicable overall capital requirements. 1 / 4 bis central bankers'speeches from today β s perspective, i think these three objectives could well be at risk. felix hufeld expressed a similar opinion. this is because provisional impact assessment studies point to a significant increase in overall capital requirements. there is, therefore, definitely some latitude for lowering requirements. we have pledged to use this latitude. and we should use it in such a way that it will serve the goals i have just mentioned. from a german perspective, there are two essential areas of action for the negotiations at the end of november. first, preservation of internal credit risk models, and therefore of a risk - sensitive approach β even at the cost of constraints resulting from input floors ; and second, not introducing an output floor. 2. is the regulatory framework appropriate from a risk perspective? the case of real estate loans let me explain the first point by taking the example of real estate loans β a topic that is particularly dear to us in germany. real estate loans are an important business area β worldwide. even a high level of property collateral cannot rule out losses in the credit business. to what extent should banks therefore be allowed to claim collateral as being risk - mitigating when calculating their regulatory capital? a typical approach is to take the market price of the collateral. but market prices are, of course, prone to overvaluations and price bubbles. the regulatory framework should take such risks into account. in basel, there is a clear consensus on this matter. in some countries, such as germany, additional risk - mitigating rules are in place. for example, banks and savings banks are obliged to apply conservative value calculations when valuing real estate. these are more cautious and less volatile than valuations based on the market value. they have led to very low loss rates for as long as they have been in place. in other countries in europe and the rest of the world, less restrictive valuation standards are often used. the basel committee would now like to see all valuation methods being treated equally. we, as the german supervisory authority, will be objecting to this proposal in the basel negotiations, as this would distort global and regional competition.
|
andreas dombret : " the new normal " in banking - perspectives for regulators speech by dr andreas dombret, member of the executive board of the deutsche bundesbank, at the bundesbank reception as part of eurofinance week 2016, frankfurt am main, 15 november 2016. * * * 1. " the new normal β in banking β orientation through regulation? ms daniele nouy vice - president sabine lautenschlager ladies and gentlemen the β new normal β is the big topic of this year β s euro finance week here in frankfurt. to me, the term β new normal β carries negative undertones. it reminds us that many aspects of banking business β from the relationship between a bank and its customers, via political risks, to sources of income β have changed, all at the same time β and for good. this can certainly engender frustration and fear. still, i don β t believe that change and uncertainty, in themselves, are necessarily a cause for complaint. after all, they are the foundations of economic activity in general, and of banking business in particular. but, as so often in life, it is a matter of degree. what many people undoubtedly want from banking business β s new normal is an adequate amount of orientation. banks and savings institutions want orientation for regulation, as well. all eyes are now on basel iii. two essential questions arise today : what is the current status of the reforms? and what can we regulators do to provide banks with suitable orientation for the β guide rails β of banking business? allow me to make a preliminary remark. in my opinion, there is no such glaring conflict between banks and regulators about the need for a planning horizon. the basel committee central bank governors have specified the timeframe in good time and stipulated that capital requirements should not increase significantly overall. such a voluntary commitment surely did not and does not make the committee β s job any easier. but it gives the institutions some orientation and helps them to establish a planning horizon. financial institutions receive clear guidelines through a globally harmonised regulatory framework which sets incentives for careful bank management while being, at the same time, as simple as possible. for me, that is the essential principle of the forthcoming basel reforms. where do we stand today? the basel committee β s all - important meeting in santiago is just over two weeks away, and i think we β ve already made good progress ; but that certainly doesn β t mean we β ve reached our destination. we still
| 1 |
. the first is that bh is going through so many transitions simultaneously that the economic numbers can move through very large ranges. second, the economic outlook depends crucially on an acceleration of the economic, regulatory and legal reform processes in bh. forecasts based on the status - quo as compared to those based on an accelerated reform path will be very different. in fact, unless the regulatory, legal and tax systems are changed, and changed quickly and substantially, bh will have a very difficult future. the environment for private investment has improved but it is still far too complicated. this applies to local as well as foreign investment. this is where the attention of bh politicians and international consultants and advisors needs to be directed. the macroeconomic situation in bh is a stable one. it is the areas of regulatory, tax and legal system reform that will determine the future of bh. i am an optimist and believe that we will see a combination of continued macro - economic stability and accelerated micro - economic and legal reform. on this basis, i would expect inflation to remain stable at around current levels, economic growth rates to be at least 6 - 7 percent per annum in nominal terms ( 5 % real ) and the balance of payments situation to gradually improve. there are still risks attached to investing in bh. but there are also many opportunities. though bh is a small country, it is very strategically located with free market access to a very large european market. it has a well educated labor force. given these two factors and the high degree of macro - economic stability in bh, i believe the balance between risk and opportunity now favors opportunity. i take your presence at this conference as a very encouraging sign for bh.
|
##s have played a key role in opening the eu payments market to innovation, providing a regulated environment for new entrants such as e - money and payment institutions to offer their services to consumers, further increasing competition and choice. 6 these pieces of legislation have created many opportunities for ntechs, and indeed traditional commercial banks, to create a wide range of new and innovative payment solutions and business models. to maintain trust in these new innovative offerings, a key priority for the central bank and industry must be to ensure the safety and integrity of the system to threats such as fraud. in this regard, the central bank has been engaging closely with industry to ensure the successful implementation of strong customer authentication ( sca ), a payments services directive ( psd2 ) mandate, aiming to strengthen resilience against fraud and make online payments more secure. while psd2 supported innovation in the payments market, in particular open banking, which offers bene ts to merchants and consumers, it has not yet reached its full potential as imperfections and barriers remain. the central bank will seek to ensure the advantages and full potential of psd2 are achieved and will continue to actively engage with our european colleagues in this area. the upcoming review of psd2 will be a key area of focus in this regard. impact of covid - 19 digitalisation and innovation had aligned with and supported changes and trends in consumer preferences and behaviour precovid - 19. the pandemic accelerated this trend, compressing years of digital transformation in the payments space into months with a surge in online transactions and contactless payments. in ireland, the value of point of sale transactions increased due to the pandemic, with june to october 2020 transactions some 17 per cent higher compared to the same months in 2019. 7 in terms of contactless payments, as the irish economy re - opened in large part in the third quarter of 2020, the volume of contactless payments increased by 36 per cent compared to the third quarter of 2019. 8 furthermore, the value of atm withdrawals for the june to october 2020 period was one third lower than a year previously. this changing behaviour is unlikely to fully reverse post pandemic. for example, survey evidence across seventeen eu countries shows that a vast majority of consumers expect to continue to use digital services as often as they do now or even more often. 9 however, while the pandemic has prompted a move away from cash for some, it likely remains the most common way of making small
| 0 |
know that the value of a strong and resilient financial system is not the ultimate goal. rather, the ultimate goal is a thriving economy. this is where a whole - of - market collaboration β from finance to fiscal to national development, entrepreneurship, industries, infrastructure, among others β is a value proposition for the general public. this is why mitigating systemic risks is all about public welfare. thank you and once again, good morning. 2 / 2 bis central bankers'speeches
|
the high penetration rate of mobile phones in the country, where even low - income earners own cell phones β the ability of fintech to accelerate financial inclusion is well recognized. while we are leveraging on fintech, a lot of work still needs to be done before the philippines becomes a truly financially inclusive economy. many filipinos still do not own bank accounts, and so are unable to access loans and other financial services from formal channels. nevertheless, we are working our way there. first, internet and mobile phone banking. banks that offer internet and mobile phone banking have increased over the years. this has allowed more people to do online transactions, not only to pay bills and purchase merchandise goods, but also to avail themselves of savings, investments, and insurance products. as of end - 2018, there were 48 banks that have already made their financial services accessible through the internet, and 26 banks that have made their services accessible through mobile phones. 2 / 6 bis central bankers'speeches second, interoperable payment systems. in the past, transferring funds from an account in one bank to another account in a different bank required physical movement of cash. now, following the launch of interoperable payments systems, funds can be transferred electronically through instapay, for low - value and real - time fund transfers, and pesonet, for bigger - value fund transfers confirmed within the same banking day. as of end - july 2019, there were 43 financial institutions participating in instapay and 51 participating in pesonet, with more to come. third, the philippine id system. following the signing into law of the philippine identification system act ( philsys ) in august last year, the country will soon have a national identification system. the objective is for all filipinos to be properly identified using a unified system that gathers basic identification and biometrics information. the bsp has assumed the task of printing the ids. we are doing this because we don β t want we expect the philippine id system to significantly hasten financial inclusion, as this addresses the problem of lack of formal ids β which are required to open a bank account. fourth, non - bank electronic money issuers. a recent phenomenon that is significantly boosting financial inclusion in the country is the emergence of non - bank e - money issuers. these are entities other than banks that also allow people to create electronic accounts in their platforms where people can store value in these electronic accounts, and make payments or do
| 0.5 |
positions going into the period of stress. this may be the typical experience in the future ; one hopes so, and the regulators are working in various ways to make it so - through the basel ii effort as one prominent example. but, unfortunately, we cannot count on that outcome. crises remain a threat, and the increasing complexity of the financial system and of the laws governing it are affecting how crises are likely to be managed. the greater variety and utilization of risk transfers will put new demands on information flows to answer the questions i posed earlier. the growing reach of major financial institutions across industry boundaries and national borders is increasing the necessity for cooperation and coordination among regulators here in the united states and around the world. at the same time, institutions manage risk on an integrated basis and understanding and dealing with the effect of financial instability and the feedback of their actions on markets and other institutions will call for an integrated overview. no institution can be β too big to fail. β handling the failure of a large, complex organization - imposing the costs of failure on management, shareholders, and uninsured creditors while minimizing the effects on the wider economy - will certainly be complicated. but we cannot allow the public interest in containing moral hazard to be held hostage to complexity. indeed, u. s. law requires that we do not. in dealing with the failure of an insured depository institution, the authorities are required to use the method that yields the least cost to the insurance fund unless they find that the least - cost method entails systemic risk and that a more costly method would mitigate that risk. in setting out a procedure to follow in such circumstances and holding authorities explicitly accountable for their decisions against a reasonably clear set of objectives, the law puts a premium on preparing for the type of analysis that will be needed. the federal reserve is in continuing conversations with other agencies on approaches to these issues. the growing complexity of institutions elevates the importance of avoiding crises, rather than managing them. we must continue to adapt our supervision of financial institutions and payment systems to encourage and reward good risk management and enhance market discipline.
|
credit, private parties may be persuaded that avoiding such an outcome is in their self - interest. but central banks must be careful that moral suasion is not perceived as coercion or an implied promise of official indemnification for private losses. if the central bank concludes that it must lend to individual depository institutions to avoid significant economic disruption, in most situations any such loans should be on terms sufficiently onerous to discourage reliance on public - sector credit. the federal reserve tries to find the approach that reduces the odds on economy - wide spillover effects while interfering as little as possible with the market and allowing people and institutions to suffer the consequences of decisions that turn out to be bad. nearly every major bout of financial instability has called for some degree of monetary easing - most often only temporarily until the threat of the low - probability but high - cost economic disruption has passed. other tools have been used occasionally, and an assessment of their costs and benefits has depended on the nature of the crisis. moral suasion was an element in dealing with the panicky private - sector actions associated with the sharp and apparently self - feeding market price breaks of 1987 and 1998. lending through the discount window helped to promote an orderly unwinding of distressed institutions in the period of prolonged and widespread problems among important intermediaries in the late 1980s and early 1990s. and such lending was crucial in getting liquidity to the right places after the disruption of 9 / 11. in each case, the nature of the response has depended on the state of the economy and financial markets before the event. when the economy is strong and financial systems robust, a shock to the financial system is less likely to feed back on the economy. information flows in a crisis clearly, judgments in a crisis must balance a number of difficult considerations in rapidly changing circumstances in which up - to - date, accurate, information is scarce. our experience suggests some of the key questions that might arise when confronting a crisis : how large is the financial disruption - how many firms or market participants are involved and how large are they? what is the potential for direct and indirect contagion, both domestic and international? who are the counterparties and what is their exposure? who else has similar exposures and might be vulnerable to further changes in asset prices that could be triggered by a firm β s failure and unwinding of positions? how long are the financial disruptions likely to last? are substitute providers of financial services available, and how easily and quickly
| 1 |
two key areas : improving public resource management and supporting the development and maintenance of a stable and transparent economic and regulatory environment so as to foster private sector activities. other institutions such as the oecd and the world bank are involved in corporate governance, with the latter formulating a set of principles such as ethics and transparency, as well as accountability. to sum up, i should emphasise that corporate governance at present is a matter of greatest concern to the business environment, just the same as we, those involved in formulating macroeconomics, are concerned more broadly with economic governance. bis central bankers β speeches i believe that emphasis now should be placed primarily on discipline, fiscal discipline in particular, but also on a shift in culture. i also like to add two words that i see essential when speaking about economic governance : stability and confidence. in my view, all efforts these days should be targeted to maintaining stability and restore confidence. thank you all! bis central bankers β speeches
|
to my area of concern. i do believe that approaching governance in a broader economic context could prove both relevant and useful. in this context, i cannot stop short of underlying how important consistent economic policies are for ensuring a sustainable development, and to repeat my belief that there is no substitute for consistent, sound and stability - oriented economic policies. therefore, i will share with you some of the lessons from my own experience. first, i will refer to the importance of having a good fiscal and monetary policy mix. if fiscal policy is relaxing, then the natural reaction is to tighten monetary policy. but one should take bis central bankers β speeches into account that monetary policy cannot always be a substitute to a sound fiscal policy. in other words, not always and in any circumstances can monetary policy steps compensate for fiscal policy measures. secondly, i will touch upon the risks related to pro - cyclical fiscal policies. we have experimented this in romania and are fully aware on the risks related to the boom - bust cycles. during booms, as budget revenues pick up there is a strong temptation to spend more and no appetite to publicly debate the issue of structural deficits. on the other hand, when bust emerges one realize how limited your toolkit is and that all measures to address the situation translates in to a prolonged recession and gdp volatility. last but not least, i will refer to the monetary policy by underlining how essential financial stability is to help achieve our overriding goal which is price stability. as i said before, it is my belief that the two are not conflicting ; they may be compatible if your measures are carefully implemented. over the past few years the nbr has used all its available instruments to fulfil its tasks in the area of achieving price stability, seeking to ensure a low volatility of the exchange rate β an exchange rate which is set by the market. in short, all our steps have focused on maintaining stability and rebuilding confidence. in conclusion, over the past 10 β 15 years most economists have discovered good governance β with its four pillars : transparency, accountability, predictability and participation β as a major determinant of economic growth. thus, economic governance implies the need to ensure stable, transparent and predictable rules that encourage competition and fair access to public services. it is achieved through a country β s public and private sector institutions and the civil society. moreover, the recent crisis, which today wreaks havoc given the structural interdependencies worldwide, has undersco
| 1 |
glass - steagall act of 1930 had by and large prevented major financial catastrophes from happening. regrettably, its repeal in 1999 opened a pandora β s box. i am very much in favour of the recommendations of the financial veteran, mr. paul volcker. he advocates the banning of proprietary trading of deposit taking banks, who should not be allowed to own hedge funds or private equity funds. in addition, a cap is to be imposed on financial institutions to prevent them from growing too big which gives rise to systemic risks. if the volcker β s rules are adopted, we shall have a much stable global financial system. 17 ) it is worthwhile mentioning that both credit rating agencies and derivatives should be put under the microscope of regulators. the woes brought about by rating agencies in rating securities, financial institutions and even sovereign countries have been known too well to our dear audience. i therefore do not want to go into details but call upon regulators globally either to have these agencies to put under supervision or we just discount the ratings in enforcing capital requirement calculations. the rating agencies should be made impartial and should stay away from any conflict of interest. 18 ) the control on derivatives, or otherwise known as β financial weapons of mass destruction β should be put under closer supervision. there is no need for me to state the very obvious β market risk β and β counterparty risk β, which led to widespread systemic risk in the last financial crisis. we should seriously consider the requirement that they must be standardized and traded in exchanges and clearing houses. 19 ) it has been proven that international cooperation is paramount before and after the outbreak in the context of financial stability. therefore cross - border regulatory supervision should be absolutely upheld for multi - national financial institutions. the malpractice of β regulatory arbitrage β should not be allowed to exist. imf staff have proposed the creation of an integrated framework for crisis management and resolution, including a european resolution authority ( the β era β ) for cross - border banks in europe. the existence of such a body will greatly reduce impact on the european financial system when a major financial crisis has erupted. it appears that the idea of era may perhaps expand internationally to provide a more stable financial environment in the event that an international financial crisis occurs. cross - border supervision is particularly important to macao as the majority of banks operating in macao are financed by overseas capital. epilogue 20 ) so far, the degree of recovery varies from one economy to another. the asian
|
aspects of the macao economy in its assessment. this year, our overall score is 72. 5 making macao the 6th freest economy in asia pacific and 20th freest globally. 5 ) inevitably, we are not immune to the destruction inflicted by the international financial crisis. our financial sector, which consists of banking arm and insurance arm, experienced a small setback as a result of the contraction of the economy. 6 ) at the beginning of the outbreak, the macao special administrative region ( msar ) government took quick and resolute measures to soften the impact. it immediately announced a 100 % guarantee on all onshore bank deposits. a series of measures were kicked out, which included accelerated public investment and expenditure ; various subsidies ; as well as liberal loans extended to small and medium - sized enterprises in order to boost internal demand and employment. the monetary authority of macao also complemented the efforts of the msar government by adopting measures to enhance liquidity of banks when needed, setting up mechanism to more closely monitor the prudential operations of banks and coordinating with neighbouring authorities in order to ensure normal operations and stability of the financial system. 7 ) the above policies and measures, together with the locomotive effect of the china economy, which i am going to mention later, have enabled macao to emerge from the tsunami unscathed. the economic contractions for macao were 12 % and 14. 8 % respectively for the 1st and 2nd quarter of 2009. the 3rd quarter saw a sharp rebound of 8. 8 % followed by a spectacular growth of 27. 4 % in the 4th quarter. the overall result for 2009 is a real growth of 1. 3 %. at the same time, the unemployment rate has been down to an enviable rate of 2. 9 %. due to limited exposure to toxic assets, overall bank profit experienced only a minor setback in 2008. it now returns to pre - eruption level, thanks to the ongoing prudence of our practitioners and the effort of the regulator before and during the eruption. asia and the economy of china β post crisis 8 ) china adopted very fast action to rescue the economy. it announced a stimulus package of rmb4 trillion, which was mainly intended to boost internal consumption, enhance social security, improve health care and rural development. it is worth mentioning that financial institutions of china have not been appreciably affected by toxic assets and hence suffered less from the financial tsunami. as a result, they are in a better
| 1 |
exactly where new risks will arise. simple rules can form a clear benchmark in uncertain situations, and there is a lot of academic theory to back this up. the economist frank knight introduced the concept of β knightian uncertainty β by making a distinction between uncertainty and risk in the sense that uncertainty cannot be quantified. indeed, we don β t know where we are heading, or what we will encounter along the way. we simply have to learn to live with unknown unknowns. another economist, hayek, also saw imperfect knowledge as a central issue. simple, robust rules can make a difference in such an uncertain and imperfect world. in a complex environment, we cannot possibly consider or measure all the conceivable outcomes. as well as being too expensive from an information point of view, it is also too complex to weigh up all the different options. bis central bankers β speeches although we like to assume our economic models are rational and omniscient, this is certainly not the case in reality. it would be more accurate to describe our world as having bounded rationality and imperfect information. simple rules are a way of reducing a complex problem with many unknowns to simpler tradeoffs, like yes or no, above or below, or left or right. it β s as in traffic : in the vast majority of situations, driving on the correct side of the road is good advice. or reducing your speed in misty weather. if we can progress along the road of simplicity, i β m sure we can also stop the pace of regulatory expansion. as leonardo da vinci said, β simplicity is the ultimate sophistication β. simplicity and transparency can help restore the public β s trust in the financial sector. financial institutions can achieve this by switching to clear business models, with streamlined structures and a prudent mindset. if they do so, the amount of regulations to be complied with can be reduced and the remaining regulations can be simplified, if and where applicable. in addition, simple rules can help us focus on key risks, as well as forming a guide for the future. greater trust, increased transparency and less complex risks will ultimately make the overall financial system more robust. and that in turn will make it easier for central banks to promote financial stability. thank you! bis central bankers β speeches
|
n., and e. nelson, ( 2001 ), β optimal horizons for inflation targeting β, journal of economic dynamics & control, 25, 891 - 910. see footnote 2 for details. β monetary policy in sweden β replaces the clarification of monetary policy published in 1999, see heikensten, l. ( 1999 ), β the riksbank β s inflation target β clarifications and evaluation β, sveriges riksbank quarterly review, 1999 : 1, 5 - 17. in this context, let me also mention something about risks. more specifically, the risks connected to rising asset prices and credit expansions. this is a question that has been much discussed in recent years, both between central banks and within the academic world, as house prices have risen rapidly in many countries including sweden. this debate could in itself be the topic of a speech so let me just briefly say that the position of the riksbank is that we do not consider it to be reasonable to entirely ignore these risks, even though it might be difficult to take these risks into account in the usual forecasting process. we have therefore acted to reduce these risks and to contribute to a calmer adjustment in house prices. the inflation forecast and future interest rate developments one of the recent changes in our strategy was the assumption regarding the development of the policy rate, which is used as a base for our forecasts. like most central banks with an inflation target, the riksbank previously made forecasts under the assumption that the policy rate would not change during the forecast period. since october last year we instead use an assumption that has gained in popularity among central banks, namely that the policy rate will develop in line with market expectations, as reflected in implied forward rates. the earlier assumption had the advantage that it illustrated in a simple manner when there was reason to change the policy rate. if inflation two years ahead was expected to be lower than two per cent, this was a signal that the interest rate needed to be cut, and if it was expected to be higher, the rate needed to be raised. of course, this rule could not capture all of the nuances in the monetary policy considerations, but it provided a rough explanation of the monetary policy decisions. however, there were also disadvantages. in normal cases it is not, for instance, particularly realistic that the policy rate would remain unchanged a couple of years ahead. the fact that the forecasts were based on this assumption made it
| 0 |
role of central banks is to indirectly support this credit extension. specifically, the role of central banks is to provide liquidity through money market operations and to take corporate debt as eligible collateral for its credit extension to private financial institutions. if central banks implement measures that take on the credit risks of individual firms, this will inevitably take away the businesses of private financial institutions. in addition, considering the increasing possibility of incurring losses, undertaking such credit risks must be examined from various aspects such as role sharing with the government in a broad sense, the financial health of the central bank, and confidence in the currency. in this connection, when the federal reserve introduced its outright purchases of cp, it attached various safety measures such as accepting only the most highly rated cp. as i mentioned earlier, financial conditions in japan are deteriorating sharply on the whole, and the risk that low interest rates may not exert their intended impact on economic activity has increased. based on this recognition, since this september the bank has introduced various measures to reduce such risk through providing liquidity to financial institutions and expanding the range of eligible corporate debt accepted as collateral. the bank has already been conducting purchases of cp under repurchase agreements, and these have been significantly increased in terms of frequency and size to support the better functioning of the cp market. in addition, with a view to facilitating corporate financing during the run - up to the calendar and fiscal year - ends, the range of corporate bonds and loans on deeds accepted as eligible collateral has been expanded and, as a temporary measure, bbb - rated corporate bonds and loans on deeds have been included in eligible collateral. furthermore, a decision was made to introduce a special operation to facilitate corporate financing, which will be implemented in early january. this special operation will enable financial institutions to obtain funds over the fiscal year - end with no explicit ceiling on the total funds available, although the maximum loans available to individual financial institutions will not exceed the value of the corporate debt pledged as collateral. also, the interest rate on these funds will be set lower than corresponding market interest rates. with these measures, the bank is aiming to support, in terms of funds availability and costs, the lending activities of financial institutions and transactions on the cp and corporate bond markets. in addition, given that the tightness in corporate financing may increase further during the run - up to the end of the fiscal year, the bank decided, last week, to introduce outright purchases of cp as a temporary measure, and to investigate how other
|
of monetary easing under the framework of yield curve control. thank you. economic activity, prices, and monetary policy in japan speech at a meeting with local leaders in ehime november 29, 2023 adachi seiji member of the policy board bank of japan chart 1 real gdp s. a., ann., tril. yen cy 08 source : cabinet office. chart 2 private consumption real private consumption consumption activity index ( cai, real ) s. a., cy 2015 = 100 consumption activity index ( cai, travel balance adjusted ) consumption of households ( excluding imputed rent ) disposable income, etc. ( sna ) cy 13 nondurable goods < 40. 5 > services < 50. 7 > durable goods < 8. 9 > cy 18 19 20 21 22 23 18 19 20 21 22 23 developments in business fixed investment plans y / y % chg. fy2023 average ( fy2004 - 2022 ) - 3 - 6 - 9 mar. fy2019 fy2020 fy2021 fy2022 june chart 3 notes : 1. in the left panel, figures for the cai are based on bank staff calculations. the cai figures ( travel balance adjusted ) exclude inbound tourism consumption and include outbound tourism consumption. 2. in the left panel, " disposable income, etc. " consists of disposable income and adjustment for the change in pension entitlements. real values are obtained using the deflator of consumption of households. 3. in the right panel, figures are based on bank staff calculations. figures in angle brackets show the weights in the cai. 4. in the right panel, nondurable goods include goods classified as semi - durable goods in the sna. sources : cabinet office ; bank of japan, etc. s. a., 2018 / q1 = 100 s. a., 2018 / q1 = 100 sept. dec. forecast actual notes : 1. figures are based on the tankan and are for all industries including financial institutions. 2. figures include software and r & d investments but exclude land purchasing expenses. r & d investment is not covered as a survey item before the march 2017 survey. 3. there is a discontinuity in the data for december 2021 due to a change in the survey sample. source : bank of japan. chart 4 business fixed investment indicators of business fixed investment s. a., ann.,
| 0.5 |
, on average, in 2018. second, the accommodative monetary policy has reduced the existing debt service costs, by alleviating the balance sheets of borrowing households and enterprises, and further bolstering the expansion of aggregate demand. third, the accommodative monetary policy has supported albania β s financial stability, by improving the solvency of the private sector, and encouraging loan restructuring. thus, monetary policy - related measures undertaken by the bank of albania have contributed to boosting economic growth. our assessments suggest that the accommodative monetary policy stance has contributed positively, on average by 0. 5 percentage point, to economic growth in the last two years. also, the accommodative monetary policy stance has contributed to the stability of the domestic currency. both transmission channels have contributed and will continue to contribute to price stability in albania. 2. banking supervision and financial stability the activity of the banking sector in 2018 was stable showing good performance and resilience indicators. the financial result was positive : the return on assets ( roa ) stood at 1. 3 % and the return on equity ( roe ) reached 13 %. in addition, capitalisation and liquidity levels were above 2 / 5 bis central bankers'speeches the respective regulatory requirements. the bank of albania judges that the capability of the banking sector to withstand risks is high. credit risk continues to represent the main risk to the activity of the banking sector, but the credit quality has improved from the previous year. at the end of 2018, the non - performing loans ratio stood at 11. 1 % from 13. 2 % a year earlier, whereas the outstanding non - performing loans decreased by 20 %. in 2018, the ownership structure of the banking system underwent some changes, bringing the number of banks down to 14, as at the end of the year. taking into account the changes in ownership taking place in 2019, the actual number of banks is 12. the bank of albania deems that the consolidation of the banking system is a welcomed development, which will revitalize the banking activity, will enhance the efficiency of the banking industry and will bolster development and innovative policies with regard to credit and payments. the main aspects of our work for safeguarding financial stability consisted in strengthening the stability of the banking system, enhancing its resilience to shocks, and adopting international standards in the fields of supervision and regulation. thus, in concrete terms : the bank of albania has worked toward fulfilling all its obligations
|
the meaning of growth, security, statistics and money. the colours of the new logo are colours contained in the flag of kosovo, the flag of the european union and the logo of the european central bank. * * * in the end, i would like to thank you once again for participating in marking this very important anniversary for us and wish you fruitful discussions with the highly respected panellists, that we will have during today's conference, which will address topics that are very important for the economy and the financial sector. now, i have the pleasure to invite his excellency the president of kosovo, mr. hashim thaqi, for an occasional speech. faqe 7 nga 7
| 0 |
december 5, 2018 bank of japan japan's economy and monetary policy speech at a meeting with business leaders in niigata masazumi wakatabe deputy governor of the bank of japan ( english translation based on the japanese original ) introduction it is my pleasure to have the opportunity today to exchange views with administrative, financial, and business leaders in niigata prefecture. i also would like to take this opportunity to express my sincere gratitude for your cooperation with the activities of the bank of japan's niigata branch. this is my first time to attend a meeting of this kind since i was appointed deputy governor of the bank of japan in march this year. it is said that people here in the echigo and sado regions historically have overcome severe natural environment - - such as dealing with heavy snow, crossing over mountain ridges, and managing floods - - with diligence, patience, and great ingenuity. 1 i would like to hear your views on the current status of the local economy, as well as your candid opinions about the bank's policies and activities. first, i will briefly explain developments in japan's economic activity and prices, and then talk about the bank's conduct of monetary policy. i. current developments in economic activity and prices let me start by talking about the current developments in economic activity. japan's economy is expanding moderately. the real economic growth rate excluding the effects of price movements, after registering relatively high growth of 3. 0 percent on an annualized basis in the april - june quarter of this year, marked negative growth of minus 1. 2 percent in the july - september quarter. this likely is mainly due to temporary factors accompanying natural disasters that occurred successively this summer. such a view is underpinned by the fact that exports and production, which had declined due to the effects of natural disasters, have turned to an increase since october. the current economic recovery phase likely has lasted for six years already, which mostly overlaps with the period of quantitative and qualitative monetary easing ( qqe ) that the bank introduced in april 2013, and this month its duration is expected to be the same as the tanaka keiichi et al., niigata - ken no rekishi, 2nd ed. ( tokyo : yamakawa shuppansha ltd., 2009 ), 7. longest post - war recovery phase in the mid - 2000s ( chart 1 ). 2 i would like to point out two characteristics of
|
##ity to consume than other generations and to firms β efforts to capture new demand. meanwhile, business fixed investment is projected to increase moderately, mainly due to the resumption of postponed investment for the maintenance and replacement of items such as machinery and to investment related to disaster prevention and energy. upward pressure on the economy from the public demand side is expected to gather full momentum as seen in the fact that the value of public works contracted, a leading indicator of public investment, has already increased significantly. the key to ensuring that this trend toward economic recovery continues and to achieving the price stability target of 2 percent in terms of the year - on - year rate of change in the consumer price index ( cpi ) is that improvements in business performance lead to increases in employee income. looking at the recent employment and income situation, supply and demand conditions in the labor market have improved, as evident in the unemployment rate and the active job openings - to - applicants ratio, and the year - on - year rate of change in the number of employees has been positive. in this situation, despite the downward pressure resulting from the uptrend in the ratio of part - time employees, the year - on - year rate of change in nominal wages per employee has turned slightly positive, with special cash bis central bankers β speeches earnings for june β which include summer bonus payments β showing an increase for the first time in three years. while uncertainty regarding the outlook remains, the bank would like to confirm whether these developments also lead to a rise in scheduled cash earnings. keeping these points in mind, i would like to summarize the outlook for japan β s economy for the next three fiscal years. while the economy will be affected by the front - loaded increase and subsequent decline in demand prior to and after the two scheduled consumption tax hikes, it is likely to continue growing at a pace above its potential, as a trend, as a virtuous cycle among production, income, and spending is maintained. in the bank β s interim assessment in july of the april 2013 outlook for economic activity and prices ( hereafter the outlook report ), the median of the policy board members β forecasts for the economic growth rate is a somewhat high 2. 8 percent for fiscal 2013 due to the effects of various economic measures and the front - loaded increase in demand, 1. 3 percent for fiscal 2014 partly due to the subsequent decline in demand, and 1. 5 percent for fiscal 2015. 2. prices next, i will talk about price
| 0.5 |
the stability and growth of the korean economy. thank you.
|
will need to manage stakeholder expectations carefully. as the npso β s supervisor we will watch closely to ensure the underlying resilience of the payment systems is maintained. npa : resilience at its core as i have said on many previous occasions, resilience is key. this is true both for the current systems being run by the npso, but also as it thinks about its journey to a new payments architecture. one of the npso β s key priorities will be designing, developing and facilitating the safe and secure transition to this new architecture that will underpin retail payments in the uk. the npa is intended to replace the three separate systems with an integrated framework which facilitates competition, innovation and interoperability. when i last spoke to this forum i discussed the psf β s vision for an npa based on a simplified payments platform and highlighted several key themes from a financial stability perspective. the npso inherited this blueprint for the npa and it is now at the behest of the npso to decide how it will take these plans forward. and this responsibility becomes even more demanding in the face of rapid change. especially since the design and build of the new architecture will pose its own challenges. the npa design must be driven by a strong business case ; and resilience and security need to be built into every step of the npso β s process from inception to any ultimate transition from one system to another. the smooth operation of payment systems must remain a priority. any change or upgrade of capability must be managed in a way which minimises disruption or detriment to the important services provided and the wider financial system. the bank β s role within this journey i β ve talked a lot about the important work that industry is driving, and i β m sure hannah and melanie will also touch on this today. however, i also want to reflect on what the bank is doing to prepare for the changes we expect to see in the payments space. not in the least to ensure that we, as a regulator, are not left behind. as i have just discussed, we have a role through our supervision of bacs and fps, and now the npso, to maintain financial stability. we will continue to ensure that financial stability is at the heart of what the payment system operators do and that risks are being appropriately managed, particularly during this time of unprecedented change and innovation, and therefore heightened risk. however, we have also made wider changes to
| 0 |
pablo hernandez de cos : remittance flows and their effects on latin american macroeconomic and financial stability during the covid - 19 crisis introductory remarks by mr pablo hernandez de cos, governor of the bank of spain and chair of the basel committee on banking supervision, to the virtual seminar on β remittance flows and their effects on latin american macroeconomic and financial stability during the covid - 19 crisis β, organized by the fondo latinoamericano de reservas ( flar ) and the bank of spain, webinar, 27 july 2021. * * * good afternoon, ladies and gentlemen. let me first thank flar ( the latin american reserve fund ) and its president, jose dario uribe, for the opportunity of jointly organising this webinar with the banco de espana. it will be the first of many and marks the start of close collaboration between both institutions, formalised in a memorandum of understanding in december 2020. the close economic and financial ties between latin america and spain are widely known. the interest of the banco de espana in the region has grown, as you know, owing to the internationalisation of spanish banks since the early 1990s, largely directed towards latin america. in this process, the region has taken on great significance for the spanish banking system. indeed, spanish banks β exposures to latin america account, on pre - pandemic data, for almost one - fifth of the system β s total exposures, and for almost 30 % of exposures outside spain. accordingly, the region β s economic performance has a most significant influence on spanish banks β balance sheets, and the risks arising from these exposures may potentially become systemic. at the banco de espana, then, several directorates general β including economics, statistics and research ; financial stability, regulation and resolution ; and banking supervision β devote many resources to monitoring all that occurs in the latin american region from the real and financial perspective. however, the banco de espana remains ambitious to strengthen its knowledge of and links to the region β s economic agents. our first strategic plan, for the 2020 - 2024 period, approved in january last year, actually set as one of its priorities that of increasing our contribution to this objective. as part of this aim, we are pursuing a series of medium and long - term - oriented actions in the sphere of cooperation with latin american central banks and institutions. we also seek to extend and enhance our analytical capacity in respect of the region β s economies and financial
|
systems. we are convinced that these seminars are a firm step forward in this direction. the aim of this webinar is to shed some light on how remittance flows during the health crisis have influenced latin america β s macroeconomic and financial stability. as you are well aware, the latin american economic situation has been particularly affected by the covid - 19 pandemic. along with the human cost in lives, the effects on poverty and income distribution have been very severe. the global economic recovery might also be delayed reaching the region, increasing the likelihood that the crisis may cause more persistent economic effects. despite this difficult situation, remittances have proven pandemic - proof1 and have behaved countercyclically in most of the region β s countries, assuming a more important role as a source of external financing. this subject is crucial to spain, since it is the second - ranked issuer country of remittances to latin america. some of the topics we will address today ( such as the growing importance of digital money remittances, the role of fiscal stimulus measures in the resilience of remittances and the function of the informal economy ) are key to understanding the behaviour of the flow of remittances in this crisis. undoubtedly, today β s event will allow us to better understand these developments and β i hope β 1 / 2 bis central bankers'speeches to draw some useful conclusions on how to tackle them from the central bank standpoint. thank you for your attention. remittances barely fell by 1. 6 % in 2020, compared with their 4. 8 % decline during the 2008 financial crisis. 2 / 2 bis central bankers'speeches
| 1 |
muhammad bin ibrahim : insights from the financial market in 2015, expectation and direction going forward opening speech by mr muhammad bin ibrahim, deputy governor of the central bank of malaysia ( bank negara malaysia ), at the annual dinner of persatuan pasaran kewangan malaysia ( ppkm ), kuala lumpur, 13 november 2015. * * * this annual dinner is an important event for it presents an opportunity for us and the market to reflect upon all the challenges in the financial market, and draw lessons as we move into the new operating year. the year 2015 has been a very interesting year for all of us here, industry players and regulators alike. during the year, we witnessed significant capital outflows as markets responded to the global economic developments. in particular, every commentary or data release hinting at policy normalization in the us was met with gyrations in financial markets. emerging currencies, felt the brunt of such volatility, especially commodity exporting countries given the significant decline in commodity and energy prices and moderation in growth for the china β s economy. for malaysia, we saw ringgit weakened as much as 18 %, while in the bond market, we saw relative stability even though yields went up by 30 to 50 bps given by the negative sentiment in the domestic and global markets. insights from the financial market in 2015 in the midst of all the global economic uncertainty and financial market volatility, i would like to highlight some observations and comments. our currency, the ringgit, has been subjected of market volatility throughout this episode of global economic uncertainty. while most emerging markets currencies depreciated following the reversal of capital flows, the extent of ringgit weakness has gone beyond fundamentals and rational thinking. while market liquidity remains sufficient, on certain days, fx spreads have widened to 100 pips in the interbank market, and led to spikes in the movements of the ringgit exchange rate. market volatility has almost doubled from around 8 % to 14 β 15 %. i believe that the recent adverse market conditions with thin liquidity in the fx market have been exacerbated by irrational market behavior and risk aversion. in the current market environment, our own analysis has revealed that the higher interbank volume and the higher market volatility were due to this risk aversion. a small client β s order gets passed around among interbank players like a β hot potato β, and the exchange rates move
|
and, this brings me to a third point, we need to enhance market participant β s professional qualification, knowledge and skill set. financial market is dynamic and evolving, and players need to keep abreast of both domestic and global developments. there are ample financial market courses and programmes offered here in kuala lumpur, however majority of these program are still at entry level courses. ppkm together with the asian institute of chartered bankers will cooperate in the future to develop a series of high quality, advanced level financial market forums and seminars, thus creating a platform to expand network, develop expertise and to advance the malaysian financial market community to another level of professional and technical excellence. fourth, technology has become a crucial enabler in the financial industry as it continues to provide benefits by reducing financial transaction cost and enhancing trade execution efficiency. we need to embrace new technology, such as electronic platform. technology also greatly facilitates market surveillance and transparency by offering real - time information. this is particularly critical in a fast moving market, where delay in information mean loss of opportunities for banks, and delay in taking action to stabilise market. the need for real - time information in a fast moving market is urgent. for instance, trades that are still being concluded through traditional voice broking and conversational dealing screens are already obsolete in developed markets. technological advancement requires behavioral change as we move forward, financial market participants who rely on the traditional ways for dealing and communicating, they must relook at how they strategize their business to remain relevant in this era of rapid technological innovation. if we fail to change, the consequence is obvious, loss of business and demise of your business. bis central bankers β speeches fifth is the trend towards further regional integration. with the implementation on asean banking integration framework, regional markets will be more integrated. domestic financial institutions must be ready and becomes an active player in the asean economic integration process. on this issue bnm has started investing our international reserves in the regional financial markets, and increasingly a large portion of our reserve management business was being done with malaysian financial institutions. with this mandate, we hope that malaysian banks can play a greater role and expand their business by improving regional expertise and reach. central to this is capacity building as more regional business opportunities will be accessible once we have the capability to offer cross border financial products and services. in this regard, for strategic positioning and to ensure long - term competitiveness, malaysian banks operating across borders, should position themselves to be the first port of call for
| 1 |
banks would be obliged to contribute to a fund according to their risk structure and their systemic relevance. thus, just like the capital requirements under basel ii, a price would be placed on risk - taking, especially if it has a major impact on the system as a whole. however, in contrast to the capital held under basel ii, the resources that are contributed to the fund are lost to the individual banks. thus, the stabilisation fund puts an outright ( pigouvian ) tax on risk - taking in order to internalise the effects of risky activities on financial stability. as an ex post instrument to put a burden on the originators of the crisis, such a tax might be justified. nevertheless, as an ex ante steering tool, the proposed fund has major shortcomings. first, it would drain capital from banks. but, more importantly, it would not solve the moral hazard problem. as the fund would act as lender of next - to - last resort for failing banks ( the government would still have to step in if the fund β s resources were exhausted in a crisis ), the problem would merely be shifted from the level of government to the level of the fund. the banks, in fact, would still have an incentive to take on too much risk, while relying on the fund to cover potential losses. in the case of a european fund, the moral hazard problem might even be amplified, since costs that would normally occur at the national level could be shifted, at least partially, to the supranational level. a systemic crisis might even provoke a rat race among national governments for the fund β s limited resources. while the basel ii framework puts a shadow price on risk, and the stabilisation fund puts a tax on risk, a third proposal goes one step further. this proposal β a core element of what is known as the volcker rule β was proposed by president obama in mid - january. this rule aims at barring banks completely from certain forms of risk - taking : they would not be allowed to invest in or sponsor hedge funds or private equity funds. they would also be banned from engaging in proprietary trading operations for their own profit. thus, the risk of bank failures would be significantly reduced. at the same time, a cap would be put on the size of banks to reduce their systemic relevance. one shortcoming of the volcker rule, however, is that it most likely would not apply to investment vehicles, such as hedge funds or investment
|
better information will help companies and ο¬nancial institutions to improve their risk management and their decision - making more generally. this is also a precondition for a green transition that leverages the power of ο¬nancial markets. thank you very much. footnotes : 1. galbraith, j. k. ( 1967 ), the new industrial state, hamish hamilton, london. 2. for an overview of the bundesbank β s activities, see weidmann, j., introductory comments at the press conference to present the annual accounts, 3 march 2021. 3. bolton, p., m. despres, l. a. pereira da silva, f. samama and r. svartzman ( 2020 ), the green swan : central banking and ο¬nancial stability in the age of climate change, bank for international settlements and banque de france. 4. german council of economic experts ( 2019 ), setting out for a new climate policy, special report ; green, j. f. ( 2021 ), does carbon pricing reduce emissions? a review of ex - post analyses, environmental research letters, vol. ( volume ) 16, no 4. 5. krueger p., z. sautner and l. t. starks ( 2020 ), the importance of climate risks for institutional investors, review of financial studies, vol. ( volume ) 33, pp. ( pages ) 1067 - 1111. 6. cdp ( 2021 ), the time to green finance, financial services disclosure report 2020. 7. task force for climate - related financial disclosures ( 2020 ), 2020 status report. 8. bingler, j. a., m. kraus and m. leippold ( 2021 ), cheap talk and cherry - picking : what climatebert has to say on corporate climate risk disclosures. 9. caruana, j., financial stability and risk disclosure, speech given on 9 december 2011. 10. admati, a. r. and p. pο¬eiderer ( 2000 ), forcing firms to talk : financial disclosure regulation and externalities, review of financial studies, vol. ( volume ) 13, pp. ( pages ) 479 - 519. 11. downar, b., j. ernstberger, s. reichelstein, s. schwenen and a. zaklan ( 2020 ), the impact of carbon disclosure mandates on emissions and financial operating
| 0.5 |
. in addition to upholding past achievements, further reform efforts are needed across the euro area, as outlined in the 2015 countryspecific recommendations, which each year identify key objectives in tackling remaining vulnerabilities and rigidities. it is only through such reforms that we can avoid a build - up of new imbalances and bring growth rates back to levels that ensure prosperity and allow households and member states to grow out of their debt. improving the functioning of the labour market remains key in this respect, with a view to ensuring a rapid adaptation to shocks or structural change. this area remains an important challenge in portugal, as also mentioned in the 2015 country - specific recommendations. taking further action is all the more important, with high unemployment, according to the latest eurobarometer, being considered the main concern to the people of portugal. but we also need reforms that encourage firms to invest. investment raises both supply tomorrow and demand today. such reforms include measures that further improve the business environment. however, investment could also be helped by addressing the corporate debt overhang. for instance, increasing the efficiency of debt restructuring tools could disburden still viable companies and thereby facilitate their investment plans. the european semester, in which these country - specific recommendations have been issued, should be a good framework to push for such a new effort. however, the countryspecific reform recommendations, as just indicated by the commission, have so far hardly or not at all been acted upon by member states. stepping up the reform momentum is therefore essential. in this respect, i have noted with great interest that you will be discussing the national reform programme later today. indeed, greater ownership not only by national governments, but also by parliaments and bodies such as this one would be crucial for the european semester to gain more traction and yield better results. making economic and monetary union work in the long run these are efforts that should be undertaken by countries individually. but there is also work to be done collectively. most importantly, governments should work towards completing economic and monetary union ( emu ). emu remains an incomplete construction. and while steps have been taken to strengthen the economic governance framework and to make our financial markets safer, this incompleteness amplified the effects of policy mistakes in the run - up to the crisis and continues to leave emu fragile and its member states vulnerable to shocks. in principle, we know where the weak spots in our construction are. the five presidents β report provides a road map on how
|
lim hng kiang : brief review of recent financial and economic developments in singapore congratulatory remarks by mr lim hng kiang, deputy chairman of the monetary authority of singapore and minister for trade and industry, at deutsche bank's 35th anniversary, singapore, 13 feb 2007. * * * distinguished guests, ladies and gentlemen, good evening, i am delighted to be with you this evening to celebrate deutsche bank's 35th anniversary in singapore. i am very glad to note as well that today's celebrations is also marked by deutsche bank's move to one raffles quay, the newest address in our financial district. it is testimony of deutsche bank's continued commitment to singapore. set up in 1972, we have seen deutsche bank singapore grow in size over the years. it has also witnessed and participated in the economic transformation of singapore, from a trading hub in the 1970s, to a major metropolis today. we are indeed heartened that, 35 years on deutsche bank continues to see opportunities to deepen its roots here. just last week, deutsche bank announced its group performance for 2006 and i must congratulate dr ackermann and your team, for registering yet another record year for deutsche bank. today deutsche bank is represented in many of asia's financial markets. we are indeed pleased that deutsche bank had made singapore the hub for your regional operations. we noted that some 1600 people are involved in a broad scope of activities including trading, treasury and investment banking here. to accommodate this, i understand that deutsche bank's trading floor in this building is one of the largest in singapore. singapore's economic growth for 2006 continues to stay strong at 7. 7 %, with almost 170, 000 jobs created last year. our market indices have breached the 3, 000 point mark and our gdp per capita has exceeded us $ 30, 000. we are also witnessing the strong growth of asia propelled primarily by the two economic powerhouses of india and china. the economies in south east asian have seen a resurgence with countries like vietnam rushing forth and is one of the fastest growing economies in the region. trade and investments among asian countries, and between regions including the middle east and asia, have increased substantially. we have also seen substantial wealth creation in the middle east and asia. asia is estimated to have about 2. 4 million high net worth individuals with assets over us $ 7. 6 trillion and comprise almost 20 % of global high new worth wealth. this is projected to grow annually by
| 0 |
a payments strategy for the 21st century remarks made by andrew hauser, executive director, banking, payments and financial resilience payment strategy forum β launch of the final strategy β, london 29 november 2016 all speeches are available online at www. bankofengland. co. uk / publications / pages / speeches / default. aspx thank you very much for the opportunity to speak to you today at the launch of the psf β s payments strategy st for the 21 century. i want to start by emphasising that this is not the bank of england β s strategy β or the uk authorities β as a whole. and that in fact is its great merit : because it has been drawn up by a genuine partnership of those who actually provide and use retail payments services, with the interests of those users uppermost in their minds. but that doesn β t mean the bank has been β hands off β, or lukewarm over the direction of travel. quite the reverse. we have a deep interest in, and responsibility for, maintaining the stability of sterling payments. first, through our statutory responsibility for the supervision of the major payments schemes. second, by ensuring that all material payments either settle in, or are backed by, central bank money β the safest form of settlement asset. and, third, through our role as member of some schemes as a bank in our own right. it is sometimes said that a focus on stability impedes innovation. but there is no reason why that has to be true. well - crafted innovation can reduce market concentration, yield new risk - mitigating technologies, and increase the scope for electronic settlement in central bank money : all of which enhances, not reduces, financial stability. so we are open, not closed, to such advances. at the same time, we make no apologies for having a relentless focus on stability and resilience, and have previously set out the criteria against which we assess change in the payments landscape. indeed, households and companies expect nothing less. surveys regularly show safety to be at the very top of people β s expectations from payments. no amount of real - time, api - enabled, mobile front ends can make up for the prospect β however remote β that one β s money might be lost or mislaid ; or that a failure in one part of the payments network might bring down other parts of the banking system. judged against those yardsticks, the uk β s payment systems have actually performed very well in recent years
|
rakesh mohan : human development and state finances speech by mr rakesh mohan, deputy governor of the reserve bank of india, at the inaugural session of the 3rd programme on β human development and state finances β, mumbai, 7 november 2005. * * * introduction it is a pleasure to be amidst officials of the state governments who are instrumental in implementing government policies that aim to improve economic and social welfare. in india, bulk of the responsibilities pertaining to expenditure in social services including education and health are placed in the domain of the state governments. thus, the nature of state finances has important implications for improving human development in india. in this context, the theme of today β s discussion β human development and state finances β is very topical as well as relevant. the reserve bank of india ( rbi ) bears a special relationship with the state governments in its multiple role as the banker, debt manager and fiscal adviser. the interactions between the rbi and the state governments have been stronger through the interface provided by the bi - annual finance secretaries β conference organised by the reserve bank since 1997. this conference has provided a common platform to discuss all aspects concerned with the fiscal affairs of the states and facilitated the evolution of a consensual approach on various key issues through active participation of state government officials. some of the outcomes include setting up of consolidated sinking funds ( csf ) for debt servicing, constitution of guarantee redemption funds ( grf ) to meet guarantee obligations, setting of ways & means advance ( wma ) limits for states, fixing limits for guarantees, and most recently, enactment of the fiscal responsibility legislation ( frl ). in this forum, in two earlier occasions, my colleague deputy governor shyamala gopinath had focused on the broad contours of human development and state finances while deputy governor shri v. leeladhar had dwelt on certain critical aspects of human development in the indian context. today i will first discuss the importance of economic growth for human development, poverty eradication and overall social welfare ; second, i will briefly give an overview of the performance on the human development at both the national level and across the states ; third, i will review the stylized facts relating to finances of the state governments as they relate to their impact on expenditure in the social sector ; fourth, i will mention some of the new initiatives taken by the government both at the centre and states β level for accelerating human development in india ; and finally, i will touch upon some further policy options. economic growth and human
| 0 |
a medium - sized local bank. as i have already said, the contribution of south east europe, including turkey and romania, to the profitability of greek banks is expected to increase in the future. however, in order to achieve this they have to integrate their new acquisitions smoothly into their systems and culture ; this is by no means an easy task. we at the bank of greece make sure that banks that expand their activities abroad not only have enough capital but also have the organizational structure to support such an expansion. as many of you probably know any acquisition of a credit or financial institution abroad and any expansion of branch network has to be approved by the bank of greece after a thorough assessment of its capital base and its internal control and risk management system. this is not only a regulatory requirement but also a business necessity in order to accurately monitor risks and thus maintain their competitive position in what is a very sought after market.
|
prospects for continuing high profit rates encouraged the creation of numerous private banks especially in the period up to 2001 and was followed by a scramble for market shares both by new and old private banks. this resulted in a major card reshuffling of the financial system. whereas until the mid - 1990s one state controlled bank β the nbg β ( including its subsidiary the national mortgage bank ) had a market share of almost 50 % and, as such, was effectively the market maker, to - day its domestic market share is 23 %, closely followed by two private banks with a market share of 18 % each and two others with 10 % each. if we include subsidiaries and branches abroad the largest bank β s share β the nbg β is higher but it is still far below that of 10 - 12 years ago. the more even distribution of market shares does not leave much room for anti - competitive practices. i would like to note that not only there is a better distribution of market shares today but also, reflecting strong competition, the ranking has significantly changed : banks with a market share of 18 % today had less than 10 % in 1995 and a couple with double - digit markets shares in 1995 have now a single - digit market share. foreign financial institutions are also present, especially in the wholesale banking sector, and they constitute a challenge for the better. as in most european countries, the greek banking landscape can now be characterized as highly competitive. this is also underlined by the sometimes aggressive advertisements by individual banks trying to take away other banks β customers, by offering very advantageous loan terms, especially to those who regroup their dispersed accounts among different banks in one bank. in the very competitive international environment, and especially after joining the euro area with its unified money market, the small size of greek banks was an important handicap that banks themselves perceived as being a serious threat to their longer - run existence. effectively they thought that either they would be an easy prey for larger foreign banks or they would be unable to compete with the larger european banks, which had much lower operating costs. in 1998, among the first 100 eu banks, there was only one greek bank and it occupied the 78th place. a wave of mergers and acquisitions ( m & as ) started towards the end of the 1990s and is still continuing, and which was also aided by the privatization process. today, the greek banking system occupies a place in europe that corresponds to the size of the country with three greek banks being among the 100
| 1 |
fomc meeting, if the economic data over the next year turn out to be broadly consistent with the outlooks that the fomc sees as most likely, which are roughly similar to the outlook i have already laid out, the fomc anticipates that it would be appropriate to begin to moderate the pace of purchases later this year. under such a scenario, subsequent reductions might occur in measured steps through the first half of next year, and an end to purchases around mid - 2014. under this scenario, at the time that asset purchases came to an end, the unemployment rate likely would be near 7 percent and the economy β s momentum strengthening, supporting further robust job gains in the future. as i noted last week in our regional press briefing, a few points deserve emphasis. first, the fomc β s policy depends on the progress we make towards our objectives. this means that the policy β including the pace of asset purchases β depends on the outlook rather than the calendar. the scenario i outlined above is only that β one possible outcome. economic circumstances could diverge significantly from the fomc β s expectations. if labor market conditions and the economy β s growth momentum were to be less favorable than in the fomc β s outlook β and this is what has happened in recent years β i would expect that the asset purchases would continue at a higher pace for longer. second, even if this scenario were to occur and the pace of purchases were reduced, it would still be the case that as long as the fomc continues its asset purchases it is adding monetary policy accommodation, not tightening monetary policy. as the fomc adds to its stock of securities, this should continue to put downward pressure on longer - term interest rates, making monetary policy more accommodative. third, the federal reserve is likely to keep most of these assets on its balance sheet for a long time. as chairman bernanke noted in his most recent press conference, a strong majority of fomc participants no longer favor selling agency mbs securities during the monetary policy normalization process. this implies a bigger balance sheet for longer, which provides additional accommodation today and continuing support for mortgage markets going forward. fourth, even under this scenario, a rise in short - term rates is very likely to be a long way off. not only will it likely take considerable time to reach the fomc β s 6. 5 percent unemployment rate threshold, but also the fomc could
|
i met with mayor finch and key economic development staff to discuss bridgeport β s redevelopment initiatives. local efforts such as these and your business council are essential complements to the fed β s support for economic recovery. i applaud the efforts of state and local governments and community leaders to bolster the recovery in bridgeport, stamford and elsewhere in the district. i also met with joan carty from the connecticut housing development fund. we discussed innovative approaches for addressing the foreclosure crisis here and across the state. housing has been a major impediment to a more rapid economic recovery and we at the fed have been working hard to help homeowners and the overall housing market recover. afterwards, i spoke with small business leaders about the opportunities and challenges they are facing today. i traveled to sikorsky aircraft corporation with several goals in mind. i wanted to learn how sequestration was affecting ground - level operations, to understand the local and regional economic impact of sikorsky, and to view state - of - the - art manufacturing at work. after this program, i will be meeting with joseph carbone of the workplace to discuss best practices and emerging approaches to workforce development, particularly his innovative program for the long - term unemployed which i understand he is piloting in five different cities bis central bankers β speeches across the nation. at the end of the day i will be meeting with university of connecticut ( uconn ) stamford campus staff, your own executive director chris bruhl and other officials to learn about the ecosystem that is being created to spur further economic development locally. i β ll end the day with a meeting with governor malloy to better understand the complex issues and opportunities facing the state. the agenda for these visits is always packed, but that β s part of the point β to meet with a diverse array of representatives in order to get a comprehensive picture of what β s happening on main street and its interaction with state and national developments. at the end of my talk i will be happy to answer any questions you have about the economic outlook from my perspective. as always, what i have to say reflects my own views and not necessarily those of the federal reserve system or the federal open market committee, also known as the fomc. national economic conditions i would like to begin by taking stock of where we are at the moment. then i will address my expectations for the performance of the economy over the remainder of 2013 and into 2014. since the end of the great recession
| 1 |
conference cycle, β thinking portugal : what macroeconomic policy should follow the programme? β. intervencao do governador carlos da silva costa na conferencia β consensus e reforma institucional β address by governor carlos da silva costa at the β consensus and institutional reform β conference ( portuguese version only ). bis central bankers β speeches domestic payments were it not for the assistance of international institutions. we have embarked on an adjustment process through a contractual relationship with those who came to our assistance. at corporate level, this situation is analogous to what happens when a company falls into difficulties and has to negotiate a restructuring plan with the bank. there are conditions and targets to fulfil that form part of the relationship of trust between the party supplying the financial assistance and the party receiving it. we are making an adjustment under very different conditions from those in force in previous financial assistance programmes, in 1977 and 1983, both in terms of the institutional framework of macroeconomic policy and in terms of the productive and financial structures. but the greatest difference arises from the starting point, which is far more unfavourable in the recent case. aside from this, the external imbalance adjusted in line with that observed in previous programmes ( figure 1 ). this development is notable, as it took place without recourse to the nominal devaluation of the exchange rate and with fairly low growth in external demand. although exports did not grow as much as in previous adjustment episodes, they increased market shares. i emphasise here the effort made by portuguese companies in the tradable sector ( including tourism ) in incremental penetration in the markets and in redirecting supply to new markets. in addition, the performance of the effective real exchange rate shows that even in the absence of a nominal exchange rate devaluation, the portuguese economy has shown the flexibility needed to adjust through variation of the relative unit labour costs. this is an important accomplishment for europe as a whole, as it proves that it is possible to make an adjustment in a single currency context. figure 1 comparison with previous financial assistance programmes : external accounts trend effective real exchange rate current and capital account balance ( % of gdp ) ( using ulc ) t - 1 t t + 1 t + 2 - 5 - 10 - 15 t - 1 exports market share t t + 1 t + 2 external demand t - 1 t t + 1 t + 2 t - 1 t t + 1 t + 2 notes : t corresponds to the start year
|
liabilities ) and tlac ( total loss - absorbing capacity ), which are good ideas for banks that are mainly financed in the market, but do not work as expected for banks essentially dependent on deposits. the latter are obliged to go to the markets and to issue debt with high costs that, in all likelihood, will be taken up by other banks, thus creating negative externalities for the stability and resilience of the financial system as a whole. this is particularly worrying because it can undermine the construction and sustainability of the banking union. 2 / 3 bis central bankers'speeches 4. financeable risk and risk that is acceptable to society banks take risks as part of their normal activity. however, when such risks are excessive they can lead to huge losses β not only for banks and their investors, but for the whole economy. regulation plays a key role in reducing vulnerability and sources of risk and in containing the costs of financial instability when it arises. nevertheless, it should be taken into account that the higher the capital required for the banking system, the higher the intermediation cost, decreasing the credit multiplier. a banking system with minimum risk means a banking system with maximum cost and, hence, smaller capacity to finance investment. if it is accepted that the financial system has to take some risk, regulations must lay down how society should react when risk becomes systemic, for instance, setting out the role of the different stakeholders in these cases. regulations should seek to make the financial system safer, but flexible enough to fulfil its function as a driver of economic development while being adaptable to new paradigms, namely to those resulting from technological innovation. society β s preferences in terms of financial security are not always consistent with the economy β s financing needs or risks arising from innovation. i will stop here, resisting the temptation to keep talking about these important and fascinating issues related to the regulatory and supervisory institutional frameworks in europe. let me just wish you a rich and fruitful debate and a very pleasant stay in sintra. thank you for your attention. 3 / 3 bis central bankers'speeches
| 0.5 |
were, in turn, funding loans to students, car buyers, small businesses, and others. the facilities were many and varied, and developed as needed, because the u. s. financial system is complex and, as the crisis unfolded, the nature of the next phase was largely unforeseeable. in several of these interventions, the fed was lending to increase the liquidity of, or activity in, securities markets, in order to maintain the flow of essential credit to businesses and to households. 4 had that flow of credit ceased, the financial crisis, the severe recession that resulted, and the consequences for the u. s. economy, and thus every american, would have been far more serious. in november of last year, in a revision to its regulations reflecting the changes to the federal reserve β s emergency lending authority included in the dodd - frank act, the board spelled the sec β s rule on disclosure requirements for certain securitizations was adopted by the sec in august 2014. the intent of these rules is to make it easier for investors to review and access the information they need to make informed investment decisions, including independently conducting due diligence so as to better assess the credit risk of asset - backed securities. for example, on october 7, 2008, the federal reserve established the commercial paper funding facility ( cpff ). under the cpff, the federal reserve lent to a special purpose vehicle that in turn purchased toprated three - month commercial paper directly from eligible issuers. and on november 25, 2008, the federal reserve and treasury announced the creation of the term asset - backed securities loan facility ( talf ). under the talf, the federal reserve extended loans to investors in certain triple - a - rated asset - backed securities ( abs ) to promote renewed issuance of abs, thereby increasing the availability of credit to households and small businesses. see dietrich domanski, richhild moessner, and william nelson ( 2014 ), β central banks as lenders of last resort : experiences during the 2007 β 2010 crisis and lessons for the future ( pdf ), β finance and economics discussion series 2014 β 110 ( washington : board of governors of the federal reserve system, may ). bis central bankers β speeches out how the federal reserve would design and operate such broad - based emergency lending facilities in the future. among other things, an emergency facility would be designed to provide liquidity to a market or sector of the financial system and not be for the
|
beverly hirtle : opening remarks - heterogeneity blog series webinar opening remarks by ms beverly hirtle, executive vice president and director of research of the federal reserve bank of new york, for the heterogeneity blog series webinar, federal reserve bank of new york, new york city, 4 march 2020. * * * as prepared for delivery i am delighted to be here today to introduce this webinar about our liberty street economics blog series on heterogeneity in labor market outcomes. these blogs describe several ways that the forces shaping u. s. labor markets cause the experiences of workers to vary for different cohorts of individuals, including for women as compared to men ; for high - wage versus lower - wage workers ; and for workers who face more or less stringent constraints on their ability to borrow. these posts are based on research and analysis being conducted by new york fed economists, part of continuing efforts by our economists to understand how economic outcomes vary for different groups in the economy. this series follows our inaugural set of posts on heterogeneity in october of last year, in what we hope will be an on - going discussion of work being done at the new york fed and elsewhere to understand these important topics. in recent years, we have devoted considerable time and resources here at the new york fed to develop data and analytical approaches to gain deeper insights into the experiences of workers and consumers. for instance, we sponsor the consumer credit panel, or ccp, a quarterly report on household credit based on a large sample of credit data from equifax. we have also developed the survey of consumer expectations, or sce, a monthly survey of consumer expectations about inflation, the labor market and household finance. these reports and summary data are available from the new york fed β s center for microeconomic data, which can be accessed on the bank β s website, newyorkfed. org. aside from producing these public reports, new york fed researchers also use the underlying data to do detailed econometric analysis, some of which forms the basis of the blog series you β ll hear about today. in some cases, we are able to link the ccp, sce and other data sets to derive insights into a wider set of factors affecting workers and consumers, such as educational attainment, student debt burden, job satisfaction, job transitions, access to credit and housing choices β and consumer expectations about many of these factors
| 0 |
in mind relates to the big changes in the exchange rate of the rand, i. e. the relative price of producing goods and services locally rather than elsewhere. a domestic wine exporter selling a bottle of wine for us $ 5 would have pocketed r37 five years ago ; today they would realise r69. the entrepreneurial response β expanding exports and substituting imports β is probably initially muted due to what the academic literature attributes to lags in both consumers β and producers β responses and imperfect competition. given the state of the world economy, the probability of a strong recovery in the international prices of south african export commodities in the near term seems low, which should assist the real exchange rate of the rand to remain relatively competitive. in addition, entrepreneurs can use hedging strategies to lock in the advantages of a certain set of relative prices for lengthy periods ; for example, in south africa there is an active market for forward cover in foreign exchange, with outright forward transactions against the rand fluctuating at around us $ 1, 7 billion and swap transactions at around us $ 13 billion per day. i am therefore confident that the adjustment towards external balance will gain further momentum and it is supported by the fact that export volumes have risen more briskly than the pace of global growth in the first half of 2015. to incubate entrepreneurship, south africa needs bold improvements in the education and school system. interestingly enough, south africa β s total public expenditure on education as a percentage of gdp, at 7, 0 per cent, puts the country in the third - highest position among the 61 countries ranked, with only denmark and iceland above it. however, the amount spent per capita gives a dramatically different result, pushing south africa down to the 42nd position on the imd ranking. education outcomes in south africa do however show room for further improvements in support of enhancing the small business sector as well as in the interest of long - term economic growth and developments. the role of the south african reserve bank ( the β bank β ) the bank is responsible for monetary policy in south africa. it has been given the task of protecting the purchasing power of our money in the interest of balanced and sustainable economic growth and development. apart from ensuring price stability, it also plays a key role in maintaining an environment of financial stability. since 2000 the task of protecting the purchasing power of our money has been given clearer definition, with government adopting an inflation - targeting framework. the target has been set at 3 to 6 per
|
cent, and the bank has instrument independence to do what is necessary with its repurchase rate to ensure that inflation remains inside the target band. in doing so, the bank is mindful of the lag between changes in the repurchase rate and inflation, and of the need to avoid unnecessary volatility in output. bis central bankers β speeches since 2002, when the inflation target became effective, the targeted rate of consumer price inflation has averaged 6, 1 per cent to date. in the preceding two decades, consumer price inflation averaged 12, 3 per cent. furthermore, the more gradualist approach facilitated by the adoption of flexible inflation targeting can be inferred from the range within which the banks β prime lending rate fluctuated over the respective periods. under inflation targeting, the prime rate has ranged between 8, 5 and 17 per cent per annum. in the two decades prior to that, it ranged between 9, 5 and 25, 5 per cent. small businesses often lack the financial reserves and facilities of the large business sector. accordingly, large swings in interest rates and inflation can be far more crippling to the smme sector. it follows that keeping inflation low and stable, and therefore being in a position to prevent sharp swings in interest rates, is the contribution that the bank can make to the financial health of the country and of smmes in particular. this is complemented by the role of the bank in making sure that the financial system is safe and sound, while allowing for the orderly entry and exit of financial institutions. conclusion in conclusion, let me firstly emphasise that the current environment is testing for small businesses. with agricultural output and mineral commodity prices down, the spending power arising from agriculture and mining - based communities and enterprises is under considerable downward pressure. this also triggers various multipliers and accelerators in the economy, working in reverse gear and extending the pain to other sectors, capital expenditure and the like. secondly, every opportunity should be grasped and, as indicated above, the depreciated external value of the rand may be one such opportunity, bringing about more attractive relative prices of exports and import - substituting goods and services. agile businesses that can respond appropriately stand to benefit. thirdly, to grow the number of small businesses in the country the education system has an important role to play by raising the level of skills among the workforce and empowering potential entrepreneurs to realise that potential. finally, the growth and indeed the flourishing of small business is key to our
| 1 |
. along with the tremendous growth in the branchless banking sector, the infrastructure of payment systems and branch network is also showing an increasing growth trend. the atms network has increased to 6, 232 whereas branch network has reached 11, 600. 94 percent of our branches are now real time on - line. similarly, the number of plastic cards has increased to 20 million and the number of pos machines has increased to 34, 000 units. this is a significant achievement, and this also demonstrates the opportunity to bring the benefits of this infrastructure to millions of the unbanked population. branchless banking has also proved to be an effective instrument in channelizing the government to persons ( g2p ) payments in trying times like serving internally displaced persons ( idps ), and devastating floods for the last two years. the benazir income support programme beneficiaries are also being served effectively through the same mechanism. in the coming days, this channel is expected to continue playing an important role towards the promotion of financial inclusion and the management of government to person ( g2p ) programs like salaries disbursements, pensions, bisp, watan cards, pakistan cards and tax collections services, etc. the existing branchless banking deployments can cater to the needs of over 10 million potential beneficiaries of g2p payments in pakistan. branchless banking is going to dominate the retail banking landscape in the long - term. whilst we seek to encourage the introduction of innovative instruments for payments, we also need to ensure that high levels of standards are maintained for safety, security and protection of consumers β interests. the central policy objectives of sbp are to ensure safety, soundness and efficiency of the banking system, and to protect the interest of consumers. since branchless banking is becoming a vital component of the national payment grid, it is prudent for all stakeholders to ensure that appropriate measures are in place to mitigate inherent risks associated with it like access by un - authorized persons / criminals such as hackers, money launderer, terrorist financiers etc. this can only be achieved when our technologies are robust and secured, and agents are comprehensively trained and effectively monitored by the banks. in this regard, the importance of a comprehensive agent development framework cannot be ignored. i am sure that our banks would not simply jump on the bandwagon without sufficient agent development mechanisms including their hiring, on - going training and monitoring. bis central bankers β speeches building public confidence on
|
##reast of industry developments, enhance their supervisory techniques, promote consistent standards and strengthen risk management practices to address emerging challenges. 27. capacity building through recruiting adequate number of quality staff and equipping them with the right skills and tools is an ongoing process that empowers supervisors to fulfil their roles in maintaining the stability and soundness of the banking sector. conclusion let me now conclude. 28. by staying abreast of technological advancements, monitoring the evolving risk landscape, keeping pace with regulatory developments, building necessary capacities and skills and adopting latest analytical tools, supervisors can more effectively fulfil their role in maintaining financial stability, protecting consumers, and fostering a resilient banking sector. learning from past experiences and collaborating across jurisdictions can help better navigate the challenges ahead. this can contribute to building a strong banking sector that supports sustainable economic growth in the asia - pacific region. 4 / 5 bis - central bankers'speeches the conference provides this platform and i believe that it shall prove to be very useful for all the participants. my best wishes to all of you. thank you! 5 / 5 bis - central bankers'speeches
| 0 |
2011 was disclosed to public by the release of the β monetary and exchange rate policy for 2011 β on december 21, 2010. accordingly, the cbrt will continue with the inflation targeting and floating exchange rate regimes in 2011. the inflation target for end - 2011 has been set at 5. 5 percent and the uncertainty band has been maintained at 2 percentage points in both directions. 51. in line with our primary objective of achieving and maintaining price stability, we will continue to monitor macroeconomic risks and financial stability, and hence, take measures towards enhancing the effectiveness of the monetary policy and liquidity management in 2011. accordingly, in the upcoming period, the cbrt may alter its liquidity management strategy to meet the emerging needs and actively use additional policy tools, such as the corridor between borrowing and lending rates and reserve requirements, to maximize the effectiveness of the 1 - week repo auction rate, the main policy tool, and to contain macro financial risks. 52. in the period ahead, monetary policy will continue to focus on achieving price stability on a permanent basis. to this end, the impact of the macroprudential measures taken by the cbrt and other relevant institutions on the inflation outlook will be considered carefully. fulfillment of the commitments to fiscal discipline in the medium term and strengthening the structural reform agenda will contribute to the improvement of turkey β s sovereign risk, and thus, support macroeconomic stability as well as price stability. sustaining the fiscal discipline will also provide room for monetary policy maneuver, supporting the social welfare by keeping interest rates permanently at low levels. in this bis central bankers β speeches respect, i would like to conclude my remarks by underlining that timely implementation of the structural reforms envisaged by the mtp and the european union accession process remains to be of utmost importance. thank you. bis central bankers β speeches
|
illustrated in the box to the left. β’ the right - hand box contains different estimates for the world, eu and denmark. β’ the estimates are based on net - zero scenarios for the world, fit for 55 scenarios for the eu and the 70 per cent goal of the climate act for denmark. β’ these figures are associated with many uncertainties, and i do not want to focus on any specific figure. page 5 of 21 β’ the point is : vast amounts of funding are necessary for the global economy to transition. slide 6 the final point on sustainable finance brings me the next topic : the role of the financial sector in the green transition. first, two important points : β’ we cannot and should not expect the financial sector β and here i include the central banks β to solve the climate problem. the tools to shift behaviour, demand and supply away from fossil fuel - based energy are fiscal and regulatory. β’ however, the financial sector can support the transition by performing its role of intermediating capital and managing the associated risks. β’ i will elaborate on this role in the next slides. page 6 of 21 slide 7 climate change and the transition bring both opportunities and risks to the financial sector. β’ any economic transition requiring investment is a business opportunity for the financial sector to apply its skills in risk pricing as well as return and profitability assessments. β’ the green transition is no different. the financing of green projects is paramount for the transition. without financing, the world cannot make the necessary investments. β’ the green transition faces a special set of challenges for risk management, which i will get back to. from a central bank and financial stability perspective, proper risk assessment associated with climate change and the energy transition is particularly important. β’ sound risk management means that risks should be held on balance sheets that have the capacity to absorb these risks if they materialise. β’ banks and investors must take account of climate - and energy - related risks in their credit policies and capital allocation. β’ this implies a special focus on the risk assessment of investments in assets that may become β stranded β in the transition, such as fossil - intensive investments. β’ green companies must undergo the same scrutiny as regular companies. the recent energy crisis in europe illustrates how climate - and energy - related risks are already first order. page 7 of 21 slide 8 climate - related risk pricing is difficult, but essential, in the financial sector. and often, climate - related risks are not well priced. poorly priced climate - related risks are a financial stability concern
| 0 |
place in may in the bond exchange nevertheless had far - reaching effects for the south african financial situation. the yield on long - term government bonds, for example, rose from a monthly average of 12. 9 per cent in april to over 18 per cent in september, and fluctuated widely on a daily basis to peak at over 21 per cent at one stage. the adverse effects of the net selling of bonds by non - residents quickly spilled over into the market for foreign exchange. pressures in this market led to an eventual devaluation in the nominal effective exchange rate of the rand of 16. 4 per cent from the end of april 1998 to 31 december 1998. the country β s net gold and foreign exchange reserves, which increased by almost r19 billion over the fifteen months that ended in march 1998, then declined again by r12Β½ billion over the last three quarters of last year. at the end of 1998, the total official reserves of the country amounted to about r31. 6 billion, the equivalent of about two months β imports. these changes in the capital account of the balance of payments, which were obviously directly linked to the worldwide dispersion of the east asian crisis, forced the reserve bank to switch to β 2 β a more restrictive monetary policy. the interest rate on the reserve bank β s daily repurchase transactions with banking institutions increased from below 15 per cent in early april 1998 to almost 22 per cent in august. in light of the declining amount of liquidity in the banking sector, and the rising rate for reserve bank accommodation, banking institutions raised their prime lending rate from 18 per cent in april 1998 to over 25 per cent in august. with these adverse developments in the financial markets, the outlook for an early improvement in real economic activity faded. on the contrary, overall economic activity slowed down further. in the third quarter, total real gross domestic product indeed showed an annualised rate of decline of 2Β½ per cent. it is estimated that, on balance, total gross domestic product in 1998 was not much different from that of 1997. the negative developments in the global financial and commodity markets had some adverse effects also on the current account of the balance of payments. the deficit indeed increased from a level of about r7 billion in the first half of the year to a level of about r18 billion in the second half. special imports, however, contributed to this increase in the negative balance, and indications are that the growth in imports is now slowing down in line with the more
|
mr stals looks at south africa β s financial and economic prospects for the next five years address by the governor of the south african reserve bank, dr chris stals, at conferences organised by omega investment research ( pty ) ltd held in frankfurt on 25 / 1 / 99 and zurich on 27 / 1 / 99. this overview of the south african economy is presented in three parts. firstly, recent developments in the economy and the current situation are summarised to provide a background for possible future developments. secondly, the more important structural economic adjustments that are now in progress and that will have an important influence on the course of future developments are referred to. thirdly, a longer - term view is taken of developments over the most recent past two five - year periods, supplemented with a forecast for the next five years. 1. recent developments and the current situation the year 1998 turned out to be a very frustrating one for the south african economy. during the first quarter, encouraging signals of an imminent improvement in underlying conditions emerged. substantial amounts of foreign capital flowed into the country, mainly in the form of portfolio investments in south african bonds and equities. the country β s foreign reserves increased sharply ; there was upward pressure on the exchange rate of the rand ; domestic liquidity increased ; and interest rates declined. at that stage, there was some optimism that the fairly depressed conditions in real economic activity since the second half of 1997 would be turned into a new upswing during the course of 1998. growth in real gross domestic product, which had declined from a level of about 3Β½ per cent per year in 1995 and 1996 to below 2 per cent in 1997, was predicted to rise again in 1998. however, the south african economy was severely shocked when the large inflows of foreign funds in the form of portfolio investment in south african bonds were suddenly reversed in may 1998. non - residents increased their holdings of south african bonds by r16 billion during the first four months, but then became net sellers, and reduced their holdings of south african bonds by r26 billion over the next eight months. it is interesting to note that, throughout last year, nonresidents remained more positive about investment in south african equities and increased their holdings of shares acquired through the johannesburg stock exchange by r42 billion over the year as a whole. despite the large disinvestment in bonds, non - residents still increased their overall holdings of south african securities by r32 billion. the abrupt change that took
| 1 |
year 2007 - 08, the reserve bank's policy endeavour would be to contain inflation close to 5. 0 per cent. in the medium term, in recognition of india β s evolving integration with the global economy and societal preferences, the resolve, going forward, is to condition policy and expectations for inflation in the range of 4. 0 - 4. 5 per cent. medium - term prospects the approach paper for the eleventh five year plan ( 2007 - 08 to 2011 - 12 ) targets an average annual growth of 9 per cent relative to 8 per cent targeted by the tenth plan ( 2002 - 03 to 2006 - 07 ). this aspiration for growth would require significant acceleration in investment from 27. 8 per cent in the tenth five year plan to 35. 1 per cent in the eleventh five year plan. while half of the increase in investment is expected to come from private investment in farms, small and medium enterprises and in the corporate sector, the rest is estimated to emanate from public investment with a focus on the infrastructure sector. the higher level of investment is proposed to be financed by some combination of increased domestic savings and increased foreign savings. a significant portion of the required increase in domestic savings is expected to come from an improvement in government savings. household savings and private corporate savings can also play a major role in this regard. realising that the growth benefits need to trickle down further, the eleventh five year plan is likely to provide an opportunity to restructure policies to achieve a new vision based on faster, more broadbased and inclusive growth. doubling of agricultural gdp growth to around 4 per cent is particularly important in this context. the approach paper suggests that this must be combined with policies to promote rapid growth in non - agricultural employment so as to create 70 million job opportunities in the 11th plan. very recently on may 29, 2007, our honourable prime minister announced a major scheme to double the growth rate of agriculture to 4. 0 per cent over the 11th plan period. the government would provide rupees 250 billion for new farm initiatives launched by states. a time - bound food security mission was also announced to counter rising prices of food products and to ensure visible changes in their availability over three years. if these objectives are achieved, the percentage of people in poverty could be reduced by 10 percentage points by the end of the plan period. the policy reforms and monitorable targets as indicated in the approach paper, particularly on education, health, women and children, infrastructure, when attained, are expected to
|
some fiscal strains, it is hoped that there will be no directional change. the annual rate of growth in broad money ( m3 ) was 22. 3 per cent in 1994 - 95, but dropped subsequently, pulling down the annual average growth rate between 1994 - 95 and 199697 to 17. 3 per cent and in the current year it should be around 15. 5 per cent. there is a similar pattern in regard to inflation, which averaged 7. 4 per cent between 1994 - 95 and 1996 - 97 and the wholesale price index this year is estimated to be around 6 per cent, less than last year β s 6. 9 per cent. finally, non - food credit growth has averaged 21 per cent per annum in the last three years and this year it is expected to be around 20 per cent including investments in psu and corporate bonds, debentures and cp. as you may be aware, the latest cso estimate places gdp growth of 1996 - 97 at 7. 5 per cent and net capital inflow from abroad for the last two years has been placed at 1. 86 and 1. 15 per cent of gdp at market prices. external sector on the external front, in sdr terms, exports have grown at 13. 6 per cent and 16. 7 per cent during 1994 - 95 and 1995 - 96 while imports have grown at 18. 0 and 23. 7 per cent. last year, ( 1996 - 97 ) there has been a deceleration to 9. 6 and 10. 6 per cent, respectively. this year, during april - december, growth of exports was 9. 1 per cent and that of imports 13. 5 per cent, both in sdr terms. the foreign direct investment flows continue to rise and are us $ 2. 5 billion during april - december 1997 - 98 as against $ 2. 7 billion during the whole of 1996 - 97. more important, the policy framework and the procedures ensure that most of the value of fdi flows to infrastructure and productive sectors. fii investments during the current year so far are less compared to $ 1. 9 billion for the entire 1996 - 97 period ; but, it is expected that it would be at least $ 1 billion during this year. the flows on account of external aid last year, commercial borrowings and non - resident deposits are positive on a net basis, and broadly as per expectations at the beginning of the year. the invisibles have also been on track and as a result, the
| 0.5 |
. in an environment of low interest rates and a well functioning financial system, household debt has risen by another 13 percentage points, relative to income. canadians are now more indebted than the americans or the british. our current account has also returned to deficit, meaning that foreign debt has begun to creep back up. the funding for these current account deficits has been coming largely from foreign purchases of canadian portfolio securities, particularly bonds. moreover, much of the proceeds of these capital inflows seem to be largely, on net, going to fund canadian household expenditures, rather than to build productive capacity in the real economy. if we can take one lesson from the crisis, it is the reminder that channelling cheap and easy capital into unsustainable increases in consumption is at best unwise. canada β s relative virtue throughout the debt super cycle affords us a privileged position now that the cycle has turned. unlike many others, we still have a risk - free rate and a wellfunctioning financial system to support our economy. it is imperative that we maintain these advantages. fortunately, this means largely doing what we have been doing β individuals and institutions acting responsibly and policy - makers executing against sound fiscal, monetary and regulatory frameworks. it cannot entirely be business as usual. our strong position gives us a window of opportunity to make the adjustments needed to continue to prosper in a deleveraging world. but opportunities are only valuable if seized. first and foremost, that means reducing our economy β s reliance on debt - fuelled household expenditures. to this end, since 2008, the federal government has taken a series of prudent and timely measures to tighten mortgage insurance requirements in order to support the long - term stability of the canadian housing market. banks are also raising capital to comply with new regulations. canadian authorities are co - operating closely and will continue to monitor the financial situation of the household sector. to eliminate the household sector β s net financial deficit would leave a noticeable gap in the economy. canadian households would need to reduce their net financing needs by about $ 37 billion per year, in aggregate. to compensate for such a reduction over two years could require an additional 3 percentage points of export growth, 4 percentage points of government spending growth or 7 percentage points of business investment growth. any of these, in isolation, would be a tall order. export markets will remain challenging. government cannot be expected to fill the gap on a sustained basis. but canadian companies, with their balance
|
years since we started taking concrete steps to include c & e risks in our ongoing supervision. in 2020 we published a guide on c & e risks, which outlined our expectations for the management and disclosure of these risks. in 2021 we published a report on banks β self - assessments of where they stood relative to those expectations and shared some of the good practices we had observed in the banking industry. early in 2021 we also asked all banks under our supervision to devise concrete action plans for ensuring full alignment with our expectations. banks provided us with such plans, and where we found them deficient, we asked them to be sharpened, which was subsequently done. in 2022 we continue to check progress under these action plans by assessing whether banks have advanced the plans submitted in 2021 and the extent to which they use them as an effective steering instrument to advance their c & e risk practices. moreover, in 2021, for the first time, c & e risks were qualitatively integrated in the supervisory review and evaluation process ( srep ). this year, our joint supervisory teams will complement the srep assessments with their observations from a climate risk stress test and a thematic review on how banks incorporate these risks into their day - to - day business. this will also be qualitatively integrated in the srep scores, which may have an indirect impact on minimum capital requirements. we are also launching on - site inspections of banks β management of these risks and are rounding off a targeted review focusing on commercial real estate exposures. all initiatives β the stress test, the thematic review and the on - site inspections β aim to monitor banks β alignment with the expectations set out in the ecb β s guide on c & e risks. they are part of what i described at the start of the year as a move towards an immersive approach to the management of climate - related and environmental risks in the banking sector. [ 1 ] we intend to fully integrate c & e risks in the regular supervisory dialogue and cycle and keep them there, treating them in the same way as any other material risks that banks face. the climate risk stress test, the results of which will be published in july, constitutes an unprecedented effort, also on the ecb β s part, to more fully understand how exposed euro area banks are to c & e risks. it will also give us a clearer picture of how resilient they are against these risks, as we are assessing, among other things, banks β climate risk stress
| 0 |
and k. west ( 2010 ), β global interest rates, currency returns, and the real value of the dollar β, american economic review, 100, pp. 562567. 6 a second explanation could be that exogenous monetary policy shocks may have less impact on long - term interest rates ( see e. g. evans, c. l. and d. a. marshall ( 1998 ), β monetary policy and the term structure of nominal interest rates : evidence and theory β, carnegie rochester series on public policy, 49, 1998, pp. 53 β 111 ). 7 for more details on estimates of us term premia, see e. g. adrian, t., r. crump and e. moench ( 2013 ), β pricing the term structure with linear regressions β, journal of financial economics, 110, pp. 110 - 138. for the euro area term premia, the breakdown is based on an affine term structure model fitted to the euro area ois curve using the method described in joslin, s., k. singleton and h. zhu ( 2011 ), β a new perspective on gaussian dynamic term structure models β, review of financial studies, 24, pp. 926 - 970. 8 the evidence presented here seems at odds with the predictions made in gali, j. ( 2017 ), β forward guidance 10 / 11 bis central bankers'speeches and the exchange rate β, mimeo. 9 this happened despite us medium - term inflation expectations as well as crude oil prices moving mostly sideward during this period, with a stable world economic outlook as depicted by the imf. 10 many market commentaries also considered that the speech by ecb president mario draghi in august 2014 in jackson hole provided signals that the ecb was considering purchases of sovereign bonds in response to a destabilisation of medium - term inflation expectations. see draghi, m. ( 2014 ), β unemployment in the euro area β, speech at the annual central bank symposium in jackson hole, 22 august. 11 for more details about the methodology, see diebold, f. x. and k. yilmaz ( 2012 ), β better to give than to receive : predictive directional measurement of volatility spillovers β, international journal of forecasting, 28, pp. 57 - 66. 12 see sims, c. ( 2003 ), β implications of rational inattention β, journal of monetary economics, 50
|
. in this sense, the implications are very similar to those described by xavier gabaix and matteo maggiori in their 2015 quarterly journal of economics article, which states that the risk - bearing capacity of financial intermediaries provides a role for capital flows to affect the exchange rate. 16 the difference is only that if asset purchases are understood by investors to be part of the reaction function of central banks, then the exchange rate can be expected to adjust before capital flows take place. this is certainly what we have seen in the euro area. this also means that we should treat more carefully findings in the event - study literature that assign most of the observed exchange rate change around central bank asset purchase announcements to the signalling channel. 17 given that intermediaries are forward - looking but constrained by their balance sheets, policy - induced exchange rate changes can also be expected to reflect expectations of future cross - border capital flows and their associated impact on the future supply of and demand for currency. in this sense, the debate also shares some similarities with a related strand of the literature, namely the transmission channels of sterilised foreign exchange interventions. the view that such interventions are effective mainly by signalling future policy intentions is frequently challenged by empirical evidence suggesting that portfolio rebalancing may have economically relevant effects. 18 of course, this does not mean that understanding the potential spillovers of central bank asset purchase programmes is enough to explain exchange rate movements. changes in relative term premia are far more difficult to interpret than changes in the expected path of future short - term interest rates. the latter can be clearly associated with changes in monetary policy expectations. 8 / 11 bis central bankers'speeches changes in term premia, by contrast, often reflect a combination of shocks, including monetary policy shocks as well as shocks to demand, risk aversion and other variables, which will drive term premia in the same or in opposite directions. the most recent disconnect between the euro and us dollar exchange rate and the expected future short - term interest rate differential is a case in point. on the left - hand side of slide 7 you can see that a significant gap between the two series re - emerged in the spring of this year, and continues to persist. it is tempting to link recent developments once more to portfolio rebalancing considerations. after all, the federal reserve is now actively reducing its balance sheet, while the ecb last week decided to extend its asset purchase programme by nine months, or more, if needed,
| 1 |
. this has obviously changed over recent years, as bank funding costs β and hence mortgage rates β have risen relative to the cash rate. as we have noted many times, the board of the rba has taken account of this in its monthly policy decisions. as a result, the cash rate today is around 1Β½ percentage points lower than it otherwise would have been. the fact that the bank has offset the effect of higher funding costs on lending rates means that the normal level of the cash rate is lower than it otherwise would have been. a 3 per cent cash rate today is not the same as a 3 per cent cash rate in the past. a more difficult issue to assess is the normal level of lending rates, as opposed to the normal level of the cash rate. it is difficult to be definitive here, but there are a couple of reasons why the normal level of lending rates may be lower, at least for a time, than was the case over the past two decades. the first reason is the international environment. as i talked about in another speech recently, many of the countries that avoided the financial crisis are experiencing uncomfortably high exchange rates and low interest rates. 5 australia is one of these. with the major economies of the world quite weak, most other countries would see themselves as benefiting from a lower exchange rate to boost their exports. but, of course, given that exchange rates are relative prices, not every country can simultaneously have a lower exchange rate. it should not really come as a surprise that countries that are in relatively good shape and have not seen large - scale expansion of the central bank balance sheet are experiencing stronger currencies than those that are in relatively poor shape. this is one of the mechanisms through which the weak conditions in most of the advanced economies are transmitted to the rest of the world. and in response to this, interest rates are lower than they otherwise would be to offset some of the effects of an uncomfortably high exchange rate. the second factor that might have an influence on the normal level of lending rates is related to the issues that i spoke about at the outset. for most of the past 20 years we were benefiting from either the credit boom or the terms of trade boom. under the influence of these two factors, one might expect, all else constant, higher average lending rates than otherwise, as both factors boost aggregate demand relative to supply at least for a period. another way of thinking about this is that in the earlier period there was an increase in the rate
|
of the rate structure in the economy. to use three examples : as one moves out along the term structure of the risk - free curve, term premia play an increasing role. risk premia are an important component of borrowing costs for private sector entities, including the banks. deans c and stewart c ( 2012 ), β banks β funding costs and lending rates β, rba bulletin, march pp 37β43. bis central bankers β speeches competitive pressures play an important role in deposit pricing. these sorts of determinants of the rate structure are not directly affected by movements in the cash rate. as i will discuss shortly, over the past few years, competitive pressures in the deposit market and risk premia for the banking sector globally have risen substantially. these have had a material impact on the cost to banks of funding their lending books. while these developments are not the result of movements in the cash rate, the reserve bank board takes these developments into account in its setting of the cash rate to ensure that the structure of interest rates in the economy is consistent with the desired stance of monetary policy. moreover, the link between movements in the cash rate and lending rates in australia is much tighter than in many other countries. in the us, for example, movements in the fed funds rate have a much less direct influence on 30 - year fixed - rate mortgages. composition of banks β funding the funding structure of the australian banking system has changed markedly over the past few years ( graph 1 ). deposits have become a much larger share of overall funding, rising from a little under 40 per cent in 2007 to 52 per cent currently. the rise in the share of deposit funding has come at the expense of a decline in the share of short - term wholesale funding from around 30 per cent to 20 per cent currently. graph 1 the structure of funding shown in graph 1 is for the banking system as a whole, not that of any particular financial institution. similarly, the analysis presented is for the cost of funding this aggregate structure and will certainly differ institution by institution. for example, the regional banks generally fund a larger share of their books via deposits, and have significantly decreased their use of securitisation. credit union and building societies continue to raise the vast majority of their funds via deposits. the major change in the funding structure of the larger banks has been the switch from short - term wholesale funding to deposits, although they have also recently increased their bis central bankers β speeches use of long - term secured iss
| 0.5 |
, though, which seems to indicate that the markets believe β as i do β that these difficulties could be solved without far - reaching financial consequences. more recently, the problems confronting some of our main financial institutions have also had some influence. the belgian government β like several other european governments β had to recapitalise those institutions, which pushed up the outstanding public debt, and thus also the credit default swap rate for belgium, which is now some 26 basis points higher than for germany. anyway, as i said before, the increase in spreads vis - a - vis the german bund is a general phenomenon. one may fear that the recent financial turbulence will lead to a standstill or even a setback for european government bond market integration. so it might be useful to consider some initiatives to relaunch this integration process. here, we can refer to several reports written by the giovannini group. in a report presented in 2000, this group addressed the issue of " co - ordinated public debt issuance in the euro area ", arguing that the decentralised approach to public debt issuance was an obstacle to full market integration. different options for greater co - ordination were discussed, including the creation of a single euro - area debt instrument backed by joint guarantees, an option that could be beneficial for smaller member states, currently paying liquidity premiums. unfortunately, the group did not start any concrete specification of such options. i nevertheless notice that tomorrow you will be bringing up the subject of common issuance again. maybe your summit will give new impetus to this idea. in two later reports ( 2001 and 2003 ), the giovannini group focused on clearing and settlement infrastructures in the eu. it described clearing and settlement as an essential feature of a smoothly functioning securities market, providing for the efficient and safe transfer of ownership from the seller to the buyer. it identified a number of barriers to efficient cross - border clearing and settlement. since the start of emu, the ecb has taken a good many initiatives to provide payment and settlement facilities that foster market infrastructure integration and ensure the highest standards of efficiency and safety. first of all, i would like to mention target, the real - time gross settlement system for the euro, which, since its launch in january 1999, has contributed to the integration of euro - area financial markets, by providing its users with an area - wide payment infrastructure. in response to the growing demand from financial institutions for more advanced and harmonised payment and settlement services across
|
, what reforms seem necessary to stimulate financial sector development and, secondly, how can central banks secure financial stability in a globalised economy? these questions are all the more relevant, given the emergence of international financial centres in beirut, dubai, qatar and bahrain, among others. the increasing importance of cross - border financial flows means shocks originating in one financial market can quickly be propagated to other markets. to avoid contagion when financial instability occurs, national financial systems need to be adapted so as to be able to contain shocks originating in their own jurisdictions, while also being capable to weather external shocks. the imf - supported conference on financial sector reforms and prospects for financial integration in the maghreb countries in morocco in december 2006 concluded that over the last decade, all countries concerned have implemented reforms to modernise their financial sectors, allowing financial systems to develop and grow more resilient and sophisticated. however, according to the conclusions of that meeting, reform efforts should continue in the following areas : β’ firstly strengthening banking system soundness by reducing banks β nonperforming loan portfolios, ensuring adequate loan classification and provisioning, and adhering fully to internationally accepted prudential rules. β’ secondly enhancing competition in the banking systems by ensuring a level playing field for all banks, including through the restructuring of public banks and privatization, if warranted. β’ thirdly deepening financial markets through strengthening the regulation and supervision of securities markets, broadening the investor base, and improving transparency. β’ fourthly strengthening financial sector oversight by allowing greater autonomy to supervisory agencies and providing them with more resources to hire, train, and retain qualified staff. β’ fifthly bringing financial infrastructure in line with international best practice by establishing commercial courts, strengthening corporate governance, and fostering a sound credit culture. regional integration can reinforce the progress made in financial sector reform. useful lessons on regional financial integration can be learned from similar endeavours in other parts of the world. these experiences, particularly those of the european union, suggest adopting a gradual approach and underscore the importance of sound macroeconomic frameworks and healthy domestic financial systems for successful financial integration. i now turn to the second issue : the role of central banks in securing financial stability in a globalised economy. the objective of financial stability requires action on three fronts : prevention, surveillance and crisis management. concerning prevention, national and international authorities have concentrated on defining and working - out rules and standards aimed at improving the functioning of institutions, markets and infrastructures that are essential for
| 0.5 |
these are mainly related to potential second - round effects on wages of the past increases in import prices, as well as to bottlenecks and shortages in labour markets. for the medium term, it remains paramount that wage developments remain moderate. in addition, it is crucial that structural adjustments continue. this requires sustained labour market reforms, continuing liberalisation of product markets and further integration in the financial services sector, all of which will expand economic activity and increase employment. it is equally important that further progress be achieved in the area of fiscal policy reform, with continuing progress in fiscal consolidation through limits in public spending growth, allowing both a reduction in remaining budget deficits and an alleviation of the fiscal burden on corporations and households without threatening or slowing the progress in fiscal consolidation. overall, the existence of the euro and the single monetary policy has provided the euro area with an institutional setting which leaves it significantly less exposed to external influences. within the euro area the maintenance of price stability over the medium term, together with further progress on structural reforms, will provide an important contribution to the achievement of sustained noninflationary economic growth and will thereby also support a further solid and sustainable expansion of the world economy. let me now give the floor to the vice - president, who will inform you about other issues decided by the governing council. the governing council has adopted a set of standards, recently endorsed by the g10 governors, as the minimum standards of the eurosystem's common oversight policy on payment systems. the eurosystem will assess all systemically important payment systems in the euro area against these " core principles " and will make the results of its assessments available to the public. concerning issues relating to euro banknotes and coins, i should also like to provide you with the following information. first, the governing council adopted an ecb guideline on the 2002 cash changeover. owing to the crucial importance of this matter, and given the responsibility of the eurosystem as a whole in achieving a smooth cash changeover, a legal framework has been established. the guideline will enable all those involved to become familiar with the basic rules to be followed in preparing for the introduction of the euro banknotes and coins. this ecb guideline will be published today on the ecb's website and shortly in the official journal of the european communities. second, yesterday evening the members of the governing council were given a presentation by publicis, the communication agency selected to assist in conducting the eurosystem '
|
. let me conclude. if well designed and thoroughly implemented, a genuine capital markets union will deepen the single market and contribute to the development of a more prosperous union. and t2s β a tremendous achievement β will serve as the basis for these further achievements, in accordance with the process envisioned by schumann 65 years ago. thank you. bis central bankers β speeches
| 0.5 |
to navigate the challenging economic situations. amid rapidly rising inflation in major economies, korea's consumer price inflation also rose to as high as 6. 3 % last july. the bank of korea responded swiftly to this by raising the base rate to 3. 5 %, and, fortunately, inflation came down to 3. 3 % last month. however, since core inflation, an indicator of underlying inflation trends, has been moderating at a slower pace, it is premature for us to lower our vigilance. therefore, we should conduct our policy more elaborately in 1 / 5 bis - central bankers'speeches overall consideration of downside risks to growth, financial stability risks, and monetary policy changes in major economies, including the u. s. federal reserve, while closely monitoring the pace of slowdown in consumer price inflation going forward. 1 as you may well recall, amid the u. s. federal reserve's acceleration of its stance of monetary policy tightening in the second half of last year, the korean won to u. s. dollar exchange rate surged. and then to make matters worse, the default of a legoland developer occurred on top of that, deepening the stress in domestic financial and foreign exchange market. in response, the bank of korea, in close policy coordination with the government and supervisory authorities, actively strove to stabilize markets and played a crucial role in overcoming the crisis. 2 in the process, the sound banking sector played an important part as the bedrock of support. although the sluggish housing market has shown signs of an easing recently, it is still necessary to remain attentive to risks in the financial sector, as the delinquency rates of real estate loans rose. over the medium - to long - term horizon, we will have to explore avenues to carry out modest deleveraging of household debt through cooperation with relevant government agencies to prevent further buildup of financial imbalances. we have witnessed considerable changes in internal management as well. we swiftly implemented a plan to innovate our organization and hr management, which had been drawn up through a series of discussions. we also began to make efforts to improve our organizational culture, by, for example, spreading a culture of debate and expanding the sharing of information. thanks to everyone's participation, i believe that, we are seeing positive changes in becoming the " vibrant bank of korea ", from the image of us being the " temple - like bank of korea ". i am grateful that more reports
|
##3 ). 3 for details, see ". future policy directions " in the payment and settlement systems report 2022 ( bank of korea, april 2023 ). 5 / 5 bis - central bankers'speeches
| 1 |
risk than the traditional banks and their cost of funds has also been higher. they have to work hard to keep their customers over the longer term as many tend to graduate to the banks as they become more successful. indeed competition across the whole banking system has noticeably stepped up in the last five years and customer bis central bankers β speeches allegiance is almost a thing of the past. no doubt each bank and credit institution is now being judged by its level of service. despite the intense competition, i think it is fair to say that our credit institutions have persevered in their niche areas and continue to perform well, backed by strong capital positions and satisfactory earnings performances. the combined balance sheet of the credit institutions recorded an annual growth of 33 percent over 2015, to reach $ 335million, with merchant finance limited contributing almost half. at the end of last year, combined credit institutions β net profit before tax stood at $ 18 million with capital and reserves growing 13 percent to $ 72 million. merchant finance limited please allow me to share a brief history of merchant finance limited. officially established in 1986 as the merchant bank of fiji, this institution initially operated as a finance company and since it did not take deposits from the public it did not come under the supervision of the reserve bank. this all changed in 1992 when we granted the company a licence to operate as a credit institution, enabling it to access public deposits. in 2002 the merchant bank of fiji changed its name to merchant finance & investment limited. further approval was granted in late 2014 to make another name change. this is the name we are actually launching tonight β merchant finance limited. so this year merchant finance limited actually enters its 24th year of serving the people of fiji as a licensed credit institution. the company has grown significantly, with an asset book of $ 21 million in 1992 to a publically reported $ 134 million in june 2015. the profitability of the institution has also increased over the years noting an β all time high β of just over $ 8 million in its last financial year. ladies and gentlemen, as the supervisor of the banking industry, the reserve bank closely observes the relationships of our licensed financial institutions with the other sectors of the economy. as i alluded to earlier, credit institutions like merchant finance limited play the unique yet important role of servicing customers and sectors which the banks may consider as high - risk. it is pleasing to see that merchant finance limited β s reach as a lender has extended to many key sectors in the economy, such as transport
|
, jackson hole conference proceedings. r. g. rajan ( 2006 ) : β monetary policy and incentives β, speech given at the bank of spain conference on central banks in the 21st century, 8 june 2006. c. m. reinhart and k. s. rogoff ( 2009 ), β the aftermath of financial crises β, american economic review, 99 ( 2 ), 466 - 472. taylor ( 2009 ), β the financial crisis and the policy responses : an empirical analysis of what went wrong β, nber working paper no 14631.
| 0 |
. so, the emphasis of post - crisis regulatory reforms on making the financial system stable is understandable. but a relevant question is, where do we strike the balance between growth and stability? in other words, how much growth are we willing to sacrifice in order to buy insurance against financial instability? for illustrative purposes, let us take the basel iii package. a bis study estimates that a one percentage point increase in the target ratio of tangible common equity ( tce ) to riskweighted assets ( rwa ) phased in over a nine year period reduces output by close to 0. 2 per cent. it is argued though that as the financial system makes the required adjustment, these costs will dissipate and then reverse after the adjustment period, and the growth path will revert to its original trajectory. a bcbs study estimates that there will be net positive benefits out of basel iii because of the reduced probability of a crisis and reduced volatility in output in response to a shock. an iif study, however, estimates a higher sacrifice ratio β that the g3 ( us, euro area and japan ) will lose 0. 3 percentage points from their annual growth rates over the full ten - year period 2011 β 2020. what are the implications of these numbers relating to growth sacrifice for emes? let me take the example of india. admittedly, the capital to risk weighted asset ratio ( crar ) of our banks, at the aggregate level, is above the basel iii requirement although a few individual banks may fall short and have to raise capital. but capital adequacy today does not necessarily mean capital adequacy going forward. as the economy grows, so too will the credit demand requiring banks to expand their balance sheets, and in order to be able to do so, they will have to augment their capital. in a structurally transforming economy with rapid upward mobility, credit demand will expand faster than gdp for several reasons. first, india will shift increasingly from services to manufactures whose credit intensity is higher per unit of gdp. second, we need to at least double our investment in infrastructure which will place enormous demands on credit. finally, financial inclusion, which both the government and the reserve bank are driving, will bring millions of low income households into the formal financial system with almost all of them needing credit. what all this means is that we are going to have to impose higher capital bis central bankers β speeches requirements on banks as per basel iii at a time when credit demand
|
context of cpi headline inflation having averaged 6. 3 per cent in the fourth quarter of 2021 - 22 and projected to average 7. 5 per cent in the first quarter of 2022 - 23 and 7. 4 per cent in the second quarter. inflation is, however, forecast to edge down to 6. 2 per cent in the third quarter and to 5. 8 per cent in the fourth quarter. the rbi act mandates that in the case of the inflation target not being met for three consecutive quarters, the rbi shall set out in a report to the central government ( a ) the reasons for failure to achieve the inflation target ; ( b ) remedial actions proposed to be taken ; and ( c ) an estimate of the time - period within which the inflation target shall be achieved pursuant to timely implementation of proposed remedial actions. what constitutes failure has been notified by the central government in the official gazette of india as ( a ) average inflation being more than the upper tolerance level of the inflation target for any three consecutive quarters ; or ( b ) average inflation being less than the lower tolerance level of the inflation target for any three consecutive quarters. let me speak to these issues squarely. monetary policy is essentially a contract between the sovereign - through its delegated authority, the central bank β and the people. it is an assurance by the sovereign that it will give to the people a money they can trust, a money that does not lose value or purchasing power, and in fact, stores value into the future. therefore, it is indeed appropriate that monetary policy is accountable, without any escape clauses. in india, this accountability is provided for with sufficient flexibility in the form of an inflation target defined in averages rather than as a point ; achievement of the target over a period of time rather than continuously ; a reasonably wide tolerance band around the target to accommodate measurement issues, forecast errors and supply shocks ; and failure being defined as three consecutive quarters of deviation of inflation from the tolerance band, rather than every deviation from the target. let me now turn to the specific aspects of the accountability conditions. research within the rbi, published in the report on currency and finance 2020 - 21, and outside it clearly demonstrates that growth is unambiguously impaired when inflation crosses 6 per cent. hence, breaching of the appropriate upper tolerance limit of 6 per cent for india β s inflation target should trigger accountability if monetary policy has to remain credible. currently, we live in extraordinary times. with inflation at multi - decada
| 0.5 |
. rozkrut m., rybinski k., sztaba l., szwaja r. β quest for central bank communication. does it pay to be β talkative? β β, mimeo, april 2006. β according to debelle ( 1997 ) and mason et al. ( 1997 ), one of the key prerequisites for the successful adoption of inflation targeting is that the central bank must have an adequate ability to produce inflation forecasts and to assess the impact of changes in monetary instruments on inflation ( the magnitude of the effects, their lags etc. ). β in poland until 1998 ( it was introduced in 1999 ) there was no clear statistical linkage between changes in the short - term policy interest rates and changes in inflation - christoffersen p., wescott r. β is poland ready for inflation targeting? β, imf working paper, 1999. imf, op. cit. thank you.
|
##za n., soto r. ( ed. ) β inflation targeting : design, performance, challenges β, central bank of chile, 2002. gurkaynak r. s., levin a. t., marder a. n., swanson e. t. β inflation targeting and the anchoring of inflation expectations in the western hemisphere β, forthcoming in mishkin f., schmidt - hebbel k. ( ed. ), series on central banking, analysis and economic policies x : monetary policy under inflation targeting ( santiago, chile : banco central de chile ), 2006 and gurkaynak r. s., levin a. t. swanson e. t. β does inflation targeting anchor long - run inflation expectations? evidence from long - term bond yields in the u. s., u. k., and sweden β, federal reserve bank of san francisco working paper 200609, march 2006. king m. β what has inflation targeting achieved? β in bernanke b. s., woodford m. ( ed. ) : the inflation - targeting debate, nber, 2005. strict inflation targeting implies monetary policy focused only on price stability. in contrast, β flexible inflation targeting implies that the central bank is not exclusively concerned about stabilizing inflation around the inflation target but is also concerned with the stability of the real economy, as represented by the output gap, the employment gap, or the unemployment gap. β β svensson l. β optimal inflation targeting : further developments of inflation targeting β, october 2005. β although inflation - targeting central banks normally acknowledge that they are flexible inflation targeters, they are normally not very explicit and transparent and probably not very consistent about the relative weight they attach to stability of other variables than inflation. β β svensson l., op. cit. β norges bank operates a flexible inflation targeting regime and seeks to achieve an interest rate path that provides a reasonable balance between the objective of bringing inflation up towards 2. 5 % over time and stabilising developments in output and employment. β - norgesbank, inflation report, march 2006. according to the federal reserve act, the board of governors and the federal open market committee should seek β to promote effectively the goals of maximum employment, stable prices, and moderate long - term interest rates. β cukierman a. β central bank independence and policy results : theory and evidence β, lecture prepared for the international conference on : β
| 1 |
profitability in the internationally exposed sector. it is important to be aware of the relationships between employment, output and inflation. if there is a shortage of labour and other economic resources, a tight monetary policy stance will reduce inflation by affecting aggregate demand. conversely, when unemployment is high, low interest rates stimulate demand, which will contribute to stable wages and prices. a monetary policy stance that is aimed at stabilising inflation will thus also contribute to stabilising aggregate output and employment. in the long term, monetary policy determines the average level of inflation. output is determined by the supply of labour, capital and technology and by productivity growth. attempts to increase output beyond the total capacity of the economy will lead to inflation in the long run. what monetary policy can do is to maintain stability without unnecessary fluctuations in output and employment. overall employment is also influenced by wage formation. if wages increase at an unsustainable pace, employment will decline and unemployment will gradually increase. monetary policy cannot prevent an increase in unemployment that is due to a wage - driven cost shock. when there is confidence that monetary policy will contribute to low and stable inflation over time, it can contribute in the short term - under certain conditions - to smoothing fluctuations in output and demand. in the short term, there is a trade - off between the objectives of inflation stability on the one hand, and output and employment stability on the other. an aggressive monetary policy will rapidly bring inflation to the target. this will cause wide fluctuations in the real economy. the interest rate can also be changed more gradually, which will have less impact on the real economy but cause more pronounced fluctuations in inflation. by influencing inflation over time, we can ensure that an overly aggressive monetary policy does not in itself cause unnecessary disturbances to the economy. the impact of monetary policy occurs with considerable and variable lags. our analyses indicate that a substantial share of the effects of an interest rate change will occur within two years. two years is thus a reasonable time horizon for achieving the inflation target. it is nevertheless conceivable that in a situation where a very high rate of inflation is accompanied by sluggish economic growth, norges bank may decide to apply a somewhat longer time horizon than two years to reach the inflation target of 2Β½ per cent. the choice of monetary policy time horizon reflects the fact that there are real economic costs associated with bringing inflation rapidly back to the target. this horizon is thus an indirect expression of the trade - off between the objectives of, on
|
governing council had cut the main refinancing rate to 1. 0 %. the main refinancing rate was lowered to 0. 25 % in november 2013, while the rate on the ecb β s overnight deposit facility was reduced to zero. the governing council now faced a dilemma : although the economic situation demanded further monetary stimulus, official interest rates could not fall much further. nominal interest rates cannot fall far below zero. otherwise, households and firms would simply withdraw money from the banking system and hold cash. this β zero lower bound β is another constraint on monetary policy and one that had not been envisaged when the monetary policy framework for the euro area was designed. in response, the ecb embarked upon a range of non - standard measures. first, following the example of several other central banks, the governing council pushed the overnight deposit rate into negative territory and the rate on the main refinancing operations down to zero. second, the ecb launched, and then extended, an asset purchase programme, pushing down long - term sovereign bond yields and lowering borrowing costs for the private sector as well. third, the ecb began offering banks a series of targeted long - term refinancing operations on favourable terms, aimed at prompting them to lend to the private sector. these measures were aimed at stimulating economic activity, staving off the threat of deflation and pushing inflation back up towards its target of below, but close to, 2 %. these unconventional policy measures have been instrumental to provide additional accommodation to the economy and prevent a self - sustaining fall in inflation. however, although economic activity has firmed, inflation still has not converged with the ecb β s objective. underlying inflation pressures remain subdued. the governing council continues to hold that such an accommodative monetary policy stance must remain in place until a sustained adjustment in the path of inflation has been achieved. until now, we do not have sufficient evidence that we have reached this critical point. this brings me to my second proposition. because of the existence of the zero lower bound, it is far easier for monetary policy to fight inflation by raising interest rates than to combat deflation by lowering them. although central banks world - wide have used a range of non - standard measures to stimulate economic activity and push inflation up to the target, in practice, this has proven to be extremely difficult. moreover, as i pointed out earlier, the institutional set - up of the euro area rules out the easiest
| 0 |
e. o. svensson, the zero bound in an open economy : a foolproof way of escaping from a liquidity trap, monetary and economic studies, volume 19, issue s1, pp. 277 - 312, february 2001 ; gunter coenen, athanasios orphanides, and volker wieland ;, price stability and monetary policy effectiveness when nominal interest rates are bounded at zero, advances in macroeconomics, volume 4, issue 1, 2004 ; ben s. bernanke and vincent r. reinhart. 2004. conducting monetary policy at very low short - term interest rates, american economic review, volume 94, no. 2, pp. 85 - 90, may 2004 ; klaus adam and roberto m. billi, optimal monetary policy under commitment with a zero bound on nominal interest rates, journal of money, credit and banking, volume 38, no. 7, pp. 1877 - 1905, october 2006. 13 reifschneider and williams 2000 ; board of governors 2002. 14 gauti b. eggertsson and michael woodford, the zero bound on interest rates and optimal monetary policy, brookings papers on economic activity, volume 34, no. 1, pp. 139 - 211, 2003 ; reifschneider and williams 2000. 15 ben s. bernanke, vincent r. reinhart, and brian p. sack, monetary policy alternatives at the zero bound : an empirical assessment, brookings papers on economic activity, the brookings institution, volume 35, no. 2, pp. 1 β 100, 2004. 16 john c. williams, lessons from the financial crisis for unconventional monetary policy, presentation at national bureau of economic research conference, cambridge, mass., october 18, 2013 ; john c. williams, monetary policy at the zero lower bound : putting theory into practice, the hutchins center on fiscal and monetary policy, the brookings institution, january 16, 2014. 17 thomas laubach and john c. williams, measuring the natural rate of interest redux, business economics, volume 51, no. 2, pp. 57 - 67, april 2016. 4 / 4 bis central bankers'speeches
|
as the economy recovers. 14 a third is that large - scale asset purchases ( lsaps ) can complement conventional policy actions by making financial conditions more favorable for growth even when short rates are constrained by the zlb. 15 armed with these insights, policymakers were prepared and able to act quickly and decisively when the financial crisis hit. a great deal was learned about the zlb and unconventional policy tools along the way. 16 indeed, another conference organized by the boston fed was held in october 2010 to assess lessons learned, and the proceedings of that conference were published in a special issue of the jmcb in february 2012. for me, the most interesting aspect of that conference was that participants took the zlb as a defining feature of the landscape : what was once viewed as primarily theoretical had become grounded in practice and experience. the zlb in 2019 this brings me to today. the federal reserve has embarked on a review of its monetary policy strategic framework. as was the case 20 years ago, the question is how to best achieve our monetary policy goals in the context of low inflation and the zlb. indeed, the policy questions we are grappling with today are exactly the ones laid out in woodstock. the one fresh wrinkle is that with estimates of the neutral real interest rate much lower than those that prevailed 20 years ago, the zlb is likely to be an even more powerful force than was imagined in 1999. 17 in approaching this question today, we should take lessons from the conference held in woodstock 20 years ago : bring together leading researchers and policymakers, draw out the best and most creative thinking, and take a long - run view of how we can navigate the environment before us. i am happy to say that this process is already in train, with the fed β s framework review incorporating perspectives from a wide range of stakeholders, culminating in an academic conference next week in chicago. conclusion in closing, i want to add a personal thanks to ken west for all he has done to promote outstanding research that is both innovative and relevant to the real - world problems that central banks face. and my best wishes for the jmcb, which i hope may continue its illustrious record for the next 50 years. as a researcher and policymaker, the one thing i am certain about is that fostering an open and active dialogue between researchers and policymakers is the best way for us to succeed in our work. thank you. 1 for references to the early literature, see james cl
| 1 |
##i ) norms. hedge funds have long used arrangements that allow them to execute trades with several dealers but there is now an increasing tendency on their part to consolidate the clearing and settlement of their trades at a single firm, the " prime broker ". prime brokerage poses some unique challenges for the management of counterparty credit and operational risk. it is commonly observed at the global level that hedge funds are " opaque " β that is, information about their portfolios is typically limited and infrequently provided. the information a fund provides may also vary considerably depending on whether the recipient of the information is an investor, a counterparty, a regulatory authority, or a general market participant. from a policy perspective, transparency to investors is largely an issue of investor protection, which, in turn, depends on the nature of investors. the need for counterparties to have adequate information is a risk - management issue. concerns about hedge fund opacity and possible liquidity risk have motivated a range of proposals for regulatory authorities to create and maintain a database of hedge fund positions. there are some uncertainties associated with the settling of trades in newer types of over - the - counter ( otc ) derivatives, particularly credit derivatives. as part of recent financial innovations, the creditderivative and structured - credit markets have grown rapidly during the past few years, allowing dispersion of credit risk by financial players. perhaps, it is necessary to evolve mechanisms to ascertain the size and structure of risk components, the scale and direction of risk transfers, and, therefore, the distribution of risk within the economy. in the recent years, the issue of institutional mechanisms for the prevention and resolution of financial crises at the multilateral level has assumed importance. on the question whether the international financial architecture is now in a position to give comfort if a country were to have a problem, there are four aspects. firstly, undoubtedly, the resilience of the world today and the private capital markets in particular, has improved enormously since 1997. macro - economic policies and approaches of international financial institutions as well as the resilience of markets have improved. secondly, even though in terms of magnitude, the official / bilateral flows of funds are miniscule, the very intent of such flows, guided by broader societal consideration, gives them strength in the face of private flows. thirdly, as we are aware, risks are never eliminated but are only mitigated. the existing international financial architecture is not adequate to prevent or
|
curacao financial sector : ready for 2019 and beyond β speech delivered by mrs. l. matroos - lasten acting president centrale bank van curacao en sint maarten on the occasion of the information session on replacing the old off - shore ; embracing the new reality centrale bank van curacao en sint maarten october 25, 2018 your excellency : the prime minister of curacao, mr. eugene rhuggenaath the minister of finance of curacao, mr. kenneth gijsbertha distinguished guests, ladies and gentlemen, good evening. there is a tendency to assume that stimulating growth and the strengthening of specific economic pillars is the sole responsibility of the government. however, as we have been recently experiencing in curacao, initiatives jointly undertaken by all key stakeholders are crucial to achieve the desired development and growth of an industry and / or an economic sector. while the private sector knows best the trends and needs, the role of the public sector is to create and safeguard the right investment climate and regulatory framework for businesses to operate, grow, and attract direct investment. the collective actions of the public and private sectors will certainly lead to sustainable economic growth and progress. for that reason, the centrale bank van curacao en sint maarten, supports the initiatives and actions that cifa and other stakeholders have been taking in due preparation of replacing the old offshore regime in favor of a new and more transparent ( fiscal ) framework, set to take effect in 2019. the theme of this information session, β curacao financial sector, ready for 2019 and beyond β is fitting, given the developments in the international financial services industry. today, i would like to discuss the potential role of the central bank in this new reality starting 2019, but first, i would like to provide a short overview of the long history of curacao as a provider of international financial services and the international context in which we have been and are now operating. ladies and gentlemen, international financial services activities in curacao date back to the late 1930s. although other countries in the region provided advantages such as being zero - tax havens, many companies ultimately chose curacao as the location to establish their business activities because of its political and economic stability, freedom of capital movements, the availability of a skilled labor - force, convenient location and communications, and the presence of related services including banking, legal, tax advisory, and audit. in addition,
| 0 |
a selfreinforcing spiral of falling prices and output. against this backdrop, in 2015 the ecb introduced quantitative easing, qe, to provide further monetary policy accommodation. by lowering long - term interest rates, qe has helped to further loosen financing conditions for households and businesses. this in turn should have a positive impact on their spending decisions and, ultimately, on inflation. rebalancing necessity, effectiveness and risks when deciding on monetary policy measures such as qe, decision - makers typically assess policy options along three dimensions : necessity, effectiveness and side effects. since these guiding parameters change over time, continuous monitoring and reassessment are needed. and this is exactly what we are reconsidering right now when reflecting on how to proceed with our qe - program beyond 2017. against this backdrop, let me discuss in a bit more detail how i reflect on the dimension of necessity of at the current juncture. a dimension along which the considerations have changed quite significantly since we first started with qe in early 2015. allow me to highlight four specific elements. first, financing conditions in the euro area are currently very accommodative and highly supportive to growth. this is largely a consequence of previous ecb monetary policy measures. second, financial fragmentation between euro area countries has been reduced. this is reflected in a more homogenous transmission of monetary policy decisions across jurisdictions compared to what we observed during the crisis. third, the economic outlook has improved significantly. specifically, we have now registered twelve quarters of reflationary growth. in other words, three years of economic growth above potential. finally, and most importantly, against the backdrop of an increasingly reflationary environment, the tail risk of a deflationary spiral is no longer imminent. consequently, the main rationale for central bank asset purchases has disappeared. to summarize, assuming the robust economic developments continue we can be confident that inflation will return to levels consistent with our aim of below but close to 2 % over the medium - term. in this environment the necessity of qe is clearly less obvious. at the same time, some may be concerned with the challenges of normalizing monetary policy. however, while there will indeed be challenges along the way, i see no reason to be overly dramatic. let me discuss some considerations that are often overlooked by commentators. first, even if we no longer expand our qe - program, we are still committed to a reinvestment policy. this reinvestment
|
substantial progress. to improve the balance between liability and control, we therefore need to improve enforcement of the rules. this would help reduce the likelihood of new imbalances and future calls on european risksharing. secondly, the emu would benefit from more private risk - sharing across borders. during the crisis, european governments used taxpayers β money to provide support. but private companies, investors and banks shared far fewer risks. improving private risk - sharing would help reduce dependence on public risk - sharing. it could also help smooth idiosyncratic business cycle shocks, as appears to have been the case in the u. s. and germany. does the answer lie in more integration? of course, the key question is : how do we further strengthen the emu? it is often assumed that deeper european integration is the answer, for example by way of more binding policy coordination. many also favor more public risk - sharing, such as the introduction of a european budgetary stabilization fund. further european integration would indeed probably lead to a better functioning emu. however, major steps forward are controversial, and may not be politically feasible in the current environment. in countries like the netherlands, controversy mostly centers around a further increase in public risksharing. the fundamental problem is that member states still differ substantially in terms of adaptability, overall competitiveness and institutional quality. if starting positions differ so much, a stabilization fund might not result in ex - ante fair risk - sharing, but in a quasi - permanent one - way transfer system. therefore, any further increase in public risk - sharing is only desirable if it is accompanied by a significant risk reduction. this however requires a further transfer of sovereignty ; a policy that is equally controversial in many member states. as a result, large leaps forward in integration are presently hard to conceive. given all the steps that have already been taken over the past years, i however believe that with a series of relatively small steps aimed at restoring the balance between liability and control we can already achieve a great deal of improvement. let me therefore conclude by mentioning four no - regret options. first, improve compliance with european fiscal and macro - economic rules, by simplifying and strengthening the rules. second, introduce some form of sovereign debt restructuring mechanism. in the future, it should be ensured that the public debt is sustainable before countries gain access to financial support. third, complete the banking union. reducing systematic differences between banks from different member states will pave the way for a
| 1 |
mention two initiatives. first, to improve public access to information concerning fed policies and programs, in coming days we will unveil a new website that will bring together in a systematic and comprehensive way the full range of information that the federal reserve already makes available, supplemented by explanations, discussions, and analyses. second, at my request, board vice chairman donald kohn is leading a committee that will review our current publications and disclosure policies relating to the fed's balance sheet and lending policies. the presumption of the committee will be that the public has a right to know, and that the nondisclosure of information must be affirmatively justified by clearly articulated criteria for confidentiality, based on factors such as reasonable claims to privacy, the confidentiality of supervisory information, and the need to ensure the effectiveness of policy. conclusion extraordinary times call for extraordinary measures. responding to the very difficult economic and financial challenges we face, the federal reserve has gone beyond traditional monetary policy making to develop new policy tools to address the dysfunctions in the for links and references, see ben s. bernanke ( 2009 ), " federal reserve programs to strengthen credit markets and the economy, " testimony before the committee on financial services, u. s. house of representatives, february 10. nation's credit markets. we have done so in a responsible way : the credit risk associated with our nontraditional policies is exceptionally low, and, by carefully monitoring our balance sheet and developing tools to drain bank reserves as needed, we will ensure that policy accommodation can be reversed at the appropriate time to avoid risks of future inflation. we provide a great deal of information about our lending programs and our balance sheet to the congress and the public. but, as i have discussed today, we will do more on this front, both expanding the information we provide and improving how we communicate that information. increased transparency is the best way to demonstrate that the federal reserve's nontraditional policies are well conceived, well managed, and produce substantial public benefit.
|
ben s bernanke : federal reserve policies to ease credit and their implications for the fed's balance sheet speech by mr ben s bernanke, chairman of the board of governors of the us federal reserve system, at the national press club luncheon, national press club, washington dc, 18 february 2009. the original speech, which contains various links to the documents mentioned, can be found on the us federal reserve system β s website. * * * we live in extraordinarily challenging times for the global economy and for economic policymakers, not least for central banks such as the federal reserve. as you know, the recent economic statistics have been dismal, with many economies, including ours, having fallen into recession. and behind those statistics, we must never forget, are millions of people struggling with lost jobs, lost homes, and lost confidence in their economic future. in examples that resonate with me personally, the unemployment rate in the small town in south carolina where i grew up has risen to 14 percent, and i learned the other day that what had once been my family home was recently put through foreclosure. traditionally the most conservative of institutions, central banks around the world have responded to this unprecedented crisis with force and innovation. in the united states, the federal reserve has done, and will continue to do, everything possible within the limits of its authority to assist in restoring our nation to financial stability and economic prosperity as quickly as possible. policy innovation has been necessary because conventional monetary policies, which focus on influencing short - term interest rates, have proven insufficient to overcome the effects of the financial crisis on credit conditions and the broader economy. to further ease financial conditions, beyond what can be attained by reducing short - term interest rates, the federal reserve has taken additional steps to improve the functioning of credit markets and to increase the supply of credit to households and businesses β a policy strategy that i have called " credit easing. " in the first portion of my remarks, i will briefly outline the three principal approaches to easing credit that we have undertaken, over and above cutting the short - term interest rate, and assess their effectiveness to date. each of these policy approaches involves the provision of credit or the purchase of debt securities by the federal reserve, which collectively have resulted in a substantial expansion in the size of the federal reserve's balance sheet. the second portion of my remarks addresses some issues raised by the changes in the size of the fed's balance sheet. in particular
| 1 |
good cooperation of the experts, their commitment and dedication to the project, at today β s first meeting, the steering committee adopted the benchmarks in all planned areas, whereby, i am pleased to say that the first stage of the project has been successfully completed. in the forthcoming period, the eurosystem experts should assess the legal framework and the nbrm β s practice in these areas and identify β the gaps β against the agreed benchmarks, to which the nbrm is fully committed and ready for open collaboration. the recommendations and directions that will be presented in the form of the report at the third and final phase, will be the basis for designing the future strategy of the nbrm for strengthening its institutional capacity ladies and gentlemen, the implementation of the european standards and best practices by the nbrm is of utmost importance, as it will not only enable the process of accession of the nbrm to the european system of central banks, but it will also contribute to the providing of bis central bankers β speeches price stability and stability and efficiency of the financial system in the country, in general, which is a precondition for eu membership. rest assured that the management and the employees of the nbrm will address this challenge in a professional manner and will use this project to further strengthen the capacity and credibility of our institution. finally, let me wish all the participants in the project a successful cooperation in their future work, believing that the cooperation with the ecb and the national central banks of the escb will further deepen in the future. i would once again like to thank the eu delegation for enabling the implementation of this project with the hope for further support in providing subsequent project for the implementation of the recommendations, and thank the other guests for their presence. bis central bankers β speeches
|
##zation could push long - term rates to zero, there is no guarantee that will provide enough stimulus, given the prevailing deflation. the real bond rate could still be too high. this proxy role for money could, in principle, cover other channels besides long - term government and private interest rates and asset prices β such as liquidity and credit effects β that might be activated by increases in the money supply. in this case, even additional conventional operations β open market operations in treasury bills β might stimulate aggregate demand, even if they could not further lower the short - term nominal interest rate. however, that affect does not seem very plausible. for example, would the increased liquidity of holding money versus short - term bills stimulate aggregate demand? if economic agents wanted the additional liquidity they could have acquired it with no holding cost by selling zero - interest - rate bills and acquiring cash. why, when the central bank initiates this change, would it affect spending, if no interest rates or asset prices were affected? bernanke and gertler have emphasized a credit channel as part of the transmission mechanism. but this channel β though amplifying the effect of monetary policy β seems itself to require a change in interest rates. for example, a decline in interest rates would, according to bernanke and gertler, reduce existing committed cash flows of borrowers and therefore make the borrower more creditworthy. this, in turn, could result in lenders offering additional credit. however, if interest rates do not decline this channel is not activated. finally, the proxy role for money could include the effect of monetization on expectations. this channel depends on the ability of policymakers to alter expectations about the course and effects of future policy. that is, the policy effect does not derive from a higher money supply today but from a perceived commitment to a higher money stock in the future. expectation effects could alter current long - term real interest rates in two ways. first, convincing the public that monetary policy will remain stimulative longer will lower expected future nominal short - term interest rates and therefore longer - term nominal interest rates. second, convincing the public that monetary policy will achieve a higher inflation rate in the future, at least on average, could lower bernanke and gertler ( 1995 ). clouse et al. ( 2000 ). i am assuming a standard expectations theory of the term structure of interest rates and constant risk premiums. long - term interest rates are,
| 0 |
8 real gdp developments in advanced economies after the global financial crisis s. a., 2007 / q1 = 100 japan united states euro area united kingdom cy 07 sources : cabinet office ; haver. chart 9 economic and price developments after the introduction of quantitative and qualitative monetary easing ( qqe ) corporate profits and business fixed investment exchange rates and stock prices thous. yen yen / u. s. dollar yen / u. s. dollar ( left scale ) nikkei 225 stock average ( right scale ) introduction of qqe cy10 unemployment rate 5. 5 ratio of current profits to sales ( left scale ) private non - residential investment ( sna, real, right scale ) nominal wages and prices s. a., % y / y % chg. 5. 0 4. 5 4. 0 - 1 3. 5 - 2 3. 0 2. 5 cy 10 s. a., ann., tril. yen s. a., % 6. 5 6. 0 5. 5 5. 0 4. 5 4. 0 3. 5 3. 0 2. 5 2. 0 cy10 hourly cash earnings cpi ( all items less fresh food and energy ) - 3 - 4 cy10 sources : bloomberg ; ministry of finance ; cabinet office ; ministry of health, labour and welfare ; ministry of internal affairs and communications. chart 10 current economic activity in japan indicators related to private consumption s. a., cy 2010 = 100 consumption activity index ( real ) cy13 s. a., di cy 13 economy watchers survey ( di for current economic conditions ) indicators related to exports and industrial production s. a., cy 2010 = 100 cy13 s. a., cy 2010 = 100 cy13 note : the consumption activity index is adjusted for travel balance. sources : bank of japan ; ministry of finance ; cabinet office ; ministry of economy, trade and industry. real exports indicies of industrial production
|
market its assessment of economic conditions and its views on the appropriate conduct of monetary policy. bearing this in mind, it is useful to incorporate an expected future change in the policy interest rate and its anticipated influence on the economy into the outlook for economic activity and prices that the central bank makes public. in the past, the bank's outlook for economic activity and prices was based on the assumption of a " fixed monetary policy, " in other words, it hypothesized that its monetary policy would be unchanged. since the april 2006 outlook report, however, the bank's outlook for economic activity and prices has been produced taking account of forecasts of the future policy interest rate embodied in market interest rates, instead of assuming that the policy interest rate will remain unchanged. a number of other central banks that publish an economic and price outlook, such as the bank of england ( boe ) and the european central bank ( ecb ), have started to use market participants'projections of the policy interest rate as the assumed policy interest rate when producing their outlooks. c. transmission lags lastly, i would like to take up the issue of the so - called transmission lag, the time lag between a monetary policy action and its impact on the economy. it takes a certain amount of time for the effects of a monetary policy action to filter through into the economy and prices. among the various transmission channels mentioned earlier, the effects of a change in interest rates on expected rates of return on investment may be felt within a relatively short period of time. transmission through foreign exchange rates and asset prices may also take place swiftly. it takes time, however, for an interest rate change to affect household income through corporate profits. considerably more time is then required for a change in corporate profits and household income to gradually alter firm and household sentiment and hence impact on consumption and investment decisions. for a policy change to be fully transmitted through to the economy, therefore, requires a considerable amount of time even when firms and households are rational and forward - looking. there are then still further lags between the change in the economic situation and the eventual impact on prices. it is such lags in policy transmission that necessitate a forward - looking approach to conducting monetary policy. for policy actions to be effective, it is necessary to act based on the outlook for economic activity and prices over a sufficiently long term. in the quarterly bulletin of the boe, for example, the economic and price outlook of monetary policy committee members
| 0.5 |
exports to china have increased, but are still limited. over several years, enterprises in central european countries have been a source of competition for norwegian jobs. integration is also opening new markets and providing new sources of income for norwegian enterprises. at the same time, tender requirements and the freedom of establishment have increased the competition facing norwegian industries that were previously sheltered. a steadily larger share of norway β s consumer goods imports come from china and central european countries. growth in imports from china was provided with an additional impetus after china became a member of the world trade organization in 2001. imports from eastern europe have also continued to grow. there are many economic agents in norway that are benefiting from globalisation. consumers are enjoying lower prices for goods and services. input prices have fallen and companies can sell their products in new markets. but there are also costs. norwegian businesses and jobs may lose in the competition. the challenge lies in moving idle resources to new business activities. this requires adaptability and a sound cost policy. the norwegian economy is unique in being both a fully developed economy and a major oil exporter. norway is the world β s third largest oil exporter. in the future, we will become an increasingly important exporter of natural gas. the petroleum sector accounts for 44 per cent of exports and 17 per cent of gdp. the present value of remaining petroleum reserves has been estimated at close to nok 2 000 billion ( present rate of net cash flow ). the bulk of norway β s petroleum wealth will be extracted over a period of 40 years, from 1990 to 2030. we are now in a phase where petroleum wealth is being converted from natural resources under the seabed to financial assets abroad. the government petroleum fund was established in 1990 with a view to promoting an even distribution of wealth across generations. the intention behind the petroleum fund is that the cash flow from petroleum production should be channeled to the fund and invested abroad. by doing so, changes in oil prices have little effect on the mainland economy. this chart illustrates how petroleum activity is separated from the mainland economy. oil companies β revenues are in foreign currency. the government net cash flow from taxes and direct ownership in oil companies is transferred directly to the petroleum fund. the return on the petroleum fund investments also adds to the capital. of the total capital accumulated last year, nok 59 billion was spent over the fiscal budget. the petroleum fund invests only in foreign markets. the fund serves as a buffer against shocks. changes in petroleum revenues are
|
and the shift from tangibles to intangibles. 4 europe already hosts the largest eco - innovation and circular economy industry in the world5 and the euro is the currency of choice for global green bond issuance. 6 in the twentieth century, europe was also at the forefront of the creation of the welfare state. the crisis today offers a possibility to consolidate and expand our global leadership on the environmental front and to make it converge with more digital lifestyles β producing a new, more sustainable economic model. finally, the drive to build more resilient supply chains could be the catalyst we need to definitively complete the single market. if we are to β de - globalise β while also achieving allocative efficiency and strategic autonomy, we will have no choice but to make full use of the size and diversity of our continent - wide economy. so the potential to frame a positive european vision should, i hope, be compelling. the commission β s recovery fund proposal is clearly a key building block in delivering on this goal. but the european level cannot be expected to do it alone. crucially, the recovery fund will only reach its full potential if it is firmly rooted in structural reforms conceived and implemented at the national level. we will get a β bigger bang β for each euro spent if countries conduct the structural reforms they need at the same time. as an illustration, ecb research shows that in the event of a common shock hitting all euro area countries β of the type we have just seen β those with less efficient economic structures can on average suffer up to twice the output loss of a country that is at the frontier of institutional parameters. 7 the country specific recommendations identify further helpful reforms. in italy β s case, i understand that these recommendations call for, among other things, investing in digital infrastructure for education and training, promoting renewable energy production, developing ebusiness models and modernising public administration. such reforms β designed and owned by you β are indispensable to capitalise on this moment. 3 / 4 bis central bankers'speeches conclusion i therefore encourage you, as policymakers, not to let this crisis go to waste. my institution, the ecb, will play its part within its mandate. but it is for you to prove to citizens that our societies will emerge from this transformation stronger and greener. if we are collectively successful, uncertainty will start to turn into confidence, and then a real recovery can begin. 1 see anderton, r., jarvis, v
| 0 |
timely fashion and proactively in the interests of preserving the stability of the financial system. the complex evolution of banking business and the concomitant increase in risk can no longer be coped with by the traditional instruments. the globalisation of the financial markets calls for a departure from purely national rules and regulations, and the adoption of greater flexibility and greater proximity to the bank on the part of supervisors, so as to foster financial market stability. europe cannot disregard these trends if it wants to hold its own in the international competition for market shares. furthermore, european banks will have to adjust to the introduction of internal rating systems if they do not wish to get out of touch with the united states in the field of up - to - date techniques of credit - risk management. market players and others are called upon to lend a hand in shaping the definitive regulations during the consultation phase that is now in progress and subsequently during the second such period from autumn 2000 onwards. academic economists, in particular, can likewise help to answer the still unresolved issues posed by the basle accord. we should face up to this major challenge, which is not least an intellectual competition for the best proposals, by making a joint effort.
|
the money stock has been around 2. 0 percent. as for developments in financial markets, money market conditions continue to be extremely easy, as the bank of japan continues to provide ample liquidity. in the foreign exchange and capital markets, the yen's exchange rate against the u. s. dollar and long - term interest rates have been around the same level as last month. meanwhile, stock prices rose significantly through mid - january, and later fell. they are currently above the level of last month. japan's economy is expected to deviate slightly above the outlook presented in the outlook for economic activity and prices ( the outlook report ) released in october last year, as both domestic and external demand continue to increase steadily. as for prices, domestic corporate goods prices are expected to deviate slightly above the outlook, reflecting the rise in international commodity prices and the depreciation of the yen in the second half of last year. meanwhile, consumer prices are projected to be broadly in line with the outlook. this report is based on data and information available at the time of the bank of japan monetary policy meeting held on january 19 and 20, 2006. the text of " the bank's view " was decided by the policy board at the monetary policy meeting held on january 19 and 20, 2006.
| 0 |
. the global economy is recovering markedly and this should augur well for our exports and tourism industries, which are supporting the domestic economic recovery. on the sectoral performance, aside from the sugar industry, which continues to show low performance, recent data indicate continued strong growth in visitor arrivals and improvements for the gold and fish sectors. there is also some indication of modest increases in consumption activity with consumer spending aided by improvements in the labour market, increased lending and higher inward personal remittances. inflation declined further to 5. 4 percent in july from 5. 5 percent in june and is expected to further decrease to around 5. 0 percent by the end of the year. on the external sector, the trade deficit narrowed in the first five months of this year, thus keeping the foreign reserves at adequate levels. consequently, bank liquidity remains at high levels. overall, the domestic economy is showing sign of improvements however, the speed of recovery is slow. given the need to support economic activity and kickstart the economy, the reserve bank decided to maintain the overnight policy rate ( opr ) at 3. 00 percent during the august board meeting. capital markets in fiji ladies and gentlemen, let me brief you on some of the work that we are doing to develop the capital markets to another level. at the outset, i wish to state that a partnership approach will help progress this faster. as i mentioned earlier, two weeks ago we had a similar seminar in suva and i am happy to say that it was a great success. the rbf had also organised 2 microfinance expos β one in ba and the recent one last week during the hibiscus festival. financial literacy sessions by financial institutions, spse and some players in the capital markets were also carried out during these events. it was encouraging to see the general public at these two venues expressing interest and wanting to know more about the capital markets. in march this year, the reserve bank formed the capital markets development taskforce. the membership of the taskforce is mainly from the private sector with governor sada reddy as the chair. it was the rbf β s intention that the private sector involvement in the development of the capital market, similar to the cmda days, continued hence the formation of the taskforce. the taskforce will assist the rbf in strategising on how to tackle some of the longstanding challenges that have hindered the development of capital markets in fiji. β grow your company, grow the economy
|
have a more significant economic impact in the longer run. issues for the domestic financial system last year β s financial stability report identified three major domestic vulnerabilities : the upward momentum in house prices, strong credit growth and rising indebtedness, and the adverse impact of increasing repayment burdens on the health of the household sector. since then, there have been a number of welcome improvements around these issues. firstly, the upward momentum in residential property prices has eased, reducing the vulnerability posed by the previous substantial increase in house prices. while house prices increased nationally by almost 12 per cent on average in 2006, they slowed significantly in the second half of the year. the slowdown continued this year and prices are now about 3Β½ per cent lower on a year - to - date basis. these developments should be assessed against the gains in house prices in recent years, where prices have risen by over 50 per cent between 2002 and 2006. house prices are now on average at mid - 2006 levels. concerns at that time that house prices would move further out of line with fundamentals, and that housing affordability would worsen, have lessened since last year β s report. regarding future house price developments, factors such as investors β participation in the property market, the sustainability of current rates of immigration, the cost of borrowing and the performance of the labour market are all important. the underlying fundamentals of the residential market continue to be reasonably strong. second, a welcome easing has taken place during 2007 in the rate of increase in privatesector borrowing, and the rate of accumulation of private - sector indebtedness has eased accordingly. ireland β s level of private - sector indebtedness, however, continues to be high by international standards. although a high level of indebtedness increases the vulnerability of the private sector to income and interest - rate developments, there are also important mitigating factors such as the sector β s high net worth and the positive outlook for the economy. when assessed alongside the slowdown in borrowing, these factors reduce this vulnerability somewhat. also, mortgage repayment burdens have generally increased in recent years β driven initially by the high rate of houses price inflation and, since late - 2005, driven by interest - rate increases. robust income growth as well as changes introduced in the last budget and the moderation in house price developments have worked to reduce repayment burdens since our last report. as well as these developments in the vulnerabilities highlighted in
| 0 |
of course, students β reliance on debt and the returns from graduating vary across educational institutions. of particular interest here is recent work by raj chetty and his co - authors showing that some colleges β some of which can be found in the cuny and california state systems β appear to be much better at fostering economic mobility than others. in other words, they accept relatively large numbers of lower - income students while also producing large numbers of high earners, which means that these institutions facilitate considerable upward mobility. learning exactly how they do it and how it can be replicated strikes me as a first - order question for further study. recent research by caroline hoxby to assess differences in productivity across educational institutions makes important progress in that direction. in summary, academic research on the financing, costs, and returns of higher education is more important now than it has ever been. we are pleased to have many of those researchers participating in this conference. i would like to thank raji chakrabarti and wilbert van der klaauw and the new york fed β s research group for organizing this timely conference, and for bringing together this superb group of scholars. thank you all for your participation. i wish you a very productive and enjoyable conference. 1 betsy bourassa, rajashri chakrabarti, andrew haughwout, and wilbert van der klaauw assisted in preparing these remarks. 2 / 2 bis central bankers'speeches
|
##ediment is the lack of preparedness among new college entrants, with large numbers of those students needing remedial courses that earn no college credit. low readiness contributes to persistently low college completion rates, especially among lower - income, parttime, and nontraditional students. higher dropout rates, in turn, contribute to a substantial reduction in the net expected and realized returns from college attendance. the third major barrier to college attendance and completion is the rise in the cost of a college education. while a college education is generally a good investment, the cost of attending a fouryear college has risen considerably faster than wages over the last several decades. this means that college has become increasingly unaffordable β which can act as a drag on economic mobility and the growth of a college - educated workforce, and by extension, on productivity growth and living standards. as has been well documented by my new york fed colleagues, many young americans have adjusted to rising tuition and fees by taking on more debt. this trend highlights the importance of the federal student loan program, which has helped mitigate the impact of the shift in financing of 1 / 2 bis central bankers'speeches higher education from state and local funding to students and their families over the past few decades. however, the end result is that more students leave college with significantly higher amounts of debt. student loan debt has more than tripled over the past two decades and now totals over $ 1. 4 trillion. it is important to consider what these changes in financing higher education mean for economic mobility. first, new york fed researchers have documented that a large percentage of student borrowers β especially those who attend less selective colleges or drop out β have trouble staying current on their loans, and often become delinquent and default on their debt. we also know that these factors β slow repayment, delinquency, and default β are most prevalent among those from more modest family circumstances. in addition, there is evidence that student debt acts as a drag on homeownership. specifically, our research indicates that when college tuition rises in a state, it leads to higher levels of student debt and a lower homeownership rate. these factors matter for inequality and social mobility, because increasing home equity is the major form of wealth accumulation for the great majority of american families. thus, rising tuition and changes in the way that college is financed appear to have diminished the ability of higher education to lift people from poverty into the middle class.
| 1 |
changes in sentiment affecting other parts of the resource sector. of greater concern for lng projects are rising costs, which reduce the returns on projects underway and reduce the prospects of future expansions. some of what has been reported as higher costs by mining companies reflects the appreciation of the australian dollar. some companies had budgeted for these projects in us dollar terms at a lower exchange rate than we face currently. still, there β s no denying that costs have increased over time even in australian dollar terms. graph 7 the estimates for gdp and employment shares of the resource sector as a whole in the mid 2000s are 10 per cent and almost 5 per cent, respectively. bis central bankers β speeches graph 8 we can try to look at some data from the australian bureau of statistics to gain some understanding of changes in costs over time, although it will not pick up important differences across different projects in different industries. there is evidence in the aggregate data of higher inflation of wages in the mining industry, and across western australia more generally ( graph 7 ). while the growth of these wages has picked up a little recently, this is unlikely to be sufficient to account for the magnitude of some of the cost overruns being reported. nevertheless, the level of wages in the mining industry remains relatively high, though this reflects the relatively high capital - to - labour ratio in this industry ( graph 8 ). one plausible explanation for at least some of the cost overruns is logistical problems affecting a number of projects. it seems that the engineering challenges for some projects are even more complex than initially thought. there are cases of projects taking longer to complete, and / or requiring more investment to bring them to fruition. in other cases, the scope of the project may have changed. all of these things can alter the profile for mining investment by affecting both the timing and the amount of expenditure. graph 9 bis central bankers β speeches so, what β s been the net effect on the outlook for mining investment overall of these changes in sentiment, timing, scope and costs? as best we can tell, mining investment now appears likely to reach a peak a bit earlier β sometime this year β and at a lower level β of around 8 per cent of gdp β than we had earlier expected ( graph 9 ). this is broadly consistent with the latest abs survey of firms β capital expenditure plans, which shows that in the mining sector, the growth of nominal investment in 2012 / 13 was revised from around 40 per cent to 20 per cent from the june quarter
|
the share of economic activity accounted for by the resource sector since the mid 2000s. while the share of the workforce directly employed in the business of mining has doubled since then, it remains relatively modest ( at around 2Β½ per cent ). however, there has been a substantial spillover of activity to other parts of the economy, including to a wide range of businesses that help mining companies to extract resources or to build up their capital infrastructure. the bank will soon publish some research providing estimates of the contribution of mining and mining - related activity to gdp and employment ( rayner and bishop, forthcoming ). this work suggests that the resource sector as a whole currently accounts for around 18 per cent of gdp, with about a third of this owing to resource - related activities. similarly, the resource sector accounts for almost rio tinto and un projections suggest a peak in 2030. projections by the bureau of resources and energy economics ( bree ) show demand increasing through to 2025. bis central bankers β speeches 10 per cent of employment, with a bit more than two - thirds of this owing to resource - related activities. 6 the sharp fall in bulk commodity prices from the middle of last year prompted mining firms to reassess their expenditure and the viability of some investment projects that had been under consideration. some uncommitted projects were deferred. much exploration activity was curtailed. spending on machinery and equipment was scaled back significantly. and some existing operations were shut down, primarily smaller, older, higher - cost coal mines. this turnaround in sentiment came about in part because lower prices reduced cash flows and external financing became harder to come by, making it more difficult to finance resource investment. the recent sharp rise in iron ore prices, as best we can tell, has not yet made much of a difference to investment plans, presumably because the price is not expected to stay at its current high level. as you are all no doubt well aware, a large share of mining investment currently underway in australia is in the liquefied natural gas ( lng ) sector. lng projects require significant investment over a 3 β 5 year period, and a very long period of production to recoup the initial investment. as a result, commitments to invest in these projects are made on the basis of long - term contracts signed with the buyers of lng ( with those buyers often even taking an equity stake in the project ). for this reason, investment in lng has been resilient to the significant
| 1 |
this worsening income inequality. notably, in the era of the fourth industrial revolution, now in progress, there are concerns that the number of unskilled jobs could decline rapidly. however, we cannot go against the flow of globalization and technological innovation. and in this regard, international organizations such as imf and world bank recommend that we should pursue β inclusive β growth, which ensures that many people can share the benefits of growth. more specifically, creating more jobs, increasing household incomes and expanding the social safety net are recognized as relevant policies for promoting inclusive growth. we can talk more about this topic during session two today, on β inclusive growth and employment. β another challenge that we must tackle is population aging, which is progressing rapidly now in many countries. population aging is likely to undermine economic growth as it reduces the labor supply and saps aggregate demand at the same time. for korea, in particular, as the pace of our population aging is rapid, but our preparations for it insufficient, the negative effects of population aging on growth seem likely to be substantial. in response to this, proper policy measures need 1 / 2 bis central bankers'speeches to be put in place, to ease the rapid drop in elderly consumption while we at the same time strengthen social support related to child birth and child care. the theme of our first session today was chosen to be β population aging β, which i think may suggest just how important and urgent this issue is. finally, we need to also address the issue of financial imbalances. since the global financial crisis, international efforts to ensure financial stability have strengthened, as seen in the introduction of global regulatory frameworks such as the basel iii accord and the otc derivatives market reforms. however, the financial imbalances in major emes have accumulated further, driven by greater household and corporate debt leverage in these economies. financial institutions have been seeking high - risk, high - return investments, in response to their worsening profitability due to the low interest rate environment. in korea, household debt is already at a historic high, and has been growing faster than incomes, so that it poses a major risk to financial stability. i hope that we will obtain valuable insights related to this tomorrow, in the special session led by the federal reserve bank of new york, on ways of securing financial stability and the role of monetary policy. so far, i have raised three policy issues β income inequality, population aging and financial imbalances. besides these, of course, there
|
chang yong rhee : new year speech new year's speech by mr chang yong rhee, governor of the bank of korea, at the bank of korea, seoul, 1 january 2024. * * * my dear colleagues at the bank of korea, today we start our first day of work in 2024. let me begin by expressing my heartfelt gratitude to all of you for your best efforts at fulfilling your duties in your respective roles throughout the past year. i would also like to extend my appreciation to all the members of the monetary policy board for their dedication to the conduct of monetary policy. i also thank your families for their unwavering support for your hard work here. as we embark on the year of the blue dragon, i wish all of you will soar like a dragon, achieving success in all your endeavors. last year proved to be a busy period in developing the best possible policies and measures in response to the rapidly changing conditions both domestically and internationally. going through a time of high tension, such as significant policy rate hikes by central banks in major economies to curb inflation, followed by the silicon valley bank incident in the u. s. and the israel - hamas conflict, we were never able to let down our guard for even a moment. amid these heightened external uncertainties, the bank of korea conducted monetary policy with the top priority on price stability, while closely monitoring financial stability risks. we kept our base rate at a restrictive level of 3. 5 %, and adopted market stabilization measures to respond actively to unrest in the financial and fx markets, such as the large deposit withdrawals from mg community credit cooperatives. fortunately, the korean economy has recently started to show positive signs, such as a recovery in growth driven by exports and a sustained slowdown in inflation. major international news agencies have also highly commended the stable trend of economic indicators in korea, including inflation and employment. all of this was made possible thanks to our fellow koreans, who, even in challenging conditions, shared the burden of hardships. this year, global economic growth will likely slow in the aftermath of the continued monetary tightening, and global inflation will continue to moderate. we are also confronted with significant uncertainties in our external conditions, such as the fragmentation of global trade, geopolitical risks surrounding the middle east and eastern europe, and the possibility of abrupt changes in the international landscape depending on election results in major countries. last year, the imf projected the global economic growth rate for the next
| 0.5 |
all the considerations we have faced would be captured by this model. concluding remarks by way of conclusion, there are a number of issues on which we need to evolve our thinking. i believe that the contributions to this conference have indeed succeeded in capturing the most important and relevant ones. see, for example, fischer, s. ( 1996 ), β why are central banks pursuing long - run price stability β, in achieving price stability, symposium sponsored by the federal reserve bank of kansas city, jackson hole, wyoming. a recent reference that has brought the problem to the fore once again is faust, j. and d. w. henderson ( 2004 ), β is inflation targeting bestpractice monetary policy? β, federal reserve bank of st. louis review 86 ( 4 ), 117 - 143. one of the most central from my point of view concerns, as i have indicated, the balance between inflation stability and output stability - both in terms of the most appropriate way to accommodate it in the practical policy and the best way to communicate it. although there is hardly any doubt that β we are all flexible inflation targeters now β, how can we progress as regards concretising this flexibility in action and communication? another interesting question is whether inflation targeting is better suited than other regimes when it comes to anchoring long - term inflation expectations. i have always thought so myself, but it is of course an issue that requires empirical investigation. one might also ask whether inflation targeting, even if it should have succeeded in anchoring long - term inflation expectations, can become better than it is today at facilitating the formation of expectations in the near and medium term? this relates to an issue that is addressed in several of the contributions, namely how we should best communicate our expectations and plans regarding the future conduct of policy. recently, a number of central banks have begun to depart from the assumption of an unchanged policy rate in their forecasts, choosing instead to work with paths for future interest rate developments. what kind of interest rate paths should we use in that case - β exogenous β paths based on implied forward rates or β endogenous β paths that reflect the central bank β s own expectations and plans, and what are the advantages and disadvantages of both options? and could, for example, an excessive degree of openness and detail as regards the central bank β s own expectations risk increasing market volatility instead of facilitating economic agents β planning? these are just a handful of the issues that are
|
to warrant β tough talk β. whether it was a wise strategy to begin in this way with a one - sided focus on inflation is perhaps open to question. one could argue that it would have been better to choose a more balanced line from the outset. it might then have been possible to counteract some of the criticism levelled at the riksbank for supposedly β focusing exclusively on inflation and completely disregarding employment β. from the mid - 1990s and onwards, though, the riksbank tried in various ways to clarify that we were not focusing solely on stabilising inflation. i believe it is correct to say that the implementation of policy also began to become more flexible around that time. one of the examples of this is the fact that we did not utilise the scope for rate cuts that - according to a stricter interpretation - deregulation and other supply factors had created during the last few years of the 1990s. the clearest example of how we attempted to convey that our inflation targeting policy was flexible rather than strict was the clarification of monetary policy that the executive board published in 1999. in that, we explained that it may be appropriate in some situations - e. g. in the event of large shocks and deviations from target - to refrain from bringing inflation back to target too quickly in order to mitigate the adverse consequences for output and employment. 1 we expressed this in terms of there being reasons to occasionally depart from our simple policy rule - that the repo rate is normally raised if inflation one to two years ahead is forecast to be above 2 per cent, and vice versa if inflation is forecast to undershoot the target. explicit framework as basis the strategy that we in sweden have chosen for dealing with the β flexibility problem β could, in simplified terms, be described as that we, when we have found it necessary, have in various ways modified and adapted a framework - mainly represented by an explicit symmetric target, regular publication of detailed decision - support data including forecasts, and a simple policy rule for how the repo rate is normally adjusted against the background of the forecasts. this is probably the key reason why the flexibility on our part can chiefly be said to be reflected in β exceptions β to the policy rule, rather than it being explicitly described in terms of a continual procedure of balancing concerns for output and inflation stability. i do not think this way of handling the flexibility issue is in any way unique to sweden but instead is fairly typical. one of our
| 1 |
top exporter. [ 13 ] and recent research indicates there is a significant correlation between a country β s trade with china and its holdings of renminbi as reserves. [ 14 ] new trade patterns may also lead to new alliances. one study finds that alliances can increase the share of a currency in the partner β s reserve holdings by roughly 30 percentage points. all this could create an opportunity for certain countries seeking to reduce their dependency on western payment systems and currency frameworks β be that for reasons of political preference, financial dependencies, or because of the use of financial sanctions in the past decade. anecdotal evidence, including official statements, suggests that some countries intend to increase their use of alternatives to major traditional currencies for invoicing international trade, such as the chinese renminbi or the indian rupee. [ 17 ] we are also seeing increased accumulation of gold as an alternative reserve asset, possibly driven by countries with closer geopolitical ties to china and russia. there are also attempts to create alternatives to swift. since 2014, russia has developed such a system for domestic and cross - border use, with over 50 banks across a dozen countries using it last year. and since 2015 china has established its own system to clear payments in renminbi. these developments do not point to any imminent loss of dominance for the us dollar or the euro. so far, the data do not show substantial changes in the use of international currencies. but they do suggest that international currency status should no longer be taken for granted. policy frameworks for a fragmenting world how should central banks respond to these twin challenges? we have clear examples of what not to do when faced with a sudden increase in volatility. in the 1970s, central banks faced upheaval in the geopolitical environment as opec became more assertive and energy prices that had been stable for decades ballooned. they failed to provide an anchor of monetary stability and inflation expectations de - anchored β a mistake that should never be repeated for as long as central banks are independent and have clear price stability mandates. so, if faced with persistent supply shocks, independent central banks can and will go ahead with ensuring price stability. but this can be achieved at a lower cost if other policies are cooperative and help replenish supply capacity. for example, if fiscal and structural policies focus on removing supply constraints created by the new geopolitics β such as securing resilient supply chains or diversifying energy production
|
starting domestic demand, by contributing to upholding household disposable income and to improving confidence. among the domestic spending components, mention should be made of household consumption ( underpinned by improved disposable income and by recourse to saving ), the sustained increase in business investment ( driven by brighter final demand prospects ) and the culmination of the sharp adjustment of residential investment, where there are signs of stabilisation. for the first time in the last six years, close - to - zero or slightly positive rates can be observed in the aggregate real estate price indices. lending figures remain in a contractionary phase, in parallel with private - sector deleveraging. but, on the data available, this process is proving compatible with a shift in credit flows towards companies with better output and export prospects and in a sounder financial position. foreign trade flows have undergone quite sharp changes in 2014, brought on by the loss of momentum in our export markets ( most particularly in specific emerging economies and in the eu ) and the acceleration in imports as the recovery took root. as a result, the net contribution of the external sector to gdp has diminished and the pace of adjustment of the external imbalance has slowed. while some of these developments are conceivably temporary, the high cyclical sensitivity of our imports alerts to the need to broaden our export base and to continue increasing the presence of spanish companies in markets with greater growth potential. it is also an indicator of the problems our competitiveness poses not only for exports but also, domestically, with regard to imports. on a par with other euro area countries, spain β s inflation rate is trending extremely moderately. in the summer months the year - on - year rate of change in the cpi turned negative ( - 0. 2 % in september ) owing to the influence of temporary factors that affected the prices of unprocessed food and energy products, following marked increases in 2013. that said, core inflation has posted practically zero growth since the start of the year, suggesting there are other, more persistent factors making for a greater sensitivity of costs and prices to the need for the economy to adjust. at the end of the year the inflation rate is expected to return to positive β though very low β values. fiscal policy such is the macro - financial setting in which the state and social security budget for 2015 has been drafted. the scenario is more favourable than in previous years, which should help us to continue the fiscal consolidation process
| 0 |
gses. our special lending programs have also been set up to minimize our credit risk. the largest program, the commercial paper funding facility, accepts only the most highly rated paper. it also charges borrowers a premium, which is set aside against possible losses. and the talf, the facility that will lend against securities backed by consumer and small business loans, is a joint federal reserve - treasury program, as i mentioned, and capital provided by the treasury will help insulate the federal reserve from credit losses. the transactions we undertook to prevent the systemically destabilizing failures of bear stearns and aig, which, as i noted, make up about 5 percent of our balance sheet, carry more risk than our traditional activities. but we intend, over time, to sell the assets acquired in those transactions in a way that maximizes the return to taxpayers, and we expect to recover the credit we have extended. moreover, in assessing the financial risks of those transactions, once again one must also consider the very grave risks our nation would have incurred had public policy makers not acted in those instances. finally, i should remind you that all the federal reserve's assets pay interest, and the expansion of our balance sheet thereby implies increased interest income, income that will accrue to the benefit of the federal budget. from the point of view of the federal government, the federal reserve's activities do not imply greater expenditure or indebtedness. to the contrary, the federal reserve's interest earnings have always been, and will continue to be, a significant source of income for the treasury. on the second question, transparency, i firmly believe that central banks should provide as much information as possible, both for reasons of democratic accountability and because many of our policies are likely to be more effective if they are well understood by the markets and the public. during my time at the federal reserve, the fomc has taken important steps to increase the transparency of monetary policy, such as moving up the publication of the minutes of policy meetings and adopting the practice of providing projections of the evolution of the economy at longer horizons and four times per year rather than twice. later today, with the release of the minutes of the most recent fomc meeting, we will be making an additional significant enhancement in federal reserve communications : to supplement the current economic projections by governors and reserve bank presidents for the next three years, we will also publish their projections of the longer - term values ( at a horizon of
|
is expected to reach around 2 percent toward the latter half of the projection period of fiscal 2013 β 15. 4 personally, i am aware of the possibility that it may take some time to achieve the 2 percent target, since the duration depends crucially on β the pace of improvement in the employment and income situation in japan. β moreover, it is possible that it may take even longer to achieve a situation where the 2 percent target is maintained in a stable manner, considering the duration required to judge whether the condition described as β in a stable manner β is met. during this period, support from monetary policy is likely to be necessary. bear in mind here that the bank adopted the 2 percent target in january 2013, assuming that such an inflation rate should be sustainable. 5 hence, the bank β s decisions on the necessity and measures of future monetary easing should be judged in line with the objective to pursue a society with 2 percent price increase in a stable manner. why is the bank β s forward guidance so different from that of the federal reserve? the form of forward guidance adopted by the bank differs from that of the federal reserve on several fronts ( chart 4 ). first, the federal reserve applies forward guidance to its primary short - term policy interest rate ( the overnight federal funds rate ) and provides guidance to the the consumption tax rate in japan is scheduled to increase from 5 percent to 8 percent in april 2014 and further to 10 percent in october 2015. the hikes are expected to raise cpi - based inflation by about 2 percentage points for fiscal 2014 and by 0. 7 percentage point for fiscal 2015, respectively. when assessing the inflation rate, the bank disregards the effects of these increases as they are temporary. the joint statement of the government and the bank of japan on overcoming deflation and achieving sustainable economic growth, released in january 2013, stated, β the bank recognizes that the inflation rate consistent with price stability on a sustainable basis will rise as efforts by a wide range of entities toward strengthening competitiveness and growth potential of japan β s economy make progress. β based on this recognition, the bank set the 2 percent target. bis central bankers β speeches markets and the public about how long it expects to keep the current exceptionally low level. in other words, the federal reserve attempts to exert downward pressure on longer - term interest rates by influencing expectations of the markets and the public regarding the continuation of the current low level of short - term interest rates over an extended period of time. asset purchases are regarded as
| 0 |
and growth pact. this means establishing stricter and more binding rules for fiscal policy, backed up by stronger sanctions or mechanisms to ensure compliance with the rules. at the same time, the effectiveness of budgetary institutions needs to be improved at the national level. in this context, effective rules on expenditure should be regarded as a means of promoting fiscal discipline and limiting fiscal vulnerabilities in the event of adverse economic shocks occurring in the future. iii. ( b ) promoting sustainable growth and job creation euro area countries also need to increase their efforts to strengthen their growth potential and their ability to create jobs in a sustainable manner. european countries have made reasonable progress over the past ten years in the area of employment. indeed, over 14 million jobs were created in the euro zone since the introduction of the euro, far more than in the previous ten years ( around 8 million ). the employment increase in the euro area since 1999 was even significantly larger than in the united states ( 7. 6 million ). this is an important achievement, but it remains insufficient, especially against the background of the massive employment destruction observed in some euro area countries during the crisis. unemployment rates have reached unacceptably high double - digit rates in some countries and segments of the population ( i. e. the young workers ), that, as a result, carry extremely large economic and social costs. this is socially unfair and economically inefficient. european countries must made more efforts to resolutely pursue β and with far greater urgency than in the past β the necessary structural reforms in product markets, labour markets, pension systems and so on. in this respect, a key contribution to the strengthening of the euro area β s long - term economic prospects will come from the thorough implementation of the europe 2020 strategy, with its focus on key areas such as : ( i ) education, research and innovation ; ( ii ) resource efficiency ; and ( iii ) high levels of employment and social cohesion. iii. ( c ) enhancing the crisis management framework in response to the sovereign debt crisis, the euro area has recently armed itself with an important tool to safeguard area - wide financial stability. at the european council meeting of 24 and 25 march 2011 the heads of state or government of the eu agreed to establish a permanent european stability mechanism ( esm ) based on the existing temporary european financial stability facility ( which will remain in place until june 2013 ). the esm will grant financial assistance to countries in distress in the form of
|
as β goldilocks β economies, with this term meaning their supposed ability to grow on a sustained basis at a rate that was neither too high to generate inflation nor to low to cause unemployment. the trust in the ability of our financial markets and economies to smoothly overcome any disturbances came to an end in the summer of 2007, when the financial β turmoil β began. after the collapse of lehman brothers in october 2008, the turmoil mutated into a full - blown financial β crisis β and many market segments seized up. the β great moderation β gave way to the β great recession β, characterised by a massive fall in industrial output and trade. bis central bankers β speeches policy interventions were made by central banks and other public authorities to restore and secure the orderly functioning of markets and economies. i like to think of the interventions by public authorities as β lines of defence β against the crisis. they proved successful in guaranteeing those authorities β ability to continue delivering macroeconomic and financial stability against the crisis. let me recall briefly the three main lines of defence : central banks increased their provision of liquidity and financial intermediation services ; monetary and fiscal authorities adjusted their policies in order to mitigate the macroeconomic impact of the crisis ; and governments implemented a variety of measures in support of the financial sector. the government measures adopted in response to the economic crisis β both those related to fiscal policy and those in support of the banking sector β did not come cheap. this is true not only in the euro area, but β more generally β in all advanced economies. together with the impact on government budgets of the massive economic contraction recorded during the crisis, they led to a significant deterioration in the public finances of a number of economies in the euro area. the deterioration was particularly significant in countries in which : ( 1 ) pre - crisis growth had been of an unsustainable and unbalanced nature β typically as a result of an over - reliance on the expansion of private credit and the contributions of housing - related sectors ( notably construction and housing finance ) β and ( 2 ) in which governments had failed to take advantage of favourable developments in the years of booming growth in order to consolidate their public finances. over time, concerns about the size of government deficits and soaring debt - to - gdp ratios β combined with uncertainty about the ability of governments to design and implement consolidation plans in the context of reduced potential growth and massive implicit liabilities towards the financial sector β developed into uncertainty about the sustainability of government debt. although
| 1 |
the twin peaks model. this model separates the two functions of financial supervision : i. supervision of financial institutions β risk management ( prudential supervision ) ; ii. supervision of conduct of business, covering such subjects as transparency and full disclosure by institutions, fair relations between them and their customers, and consumer protection. in the netherlands, the supervision of financial institutions β risk management is the responsibility of the central bank, while supervision of business conduct is performed by a separate authority. another model is the irish one, where the central bank supervises both financial institutions β risk management and their business conduct. in australia, in contrast, the central bank is not responsible for either supervision of risk management by financial institutions or their business conduct. if the bank of israel is given the responsibility for the supervision of financial institutions, it would be advisable to adopt the functional supervision approach, in other words, to separate the two supervisory functions β the supervision of financial institutions β risk management and the supervision of their business conduct. later, after some years β experience, the situation can be reviewed, and the question considered of whether supervision of business conduct should be transferred from the bank of israel to a new authority that would be established specifically for that purpose. to conclude : financial supervision is one of the most important issues affecting the functioning and development of the financial markets and the economy as a whole. in israel the issue assumed even greater import with the implementation of the recommendations of the bachar committee, and at this time it has come to the fore again in light of the implications of the global financial crisis. after examining the question very closely, and taking into consideration the conclusions being drawn in the major financial institutions around the world, we recommend that the supervision of banks be merged with the supervision of insurance, provident funds and pension funds, within the bank of israel. it is advisable to switch then to the functional supervision approach, i. e., to distinguish between the supervision of risk management in financial institutions and supervision of their business conduct. at a later stage, after some years, we can examine the question of whether the supervision of business conduct should be transferred from the bank of israel to another authority.
|
, reflecting in part efforts to stimulate domestic demand, that has been offset by a widening in the surplus of the major oil producers as increased revenues resulting from high oil prices are largely saved rather than spent. while one might expect the chinese economy to continue to rebalance towards greater reliance on domestic demand and lower savings, that process is likely to take many years to play out, so an early reversal of that factor holding down yields seems unlikely. another possibility is a shortage of high - quality safe assets, 10 with countries like china accumulating reserves particularly in the form of us treasuries. that in turn will also have increased the demand for substitutes, including the government debt of other advanced economies. but recent events in the euro area have highlighted the fact that the debt of for instance, if an employer is putting aside an additional 15 % of the wage bill to cover accumulating pension liabilities and the price of buying a given stream of future income rises by 20 %, then he would now need to put aside an additional 3 % of the wage bill to meet those obligations. see ben bernanke ( 2005 ), β the global saving glut and the us current account deficit β, sandridge lecture, virginia association of economics, richmond, virginia, 10 march. see ricardo caballero, emmanuel farhi and pierre - olivier gourinchas ( 2008 ), β an equilibrium model of global imbalances and low interest rates β, american economic review, pp. 358 β 393. bis central bankers β speeches some sovereigns is not as safe as market participants thought. that has led to increased demand for the debt of those sovereigns that are still regarded as safe, including that of the united kingdom. how long such a β safe - haven discount β persists depends not only on what happens in this country but also what happens abroad : the demand for one country β s bonds as a safe haven depends in part on how risky those of other countries are thought to be. since the financial crisis and subsequent recession, another factor likely to have contributed to depressing yields is the sharp decline in investment, prompted by the deterioration in the outlook and heightened uncertainty. to date the recovery has been painfully slow, with negligible growth in the united kingdom over the past year and a half. and though there is some variation in the pace of recovery across countries, in general growth has been weaker than after a normal cyclical downturn. in part that reflects the fact
| 0 |
cipsea and other statutes. and allocating resources to better measure the most dynamic parts of the economy will help us get the most bang per buck in economic statistics by enhancing our ability to spot trends and improve forecasts of the direction of the economy. policymakers, businesses, and average americans are able to make better decisions with economic statistics that reflect the latest innovations in the economy. achieving an innovation - sensitive statistical system can be fostered by removing legislative barriers that impose costs on the system with no ( or little ) benefit. also, statistical agencies need to be nimble at recognizing and responding promptly to emerging trends in the structure of the economy. one way of achieving nimbleness is by getting feedback from users in government, in the academy and in business. the federal economic statistics advisory committee and the bea advisory committee are good examples of statistical agencies trying to increase the amount of feedback they receive. and organizations like the national association for business economics can communicate more widely the importance of innovative statistics for a dynamic economy. together we can try to fix the speedometer and clear the fog from the windshield to improve both public and private decisionmaking. carol corrado, charles hulten, and daniel sichel ( 2006 ), " intangible capital and economic growth ", nber working paper series 11948 ( cambridge, mass. : national bureau of economic research, january ). randall s. kroszner ( 2002 ), " bureau of economic analysis'strategic plan for 2001 - 2005 : comments " ( 636 kb pdf ), survey of current business ( may ), pp. 10 - 11. for example, robert c. feenstra and matthew d. shapiro, eds. ( 2003 ), scanner data and price indexes, studies in income and wealth, vol. 64 ( chicago : university of chicago press ) ; and erik hurst and mark aguiar ( 2005 ), " lifecycle prices and production ", nber working paper series 11601 ( cambridge, mass. : national bureau of economic research, september ).
|
board found that, according to the bls in 1997, 1. 1 million workers were employed in the industry category known as management of companies, whereas the census bureau tallied employment at 2. 6 million for that year! 5 in other industries, the differences in 1997, though not as large, still are dramatic. in the oil and gas extraction industry, the employment counts differ by more than 30 percent. in the computer and electronic product manufacturing industry, the bls and census counts differ by more than 12 percent, and so on. the reason the two business registers have not been harmonized is that current law prevents the bls from having the same access as the census bureau to business identifiers on tax forms. removing this barrier to sharing such data for statistical purposes would have significant payoffs. sharing of business registers would help provide for more accurate measures of industry output, compensation, and productivity trends. it would permit the statistical agencies to keep abreast of our dynamic economy by producing statistical samples that are consistently adjusted for the entry and exit of new businesses in a timely manner, and it would allow the agencies to correct errors quickly and efficiently. this is especially important for fast - growing and innovative industries such as information technology. such improvements would improve our ability to perceive emerging trends in the economy and more accurately forecast economic activity. the bea, the statistical agency responsible for estimating gdp and the other components of the national income and product accounts, cannot currently access information from business taxes. allowing the bea to obtain certain aggregate numbers from business tax returns for statistical purposes would let the bea significantly improve its estimates of the role of noncorporate businesses in the economy. this is important, in part, because many entrepreneurial start - up firms, which are a source of dynamism in the economy, begin their lives organized as sole proprietorships or partnerships - - that is, not as corporations. permitting the bea to use limited business tax information for statistical purposes could appreciably improve the measurement of this vibrant part of the economy and, once again, improve our ability to spot new trends and forecast economic activity. of course, in obtaining this information, the bea would continue to be subject to the strict confidentiality requirements and disclosure penalties embodied in cipsea. protecting data privacy is of utmost concern, and i would certainly not suggest changes that would compromise confidentiality. i now would like to turn to the second element i want to emphasize in improving the cost - benefit trade off for
| 1 |
reducing the federal funds rate. this means that we will need to allow our restrictive policy some further time to continue to do its work. i think we are in a good position to hold steady and closely watch how conditions evolve. i remain vigilant to the risks to achieving both components of our mandate. i believe that the current approach is a prudent way to manage those risks. evaluating risks is also fundamental to my other role as vice chair for supervision. in the same way that the public depends on monetary policy to support a healthy economy, the public also depends on a strong and stable financial system, so i would like a spend the remainder of my time discussing the prudential regulatory framework the fed uses to oversee banks and promote financial stability. conceptual framework underpinning our regulatory structure the prudential regulatory framework for the banking system is crucial to supporting an economy that works for everyone. as i have spoken about many times before, banks play a critical role in the economy in taking deposits and providing credit to households and businesses, but distress in the banking system can impose widespread costs on society. the government and taxpayers support the banking system through deposit insurance and other forms of government support. the system relies on banks having the capacity to remain resilient and continue lending to households and businesses through times of stress. - 3i will focus on three key components that underlie the resilience of the banking system : capital, liquidity, and resolution resources. each component plays a distinct role in fostering a safe and stable banking system by promoting the resilience of banks and limiting the impact of their distress or failure on the broader economy. the three elements work together : capital absorbs the impact of unanticipated losses ; liquidity enables a bank to meet funding withdrawals and provides time to right itself from a bout of stress ; and resolution resources facilitate an orderly wind down of a failing bank, which promotes financial stability and limits damage to the economy. capital is a core source of resilience, and common equity is the core of capital. common equity provides the greatest degree of loss absorbency, and it is the first line of defense against the risk of bank runs. sufficient capital makes a bank resilient both to cyclical economic downturns and unexpected shocks like we saw in march 2023. capital can absorb losses no matter the source, so it is an effective defense against a wide range of risks that banks face. we use different models to set capital
|
and the regulatory adjustments we are considering would ensure that all large banks maintain better liquidity risk management practices going forward. 9 they would also complement the capital requirements by improving banks β ability to respond to funding shocks. first, we are exploring a requirement that banks over a certain size maintain a minimum amount of readily available liquidity with a pool of reserves and pre - positioned collateral at the discount window, based on a fraction of their uninsured deposits. i have discussed the importance of prudent liquidity risk management in a number of previous speeches. see, for example, michael s. barr, β the importance of effective liquidity risk management β ( speech at the ecb forum on banking supervision, frankfurt, germany, december 1, 2023 ), https : / / www. federalreserve. gov / newsevents / speech / barr20231201a. htm. see also michael s. barr, β the intersection of monetary policy, market functioning, and liquidity risk management β ( speech at the 40th annual national association for business economics ( nabe ) economic policy conference, washington, dc, february 14, 2024 ), https : / / www. federalreserve. gov / newsevents / speech / barr20240214a. htm. the steps banks have taken include updating their contingency funding plans, reducing their reliance on htm assets for liquidity purposes, adjusting the composition of their high - quality liquid asset portfolios, and enhancing their ability to tap different sources of liquidity. - 9uninsured deposits often represent cash needed to meet near - term needs β like paying bills or making payroll β and we have seen depositors act quickly to withdraw these funds if their availability is in doubt. it is vital that uninsured depositors have confidence that their funds will be readily available, if needed, and this confidence would be enhanced by a requirement that large banks have readily available liquidity to meet requests for these deposits. incorporating the discount window into a readiness requirement would also reemphasize that supervisors and examiners view use of the discount window as appropriate and unexceptional under both normal and stressed market conditions. given the important role of the discount window, we β re also actively working to improve its functionality. as part of these efforts, we are seeking feedback from banks, and this feedback will help us to further prioritize operational improvements. second, we are considering a restriction
| 1 |
reluctant ( as indicated in my january 2011 speech ) to endorse further accumulation of indebtedness of the state in order to recapitalise the banks to insulate the financial system and the economy against tail risks. even if external insurance was not available, direct injection of the capital from external sources would have been a much better solution. however ( as has been seen again with the case of spain ) this was simply not on offer, limiting the possibility for decoupling the pressures of the banking system from those of the sovereign. global upward pressures have increased the amount of capital banks are expected to maintain as both market participants and regulators reassess the uncertainty and volatility surrounding bank asset valuations. and it β s not just a question of ratios : upgraded regulatory requirements will soon disallow some elements of what used to be counted as capital, placing further upward pressure. for ireland, the agreement with the troika requires irish guaranteed banks to hold sufficient capital not only to meet the crd ( international regulatory requirements ), but to have enough to absorb prospective losses over the period 2012 β 2014, based on the independent calculations of blackrock solutions, and the cost of selling - off non - core assets sufficient to bring the loan - to - deposit ratios of the banks back into a plausible range ( not more than 122Β½ % ), and to maintain the higher threshold of 10Β½ % capital ( even excluding elements of capital that are not regarded as β core tier 1 β ) in the base case scenario. this is what determined the additional capital requirements announced in march 2012. our assessment of the capital needs of the banks will evolve over the coming years. as i stressed here eighteen months ago, loan - loss projections following a big bust involve an irreducibly large element of uncertainty. at the central bank, we continue to research the determinants of loan losses. economic conditions ( including house prices ) facing the borrowing firms and households are not the only determinants. as we have been stressing in other fora, the effectiveness of the banks β engagement with their stressed borrowers, as well as the legislative and administrative framework for dealing with insolvency ( details of which are being announced by the government today ) are important factors. it should not be thought a paradox that a more engaged and holistic approach by banks, and a less rigid and costly insolvency framework can help reduce loan losses over time. meanwhile, given the final view of
|
β sets out three transparency practices which are critical to the setting of policy objectives. they are 1. clear specification of the processes for formulating and reporting monetary policy decisions ; 2. public availability of information on monetary policies ; 3. accountability and assurances of integrity by the central bank. this formal presentation of the bank β s annual operations and the publication of its audited accounts is in keeping with these requirements. the bank also proposes to set out a list of objectives at the beginning of each financial year as contained in its annual report which will guide its operations for the ensuing year. these objectives will be derived from the following : 1. the scope of the eccb agreement ; 2. the past decisions and directives of the council ; 3. an analysis of the economic policies of member governments ; 4. the perceived sentiments of the public ; 5. the independent research and analysis of the bank. arising from these reviews the five ( 5 ) major operational objectives of the bank have been identified as follows : 1. monetary stability as represented by the maintenance of the external and domestic value of the currency ; 2. financial stability as represented by the safety and soundness of the banking and financial system ; 3. the development of money and capital markets as represented by the creation of new currency union wide financial markets, products, and institutions ; 4. the regulation of money and credit to provide short, medium and long term finance at the appropriate prices, volumes and maturities ; 5. the active promotion of economic development through policy research and advocacy. a review of the year 2003 / 2004 shows that the total assets of the bank grew from ec $ 1, 617 billion in march 2003 to ec $ 1, 740 billion in march 2004 with foreign reserve assets moving from ec $ 1, 455 billion to ec $ 1, 576 over the same period. the currency backing was at 97. 65 % as at 31 march 2004, which represented 8. 6 months of imports of goods and services. currency in circulation increased from ec $ 478 million in march 2003 to ec $ 532 million in march 2004. the currency maintained its value at 2. 7 to the us dollar. the rate of inflation in the currency union averaged 1. 8 % during the year. the commercial banking system remained stable with total assets of ec $ 13, 889. 6 million as at the end of april 2004, total deposits of ec $ 11, 049. 1 million, and total loans of ec $ 7, 67
| 0 |
is well placed to tackle the emergence of national interests in supervision. it is therefore imperative that the structures and the processes of the ssm support a european perspective and interests. so, how does the ssm measure up in this respect? joint supervisory teams, led by the ecb, have been established for carrying out the day - to - day supervision of significant banks. they integrate the ecb and national authority staff into single supervisory units. it is fair to say that full harmonisation in the supervisory approach has not yet been reached, but significant progress can already be observed. going forward, the work on establishing clear principles and criteria to guide ssm supervisory decisions needs to be further prioritised. as regards the elimination of national biases in supervision, in my view, the functioning of the ssm so far points very clearly to this direction. in fact, in the current global banking environment, it may be better to aim for a level playing field internationally and enhance competition in the national market than look after the interests of domestic banks. frankly speaking, the elimination of the old habit of defending one β s β national champions β may turn out to be more challenging in the crisis resolution pillar of the banking union than in bank supervision. third, the preconditions for the ecb to be a world - class supervisor are in place. the ssm aims at adopting best supervisory practices to conduct high - quality supervision with no biases. the ssm, as a system, has the necessary skills and resources to live up to the high expectations placed upon it. it is a strong, independent and multicultural supervisor with the ability to attract highly skilled staff. the participating national authorities get all the information and take part in all supervisory decisions. particularly the smaller national supervisors benefit from the ssm, since on their own they would not be able to participate in all relevant work in an increasingly complex world. through the ssm, they stay up - to - date and can take part in regulatory developments at the global fora. i am convinced that the ssm will soon establish itself among the leading global banking regulators with high demand for its best practices. obviously, as with any new institution, getting up to full speed will take some time. among other things, the increased demand for skilled supervisors needs to be matched at the ssm area, and there are a number of practical issues related to day - to - day supervisory work, including language issues, yet to be fully ironed out. bis central
|
pentti hakkarainen : supervisory policies after the start of banking union β initial experiences and outlook for cesee countries speech by mr pentti hakkarainen, deputy governor of the bank of finland, at the ecb conference β cesee β old and new policy challenges β, frankfurt am main, 10 june 2015. * * * accompanying slides can be found on the bank of finland β s website : slides ( pdf ). it is a great pleasure for me to participate in this conference here at the ecb. and i β m particularly pleased to speak to you about the first experiences gained of the banking union, which is the most important step in the european integration since the introduction of euro. the recent crises have made it very clear that international, highly interconnected financial markets require a stronger institutional framework than what we have had in recent years. the key lesson we have learnt is that economic dislocations without proper arrangements to tackle troubled banks have devastating effects on the real economy, taxpayers and the whole society. and regaining growth proves to be painfully slow and long - lasting. in response, the eu leaders agreed in june 2012 on creating the banking union which consists of three main pillars : ( 1 ) the single supervisory mechanism and ( 2 ) the single resolution mechanism and ( 3 ) harmonized deposit protection systems. the focus of this session is on the first pillar, i. e. on the new arrangements for the conduct of supervisory policies and actions. the establishment of the ssm is not only a game - changer in the european financial market, but also very interesting and challenging from the perspective of the nordic banking sector. as a euro area country, finland automatically participates in the banking union. the finnish banking market is integrated both within the banking union and across the nordic area, with subsidiaries of large non - euro area banking groups playing an important role. our banks are strongly connected to the other nordic countries. we also have a highly concentrated banking market in european comparison. my views will be given with this background in mind, plus the fact that, some years ago, i have worked as a banker in the private sector myself. in my intervention, i would like to highlight three points particularly. first, we have gained a lot of information and valuable expertise. the comprehensive assessment, as a precursor for the start of the ssm supervision, was instrumental in many ways β not only in ensuring the health of the banks to be taken under direct ecb supervision, but also in providing
| 1 |
consolidation, as well as reforms, appear less urgent. i am thinking here of institutional reforms to make the euro area more stable. and this is precisely what i wish to talk briefly about today. 2 assessment of the italian referendum in this context, this must, of course, include an initial, provisional assessment of the implications of the italian referendum. as you know, a majority of italian voters rejected constitutional reform in yesterday β s referendum. 1 / 6 bis central bankers'speeches there is cause for concern that reforms in italy will stall once again. and this would be a troubling development, not just for italy. for years now, italy has been plagued by anaemic growth, very high government debt and piles of bad debt on banks β balance sheets. to quote the italian finance minister, a β no β would not the end of the world ; however, it is now all the more important for italy β s political class to send convincing signals that it is willing to tackle the root causes of its economic woes. 3 the institutional architecture of the monetary union and the need for reforms minister of state dr merk, you have invited us all to attend the award ceremony here at the prinz - carl palace, which houses the offices of bavaria β s prime minister and is regarded as one of munich β s most beautiful buildings. it is all the more noteworthy that this building β s architect, karl von fischer, was all of 21 years old and still a student when he received the commission to design this building. however, the patron, a french clergyman named pierre de salabert, found fischer β s blueprint too complex β and possibly too expensive β forcing the architect to scale back his design. what was built was the main section with a representative facade and a shortened wing branching off to the left. ladies and gentlemen, why am i telling you this story, which i β m sure you know already? well, the reason is that it somehow reminds me of the construction of european economic and monetary union. and i β m not saying that the architects of monetary union were novices. but it does appear that it was impossible to give the builders more comprehensive blueprints, which is why the monetary union was initially built with only one wing : the single currency. the second wing β a single fiscal and economic policy β was intentionally left out. this has left us with a single monetary policy in the euro area but largely autonomous national fiscal and economic policies. now, the architects were
|
joachim nagel : remarks at the " bell ringing ceremony " remarks by dr joachim nagel, president of the deutsche bundesbank, at the " bell ringing ceremony " to celebrate the european commission joining the european repo market at deutsche borse / eurex, frankfurt am main, 7 october 2024. * * * check against delivery ladies and gentlemen, it is a great pleasure to be here today to celebrate the european commission joining the european repo market at deutsche borse / eurex. this is a significant milestone, and i am happy to share this moment with all of you. the bundesbank will act as a general clearing member for the commission. having provided similar services to several other public entities for many years, the bundesbank brings experience to the table. with this robust track record, we are happy to provide our services to the commission. i can assure you that you are in good hands. eurex already supports a wide range of repo transactions and is a major player in europe's financial landscape. since 2021, the commission has been issuing bonds under the temporary nextgenerationeu programme, and this will continue until 2028. in total, bonds worth approximately β¬800 billion will ultimately be issued. the eu is therefore set to become an important player in the euro bond market for some time to come. the repo facility introduced today will significantly enhance liquidity in the secondary market for these bonds. ladies and gentlemen, today's event not only highlights the attractiveness of frankfurt as a financial hub, it also helps strengthen it further. this is particularly important as much investment will be needed in the areas of digitalisation and decarbonisation in the future. of course, bank loans will likely continue to play a vital role in financing these investments. but there is also substantial potential for more financing through capital markets. as many of you probably already know, i have long been an advocate of greater integration of european capital markets. i firmly believe that advancing the capital markets union is essential, particularly in the areas of securitisation, insolvency laws, and venture capital. a transparent and high - quality securitisation market would enable banks to transfer parts of their loan portfolios to the capital market. this would relieve their balance sheets and create scope for additional loans. an effective and harmonised insolvency regime would facilitate cross - border investment and the reallocation of scarce resources to innovative firms striving
| 0.5 |
years ago as we prepared our first estimates of loan loss. not fixed, to be sure, but on its way. if my hopes for the banking union are realised, and the pitfalls avoided, a recurrence in any part of the banking union of a disaster as great as these banks brought to ireland can surely be avoided. bis central bankers β speeches
|
##vernmentalism in finance, the union has firmly determined on greater centralisation as a foundation for the way forward. not only the commission, but the council, the parliament and the ecb have, through their presidents, called for a closer union including on fiscal and growth policies, as well as the banking union, all underpinned by a stronger political union. each of these dimensions calls for greater centralisation and therefore a relative reduction in the role of distributed decision making or, specifically, intergovernmentalism. but will it all work. how big are the potential benefits and can it all be made workable? bis central bankers β speeches to answer those questions would take me well beyond my competence. instead let me confine myself to some observations about the banking union and in particular the single supervisory mechanism. banking union as we work at breakneck speed to construct what is undoubtedly a most ambitious project, european banking union, it is good to stop from time to time and take stock of what we are hoping to achieve and what might stand in the way of success. as i have already pinned my flag to the mast as an enthusiastic supporter of banking union, i may be permitted to dwell a little longer on the pitfalls, with a view to exploring how we can best work around them. but let us start with the potential, and here i will list four hopes that i have for the project. first, i hope that it will go some distance to removing politics from the enforcement of bank supervision. second, i hope that it brings emotional detachment to the process of supervision. third, i hope that it manages to lever the diversity of supervisory experience and aptitude across europe to provide multiple cross - checks on bank soundness, while not limiting into straitjacket bank behaviour. fourth, i hope it is effective in breaking the link between sovereign and banks, not only to protect the sovereign but to allow banks to operate effectively and have access to european funding markets on a basis that is not subject to a sovereign risk - add on, but depends only on the bank β s own creditworthiness and standing. as to pitfalls, let me mention four here also. first, i hope that it doesn β t get bogged - down in overly complex layering of decision - making structures. second, i hope that the huge task of transferring knowledge to the centre and building new communications channels between national supervisors and the central team does not result in process overwhelming product in an interim period with the result
| 1 |
average ( 2005 β 2012 ) : philippines β 52. 2 ; malaysia β 144. 6 ; singapore β 290. 6 ; thailand β 123. 6 ; indonesia β 44. 3 ; taiwan ( prc ) β 118. 7 ; south korea β 84. 6. bis central bankers β speeches inflation would remain positive. these are wage rigidities and the upside risks from pending petitions for utility rate adjustments ( electricity ) and potential power shortages. given this scenario, what would the monetary response of the bsp be? our initial projections using lower oil prices show that inflation would still be within the target range for 2015, which is now lower at 2 β 4 percent compared to the previous year β s target of 3 β 5 percent. indications of easing inflationary pressures owing in part to the decline in international oil prices as well as signs of robust domestic economic growth allow the bsp some room to maintain its current monetary policy stance. even so, we do not pre - commit to a set course of action. as i have always said, the stance of monetary policy will remain data - dependent. one thing we keep in the back of our minds is that prices can reverse and often very quickly. if you have been in this market long enough β as i believe some in the audience have β you know that markets tend to get ahead of themselves. so, we continue to watch developments in the oil market carefully and how these affect inflation and growth dynamics, to see if there is any need to make adjustments in the stance of policy. while volatilities in oil prices have complicated the balance of growth prospects, there are the other underlying other risks that we see in the horizon. these include a bumpy growth path for china, delays in the needed structural reforms in the eu and japan, and geopolitical risks that could arise from a worsening of the situation in russia or the middle east β all of which can heighten financial market volatilities. can we remain steadfast in 2015? going back to the earlier question of whether we will be able to sustain our position of strength in 2015. let me share that, in the areas under the purview of the bsp, we believe we will be able to withstand headwinds in the global economy. and i have four reasons. one, our monetary policy is focused. while we are mindful of developments externally, we will always adjust policy in consideration of domestic demand and supply dynamics as reflected in our forecasted inflation path.
|
nestor a espenilla, jr : ensuring price stability through monetary policy presentation by mr nestor a espenilla, jr, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), during the forum of the economic journalists β association of the philippines ( ejap ), manila, 28 august 2018. * * * secretary of finance carlos dominguez iii, dbm secretary benjamin diokno, neda directorgeneral ernesto pernia, dotr secretary arthur tugade, dpwh secretary mark villar, esteemed guests, ladies and gentlemen, a pleasant morning to all of you. i would like to thank ejap president louella desiderio, the economic journalists β association of the philippines for inviting me to share the bangko sentral β s views on inflation, as well as our game plan to address it. in the first part, i will dissect the numbers to identify the real drivers of the recent spike in inflation. i will then explain the bsp β s inflation outlook, or how we expect the inflation environment to evolve over the next two years. casting inflation against this proper context helps put into sharper focus the policy measures needed to address the issue. i maintain that not only have the bsp β s monetary responses been timely and appropriate, but that tempering inflation and its side - effects will require the coordinated efforts of various government agencies as well. let me begin with the recent inflation numbers. in the first seven months of 2018, year - on - year headline inflation averaged 4. 5 percent, well above the government β s target range of 2 β 4 percent for the year. as this chart shows, supply - side factors are the main drivers of overall inflation. these include rising international oil prices, higher excise taxes, and weather disturbances that affected food supply. meanwhile, in this next chart, we see how supply - side forces drive inflation on a month - on - month basis, with factors such as the recent increase in jeepney fares and utility rates contributing to the july inflation print. there are two important points that i need to highlight in this chart. the first is that the inflation momentum is slowing down, as headline inflation has generally declined in month - on - month terms from 0. 9 percent in january 2018 to 0. 5 percent in july 2018. in particular, after spiking in the first quarter of 2018, the month - on - month changes for electricity
| 0.5 |
t know how the situation in the middle east will be resolved. so, we have made an assumption that the related uncertainties will dissipate in the second half of 2003. our projections for the global and canadian economies are based on this assumption. so, let me now turn to the canadian outlook. after growing significantly faster than potential during the first half of 2002, canada's economy slowed to a growth rate close to potential in the second half of the year. even with this slowdown, the level of demand has remained near capacity since the middle of last year. as we look forward, we foresee below - potential growth in the first half of the year. but we anticipate increased demand pressures in the second half of 2003 and into 2004, as global uncertainties diminish. however, with an appropriate reduction in the amount of monetary stimulus, we see the level of output remaining close to capacity during 2003 and into 2004. as i said earlier, recent inflation rates have come in somewhat higher than expected. this reflects certain one - off price increases, such as higher insurance premiums, but also some broadening of price pressures as a result of stronger demand. the one - off factors will hold the core rate of inflation well above the 2 per cent target in the first half of this year. in the second half and into 2004, we expect the core rate to ease, as the effect of the one - off factors diminishes and the removal of monetary stimulus keeps demand pressures in check. the outlook for total cpi inflation this year will continue to be importantly affected by developments in crude oil prices. with oil and gas prices where they are now, we could see cpi inflation rates between 4 and 4. 5 per cent in the first quarter. if oil and gas prices decline in the second half, as futures prices suggest they will, then total cpi inflation would move back down in line with core inflation. let's remember that the stance of monetary policy remains stimulative. to return inflation to the 2 per cent target over the medium term, we will need to remove some of the stimulus. in other words, we will need to raise interest rates. a number of elements will come into play in determining the pace at which we will reduce monetary stimulus. let me reiterate them. first, although much of the recent run - up in inflation was the result of special factors, we can't rule out the possibility that demand pressures are becoming more prominent
|
guy debelle : the global code of conduct for the foreign exchange market speech by mr guy debelle, assistant governor ( financial markets ) of the reserve bank of australia, at the fx week asia conference, singapore, 31 august 2016. * * * thank you for having me here today to talk about the global code of conduct for the foreign exchange market. as you may know, phase 1 of the code was launched in new york in late may. 1 today i will reiterate the motivation for the work we are doing on the global code, then update you on where we are at with the process and outline the way forward. why is the work going on? as i have stated on previous occasions, the foreign exchange ( fx ) industry is suffering from a lack of trust in its functioning. this lack of trust is evident both between participants in the market, but at least as importantly, between the public and the market. the market needs to move toward a more favourable and desirable location, and allow participants to have much greater confidence that the market is functioning appropriately. a well - functioning foreign exchange market is very much in the interest of all market participants. this clearly includes central banks, both in their own role as market participants but also as the exchange rate is an important channel of monetary policy transmission. in a globalised world, the foreign exchange market is one of the most vital parts of the financial plumbing. the global code sets out global principles of good practice in the foreign exchange market to provide a common set of guidance to the market, including in areas where there is a degree of uncertainty about what sort of practices are acceptable, and what are not. this should help to restore confidence and promote the effective functioning of the wholesale fx market. to that end, one of the guiding principles underpinning our work is that the code should promote a robust, fair, liquid, open, and transparent market. a diverse set of buyers and sellers, supported by resilient infrastructure, should be able to confidently and effectively transact at competitive prices that reflect available market information and in a manner that conforms to acceptable standards of behaviour. the work to develop the global code commenced in may last year, when the bank for international settlements ( bis ) governors commissioned a working group of the markets committee of the bis to facilitate the establishment of a single global code of conduct for the wholesale fx market and to come up with mechanisms to promote greater adherence to the code. 2 there are two important points worth highlighting :
| 0 |
and co - chaired by myself and the director - general of the independent commission against corruption to develop and coordinate the strategies, policies and actions to ensure the implementation of the recommended actions in the 2018 mutual evaluation report. the core group now has the mandate to ensure the sustainability and continuity of the aml / cft reforms and to take appropriate actions for any emerging aml / cft risks. i must here express my deep - felt gratitude to the eu global facility which has been instrumental in the process for mauritius to exit the fatf list. continuous support and assistance have been provided by the eu global facility since september 2019 when they came to mauritius to carry out a scoping mission for delivery of technical assistance, the objective of which was to help mauritius implement relevant actions with respect to aml / cft. in this respect, i would like to enumerate some of the specific fields where support was provided to mauritius : i. technical assistance to the gambling regulatory authority to implement the risk - based supervision framework, capacity building for staff and provision of outreach to the gambling sector ; ii. assisting mauritius in conducting the npo terrorist financing risk assessment, training of the npo regulators, the law enforcement agents, including the mauritius revenue authority ; iii. training on the requirements of beneficial ownership for the financial sector and banking sector and dnfbp supervisors. this includes the formulation of a specific guidance and supervisory manual on beneficial ownership for bank of mauritius β licensees and staff. these two documents provide more granular guidance for alignment with international standards on bo information ; and iv. coaching the mauritian authorities for reporting to fatf on the icrg action plan. this is indeed to mention just a few of the projects where we have collaborated. many others are in the pipeline also. ladies and gentlemen, given the exit of mauritius from the fatf list of countries under increased monitoring ahead of its timeline, the country is now being looked upon to provide assistance and sharing experience with other countries in the icrg process. in this regard, jordan and panama are among the first countries to have benefited from the experience of mauritius. this will not have been possible without the support of the eu global facility team. i am equally pleased to share that at the level of the bank of mauritius, we are in discussion with a number of other central banks across the african continent on the topic of aml / cft and will soon be starting sharing expertise and experience in this field. ladies and gentlemen, the exit from the
|
backing it. backed private token money would reduce the need for synchronisation, since assets and money would be available on the same platform. depending on the design, it could entail fewer governance challenges than with wholesale cbdc in helvetia iii, but fragmentation challenges would be the same. compared to wholesale cbdc and sight deposits, however, backed private token money is not a direct claim on the central bank, and thus requires a thorough analysis with regard to its regulatory treatment. our work so far on the three settlement approaches suggests that they are all technically and legally feasible. they do, however, have different operational, governance and risk implications and they might differ in their ability to deliver efficiency gains. it will therefore be important to carefully assess the respective benefits and risks of the approaches in order to decide on the best way forward. conclusion ladies and gentlemen, let me conclude. technological innovations such as tokenisation may help to make today's financial system more efficient. this raises the general question of how central banks should respond to tokenisation. as with any technological innovation, a central bank's actions must reflect its mandate. and these actions may depend on the relevance of tokenisation for its domestic financial market. if the tokenisation of assets becomes mainstream, settlement in central bank money will be crucial. this will allow central bank money to maintain its essential role as the anchor of the monetary system and to continue to serve as a safe means of payment. the snb is currently investigating three approaches to settling transactions with tokenised assets in order to understand and compare their respective risks and benefits. this will then put us in a position β should the need arise β to take an informed decision on the choice of one or perhaps multiple settlement approaches. 3 / 4 bis - central bankers'speeches given that the tokenisation of assets is still a niche phenomenon, central banks must address the question of whether and how they should engage at this stage. they can take a wait - andsee stance and only act if tokenisation is adopted at scale. alternatively, they can push ahead independently of market adoption and offer new approaches for the settlement of tokenised asset transactions at an early stage. or they can proceed stepwise to identify the optimal solutions for settling tokenised asset transactions together with market participants through experiments or pilots. the snb is pursuing the third option. through our helvetia iii pilot, we are contributing to the private sector's exploration of how tokenisation can improve the current financial system
| 0 |
savenaca narube : overview of fiji β s economy summary of a presentation by mr savenaca narube, governor of the reserve bank of fiji, to the 19th australia fiji business forum on the fiji economy, sunshine coast, australia, 9 october 2006. * * * 1. economic performance β’ economic growth has averaged around 2. 4 percent over the past 5 years and is expected to average around 2. 7 percent in the next 3 years. β’ investment performance has increased since 2001, with the momentum coming from the private sector. 2. what are our key challenges? β’ challenge 1 : underperforming resource based sectors β’ o gold production has performed poorly in spite of favourable international prices recorded in recent years o forestry showing signs of recovery in the medium term o fisheries sector has shown some growth but is still below potential o mitigating factors : a company restructure is underway at the vatukoula gold mine incentives are being offered by government for investment in agricultural production greater public - private partnership is being encouraged government is looking at ways to improve market access for these sectors value adding initiatives are also being promoted challenge 2 : sugar o sugar production is far below its potential with sugar exports performing poorly when compared to previous years o preferential pricing is gradually being withdrawn : o o 60 percent of fiji β s sugar is exported to the eu market eu preferential price will undergo a 36 percent reduction over a period of 4 years, beginning in 2006 expiring land leases also pose a challenge for the sector : around 2, 800 farm leases will expire by 2008 about 10, 300 farm leases will be expiring over the next 25 years mitigating factors : sugar reforms are underway with support from the indian government adb support through the alternative livelihoods programme is ensuring that those displaced by the reforms have assistance eu support has also been promised β’ β’ the multi - party system will facilitate the passage of land tenure legislation through parliament diversification within the industry to produce ethanol is also being considered challenge 3 : debt o increasing government debt is becoming an issue of sustainability o while, the higher fiscal deficits in the past worked well to raise economic growth, we now need to relook at our strategy to secure sustainability o mitigating factors : strategic development plan 2007 - 2011 has a strong commitment to lower deficits to around 2 percent in any year of the sdp plan period this is expected to help bring the level of government debt down to 49 percent of gdp by 2009 challenge
|
4 : balance of payments o strong demand is leading to an increase in imports o unfortunately, this is happening at a time when our exports are performing poorly o this is unsustainable given that it is leading to a widening trade gap o while a surplus from the services and transfers accounts are growing, the surplus generated is still insufficient to offset the trade gap o as a result, our current account imbalance is worsening, thus placing pressure on fiji β s balance of payments o mitigating factors : rbf has raised interest rates to quell the surge in consumption driven demand fiscal consolidation plans is a part of the sdp commitment this means that there will be greater policy coordination between monetary and fiscal policy government has successfully conducted an international bond issue national exports strategy has been developed in order to raise fiji β s exports alternative sources of energy are being pursued to reduce our dependence on fuel imports import substitution is being considered for relevant and viable areas 3. what are our key strengths? β’ strength 1 : low external debt o government external debt has been on a declining trend since 1999 and was around 3. 6 percent of gdp or 6. 8 percent of total government debt by 2005 o this declining trend in external debt has also led to lower debt servicing commitments over the years with debt servicing ratio at 0. 5 percent o international bond issue by government : β’ β’ β’ this was to finance government capital projects and avoid crowding out the private sector at a time when liquidity conditions are tight with very low external debt, there is much room for government to diversify its sources of borrowing externally requirement of us $ 150 million fiji received a ba2 rating by moodys and a bb rating by standard & poors β reflecting a stable outlook for the fiji economy results : 5 year tenure ; initial price guidance of 7. 25 percent was announced ; 10 times oversubscribed ( us $ 1. 4 billion ) ; finally priced with a coupon rate of 6. 875 percent to yield 7. 000 percent this very successful debut bond issue reflects confidence in the fiji economy strength 2 : low inflation o inflation in fiji has been low, averaging around 3 percent over the last 10 years o reasons for low inflation : fiji has a fixed exchange rate that serves as an anchor on prices wage demands are relatively modest good inflation management is practised by our major trading partners all of whom either explicitly or implicitly target inflation good supply conditions for local market produce strength 3 : robust tourism sector o the tourism industry is currently being touted as fiji
| 1 |
october 21, 2016 bank of japan new challenges for japan's labor market speech at the japan summit 2016 in tokyo haruhiko kuroda governor of the bank of japan introduction it is my great pleasure to have the opportunity today to speak at this japan summit 2016. today's summit brings to the fore the new challenges for japan's labor market in responding to advances in technological innovation, globalization, and demographic change. whether japan's economy will grow in the long - run depends on whether the country's labor market can successfully adapt to this changing environment. indeed, labor market reform is a vital part of the current government's policy agenda. as for the long - term economic outlook, given japan's aging population and low birth rate, an increase in labor force participation and a further rise in labor productivity are both essential if japan is to lift sustainable long - run growth, in other words, to raise its growth potential. today, i offer my own vision of the future for japan's labor market, and look at how it will strengthen the growth potential of our economy. feature of japan's labor market it - related developments and globalization have affected japan's labor market. the manufacturing industry, in particular, has seen existing jobs being replaced with machines and outsourcing to other countries, resulting in downward pressure on wages and lost job opportunities. however, there is a view that japan's labor market as a whole has not undergone drastic changes. our well - known system of life - time employment and seniority - based wages virtually continues to this day. this practice prevailed among japanese firms especially throughout the period of high economic growth. legal norms developed to support this system provided the firm foundations for the job security enjoyed in japan's labor market. with the japanese economy entering a period of stagnant growth in the second half of the 1990s, the economic situation underwent dramatic changes. nevertheless, despite shifts to the use of non - regular workers, the employment and wage system for regular workers remained virtually the same. indeed, the average number of working years at a specific firm is about 14 years for japanese male workers, the highest among advanced economies ; this compares, for example, with five years for those in the united states and nine years in the united kingdom. when looking at the evolution of wages over male workers'lifetimes, wages are seen to approximately double after 30 working years compared to when they first started working - - once again the highest such figure among advanced
|
economies. in addition, labor mobility in japan across firms and industries has been low, especially among regular workers who tend to stay at the same company or within the same industry throughout their careers. the gradual pace of change in the labor market may arise because how we work is closely related to other aspects of our way of life as well as social values and norms. i believe that the rapid socio - economic changes of recent years mentioned here at this summit will, however, bring a significant change to the japanese labor market over time. three challenges for japan's labor market it is my belief that labor markets should adapt to the changing economic environment in a flexible manner. in this sense, customs and institutions - - which have long structured japan's labor market - - must be transformed in order to boost our country's growth potential. although further discussion is needed on the nature of these transformations, today's summit has given us some insightful hints. from now on, i will refer to the three challenges for the labor market which i think are important. the first challenge is how our labor market will respond to further advances in technological innovation. it is often pointed out that recent technological innovations, namely in robots, ai, and big data, will encourage substitution between workers and machines. there are concerns that such substitution may extend into a broader range of fields than we have hitherto experienced - - even into fields previously believed to be " sacrosanct " and reserved exclusively for humans. however, history tells us that technological innovation generates economic prosperity in the long run. technological progress increases income and purchasing power, as well as demand for new goods and services ; furthermore, it creates new jobs. in this situation, we should ensure the smooth transition of labor to growing sectors with new jobs so as to reap the benefits of technological innovation. japan's labor market is, however, well known for its low labor mobility due to long - standing life - time employment practices. from now on, our labor market should embrace new practices that accommodate workers seeking transition from one job to another, with programs for re - training and a social safety net for the unemployed. the second challenge is how our labor market will change in the face of further globalization. since globalization often goes hand in hand with innovation, it will accelerate improvements in labor productivity. the next stage of globalization will entail both an increase in the number of japanese workers abroad and an influx of foreign workers coming to japan. indeed, government policy has
| 1 |
joseph o sanusi : small and medium enterprises in nigeria opening remarks by dr joseph o sanusi, governor of the central bank of nigeria, at the national summit on the small and medium industries equity investment scheme ( smieis ) held at the lagos chamber of commerce and industry auditorium, victoria island, lagos, 10 june 2003. * * * representative of the honourable minister of industry ; the president, lagos chamber of commerce and industry ; captains of industry ; eminent bankers ; members of the organized private sector ; entrepreneurs ; distinguished ladies and gentlemen. i am most delighted to join the president of the lagos chamber of commerce and industry in welcoming all dignitaries to this national summit on the small and medium industries equity investment scheme ( smieis ) and to make a few opening remarks. the establishment of smieis was informed by the lingering problems of the dearth of long - term funding and poor business management skills which have inhibited the realization of the potentials of the small and medium - scale industries as the engine of growth in the nigerian economy, despite the various schemes that had been initiated in the past to provide incentives for development of this sector. smieis is an innovation designed for our peculiar situation in the country. this initiative has recorded satisfactory progress so far within the short period of its existence. as at 31st may, 2003, a total of n14. 6 billion had been set aside by banks for equity investment under the scheme. however, despite the rapid accumulation of resources, only n4. 3 billion, or 29. 4 per cent of the fund had been invested so far. the reasons for this slow pace are not far - fetched. first, equity investment requires skill - sets which are quite different from what the banks are familiar with in credit appraisal and management. secondly, at the time the scheme took off in 2001, the necessary structures for the investing banks to effectively administer the scheme were not in place. however, it is encouraging to note that several applications are being processed by the securities and exchange commission ( sec ) for the registration of subsidiaries of banks as venture capital companies for the purpose of channeling investments under the scheme. thirdly, the dearth of attractive projects in which banks can invest, owing to poor record - keeping, poor managerial capability and lack of business packaging skills remains a limiting factor. fourthly, there was resistance from the entrepreneurs who were reluctant to dilute their shareholding. it took them time to accept the idea of patronizing equity
|
will surely succeed and realize its intended objective of making smes the engine of growth in this economy and a veritable tool for the development of indigenous technology, rapid industrialization, generation of employment for our teeming youths and the pivot for sustainable economic development in nigeria. distinguished ladies and gentlemen, it is now my honour and privilege to declare this national summit on smieis open. i thank you for your kind attention.
| 1 |
has been revised upwards. the risks surrounding the economic outlook for the euro area continue to be on the downside. geopolitical risks, as well as developments in emerging market economies and global financial markets, may have the potential to affect economic conditions negatively. other downside risks include weaker than expected domestic demand and insufficient implementation of structural reforms in euro area countries, as well as weaker export growth. according to eurostat β s flash estimate, euro area annual hicp inflation was 0. 5 % in may 2014, after 0. 7 % in april. this outcome was lower than expected. on the basis of the information available to us at today β s meeting, annual hicp inflation is expected to remain at bis central bankers β speeches low levels over the coming months, before increasing only gradually during 2015 and 2016, thereby underpinning the case for today β s decisions. meanwhile, inflation expectations for the euro area over the medium to long term continue to be firmly anchored in line with our aim of maintaining inflation rates below, but close to, 2 %. looking ahead, the governing council is strongly determined to safeguard this anchoring. our assessment has been supported by the june 2014 eurosystem staff macroeconomic projections for the euro area. they foresee annual hicp inflation at 0. 7 % in 2014, 1. 1 % in 2015 and 1. 4 % in 2016. in the last quarter of 2016, annual hicp inflation is projected to be 1. 5 %. in comparison with the march 2014 ecb staff macroeconomic projections, the projections for inflation for 2014, 2015 and 2016 have been revised downwards. it should be stressed that the projections are conditional on a number of technical assumptions, including exchange rates and oil prices, and that the uncertainty surrounding each projection increases with the length of the projection horizon. the governing council sees both upside and downside risks to the outlook for price developments as limited and broadly balanced over the medium term. in this context, we will closely monitor the possible repercussions of geopolitical risks and exchange rate developments. turning to the monetary analysis, data for april 2014 continue to point to subdued underlying growth in broad money ( m3 ). annual growth in m3 moderated further to 0. 8 % in april, from 1. 0 % in march. the growth of the narrow monetary aggregate m1 moderated to 5. 2 % in april, after 5. 6 % in march. in the recent past, the increase in the mfi net external
|
difficulties to issue unsecured bonds and thus can worsen their access to private sources of refinancing. the ecb β s measures during the financial crisis let me now turn to the concrete measures that the eurosystem has undertaken during the crisis. when rumours about some european banks β exposure to the us subprime market in august 2007 strongly affected money market interest rates and trading volumes within just a few hours, the ecb reacted by providing liquidity to the banking sector on a short - term basis β first overnight, then for slightly longer maturities. this served to ensure that solvent banks would obtain the liquidity that was disappearing from other sources. the first overnight provision of liquidity by the ecb of almost β¬ 100 billion was demand - driven and revealed the see allen, f, chui, m., and a. maddaloni, a., 2004. β financial systems in europe, the u. s. a. and asia. β oxford review of economic policy 20 ( 4 ) : 490 β 508. bis central bankers β speeches high uncertainty within the banking sector on the ability to obtain funding from private sources. in general, during the first year of the crisis, there was a high degree of uncertainty on individual exposures, but not yet a very strong perception of more severe problems in the banking sector as a whole. central bank liquidity provision thus aimed at stabilising interest rates, and ensured that temporary liquidity problems of banks would not create problems for bank solvency. the eurosystem was able to deal with these tensions by only slightly altering its operations under the standard operational framework. this was due to the fact that the number of counterparties to monetary policy operations has historically been very large in the euro area, and because the standard framework offers quite some flexibility. in a nutshell, during this first phase of the crisis, the eurosystem ( 1 ) more flexibly used its open market operations by changing the time - path of liquidity provision and employing fine - tuning operations, ( 2 ) lengthened the maturity structure of its open market operations ( for instance, operations with a maturity of six months were introduced, whereas the maximum length had been three months before the crisis ), and ( 3 ) coordinated with other central banks around the world to provide us dollar funding. 4 the failure of lehman brothers in september 2008 and the subsequent very severe financial market tensions led the eurosystem to adopt further measures. official interest rates were cut
| 0.5 |
##il its mandate, but sets also some limits. germany as the fourth largest shareholder and the bundesbank value the imf as a very important international financial institution. we will continue our attentiveness to imf policy and close cooperation. the bundesbank provides the subscription payments for germany β s quota increases, participates in the so - called β new arrangements to borrow β process and the financial transaction plan and stands ready for special drawing rights exchanges in the context of the voluntary trading arrangements. bis central bankers β speeches moreover, the bundesbank provided β under very specific circumstances β a very significant, temporary bilateral credit line in 2012, and prolonged it twice to its maximum maturity in november 2016. the bundesbank continues to stand ready to cooperate with the fund as needed and appropriate, in the context of a fair global burden sharing that involves all major shareholders. at this stage, we see the imf to be well equipped with resources. however, when the fund demonstrates a clear need for additional resources to pursue its mandate, the bundesbank will remain open minded for contributions. as indicated, the term in office of mr temmeyer has covered many interesting and challenging topics, and i would like to thank mr temmeyer for his dedication and excellent work. he will return to germany as the president of a regional office of the deutsche bundesbank in leipzig, which leaves me to say : β welcome home β. most of the issues mentioned fell also in the term of office of dr steffen meyer who served as alternate executive director since june 2011. it is my pleasure to welcome mr meyer as the new executive director for germany. his strong experience in the fund and before in the ministry of finance dealing with imf issues allows us to β change horses at full speed β at the helm of the german executive directors office. it is also my pleasure to welcome mr klaus merk as the new alternate executive director for germany. mr merk has lastly served as the head of the representative office of the bundesbank in tokyo and has used the last five months to familiarize himself more closely with imf matters. mr meyer, mr merk, let me wish both of you all the best and good luck for this quite challenging and responsible position. i look forward to a close and trusting cooperation. thank you for your attention. bis central bankers β speeches
|
from a home country perspective : first, how does each central bank ensure an adequate supply of cash to the economy? second, how important do central banks assess cash as being for the domestic economy? third, what role could cash carve out for itself in the digital era? what is striking here is that many of these countries have undergone similar developments and are facing comparable challenges with respect to their cash cycle. however, differences and national particularities are also visible in the book β not least across continents and cultures. what all g20 central banks have in common are the new challenges they will face as payments go increasingly digital. but each country's cash cycle is different, meaning that the question as to the future of money requires individual and country - specific responses. particular attention is devoted to this forward - looking perspective in the book's third part. through the interdisciplinary lens of economics, philosophy, sociology and psychology, thoughts on the role of cash as well as the money of tomorrow are raised and discussed in depth. one strong focus here is on the importance of digital forms of money, up to and including central bank digital currency. 4 conclusion ladies and gentlemen, 3 / 4 bis - central bankers'speeches in marking the 20th anniversary of the introduction of euro banknotes and coins, we wanted to take the opportunity not only to look back but also to cast our eyes to the future. this forward - looking perspective runs through the book like a common thread. who in the future can tell us what money is? of course, no definitive answers can be given in the midst of a process of economic and also potentially societal transition, triggered not least by the pandemic. be that as it may, one lesson from history contained in the book is that the basic idea of money endures : money needs to be readily available, generally accepted and, above all, stable in value. this is more important than ever in the current environment. money is based on trust. that is what underpins our money economy today and will do so tomorrow as well. thank you. 1 the book " the euro at 20 β the future of our money ", edited by johannes beermann, is published by penguin and available in bookshops now ( isbn 978 - 3328602743 ). 2 see https : / / www. frbsf. org / wp - content / uploads / sites / 7 / 2022 - findings - from - the - diary - of - consumer - payment
| 0.5 |
the fragility of nature, and which are the likely targets of policies aimed at restoring it. investments in such companies create transition risks, and make the financial sector part of the problem. but it is does not have to be this way. financial institutions are the enablers of economy activity. they have the power, through capital allocation, to guide financial flows away from activities that hurt nature. the question is : how can and will we make sure that we β the broad financial system, from public to private actors β become part of the solution? studies by the world bank, the central banks of the netherlands, france, malaysia and mexico and others, and the study by the network for greening the financial system β that is our partnership of 116 central banks and international organisations β recently concluded that biodiversity loss is a source of financial risks and could affect financial stability. creating awareness, that is step one. g p the second step is the need to understand the problem. several central banks and supervisors are working on quantifying the problem : measuring the value of natural capital, understanding its relation to economic growth, providing assessments of financial vulnerabilities and building scenarios to create a much needed perspective.. better disclosures are at the heart of those efforts. after all, information provided by corporate and financial institutions is a key ingredient for better analyses and decision - making. governments and standard setters have to take a leading role by implementing, improving and harmonising disclosure requirements. of equal importance are market - led initiatives like the work that is currently being done by the taskforce on nature - related disclosures ( tnfd ) these two steps represent what we excel at : collecting and interpreting data. but we have to make sure that our quest for better data does not result in delays. because it is time β high time β for the third step : to actually take action and use the data at our disposal, to change the way we do things, to restore the balance between nature and economy. as the nitrogen crisis and last year β s floods in the netherlands show, the loss of biodiversity is not merely a challenge for future generations. timely action is needed to ensure that we bend the curve in time. actions to stop the degradation of nature in the short term actions to move swiftly to an economy that helps to restore nature. this is why i am thrilled that the ngfs does not only acknowledge the relevance of naturerelated risks, but also established a taskforce to make sure these risks are
|
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
| 0 |
. why cigarettes, not milk or fruits? the answer is, it is hard to hold so many fruits in your pocket. also, fruits and milk are not standardized. what happened was that cigarettes emerged as the currency of choice in the camps. but then, many problems came out later. a smoker knows a bad cigarette from a good one. so, he will keep the good cigarettes and trade the bad ones. 1 / 3 bis - central bankers'speeches so, we expect that all these problems will happen as well to virtual currency. there are many competing ones, and even the ones that survive will have problems because of all these issues. the limits of decentralization : when should regulation step in? if the goal is to use them as stablecoins, clearly, that is banking. because then, you are taking money - taking deposits and guaranteeing deposits to support the currency. therefore, you should be treated like a bank and regulated like one. if you are issuing a stablecoin, maybe the requirement should be at least 50 percent of the assets that back it up should be very liquid assets. maybe you should have a reserve requirement. maybe you should have a liquidity coverage ratio, and so on and so forth. therefore, this avoids the very purpose of why these currencies were created to begin with. for them to be useful and safe, they have to be regulated. i think that this is the story of ftx [ failed cryptocurrency exchange ]. encouraging responsible and cautious innovation nonetheless, we should be open to new developments, especially [ in ] a country [ like ours ] that is dependent on remittances. therefore, we have to have an open mind. at the same time, as [ mbm ] eli [ remolona ] said, regulation should be a cautious one. we do not want to regulate without asking what the private players think and the role that they envision for virtual currencies. are they for remittances? are they for speculation? we are clearly, more likely to give [ virtual asset service provider ( vasp ) ] licenses to banks that already exist if, at all, there will be trading ; if they will be allowed to trade in these virtual currencies. by the way, if virtual currencies were to replace gold - if you believe google - the overall supply of gold is us $ 7. 5 trillion globally. if this can displace just
|
13 percent of gold, then, at the very least, the value of vas is us $ 1. 0 trillion. exactly which va will be worth us $ 1. 0 trillion, we actually do not know. the other question is one of consumer protection - the extent to which the government and the central bank must educate the public and say, " we are allowing this to happen, but these are very risky assets. you should not put in money that you really need for many important things. " ongoing dialogue between regulators and market players in this ese, we would like to be updated on the adoption and usage of vas in the philippines. what exactly is happening on the ground? what are they being used for? to what extent should regulation apply? 2 / 3 bis - central bankers'speeches right now, our view is [ that ] the moment vas meet fiat currency or deposits, clearly, you have to be regulated. exactly what the form of regulation will be is, of course, evolving. our view is one of caution. when did we freeze the issuance of vasps? about six months ago. our view is a cautious one, but regulation should be open to potentially good uses. therefore, if you ban it, then you are not in a position to move in that direction. we hope that we can gain some insights from our speakers. i hope that we can have a fruitful, balanced, and productive discussion ahead. as i already said, the central bank is open to it but very, very cautious. the more we learn, the more we can handle it better. thank you very much, and i hope that it will be a very good afternoon and [ an ] interesting discussion. 3 / 3 bis - central bankers'speeches
| 1 |
commitment to support socioeconomic progress and sustainable economic development in namibia. as the bank of namibia, we remain committed to leading with vision and integrity. we vow to serve and grow this jewel called namibia. 7. the good book states in proverbs 12 : 15 states that " he who is wise listens ". in this regard, i will keep my remarks today very brief as i know everyone in this auditorium today as well as those that have joined us online are eager to listen and tap from the well of wisdom of our head of state. therefore, without any delay, i would like to call upon his excellency the president, dr. hage geingob to share his thoughts with us. i thank you. 3 / 3 bis - central bankers'speeches
|
, it has played an important role in building a body of outstanding caribbean economics scholarship through on - going collaboration, primarily among the caricom central banks, the university of the west indies, the private sector and civil society organisations. it is no surprise, therefore, that this forum has contributed to and honed the economic acumen of some of the more prominent economists of our generation, including current governors of some of our central banks. indeed, i personally recall my first attendance at a regional monetary studies conference in 1981 where i first came face to face with some of the legends of this region. the contribution of stalwarts to this conference such as professor c. y. thomas, professor compton bourne, terrence farrell, delisle worrell, the late professor roland craigwell, shelton nicholls, to name but a few is worthy of emulation. it is my considered view that for young economists, the comments and encouragement provided by persons of this calibre served to strengthen, over time, the quality of research produced within the region. as policy makers, we recognise that focused, timely and relevant research is important for good policy - making. in the region, we continue to face many economic challenges in a global environment that is not always favourable. as we speak, there is uncertainty created by international developments such as the discussions on brexit, protectionism and threats of trade wars, the risks posed by geopolitical risks to oil prices and rising interest rates. at the same time, some of our economies, which have had to shift their economies from traditional primary products to services in an effort to facilitate growth and jobs and make them more resilient to economic and climatic shocks, now face the threats presented by the oecd initiative on base erosion profit sharing and the threats of eu blacklisting. at the domestic level, fiscal imbalances and high public sector indebtedness act as a brake on growth, raising the question of whether there is an optimal size to government in our economies. there are still constraints on the availability of finance for small enterprises and how can we improve the efficiency of the financial system to promote growth. at the regional level, we are not as advanced in the regional project as we would have wanted to be. these are but some of the challenges for which we require solutions. in this context therefore, while our research techniques have become more sophisticated through the use of the latest in econometric methods, we must not forget that the underlying
| 0 |
amando m tetangco, jr : bsp and sss β moving towards a common vision speech by mr amando m tetangco, jr, governor of the central bank of the philippines ( bangko sentral ng pilipinas ), at the sss anniversary celebration, quezon city, 1 september 2009. * * * social security commission chairman thelmo cunanan, sss president and ceo sec. romulo neri, former sss president and ceo corazon de la paz - bernardo, distinguished members of the social security commission, past and present, coa chairman rey villar, other officers and staff of sss, fellow workers in government, special guests, members of the press, ladies and gentlemen, good morning. it is a pleasure to be part of the 52nd anniversary celebration of the sss, the philippine institution that has 28 million members or nearly one - third of our country β s population! indeed, the sss is one of the most important institutions in our country : it is the institution that has been providing support and protection to millions of its members who face financial challenges from sickness, disability, death, maternity, and other contingencies for 52 years now. this tells us that sss has been faithful in fulfilling its responsibilities to its members and that, in turn, its members continue to trust sss with their hard - earned money. for this, the men and women of the sss, past and present, deserve our appreciation and a long - round of applause! let us also give a big hand to all the balikat ng bayan awardees who are the exceptional bank partners and top employers that help the sss achieve its objectives and provide good service to its members. palakpakan din po natin sila! ladies and gentlemen, the continuing stability and strength of the sss is important not only for its members and employees but also for the economy as a whole. among others, each time it extends benefits to its members, the sss, in effect, reminds them of the value of regularly setting aside part of one β s income for the rainy days. this is important as it is the accumulated savings of our people that enable our banks to sustain lending for economic activities that generate and keep jobs. in turn, the new additions to the labor force keep on expanding the membership base of the sss. banks are also important conduits for the collection of sss premiums as well as for the distribution of
|
made through pesonet more than doubled with volume surging by 264 percent year on year and value rising by 160 percent, over the same period. aside from aiding businesses in mobilizing funds during the pandemic, the pesonet was also used for social transfers made through the social security system β s small business wage subsidy ( sbws ) program. this shows that this facility is a viable and efficient means of distributing welfare benefits to indigent citizens. similarly, since its launch in april 2018, instapay exponentially grew, registering over 1 million percent increase in volume and over 700 thousand percent in value as of september 2020, with the volume rising to 30. 3 million from 1, 740 transactions and the value growing to php143. 2 billion from php 19. 1 billion. the performance of instapay from september 2019 to september 2020 was spectacular. it grew by 758 percent in volume, from 3. 5 million to 30. 3 million transactions, and 466 percent in value, from php25. 3 billion to php 143. 2 billion. based on the baseline survey, the banking system may grow by 3. 6 percent by end - december 2020. this expected growth, however, represents the top 20 banks across universal banks, thrift banks and rural and cooperative banks. we expect loans to the msme to soar. based on the bsp data, the philippine banking system continued to support the msmes during these difficult times. 3 / 7 bis central bankers'speeches in particular, the banking system β s new msme loans used for compliance with the reserve requirements have averaged php127. 5 billion as of the reserve week of 22 october 2020 from php9. 3 billion as of 30 april 2020. the loan quality remained satisfactory amid continued loan growth. the quality of the banking system β s loan portfolio remained satisfactory. the non - performing loan ( npl ) ratio was manageable at 3. 4 percent as of end - september 2020, slightly higher than the 2. 1 percent ratio as of end - september 2019. loan loss reserves have been generally increasing since the start of this year but inched down as of end - september 2020, resulting to a lower npl coverage ratio of 91. 7 percent. we expect the banking industry to book additional provisions as they continue to reassess the quality of the loan portfolio. the year - on - year growth of financial assets ( aside from loans ) sharply fell from 15. 2
| 0.5 |
hendar : indonesia β s recent economic and financial sector challenges remarks by mr hendar, deputy governor of bank indonesia, at the graduation of the stie indonesia banking school year 2015, jakarta, 14 november 2015. * * * honorable, β’ chairman of commissioners of financial services authority, dr. muliaman d, hadad ; β’ head of stie indonesia banking school ( ibs ), dr. subarjo joyosumarto ; β’ coordinator of kopertis wilayah iii, dr. ir. illah sailah ; β’ honorable faculty of stie ibs : o o o o o o drs. rachmat saleh prof. adrianus mooy dr. darmin nasution dr. kh. ( hc ) ma β ruf amin drs. binhadi prof. dr. h. djokosantoso moeljono ; β’ members of academic senate of stie ibs ; β’ founders of stie ibs : β’ managing director of lppi, dr. hartadi a. sarwono and the board of directors of lppi ; β’ chairman of yppi β mr. abdul aziz ; β’ the academic community of stie ibs, lecturers, and students ; β’ attendees and invitees, assalamualaikum wr. wb. 1. to start the remarks, please allow me to ask you all to praise and thank god the almighty, as only for his blessing we are able to gather here in the good atmosphere, attending and witnessing the graduation of stie indonesia banking school ( ibs ) year 2015. on behalf of the board of governor of bank indonesia and i personally, we would like to congratulate the graduates of stie ibs and the parents attending today β s graduation ceremony. 2. before i read the remarks of the governor of bank indonesia as the chairman of the board of curators, allow me to convey the governor of bank indonesia, bapak agus martowardojo β s apology for not being able to attend today β s graduation of stie ibs. since last thursday up to sunday, tomorrow, all members of the board of governors of bank indonesia have been and are in yogyakarta in a series of activities of the board seminar on regional financial and economic study and coordination between bank indonesia - central government - regional government in yogyakarta. such activities are a routine agenda since the beginning of 2015 as a part of bank indonesia
|
of indonesia economy. the various measures of policies are expected to create investment climate that increasingly conducive, which in turn can improve the outlook of the indonesia economy. 9. these several measures of policies have provided positive impacts, although not yet fully up to the expectation. the good news issued just last week, stating that fitch rating has given affirmation for indonesia sovereign rating with a stable outlook ( bbb - ). we should be grateful for that, it in the midst of global volatility that increases again. nevertheless, the pressure against rupiah is still not abating, although bank indonesia has done quite a lot in stabilizing the foreign exchange market. aware of the complexity of the challenge faced, we will continue what we are doing and strengthen policy coordination between institutions. confidence and positive perception 10. we are aware that it is not easy for us to go through the variety of challenges faced by the economy. however, we must remain optimistic, as history proves that we had good experiences in running the economic reformation. first, at the era pre the old order, indonesia has ever been recorded in the book of economics development written by benjamin higgins in 1963 as β the chronic drop out β and declared as the example of failure in managing economy. however, within 30 years, imf and the world bank declared that indonesia was one of the β asian miracle β, with a high and stable economic growth, a successful structural transformation, and a controlled inflation. 11. second, at the time of asia financial crisis in 1997, indonesia along with thailand and korea became the countries experiencing the worst impacts, so that it ended in political crisis and change of power. nonetheless, with the various reformation we conducted, in 2008 global financial crisis, indonesia together with china and india became the few countries surviving the vortex of the largest world economic crisis after the 1930 economic crisis, with economic growth above 4 %. 12. such experiences conveyed a message to us all that we can get through any tough challenge provided that we remain maintaining confidence and deliver positive perception that we have, are, and will conduct structural reformation. this requires synergy of indonesia incorporated, whether the government, central bank, ojk and the business world including the banking and financial sector. bis central bankers β speeches ladies and gentlemen, invitees and attendees, 13. in facing this challenge, in particular to face mea 2015, actors in the financial sector must prepare themselves well so as to have competitiveness and high professionalism in
| 1 |
##grade over time. for example, if we go back to our june 2023 projections, we expected average growth of 1. 5 % in 2024. now, we expect 0. 7 %. one driver of this delayed recovery has been sluggish export growth, driven by the competitive challenges facing euro area companies. but the most important driver of our growth forecast misses has been the domestic economy. in fact, around half of the misses since end - 2021 relate to investment and a quarter relate to consumption. the behaviour of investment can be attributed to a combination of factors, including the stronger - than - expected impact of higher interest rates, higher energy prices and structural deterrents. the inertia in consumption has been striking given that the conditions for a recovery are in place. employment is historically high and real incomes 4 / 7 bis - central bankers'speeches are rising. but households continue to save an unusually high share of their income and take a cautious approach to spending. one reason for this caution is that many households have a perception of their real income growth that is well below measured data. just 37 % of households in our consumer survey believe that their real income has risen or stayed the same, even though 50 % of all households have experienced actual increases. and these households have significantly lower consumption growth than those with correct perceptions. this pessimism about real incomes is largely driven by past inflation, and so in principle it should dissipate as the high - inflation episode moves further into the rearview mirror. 2 but increasing geopolitical uncertainty could create new dents in household sentiment. in particular, if the united states β our largest export market β takes a protectionist turn, growth in the euro area is likely to take a hit. our exporters also specialise in capital goods that other countries use for export production, which makes them particularly sensitive to shifts in confidence about world trade. the main upside risks we see in the future also relate to external shocks. a rise in geopolitical tensions could push energy prices and freight costs higher in the near term, while extreme weather events could drive up food prices. the net effect of trade fragmentation and tariffs on inflation remains uncertain, as it involves assumptions that are impossible to anticipate with precision. these include potential retaliatory actions as well as exchange rate and commodity price movements. implications for monetary policy so what does this changing environment mean for our monetary policy? there are three main implications. the first concerns our current policy stance and
|
be considered as a clear signal in favour of a more integrated europe. i should like to take the opportunity here to express my gratitude to the european citizens and all parties involved in the changeover for their efforts and their fruitful collaboration with the eurosystem over the years. just to flag some of the efforts made : by the end of 2001, more than 6. 5 billion euro banknotes worth some eur 133 billion and amounting to almost 50 % of national banknote circulation had been frontloaded. with regard to the euro coins, more than 37. 5 billion coins with a total value of around eur 12. 4 billion had been frontloaded. overall, citizens acquired more than 150 million coin starter kits. at the beginning of this week, around 8. 1 billion euro banknotes were in circulation, which is more than 90 % of the number of euro banknotes that had initially been estimated for the end of february 2002. in terms of value, this corresponds to approximately eur 209 billion, which is equivalent to 77 % of national banknotes circulation at the end of 2001. in total, the legacy currency banknotes in circulation declined in 2001 by eur 110 billion to eur 270 billion at the end of the year. since the beginning of 2002, this figure has come down by 51 % to eur 133 billion last monday. the euro progress ratio, which calculates the value of euro banknotes in circulation divided by the total value of euro and national banknotes in circulation, was 61 % on 21 january 2002, up from 33 % on 1 january 2002. given that, in terms of transactions, around 70 % of all banknotes are put into circulation via automated teller machines ( atms ), the quick adaptation of these machines was one of the key factors for a smooth changeover. in total, more than 200, 000 atms had to be converted. in virtually all euro area countries, 100 % of the atms were converted within less than one week. as a result, on average, 75 % of all cash transactions were already effected in euro after only one week. naturally, this figure varied from country to country and from sector to sector. on the whole, the euro banknotes and coins were introduced considerably faster than originally foreseen, not least because of the favourable attitude of and quick acceptance by european citizens. today, even though the technical adaptation of the vending machines has not yet been completed, the cash changeover can be considered
| 0.5 |
too early to declare victory. mas will remain vigilant to any signs of a resurgence of inflation. even as we remain vigilant on our current challenges, let us not ignore our longer - term imperatives. i will highlight two such imperatives for china and singapore : financial market connectivity and co - operation ; and green and transition financing. the cci financial summit has been a key platform for financial co - operation between chongqing and singapore. since its inception in 2015, the cci financial summit has connected more than 2000 policymakers and industry leaders from asean and china, to exchange ideas and to explore new areas for cooperation. to - date, the cci has facilitated 239 cross - border financing deals worth over us $ 29 billion. in 2022 alone, 27 financing deals worth about us $ 6 billion were concluded. the second imperative β green and transition financing β is a new dimension in financial co - operation between china and singapore as well as asean. many countries and corporates have made commitments to reach net - zero by 2050. financing is critical to support these efforts and facilitate the progressive decarbonisation of our economies. mckinsey has estimated that $ 9 trillion a year till 2050 is needed to achieve netzero. one - third of this amount is required in the asia - pacific. mas and the people's bank of china ( pbc ) have formed a china - singapore green finance taskforce. the taskforce will : facilitate public - private sector exchanges to better mobilise private capital for sustainable development needs ; and collaborate on standards, financing solutions, data collection, and technology enablers to enhance green investment opportunities in china and the asean region. the first session of the taskforce will be held tomorrow in chongqing. let me suggest four potential areas of co - operation between chongqing and singapore, leveraging on the work of the china - singapore green finance taskforce. first, we can work together to incubate pilots and test initiatives. 2 / 3 bis - central bankers'speeches chongqing has a green financial reform and innovation pilot zone. this could serve as a safe space for green finance initiatives to be piloted. as taskforce discussions progress, we can work closely with chongqing to assess suitable green projects for incubation. second, we can explore together how to develop a green financial market ecosystem. chongqing and singapore have been working with our financial institutions to raise awareness of green financing amongst chinese corporates. chinese corporates
|
number of complaints submitted to the banco de espana. as you will know, in recent years the problems related to mortgage loans have led to the change in the number of complaints lodged with the banco de espana. this is due in particular to two issues : the above - mentioned floor clauses and mortgage loan arrangement costs, which saw a record number of complaints submitted in 2017. however, mortgage loan complaints made last year fell to levels of a decade ago. we expect this trend to continue. but apart from one - off changes in the time series, i wish to emphasise the fact that the problems behind these complaints stem from operations entered into prior to the enactment of the law in question. in short, i expect the law on real estate lending, along with the new bank culture in respect of customer relations, to provide for an appropriate framework for the development of the mortgage market. it may thus cast off once and for all the legal uncertainty that has been trailing it. i would like to refer to an essential aspect the law addresses : the obligation to evaluate in depth the solvency of the potential borrower, surety or guarantor before entering into a loan agreement. as you may well imagine, i fully share the caveats set out in the regulations. we must never forget that the essential element for consideration in granting a loan is not the value of the collateral, but the ability of the borrower to pay. evidently, when analysis prior to the granting of the exposure is based excessively on the value of the collateral put up, there is no effective, practical restriction on the continuous growth of the loan, at least while the collateral value also continues to rise. the incentive to ease appraisal stringency is greatest when the appraisal value is practically the only parameter justifying the granting of the loan. the law also makes it very clear that the value of the collateral should not be the fundamental factor when it comes to granting financing. this is a factor of protection for the customer since it places all responsibility for analysing ability to pay on the bank. in this respect, the financial crisis painfully reminded us that the worst business that can be done is to extend a mortgage loan to somebody who has little possibility of meeting the payment obligations. it is bad business for the bank, but also for the customer and for society as a whole. particular care is unquestionably needed in granting new loans. but we must assume that, inevitably, the application of strict standards, as the law
| 0 |
, a non - risk based measure β the leverage ratio β has been introduced. on the liquidity framework, two key ratios have been put in place to enhance liquidity buffers in short and longer - term horizons, with the aim of reducing funding vulnerabilities and increase overall resilience to liquidity drains. here, we should bear in mind that, to a large extent, underlying the new regulatory framework is a better understanding of the concept and measurement of systemic risk, reflected in relatively simple and operational measures to address it. the aim is to have better regulation as a result of the combination of micro - prudential and macro - prudential perspectives, rather than more regulation per se. without pretending to be exhaustive, let me just refer to private sector initiatives which will also contribute to the overall soundness of the financial system. these comprise initiatives in the area of financial market infrastructure, such as the establishment of central counterparties for over - the - counter ( otc ) derivatives clearance. sound market infrastructures with appropriate risk management frameworks should mitigate counterparty risk and contribute to restoring trust in the financial system in the years ahead. the role of the financial sector in constructing a more stable financial system is also critical with respect to disclosure. more disclosure in firms β financial reporting and better quality of publicly available firm - level data should enable a better assessment of counterparty risk and for contagion via direct and indirect channels. for macro - prudential analysis, enhanced disclosure will allow a better understanding and measurement of where systemic risk might be via the construction of more accurate indicators of aggregate leverage, correlation and concentration of exposures to specific asset classes and of a firm β s level of interconnectedness, for example. furthermore, for financial market players, better quality of information on a counterparty β s financial condition should also contribute to enhancing in - house stress testing and strengthen firms β risk management systems. this could enable financial institutions to improve their forward - looking capacity in decision - making, resulting in them taking corrective measures with sufficient lead time and being more resilient to market tensions should they arise. concluding remarks the financial sector has an important stake in a stable financial system and therefore in a well - functioning macro - prudential oversight and policy framework. in my remarks today, i have referred to the main areas in which the ecb and the central banking community are investing in order to operationalise the new macro - prudential oversight function entrusted to the
|
a false sense of omnipotence. listen to your hearts and conscience. always keep in mind that economics is a social science. models will not take away the burden and responsibility of making judgements. economics involves much trial and error β you have to take decisions in the fog when you can barely see your hand in front of your face. this makes our profession exciting! with this in mind, i wish you the best of luck. thank you. [ 1 ] source : national science foundation. [ 2 ] see casey, b. ( 2009 ), β the economic contribution of phds β, journal of higher education policy and management, vol. 31 ( 3 ). [ 3 ] graber, d. ( 2018 ), bullshit jobs : a theory, simon & schuster. [ 4 ] see clarida, r., gali, j. and gertler, m. ( 1999 ), β the science of monetary policy : a new keynesian perspective β, journal of economic literature, vol. 37, no. 4, pp. 1661 - 1707. [ 5 ] see, for example, hartmann, p. and smets, f. ( 2019 ), β the first twenty years of the european central bank : monetary policy β, working paper series, no. 2219, ecb. [ 6 ] see banerjee, a. and duflo, e. ( 2019 ), good economics for hard times, publicaffairs, chapter2. [ 7 ] robinson, j. ( 1955 ), β marx, marshall and keynes β, delhi school of economics occasional paper, no. 9. [ 8 ] for a discussion of the limits of knowledge and representation in policymaking, see benassy - quere, a., cΕure, b., jacquet, p. and pisani - ferry, j. ( 2018 ), economic policy : theory and practice, second edition, oxford university press, chapter 2. [ 9 ] see cΕure, b. ( 2017 ), β scars or scratches? hysteresis in the euro area β, speech at the international center for monetary and banking studies, geneva, 19 may. [ 10 ] see, for example, lane, ph. ( 2019 ), β the philips curve at the ecb β, 50th anniversary conference of the money, macro and finance research group, london school of economics, 4 september. [ 11 ] see blanchard
| 0.5 |
heng swee keat : a more challenging global and domestic economic environment opening remarks by mr heng swee keat, managing director of the monetary authority of singapore, at the monetary authority of singapore β s annual report 2007 / 2008 press conference, singapore, 24 july 2008. * * * 1. there is heightened uncertainty in the global economy and financial markets. the us subprime mortgage crisis has led to financial turbulence that hit many american and european financial institutions, forcing them to recapitalize and tighten lending standards. these stresses in financial markets have been a drag on economic activity in the industrialized countries through various channels, including the adjustment in the housing market and wider credit spreads. 2. the pace of us economic growth is slowing, constrained by the ongoing credit crisis, the unprecedented fall in the housing markets across the country, and rising commodity prices. in europe and japan, business expectations and consumer confidence continue to weaken. in asia, growth has held up relatively well, helped in part by the robust expansion in china and india so far. nonetheless, rising inflation will impact the real earnings of households and corporates in the region, with a concomitant pullback in spending. overall, global growth is expected to fall to 2. 9 % this year from 3. 8 % in 2007. at the same time, inflation has emerged as a significant risk factor. slower growth, together with rising inflationary pressures, presents challenges for the global economy. 3. in singapore, economic activity is moderating. after 17 consecutive quarters of sequential expansion, the growth momentum has eased since the fourth quarter of 2007 as anticipated, to around the economy β s medium term potential. on average, gdp grew slightly over 4 % in the first half of this year, registering 6. 9 % in the first quarter and 1. 9 % in the second quarter of 2008. the weaker performance in q2 was due in part to a sharp decline in the output of the pharmaceutical sector, which can fluctuate significantly from quarter to quarter because of company - specific production cycles. 4. in the coming months, activities which rely directly on g3 demand, such as electronics manufacturing, or are sentiment - driven like stockbroking, will be more adversely affected by the global headwinds. however, other industries including construction, marine and offshore engineering as well as financial intermediation services are expected to continue to provide support to gdp growth over the rest of 2008. our assessment for full -
|
andreas dombret : introductory statement - iif international capital markets and emerging markets roundtable introductory statement by dr andreas dombret, member of the executive board of the deutsche bundesbank, at the iif international capital markets and emerging markets roundtable, washington dc, 20 april 2018. * * * ladies and gentlemen ever since the ground - breaking work of solow in the fifties most policy makers and members of academia β especially in the advanced economies β have inclined to favour free capital flows. many crises later, the view has somewhat shifted, in particular, regarding emerging markets and developing countries, which is the group of countries that i will focus my remarks on. not only can capital flow reversals and in the extreme form sudden stops create significant costs in terms of output losses, financial instability and even political instability. but from all we know today it is surprisingly difficult to find empirical evidence of capital account liberalization being beneficial in terms of output gains, investment, productivity gains, or risk sharing for countries that have not progressed sufficiently far in their institutional development. much of the work on this has been carried out by the imf and indeed by maurice obstfeld himself, so maurice should correct me if i am wrong, but essentially liberalized capital flows should go hand in hand with functioning judicial systems including well enforced property rights, developed and well regulated financial systems as well as stability - oriented macroeconomic policies. there are even longer lists, but these seem to be the minimum requirements. so, given that these conditions are not always met fully, should countries resort to capital flow measures if faced with volatile flows? by the way, i am using the imf terminology of capital flow measures. these are basically capital controls plus those macroprudential measures that aim to limit financial stability risks arising from cross - border capital flows. i think we all agree that sound domestic policies should always be the first line of defence and that capital flow measures should not substitute for warranted macroeconomic or exchange rate adjustments. but it is also useful to state an obvious but often overlooked fact : unlike restrictions on the current account, the imposition of capital flow measures is not under the jurisdiction of the imf, thus, any country can basically adopt such controls as it deems necessary to regulate capital movements. however, capital flow policies are part of the funds surveillance and as such open to an assessment of their impact on the international monetary system. objectives of capital flow measures usually are to maintain monetary independence, to mitigate exchange
| 0 |
to financial stability come from a wide range of sources. external β new zealand β s financial system is heavily reliant on external funding, which makes us vulnerable to dislocation in overseas funding markets. domestic β risks related to lending to our dairy industry and to our already highly indebted households. and our most recent financial stability report notes the risks from technology disruptions, misconduct and cybercrime, insurance affordability and climate change. we also have to consider the vulnerabilities of our financial system. it is relatively small, and is dominated by a handful of institutions that have similar underlying business models. that means the distress or failure of one of the major institutions is likely to have significant implications for the system as a whole. and we have to remain alert to new risks. history tells us that there are a wide variety of triggers for financial instability. every financial crisis is different. β¦ and is subject to market failures financial stability is a common resource that benefits us all. but because it is a common resource, it is also prone to the tragedy of the commons β the risk that it is abused and degraded by individual agents who do not have the right incentives to look after it, or at least to internalise the cost that instability imposes on others. viewed through this lens, ref # 8022722 v2. 0 maintaining financial stability depends on market participants being willing and able to identify, price, allocate and manage their risks appropriately. 3 information asymmetries β where one party to a transaction knows more than the other β exacerbate this free - riding problem. small retail savers are likely to find it difficult to detect and price for higher risk - taking at a financial institution, although wholesale investors will exert discipline. in addition there are factors that limit the incentive for financial institutions to internalise the costs to society of a financial crisis. for example, moral hazard can result if institutions believe the taxpayer will bail them out in the event of a crisis. the larger the scale of this distortion, the greater the risk to financial stability and the greater the risk to other regulated entities, investors, depositors and ultimately taxpayers. these structural market failures tend to be reinforced by behavioural factors. it is well recognised that individually rational people make decisions on the basis of other people β s credit and risk assessments. 4 this herd behaviour can create market momentum that drives the price away from the underlying risks and returns. in the absence of objective information about the fundamental
|
##taking activity from banks to finance companies that are currently outside of our banking perimeter, although in a sector as dynamic as the finance industry perimeter issues will never be settled entirely. more work will be required to design the details of this new regime, particularly to ensure that it can be applied proportionately to the biggest australian - owned bank or the smallest credit union. deposit insurance the government has proposed introducing a depositor insurance scheme with a coverage limit in the range of $ 30, 000 to $ 50, 000. there is still a great deal of detail to work through in terms of how the scheme will be funded and operate but we expect the scheme will complement our role as resolution authority. as we work through the details, we will consider the consequences of the scheme for self - and market - discipline, and the need to adapt other aspects of our regulatory and supervisory framework accordingly. part 4 β conclusion financial stability is important for new zealand and all new zealanders. the cost of a financial crisis would be significant and wide - ranging. its effects β in terms of lost output and unemployment β would persist, likely for a decade or more. this means focusing not just on risks to our financial system but on the market failures that can exacerbate these risks and undermine financial stability. the reserve bank β s approach to maintaining and promoting financial stability in new zealand is expanding and becoming more intensive, in terms of both regulation and supervision. we are recalibrating the rules and our enforcement of them. this is in response to our own experience and a publicly perceived need for us to do more, and better. by necessity our approach is dynamic : we monitor and enhance the resilience of the financial system and intervene in times of crisis in order to manage the fallout. we do this through fit - for - purpose regulation and risk - based supervision. and we do so in a way where each of the moving parts is complementary in creating a financial system that is sound and efficient. the reserve bank is uniquely placed to do this. as a full service central bank we can leverage our different tools and market functions. that means that, not only can we adapt our regulatory or supervisory response as circumstances dictate, we can also use our markets functions to provide liquidity to the financial system at times of stress. we work with other agencies to promote a dynamic and healthy financial system. we are working hard to set robust requirements that address structural, cyclical and emerging risks in the financial system. our requirements are
| 1 |
of 8 years to usd11. 1 billion per day, at a ratio of about 6 times of total trade. like most regional blocs, the integration process for asean seeks to promote greater regional connectivity which will in turn expand and reinforce the region β s growth potential. the aim of reinforcing the regional linkages in the payment and settlement systems is to enable the establishment of risk mitigation mechanisms such as payment versus payment ( pvp ) and delivery versus payment ( dvp ) to reduce the foreign exchange and securities settlement risk. since the asean region is largely within the same time zone, the ultimate aim is to achieve same day settlement and funds availability. in this regard, the asean working committees have been working to create an enabling environment to promote efficient and effective linkages for intermediation of cross - border financial flows and capital market transactions. a crucial pre - requisite to this is the adoption of common messaging standards and platform such as that provided by the swift global messaging standard to facilitate interoperability and efficient processing of transactions. market infrastructure service providers, and operators of payment systems, and the banking industry, have a significant role in supporting this financial integration process, while ensuring safety, reliability and security. i understand swift and the association of islamic banking bis central bankers β speeches institutions malaysia and other stakeholders in the malaysian islamic financial community are also collaborating on the development of a new rulebook for the usage of swift messages for islamic financial transactions. this will provide an efficient platform for the exchange of messages for islamic finance transactions based on such standardised formats and bring us a step further at the frontier of islamic finance. let me now turn to the developments in malaysia β s payment system. the malaysian payment system is undergoing a major transformation. like other successful financial market infrastructure globally, concerted efforts are being made to enhance the reliability, security, efficiency and inter - connectedness of the malaysian payment system for the benefit of all stakeholders in the payment value chain. for large value payment system, rentas, the systemically important payment system for transfer and settlement of high value interbank funds and scripless securities transactions, is continuously being enhanced to support cross - border payments and settlements. in this regard, a payment versus payment infrastructure for interbank settlement of usd / rm trade transactions was implemented in 2006 in collaboration with hong kong monetary authority and a cross - border link with euroclear was established in 2012. in addition, rentas has also been equipped with the capability to support renmin
|
zeti akhtar aziz : improving and expanding malaysia β s cross - border financial flows and capital market transactions speech by dr zeti akhtar aziz, governor of the central bank of malaysia ( bank negara malaysia ), at the official launch of the expansion of swift office in kuala lumpur, kuala lumpur, 24 november 2014. * * * it is my pleasure to be here today on the occasion of the opening of this expanded swift kuala lumpur corporate services centre. we are most honoured with the presence of her royal highness princess astrid of belgium. allow me to, first of all, welcome her royal highness princess astrid of belgium. it is also my pleasure to welcome his excellency didier reynders, federal deputy prime minister and minister of foreign affairs and european affairs of belgium, and his excellency pieter de crem, federal secretary of state for foreign trade of belgium to kuala lumpur. it is my honour to address such a distinguished gathering including the practitioners from the financial fraternity. we are pleased to welcome the expansion of the swift office in kuala lumpur. malaysia has aspired to be an important destination for international corporations and organisations to operate in. malaysia has well - developed infrastructure, a dynamic workforce and costcompetitive environment to provide an enabling environment for mutually reinforcing benefits. malaysia is now home to more than 5, 000 foreign companies from more than 40 countries. additionally, it also includes global and regional shared services hubs that serve worldleading financial services providers and international corporations. malaysia is also the host to a number of the international institutions in the area of finance that include the islamic financial services board, and more recently, the alliance for financial inclusion. we are very pleased that swift, an important market infrastructure service provider to the global financial community, has selected kuala lumpur as its corporate services centre. malaysia β s financial sector has in this recent decade made significant strides in facilitating the country β s cross - border economic linkages with other economies. malaysia is part of a vibrant region, comprising asean and of the greater asia. the region has prevailing strong foundations and significant growth prospects with strong inter regional connectivity. malaysia β s volume of cross - border trade and foreign exchange settlements with asean economies alone has grown at an average rate of 10 % in the recent four years, reflecting malaysia β s increasing integration with the regional markets. a vibrant foreign exchange market has supported this growth, where the overall malaysian foreign exchange market volume has increased by more than five - fold in a period
| 1 |
share that our next milestone will be the development of a " national green taxonomy " in coordination with relevant stakeholders. this will facilitate financial institutions in identifying, and financing green projects and reporting their green finance portfolios to sbp and public. this will also lay - out the groundwork for development of green bond and sukuk market in pakistan. in my concluding remarks, i would like to re - iterate that financing for sustainable development has a pivotal role to play in achieving a resource efficient and climate resilient economy. at the same time, given strong macro - linkages with the real economy, the role of environmental & social risk management ( esrm ) is critical for reducing vulnerability to financial system stability. well - coordinated and more concerted efforts are needed to mitigate and manage risks associated with climate change. sbp will continue to analyze climate - related risks and opportunities and devise mechanisms for ensuring effective supervisory role to achieve a sustainable financial system in pakistan. i wish you interactive and productive sessions ahead. thank you! 3 / 3 bis - central bankers'speeches
|
jameel ahmad : launch of environmental and social risk management manual keynote address by mr jameel ahmad, governor of the state bank of pakistan, at the sustainable banking conference, karachi, 9 november 2022. * * * as prepared to deliver in the event dr. shamshad akhtar, chairperson - pakistan stock exchange board, yaseen anwar sahib, senior policy advisor - ifc, mr. toshio odagiri, consul general of japan in karachi, khawaja aftab ahmed, regional director - ifc, zeeshan ahmed sheikh, country manager pakistan & afghanistan - ifc, banks'presidents and ceos, distinguished guests, ladies & gentlemen, assalam o alaikum and a very good morning. it gives me immense pleasure to addressthis esteemed gathering at this conference on sustainable banking, organized jointly by sbp and ifc with the support from the government of japan. this conference aims at creating awareness about risks associated with climate change to the financial sector and provides a platform for deliberating and identifying tangible actions to effectively mitigate and manage these risks. i would like to express my gratitude to both ifc and the government of japan for joining us in organizing this important event. ladies and gentlemen, i was part of the recently concluded imf - world bank annual meetings held in washington dc and one of the spotlight discussions was regarding the threats of climate change to financial stability. a key takeaway from these sessions was the increased realization that climate change is a global issue, which urgently requires a coordinated global response. the world bank has established a new fund, namely " scaling climate action by lowering emissions " for developing countries, which was launched yesterday at the cop27 event in egypt. the detrimental impacts of environmental degradation and climate change on economic growth are real. we all can observe that the climate change is having its toll on pakistan. the weather patterns are changing and recently we have experienced some abnormally high downpours and flooding, never observed in our history. one - third of our country was underwater and one in every seven persons was displaced. ironically there are variations across countries in how the climate change affects the weather patterns, causes flash flooding, droughts, melting of glaciers and rises in sea levels etc. pakistan is ranked among the top 10 countries most vulnerable to climate change. ladies and gentlemen, the transition to a low carbon green economy requires a shift in production and consumption patterns. in this context, the financial industry can play
| 1 |
george a provopoulos : interview in suddeutsche zeitung interview with mr george a provopoulos, governor of the bank of greece, in suddeutsche zeitung, conducted by mr Ξ±lexander Ξ·ageluken and mr markus zydra, published on 31 january 2013. * * * governor provopoulos, there is still a lot of scepticism towards your country. why should europe β s taxpayers give ever more money to greece? as a greek citizen i thank the european taxpayers β 230 billion euros to greece is a gigantic sum. previously we implemented fiscal consolidation, but we did not adequately implement structural reforms. as it became evident that the program was off track, confidence declined. therefore, i can understand the concerns of european taxpayers. but i can tell them : this time the greek government is committed to deliver. the country is changing. european taxpayers will get their money back. that sounds very optimistic. look, there has been a lot of progress. here are just a few examples : greece cut its fiscal deficit by nine percentage points compared to 2009. it cut the structural fiscal deficit β that is, excluding cyclical effects β by even more : 15 percentage points. these figures are unprecedented for any country at any time. plus, by the end of this year, greece will have fully regained the 32 percent loss in competitiveness ( measured in terms of relative unit labor costs ) that we suffered from 2001 to 2009. but that's not the whole story. greece hasn't fulfilled other promises. that is true. in the past structural reforms were not properly or adequately implemented. that was a big mistake, because they were needed to generate growth. and we badly needed measures that could offset the contractionary effects of fiscal consolidation. some economists say : it's not about lower labor costs, the greeks simply don't have products that can compete internationally. that is not true! we have tourism, shipping, light industry, agriculture, sources of renewable energy and so on β plus our ports are uniquely placed to serve as transportation hubs for a much broader area. with our warm weather we could be a significant agricultural producer. instead we import tomatoes from northern europe where the weather is like this ( points out of the window ). a major problem however was the steady erosion of competitiveness. do you really believe the politicians? it was you who testified before a parliamentary comittee last year that you had warned the two previous governments that the
|
last year and june 2008, inflation rates have risen significantly. june data showed clearly that inflation in the euro area as a whole would be above the medium - term target of 2 % for a more protracted period than previously thought. - moreover, the continuation of vigorous money and credit growth and the absence thus far of significant constraints on bank loan supply in a context of ongoing financial market tensions confirm the assessment of upside risks to price stability over the medium term. - at the same time, while the assessment is made that real gdp growth weakened over the first half of this year ( despite satisfactory figures for the first quarter which reflected temporary factors ), the economic fundamentals of the euro area remain sound. 4. in the first few days after the recent increase in the ecb interest rates, the signals coming from credit markets indicated that the upward trend of inflation expectations has come to a halt. last week's indications were that expectations have started to decline. these are encouraging signs, which, however, should not lead to complacency. indeed, headline inflation rates of around 4 % in the euro area and 4. 9 % in greece are disconcerting. according to recent surveys, both in greece and in the euro area, citizens cite inflation as their number one problem and source of concern. 5. let me assure you that the ecb, as it has always done, will stand ready to achieve its primary objective and fulfill the mandate entrusted to it by 320 million european citizens. that is, it will continue to take any action necessary to ensure the firm anchoring of inflation expectations at sufficiently low levels and to safeguard price stability over the medium term.
| 0.5 |
β remarks at the quarterly regional economic press briefing, new york city. august 12. bis central bankers β speeches current with their payments β using the special consumer credit panel we developed. the report for the second quarter of this year was just released on monday. 3 families in new jersey are reducing their debt levels. as of the second quarter of this year, for those people with a credit report, average debt per person was about $ 60, 400 down from $ 63, 000 three years ago. but the crisis has taken its toll. delinquency rates on the debt are high : 7. 4 percent of all debt in the state is seriously delinquent, roughly the same rate as the nation. the comparable figure for the state just three years ago was 4. 1 percent, so, like the nation, households in the state still appear to have a considerable way to go before they reach more comfortable debt levels. while there have been indications that home prices in the area have been firming in the past few months, the mortgage crisis continues to take a toll on new jersey homeowners. as of march of this year, 10 percent of all borrowers in the state were either 90 - plus days delinquent on their mortgages or their homes were in foreclosure β above the national rate of 7. 7 percent. in essex county, that rate had reached 16 percent, and in newark it was 30 percent. in our recent small business survey, which we conducted in may, we asked firms to report on their first quarter sales and their future outlook. the results were encouraging. over twothirds of firms told us they had stable or increased sales in q1, up from 50 percent last year. when asked about their future outlook, while the majority of business owners, 56 percent, were neutral β many more said they were optimistic than pessimistic β 37 percent compared with only 7 percent. conclusion these debt and delinquency figures, together with the weak jobs picture, suggest that new jersey faces a number of challenges. in the near term, the key issue will be to expand jobs and reduce unemployment. at this point it is difficult to say when the pace of recovery in the state will pick up, but several factors appear encouraging. a continued expansion of output and employment nationally would clearly help to expand activity and employment in a number of industries in the state, including professional and business services and the goods distribution industries. also, the pace of contraction in
|
s. and overseas, we hope to broaden the understanding of the role and objectives of supervision. the goal is to spur conversation and new research on what supervision should be trying to achieve and the best means for achieving those ends. just as important, we want to generate ideas for how to better assess the effectiveness of supervisory activities. in a world of limited resources, how do we deploy our people and technology in the most effective way to limit disruption and distress at individual firms and to the financial system, while still fostering an efficient and innovative financial system? in considering these questions, a good starting point is to understand more fully what supervisors do and how they do it in the current environment. the papers that are being presented here today are largely aimed at achieving this goal. as described in the first paper β β supervising large, complex financial institutions : what do supervisors do? β β bank supervision has long been an integral component of the federal reserve β s beverly hirtle, david lucca and joseph tracy assisted in preparing these remarks. bis central bankers β speeches responsibilities. at a broad level, federal reserve supervision of large financial institutions is guided by two key objectives : β enhancing the resiliency of a firm to lower the probability of its failure or inability to serve as a financial intermediary [ and ] reducing the impact on the financial system and the broader economy in the event of a firm β s failure or material weakness. β 2 in addressing these objectives, bank supervisors enforce laws and regulations, but there is much more to supervision than just enforcement. the activities and practices at large, complex financial organizations are simply too intricate and evolve too quickly to be fully described ex ante in regulation. banking supervision works in concert with regulation as the more flexible element of banking policy. supervisory policy and standards can, and do, evolve over time to reflect the evolution in practice in the banking industry and in financial markets. overall, supervisors are guided by the mandate to identify any practices or conditions at supervised firms that are a threat to the safety and soundness of those firms β and, of course, to ensure that the firms take all necessary steps to promptly remediate any such conditions. critically, the definition of what constitutes β safe and sound β is not hard - coded into regulation, but is guided by the information and analysis done by supervisors and other federal reserve staff, such as economists, attorneys and market analysts. supervisory expectations and standards are expressed through public guidance such as supervision and regulation letters ( sr letters
| 0.5 |
or even a single region subject to a subdued macroeconomic performance in the recent past. third, regulation. banks are now facing new requests to raise more and better - quality capital. more importantly, significant institutions will have to hold on their balance sheets substantial volumes of liabilities that could be subject to bail - in. clearly, those retail banks with little or no tradition in issuing capital and other securities in capital markets will have particular difficulties coping with the enhanced regulatory framework. admittedly, though, the corporate structure of many retail banks - particularly those which are not yet regular corporations listed in capital markets - may face less immediate pressure to restore higher profitability levels. that may allow them to buy some time. 3 / 5 yet, low sustained profitability is often a symptom of vulnerability and, certainly, of inefficient allocation of the resources employed in the banking business. there is therefore a need to reflect on the best way to strengthen retail banks, to make them better able to cope with the new macroeconomic and regulatory conditions without damaging the social benefits associated with their activity. it would be unsound to try to establish specific strategies with the pretention to be unconditionally applied in all circumstances. however, i see some difficulties for numerous retail banks in adapting to the low - profitability and tighter regulatory environment if they are not able to increase their ability to compete with banking corporations in terms of costefficiency, business diversification and access to capital markets. some transformation of the retail and, in particular, the saving banking sector therefore seems unavoidable in order to meet the target. we, in spain, have already taken some steps in that direction. as you well know, in response to the financial crisis, measures were taken along different lines, which helped solve the main shortcomings affecting the spanish banking sector at that moment in time and positioned it in a good starting point for the implementation of the ssm. in addition to measures taken to reduce the level of exposure to real estate development and to drive greater consolidation in the sector, a major effort was made in the field of recapitalisation, which went beyond the actions taken by public authorities. since 2008, the sector has set aside new provisions for outstanding loans or foreclosures for approximately β¬300 billion. and, after absorbing this substantial balance sheet clean - up into results or reserves, banks have managed to increase their own funds by approximately β¬70 billion over the same period.
|
and international organisations, suddenly turned into a collapse of all macroeconomic indicators. that obliged banks and savings banks to accelerate the clean - up of their balance sheets and to set in train what has ultimately become a full - fledged industrial restructuring of the spanish banking system. bis central bankers β speeches the toolkit at hand, which had been successfully used in the past, was not up to facing a crisis of this nature. the legislation on bank resolution had not been adapted to the demands of the monetary union, in particular to the prohibition of monetary financing, and nor did it envisage that it was savings banks that would essentially need to be repaired. moreover, the singularity of a systemic crisis, on a global scale and with absolutely unrestricted capital movements, made it impossible to make creditors take haircuts without running the very serious risk that market alarm would ultimately lead healthy institutions to sink. our main strength β one by no means insubstantial β was that the large credit institutions were reasonably sound and that the problems were concentrated in a clearly defined group of small and medium - sized institution. so as to be able to have a new toolkit adapted to this crisis, more than half a dozen laws1 had to be approved, from first creating the fund for the orderly restructuring of the banking sector ( frob ) in 2009 to the last decree law approved in february, with regulations that have set about righting the shortcomings. these include the creation of an institution / fund allowing for the obligatory and orderly restructuring of non - viable banks and encouraging the merger of viable ones ; the regulation of institutional protection schemes ; the possibility of converting savings banks into banks ; new capital requirements to speed through restructuring ; the granting of greater powers to the banco de espana ; the merger of the deposit guarantee funds, etc. promoting all these changes in a full - blown crisis was like negotiating twin tasks on a ship that has hit the rocks : while evacuating the passengers, it was necessary to repair the lifeboats. a most difficult task, as i said, but the seven laws have now been passed. and there is one very positive aspect, namely that all these regulations have had the backing of the country β s two main parties. this is perhaps why these reforms have maintained a series of common characteristics and, while giving due merit to the main actors, i. e. the different governments and the legislative chambers, mention might be made of the advice that the banco de espana has offered and continues to offer
| 0.5 |
good balance in our government finances, and compared with the other european countries in general, our public debt has been kept at a fairly low level. however, due to the economic recession we saw somewhat concerning development starting. looking into the coming years we have to curb the current pace of incurring of the public debt. in the absence of new fiscal policy measures during the forecast period, the general government deficit will contract only slightly and the general government debt will continue to grow during the forecast period ( figure 26 ). let me conclude by saying that, in general, the recent developments in the finnish economy have been mixed. on one hand, economic growth has strengthened and surveys indicate strongly improved confidence in the future. on the other hand, the rapid growth has touched only some sectors of the economy, and new areas of concern have emerged both internationally and domestically. the key challenge for economic policy is to restore the sustainability of the public finances in finland. thank you very much for your attention and successful meetings in helsinki during the following days. bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches bis central bankers β speeches
|
related to fiscal sustainability. in the european union, our common fiscal rules play an important role in safeguarding fiscal sustainability. in a moment, i will address some issues related to eu fiscal rules. however, before that, let me go back in time a few years to a situation where issues related to fiscal sustainability and the reliability of fiscal data suddenly became headline news in europe. i am referring to greece and my years as the eu commissioner for economic and financial affairs. slide 2 β summary the global financial crisis rocked the financial system and the world economy starting in 2008. the first signs of the crisis emerged in the united states, but it soon became clear that the crisis will not remain outside the borders of europe. 1 / 5 bis central bankers'speeches certain european countries came to suffer more from the crisis than others. in many countries, household borrowing and house price increases were unsustainable, risks had accumulated in the banking system, and large current account deficits marked wide imbalances in the economy. however, fiscal policies also played a role. almost exactly 10 years ago, in october 2009, the financial crisis took a new turn in europe. it morphed into a sovereign debt crisis. upon taking office, the prime minister of greece, george papandreou, revealed that the fiscal deficit in greece was significantly larger than previously reported. as it later turned out, the deficit was above 10 % of gdp in 2008 and above 15 % of gdp in 2009, which triggered and caused the greek crisis. as investors became aware of the real state of greek public finances and of the systematic falsification of statistics, investors woke up to the risk attached to the sovereign bonds of not just greece but also other vulnerable euro area countries. papandreou β s announcement caused a shock in the financial markets and stupefied political decision makers. the yields on greek sovereign bonds began to rise to unsustainable levels. by may 2010, the yield on 10 - year greek sovereign bonds had risen to over 10 percentage points above those of germany. greece would no longer have been able to finance its public expenditures. the government did not have many options : greece had its back against the wall. it had to choose between a default and a request for international support. a contagion effect was soon felt in other vulnerable countries : portugal and spain also saw their credit ratings downgraded in march - april 2010. the crisis was widening and deepening with accelerating speed. one critical lesson is
| 0.5 |
costs are regularly passed on to consumer prices. markets for foodstuff are globally integrated and competitive. in the case of fuels, every week the changes in the international price are passed on to domestic consumers. however, there is a price stabilization fund to smooth out short run fluctuations and recently there has been a gasoline tax cut, which ameliorates the large increase in international prices. finally, the electric power price - setting mechanism is designed to pass changes in upstream marginal costs to retail prices. electric power rates, affected by a rise in costs, posted an average increase of 23 % during 2007 compared with a less than 6 % average increase between 2000 and 2006. this context of price flexibility provides the right signals to markets. in the case of chile, with the increase in the prices of electricity and minerals, several investment projects are in the pipeline, which will propel an expansion of supply. electricity ( us $ mm ; index dec - 98 = 100 ) iii energy investment iii 08 cpi electricity ( 1 ) figures as of february. ( 2 ) includes investment in buildings, engineering, equipments and others. sources : corporation for technological development of capital goods ( cbc ) and national statistics bureau ( ine ). copper ( us $ mm ; us cents / lb. ) iii mining investment iii 08 copper price ( 1 ) figures as of february. ( 2 ) includes investment in buildings, engineering, equipments and others. sources : corporation for technological development of capital goods ( cbc ) and bloomberg. for countries that are net exporters of commodities, the impressive price hikes results in a positive terms - of - trade shock. in chile, terms of trade have increased by almost 70 % in the last three years, mostly due to the sharp increase in copper prices. not surprisingly, this shock has resulted in an appreciation of the real exchange rate. however, the macroeconomic policy framework, as well as particular characteristics of the chilean mining sector, has mitigated the effects of terms of trade gains on domestic demand, inflation and the exchange rate. half the income from copper ( after tax ) goes to foreigners and almost none of it remains in chilean territory. the other half is from a state - owned enterprise and taxes from private companies. there is a fiscal rule for government spending that stipulates that all income above certain long - term price has to be saved. government surplus has been 7 % on average the last three years, and foreign assets reached about 13 % of gdp in 2007. moreover
|
in direct contrast to the great depression, when policy - makers basically failed to respond and even worsened the situation by enacting protectionist international trade policies. the response today is designed precisely to mitigate the risk of a recessionary or depression - like negative dynamic. indeed, the situation is much more like a natural disaster than a typical 2 / 5 bis central bankers'speeches economic recession β with policies designed to essentially stop the clock and later restart it. economic recoveries from natural disasters are usually quite rapid and robust. instead of offering new forecasts, bank staff worked through multiple scenarios. these were designed to help us understand the importance of assumptions around the spread of the virus and the associated containment measures, how financial markets might react, how business and consumer confidence might be affected, and how much long - term or permanent structural damage might result from the shutdown. positives in the mix were fiscal measures, including outright income support ; policies to encourage maintenance and expansion of credit ; and monetary easing. with these variables, bank staff developed two contrasting scenarios for the bank β s governing council to consider. the first, β best - case, β scenario assumed that containment measures would be lifted at least in part during may. this scenario would see a decline in the economy during the first quarter of 1 β 3 percent, and a further decline in the second quarter that would take the economy to around 15 percent below its level at the start of the year. the third quarter would then see a significant but partial rebound in the level of activity and then a gradual recovery back to trend over the next year or two. very little structural damage was envisioned under this scenario. the darker scenario assumed that containment measures would extend into summer, taking the economy in the second quarter as much as 30 percent below its level at the start of the year. the rebound in the second half would be even more partial, and the structural damage would be much greater. even after two years of recovery, the level of gross domestic product ( gdp ) would still be well short of its original trendline under this scenario. in mid - april, there were signs that canada β s containment measures were succeeding in flattening the curve, despite the tragedy that was unfolding in long - term care centres. further, governments were beginning to lay out criteria for a return to work. all of this suggested to us that our best - case scenario was within reach. nevertheless, the recovery phase requires that monetary policy contribute significantly once containment measures begin to
| 0 |
, business cycles are typically relatively short - lived affairs : for instance, the average duration of business cycles in the uk and us economy in the post - war period has been estimated at 5 Β½ years. 5 however, though financial cycles build up much more slowly than business cycles, the amplitude β the swings between the peaks and troughs β is greater. in the uk the peak - totrough variation in credit has been around 40 percentage points on average for financial cycles, whereas the average peak to trough change in gdp in the business cycle has been around 10 percentage points. financial cycles do not always mirror or drive business cycles. to a headline writer, the fact that credit grew twice as fast as gdp for 10 years before 2007 and that household debt rose from levels of around 100 % of household income in 1997 to 155 % shouts β unsustainable, debt financed growth β. but over those 10 years, the economy was not obviously growing at abovenormal rates and inflation remained subdued, albeit aided perhaps by the favourable terms of trade shock that followed china β s admission to the world trade organisation in 2001. 6 while the increase in debt may have had some impact on growth, the uk certainly did not appear to enjoy a credit financed boom. so one very important lesson in this is that traditional indicators of the business cycle cannot be relied upon to flash warning lights about vulnerabilities building up in the financial system. where did the money go? if the total amount of uk private credit in the economy rose sharply in the 10 years before the crisis without much impact on private sector demand or the economy as a whole, where did the money go? some went to business β around a third, much of it to commercial real estate. but the bulk, around two - thirds of the credit, was to households ( chart 3 ). bank lending to households made a particularly large contribution to credit growth in the first half of the 2000s. and while unsecured lending grew strongly over the period, it only comprised about 10 β 15 % of lending to households. the much larger part was, of course, secured lending for housing. and it is fair to call it a boom. secured household debt relative to annual household income was stable at around 70 % for much of the 1990s, before rising rapidly to over 110 % by 2007. the stock of household debt secured on housing went in real terms from around Β£300 billion to Β£700 billion. the main driver of course was the increase in house prices
|
anselmo l s teng : industrial transfer and financial services viewed from the perspective of macao keynote speech by mr anselmo l s teng, chairman of the monetary authority of macao, at the 5th pan pearl river delta regional cooperation and development forum, nanning, 14 august 2009. * * * honourable heads of delegation, dear delegates, ladies and gentlemen, good day! i would like to express gratitude to the host and mr. ma jing, president of the people β s bank of china guangzhou branch who have given me an opportunity to communicate with you over how we can make use of the opportunity provided by industrial transfer to promote the development of financial services. at the same time, i would like to make use of the opportunity to greet the financial practitioners from other provinces who attend this meeting and hope that we can enhance our link with a view to fulfilling our common target of achieving regional development. industrial transfer is a relocation of assets for more profitable results. through more effective combination with other production factors, a higher economic growth can be achieved. in general, industrial transfer can be realized via different forms, such as partnership, mergers, re - organization, cooperation and capital pooling. in the process of transfer and acceptance, it will involve a financial platform to facilitate initiation of investment, finance, merger and acquisition which will certainly give rise to a demand for financial services and enhancement of financial efficiency. the demand needs to be satisfied through innovation of financial products and services, business channels and management expertise which financial institutions are expected to provide. the whole process can strengthen the foundation of the financial institution, reinforce its competitiveness and resistance against risks, which to a certain extent enhances the safety and stability of the financial system as a whole. industrial transfer obviously triggers demand and development of financial services. yet, the success of an industrial transfer depends on the result of a series of interactions and related promotions, which may involve financial elements and non - financial elements, such as the incentive, guidance or encouragement arising from government policy relating to industrial transfer. market demand cannot be neglected. the impact on local inhabitants and environment, the economic gains before the enterprise, the capability of the region to accommodate the transfer should be considered. this will include accessory industries and professional services, local financial services including investment and credit services which the newly relocated industry badly needs. so much the better if a bank which treasures its clients will set up a branch in that location to provide tailor - made financial services. now, i would like
| 0 |
and what role can economic research play in fostering such growth. transformational growth is a long - run phenomenon, which involves at its core the structural transformation of the economy, the basic premise being the repositioning and reallocation of economic activity across the broad sectors of the domestic economy. for the majority of caribbean countries, these sectors are services, primarily tourism and financial services, and to a lesser extent manufacturing, mining and agriculture. in the case of barbados, the government has articulated a national digitisation strategy to transform the economy. the aim is to build a new economy that is knowledge - intensive, technologically driven, and that promotes innovation, creativity and inclusiveness. indeed, technological advancements are fuelling the pace of digitisation of the global economy, 1 / 2 bis central bankers'speeches which represents the greatest potential to drive transformational growth through changes in the economic structure of production. we at the bank recognise that changes in technology are transforming the way financial institutions are interacting with their customers. in particular, the impact of technological advancements on financial regulation and supervision should be an area of research focus, as central banks must adapt to these changes and engage with key stakeholders to ensure the appropriate safeguards are in place to manage the inevitable risks that the new developments present. we must also conduct more micro - based studies to develop a deeper understanding of the behaviours our societies. the initiative to reduce the use of cash is a prime example of how such research can help us better understand the payments landscape in our economies. the goal of structural transformation and ultimately the realisation of transformative growth must be inclusive. this means that everyone benefits from or shares in the income and wealth generation when the economy expands. from an economic perspective, research on the strategies that increase total factor productivity, competitiveness and economic diversification within and across economic sectors are essential. finally, our research must examine how we can reduce the unsustainable use of natural resources to ensure that natural disasters and climate change do not put the prospects for transformational growth at risk. the seminar programme reveals an interesting mix of research papers, the launch of the 2019 financial stability report and a barbados economics society discussion forum on the effectiveness of the bert programme. on behalf of the central bank of barbados, welcome once again and i wish you fruitful, stimulating and enjoyable seminar over these three days, and may we all be inspired to conduct more research that transforms our economies. thank you. 2 / 2 bis central bankers'speeches
|
, we are wary of it, perhaps feeling, as karl marx did that β machinery does not just act as a superior competitor to the worker, always on the point of making him superfluous. β such fears can lead to resistance or, in extreme cases, obstruction, to your efforts. merely offering statistics that show that adopting new technology can lead to increased job creation and higher productivity will not be sufficient to prevent this. hr managers and their teams need to counsel staff about the impending changes, offer a vision of what the transformed organisation will look like, and then shepherd them through the process. this means that you, too, must embrace the idea and all that it encompasses. indeed, for you to be truly effective, you must also demonstrate your own ability to adapt your systems. one aspect of this is reskilling. while greater utilisation of technology might not lead to a significant reduction in an organisation β s staff complement, it will inevitably lead to a shift in where and how staff members are deployed. an employee who previously performed a job that can now be made more efficient through automation, could find himself transferred within the organisations to perform a new function. for many employees, especially those who have spent their entire tenure in one department, and potentially in the same post, this can be a tremendous shock. as hr professionals, you will be tasked with making that transition smoother, including by identifying the training they will need. even when employees maintain their current position, they will need to broaden the scope of their abilities. consider our colleagues in our bank supervision departments : how many of them even 10 years ago would have contemplated the regulatory challenges posed by fintech or by new entrants from outside the traditional financial sector into the market? how many would have known how to even approach regulating it? the education and training employees get before entering the workforce is now just the beginning. they will need to commit to lifelong learning, to continually upgrading their expertise. indeed, deloitte estimates that the time it takes for the skills you currently have to become obsolete is a mere two and a half to five years. 2 / 5 bis central bankers'speeches moving beyond β that β s the way we β ve always done it β for us as central banks to effectively fulfil our mandate, we must be able to identify the gaps in employees β competencies and support them as they work to fill them. be mindful, however, that as we look to embrace this transformation, we
| 0.5 |
over - priced with markets quickly becoming one - sided as a result of contagion and extreme risk aversion. underlying the crisis is thus a significant fragility of security markets, which calls into question the efficiency of financial markets more generally. bis central bankers β speeches from the sub - prime to the sovereign debt crisis at least three aspects of the sub - prime crisis contributed also to the current sovereign debt crisis. first, the sub - prime crisis weakened banks β balance sheets, which were still under repair when the sovereign debt crisis came to a head in may 2010. second, the fiscal support given to banking systems and significant spending packages worsened public debts and deficits. third, the lehman bankruptcy left confidence in the robustness of the financial system severely dented. the root cause of the current crisis, however, lies within the shores of the euro area. nonetheless, with the internal and external value of the euro holding up well, this is certainly not a crisis of the euro but a sovereign debt crisis focused on some euro area sovereigns. two things, however, have gone wrong : first, some countries have accumulated debts and deficits, which at a minimum make them vulnerable to self - fulfilling unsustainable dynamics. second, the stability and growth pact was effectively suspended when france and germany escaped sanctions for breaching the debt and deficit criteria in 2003. more generally and at a deeper level, the governance of the economic union, which should complement the monetary union, has been insufficiently articulated since the outset of emu. the standard tool : the official interest rate what has been the role of monetary policy in this context of economic and financial crisis? let β s start by first looking at what is often referred to as conventional monetary policy. the standard and most important tool of monetary policy is the official interest rate, in the case of the eurosystem the minimum bid rate in the weekly main refinancing operations. although we characterise this tool as β standard β, the financial crisis did require significant and aggressive cuts in interest rates : following the collapse of lehman brothers the ecb lowered, within a period of seven months, the refinancing rate by 325 basis points from 4. 25 % to a historic low of 1 %. the rate was kept at this historically low level until april 2011 when the governing council decided to increase the rate by 25 basis points. this was complemented by another rate increase to the current level of 1. 5 %, which the governing
|
side ( nearly 40 % and 23. 5 %, respectively ). all data in this section refer to 2005 unless otherwise indicated, as 2006 data are not yet available for all countries. the data source is the imf international financial statistics, which provides comparable data across countries. these data may somewhat differ from other data sources. at the same time, i should also stress that the amount of euro area fdi in emerging market economies rose quickly. between 1999 and 2005, outward fdi from the euro area to the so - called bric group β which includes brazil, russia, india and china β increased markedly. over this period, the stock of outward fdi in the bric group rose from β¬63 billion to β¬133 billion ( or by 111 % ). in comparison, the stock of euro area fdi in the united states increased by 55 %, from β¬ 360 billion to β¬558 billion, during the same period. while the overwhelming share of outward fdi to the bric group was directed to brazil, euro area companies have raised considerably their fdi stocks in russia, china and india in recent years. even more interestingly, the euro area has also become attractive as a destination for fdi from the bric countries : between 1999 and 2005, fdi stocks from the bric group in the euro area tripled, from β¬4 billion to β¬12 billion, while still remaining low in comparative terms ( for instance, the figures for us fdi stocks in the euro area rose from β¬322 billion to β¬560 billion over the same period ). the brazilian and russian firms account for the bulk of the bric countries β fdi surge in the euro area, but chinese and indian fdi has picked up in most recent years, as frequently reported in the media. on the whole, this evidence suggests that the euro area is financially integrated not only with mature economies but increasingly also with the most sizeable emerging economies. concluding remarks ladies and gentlemen, this brings me to the end of my remarks in which i have highlighted some major issues related to the process of european financial integration, a process that should not be seen in isolation but rather as an important contribution to global financial integration. i very much appreciate the transatlantic dialogue on the lessons we can learn from each other. this round table today contributes a great deal to increasing our awareness of these issues. thank you very much for your attention.
| 0.5 |
, as a country aspiring to access the union, have another fresh challenge before us. we are profoundly aware of this fact, which has been taken into utmost consideration in all our activities to this day. the insurance law that we have today has already integrated some elements of the solvency ii regulatory framework, and we have established a strategy for the path to full harmonisation. in view of the new deadlines to complete the national legal framework entirely built on european 3 / 5 bis central bankers'speeches standards, our plan is to prepare new regulations by 2020 or 2021 to meet this objective. what remains until then is for us to prepare well and also to prepare the market under our supervision. for this reason, we have already conducted a preliminary stress test, and plan on implementing a number of quantitative impact studies and defining an optimal model of legal amendments and secondary legislation, which will implement the solvency ii framework by the stated deadline. the question, however, is when they will be applied. a number of future provisions is also expected to have a delayed effect. what lies before us is certainly a complex task of meeting european standards, all the while maintaining the stability of the domestic insurance market. at the moment, perhaps the largest challenge is improving regulations concerning compulsory traffic insurance. this is a task undertaken by the ministry of finance, though with the wholehearted help and coordination of other public institutions, including the national bank of serbia. at our initiative, the insurance sector was directly involved in this task through the association of serbian insurers. therefore, it is very good to have all the relevant parties gathered here today, where one of the central topics for further discussion will, in fact, be compulsory traffic insurance. my close associate will also take part in these discussions, but something i wish to tell you personally is that market participants must reach a consensus about sensitive matters, for this is the only way that we can ultimately get regulations that are applicable in practice. the lack of such applicability is precisely the greatest drawback of a large number of provisions under the current law on compulsory traffic insurance. once that job is done, we will have a well - rounded and high - quality regulatory framework for insurance, paving the way for further improvements of regulations, which have already been mentioned. in addition to all what has been said, the national bank of serbia makes effort, within its main competences, to have a continuous influence on the business and investment climate in serbia, as well as overall price and financial stability
|
jorgovanka tabakovic : current situation and challenges in supervision of the domestic insurance market introductory address by dr jorgovanka tabakovic, governor of the national bank of serbia, at the insurance gathering " serbian insurance days ", aranΔelovac, 29 november 2017. * * * dear ladies and gentlemen, esteemed representatives of the insurance industry, state institutions, corporate sector and university, dear international guests, i have the pleasure of introductory address at this gathering, the first large - scale event fully dedicated to insurance business. first of all, i would like to extend my full support to the organisers β idea to contribute, by this event, to putting insurance business in its rightful place, not only in the country β s financial system, but also in the lives of each one of us, as citizens and beneficiaries. this important and yet unjustifiably neglected activity, managed to remain healthy in its core and to continue its slow, but still unstoppable development. though the pace of that development is not what we, workers in the financial sector, would like it to be, insurance is definitely looking at a bright future. as the governor of the national bank of serbia, the insurance supervisor for already thirteen years, i will briefly recapitulate for you today our vision of insurance business, issues that are topical and pending, and desirable ways to address them, as well as other aspects and challenges of our supervisory work. insurance business in serbia has seen some drastic changes and improvements since the national bank of serbia assumed the role of its supervisor. this business is still constantly changing and aligning with the european standards. all entities that failed to meet the criteria of such alignment left the insurance business, making room for new market players, mostly as subsidiaries of internationally recognised insurance undertakings. therefore, in the last decade the insurance business was very dynamic also in terms of foreign direct investment. insurance undertakings founded by foreign owners started from very high pecuniary founder β s stakes, and with the growth of their business, became also serious investors in government bonds and other financial instruments ; not so rarely they even founded their own subsidiaries and invested in real estate construction. today, the serbian insurance market comprises seventeen insurance undertakings and four reinsurance undertakings. six undertakings are engaged in both life and non - life insurance, while four are exclusive life insurers and seven exclusive non - life insurers. in addition to insurance and
| 1 |
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.