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In this world, whose individual economies are all interlinked in one form or another, the strange phenomenon of the tail wagging the body can no longer be deemed exceptional. It has become more important to understand tail risks, which are hard to predict due to their low probability, than it is high probability events.

What we have to reflect seriously on is the issue of whether an event that has occurred was from the tail as originally expected, or whether the shape of the distribution had already changed and the event had in fact migrated from the tail to the body but we were oblivious of this change in circumstances and had sought to analyze it as a low probability event based upon an outdated distribution.

The Bank sold some foreign exchange from its official reserves, not with the intention to fix the exchange rate, but rather to provide liquidity to the market and to smooth the adjustment process. As the Reserve Bank sold foreign exchange to the market to partly finance the overall balance of payments deficit, domestic rand liquidity was drained from the banking system.

Finally, it would make the integration of the central banks concerned into the Eurosystem operational framework much more difficult, if not impossible. Ladies and gentlemen, I should like to end my remarks here by saying that the Eurosystem is fully aware of the future implications of the ongoing accession process for the fulfilment of its own statutory objectives.

Fourth, there is a growing recognition in India that governance reforms are critical to strengthen state capacity and enable it to perform its core functions. The task of improving the institutions of economic governance comprise, among others, many organizations and actions essential for good functioning of markets.

It must be recognized that good governance can co-exist only when public sector functions fairly and efficiently, which is achievable by improving and not undermining it. The business community has therefore a vital stake in improving and empowering public institutions. I would like to endorse what Professor Avinash K. Dixit, President-Elect, American Economic Association said in the Second P.R.

So, I begin by complimenting ASSOCHAM for conceptualizing this “Bankers-BorrowersBusiness” meet and more so, for choosing “Empowering MSMEs” as the theme for the second edition of the Meet.

The theme is extremely significant for a number of reasons: continued moderation in economic growth; rising pile of stressed assets in the corporate loan book of banks; need for employment generation; fulfilling entrepreneurial ambitions and so on. 2.

Let us hope that it won’t take us as long to wake up to the importance of biodiversity as it took us to notice climate change. Central banks should not be the primary actors in mitigating climate change and reducing biodiversity loss. Value judgements should be left for the representatives chosen at general elections.

For the varying impact of the pandemic crisis across the world, see, for example, Weidmann, J., Welcome address for David Malpass, President of the World Bank Group, speech delivered on 5 October 2020. 5. Bernard, R., P. Tzamourani and M. Weber, How are households’ consumption plans affected by the COVID-19 pandemic?, Bundesbank Research Brief, November 2020. 6.

Bank credit to the SSI sector increased from Rs.168 billion in March 1991 to Rs.530 billion in March 2003. In the policy context, there has been a paradigm shift. The Indian industry remained within a inward oriented policy framework up to the 1990s. With globalisation, liberalization, financial and real sector reforms, the country adopted an outward looking approach.

At present, both the industrial sector in general and SSI sector in particular are exposed to international competitive environment. However, the most significant aspect is that India has evolved a sound institutional set up for financing of the SSI sector.

Demand pressures stemmed from rising incomes and sudden release of pent up demand as recovery began. The supply shocks and demand pressures combined to trigger a wider inflationary process. We were caught in the quintessential central banking dilemma of balancing growth and inflation. 19.

In response to the inflation pressures, the Reserve Bank reversed its crisis driven accommodative monetary policy as early as October 2009 and started tightening. We have been criticized for our anti-inflationary stance, ironically from two opposite directions.

CCIL is also subjected, on an on-going basis, to rules and regulations that are consistent with the Principles for Financial Market Infrastructures (PFMIs) issued by the Committee on Payment and Markets Infrastructure (CPMI) and International Organisation of Securities Commissions (IOSCO). 35. Ideally all trading pools on whatever platform must have access to such a CCP arrangement.

We are in the process of preparing a broad policy framework, based on consultation with all stakeholders, on authorization of Electronic Trading Platforms for various asset classes and their access to CCP facilities. Issue of rupee bonds overseas 36. The Reserve Bank had issued draft guidelines for public feedback on issuance of Rupee bonds overseas.

While they also bring in additional regulatory capital prescriptions to act as a loss absorbent, in a competitive capital market, the possibility of SIFIs/SIBs taking additional risks to earn the additional returns on capital and thereby negating the role of additional capital can never be ruled out.

Hence, the nature of supervisory oversight of SIFIs/SIBs ought to be a lot more intrusive relative to other financial institutions. The bank bailouts experience in Europe shows that political economy of bailouts is more important than regulatory labelling. (v) Inadequacy of global financial safety nets (GFSNs) and discriminatory central bank swap lines force EMEs to self-insurance. 13.

When designing the policy, we must take into consideration the decisive role of the market in resource allocation and put power under control. When does power most probably incur problems? One is when you can decide who can issue bonds and who cannot. In fact, we cannot determine who can or cannot issue bonds since the decision should be made by the market.

The same case goes with the question of who can or cannot successfully issue bonds. We have adhered to this principle in the design of this instrument by requiring that the competent authorities must not be involved in the selection of the company list. This is aimed at limiting the power.

at least once a week) during lessons.

In this particular category, Germany actually brings up the rear among the countries surveyed.9 Swiss economist Thomas Straubhaar also highlighted the fundamental importance of education in the digital age in a recent op-ed piece he wrote for a German daily newspaper: “A good education system may be expensive,” he conceded, but in the long run, he continued, one thing is even costlier, and that’s a bad education system.10 4 Impact on inflation Ladies and gentlemen, As a central bank, we are interested in more than just the ramifications of digitalisation for the real economy.

For the sake of simplification I will describe alternative exchange-rate regimes for the Faroe Islands only. In principle, the same would apply to Greenland, however. At the moment an independent currency for the Faroe Islands is not an issue since the political announcements are that monetary and foreign-exchange policy should still be conducted by the Danish national authorities.

This policy is an extraordinary measure for a central bank to implement in that, taking into account that there was little room for a further decline in short-term interest rates, it aims to encourage declines in longer-term interest rates and various risk premiums using a combination of a number of policy measures.

In April the quarterly rate of growth of credit to non-financial firms was nil; it had been 12 per cent a year earlier. Lending to households has also continued to slow. A part of the deceleration can be explained by a decline in manufacturing and real estate investment and in the consumption of durable goods.

But the supply of bank lending has also been curtailed, mainly owing to difficulties in raising medium and long-term funds and to the increase in credit risk. Our survey found that the loan applications of 8 per cent of firms were rejected − the highest figure since the mid-1990s; it was less than 3 per cent a year ago.

Complexity was also used, somewhat perversely, as an argument in favour of a sort of benign neglect on the part of regulators. The big financial players argued successfully that financial innovation was too complex and too opaque for the regulators to get their heads around.

Indeed, they said, to safeguard the international financial system from systemic risk, the main priority was promoting an “industry-led” effort to improve internal risk management and related systems.

In sum, then, we ought to focus on truly global aspects, like regulating globally active banks, while leaving it to individual countries to carry out those tasks that they are better placed to take care of, such as regulating locally active banks. 4 The challenge of supervisory cooperation The second area in which we will see a re-balancing of global cooperation is supervisory cooperation.

Here, like with regulation, we should reassess where a global approach is sensible, and in which cases national approaches are better suited. As a result, we are likely to see more divergence in some areas, but hopefully some more cooperation in other areas. An example for more divergence is likely to be higher demands for licensing foreign bank branches and subsidiaries.

Second, we must strengthen what I will call the financial infrastructure – the systems, rules, and conventions that govern trading, payment, clearing, and settlement in financial markets – to ensure that it will perform well under stress.

To achieve their objectives, it is necessary that the regulatory frameworks governing IFSC operations are well-thought out, guided by the ease of doing business principle, tempered by prudent risk management, and geared to deliver efficient financial services. The various areas of attention from this standpoint include registration and approval process for new entrants, regulation, supervision and resolution of financial entities, and dispute settlement. 4.

As for the financial system, the nonperforming-loan (NPL) problem, which has placed downward pressure on the economy together with these three excesses, has nearly been resolved.

Diffusion indexes for production capacity and employment conditions in the September 2005 Tankan (Short Term Economic Survey of Enterprises in Japan) are at the level of 1992, immediately after the bursting of the economic bubble, showing that adjustments in the excesses have made much progress.

BIS Review 15/2005 1 Besides nominal convergence, it is also important to assess the degree of real convergence. This covers such topics as business cycle synchronisation, the degree of trade and financial integration, factor mobility as displayed in wage and price flexibility, and the risk of asymmetric shocks and the capacity to absorb them.

I will turn to these in a minute. But there are also circumstances where central banks can and should help reduce perilous disparities, in particular when they threaten the effectiveness of our monetary policy. Our experience since 2014 illustrates this aspect well. Around that time, we faced a dangerous disparity in firms’ access to credit.

With the US housing market moribund from low household income, confidence effects, falling prices and lengthy legal delays on the mortgage foreclosure process, workers have been either unwilling or simply unable to move to seek new employment. Moreover, in the US, both monetary policy and fiscal policy face constraints.

While the Federal Reserve can pump more money into the system this risks losses on the securities they hold in return for this cash. In addition, quantitative easing no longer has the same surprise impact; reducing mortgage interest rates at the margin has little impact on households facing unemployment and unable to sell their own home.

Our main indicators are derived from data, but the data we use are often subject to a good deal of revision. And for certain variables that are fundamental to conducting monetary policy – potential output is a good example – there are no direct measures at all. Our destination, however, remains clear: achieving the 2 per cent inflation target.

Tax and regulatory reforms aimed at supporting equity and venture capital investments are a key ingredient in deeper capital market integration. Ensuring strategic autonomy Taking these steps will create a stronger and more dynamic European equity landscape, which at the moment unfortunately lags behind our international peers.

But Australia’s biggest problems for the conduct of monetary policy came in the days when capital flows were more restricted than they are now, but financial prices were regulated.

In those days – and I refer here to the period before the decisions in the early 1980s to allow markets to set the exchange rate and yields on government debt – the problem was basically one of monetary control: policy-makers could not accurately control the amount of settlement funds available to the banking system because domestic policy actions to control these funds were often over-run by foreign operations we had to undertake to clear the foreign exchange market at the nominated exchange rate.

According to the current framework the required capital to be set aside against both customers would be 8% of the amount lent. According to the new framework: • If the standardized approach is used the capital to be set aside the first customer would be 4% while the capital set aside for the second customer would be 8%.

2 BIS Review 28/2005 • If the Foundation IRB Approach is used the capital required against the first customer would be 2.7% for the first and 8.9% for the second. The new framework allows, therefore, greater differentiation of the amount of capital to be set aside against loans to each of these customers.

Its cumulative number of suspicious activities reports in both RMB and foreign currencies posted 654,400, amounting to RMB248.023 billion yuan and USD76.92 billion and covering provinces, autonomous regions and municipalities across the nation. By means of identification, analysis, investigation on suspicious activities reports, increasingly more money laundering related cases were referred to departments of public security for further investigation.

According to incomplete statistics, since April 2004, the PBC and the SAFE have altogether referred more than 1,500 clues to departments of public security at various levels.

The global financial crisis of 2007–08 spurred a vast research agenda on macro-financial linkages, providing us with new analytical tools to calibrate macroprudential measures and to evaluate their impact.

As we think about the path forward, it is important that we retain the CRA’s core focus on place while improving upon the regulation’s flexibility in order to provide meaningful CRA evaluations of banks that largely deliver their products and services digitally.

Drawing on the ideas of the great German thinker Max Weber, I would say that we have to rely on both the ethic of conviction, which I associate with the interest rate measures, and the ethic of responsibility, which I associate with all the non-standard measures. And we have to do that in a highly responsible way.

Therefore, 1/5 BIS central bankers' speeches the High Level Group on Non-Performing Loans – which I have the honour to chair – was mandated to develop a consistent supervisory approach to the treatment of NPLs.

* * * 1 Introduction Ladies and gentlemen About a week ago, the Nobel Prize in Medicine was awarded for work that is of indirect interest to the banking industry. Japan’s Yoshinori Oshumi was honoured for exploring how human cells not only break down but also recycle cell trash that results, for example, from fighting diseases.

Oshumi found that when this process, called autophagy, is disturbed, for example through ageing, this has serious repercussions on our health. I think it is fair to say that this sort of mechanism was truly needed after the financial crisis revealed the damaging cell material within banks.

We heard that we are doing many things well, that we have much we can improve, and that there are different views about which is which. That disagreement is neither surprising nor unwelcome. The questions we are confronting about monetary policymaking and communication, particularly those relating to the ELB, are difficult ones that have grown in urgency over the past two decades.

That is why it is so important that we actively seek opinions, ideas, and critiques from people throughout the economy to refine our understanding of how best to use the monetary policy powers Congress has granted us.

First, despite the best efforts of all actors involved, the crisis has shown that monetary union requires a political centre; a centre that can take the relevant fiscal, economic and financial decisions for the euro area as a whole in a swift and transparent manner with full democratic legitimacy and a clear set of responsibilities given to it by the legislators.

At the end of June 2018, c.46,000 accounts were in arrears greater than 90 days. The outstanding balance on all lenders’ owner occupier The Banking Crisis – A Decade On mortgage accounts in arrears of more than 90 days was € billion, equivalent to c.10 per cent of the total outstanding balance on all owner occupier mortgage accounts.

These countries should use that space to prepare for the future, although it is not for the ECB to tell them how to do it. So Europeans need to carry out their own fiscal agenda, not follow the US?

Let me underscore that the aim of FATCA is to target those who evade paying U.S. taxes by hiding assets in undisclosed foreign bank accounts. We recognize and affirm the sovereign right of the U.S. government, as it is of any government, to collect taxes from its citizens.

Most importantly, we provided banks with unlimited access to liquidity at fixed rates for up to six months. The ECB also expanded its list of assets eligible for use as collateral in the Eurosystem’s credit operations. Moreover, we recently announced further measures, namely to provide longer term refinancing up to one year and to purchase covered bonds of up to EUR 60 bn.

Exiting the crisis mode could pose risks to financial stability in the current environment, which is marked by a prolonged period of low yields and reduced volatility, making it challenging for the financial sector to properly accommodate interest rate risk.

Furthermore, the Incredible India campaign was initiated and large number of foreign tourists started taking interest in India. In fact, receipts from the tourism sector grew by almost eight times from $ 3.5 billion in 2000–01 to $ 28.4 billion in 2018–19.

Growth in the late 1990s and in the early years of this century was, thus, primarily driven by IT, telecom, manufacturing, especially in automobiles, electronics and tourism. Related segments within the service sector also experienced concomitant expansion. What can be the growth drivers of today? 3/7 BIS central bankers' speeches 21.

Moreover, if covenants allow borrowers and agent banks to respond more promptly when firms become financially distressed, the amount of lending and investment that goes to finance low-return projects will gradually decrease, and this should accelerate the shift of economic resources to highly-profitable businesses and industries. I look forward to seeing the JSLA continue to contribute actively in this area. VI.

9 I have a father, who is now fully retired and is one of those enjoying longer life. When I visited him over the New Year holiday, he told me he still regularly exchanges updated family history with his alten Kameraden (old comrades) fifty years on since his days in Germany. Old friendship never dies.

What the crisis has done is to cause a massive break down of trust: trust in the financial system, trust in bankers, trust in business, trust in business leaders, trust in investment advisers, trust in credit rating agencies, in politicians, in the media and in the process of globalization.

When you break down the complex gamut of the causes of the crisis, several skeletons tumble out of the cupboard. Almost all of these relate to how the financial system operated. In a phrase that has now become daily staple, sub-prime borrowers were given loans at teaser rates.

The increase in VAT receipts was particularly small (1.5 per cent); it was probably affected by the complete utilization in 2008 of the changes in the deductibility of VAT on expenses connected with company cars, resulting from the 2006 decision of the European Court of Justice.

Adjusting imbalances entirely through exchange rate realignments is neither practical nor desirable. Meanwhile, policy choices can influence absorption. If dissavings by the government are resulting in current account deficits, consolidation of fiscal expenditure would be necessary. Governments of deficit-running economies might also review any policies that are discouraging private savings or adopt policies that encourage private savings.

In this approach, such a commitment would tend to raise inflation expectations and lower long-term nominal rates, thereby inducing households and businesses to spend more today. This approach asks more of forward guidance than just articulating a reaction function.

Benjamin E Diokno: Role of Islamic banking in promoting financial inclusion in the Philippines Speech by Mr Benjamin E Diokno, Governor of Bangko Sentral ng Pilipinas (BSP, the central bank of the Philippines), at the 4th International Islamic Finance Conference, Manila, 25 November 2019. * * * Assala Mualaukum!

Conclusion I would like to conclude by drawing your particular attention to the following five points: First, let us never forget that scientific and technological progress is very much at the root of globalisation. There would be no low-cost, instantaneous transmission of information, concepts and services at the global level without new information and communication technologies.

These are broadly in line with the national government’s forecasts of 6.5 to 7.5 percent for 2021. Meanwhile, some foreign analysts have rosier estimates for the year, with growth projections ranging from 6.1 percent to as high as 9.6 percent. This shared optimism is based on the Philippines’ macroeconomic fundamentals, which have remained broadly intact, despite the pandemic.

You have just been playing against each other in € and I hope you found it interesting and fun. But perhaps it wasn’t so easy to keep inflation low and stable, in line with our definition of price stability: less than 2%, but close to 2%.

The Chinese government pursues independent foreign policy for peace and advocates the establishment of an equitable and fair world order. Promoting the friendly cooperative relationship with the developing world including the African countries has always been a fundamental element of China’s foreign policy.

On the contrary, these are signs that the transmission process is working. Another channel for the transmission of monetary policy is the lending behaviour among banks. Recently, there were concerns that banks might excessively restrict access to loans following the turmoil in the financial markets during the spring. In economic jargon, these would be referred to as "credit supply restrictions".

Too many of these would cause a "credit crunch", which would slam the brakes on the economy. Banks in the euro area have, in fact, gradually tightened their lending conditions over the past few quarters. They justified this tightening mainly on the basis of higher credit risk among borrowers and the bleaker economic environment.

Risks to this medium-term outlook for price developments are fully confirmed to lie on the upside. These risks include the possibility that stronger than currently expected wage growth may emerge, taking into account capacity constraints and the positive developments in labour markets. Furthermore, the pricing power of firms – notably in market segments with low competition – could be stronger than expected.

JPMC has said that it recognizes the need for, and its own interest in, ensuring that its exit does not disrupt the market. Indeed, JPMC will itself need to rely on these services going forward.

It is a strong coordinating tool for negotiations at sectoral level. Among these sectors, the so-called "all-in" agreements, introducing a corrective mechanism in the event of higher indexation than anticipated during the negotiations, have mushroomed. All in all, I would say that if we didn’t have wage indexation, we wouldn’t have to invent it.

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The lengthening in maturities reflects principally two developments: improvement in overall risk sentiment; and the search for yield in a low interest rate environment pushing investors out along the yield curve in search for yield pick-up. BIS central bankers’ speeches 3 Graph 2 Recent issuance trends I will now go through these developments in more detail.

12 As financial institutions further strengthen their practices, data availability in this area may improve over time. With regard to models, we need dynamic general equilibrium modelling frameworks capable of measuring (possibly non-linear) interactions between the financial and non-financial sectors of the economy and the links to monetary policy instruments.

This means that everyone is worse off in the end. [5] In actual fact, analyses suggest that there are only losers in the trade conflict between the United States and China.

See Trichet, J.C. (2006), “Monetary Policy and Economic Prospects in the Euro Area”, speech at the Institute of Economic Affairs conference on “The State of the Economy: Overcoming Key Challenges to Sustainable Economic Growth”, London, 6 February. 8 See, for example, Blinder, A.S., M. Ehrmann, M. Fratzscher, J.

The agreed payout in the event of bank failure and the revocation of licenses have been pegged at ¢ per customer for banks and ¢ per customer for Specialised Deposit-Taking Institutions. Consolidating the Gains 11.

Going forward, we expect access to credit to be on a predictable and cost effective terms as part of the benefits of the reforms and this week we have met with every bank and discussed ways in which these results can be realised by the end of the year.

During the past decade, despite more than 250 billion barrels of oil extracted worldwide, net proved reserves rose in excess of 100 billion barrels. That is, gross additions to reserves have significantly exceeded the extraction of oil the reserves replaced.

Indeed, in fields where, two decades ago, roughly one-third of the oil in place ultimately could be extracted, almost half appears to be recoverable today. I exclude from these calculations the reported vast reserves of so-called unconventional oils such as Canadian tar sands and Venezuelan heavy oil.

A European supervisory body will be able to identify risks early on and act effectively. The SSM will be in a position to provide a considerable part of what a supervisor can do for a resistant banking system. Among other things, the division of tasks between national supervisors and the ECB will ensure this.

Further, with an objective to provide more focus on inclusive development, the Reserve Bank last year broadened the scope of PSL by (a) including start-ups; (b) enhanced the limits for lending to renewable energy sector; (c) increased the targets for small and marginal farmers and weaker sections; and (d) 6 https://pmjdy.gov.in/ 6 incentivised banks to augment credit flows to districts with relatively lower credit penetration.

In general, this means making sure that policies do not frustrate marketbased adjustments, but rather are aimed at promoting flexibility in markets – particularly labour markets. This means maximizing the ability of workers to relocate if they wish, maintaining appropriate social safety nets that do not discourage employment, and focusing on lifelong learning and training. Beyond labour markets, governments should focus on domestic integration.

This potentially creates instability and fuels global imbalances. Moreover, such a reserve system aggravates interdependence between the reserve accumulating countries and the reserve-issuing country. For instance, the US Treasury market relies largely on demand from emerging market central banks. This dependence is likely to increase as the Federal Reserve phases out its asset purchase program, reducing US demand.

First, it decided and implemented two measures to ensure smooth financing. These are (1) an increase in purchases of CP and corporate bonds and (2) the establishment and strengthening of the Special Funds-Supplying Operations to Facilitate Financing in Response to the Novel Coronavirus (COVID-19).

As for the first measure, the Bank decided to increase by four times the maximum amount outstanding of CP and corporate bonds to be purchased, from about 5 trillion yen to about 20 trillion yen in total.

I would urge the CICs to take urgent steps to bridge this information void and help facilitate flow of credit to SMEs, which would provide an impetus to the overall economic growth environment.

In a democratic society, such a stark bifurcation of wealth and income trends among large segments of the population can fuel resentment and political polarization. These social developments can lead to political clashes and misguided economic policies that work to the detriment of the economy and society as a whole.

HVB bank has recently cut its effective interest rates on foreign currency credits and has now launched a new product – an authentic dinar cash credit, with no revaluation. Some other banks have also announced their intention to reduce interest rates on credits in euros.

Present developments only go to confirm what the NBS has claimed, in response to criticisms purporting that the restrictive measures of the National Bank are entirely to blame for the high cost of credits in Serbia: inflation needs to decline first, and only then can we count on a gradual decline in interest rates.

As per the progress reports received from SLBCs, banks had opened banking outlets in 183,993 unbanked villages by March 2014, comprising 7,761 branches, 163,187 BCs and 13,045 through other modes. The Reserve Bank is closely monitoring the progress made by the banks under the roadmap.

Financial inclusion plan and its performance evaluation The Reserve Bank has used (Financial Inclusion Plans) FIPs to gauge the performance of banks under their (FI) initiatives.

To sum up, in the past couple of decades we have witnessed a trend towards independent central banks that are becoming increasingly specific and open regarding their objectives, analysis and intentions.

The excess of FX supply over demand in the interbank market enabled the NBU to buy foreign currency to replenish international reserves without throwing the exchange rate off the course determined by market forces. The NBU has made USD 625 million in net FX purchases since the year started.

We should not be surprised by this as the income and wealth generated over the past five years were simply extraordinary. By definition, the economy must grow at a below-average pace for some of the time. These periods provide the economy with the breathing space to sustain the expansion.

Net exports recovered in the fourth quarter of 2018 (according to preliminary estimates), but weaker exports were the main factor behind the steep growth slowdown observed in the third quarter. In the euro area, the slowdown in growth has been particularly visible in the manufacturing sector.

As a conscious policy stance, we have been trying to nudge the foreign portfolio investors towards investing in long term papers. It is to be appreciated that investment in short dated papers, treasury bills and commercial papers are essentially volatile and constitute interest rate play. This is not in sync with our policy imperative.

Accordingly, we have mandated last month that all fresh investment upon sale or redemption of existing investment in sovereign debt has to be necessarily in government dated security of a minimum residual maturity of 3 years. There is no lock in period and no restriction on selling the bonds to residents irrespective of their residual maturity. BIS central bankers’ speeches 3 14.

More specifically, what is needed is: First, a drastic overhaul of public administration with clear delimitation of state intervention in private initiative. The state’s role should be to regulate the institutional framework governing the private economy and provide oversight of performance and monitoring capacity rather than acting as an entrepreneur-producer.

Furthermore, the use of public-private partnerships in a wide range of administrative procedures and in the delivery of public services would shift costs from taxpayers onto users, while at the same time enabling care to be taken to support the weaker groups of the population. Second, speeding up the privatisation programme and the development of public property.

The actions we have taken, including with our colleagues at the ECB, have been designed to ensure supportive financing conditions, enabling credit institutions to absorb losses and to support lending to businesses and households. Real-time data for the Irish economy point to a trough reached in April, and an increase in activity as the economy re-opens.

In recent weeks we have seen the beginning of a return to work in some sectors and a decline in the numbers in receipt of income supports. Payments data also point to some rebound in spending. However, overall, economic output has declined substantially in recent months and remains significantly below pre-Covid levels.

As the correlation coefficient falls, as it has over the past decade, one would expect the near algebraic equivalent - the dispersion of current account balances - to increase. And, of course, it has. Over the 1 Martin Feldstein and Charles Horioka (1980), “Domestic Saving and International Capital Flows,” The Economic Journal (June), pp 314-29.

BIS Review 70/2004 1 past ten years, a large current account deficit has emerged in the United States matched by current account surpluses in other countries. *** How far can the decline in home bias and the increase in the variance of current account balances be expected to proceed, and where will it lead?

Second, more than in the past, global governance must demonstrate a capacity to coordinate and decide extremely swiftly. A characteristic of the turbulences that intensified in September 2008 was the extreme rapidity in the succession of events as the crisis unfolded. The very high degree of interdependency between all economies calls for a much higher level of cooperation than in the past.

Third, the crisis has rightly accelerated the inclusion of emerging markets into the framework of global governance. But there are two reasons for this change. One is positive: the emerging economies are now economically and financially so important, and systemically so influential, that they must be fully involved in global governance.

It’s not hard to see, though, that to get such a degree of cross-border public financial engineering working smoothly at the European level requires an institutional structure that is both more comprehensive and more streamlined than exists today. It is clearly something much more ambitious than has ever been attempted by the IMF and World Bank.

However, the Committee can estimate the level of maximum employment and use that estimate to inform policy decisions. In our most recent projections in January, for example, FOMC participants’ estimates of the longer-run, normal rate of unemployment had a central tendency of 5.2 to 6.0 percent.

The Reserve Bank has been conducting several surveys to provide forward-looking inputs for policy purposes. In this context, Professor Rao’s guidance will be extremely valuable; moreover, he has had a long-standing relationship with the Bank in the Technical Advisory Committee on Surveys.

This is known as the “too many to fail” problem. It deserves particular attention – and probably a response that goes beyond the standard microprudential supervision that we are here to talk about today. As small banks are generally less risky, the costs and benefits of regulation and supervision may not be balanced for small banks in some areas.

Many people feel that the EU is not doing enough to protect them from globalisation. Are they right? Despite national concerns on the subject, the recovery in the euro area is bearing fruit. It is creating jobs, and people are taking note of that.

This is how the euro was born, after all, as it became clear, in particular after the 1992-93 foreign exchange crisis, that it was not sustainable to run different monetary policies within a single market. The same logic could apply in the case of financial regulation and supervision. And national authorities know it.

2 The real effective exchange rate provides a more accurate picture of competitiveness than the nominal effective exchange rate as it corrects for differences in relative inflation rates (or relative unit labour costs movements) between New Zealand and its major trading partners. BIS central bankers’ speeches 1 Figure 1: New Zealand’s real effective exchange rate Source: Bank for International Settlements.

Finally, I believe that accounting standard setters, regulatory bodies, and lawmakers have a vested interest in working together to ensure the oversight mechanisms, reporting frameworks, and other elements of the revitalized financial system operate in a manner that is both stable and efficient. BIS Review 107/2009 7

Machinery investment, which had continued to decline, has picked up recently, reflecting increases in exports and production. On the other hand, construction investment has remained on a moderate declining trend due to a decrease in construction of stores and accommodation facilities by the face-to-face services industry.

According to the business fixed investment plans in the December 2020 Tankan (Short-Term Economic Survey of Enterprises in Japan) released by the Bank, the year-on-year rate of change in business fixed investment for fiscal 2020 is minus 2.4 percent.

Another company which merits attention is ITC Ltd. Their commercial model of moving over from being a cigarette company to a multi business conglomerate including agri business was a necessity on account not only because of high incidence of taxes on tobacco being levied by the Government but also due to the growing awareness among the general public towards the ill effects of smoking and the consequent move away from cigarettes.

In the future conduct of monetary policy, I consider it necessary for the Bank to conduct its policy flexibly, giving greater consideration to its policy framework of “two perspectives.” Specifically, the first perspective is examining, as regards economic activity and prices over the next two years or so, whether the outlook deemed most likely by the Bank is reasonable judging from the growth potential of Japan’s economy at each point in time.

We are making no assumptions about other factors, such as an improvement in confidence, that could positively influence consumer behaviour. Of course, if oil prices turn out to be higher than currently envisaged, they would dampen disposable income and consumption growth. What constitutes a natural interest rate for the ECB?

The concept of a natural interest rate refers to an equilibrium real interest rate that reflects productivity and population growth.

We have taken a major step forward by offering a candid attitude to promote and realize a common objective. Before I conclude, please allow me again to propose a vote of thanks to guests and delegates who have come a long way from home to attend this conference hosted by AMCM.

Simultaneously, I would like to express our warmest gratitude to the delegates for their candid and frank opinions. On the other hand, there may be deficiencies in organizing this event due to various constraints. In this respect, your opinions and tolerance are most appreciated. I would like to take this opportunity to wish you good health and a pleasant stay in Macao.

Although monetary policy can therefore contribute to inclusive and sustainable growth (and you will probably agree that the SARB has indeed adopted policies that are supportive in this regard), one needs to recognise the limitations of monetary policy and hence acknowledge that other policymakers and stakeholders also have an important and significant role to play in achieving both inclusive and sustainable growth over the longer term.

2/5 Year-to- BIS central bankers' speeches Oh… but wait… like the Waze and Googlemap apps that report possible challenges ahead, we also see downside risks such as uncertainty from monetary policy in advanced economies and geopolitical risks. Seeing these risks, we at the Bangko Sentral, have taken stock of our strengths, and remain vigilant.

There are many lessons to be learned there. 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.

The greater the extent to which capital inflows act to augment residential construction and especially current consumption spending, the greater the future economic burden of repaying the foreign debt is likely to be. A third concern with the pattern of capital flows arises from the indirect effects of those flows on the sectoral composition of the economies that receive them.

Moreover, lower interest rates and lower risk premiums may make prices for long-term assets, such as stocks and housing, more sensitive to perceived changes in both risk and in the path of future interest rates, thus making these prices more variable. This possibility may, in fact, offset any reduction in financial market volatility that would otherwise stem from reduced macroeconomic volatility.

So far, I've focused on the impact that monetary policy and the decline in macroeconomic volatility has had on the volatility of bond markets. But other structural factors in financial markets have also affected financial market volatility.

Additionally, the Committee’s mandate also includes suggesting best practices for the guidance of credit institutions in respect of usage of credit information as a part of their credit appraisal process. (ii) Need for maintenance of up-to-date data The CICRA mandates that the data should be submitted by credit institutions on a monthly basis.

In this regard, COGESI continues to be one of the most important sources of feedback from market participants and infrastructure representatives on initiatives related to euro securities clearing and settlement integration. The transparency generated through these exchanges of information plays an important role in building confidence in the financial system.

Moreover, the long-term success of non-conventional policies depends on the policy-maker’s ability to pull off a difficult balancing act: to provide massive stimulus to the economy in the short-term, while keeping long-term private sector inflation expectations firmly anchored. The failure to preserve the anchoring of long-term inflation expectations would be self-defeating for non-conventional policies.

Of course, we do not have comprehensive measures of output on a monthly basis, but available data suggest a roughly comparable deceleration. A lower overall rate of economic growth that did not carry with it a significant deterioration in productivity growth obviously would be a desirable outcome.

It could be a sign of an increased risk premium, which is also part of the calculation of market-determined yields. The risk premium takes into account the danger that inflation expectations might turn out to be wrong. Perhaps more importantly, the risk premium catches all uncertainties; it also relates to exchange rate concerns and even political uncertainty.

If the risk premium rises during a period of monetary easing and declining short-term interest rates, it follows that the yield curve will tend to steepen. As I have already mentioned, heightened economic activity increases the risk of inflation. As a result, investors might demand a higher risk premium as economic activity starts gaining momentum, especially if there is any uncertainty over policy.

One way that examiners are adapting to this changed world is to focus much of their attention on the information and risk management systems of banks. The key question they ask is: How effectively are these systems measuring and controlling an institution’s rapidly changing risk profile? The emphasis on risk management is most critical at our largest, most sophisticated, and most internationally active banks.

The PBC will, in accordance with the decisions and arrangements of the CPC Central Committee, continue to deepen the practical cooperation with Hong Kong, support the building and development of Hong Kong as an international financial center, and finally promote the high-level opening-up of China’s financial markets. In the end, I wish Hong Kong a new and splendid success as an international financial center!

A third and related issue we considered was that by continuing to purchase government bonds at the rate of $ billion a week we will be adding to the support provided to the economy during the recovery phase. The evidence suggests that the expected stock of central bank bond purchases matters more than how many bonds the central bank buys each week.

By February, our cumulative purchases under the bond purchase program will have amounted to $ billion. We will hold around 35 per cent of the Australian Government bonds on issue and 18 per cent of the state and territory bonds.

* * * My topic today is financial inclusion for sustainable development and how IT and community based organisations including NGOs can be leveraged for expanding banking outreach so as to meet the needs of the underserved population.

Greener because, over the life of the series, fewer notes produced also means fewer notes transported. And when they do need to be replaced, the notes will be recycled in Canada. As we all know, these polymer bank notes look and feel different than the paper-based currency of the past.

18 EUROPEAN CENTRAL BANK, Virtual Currency Schemes – A Further Analysis, February 2015, 24. 19 Idem, 24. The crypto-community is, however, looking for solutions to this problem, e.g. through the creation of stablecoins. See https://medium.com/fintech-weekly-magazine/stablecoins-what-are-they-actually-fora1bc0732e472.

Keynote_Governor_AEDBF_30_Nov_2018_final.docx 6. used as a medium of exchange, since in this case cryptocurrencies would usually be converted back to regular money as soon as the transaction is settled 20. Financial stability risks may, on the other hand, appear if cryptocurrencies were to be widely perceived as a proper store of value, which they are not.

Reinsurance premiums paid by general insurers in 2018 totalled $ million with total reinsurance recoveries reported at $ million. 3  The insurance industry also plays a significant role by supporting economic growth as it recycles premiums back into the economy as investment capital.

Among these, we generally consider that two curves in particular provide us with insight and inform our policy decisions: the overnight index swaps (OIS) curve and the Bund curve, as these have become widely accepted proxies for risk-free yields in the euro area.3 As such, they serve as the bedrock for pricing virtually all credit products and related derivatives.

To prevent this from happening again, G-20 leaders have agreed that by the end of 2012, all standardized OTC derivatives contracts should be traded on exchanges or electronic trading platforms, where appropriate, and cleared through central counterparties (CCPs). A great deal of work remains if this goal is to be realized.

Central counterparties for OTC derivatives will provide greater certainty of payment, mitigating the harmful spillovers resulting from the failure of a counterparty, as well as increased transparency, thereby reducing contagion and maintaining continuous markets in times of stress. But CCPs also have the potential to create new single points of vulnerability.

This is because new entrants would only survive in such a competitive environment by applying innovative technology and business models which will eventually compel other market participants to follow suit, much to the benefit of the final consumer.

Ladies and Gentlemen, anecdotal evidence on the banking industry in Ghana however suggests that a significant proportion of customers have the perception that their banks do not provide helpful, proactive and customized financial services to them.

Clearly, mortgages and credit cards already fall into this category of financial product. Nonetheless, the implications of these newer delivery channels for banking products other than mortgages and credit cards seem more potential than real for the vast majority of bank retail customers.

For example, despite the expanded options made available to customers as a result of technological advances, data collected in the Federal Reserve’s 1998 Survey of Consumer Finances and 1998 Survey of Small Business Finances indicate that households and small businesses still rely very heavily on in-person visits to carry out their financial transactions.

You have a unique place in our economy as you personify the convergence of the best from two cultures: the highly admired Chinese work ethic combined with Filipino ingenuity. This formidable combination has given wings to a strong entrepreneurial spirit that has helped strengthen the backbone of the Philippine economy.

I am pleased therefore to give you an overview of how our economy performed in 2005, the developments that can affect your business and how we at the Bangko Sentral ng Pilipinas see the prospects for the Philippine economy. Later, we can have a discussion on economic issues of particular interest to you.

Firstly, more transparency at the national level: besides macro-economic data, financial market data must be monitored more carefully than before. Above all, more, and more up-to-date, particulars on national debts in foreign currencies, and on maturities, are required. This is a challenge to borrowers and lenders alike. Secondly, more transparency at the level of market players.

The experience of the past few days has shown that there seems to be a particular need to take action in the case of Hedge Funds. How this is to be done can still be discussed. An indirect solution BIS Review 84/1998 -5- has been proposed: banking supervisors monitor the lending of an individual bank to a Hedge Fund.

In particular, projects may be implemented more efficiently if private sector companies, with specialist expertise, invest in, and manage the project and bear the risks that the project will not be completed on time and within budget. These are important advantages, not least because project implementation capacity is weak in Uganda and some other countries in the region.

However, it is a misperception that PPPs reduce the fiscal burden on the Government over the long term; instead they usually only extend the time frame over which the fiscal costs are incurred. PPPs in many countries have 2 BIS central bankers’ speeches also entailed substantial quasi fiscal liabilities because of implicit or explicit public guarantees given to private investors.

And then there are the works of photographer Barbara Klemm, who photographed visitors to museums and exhibitions in various countries over the course of several decades, and thus, very different ways of observing art. Her images range from protagonists deep in contemplation all the way to what appears to be a jolly family outing.

These activities are undertaken with the assistance of and in collaboration with the IMF, the World Bank and other international institutions, and the FSB should support already established processes. In this connection, the Caribbean identifies the statistical data gaps as a priority for attention. 2 BIS Review 142/2010

We publicly acknowledged that a crisis was under way, and through this recognition and our follow-up actions, we sought to reassure participants that we were doing what we could to limit the possible systemic effects on the economy. The hope was that such reassurance might encourage a return to risk-taking.

Accordingly, open market operations were directed toward an easing of reserve-market conditions and were guided by day-to-day developments. For example, in October 1987, open market operations accommodated substantially enlarged desires for excess reserves and a large increase in required reserves associated with a sharp rise in transactions deposits.

We have kept the economy stable, preserved price stability at home despite surging inflationary pressure worldwide, and maintained a fine balance between internal and external equilibrium. China's GDP grew by 3.9 percent year on year (YoY) in Q3. The CPI increased by 2.1 percent YoY in October and its annual growth rate has stayed at around 2 percent over the past five years.

Since the beginning of the year, the RMB has seen some depreciation against the US dollar but of a smaller scale compared with other major currencies. The value and purchasing power of RMB has been basically stable. Second, while providing significant support to the real economy, the PBOC has not substantially expanded its balance sheet.

It’s in the interest of all – of those who want to enter the euro area, and of the euro area itself. The decision which was recently taken by the European council on a proposal of the Commission – to approve Slovenia as a member of the euro area - has proven that the euro area is not a closed shop.

In my view, firms that are breaking new ground should avoid bank debt if possible, because any new activity needs to be generating a reliable on-going stream of income sufficient to meet operational costs, before it begins to take on bank debt, which comes with a monthly service cost.

Closing Remarks As I conclude, I would emphasize how crucial it is to balance effective regulation and supervision to ensure the safety and soundness of community banks while also ensuring that undue burden does not constrain the capacity of these institutions to support the communities they serve.

As I previously noted, one of the most important aspects of my job, as I see it, is to have open lines of communication and feedback between regulators and community banks and bankers. As a former community banker and state regulator, I understand how clear communication can help us all do our jobs better.

Building upon this mandate, the Reserve Bank last year published two papers inviting feedback from the public on the role of cash.

The public policy case on cash was set out in 9 We have been working with the Ministry of Foreign Affairs and Trade, the Department of Internal Affairs, the Reserve Bank of Australia, South Pacific Central Banks and international financial agencies to address the challenges facing providers of these services domestically and in the Pacific region.

The concept assumes therefore that money, as well as finance, are neutral in the long run, and only act as devices that facilitate contemporaneous and intertemporal transactions. Many general equilibrium models operate reflecting this vision, which may be difficult to square with economies at present, on the back of the staggering permanent loss of output resulting by the recent financial crisis.

We also project that total CPI inflation will drop to close to 2 per cent over the same period, assuming that energy prices remain near current levels. There is a risk that world oil prices could rise sharply, depending on the fallout from last week’s events.

Overall, significant progress has been made with resolution reforms, there is still plenty of work to do. Meanwhile, both short-term and long-term challenges to the financial system have increased, and a fully functional resolution system is highly important in this situation.

Central bank cross-border collateral arrangements Now, let me talk about another example of the enhancement of cross-border settlement infrastructure, which is a cross-border collateral arrangement for JGBs among central banks.

Despite lower production in the three high-profile sectors I just mentioned, aggregate economic activity continues to grow, buttressed by underlying strength in other areas, including the energy sector, retail sales, housing, non-residential construction, and most service industries. BIS Review 35/2001 1 Supported by recent tax cuts that boost disposable income, final domestic demand should continue to expand.

And we expect a recovery in foreign demand in the latter part of the year, encouraged by the substantial reductions in U.S. interest rates. Nonetheless, there are uncertainties about the exact timing and strength of the pickup in U.S. growth.

In my view, this gradual reduction of economic and regulation uncertainty opens up a window of opportunity, above all in Germany, for more mergers and acquisitions.

Table 1: Central Government spending on rural infrastructure (2000–12) (at 2006–07 prices) ₹ billion) Items Total expenditure Share (%) Rural roads 905.17 29.8 Rural drinking water and sanitation 623.42 20.5 Rural housing 485.11 16.0 Irrigation 481.84 15.9 Rural electrification 241.00 7.9 Telecommunication 138.51 4.6 Watershed 105.57 3.5 Integrated Action Plan (IAP) 36.54 1.2 Storage 19.72 0.6 PURA 2.06 0.1 3038.94 100 Actual expenditure on rural infrastructure {Note: All figures include both Plan and non-Plan expenditure; Storage data (for constant 2006–07 prices) consists of expenditure on construction of rural godown, investment in the Food Corporation of India and the Central Warehousing Corporation.

In the case of the recent attacks, it seems that Saudi supply has been mostly restored already. So the effect on prices has been small and transient. But it is easy to see how these kinds of events can have more pervasive effects.

These early school years then go on to influence our Matric educational achievement. And despite all the limitations of a Matric qualification, it was for most of us the key determinant of our ultimate educational achievement. It still is.

Different causes stand behind banks’ profitability challenges: legacy non-performing loans, excess banking capacity, growing competition from non-banks, ineffective cost-control and slow adjustment to new business models in the context of a low interest rate environment, are among the most important ones.

Return on equity stood at 5% in the first half of 2016, against 5.5% for the whole of last year, which is worryingly well below the cost of equity resulting from share prices determined by investor’s expectations.

The third risk I mentioned was the balance of payments, where the current account deficit is estimated to be 6¾ per cent of GDP.

Because curbing benefits once bestowed has proved so difficult in the past, fiscal policymakers must be especially vigilant to create new benefits only when their sustainability under the most adverse projections is virtually ensured. * * * Responding to the pending dramatic rise in dependency ratios will be exceptionally challenging for the policymakers in developed countries.

Indeed, the rise in the number of international meetings and participants evidences the extent to which economies are becoming globalized. The second thing I have noticed is that various kinds of tensions have arisen as the market economy has become more globalized. I clearly recall NGO activists surrounding the WTO’s Ministerial Conference in Seattle last December.

The IMFC meeting, which I attended in late April on the day after the G7 Meeting, was also the target of similar protests. How can it be that the IMF, a pivotal contributor to the development of the liberalized market economy after the Second World War, and the WTO, a legitimate successor to GATT, have become the targets of such protests?

As a result of cross-border mergers and acquisitions, an increasing number of banking markets now have a significant foreign bank presence. In general, I would argue that the scale of foreign banks operating in emerging markets allows them to bring expertise and financial resources that might not otherwise be available.

They can also introduce more sophisticated risk management tools that may have been developed for the larger financial group. While these benefits are significant, the scale of foreign banks’ presence can have implications for host countries. For example, a local financial system could be disproportionately dependent on the safety and soundness of a small handful of foreign banks.

First, respondents indicated that although climate-related risks and opportunities were incorporated into the prices of financial instruments to some extent, there was still room for them to be incorporated to a greater extent. Second, with regard to the market for climate change-related ESG bonds, such as green bonds, the survey suggested that there was strong demand for ESG bonds.

A clear and consistent framework for bank recovery and resolution, including “bail-in” rules with a clear pecking order and limited exemptions, will be conducive to a stricter monitoring of risks by bank creditors. In fact, as I mentioned before, many of the most severe financial crisis since the Great Depression broke out after prolonged periods of exceptionally easy monetary conditions.

The robust state of the economy confirms the consensus view on the ECB Governing Council that inflation will move towards the inflation target of below, but close to, 2%. This can also be seen in the latest Eurosystem price forecast, as it happens. And it is also demonstrated by the current pay agreement in the metalworking and electrical engineering industry in Germany.

5 The Joint Statement of the Government and the Bank of Japan on Overcoming Deflation and Achieving Sustainable Economic Growth, released in January 2013, stated, “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’s economy make progress.” Based on this recognition, the Bank set the 2 percent target.

Despite the good and thorough work being undertaken in both the Basel Committee on Banking Supervision (Basel Committee) and the Financial Stability Board, we must acknowledge that satisfyingly clean and comprehensive solutions to the international difficulties occasioned by such insolvencies are not within sight.

In Australia’s case, household gross assets are now about 8½ times current income, compared with about 5 times in 1980, and about 6 times as recently as the mid 1990s. Financial assets have grown, but much of the increased wealth has been in the form of dwellings. Since 1997, the Australia-wide median price for an established house has doubled.