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Our monetary and financial policy options are part of an extensive review of the importance central banks should assign to the various goals set, particularly, what role and weight should be given to price stability, output stability and financial stability.

However, having a number of possibly conflicting policy goals could make it difficult to maintain consistency in monetary policy operations, and therefore we will need to refer to research outcomes and past experiences at home and abroad, while listening carefully to experts, to come up with an optimal solution that fits the conditions we are facing.

4 By focusing efforts and resources on the digitization of core business processes, financial institutions enhance their ability to respond to the inherent dynamism associated with technology, and to the competitive pressures that increasingly manifest in the banking sector, both today and tomorrow.

 The evolution and increasing sophistication of customer tastes and preferences must be met by anytime-anywhere functionality. In order to respond appropriately to these needs, financial Institutions must design financial service products and solutions that contain these same features.

* * * As the economic prospects brighten, higher expected returns on business investment will make borrowing conditions increasingly attractive. This, in and of itself, will reinforce accommodation and make sure that inflation sustainably converges towards our objective of below, but close to, 2% over the medium term. But our mission is not yet accomplished. We need patience and persistence.

We need to be patient, because inflation convergence needs more time to show through convincingly in the data. The euro area’s economic environment is improving, and the fat negative tail to inflation expectations, which was so visible at the start of our asset purchase programme, has virtually disappeared (see Chart 4).

A small part of this could be due to measurement errors (which will be corrected over time) and a bit more reflects lags associated with the economy’s adjustment process, but most of this yawning gap between us and our peers reflects fundamental shortcomings.

The European Commission’s legislative proposals for the establishment and functioning of the ESRB have received the support by the ECOFIN and the EU Council. The European Parliament is currently considering the proposals in its turn. Let me also mention that the ECB/Eurosystem expressed its stance in the opinion adopted on 26 October.

But let me emphasise, as you indicated, it’s possible to have a view of especially sovereign purchases from a philosophical point of view. It’s also possible to have it from a tactical point of view, as in do current conditions warrant it or not. Clearly, there are individuals in either camp.

For consumption, one useful indicator is the gap between essential purchases, such as food and rent, and non-essential ones, such as electrical goods and holidays.

I believe that there is currently no will, among either the general public or governments, to truly concede sovereignty, which would be a prerequisite for a fiscal union; and this state of affairs is not about to change anytime soon. On the contrary, the member states continue to insist on having the final say.

When the European Commission recommended last year that the deadline for correcting the excessive government deficit be extended for France and other countries, while in return expecting France to implement concrete reforms, the French president reacted indignantly saying that: “The European Commission cannot dictate to us what we have to do.” I think this example illustrates rather clearly the willingness of the member states to allow interference from outside parties.

2021 Yoneyama, S., "Central Bank Transparency and Disagreement in Inflation Expectations," IMES Discussion Paper Series, no. 2021-E-12. Nakajima, J. et al., "Extracting Firms' Short-Term Inflation Expectations from the Economy Watchers Survey Using Text Analysis," Bank of Japan Working Paper Series, no. 21-E-12. Okuda, T., and Tsuruga, T., "Inflation Expectations and Central Bank Communication with Unknown Prior," IMES Discussion Paper Series, no. 2021-E-7.

Over the medium term, the recovery of the euro area economy should be supported by favourable financing conditions, an expansionary fiscal stance and a recovery in demand as containment 2/4 BIS central bankers' speeches measures are gradually lifted. This assessment is broadly reflected in the baseline scenario of the March 2021 ECB staff macroeconomic projections for the euro area.

The BSP is mindful that the openness in the financial services industry and the ease of access to products will not by itself lead to inclusiveness. The risks to the customers and investors and service providers alike are higher if products and modes of delivery are not well understood.

Forging trust in the financial services industry is necessary and these can be achieved by promoting financial literacy and consumer protection. This is why the Bangko Sentral advocates these complementary initiatives. Educating Investors 4/6 BIS central bankers' speeches For two years now, the BSP has been organizing financial education expos.

In Italy, where the NPL ratio is currently around 9.7%, the securitisation scheme supported by state guarantees (known as GACS) was introduced in 2016 and extended for another six months in September 2018. Several other market infrastructure initiatives are also helpful towards tackling NPLs.

For example, in Portugal that has an NPL ratio of 12.4%, initiatives targeted at promoting smooth coordination among creditors (to accelerate credit restructuring, NPL sales, etc.) are a welcome addition to the existing policy mix. Chart 3. NPL ratios in EU Member States Source: EBA, Risk Dashboard, Data as of Q3 2018.

It is a privilege for me to address this joint meeting of the Empire and Canadian clubs, and I thank you for the opportunity to do so. I am particularly pleased to speak to you today because this is a bit of a red-letter day on the Bank of Canada’s calendar. Today, we released the latest edition of our semi-annual Financial System Review (FSR).

This publication, which is only a couple of years old, examines issues that relate to Canada’s financial system. Each edition of the FSR takes a look at recent developments and trends in the financial system, as well as issues that have an impact on its efficiency, safety, and soundness.

However, macro-prudential policy is one of many factors aimed at reducing the imbalances in the Auckland housing market. Much more rapid progress in producing new housing is needed in order to get on top of this issue.

From 2025 [for fiscal year 2024], EU companies falling within the scope of the CSRD4 will have to disclose transition plans. The UK, which is clearly a transition-plan pioneer, is even more ambitious. Its Financial Conduct Authority (FCA) already now requires listed companies to disclose transition plans on a 'comply-or-explain' basis.

[1] I would like to thank Tobias Blattner for his contribution to this speech and for his unwavering support, alongside my former counsellors, Lorenzo Cappiello and Roland Straub. As always, all opinions expressed here are mine, as are any mistakes. [2] Source: European Commission, Standard Eurobarometer 91, fieldwork in June 2019, and Flash Eurobarometer 481, fieldwork in October 2019. [3] See Hammermann et al.

Overview of New RoI Mortgage Lending Section 1: Irish Mortgage Lending Macroprudential Measures New RoI Mortgage Lending € millions) New RoI Mortgage Lending (Number of Loans) Note: 2017 includes the 5 retail banks and 2 retail credit firms.

Although I agree that hitting the zero bound presents challenges to monetary policy, I do not believe central banks should raise their inflation targets. Central banks around the world have been working for 30 years to get inflation down to levels where it can largely be ignored by businesses and households when making decisions about the future.

Moreover, inflation expectations are well anchored at those low levels. Increasing our inflation targets could result in more-variable inflation and worse economic outcomes over time. First of all, inflation expectations would necessarily have to become unanchored as inflation moved up.

Isabel Schnabel: Pulling together - fiscal and monetary policies in a low interest rate environment Speech by Ms Isabel Schnabel, Member of the Executive Board of the European Central Bank, at the Interparliamentary Conference on Stability, Economic Coordination and Governance in the European Union, Frankfurt am Main, 12 October 2020.

* * * The title of this morning’s session is intriguing in many ways: it speaks of a “new partnership” between monetary and fiscal policy and of the “requested” fiscal support.

It can also help manage some of the new risks arising from these global developments. Monetary policy can help the adjustment by keeping inflation under control and maintaining stability in the overall economy. Our judgement is that the current setting of monetary policy is consistent with this, with the Board keeping the cash rate unchanged at 4.25 per cent at its meeting yesterday.

Second, the coexistence of different levels of protection could give rise to unfair competitive advantages; vis-à-vis other forms of savings or vis-à-vis other deposit-taking institutions that do not enjoy the guarantee. Third, to make a guarantee credible it is important to specify the manner in which it will be provided.........

With these decisions, the Eurosystem continues to provide liquidity support to the banking system of the euro area for an extended period at very favourable conditions and to facilitate the provision of credit to the euro area economy. Let me now explain our assessment in greater detail, starting with the economic analysis.

Identity is a prequisite for the stable, efficient, safe and inclusive financial sector that is envisaged pursuant to Vision 2030. It is the process of identification and a host of menu services that can be included that makes an assurance of safety and accessibility of financial services. Without identity, individuals and corporate entities cannot access the financial sector.

But multinationals, at various points of time, have had similar concerns over doing business elsewhere too. At the DLD technology conference in Munich recently, Nicolas Brusson, the co-founder of BlaBlaCar, the French ride-sharing start-up, when questioned about the rationale in starting his venture out of France with its 28 sets of laws and regulations, replied: “when you start from France, everything looks simple”.

I am sure Indian companies that ventured overseas in the last one decade or so may now vouch for these sentiments. In the current context, it may make immense sense to seriously look at the “Make in India” pitch with the government trying to do what it can.

In fact, Prasan, Rajan and Subramanian (2006) conclude that, in contrast with predictions from standard models usually calibrated for developed countries, emerging countries that committed themselves to external savings have not grown faster in the long term. This difference is attributable to the local financial systems’ inability to efficiently allocate foreign capital. 5.

Finally, the search for other currencies introduces an “imported volatility” that distorts relative price signals for consumption, savings and investment decisions in our economies, small economies with inherent sources of instability where it is difficult to know the equilibrium level of real variables.

Sadly, despite significant resources being allocated to education, many parts of the system remain dysfunctional. A literate and skilled labour force is necessary to ensure domestic growth, employment opportunities, social stability and cohesion, and the ability to compete globally. Unfortunately the global environment in which we find ourselves is extremely difficult and is likely to remain so for a good number of years.

The challenges facing Europe are of a long term nature, so even if appropriate steps are taken at this stage to deal with some of the issues that are making the headlines, the best case scenario will still be one of slow growth for some time to come before the required structural reforms can take place and take effect.

But the U.S. agencies have exercised national discretion and have tailored the Basel II framework to fit the U.S. banking system BIS Review 62/2006 3 and U.S. financial environment - just as their counterparts in other countries have tailored the framework to their situations.

For example, as I have just mentioned, the U.S. agencies continue to propose that we implement only the advanced approaches of Basel II, namely the advanced internalratings-based approach (AIRB) for credit risk and the advanced measurement approaches (AMA) for operational risk.

As history amply demonstrates, unless a broad majority of a population implicitly or otherwise believes that a competitive free market paradigm advances their welfare, it cannot for long be imposed on them by an authoritarian or even a democratically elected government. 17 Fischer (1993). 18 World Bank (2002)--GDP per capita (constant 1995 dollars). 19 Easterly (2001).

20 Easterly and Levine (1997) cited in Easterly (2001). 21 Alesina and Summers (1993). 22 Gutierrez (2002) and Cukierman, Miller, and Neyapti (2002).

There are a few areas where action is called for, such as the regulatory treatment of sovereign bonds. But apart from that, we should not tighten the screws of regulation further. Financial institutions need regulatory certainty, and they need a period of respite.

We should use this break to thoroughly evaluate the impact of our recent reforms, and to amend and improve them where gaps and errors are found. 3. Getting implementation right In parallel, we need to focus our energy on the comprehensive and consistent implementation of the Basel rules. Good rules are not worth the paper they are written on without good implementation.

Anecdotal information suggests that, although private consumption – mainly apparel, high-end goods, furniture, and household electrical appliances – has been affected by the reactionary decline in demand following the front-loaded increase prior to the consumption tax hike, the decline is not significant despite a larger-than-expected front-loaded increase in demand.

Private consumption is therefore likely to remain resilient in a situation where labor supply and demand conditions continue to improve. Business fixed investment will likely expand significantly in nonmanufacturing, due, for example, to new construction of large distribution sites and to an extensive renovation of a new commercial complex, which will open at Kyushu Railway Company’s Oita Station.

Christine Lagarde: Hearing of the Committee on Economic and Monetary Affairs of the European Parliament Introductory statement by Ms Christine Lagarde, President of the European Central Bank, at the Hearing of the Committee on Economic and Monetary Affairs of the European Parliament (by videoconference), Frankfurt am Main, 21 June 2021.

* * * Dear Chair, Honourable members of the Economic and Monetary Affairs Committee, Ladies and Gentlemen, I am very happy to appear before this Committee again today.

* * * Distinguished guests Ladies and gentlemen Good evening I am pleased to welcome you, once again, to the Bank of Mauritius Annual Dinner. Ever since I initiated this annual ritual of holding a dinner with major economic stakeholders way back in December 1998, I have often been told by a few that my speeches tend to be lengthy. I have a problem.

And the problem is that short speeches take too long to write; it also requires an exhaustive use of my cerebral capacity. Long speeches take less time to write. This evening, I’ll ask for your forbearance once again because the Bank of Mauritius is 50 years old.

While CRT markets have obvious benefits in terms of allowing effective risk sharing in the financial system, excessive reliance on the functioning of such mechanisms can lead to complacency on risks. In addition, CRT markets operate in a rather opaque manner which does not allow for monitoring of concentration and counterparty risks by other market participants or by public authorities.

To fast-track the opening and operationalization of reciprocal accounts at both BSS and CBK to facilitate trade between the two countries and solve the supply constraints of dollars in the market in South Sudan; 5. To formulate a method of determining the bilateral exchange rate; 6.

Large players in developed economies compete with each other intensely, while it is possible that a few of them dominate in each of the EME's financial markets. A few of the financial intermediaries could thus wield dominant position in the financial markets of these countries, increasing the concentration risk.

While it is extremely difficult to envision how the current disturbances in financial markets will resolve, the focus of many EMEs will be on considering various scenarios and being in readiness with appropriate policy strategies and contingency plans.

At the same time, the Japanese experience shows that it is quite difficult to create sufficiently benign financial conditions only with a reduction in the policy interest rate when the balance sheets of firms and financial institutions are severely devastated.

When looking at the current U.S. financial situation, the yields of corporate bonds with low credit standings have not been reduced yet compared with the level in summer 2007, despite the massive decrease in the policy rate.

So long as the existence of a federal guarantee of deposits and other elements of the safety net call for federal regulation of banks, such regulation should entail a choice of federal regulator in order to ensure the critical competitiveness of our banks.

Cash is familiar, inclusive and continues to be used across sectors of society. It is also considered to be a safe haven during times of crisis and is relied upon when other forms of payment are not as easily accessible. It is vital in the functioning of our economy.

In particular, the Administration and the Congressional Budget Office (CBO) project that the deficit will recede somewhat over the next two years as the temporary stimulus measures wind down and as economic recovery leads to higher revenues. Thereafter, however, the annual deficit is expected to remain high through 2020, in the neighborhood of 4 to 5 percent of GDP.

Deficits at that level would lead the ratio of federal debt held by the public to the GDP, already expected to be greater than 70 percent at the end of fiscal 2012, to rise considerably further.

There is of course much we still have to learn about the design and implementation of such instruments; indeed, we are still only beginning to discover the mechanisms through which macroprudential policy works in the banking sector.

Earlier in the post– World War II period, recessions were sometimes linked to a cycle of high inflation followed by Fed tightening.2 The lower inflation levels of recent decades have brought a series of long expansions, often accompanied by the buildup of imbalances over time—asset prices that reached unsupportable levels, for instance, or important sectors of the economy, such as housing, that boomed unsustainably.

It was during these years that the Chinese financial system developed some particular characteristics. Two are worth highlighting. The first is that the system was very government centric. It was configured with the objective of channelling China's very high household savings into state-owned enterprises (SOEs) through government-owned banks. And it did this on very favourable terms to the SOEs.

This was part of the strategy of fast-tracking industrial development and urbanisation. The second characteristic was that there was very heavy financial repression – extensive capital controls, low deposit rates for savers, extensive restrictions on what banks could and could not do, a lack of alternative investment opportunities for savers, and limited access to finance for the fledgling private sector.

Many industries were arranged and regulated along this line. For example, in the auto industry, a truck maker only produced trucks whereas a bus maker made buses only, and car maker manufacture just cars. Furthermore, in the truck sector, production of heavy-duty trucks, light trucks and agricultural trucks were separated.

If an enterprise wished to operate beyond one sub-sector, approval was needed, which was in fact very difficult to get. This was also true for foreign trade. In order to prevent competition and pricing problems among the more than a dozen state-owned trade companies, the trade business was carefully divided among them.

3/5 BIS central bankers' speeches On balance then, from a macro stability perspective, the situation looks less risky than it was a while ago. We do, however, continue to watch household balance sheets carefully as there are still risks here. Challenges I would now like to move to the second question that I get asked frequently.

Beyond the short term, what are the challenges facing the Australian economy?

Therefore, the stricter regulatory rules regarding ABS are important to prevent similar developments in the future. However, we should bear in mind that the ABS market is quite heterogeneous. “Plain vanilla” ABS backed by high-quality assets are fairly safe investments which have wrongly got a bad reputation.

To increase investor confidence, the Eurosystem has supported the ABS market by promoting the “Loan Level Data Initiative”, which has significantly improved transparency regarding underlying assets. In turn, this has allowed the Eurosystem to relax collateral requirements for ABS recently. ABS are one the most prominent asset classes used as collateral for Eurosystem refinancing operations.

Governor Carney spoke recently about this topic, so I won't dwell on it here, but suffice it so say that these events highlight the need for change in both the private and public sectors so that markets can return to more normal functioning.

In the private sector, the most pressing needs for change include greater transparency in financial products, improved risk and liquidity management, and more rational, better-aligned incentives.

At the current stage, the most obvious and immediate challenge on our agenda is obviously the cash changeover, an enterprise of historic relevance that will change the life of 300 million Europeans in a lasting manner. You will certainly know that after E-day (1 January 2002) the euro and the legacy currencies will circulate in parallel for at most two months.

The euro will become the only legal tender in the twelve participating Member States. The ECB and the national central banks are actively engaged on two fronts, the production of the banknotes and the information campaign (the "Euro 2002 Information Campaign").

A key enabler tying up with the theme of financial inclusion is the information infrastructure and decisioning architecture necessary to bridge the information asymmetry divide for individuals who are first-time borrowers from the banking system.

A bank targeting commercial real estate lending as a primary business activity BIS Review 35/2006 1 needs to consider that the risk exposure arising from the performance of its total CRE loan portfolio-the concentration risk--depends on broader real estate market conditions.

Comparing Japan's experience of balance-sheet adjustments in the 1990s and the current situation in the United States may provide some important pointers in this context. II. Balance-sheet adjustments and policy responses The size of balance-sheet adjustments Let me begin by comparing the size of balance-sheet adjustments necessary in Japan and the United States.

Taking as an example real estate prices in real terms – using the consumer price index as deflator – the pace of decline in both residential and commercial real estate prices from their peak levels has been more or less the same in the United States and Japan, although thus far it seems to have been slightly faster in the United States.

Technological Innovation, Economic Growth, and Finance Innovation is undoubtedly a main driver of economic growth, and thus it has always been the focus of economic policy. Historical studies show that global economic growth was considerably slow until the medieval period. The growth rate surged in the modern era when new industrial technologies were widely applied to economic activities.

 An abrupt risk-off episode could expose financial vulnerabilities accumulated during years of low-interest rates and depress 4 global growth as highly leveraged borrowers could find it difficult to roll over debt.  As you will be discussing in one of the sessions, this requires a better integration of monetary and financial stability issues. 2.

Today we have an excellent line of speakers, who will be deliberating a current and important issue in the global economy: an increasingly divergent global recovery paths in growth and policies, particularly from central bank perspectives.

Although we have previously been releasing our basic understanding of the economic situation in the form of "The Bank's View" immediately after the meeting, communication regarding monetary policy had only been an announcement of the decision of "no change" in cases when there was no change in policy.

However, in the recent episode, some originators had little capital at stake, reducing their exposure to the risk that the loans would perform poorly. So long as house prices were rising, subprime borrowers saw their home equity increase and were often able to refinance into more-sustainable mortgages.

Moreover, a “stimulus package” decided by the Cabinet recently is of a significantly large scale, amounting to over 28 trillion yen in project size, and is expected to stimulate the 2 BIS central bankers’ speeches economy considerably in both fiscal 2016 and 2017.

However, the composition of that growth contained a few surprises. In particular, while the Reserve Bank had long expected a very large lift in investment in the resources sector in 2011 – and this indeed occurred – the increase was even larger than had been forecast.

As one indication of the very strong outcome, the ABS estimates that engineering investment increased by almost 50 per cent over 2011. On the other hand, growth in demand not directly related to mining investment was not as strong as was forecast. The biggest surprise was probably in terms of home building.

The collateralized market does not appeal to many market participants and is more expensive compared to the uncollateralized interbank money market. In the meantime, the foreign exchange market is characterized by low volume and inactive hedging transactions. With such micro structure, the exchange rate is easily under pressure even when the demand for foreign exchange experiences a small upsurge.

At this point let’s discuss some issues relating to the global regulatory trends. The World Council of Credit Union (WOCCU) 2013 Annual Report, highlighted the following four issues as key challenges to the credit union movement, which are: 1. Increased regulatory burden; 2. Payments innovation; 3. Young adult membership growth; and 4. Small credit union sustainability.

The confidence of households and firms has nonetheless remained high, with positive indications also coming from the expansion of bank lending and improvements in the labour market. Although unemployment is still above 10 per cent, employment has surpassed the peaks observed prior to the double-dip recession. In more recent months, both the fixed-term and, to a lesser extent, permanent components have recorded increases.

In most of the forecasts made by national and international institutions, Italy’s growth is expected to exceed 1 per cent on average in the three years 2018-20. This scenario assumes monetary policy will continue to be accommodative and financial conditions relaxed, and that there will be a favourable economic environment worldwide.

At the same time, increased global competition has led to the demise of traditional manufacturing industries in the advanced economies, many of which have been situated in these provincial towns. 4. The geographic redistribution of growth is also associated with the diminished role of local communities and the decline in different forms of belonging to society.

This case is particularly strongly made in Raghu Rajan’s recent book “The Third Pillar”: the three key pillars of society – the state, the market, and the community – need to be in balance for strong, sustainable and inclusive growth and development. If any of the pillars weakens too much relative to the others, the society suffers.

In view of progress on reduction of unemployment, it is not surprising that FOMC members and markets alike anticipate the first Fed funds rate hike also this year.

Part of these velocity declines reflected some reduction in the opportunity cost of holding money; interest rates on Treasury securities, which represent an alternative return on non-monetary assets, dropped more than did the average of interest rates on deposits and money market mutual funds in BIS Review 21/1999 6 M2, drawing funds into the aggregate.

If you look back at the period before the crisis, the aforementioned flow of capital to catching-up economies did not lead to total factor productivity increases in these countries. This would have been an important condition for sustainable convergence between euro area countries. One of the reasons was an incomplete single market in goods and services.

The deep recession and slow recovery likely have held back investment in physical and human capital, restrained the rate of new business formation, prompted discouraged workers to leave the labor force, and eroded the skills of the long-term unemployed.

Ladies and gentlemen, In the last 15 minutes the focus was on the PSPP. But let’s not get too carried away with this instrument. I would warmly recommend that you take the trouble to broaden your view to the other decisions by the ECB Governing Council, including private sector purchases, reinvestments, forward guidance, targeted longer-term refinancing operations and, of course, key rates.

On aggregate, the monetary policy stance of the Eurosystem will remain highly accommodative for a while yet. 4/4 BIS central bankers' speeches

Notwithstanding the recession and notwithstanding instances of misconduct, the system as a whole has held firm. I am confident that the banks, good credit and sound finance, will contribute significantly to the economic recovery, which needs to be consolidated and strengthened.

The Bank's assessment is that Japan's economy is expanding moderately, with a virtuous cycle from income to spending operating. The output gap -- which shows the utilization of capital and labor -- widened within positive territory from late 2016, for seven consecutive quarters through the April-June quarter of 2018.

• The performance of the European economy: the euro area economy has bottomed out and shows signs of a moderate pick-up in recent months. Japan’s exports to Europe have also begun to increase. However, the banking sector within the euro area remains fragmented, and thus countries in the area still have lending interest rate differentials.

Attention needs to be paid to uncertainty regarding Asset Quality Reviews and stress tests to be conducted by the European Central Bank (ECB) over the twelve months from November 2013 and the associated recapitalization process that may occur.

Reflecting notably better conditions in many markets for asset-backed securities, the TALF is scheduled to close on March 31 for loans backed by all types of collateral except newly issued commercial mortgage-backed securities (CMBS) and on June 30 for loans backed by newly issued CMBS.

2 1 The exit from these programs is substantially complete: Total credit outstanding under all programs, including the regular discount window, has fallen sharply from a peak of $ trillion around year-end 2008 to about $ billion last week. 2 The TALF extends three- and five-year loans, which will remain outstanding after the facility closes for new loans.

Third, savings and loans with new federal charters were required to make fully amortizing loans except when state law forbade it. The challenge for us today, as I see it, is to emulate our predecessors from the 1930s who dealt with a comparable crisis. We need to consider our current array of mortgage contracts with a dispassionate eye and open mind.

Thus from the very start he affirmed the political nature of the European project, and consequently the importance of the democratic underpinning of its institutions – insisting that the new pan-European executive be subject to the double scrutiny of a parliamentary assembly and a fully-fledged court of justice.

2 BIS central bankers’ speeches Unsustainable government policies and the failure of governance But let me be clear: Although the economic crisis significantly increased the burden on government budgets, the true “failures” leading up to the current sovereign debt crisis lie with the unsustainable fiscal and structural policies pursued by many of these governments before the crisis and with the governance system of the euro area.

The partnership between Safaricom and MoneyGram International is not only an opportunity for Safaricom to satisfy the needs of its customers but also to contribute in enhancing the quality of financial inclusion. I commend the Board, Management and Staff of Safaricom and MoneyGram International for their decision to operationalise this partnership. This partnership will benefit both parties through expansion of network of outlets.

This process could provide an opportunity for exerting peer pressure among members to undertake the required structural reforms. Regarding the design of the relevant supervisory mechanism some progress was made during a meeting of the G20 in mid-February. Though difficult negotiations still lie ahead I am confident that they will eventually lead to viable results. 4.

Some took this as a sign 2/3 BIS central bankers' speeches of imminent recession in Canada and elsewhere. At the time, we were forecasting economic growth for 2019 of close to 2 percent, and some saw this as far too optimistic.

Overall, a surge of protectionist measures would not only undermine the recovery in global trade, it would also disrupt global supply chains and limit international factor movements, for both labour and capital. A protectionist backlash would not just have an adverse near-term cyclical impact, but also a negative long-term structural impact on potential growth.

Finally, two cautious remarks on the US economy: (1) A skyrocketing dollar may inhibit growth. The dollar is up 25% against the euro since 2014. (2) The recent big fall in real US yields (for 10-year Treasury notes to 0.38% today, from 0.74% one month earlier) may suggest that investors moderate their expectations for Trump’s economic agenda.

In the financial sector, regulatory capital ratios remain at historically high levels, and liquidity buffers appear sizable in the banking sector. Capital ratios continue to trend upward for both life and property and casualty insurers. 3 The OFR reports its monitoring efforts regularly, including in its annual reports (available on the OFR website at http://financialresearch.gov/annual-reports).

Research by OFR staff members on similar issues includes Flood and others (2015). 4 For a more comprehensive review of structural changes since the financial crisis, see my Feldstein lecture (Fischer, 2014). 5 For a discussion organizing vulnerabilities along these lines, see Adrian, Covitz, and Liang (2013).

In this interpretation of convergence — which has determined the German debate — there are two ideas which play a key role: the idea of the permanence of sufficient convergence and the idea that the present and the past are a test of the future ability to stay the pace on a lasting basis.

Banks sought for economies of scale and scope and strived to take advantage of diversification benefits from multiple sources of income. Commercial banking had increasingly moved away from customer relationship-based banking where loans are granted and then held until maturity to the “originate and distribute” model where granted loans are pooled, then securitized and sold to investors.

Agreement on abstract principles of private-sector involvement remain elusive, but on the practical level, instances of private-sector involvement are accumulating, laying down a foundation of practices and precedents that should serve to make future restructurings more orderly and predictable.

In recent years, international bond restructurings have been conducted by Pakistan, Ukraine, and Ecuador as a means of either dealing with an existing default or avoiding an impending default. In addition, the IMFled financial assistance to both Turkey and Argentina has included various forms of private-sector involvement.

Andreas Dombret: The euro area – where do we stand? Speech by Dr Andreas Dombret, Member of the Executive Board of the Deutsche Bundesbank, at the German-Turkish Chamber of Trade and Commerce, Istanbul, 10 February 2015. * 1.

* * Introduction Ladies and gentlemen Thank you for inviting me to speak here at the German-Turkish Chamber of Industry and Commerce in Istanbul. Isaac Newton once observed that “we build too many walls and not enough bridges”. Istanbul has for centuries been a bridge between two continents – Asia and Europe.

Therefore shock absorption within each member country has to take place either via the private sector, through financial risk-sharing, or by each national government individually through its fiscal policy.

I should add in passing that certain society-level efficiency gains (e.g. fewer hours wasted in commuting, less traffic congestion, less pollution) may never show in productivity statistics at the firm level. • Swift technological progress can have disruptive effects on market dynamics. New leaders emerge and incumbent firms are often displaced in a relentless process of creative destruction.

A main reason I expect this outcome is simply the fact that the very low inflation readings during last spring’s deep economic contraction will drop from the usual calculation of 12-month price changes.

But in addition, the unusually rapid rebound in economic activity that we’ve seen, along with the pandemic-driven shift towards goods purchases, has led to supply-chain bottlenecks in a number of areas, which in turn have pushed up prices for many goods.

We are ensuring that bankers develop appropriate short-term and long-term liquidity risk management strategies. Consistent with the findings of recent reports, we are emphasizing the importance of appropriate stress testing of liquidity needs and maintenance of robust liquidity buffers.

In addition, we worked with our colleagues on the Basel Committee on Banking Supervision to enhance existing guidance on the management of liquidity risks, which was released two days ago. That work was drawn from recent and ongoing efforts on liquidity risk by the public and private sectors and is intended to strengthen banks' liquidity risk management and improve global supervisory practices.

The Governing Council of the European Central Bank designs monetary policy to fit the euro area as a whole. A country whose business cycle gets completely out of step might therefore suffer from an individually inadequate monetary policy. However, marching in absolute lock-step is not necessary, as can be seen in the US, where certain regions grow faster than others.

During recent years, Ireland has been growing considerably faster than, for example, Germany. The faster growth is due mainly to catching-up, and to the still incomplete synchronicity of the Anglo-Saxon and the continental business cycles. Irish economic growth derived additional impetus from the start of the European Monetary Union. Interest rates in Ireland were effectively cut by three percentage points on January 1, 1999.

BIS Review 12/2007 3 at the lower end of the distribution, even though, of the two groups, workers in the middle of the distribution are typically the better educated (Autor, Katz, and Kearney, 2006; Autor, Levy, and Murnane, 2003).

So if we look at the back of the note, we will see several images of Canada’s natural beauty, seamlessly woven together—from sea to sea to sea. From left to right, we start in the west with the Lions—or the Twin Sisters, as the Squamish people know them—the peaks of the North Shore Mountains, which overlook Vancouver.

But it is important to point out that our focus on arrears is not confined to mortgage arrears. In our review of the Consumer Protection Code we have proposed new requirements for arrears on other types of non-mortgage debt. These will similarly prevent harassing behaviour. We plan to finalise the revised Code in the autumn following a consultation over the summer.

We are also considering what additional protections need to be put in place to help small companies who may be viable but who currently have arrears on existing loans.

The upcoming technical and functional convergence of TARGET2 and T2S will further optimise liquidity management and generate new cost efficiencies. In particular, the consolidation project, which will run until 2021, will introduce a central liquidity management system that will allow participants to monitor and manage their liquidity for all TARGET services.

More specifically, it will provide a central liquidity overview on a single screen with easy access to more detailed information. It will enable centralised management and control over the payment capacity with a clear allocation of liquidity for the different settlement purposes. Real-time gross settlement participation will be segregated from interaction with central banks for monetary policy purposes.

Since the beginning of 2009, global equity markets have fallen about 15 percent, and the global market capitalization of financial institutions generally underperformed the broader indexes.9 Few sanctuaries appear to exist from the recession and corresponding global asset revaluation. These real-time economic and financial market indicators surely describe recessionary conditions, a period of significant economic weakness and a global revaluation of asset values.

17 The ECB has recently started to publish price competitiveness measures, the Harmonised Competitiveness Indicators (HCIs). See the box entitled “The introduction of harmonised competitiveness indicators for euro area countries”, in the February 2007 issue of the ECB’s Monthly Bulletin.

Unfortunately, it does not seem to be that simple. Standard reasoning holds that capital-per-worker drives productivity. While we have had slower capital accumulation of late, we have also had slower growth in labor supply--hours worked. Thus, capital per worker, according to some analysis, has continued to increase roughly at its pre-recession trend.

The theme of this Forum; “Financial Services for Food Security: Leveraging on Innovation” is quite timely and anchors well with the emerging trend whereby most of the agricultural land is being urbanized as well as the drastic climatic changes arising from global warming, which are posing a serious threat to food security for the future generations.

• Weighing these considerations, the Bank judges that the balance of risks remains within the zone articulated in October, and therefore has decided to maintain the target for the overnight rate at 1 per cent. The timing and direction of the next change to the policy rate will depend on how new information influences this balance of risks.

With that, Tiff and I would be pleased to take your questions. 2 BIS central bankers’ speeches

Finally, in light of the economic hardships that are facing our nation, I want to underscore that the Federal Reserve is fully committed to doing everything we can to promote maximum employment in the context of price stability. Thank you again for the opportunity to speak with you today, and I look forward to hearing your comments and questions.

BIS central bankers’ speeches 7

But first, I’d like to say how much I appreciate the chance to return to the University of British Columbia campus. Five years ago, I was here as a Senior Fellow in the Commerce Faculty.

While my current job is different, there is one common thread that unites this institution and, indeed, all Canadian universities, with the Bank of Canada—a commitment to excellence in research. The Bank of Canada fellowship program Indeed, a strong research environment has long been a hallmark of the Bank.

The ARRC has issued a first letter to U.S. regulators asking us to consider exemptions for legacy swaps seeking to incorporate the International Swaps and Derivatives Association’s protocol or exemptions for amending to move from LIBOR to SOFR, and these are issues that we should look at seriously; we should avoid placing unintended hurdles in the way of those who may seek to transition from LIBOR.

And this applies not only to men but also to us women. We too are receptive to stereotypes. Studies show that women, just like men, unconsciously discriminate according to sex – also in the workplace. What we need is a change of culture. And the starting point for that is to call into question not only the behaviour of others, but also our own.

This intuitively would result in a reduction in broader economic activity, without raising policy rates, and would possibly compromise the transmission mechanism based on the prevailing monetary policy settings.

To counter the possibility of an asset bubble in addition to concerns about credit quality led to risk weight on banks’ exposure to the commercial real estate (CRE) and capital market being increased from 100 per cent to 125 per cent in July 2005.

Although the standards have evolved in the context of international stability, they have enormous efficiency-enhancing value by themselves. Standards by themselves may be presumed to be, prima facie, desirable, and it is, therefore, in the national interest to develop institutional mechanisms for consideration of international standards.

The GDP of India rose from a meagre Rs. 5 lakh crore (1950-51) to about 147 lakh crore (2020-21) at constant prices of 2011-12, growing about 27 times with a CAGR of about 4.8 per cent. But in the shadow of this growth story lies a duality which attracts the attention of every policymaker and concerned citizens.

1 I propose in this talk to start by summarizing my (necessarily imprecise) reading of Fukuyama’s ideas to you. I would urge you to read the books to get their full richness. I will then go on to argue that he leaves out a fourth pillar, free markets, which are essential to make the liberal democracy prosperous.

In addition, although at this time we are responding to very broad recommendations, we urge that the implementing details be kept as straightforward as possible to minimize the risk of unintended consequences that comes with complexity. Recommendations for reform The FDIC has made five broad recommendations. 1.

Failure to capture major on-and off-balance sheet risks as well as derivative related exposures, was also a key destabilising factor. The provisions of IAS 39-Financial Instruments-Recognition and Measurement issued by the International Accounting Standards Board (IASB), establishes the principles for recognizing and measuring financial assets and financial liabilities.

This standard is of particular importance to the banking sector and NBFCs which deal primarily in financial instruments. IAS 39 includes provisions about classification of financial instruments, their ongoing measurement (including when impairment is required) and derecognition. The provisions of IAS 39 are currently applicable globally in respect of financial instruments.

2 Let me turn now to my main focus, namely an assessment of why the equilibrium interest rate is so low. To frame this discussion, it is useful to think about the real interest rate as the price that equilibrates the economy’s supply of saving with the economy’s demand for investment.

To explain why interest rates are low, we look for factors that are boosting saving, depressing investment, or both.

Decisions on further steps will be taken after that committee submits its report in a couple of months. Meanwhile, we can note some of the issues that will need attention as we achieve fuller capital account openness.

A key component of Indian capital account management has been the management of volatility in the forex market, and of its consequential impact on the money market and hence on monetary operations guided by the extant monetary policy objectives.

In the meanwhile, the role of green finance in maturity conversion and risk management should be brought into play so as to guide cross-cycle investment and promote the R&D of lowcarbon technology. We need to work in the following two aspects. For one thing, we should set a clear goal of total carbon emissions as early as possible.

With a cap on total emissions, allowance-based transactions of the market will be decided by the supply and demand and send a clear price signal, thus guiding and stabilizing expectations and promoting low-carbon investment. For another, we should leverage finance to support the building of the carbon market.

Such an unprecedented relaxation of capital requirements was taken to support lending and mitigate any second-round effects of the lockdown measures via the banking sector. The second set of economic policies are of course fiscal policies. In an environment of constrained policy space, it is crucial that such policies play a pronounced role in smoothing local cycles.

EU fiscal rules should therefore also strive for countercyclicality at the member state level. As a reaction to the global financial crisis, all major central banks resorted to unconventional monetary policies. However, the Eurozone faced a specific challenge in the interaction between the single monetary policy and the varied economic and fiscal positions of member states.

To date exports have been temporarily cushioned by the depletion of stockpiles, but it will affect the GDP growth outcome. Whether or not this strike has longer term ramifications will depend on its persistence, the nature of the ultimate settlement, and any knock-on effect on other sectors and wage settlements.

Regulated institutions are best placed to ensure safety of people’s savings because they are demanded to act diligently in accordance with the set laws and regulations; offer a recourse to the regulator for consumer protection in case of complaints or irregular activity, and in the event of having to be closed and liquidated, there is a final recourse to the deposit protection fund for depositors in these regulated financial institutions.

And in the vast majority of cases, these institutions post collateral to each other to help minimize possible losses. Although U.S. banks have limited exposure to peripheral European countries, their exposures to European banks and to the larger, “core” countries of Europe are more material.

Moreover, European holdings represented 35 percent of the assets of prime U.S. money market funds in February, and these funds remain structurally vulnerable despite some constructive steps, such as improved liquidity requirements, taken since the recent financial crisis.

This reflects the fact that the benefits of federalism are much broader than its economic, fiscal and monetary dimensions. Indeed, since the EU was originally devised as a peace-keeping device, it is not surprising that one of the early initiatives for European integration was a motion to establish a European Defence Community, although this failed in 1954.

The policy implications of these developments are fiscal rectitude and strong demand management policies. Why fiscal rectitude? Let me explain. Two different hypotheses exist in regard to the relation between trade deficits and budget deficits. One of them is the twin deficit hypothesis postulating that budget deficits cause trade deficits.

8 Looking ahead to 2050, China would be the world’s largest economy and India would be its third largest, behind the United States. A similar picture emerges from other studies, with some nuances. 9 4 See IMF, “World Economic Outlook”, September 2007. 5 See Forbes' Global 2000_Rank.html). 6 See Forbes' list Billionaires_Rank.html).

This is intended to provide a measure of relief to the small UCBs and improve their financial performance through lower Non Performing Advances requiring lower provisioning, which in turn would translate into higher profits that could be used to shore up the capital base of these banks. Incidentally, about a thousand UCBs stand to gain from such differential regulatory regime.

The greater the risk of an insolvency, the higher the premium has to be that potential creditors demand as compensation for providing further funding. But it would be irresponsible to rely solely on the markets to impose fiscal discipline. This is something the founders of monetary union also realised, which is why the Stability and Growth Pact also contains rules on debt.

But what use are rules when they are interpreted so freely that almost any excuse is accepted for exceeding the deficit limits?

We swiftly implemented a plan to innovate our organization and HR management, which had been drawn up through a series of discussions. We also began to make efforts to improve our organizational culture, by, for example, spreading a culture of debate and expanding the sharing of information.

Thanks to everyone's participation, I believe that, we are seeing positive changes in becoming the "vibrant Bank of Korea", from the image of us being the "temple-like Bank of Korea". I am grateful that more reports on major economic issues have been published externally, and that staff at our regional branches are actively engaging as ambassadors for the Bank.

In the above backdrop, the Indian response in the post-crisis period was primarily guided by the immediate imperative of containing the financial contagion from abroad and carrying forward the process of financial sector reforms in a calibrated manner distilling the lessons from the crisis. Measures for containing financial contagion 32.

The RBI responded to the crisis by providing ample rupee liquidity and comfortable forex liquidity to ensure that credit and financial markets functioned normally. To cushion the BIS central bankers’ speeches 5 adverse impact of the downturn, various sector-specific counter-cyclical regulatory measures involving risk-weights and provisioning were introduced.

The first is the “interest rate hypothesis” – the belief that aggregate demand reacts linearly to changes in real interest rates. The second is the “expectations hypothesis” – the belief that expected real interest rates matter and that changes in inflation expectations have real effects. These two cornerstones have long been taken for granted. But they are now under increasing scrutiny.

https://www.ecb.europa.eu/press/key/date/2020/html/ecb.sp201124~bcaebee7c0.en.html 5/13 24/11/2020 COVID-19 and monetary policy: Reinforcing prevailing challenges Monetary policy and the interest rate hypothesis The interest rate hypothesis needs closer inspection on three grounds. [9] First, an emerging literature suggests that monetary policy transmission may not be linear in the level of the interest rate.

Ariff Ali: Climate change, financial inclusion and inclusive green finance Welcoming remarks by Mr Ariff Ali, Governor of the Reserve Bank of Fiji, atThe RBF-AFI Virtual Joint Learning Programme on Inclusive Green Finance Implementation, 19 October 2020.

Technology helped banks to reach the doorsteps of the customer by overcoming the limitations on geographical/ physical reach in branch banking and easing the resource and volume constraints posed by the brick and mortar model.

From a global perspective, however, the regulatory effort needs to be carried out by the widest range of jurisdictions as made clear at the recent G20 meeting in Moscow. Significant efforts are also expected from the industry.

The last FSB report on the implementation of the OTC derivatives market reform estimates that “approximately 10 per cent of outstanding credit default swaps and approximately 40 per cent of outstanding 6 BIS central bankers’ speeches interest rates derivatives had been centrally cleared as of end-August 2012”.5 These shares should grow rapidly, so as to leave to customized OTC derivatives the sole purpose of meeting the specific hedging needs of financial and non financial counterparts which cannot be met by standardised, clearing-eligible contracts.

Market mechanisms now allow the wholesale transfer of risks, and the final resting place is more unclear than ever before. While no one really knows, the common presumption is that these risks are now safely in the hands of those who can best bear them.

In the short term, as our virtual conference exemplifies, global mobility has shrunk dramatically. In the longer term, a question mark hangs over the international division of labour, with many pointing to a potential trade-off between efficiency and resilience (or safety), and potential tensions between the winners and losers of reshoring.

Many believe that it will be the short-term speculative funds that will benefit from this, while the country will continue to be burdened with high public debt and extremely high unemployment. The inclusion of Greek bonds in the PSPP could be an important signal that reforms are on track and debt is being put on a more sustainable footing.

But again, we do not have a precise timeline yet and any decision will be based on internal analysis taking into account risk management considerations. Is the Greek programme workable? Do you believe that, in 2018, Greece will have returned to the markets successfully and will be able to be entirely funded by them?

Furthermore, the ECB offered all citizens the opportunity to express their views via the ‘ECB Listens Portal’ to better understand their perspectives on the economy and what they expect from their central bank.

On our part, we have scheduled our own listening event entitled ‘The Bank of Greece Listens’ in early 2021, with the participation of social partners and with the aim of promoting dialogue on the monetary policy strategy. In closing, I would like to congratulate all those who have made this conference possible. 1 See interview by President Christine Lagarde on 19 October 2020.

51–106; and Demirgüç-Kunt, A., E. Feyen and R. Levine (2013), “The evolving importance of banks and securities markets”, World Bank Economic Review, Vol. 27(3), pp. 476–490. 26 See Bartelsman, E., P. Lopez-Garcia and G. Presidente (2017), “Factor reallocation in Europe”, ECB, mimeo. 27 See Hsu, P., X. Tian and Y. Xu (2014), “Financial development and innovation: Cross-country evidence”, Journal of Financial Economics, Vol.

Issues of personal growth and well-being are important as these not only contribute to a more healthy work environment but can be effectively harnessed to help align personal goals with organizational goals. It implies an approach where the organization attempts to build upon strengths of its human capital combined with appropriate placements where we can harness individual passions and energies into fulfilling organizational objectives.

6 See, for example, Bordo, Michael D. and Olivier Jeanne, (2002) “Monetary Policy and Asset Prices: Does “Benign Neglect” Make Sense?”, International Finance, 5(2): 139–64. 7 This follows the so-called ‘Tinbergen rule’ (see Tinbergen, Jan, (1952), “On the Theory of Economic Policy”, North-Holland Pub. Co., Holland). 8 They also complement existing microprudential supervision and banks’ own risk management practices.

In Governor Blackman’s view, Bruce had talent so great, networking connections so vast, and a capacity for service so tremendous that he could not be contained within the confines of his native land. It was thus not surprising that his last days were spent in the service of Africa.

However, I can already see one challenge for regulators, which is to let banks reap the economies of scale inherent to digital technologies while not recreating risks of too-big-to-fail. This scenario also crucially assumes that banks are profitable enough to carry out the necessary investments, which in Europe involves reducing costs and addressing forcefully non-performing loans.

In the second scenario banks remain more defensive or, as they would probably like to argue, stifled by regulation and the low interest rate environment. As a result, they increasingly risk failing to meet the changing demands of customers, who, in a digitalised world, expect financial services to be available in real time, anywhere and at any time.

However, what actually forced the German government to undertake a set of major reforms was a couple of intensifying domestic problems which depressed growth and increasingly constrained policy makers’ scope of action.

The Financial Stability Board, for example, has recently issued policy proposals to tackle vulnerabilities in MMFs.7 The ESRB will also soon publish a recommendation on money market fund reforms and the European Commission will review the EU money market fund regulation in 2022.

The focus is to ensure that governance best practices are embedded in the industry including the CBN as well as ensuring that risk-based supervision (RBS) principles, methodology and processes are established across the CBN and NDIC.

Under the RBS, the intention is to establish a programme management structure within the CBN to ensure that there is a high level of communication with the industry, implementation quality is measured and examiners acquire the necessary skills. A monitoring mechanism to measure the programme’s impact and ensure a high level of responsiveness to issues raised by the industry will also be established.

We must maintain our current efforts in order to achieve the 2 percent inflation target at the earliest possible time, which we now expect to be around the first half of fiscal 2016. Another interesting fact illustrated by the graph is that the recent unemployment rate in Japan, about 3.5 percent, is low even by Japanese standards.

With everything else being equal, the lower the unemployment rate, the better the economic welfare. However, that may not be the whole story. The fact that we have achieved this very low level of unemployment with only modest economic growth in the last two years indicates how heavily our adverse demography is weighing on the supply side of the economy.