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Under this scheme, RBI invests, in tranches, up to an aggregate amount of USD 5 billion in fully government guaranteed foreign currency denominated bonds issued by this overseas Special Purpose Vehicles (SPV) of the IIFCL.

Klaas Knot: On payment trends - opportunities and risks Speech by Mr Klaas Knot, President of the Netherlands Bank, at the 13th Conference on Payments and Market Infrastructure, jointly organised by the National Bank of North Macedonia and the Netherlands Bank, Ohrid (digitally), 9 December 2021. * * * Good morning everyone.

I look forward to the conversation and the question-and-answer session to follow. 1 These remarks represent my own views, which do not necessarily represent those of the Federal Reserve Board or the Federal Open Market Committee. I am grateful to Brian Doyle of the Federal Reserve Board staff for his assistance in preparing this text.

While for the largest firms, which can stand up to the scrutiny of external investors and sustain the costs of access to capital markets, non-banking finance is sure to become a key point of reference, for most businesses, banks will remain the first port of call for external resources.

Equally significant has been the fact that, over the years, we have had the pleasure of engaging ourselves in countless discussions with such eminent figures as market participants, distinguished scholars, and especially the esteemed Federal Reserve officials, on topics ranging from monetary policy to financial market developments.

On December 1913, the Federal Reserve Act was enacted, and the following year, the Federal Reserve Bank of New York came into existence. Through the discussions with the Fed, we have 7developed common understandings, such as: the importance of price stability for sustainable economic growth; the importance of a sound financial system as well as liquid and well functioning financial markets.

I cannot overstate the importance of adopting such core principles of sound banking and banking supervision in the international banking system, and also the need to develop a workable mechanism for enforcing the implementation of these standards. The Asian crisis also underscores the importance of transparency. Adequate market discipline depends on investors having information that is sufficient in quantity, reliability, and timeliness.

If the quantitative easing policies, termed LTRO and QE, are additionally implemented, this should help temporarily in for instance stabilizing the financial markets and enhancing soundness by preventing excessive deleveraging on the parts of troubled banks thanks to their securing of liquidity; in a situation in which such additional supply of money does not fundamentally lead to credit extension to the private sector, however, i.e.

Tighter financing conditions would mitigate the build-up of financial vulnerabilities and lower tail risks to inflation over the medium term, at the cost of a higher risk of systemic stress and greater downside risks to growth in the short term. In addition, the liquidity needs of nonbank financial institutions may amplify market volatility.

These upside risks include increases in indirect taxes beyond those anticipated thus far and further increases in oil prices and prices for agricultural products. More fundamentally, stronger than expected wage developments and an increase in the pricing power in market segments with low competition may occur. Such developments would pose upside risks to price stability.

Moreover, the global financial crisis demonstrated many ways in which shadow 6 BIS central bankers’ speeches banking can have an impact on the global financial system, both directly and through its interconnectedness with the regular banking system, prompting the move to overhaul the regulation of shadow banking system.

Rest assured, I will not go into the details but leave it to the experts to delve into the technicalities of IFRS9. It is essential that supervisors and regulators are well aware of the underlying concepts of IFRS9. They need to be equipped with the right tools and techniques to conduct supervision of banks and financial institutions in the most effective way.

Wide margins of economic slack and reduced cost pressures suggest that inflation is likely to remain quite low over the next couple of years. Although the near-term outlook for the economy is weak, over time, a number of factors should promote the return of solid gains in economic activity in the context of low and stable inflation.

The effectiveness of the policy actions taken by the Federal Reserve, the Treasury, and other government entities in restoring a reasonable degree of financial stability will be critical determinants of the timing and strength of the recovery.

The border between banks and non bank financial institutions – which can be drawn not without difficulty in conventional finance systems – become very blurred in Islamic finance. We therefore lean on the Memorandum of Understanding which the Bank signed with the Financial Services Commission to ensure that there is no regulatory overkill.

The steep decline in the IMF's lending activities as a result of reduced loan demand from large emerging market countries, such as Brazil, necessitate fundamental reforms in the way that the IMF finances its activities. There are ongoing discussions on a new liquidity instrument for market access countries that would better respond to potential borrowing needs of emerging market countries.

The result is an increase in property prices while general price levels remain stable.4 However, this raises the problem of quantitative significance. Though this hypothesis can explain “correlation” qualitatively, it is not sufficient to explain these malign property price bubbles quantitatively. The magnitude of these bubbles is simply mind-boggling.

Also, not every country experiencing this sort of demographic change has a malign property bubble and a financial crisis. Therefore, we should not think of this strong positive correlation between demographic factors and malign bubbles as a strict causal relationship. Rather we should regard the demographic conditions of population dividend as “fertile ground” for malign property bubbles.

Many member countries who were far removed from the epicentre and had no role or responsibility in the making of the crisis have nevertheless been adversely affected by it. The Fund would have to assist them and ensure that the fallout of the crisis in emerging markets and developing countries is contained.

The Federal Reserve’s Survey of Consumer Finances suggests that renters who have recently purchased homes tend to carry higher levels of nonmortgage debt and, in particular, credit card debt. Moreover, credit card debt ratios have been rising among all households because of the use of credit cards for new purposes.

I think it is a very apt comparison. The elements that made the Marshall plan a success are reflected in the plan for a European recovery. The recovery fund is not emergency aid but is intended to support public investments in countries that strengthen economic growth potential.

The receiving countries retain an important degree of responsibility for how the money is spent, within certain set conditions. The financing has been structured in such a way as to ensure southern European countries do not accumulate ever more debt. And the fund is big enough to really make a difference.

If terms are short and, especially if the chairman and the other voting members can be reappointed for additional terms, more control can be exercised through the reappointment process, and committee members can more easily be held accountable for their policy votes.

This is another clear example of the tradeoff between independence (facilitated by long terms without the possibility of reappointment) and accountability (facilitated by short terms with opportunities for reappointment). BIS Review 43/2001 5 A third source of accountability is oversight hearings on monetary policy held by legislative committees.

Second, looking ahead, the cross-country dispersion of price-based indicators of financial integration in various markets is likely to reflect a different appreciation of risks across the EU compared with that prevailing before the crisis.

Finally, it is important to recognise that despite the adverse temporary effects of the crisis on the integration of financial markets, the high degree of financial integration achieved in the euro area before the eruption of the crisis helped contain its impact on the financial system and the broader economy.

Global rebalancing will require deficit economies to save more and consume less. They need to depend for growth more on external demand which calls for a real depreciation of their currencies. The surplus economies will need to mirror these efforts – save less and spend more, and shift from external to domestic demand. They need to let their currencies appreciate.

First, I would like to thank Agustín Carstens, not just in his capacity as a representative from the Bank for International Settlements but also as one of the many international central bankers and government representatives I have had the privilege of working with, some of whom have joined us here in Frankfurt. I am delighted to see him here with us today.

Daniel K Tarullo: The international agenda for financial regulation Speech by Mr Daniel K Tarullo, Member of the Board of Governors of the Federal Reserve System, at the American Bar Association Banking Law Committee Fall Meeting, Washington DC, 4 November 2011. * * * Long before the recent financial crisis, banking regulation had acquired an important international dimension.

The crisis renewed attention to the interconnectedness among national financial markets. In its aftermath, accordingly, the international focus on banking regulation has grown even more extensive. Today I will discuss three subjects germane to the increasingly significant international regulatory agenda. First are the steps needed to complete the reform agenda on capital and liquidity standards, including some implementation issues in the United States.

Amando M Tetangco, Jr: Taking the next steps at a time of change Speech by Mr Amando M Tetangco, Jr, Governor of Bangko Sentral ng Pilipinas (the central bank of the Philippines), at the Philippine Financial Market Forum “The way forward: building opportunities – riding on the wave of emerging market growth”, Makati City, 18 June 2012.

The momentum toward achieving the price stability target of 2 percent is maintained but is not yet sufficiently firm, and thus developments in prices continue to warrant careful attention. II. Conduct of Monetary Policy Next, I will explain the Bank’s conduct of monetary policy.

Today, there is far-reaching consensus between academics and policy-makers, distilled through decades of academic reflection and policy experience, that price stability is a necessary condition for sustained economic growth and sustained job creation, and that the responsibility for price stability is best placed in the hands of an independent central bank.

So APRA quite rightly has said that lenders can expect a strong supervisory focus on loans with a very low net income surplus. The second area is interest-only lending.

For now, the financial system has weathered the challenging economic conditions very well, thanks to a more resilient financial system. And we are making active use of macroprudential instruments. For example, in the Netherlands we have recently decided to activate the countercyclical buffer to strengthen the buffers of banks. At the same time, our macroprudential toolkit remains incomplete in some areas.

For example, we have imposed higher risk weights for mortgage portfolios of banks, but we don’t have instruments of LTV/LTI limits to curb excessive lending in the housing market. Also, we don’t have many macroprudential tools in the non-bank financial sector. So there is still a lot of work to be done.

The central banks can play a 12 significant role in shaping the response of financial sector to the challenges posed by risks emerging from the climate change through appropriate guidance and regulations. 33.

Views about what monetary policy can and cannot achieve have evolved over the past century or two. The current consensus, based on the experience of the post-war period, is that the principal contribution it can make to economic well-being is to maintain low and stable inflation. As a result, a number of countries, including Australia, have adopted a monetary policy regime based on inflationtargeting.

But the decline in inflation, to 1.7 per cent, was a bit less than we had anticipated, reflecting a number 7/9 BIS central bankers' speeches of factors. Inflation is expected to climb back to around our target in the coming months as gasoline prices pick up on a year-over-year basis.

Companies in that sector are funding themselves from cash or directly from global financial markets. Hence the domestic banking system is seeing much less of that business than in the past. To put it another way, intermediated business credit is likely to grow a lot slower in the period ahead than historical relationships with GDP and investment would lead one to believe.

Nevertheless, the reason behind the recurring argument for insufficient monetary easing comes from a misunderstanding concerning the amount of currency the central bank supplies.

Under a zero interest rate, the cost associated with holding either banknotes or the central bank’s current deposits is negligible; no matter how much money it supplies, this will be held in such a form as the central bank’s current deposits. In terms of quantity, this is completely ineffective.

Sometimes, an NPA classification, even while permitting deeper surgery, prompts risk aversion on the part of bank boards and they stop lending even when the project is viable. We need to overcome this view – we have issued circulars stating that a loan to a project whose other loans are NPA does not automatically become an NPA – but it will take time.

While we acknowledge that sometimes these linkages are not blatant, we cannot rule out the possibility that some of the trickle-down effects are real and warrant more in-depth interrogation. It is for this reason in particular that we thought it necessary in February 2001 to establish a Labour Markets and Social Issues Unit as part of the Research Department.

We will select out financial institutions and franchised institutions which have more favorable conditions to participate in the endeavors first, firmly bear in mind China’s realities, learn the experiences, both positive and negative, of other countries, and blaze a trail for the reform and development of old-age finance. III.

Some of these challenges affect all central banks, while others are specific to the institutional context in which the ECB operates. Setting the stage To set the scene, let me first present two stylized facts on long-run inflation dynamics. First, low and falling inflation is not a recent phenomenon.

In past housing cycles, house prices have tended to fall below the level warranted by fundamentals, presumably as weak market conditions led sellers to make aggressive price cuts. The potential for an overcorrection of house prices in this cycle seems particularly acute given the potential for foreclosures to create a glut of properties for sale.

Meanwhile, consumer prices continue to be somewhat weak 1 2 This report was written based on data and information available when the Bank of Japan Monetary Policy Meeting was held on 13 October 2000.

Based on our recognition of the importance of the Islamic banking industry in financing development projects, the Central Bank of Bahrain has provided the requisite supervisory and legislative foundation that corresponds to international best standards to facilitate further growth and development of this industry. As such, these standards were incorporated into our prudential regulations that were issued from 2001 onwards.

As a result, Bahrain became the first country in the region to develop and implement regulations specific to the Islamic banking industry. The Central Bank of Bahrain also pioneered the issuance of sukuk (Islamic bonds) in 2001 and since a rolling programme of monthly issuance of the short-term Sukuk Al-Salam was put in place.

As you know, the United States remains far more dependent on paper checks for making payments than any other industrialized country, even though electronic transactions appear to be more efficient and less costly. As you also know, the Federal Reserve is the only institution that presents checks to all depository institutions nationwide.

I recognize that this last option involves hard choices and short-term pain. However, in my view it is the responsible path to sustainable economic growth with price stability. The alternative options inevitably lead to financial crisis and greater long-run losses in national income and wealth.

Contemporary economic thinking and lots of experience indicates that monetary policies cannot do much about structural growth and employment problems. If you do not have enough skilled workers, the central bank cannot mint doctors and engineers. The thinking and experience also stresses that any trade-off between growth 6 See Sarwat J, March 2012, Inflation targeting: holding the line, available at http://www.imf.org/external/pubs/ft/fandd/basics/target.htm.

7 The data for 2017 inflation targets are drawn from http://www.centralbanknews.info/p/inflationtargets.html. Page 7 of 17 and inflation, or unemployment and inflation, is short-term only. What you can do is stabilise inflation at the target and employment or growth at its sustainable rate. For this reason, even the central banks with multiple mandates tend to behave a lot like inflation targeters.

Through this act, government entities are directed to use digital payments both in collections and disbursements, including account-based distribution of government financial assistance or ayuda. It also supports merchant acceptance of digital payments by directing local government units to adopt incentive frameworks that encourage the use of digital payments.

That “the last syllable of recorded time” be not the word “tragedy”. So let us together ensure that horizons from this day will no longer be associated with tragedy, but instead with a bright, green, sustainable future. Let the future of finance be that of financing the future! Thank you. 2

It is probably more sensible to share the risks with global capital markets and global companies. But these trends will take some explaining, not least to foreign and international organisations, many of which have a more traditional view of current account positions. 4 BIS Review 137/2009 Our explanation to our own citizens will also be important, and not just about capital flows.

The process subsequently set in motion produced first the abandonment and then the prohibition of monetary financing of the Treasury, the assignment to the Bank of Italy of the power to set the discount rate, formal recognition of its independence and, finally, its formal mandate, within the framework of the European System of Central Banks, to work for the objective of price stability.

Having considered the obstacles likely to hamper global growth prospects, let me take the opportunity to share my views on what features the global growth model should have, if it is to be sustainable. First, we need to reconfirm our commitment to medium-term, stability-oriented macroeconomic policies.

As before, these policies should be focused on maintaining fiscal sustainability, price stability and financial stability, which should help limit boom and bust cycles in the future. We need sound fiscal policies supported by credible fiscal rules. In Europe, the Stability and Growth Pact provides a rule-based framework based on reference ratios for fiscal deficits and public debt in terms of GDP.

BIS central bankers’ speeches 1 The primary rationale for the monetary union is to cement the benefits of regional economic integration. Replacing individual currencies with one single common currency will reduce the costs and risks of transacting business across the national boundaries of the partner states of the EAC.

There is no time to relax; there is just a little more time to prepare. Now, Brexit at least offers an opportunity to think about CCPs and concentration risk in more general terms. The market for clearing is highly concentrated. While I do see the benefits in terms of efficiency, I also see the risks. And this is something we definitely need to discuss.

They do not want to – or they do not have the confidence to – bring forward future spending to today. As a result, household indebtedness in many countries has declined even though interest rates are the lowest on record.

One area where low interest rates do appear to be having the broadly expected effect is on asset prices: global equity markets have been strong; property prices are again recording solid gains in some countries; and bond prices have increased substantially. However, for these increases in asset prices to boost the global economy, households and businesses need to respond by increasing their spending.

It means that we, and the other federal and provincial agencies responsible for the health of our financial system, must monitor these developments and understand their potential implications for financial stability. And we must continue to strengthen the ability of our financial system to withstand shocks.

2/5 BIS central bankers' speeches Beyond Traditional Central Banking In being a conservative central monetary authority, we face a significant tension: there are several factors that compel us to become more innovative and creative in our approaches and go beyond traditional central banking.

Nevertheless, the strength and sustainability of this recovery will to a large extent depend on the persistence and speed at which the reforms that have already been set in motion are pushed through. In particular, next to the substantial budgetary consolidation efforts, the continuation of wage moderation to foster price competitiveness is essential.

If taken with determination, such actions can create room for maneuver in these countries so that they can alleviate the effects of the crisis and improve growth prospects. As fiscal measures are being taken in many countries to counteract the economic contraction, the need to ensure that individual actions come to form a coherent approach is more pressing.

But let us be modest and bear in mind that solutions to the crisis are only good:  if they are thought through carefully,  if they are widely accepted and shared by European citizens, and  if they are widely implemented across euro area countries and, when needed, improved and strengthened as necessary.

It is an interesting question as to whether it is better for a bank to pool the risks on its own books or whether it is better for the risk to be off the books of the banks and instead be distributed round the system.

In the second phase, or the second generation reforms, which started in the mid1990s, the emphasis of reforms has been on strengthening the financial system and introducing structural improvements. Against this brief overview of the philosophy of financial sector reforms, let me briefly touch upon reforms in various sectors and segments of the financial sector.

Banking sector The main objective of banking sector reforms was to promote a diversified, efficient and competitive financial system with the ultimate goal of improving the allocative efficiency of resources through operational flexibility, improved financial viability and institutional strengthening. The reforms have focussed on removing financial repression through reductions in statutory pre-emptions, while stepping up prudential regulations at the same time.

Such a policy increased appetite on the part of employees to take unwarranted risks on behalf of the institutions they were working for. It is never too late to mend. After all, we all learn from mistakes. It is therefore imperative in human resources management to devise a fair compensation scheme for financial institutions.

It is my personal conviction that compensation for risk taking should be based on the following principles: 1) An executive compensation scheme should adequately reflect the performance of the executive in the medium and long term. Therefore, executives and traders should not be compensated based on current year revenue but the average income of a financial institution in a defined period.

These engagements make an important contribution to enriching our understanding of financial market developments in support of the formulation and implementation of monetary policy and financial stability policy. We also value that we get to network a little less formally at this event than at our various official forums.

Allow me to take stock of what has again been a rather eventful year in international and domestic financial markets since we last met for the annual cocktail function.

Second challenge: Still hampered monetary policy transmission Let me move to the second challenge: As long as we are below our focal point for inflation over the medium term, we want to ensure that our measures are effective in pushing inflation back to our medium-term price stability objective and that they are transmitted smoothly and quickly through the economy.

Of course, the response of central banks to this risk should not be to avoid taking policy actions that are necessary to achieve macroeconomic objectives. But central banks can mitigate the potential for unintended market reactions by communicating their goals and economic outlook as clearly as possible to inform market expectations and thereby avoid possible misperceptions about the future path for policy.

Country specific responses The Bank of Greece has acted similarly to other NCAs on the regulatory front and adopted similar measures with that of the SSM for the Less Systemic Institutions that fall under our supervisory competence.

In addition, and as we did not have in place countercyclical capital buffer to release, we decided to ‘freeze’ the level of Other Systemically Important Institutions Buffer at the existing levels for a year. Banks also announced in the early stage of the crisis, a system-wide loan moratorium that is compatible with the relevant EBA Guidelines.

Even among college graduates, whose unemployment rate is much lower than that of the population as a whole, the rate has doubled since the onset of the recession. As familiar as the unemployment rate is, both as a measure of economic slack and as an indicator of the pain experienced by American households, it does not tell the whole story.

Most Australians now work in the service sector and live in cities, so how we deliver services and how our cities function have a major influence on our future living standards. This is yet another area where we will benefit from a strong innovation mindset. On building our links with Asia, we continue to see progress.

have also been initiated. Role of the auditor community in promoting sustainable growth 18. Let me now turn to some messages that I would like to give the auditor community present here.

First of all let me compliment you for the very critical role that you play in keeping the banking sector healthy by auditing the balance sheets of banks and that of the borrowers to whom the banks lend. I would, however, begin on a light-hearted note.

We are able to make thousands of transactions in a second and transmit huge amounts of data across the globe at the click of a mouse, but at the same time we are exposed to the risk of high-speed and high-volume losses. There is a trade-off for every innovation.

But before you can assess the trade-off, you have to know what elements are being traded off against each other. For example, at the Bundesbank, we have identified a trade-off between the need to use mobile devices and the need to use data sparingly; we now ask our staff to use mobile data only when necessary.

Older people have increased their participation, and so have women across many age groups. Part of this effect could be cyclical. Women in their middle years and older workers of both sexes are two of the groups who increase their labour supply noticeably when demand for labour is strong (Evans, Moore and Rees 2018). But there is also a structural element to these increases.

In fact we should have expected it. That is because these two groups are also the groups whose participation you'd expect would increase as part of population ageing. Population ageing comes from two drivers – lower fertility, and increasing longevity. If women are having fewer children on average, then fewer women are out of the labour force caring for children at any one time.

Comparison," Financial System Review (Ottawa: Bank of Canada, December 2006): 61-65. Available at: <http://www.bankofcanada.ca/en/fsr/2006/research_1206.pdf>. 18 V. Dolar and C. Meh, "Financial Structure and Economic Growth: A Non-Technical Survey" (Working Paper No. 2002-24, Bank of Canada, 2002). Available at: <http://www.bankofcanada.ca/en/res/wp/2002/wp0224.pdf>. BIS Review 103/2009 7 the risks associated with financial innovation, in the context of an appropriate regulatory framework.

I'd now like to draw some of these threads together by discussing what policy can do to help. The role of policy The combination of factors that are thought to explain Canada's productivity problem suggests that efforts to tackle the productivity challenge must be broad based.

But many organizations are on their own to test their critical systems with their key suppliers and customers. Because this situation is both complex and fragmented, it is a very difficult task to quantify the aggregate costs of Y2K remediation. Similarly and perhaps more importantly, we also have no national scorecard on how effective our economy is being in our remediation efforts.

Under these circumstances, it is not hard to understand why the millennium bug is viewed as such an unpredictable phenomenon, and why it has attracted so much gloom and doom commentary. What is Being Done? So, what is being done? The short answer is a lot is being done.

In fact, the latest economic indicators show that the effects of the decline following the consumption tax hike have been waning, except for durable goods including automobiles. Some people view a statistical negative growth in real wages as a problem, but it is due to a one-time increase in the inflation rate resulting from the consumption tax hike.

With respect to financial stability, whereas in the case of the devaluation you will lose the ability to purchase more goods and services, in this case, if a bank closes you will lose all of your money. A proper legal and regulatory environment is therefore vital to the maintenance of stability.

John McDermott: Understanding the New Zealand exchange rate Speech by Dr John McDermott, Assistant Governor and Head of Economics of the Reserve Bank of New Zealand, to Federated Farmers, Wellington, 22 November 2013. * * * Whenever presenting on the economy, the first question I get almost always relates to the elevated level of the New Zealand dollar.

People are often concerned that that the exchange rate is too high or too volatile and believe that these problems could be addressed by running monetary policy differently. Concern about the exchange rate is understandable. Movements in, and the level of, the exchange rate can have substantial impacts on the performance and structure of the New Zealand economy and on people’s livelihoods.

This conditional commitment was buttressed by a decision to offer term purchase and resale agreements out to a one-year maturity, with set maximum and minimum bid rates.7 So, how have all of these diverse actions fared? Here is a brief and tentative summary of how the unconventional measures adopted by Canada and other industrial countries have performed so far.

6 Although Japan's financial system was relatively unaffected by the global turmoil, last fall conditions in its commercial paper and corporate bond markets tightened sharply. In that context, the Bank of Japan began to buy commercial paper and corporate bonds to support corporate financing.

When evaluating the current situation, I would like to emphasise the obvious, namely that the monetary policy decisions of the ECB are based on the assessment formulated under both pillars of the monetary policy strategy of the ECB and nothing else. The outcome of this assessment is not least reflected in the level of the minimum bid rate on the main refinancing operations.

That said, I must also indicate that I assume that I have not breached the order of precedence of your organisation and hasten to declare that I proceed on the basis that all protocol has been observed.

The primary credit facility is the main program under which the Federal Reserve extends loans to depository institutions. 5 Under this program, each loan is extended for very short terms (usually overnight) to a depository institution in sound financial condition, and the interest rate on such loans is referred to as the "discount rate."

Since 2003, the discount rate has been set above the usual level of short-term market interest rates, and during normal times this rate has been maintained at 100 basis points (1 percentage point) above the federal funds rate target. As a tool for providing liquidity to the financial system, the discount window is distinct from open market operations in two important respects.

São Paulo is the financial and economic centre of Latin America and, for that reason, the Bundesbank has been sending a representative to the German Consulate General here since 2005. Today, a new representative has taken up office.

A key factor contributing to the relatively rapid recovery of the Asian emerging market economies was that, in contrast to many previous episodes of severe stress, these economies were well-positioned to permit the use of countercyclical fiscal and monetary policies.

In this context, the Governing Council decided last month to adopt several credit easing measures – by which I mean, measures aimed at ensuring that the accommodative policy stance is translated into a corresponding easing in credit conditions. In particular, these measures include a series of targeted longer-term refinancing operations (TLTROs) aimed at easing credit conditions.

The TLTROs are expected to ease overly tight lending conditions, lower lending rates and stimulate credit volumes through several channels. The first and most important channel is through a reduction in term funding costs for banks.

From our analysis there is no immediate risk facing our banking system which happens to be well capitalized (with a capital/assets ratio of about 18 per cent), with a very low level of nonperforming loans and basking in excess liquidity.

Unlike the banks in large emerging markets the lending operations of our banks are based on local deposits rather than on borrowing from foreign banks. All of our local banks have foreign short-term revolving credit lines. However, given the ample availability of foreign exchange from the central bank and in the domestic market, these lines are quickly amortized when used.

A separation principle was established; and supervision does not have broad regulatory powers like in monetary policy. So while our unconventional measures undoubtedly have side effects, the essential point is that these side effects are not manifestly disproportionate to the primary objective of the measures – contributing to price stability.

But we have to continuously monitor the ongoing appropriateness of our measures in order to preserve the balance between costs and benefits. And while the growing number of new tools and activities has moved the actions of the central bank closer to other policy realms, the boundary was never crossed – as confirmed by the European Court of Justice.

The measures taken are only one side of the coin when it comes to discuss the euro’s role as a shelter. It is plain to see that EU membership alone has stabilized the region. It boosted access to international financial markets and enhanced the provisioning of indirect support to local banks.

The severity of the downturn during the crisis was accentuated by the excessive financial leverage of large international banks, typically as high as 50:1.

Fortunately, the idea has not gained acceptance, not only because of the ECB’s dislike but also because of the devastating effect it has had on financial markets. It will take time to recover from the loss of credibility suffered by Europe with that proposal.

You might also be expecting me to talk about the advantages of Europe’s new Single Supervisory Mechanism. Or about the challenges we face in completing Economic and Monetary Union. Well, these are indeed important issues, but I’d like to approach them today from a slightly different angle, namely from the perspective of economic and financial globalisation.

While Title II establishes a special resolution mechanism and grants the FDIC powers responsive to the special challenges posed by the failure of large financial institutions, it provides only a legal framework, not an elaborated description of how these powers would be used to resolve a systemically important financial firm.

Moreover, the very large financial firms that are the most likely subjects of a Title II proceeding have extensive cross-border activities, and thus implicate the legal systems of other countries.

Considering that financial institutions need to hold a certain amount of JGBs for such purposes as collateral, as mentioned earlier, there will be a phase in which they will not sell their JGB holdings actively even amid declining interest rates.

In view of the tighter labour market, DNB is keen to use female potential. Finally, as a guardian of financial stability, DNB has an important social role. In keeping with our social responsibility, we wish to pursue a diversity policy that ensures that our workforce is a good reflection of our society.

In terms of structure, the financial account still recorded a high net inflow of foreign direct investment, which was higher by around 2% year-on-year and boosted by the net inflow of portfolio investment. We estimate that the net inflow of foreign direct investment for the entire year will be around EUR 2.6 billion.

Since the start of the year, lending also posted accelerated growth – to 7.5% year-on-year in March, sustained by the effects of past monetary policy easing, growing economic activity and labour market recovery. Coupled with the activities on the resolution of non-performing loans, this was conducive to the continued reduction in the share of non-performing loans in total loans to 9.2% in March.

There are many factors to this such as political stability, the quality of our infrastructure, the efficiency of the approval process and the cost of doing business. These are very important issues and we need to do all we can now to deliver them to the investors.

However, I would like to focus on one important issue and that is the role of the capital market in raising this investment and thereby promoting economic growth. This, I believe, is the central theme of this workshop.

The Council published its framework for assessing the CCyB in December 2014. 21 Denmark was one of the first countries to develop and publish a method to assess the CCyB. In Denmark, the CCyB could potentially have been set at a positive rate from 2015. This was one year earlier than in many other countries.

The Danish framework was gradually phased in from 2015 to 2019. The buffer rate could be set at up to 2.5 per cent in 2019, and from 2020 it can be set at a higher value if justified by the assessment basis. The initial method for assessing the CCyB comprised three steps.

Schließlich möchte ich ein paar Anmerkungen machen zu den Produktivitätsentwicklungen in Europa, die wir in letzter Zeit beobachtet haben, sowie zu den Kriterien, die erfüllt sein müssen, um dem Euro-Währungsgebiet beizutreten.

Economic and monetary developments Since my previous appearance before the European Parliament a month ago, the new economic data which have become available have confirmed our view that risks to price stability remain on the upside over the medium term, as identified by both our economic and monetary analyses.

Of course, this was not the only reason for our somewhat surprising decision last Thursday. There were other reasons, too. I will come back to them later. In retrospect, in the eyes of the central banks involved, the merging to form a common, larger monetary area went beyond a mere geographical reorientation of monetary policy.

When Bank of England governor Mark Carney gave his famous speech on climate change almost two years ago, he mentioned ‘the tragedy of the horizon’. He was referring to how the catastrophic impact of climate change will be felt beyond our traditional horizon – imposing a cost on future generations that the current generation has no incentive to fix.

We need to focus long term policy on an effort to break the productivity barrier, in order to ensure sustainable and inclusive growth, prosperity, and a suitable standard of living. • Despite the growth in labor input, the output gap between us and advanced economies isn’t closing.

This is a result of low capital stock and investment, poor infrastructures, inadequate government investment in research and development, and an inefficient business environment. • Expected trends in world trade, global growth, demographics, and human capital development, will reduce the growth of Israel’s economy in the coming decades.

As can be seen, in Japan, capital input, labor input, and TFP growth all decelerated in 1995-2012, and thus all three contributed to the decline in growth overall.

Other countries in the euro area, however, can only place their securities with investors at relatively high interest rates. Although monetary policy can reduce this fragmentation of the markets in the euro area, it cannot completely eliminate it. This can only be done at the political level.

To take 2010 figures, the EOE sector represents around 6 per cent of GDP, accounts for 58 per cent of total export of goods, and provides employment to nearly 56,000 persons, which in turn represents a little over 10 per cent of total employment.

However, the EOE sector and external demand-led sectors as a whole are subject to some structural weaknesses which make them particularly vulnerable to external shocks. A full two-thirds of our total export of goods was directed to European markets in 2010. This BIS central bankers’ speeches 3 pattern of dependence on Europe is also evident on the services front.

1 V Acharya and S Steffen (2013), The “Greatest” Carry Trade Ever? Understanding Eurozone Bank Risks, Working Paper, NYU Stern School of Business. 4 BIS central bankers’ speeches Hence, this strategy further intensified the negative feedback loop between banks and sovereigns during the crisis. Several incisions will be needed if we are to sever these links.

The first of these will be the Single Supervisory Mechanism, which is tasked with preventing banks from getting into difficulties at an early stage. But these are problems that cannot be entirely ruled out in the future, nor would we want to do so. After all, the possibility of failure is vital for a functioning market economy.

The systemic risk arising from the shadow banking sector cannot be easily ring-fenced. This is because of the interconnectedness of shadow banks with the regulated part of the financial system. Stress in the shadow banking sector can be transmitted to the banks both through direct and indirect channels: banks’ exposures to shadow banks through equity investments, credit claims or liquidity lines.

Credit claims are often related to prime brokerage services allowing de facto non-bank financial institutions to increase their leverage. Undrawn liquidity lines can also be activated once the redemption risk materialises. Banks also rely on funding received from shadow banks, which often invest in bank debt securities or provide liquidity through repo transactions or through provision of collateral.

They estimate that inflation in Germany, as measured by the HICP (Harmonised Index of Consumer Prices), is currently at 8.8%. Inflation in the euro area as a whole has been running well above the Eurosystem’s 2% target for quite some time now. Many view Russia’s war against Ukraine and its economic repercussions as key factors behind the high inflation.

Good morning to you all and thank you for taking out time from your busy schedules to be part of this forum. This Workshop marks another important milestone on our journey towards building financial literacy and financial inclusion in Fiji.

In the case of loans to households, the latest data provide further confirmation of a levelling-off at low rates of growth. As regards loans to non-financial corporations, it is worthwhile to note that the growth of loans to enterprises typically picks up with some lag compared with the cycle in economic activity.

In this respect, the still subdued levels of production and trade, as well as the ongoing uncertainty surrounding the business outlook, are likely to dampen firms’ demand for bank financing also in the coming months, especially for short-term loans. At the same time, overall financing conditions continue to improve, which should support the demand for loans in the period ahead.

We are, though, strongly committed to providing the information that allows people to make their own judgements about future movements in interest rates. This information includes our economic forecasts, the issues and uncertainties that the Board is focusing on and how the Board is using the policy framework to make its decisions.

We hope this transparency is helpful for people in understanding how monetary policy is set. 9 As you would be aware, the Board has increased the cash rate significantly since May, with the cash rate currently standing at 2.85 per cent (Graph 10). We needed to remove the pandemic emergency settings and respond to the high rate of inflation.

Growth of community development finance and current challenges The Community Reinvestment Act (CRA) was enacted more than 30 years ago in response to deteriorating economic conditions in urban areas, particularly in lower-income and minority communities. The CRA served as a catalyst in attracting innovative public and private investment capital into low- and moderate-income communities.

By the middle of 2009, euro area real GDP was more than 5% below its peak at the beginning of 2008, wiping out much of the growth witnessed between 2005 and 2007. Euro area industrial production excluding construction fell by more than 18%, while export volumes came down by more than 17%.

Any unregulated private issuer would have the incentive to increase note issuance well beyond the socially-optimal level. This is due to a failure of private issuers to account for the negative externalities that increased production of currency, and the concomitant erosion in its value, would have on those using it.

Many of our panelists contributed to the volume; their articles give us a look at the issue from every angle, provide great insight, and offer promising solutions. And I would note that a number of participants and contributors are current or former members of the Federal Reserve Consumer Advisory Council (CAC).

The implied Blue Chip consensus longer-run real federal funds rate averaged around 2.2 percent in the two decades preceding the crisis, which is close to the level of the intercept term in the Taylor (1993) rule, which in turn is based on empirical analysis of the period from the mid-1980s to the early 1990s.

Martin, Jr., Chairman, Board of Governors of the Federal Reserve System, to the Joint Economic Committee, December 13, 1965 (available at the St. Louis FED website).

At other times, they are “out of sync” and can work against it, making monetary policy spongier, and perhaps less effective at the margin than would otherwise be the case. At times over the past decade, monetary policy in New Zealand and some other smaller open economies had to contend with global interest rates that were considerably lower than domestic economic conditions would warrant.

Financial institutions in these countries were able to access cheaper funding than they could obtain domestically, exchange rates rose to uncomfortable levels on the back of the carry trade and some asset markets – such as housing – were able to surge on the back of lower effective interest rates than domestic policy settings might suggest.

In my opinion, negative real interest rates – relative to saving deposit rates offered by banks, typically 25–115 basis points below the KRR – have contributed to a significant decline in the savings rate, given a boost to consumption leading to a sharp deterioration in BIS central bankers’ speeches 7 the current account deficit, and fuelled speculation in search of higher yield beyond the safety of bank deposits.

Second, the proposals never say anything about the implications for the fiscus, for interest rates, and for the broader economy of targeting a specific exchange rate level.13 Third, I would like to hear why this effort would be successful in South Africa when it has not worked well in other democracies that have tried it.

As a result, although total cash earnings per employee have risen moderately, albeit with fluctuations, the increases have remained relatively weak compared to tight labor market conditions, partly due to the high wage elasticity of labor supply in recent years, mainly among women and seniors.

As Japan's economy is likely to continue on an expanding trend, it is expected that the supplydemand conditions in the labor market will remain tight. I therefore expect the rate of increase in total cash earnings per employee to gradually accelerate.

As I mentioned earlier, this is likely reducing the level of investment. Now, let’s look at the structural factors that affected business investment during this period. I’ll focus on two: demographics and productivity growth. Population aging under way across most advanced economies has led to a marked slowdown in labour force growth, and this has been a strong headwind to investment.

In Canada and the United States, for example, the annual growth rate of the labour force slowed from around 1 1/4 per cent in 2006 to less than 1/2 per cent in 2016.11 This decline has reduced potential output growth and investment demand. Low productivity growth since 2007 has also been a headwind on business investment.

Cependant, en dépit des efforts déployés avant et pendant le conseil d’Amsterdam, aucune solution n’a été trouvée pour une grande partie des interrogations suscitées par la question de la finalité politique de l’intégration européenne.

Volume of transactions via PesoNET and InstaPay—the platforms for large- and small-amount fund transfers—grew year-on-year last January by 293 and 396 percent, respectively. Digitalization also accelerates financial inclusion to those unserved and underserved by traditional bank branches. This results in more economic activities and, therefore, faster economic growth. With an enabling regulatory environment, we have seen an increase in digital financial accounts.

A rise in the S&P 500 often reflects a broader ‘risk on’ trading environment that leads to higher exchange rates in the currencies of better performing advanced economies such as New Zealand, Australia, Norway, Sweden, and some emerging market economies.

[As you know,] the most powerful Roman after Julius Caesar and his three famous words “veni, vidi, vici” is President Draghi with his famous three words “whatever it takes” (to save the euro) announced in July 2012 in a speech in London, thereafter quantified with the announcement of the OMT programme in September of the same year, which resulted in a huge drop in Italian and Spanish yields as you can see from the following Figure (page 18).

According to the IMF’s database, India’s contribution to world growth has risen from 7.6 per cent during 2000–2008 to 14.5 per cent in 2018. Multilateral agencies are further optimistic on this as far as the medium-term outlook is concerned. Most importantly, India’s growth story is backed by strong domestic fundamentals.

For instance, (i) inflation has eased, (ii) central government remains committed to the fiscal targets, and (iii) the current account deficit (CAD) is far less than its peak level during the stress period (i.e., taper talk period of mid-2013). 3. Indian economy has witnessed an accelerated pace of domestic reforms in recent years.

The direction of play remains unclear at this stage. It may be that the rise of one form of digital payment will lead to the fall of another. It is also possible that physical cash is used to a lesser and lesser extent until it effectively fades from existence, at least as far as transactions are concerned.

None of us have a crystal ball to tell us how the match will end. But we can look at existing 1/4 BIS central bankers' speeches evidence. In my brief remarks this evening, let us turn to the hypothetical question: how would the coin toss change, if one of the sides were to vanish?

As leaders of the State Council are much attentive to the making of micro guaranteed credit policy on unemployed laid-off workers, so banking system should seriously study the spirit of Vice Premier Huang Ju’s instructions and learn from the advanced experiences of the 5 provinces and cities to facilitate the work of micro guaranteed credit for unemployed laid-off workers to make new breakthroughs continually.

In times of change, however, it is almost impossible for us to derive expectations about the future from the adjustment patterns of the past. This is particularly true at the current juncture: despite severe shocks buffeting the economy, non-performing loans have not risen materially. At around 1.3% at the end of 2022, the NPL (Non-performing Loan) ratio remained low.

It would be useful to draw upon the Introduction in an IMF Working Paper3 on the subject which identifies four major trends in the financial economy of the past decades and mentions the following: “Although these trends reflect important advances in finance that have contributed substantively to economic efficiency, they evidently have implications for the nature of financial risks and vulnerabilities and the way these affect the real economy, as well as for the role of policymakers in promoting financial stability.

Macro-prudential analysis must rely on rapid, direct and comprehensive access to data on individual developments liable to affect global financial stability while, in turn, this analysis must feed the micro-prudential control. It would be a pity if our efforts to improve this flow of information in our respective countries were to be impeded by hurdles at the international level.

Among other things, the simulation aims to ensure that each subcomponent of the greater SAA exercise is owned, that timelines are accurate and effective, and that each procedure is well documented by owners in a complete and up-to-date procedure manual.

In doing this, we hope to create a separate environment and process where we can focus solely on the SAA process itself, removed from the overarching deadlines which are present in real-life SAAs. In this way, we aim to create a more robust operational framework for future SAAs.

* * * More than two hundred years ago, Adam Smith offered the first comprehensive examination of why some countries are able to grow and have high standards of living while others make little progress. In The Wealth of Nations, Smith put forward a number of explanations for the different paths that countries follow.

He accurately identified capital accumulation, free trade, an appropriate--but circumscribed--role for government, and good "institutional infrastructure" as key drivers of national prosperity. Perhaps most important, he emphasized the role of personal initiative: The natural effort of every individual to better his own condition, when suffered to exert itself with freedom and security, is so powerful a principle, that it is . . .

And that thousand rand plus is roughly made up of two R10 notes, three R20 notes, two R50 notes, seven R100 notes and one R200 note. Although in your design competition you worked on a R500 note, we are far from needing it. 8. I am happy to confess that the issuing of bank notes is a monopoly.

As is the case in any burgeoning enterprise, some of the real challenges are still in the domain of the unknown. The experience of other jurisdictions provides us with precious insights and helps us to avoid certain pitfalls. Indeed, this is not the case only with Islamic Finance, but applies to the entire financial sector.

For example, measuring firms’ investments or those of an entire domestic economy, in a way that can be compared across firms and countries, first requires setting multiple and detailed accounting and statistical standards, identifying the right interlocutors in firms, and formulating the right questions for data collectors: because a productive investment can have a thousand different implications, from the purchase of a pencil 9 On the role of scientific paradigms, Thomas Kuhn is among the most often cited (1962), The Structure of Scientific Revolutions, The University of Chicago.

11 to new software or an entire skyscraper, from the construction of a warehouse to the planning and realization of industrial machinery. It is even more difficult to measure the sentiment and expectations of a local, national or international community: confidence levels, inflation expectations, consumption or investment intentions.

The first point that should be made here is that the main burden for getting things sorted out again clearly rests with these countries themselves. The related point here is that, for some, (to borrow the catch-cry from positive-thinking management texts) “this isn’t a problem, it’s an opportunity”.

However, the role of this sector has recently been scrutinized for its contribution to financial sector fragility during the recent global financial crises. Therefore, at the November 2010 G20 Seoul Summit, while reviewing the new capital standards for banks (Basel III), the G20 Leaders identified some remaining issues of financial sector regulation that warranted attention.

Jean-Claude Trichet: Interview with Le Point English translation of the full Interview with Mr Jean-Claude Trichet, President of the European Central Bank, in Le Point, conducted by Patrick Bonazza on 22 July 2011, published on 27 July 2011. * * * Has the euro been saved, then, after last week’s summit in Brussels?

The euro itself, that is the currency, has never been under threat. The risk was not to the stability of the single currency, but rather to the financial stability of the euro area owing to the fiscal problems in Greece. The euro is not in question: it is solid, strong and credible. The euro has kept its value for over 12 years.

In this capacity DNB uses its influence in the international regulatory environment. There we liaise with standard-setting bodies to ensure that new regulations and standards advance the public good. I will illustrate how we have played this role in practice, using recent developments of International Financial Reporting Standards as an example.

The Reserve Bank has also been looking into the effectiveness of some macroprudential instruments that may limit build-ups of problems in future periods of rapid credit growth. 7 7 For details see Spencer (2012) “Prudential lessons from the Global Financial Crisis”, Presentation to Financial Institutions of New Zealand 2012 Remuneration Forum, May. BIS central bankers’ speeches 7

I am exceptionally pleased to be able to welcome Professor Helmut Schlesinger, President of the Deutsche Bundesbank from 1991 to 1993. I am glad to have with us today Jürgen Hettinger, President of the Frankfurt Regional Office of the Deutsche Bundesbank. Thank you for hosting this conference.

And, last but not least, I would like welcome the distinguished speakers who will make this conference an inspiring event: Professor Giancarlo Corsetti, Professor Gerhard Illing, Professor Philip Lane, Professor Andrew K Rose, Professor Karlhans Sauernheimer, Associate Professor Philip E Strahan. Ladies and gentlemen! I came into office as President of the Deutsche Bundesbank only five weeks ago.

In addition, persistent and unexpectedly low inflation may significantly raise the real cost of making mortgage and other loan payments if accompanied by (as is typically the case) smaller-thananticipated nominal income gains.

Return to text 5 On a seasonally adjusted basis, sales of light motor vehicles fell to an annual rate of 16.5 million units in March but then rebounded to a pace of 17.3 million units in April and 17.4 million units in May.

Over time, it has become clear that the best way for us to fulfill this mandate is to keep inflation low, stable, and predictable. Specifically, we aim to keep the annual rate of consumer price inflation at the 2 per cent midpoint of a 1 to 3 per cent target range.

It remains to be seen to what extent outsourcing could be expanded. Corporates have two important roles to play in these different levels of innovation. On the one hand, they are playing an important role, together with the banking industry, in the creation of these new payment solutions and the related processes.

However, despite a gradual decrease in public-sector investment from the latter half of 1996, the virtuous circle - in which increased production leads to a recovery in business fixed investment and personal consumption through improved corporate profits and employment income - is gradually becoming more apparent. This improvement is encouraging.

In contrast to these recent improvements in economic indicators, the beginning of the year saw a significant fall in stock prices and this, together with the decline in long-term interest rates in the financial markets, indicates that the confidence of the market participants in the economic outlook is still slow to improve.

The decline in the foreign exchange value of the dollar over the past year or so has contributed to the rise in the price of imports in the United States.

The prices of core non-energy imports began to increase more rapidly than the general level of core consumer prices in 2003, and the difference widened in the first quarter of this year, adding to general price increases.

The overwhelming majority, over 90 per cent, of the investment has been by publicly listed companies (Graph 1). The investment has been predominately in iron ore, coal, oil and gas (mainly LNG), with these four commodities accounting for 84 per cent of the investment in physical infrastructure during the boom.

Protecting the legal tender status of our banknotes will still call for a high level of vigilance from the ECB and the NCBs, in particular in order to prevent unwarranted limits and thereby ensure support for the euro and its existence.

The reasons for that are not hard to understand: a combination of automatic fiscal stabilisers as revenues declined when the major economies went into recession; discretionary stimulus measures to counteract the crisis impact; and in some cases, the costs of emergency public support to troubled financial institutions.

The reason for the delay is the existence of significant productive capacity that remains unused in many of the developed nations. While the U.S. economy has clearly strengthened, it has not yet returned to pre-crisis output and employment levels. Its unemployment rate, for example, remains near 9 percent. In the U.K., unemployment remains near 8 percent.

This is despite the significant contribution that these businesses make to gross domestic product (GDP) and employment. The inability of SMMEs to raise funds is caused by a number of demand- and supplyside factors, such as the lack of financial records and the inability of lenders to tailor their loan terms to match the business needs.

The impossible trinity suggests that you cannot limit interest rates, prohibit the taking of collateral, and still expect the borrower to have the same level of access to loans.