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On the basis of these considerations, until 2000 the government continued to display reluctance to set annual inflation targets (it deferred determining a target for as long as possible, leaving it to the end of the year, ignoring the logic regarding the lags with which monetary policy takes effect; from time to time it considered accepting the inevitability of rising inflation; it refused to set a long-term or final target).

One thing is certain: the incoming administration will inherit a better state of infrastructure to help in its socioeconomic agenda. The next administration will inherit a robust pipeline of implementationready infrastructure projects. A total of 88 infrastructure flagship projects for completion in 2023 and beyond will be up to the next administration to continue.

In January this year the London-based Committee of European Banking Supervisors began operation, alongside other similar committees set up for the markets in financial and insurance services.

The Government has also introduced the District Treasury Roll-out Program, which will further complement the provision of financial services in the rural parts of PNG. This entails the provision of treasury, banking and post office services from one outlet mainly at local and district levels. I am still very concerned about fast money scams.

3 The results of the risk-based supervision model determine the frequency and depth of supervisory monitoring. The surveillance is proportionate to the risk profile of financial institutions.

Therefore, the role of FEDAI assumes greater significance in the present context. There is, thus, a need to have a closer look at the working and functions of FEDAI and strategize on how to transform it to a fullfledged and responsive SRO.

Mr Draghi: No, I have never made any transaction with any government. The reason is simple: I was too busy doing corporate investment banking with private clients. Handelsblatt: Have you ever been to Greece? Mr Draghi: I have never been to Greece for working reasons. Those transactions were done before my arrival at Goldman Sachs.

There have been further transactions with Greece but I have never been involved. I would also like to point out that I was not deputy CEO, because that position does not exist at Goldman Sachs. Handelsblatt: When you think now about Goldman Sachs and Greece, do you think it was a good idea for Goldman to help Greece mask its budget?

Most notable is a series of recent bills adopted against the backdrop of rising US-China trade tensions – such as the Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act and the Inflation Reduction Act in the US and the European Chips Act – that could affect multinational corporations’ production and sourcing strategies, prompting efforts to reconfigure their supply chain networks.” See IMF (2023), op.

As a consequence, aggregate output in the second quarter still had not reached its peak level just prior to the recession.

While today’s webinar is no substitute for face-to-face meetings with bankers, it is a special treat to be able to leverage technology to speak to and hear from so many community bankers across the country at the same time. As all of you surely know, community banks play a vital role in the U.S. financial system.

In 2006 these benefited from higher-than-expected revenue, partly due to the good performance of the economy. The temptation to squander this fiscal windfall must be resisted. The public debt, the cumulative result of improvident decisions over a long stretch of time, remains extremely large – the largest in Europe in relation to gross domestic product.

You cannot lead it solely out of Frankfurt. But the nickname “Mr Somewhere Else” has pursued me for 20 years! Since your time at the Italian Treasury? Yes, I had a thousand things to do. Sometimes people tried to find me and could not so.

In view of the current uncertainty we will be continuing these crisis measures. At any rate, the floor for the risk weighting of mortgage loans and the countercyclical capital buffer will not come into force before the end of 2021.  In summary, we are still in a historically deep economic crisis. Fortunately, this has not so far sparked a financial crisis.

This was low, but it was generally expected to rise safely above 1% by now. Instead, the latest reading for headline inflation is 0.4%. This downward movement of inflation was primarily driven by declines in energy and food price inflation, which are two components that tend to be volatile and whose effects are typically temporary.

One of the findings, perhaps unsurprisingly, is that there is a close link between the degree of market integration and the available underlying market infrastructure. The euro money market is essentially fully integrated, thanks to the integration of large-value payment systems.

And an economic situation that requires such a policy often occurs in the midst of severe and protracted economic stagnation following a financial crisis, in which firms and households have shouldered excessive debts. Therefore, it could indeed be an economic environment in which a normal transmission mechanism cannot function properly.

BIS Review 108/2010 3 However, the most significant event is the increase in the rate of GST on 1 October. This will push headline inflation substantially higher. This mainly involves direct effects of GST on goods and services purchased.

In concluding, Distinguished Guests, Ladies and Gentlemen, a stable macroeconomic environment, characterised by low and predictable levels of inflation, safe, sound and inclusive financial sector, supportive regulatory environment and well-informed consumers of financial services is positive for wealth creation and preservation, as well as inclusive growth. I thank you for your kind attention. 9

Work will be undertaken by the Nationale Bank van België/Banque Nationale de Belgique and De Nederlandsche Bank based on their existing system. As you can see a range of different organisational models are explored to achieve maximum synergies, e.g.

Against this background, funding conditions remain very challenging for Irish banks and this is reflected in their significant recourse to the Eurosystem, which is of particular value to the country at this time. Domestically, the contraction in the real economy and a continuing weak property market have meant that banks have incurred substantial loan impairments.

In addition, earnings are likely to remain relatively subdued in the near term because of higher loan provisions, increased funding costs, the pass-through of lower ECB policy rates and competition for deposits. Overall, our banking system, similar to those elsewhere, continues to face significant challenges.

It is an honour to open this Pacific Financial Intelligence Community Plenary this morning and I would like to begin by welcoming our international visitors: the heads of the FIUs of our Pacific Island nations and the delegations from each of the countries represented here today.

I would like to open this plenary in a manner that I hope may set the tone for the next two days and indeed provide a direction of sorts for the work that is to come over the coming months and years for this financial intelligence community.

Let me begin by refreshing memories on the objective and content of the Monetary Policy Statement, which the Bank of Botswana issues every year. The Statement serves several purposes. First, it provides an opportunity for the Bank to report on inflation and monetary policy developments in the previous year, and to present its assessment of the outlook for inflation in the current year.

I have also heard questions regarding the implementation of existing regulations, such as capital treatment of liquidity waivers, the application of the new discretion on GSIB methodology, the impact of NPL disposals on internal model parameters, and the interaction with resolution strategies. The transposition of EU laws into national laws has also provided loopholes allowing preferential treatment.

Let me illustrate this by drawing your attention to the fact that in some countries, the payment system turnover to GDP ratio is more than 100. The significance of this number is that it means that the turnover in the payment system over a period of three days is equal to the GDP (of that particular nation).

Therefore, any disturbance in the orderly functioning of the payments and settlement system could disrupt the smooth functioning of the economy, the markets, the financial market infrastructure and the participants themselves. As flagged earlier, the recent financial crisis demonstrated the importance of payment and settlement systems.

But it is also true that some elements of the regulatory framework for the financial system as well as the behaviour of public authorities may contribute to augmenting the amplitude of the fluctuations.

Looking ahead, an ambitious additional consolidation effort appears necessary if Slovakia is to reach its medium-term objective for the structural deficit of 0.8% of GDP in 2010. The vitality of the country’s economy can be seen by comparing its real GDP growth with that of the euro area.

Implications for the interaction of fiscal and monetary policy The second set of questions I would like to address is as follows: what are the implications of the SGP reform for the interaction of fiscal and monetary policy? And what role should the European Central Bank play in this context?

I’d like to arrange my remarks around three types of structural change. The first is change in the underlying structure of the real economy. The second is change in the inflation process. The third is change in the financial structure. I will argue that the last is probably the most difficult for central banks to deal with.

Unfortunately, even after economic conditions have returned to normal, the nation will still face a sizable structural budget gap if current budget policies continue.

At the same time, reforms were also undertaken in various segments of financial markets, to enable the banking sector to perform its intermediation role in an efficient manner. The thrust of these reforms was to promote a diversified, efficient and competitive financial system, with the ultimate objective of improving the allocative efficiency of resources, through operational flexibility, improved financial viability and institutional strengthening.

Doubts over asset quality, uncertainty over funding and generally reduced appetite for risk suddenly erupted last August into a scramble for liquidity. These pressures have been seen in most of the developed economies, though they have been most acute in the US, the UK, the euro area and Canada.

For at least some of the G7 economies, then, these events would appear to have the characteristic of a common shock, in the form of a rise in the market cost of finance and, in 2 BIS Review 7/2008 some cases, perhaps, the possibility of a wider withdrawal of credit.

While Grade I covers banks with no major supervisory concerns, the other three grades would indicate existence of supervisory concerns in increasing degree. Table 5 gives the grading-wise distribution of banks as on March 31, 2006 (as per provisional data).

It is seen that 37% of UCBs in the country, accounting for 25.60% of total deposits, were in Grades-III and IV signifying weakness/and sickness, while the remaining major portion (63%) of UCBs, accounting for 74.40% of total deposits, were in Grades-I and II, indicating good/satisfactory performance/ financials.

The arrangements allow for the provision of liquidity in each jurisdiction in any of the five currencies foreign to that jurisdiction, should the two central banks in a particular bilateral swap arrangement judge that market conditions warrant such action in one of their currencies. The arrangements have helped to ease strains in financial markets, especially in the euro area.

Another factor is various government initiatives to address cost-of-living pressures, with these initiatives pushing down inflation in administered prices. The price rises for utilities are also much lower than over recent years. Working in the other direction, the drought and the depreciation of the exchange rate have been pushing up retail prices over the past year.

However, if inflation were to remain persistently low or the expansion were to falter, the FOMC would be able to provide only a limited amount of additional stimulus through conventional means.15 These motivations notwithstanding, I continue to believe that it will be appropriate to gradually reduce the degree of monetary policy accommodation, provided that labor market conditions strengthen further and inflation continues to make progress toward our 2 percent objective.

8 See ECB Financial Integration in Europe, May 2017. 9 For instance, the share of the 5 largest credit institutions in total banking sector assets was just 43% in Italy compared to an average of 63% across the euro area countries (based on 2016 data).

And the International Monetary Fund expects Canada to have the strongest average GDP growth in the G7 over 2023 and 2024.6 That’s good news, but it underscores that our interest rate increases still need to work their way through the economy to ensure demand cools enough for supply to catch up. Our employment growth has also been strong compared with most of the G7.

We’ve had the second-strongest recovery in jobs and hours worked since the start of the pandemic. We’ve also had the fastest adult population growth, fuelled by immigration. And our labour force participation rate for women is at the top of the G7, helped by more affordable child care and flexible work arrangements.

As a result, Greek banks’ capital levels are at a par with the EU average (11.7 percent), with a Tier 1 ratio of 10.6 percent (Q3 2009) from 7.9 percent at end 2008. The leverage ratio stands at 13.4 and is significantly lower than the European average. Profitability Greek banks have remained profitable.

Net interest margin stood at 2.6 percent during the first 9 months of 2009, twice the EU average. However, profitability declined y-o-y by around 42%. This outcome was the unavoidable result of the crisis that hit Greece with a time lag and was aggravated by the structural and fiscal imbalances that characterise the Greek economy. Impairment charges have been the key drag on profits.

Fourth, a collaborative approach with other official entities was adopted to buttress the strategy. Investigative agencies were brought on board to examine the available information for evidence of crimes. Other central banks were also roped in to ensure that escape of counterfeiters and perpetrators of illicit funds through those jurisdictions was thwarted.

This approach is akin to an army overwhelming the enemy by attacking on all flanks at once. As the sun set on demonetization on September 30, 2019, inflation, the exchange rate and other key macroeconomic indicators remained stable. There were no last minute panic queues outside banking halls—the awareness campaign had been effective and ordinary Kenyans had exchanged their notes in good time.

Another measure of the “democratising” of the financial system is that practically all permanent employees now receive privately funded superannuation benefits, compared with less than half a decade ago. It is the investment of these funds which has provided such an important stimulus to the growth of the funds management industry over the past decade and a half.

If we look at any measure of inflation, we see that it takes quite an effort to raise inflation expectations and actual inflation to the levels that are consistent with our objective of “below, but close to 2%” in the medium term.

It is not hard to illustrate ways in which the Irish economy has differed – in some respects quite sharply and measurably – from otherwise comparable countries. One dimension is demography, and that brings us back to the Great Famine.

Within South East Asia, BIS Review 128/2007 1 Malaysia stands out with $ billion Islamic banking assets, $ billion Takaful industry and has the largest Islamic private debt market which constitutes 45.5% of its total debt market. 1 Other countries in South East Asia have smaller Islamic financial markets and Singapore has positioned itself to offer strong wealth management potential.

The pitfalls and dangers of not returning to target For the better part of the last 30 years, Canada has benefited from the selfstabilizing mechanisms I just described.5 But these mechanisms cannot be taken for granted. In fact, they’re being tested by the series of large shocks that our economy has experienced over the past 18 months.

The longer inflation stays significantly above target, the greater the risk that these mechanisms could turn from stabilizers into de-stabilizers.6 For example, mounting evidence shows that over the past two years passthrough from costs to prices has been stronger and more widespread than before the pandemic.7 As I explained earlier, that’s partly because firms tend to adjust 5 In fact, many countries around the world have benefited from these self-stabilizing mechanisms.

Thus, let us look at medium- to long-term indicators: the inflation outlook (excluding the direct effects of the consumption tax hikes) over the next five years for households and that over 10 BIS central bankers’ speeches the next three and five years for firms. Chart 3 indicates that households’ inflation expectations have remained at around 2.0-2.5 percent since late 2011.

Meanwhile, firms’ inflation expectations recorded 1.7 percent for both the next three and five years, according to a survey conducted in March 2014 as a part of the Tankan (Chart 18). 7 Going forward, inflation expectations are likely to rise to around 2 percent, thereby raising the actual prices and wages.

We, and the rest of the world, doubtless will have to live with the geopolitical and other uncertainties of the oil markets for some time to come.

*** We are unable to judge with certainty how technological possibilities will play out in the future, but we can say with some assurance that developments in energy markets will remain central in determining the longer-run health of our nation's economy.

It would be hard to argue that their precise implementation could be foreseen ex ante as the obvious and necessary reaction implied by their monetary policy strategy to a “financial crisis event”. Such degree of predictability would only be attained if central banks could foresee all possible future contingencies, and thus provide an exhaustive list of their reactions to all of them.

Naturally, this is impossible in response to a crisis, which is likely to emerge in a way that could not be anticipated in its details. Nevertheless, in the case of the ECB, the non-standard measures adopted during the crisis are ultimately embedded within the same medium term-oriented framework and their effectiveness depends on the credibility of this framework.

G The desire for certainty and control which seems to underlie such proposals is understandable, as it appears to offer the promise of using less public money, and seemingly entails less risk that creditors will be bailed out for poor credit decisions. But the control and manageability that might result may be more seeming than real.

G For one, a perceived disposition to preemptively lock the door seems likely to send investors heading for the exits all that much sooner. As a result, many avoidable crises soon may become inevitable. And the problem of contagion, whereby difficulties in one case spread to many, would seem likely to worsen.

The use of short-term unemployment 1 or household inflation expectations that are closer to those of economic agents are two examples of promising developments. Drivers of inflation in the euro area Let us look at the euro area.

In February 2020, R&I upgraded the Philippines’ credit rating from “BBB” to “BBB+” with a “stable outlook.” In May, Fitch Ratings and S&P Global affirmed the Philippines’ credit rating of “BBB” and “BBB+” respectively. In June, Japan Credit Rating Agency upgraded Philippine sovereign debt to A- (Stable), citing strong economic fundamentals. And in July, Moody’s affirmed the Philippines’ “Baa2” rating with a “stable” outlook.

The original speech, which contains various links to the documents mentioned, can be found on the US Federal Reserve System’s website.

* * * I would like to thank the organizers here at the Bank for inviting me to this year's conference and for giving me the opportunity to join Madam Hu and Bill White in this session on “Different Tools, Different Realities.

The past few years have been probably the busiest ever for the Bank as it has raced to stem or meet outflows and repair the damage to the banking system that has so undermined national prosperity. With industry promotion no longer part of the Bank’s statutory mandate, the regulatory agenda has shifted into an unapologetically intrusive mode.

The fact that, over the years, more than 94 percent of the workforce has been employed, on average, indicates that U.S. workers apparently have been sufficiently skilled and motivated to learn the new tasks that enable them to earn, on average, an ever-rising real wage.

In the 1970s and 1980s, Italy’s ‘industrial districts’ (clusters of small, specialised manufacturing firms) prospered largely on the strength of a peculiar, highly localised form of human capital, acquired in vocational schools, through on-the-job training, and through general social interaction (sometimes called the ‘local industrial climate’). In that context, the returns to formal education appeared to be low.

As a part of reforms, concessionary financing was eliminated with introduction of market auction system and phasing out of automatic monetisation with Ways and Means Advances (WMA).

Movements toward structural reform Response to the aftereffects of the bursting of the bubble - declining financial intermediary function Now let me turn to the earnest structural reform efforts being seen in various areas of the economy. First, the problem of the declining financial intermediary function after the bursting of the bubble has begun to be resolved.

Meanwhile, according to business surveys, the financial position of firms, particularly that of small firms, remains severe. The monetary base exhibits a high year-on-year growth rate of around 20 percent. The year-on-year growth rate of the money stock dropped to around 2.0-2.5 percent in December. Funding costs for firms continue to be at extremely low levels on the whole.

There is also a provision for the State to subscribe financial instruments issued by listed banks that are fundamentally sound; these instruments count as regulatory capital; in April 2009 the Combined Report on the Economy and the Public Finances assumed that the resources employed would amount to around € billion; to date issues of about € billion are nearing completion.

Because of telecommunications it is possible nowadays to provide the inputs into any firm’s production process from a variety of sources, in many different locations, anywhere in the world.

The Soviet Union collapsed in the end of 1991 and in March 1992 Finland was ready to apply for membership in the EC. Finland joined the EU together with Sweden and Austria 1 January 1995. By next year end Finland has been a member of the EU for 20 years.

Improving foreign demand, mostly from the United States, and higher oil and other commodity prices are positive signs that raise the prospects of stronger export growth and a rebound in investment. At the same time, Governing Council considered the recent rise in unemployment, the very uneven impacts of the job losses and the growth in longterm unemployment.

These can include currency, maturity and liquidity mismatches: in some instances, where liquid short-term banking flows denominated in foreign currencies are used to finance longer-term domestic currency lending, you get all three. Waves of foreign capital can also fuel credit booms, which are associated with mounting leverage and deteriorating credit quality.

It is essential to move from a bad equilibrium with high financing costs and insufficient green capital mobilization to advance this agenda globally, to an equilibrium with climate friendly funding sources at scale for these countries at genuinely low financing costs. Such funding alternatives would have positive global externalities and support economic activity and investment in these regions.

This is a necessary condition to (i) bring our workers’ wage levels closer to European standards; and (ii) finance the welfare state in a context of unfavourable demographic developments. The challenge is thus one of activating the ‘levers’ of employment and productivity. I will briefly highlight the four most critical ones. 1. First, investment.

It is vital to increase both the stock of capital and investment in intangibles, learning from past mistakes, particularly by scrutinising investment projects in a far more demanding way. Of course, we cannot ignore the fact that the recovery in investment is constrained by the (still) high indebtedness level and low savings rate of the Portuguese economy.

2 For example, considerations of how the public learns about the economy and the objectives of the central bank can affect the form of the optimal monetary policy (Gaspar, Smets, and Vestin, 2006; Orphanides and Williams, 2007).

Furthermore, when the public is unsure about the central bank's objectives, even greater benefits may accompany achieving a stable inflation rate, as doing so may help anchor the public's inflation expectations.

3 See Cœuré, B. (2017), “Central clearing: Reaping the benefits, controlling the risks”, Banque de France, Financial Stability Review, No. 21, April.

And these companies are funded by individuals who are willing to invest their savings through a financial system that they trust. Clearly, infrastructure plays a key role in creating an efficient, productive economy. But today, there are clear signs of a public infrastructure deficit in Canada.

Before turning to these points, I want to develop briefly the comparison between deposit runs of the pre-FDIC period and contemporary short-term wholesale funding runs in order better to explain the nature of the regulatory challenge.

Vulnerabilities created by short-term wholesale funding There are notable similarities between the bank runs that periodically afflicted the U.S. banking system before the creation of federal deposit insurance and the dramatic short-term wholesale funding runs that began in 2007.

In light of this, it is important to understand the sources of the growth slowdown we have witnessed this year. At present there are two main sources. The first is one-off factors, which have clearly played an important role in the underperformance of growth since the start of the year.

In the first half of 2018, weather, sickness and industrial action affected output in a number of countries. And in the third quarter, we saw a significant disruption of car production created by the introduction of new vehicle emissions standards on 1 September.

We can quantify this latter consideration using the so-called sacrifice ratio – the number of years that unemployment has to be 1.0 percentage point greater than its natural rate to reduce the inflation rate 1.0 percentage point.

Averaging estimates obtained from a comprehensive battery of equation specifications suggests that the sacrifice ratio may be 40 percent larger – that is, it may be 40 percent more costly to reduce inflation than it was two decades ago. Is this really bad news? I will return to this question later.

There was widespread agreement that Denmark is among the most digitised countries, but also that Denmark may not be in the top league when it comes to the degree of cybersecurity. We must continue our journey towards increased cybersecurity.

So in 2018 Danmarks Nationalbank will conduct a survey similar to that carried out in 2016 to see whether cyber resilience has increased, and we will also establish an "intelligence-led red-team testing programme" for the financial sector. I think this programme will be useful for the individual actors and for the sector overall.

There is no single comprehensive measure that can be used to indicate the extent of financial inclusion across economies. Specific indicators such as number of bank accounts, number of bank branches, that are generally used as measures of financial inclusion, can provide only partial information on the level of financial inclusion in an economy.

Measures of financial exclusion Whatever measure one may use for India, it is apparent that the financially excluded constitute a significant share of the population especially amongst the low income groups. Based on the AIDIS 2002 survey, RC showed that 111.5 million households had no access to formal credit. It also showed that 17 million households were indebted to moneylenders.

He or she could ensure that national fiscal policy is conducted with a view to contributing to the achievement of the EU’s objectives. The trouble for politicians is that voters may feel that granting greater scope at the EU level means taking away from national interests.

After all, our people embrace technology and mobile communications in a manner that has raised our mobile phones to around 110 million, more than our population. In the last nine quarters, we saw deposit accounts grow by nearly 7 million or 17.5% to nearly 47 million. About 93% of the new accounts have outstanding balances of about one hundred thousand pesos or less.

a cap on the overall cost of borrowing, as a tool to address the adverse selection problem, h. It is true that the ECB regime has evolved in response to the investment needs of the economy as well as that of specific priority sectors and in the process has perhaps become more discretionary than necessary.

Indeed, a key lesson from the experience of the late 1960s and 1970s is that the stability of longer-run inflation expectations cannot be taken for granted.

Urjit R Patel: Banking regulatory powers should be ownership neutral Inaugural Lecture by Dr Urjit R Patel, Governor of the Reserve Bank of India, at the Centre for Law & Economics, Centre for Banking & Financial Laws Gujarat National Law University, Gandhinagar, 14 March 2018.

* * * I speak today to highlight some fundamental fissures that exist in the regulation of banks, in particular, public sector banks (PSBs). It has been slightly over a month since the latest fraud in the Indian banking sector broke news. Success has many fathers; failures none.

Some particular factors stand out, which were highlighted in the last issue of the SARB’s Monetary Policy Review. First, the decline in food inflation that began in early 2017, as crops recovered from a drought-induced plunge a year earlier, lasted longer than most projections had anticipated. Part of this positive surprise reflected a continued decline in global food commodity prices.

conflict of interest-between rating fee and quality of ratings, conflict of interest with shareholders, conflict of interest at rating committee level, separation of business development and rating activities, separation of rating business from other business activities.

“Equivalent confiscation” and “enlarged confiscation” are valid tools for attacking assets of illegal origin. The former makes it possible to seize property of equivalent value to the profit of crime even if not originating from crime, while the latter, inverting the burden of proof, requires the accused to demonstrate the provenance of his assets when they are disproportionate to his declared income or activity.

21 However, the provisions on seizure and confiscation are numerous and not always coordinated. Moreover, they do not take account of the difficulty that confiscation may involve in an advanced economic and financial environment, where it is often necessary to intervene on innovative and complex financial instruments.

Other regulators must also take responsibility for looking at the extent to which the mandated use of ratings has encouraged credit outsourcing, led to pro-cyclical price movements, and encouraged discontinuous crowded trades.

The Japanese economy is expected to return to a moderate recovery path from the latter half of this fiscal year as production regains traction with further easing of supply-side constraints, backed by an increase in exports reflecting the recovery in overseas economies and by a rise in rebuilding demand.

This has introduced a risk in the Danish mortgage system that did not exist previously – a risk that has been accentuated by the financial crisis. Danmarks Nationalbank finds it important to consider this aspect carefully when reviewing SDO legislation. After all, government guarantees do not last forever.

Late in the SDO legislation process a deal was struck whereby SDO loans can be redeemed at par. This provision has limited the scope for product development, and as such it is worth preserving. Under the traditional Danish mortgage system, mortgage loans are redeemable at around par. This is a good arrangement, which safeguards consumers against unpleasant surprises.

Achieving a balanced growth path also requires to strengthen the euro area ability to deal with 3/4 BIS central bankers' speeches risks, whenever they will materialise. The current economic outlook provides a unique opportunity to reduce the likelihood of severe shocks by strengthening the economic structures of Member States, with policy actions both on the fiscal and structural side.

At the same time, boosting the resilience of the Economic and Monetary Union (EMU) implies also reinforcing our common institutional set-up so as to prevent and manage shocks. I thus welcome the European Parliament’s role in such discussions and the renewed efforts by euro area leaders and ministers to tackle the issue, as reflected in, for instance, the recent Eurogroup meeting.

If this strength persists, full removal of LVR restrictions outside of Auckland could be delayed. The Bank will continue to monitor housing market developments and modify its macro-prudential policies accordingly. Implementing the new measures The Reserve Bank undertook a public consultation on the proposed changes to LVR restrictions in June.

As a result of the feedback received, some changes are being made to facilitate the implementation of the policy, but the substance of the policy remains intact. The details of the final policy are now available on the Bank’s website. www.rbnz.govt.nz/regulation_and_supervision/banks/consultations/Response-tosubmissions-21-august.pdf. We announced our proposals for changes to the LVR policy in the MayFinancial Stability Report and began public consultation on 3 June.

The Governing Council also conducted its regular review of the outlook for price developments and the risks to price stability in the euro area, this time including a review of the most recent forecasts and projections.

After this examination, the interest rate on the main refinancing operations of the Eurosystem was left at 3.0% and the interest rates on the marginal lending facility and on the deposit facility were maintained at 4.0% and 2.0% respectively. Allow me to outline the main elements of our assessment of the latest information on monetary, financial market and other economic developments.

The steady decline in the unemployment rate is mirrored by the decline in financial hardship reported by respondents to the Federal Reserve’s Survey of Household Economics and Decisionmaking over the past five years. 1 Wage gains, increased household wealth, and elevated consumer confidence are supporting robust consumer spending.

Since the crisis, we have also taken numerous steps to make the financial system safer and stronger, leaving it better equipped to support the financial needs of consumers and communities through good times and bad. 2 1 Board of Governors of the Federal Reserve System, Report on the Economic Well-Being of U.S. Households in 2017 (Washington: Board of Governors, May 2018), www.federalreserve.gov/publications/files/2017-reporteconomic-well-being-us-households-201805.pdf.

I can only agree with what was mentioned a moment ago: that the guidelines we received were precise and timely and the communication with the relevant authorities was very well organised. The speed with which our application was handled is further testimony to the excellent collaboration between our New ECB Premises project team and the city authorities.

So, Newtonian physics works and works 2 BIS Review 21/2010 effectively as a very good approximation for understanding the known universe. At the extremes, we need the sophistication of quantum mechanics or relativistic mechanics.

After tracing the implications for regulatory and supervisory policy, I will conclude by identifying broader policy co-ordination issues. You will excuse me if I am deliberately provocative, in the interest of sharpening the issues and encouraging a broader debate. 1 BIS Review 76/2000 I.

The micro- and macro-prudential dimensions of financial stability Promising discussions are often derailed by lack of precision in the definition of terms, when interlocutors think they share the same understanding but, in fact, do not. Arguably, the debate on the micro- and macro-prudential dimensions of financial stability is one such example.

Today, more than 300 million citizens in Europe share the same currency. The process of monetary integration as laid down in the Maastricht Treaty has found its tangible expression and culminating point in the everyday life of the citizens of the euro area.

It is important to stress that pension funds, while a type of managed asset fund, are not normally considered to be a source of systemic risk, despite providing non-bank financial intermediation, because these four sources of systemic risk are generally not present.

It is very satisfying to see some serious effort to improve financing of priority sector - a less fashionable, but more legitimate area for banks.

Governance aspects covered in the third section are somewhat tricky to be handled for several reasons, but some of the distinguished speakers seem to have made telling points such as the need for arms-length to be maintained by owners with the Board, and the fact that best corporate governance exists when ownership is widely distributed.

Economic growth will be higher, and macroeconomic and financial stability will be sound. There are some risks, of course, that we need to closely monitor and address, e.g. FFR increases, China factors, commodity price declines, and fiscal revenues. This is the time for Indonesia to move forward, and we will. All the three policy mix at the national level, i.e.

First, the lacklustre relative export performance and shrinking tradeable sector. In contrast to countries that attained middle-income status rapidly (in Latin America and South-East Asia, for example), for Botswana, over the last few 4 years, the private tradeable sector declined as a share of the country’s GDP.

While this approach may work in the major developed economies, it does not recognise the crucial role that central bank liquidity policies can play in smaller economies, particularly where there is no deep government security market. Of course, during the consultation process, the Basel III standards have been modified to accommodate certain local conditions through the alternative liquidity arrangement (ALA) provisions.

In particular, the Committed Liquidity Facility (CLF) variation has been designed to accommodate countries where there is a shortage of Government stock (such as Australia and South Africa). This is a positive move in that it recognises the essential role of the central bank in liquidity provision during a crisis.

However, for the past decade or so, the Bank has been considering these bank notes, and we’ve been asking ourselves: could Canada and Canadians benefit from a digital form of cash?

In a speech in Montréal a year ago, I gave our preliminary view: we did not see a need for a central bank digital currency at that time, but we could imagine scenarios that could make a central bank digital currency beneficial in Canada.

But, as they say, "The plans of mice and men often go awry." In this case, it was what happened in the US: US monetary policy becoming so aggressive and, of course, the very large increase in our import prices.

I will now turn to the main determinants of the risk profile, on the asset side, of a central bank’s balance sheet, by describing the Eurosystem case, and, in particular, that of the ECB. I’ll consider the applicable risk mitigation measures as well. I will start by describing a central bank’s exposure to exchange rate (or FX) risk.

As the authorities respond with higher policy rates, which are necessary to control second-order effects, what we in the central bank want is that the supply-side effects do not generate inflationary expectations that make inflation keep rising-even after the supply shocks have gone.

There are risks to the real economy, which, thankfully, we [the economy] were able to absorb, and we do believe we will be able to absorb this [impact of the BSP's rate hikes] as well. But these spillover effects are critical-just as we are worried about any spillback risks from financial markets into the real economy.

In addition to JGBs, the Bank decided to increase the purchases of risk assets such as exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs) so that their amounts outstanding will be tripled and increase at an annual pace of about 3 trillion yen and about 90 billion yen, respectively.

The Bank will also make ETFs that track the JPX-Nikkei Index 400 eligible for purchase. B. Reasons for expanding QQE: the bank’s view Having said this, let me discuss why the Bank decided on the expansion of QQE. As explained earlier, Japan’s economy has continued to recover moderately as a trend and is expected to continue growing at a pace above its potential.

I mentioned previously that leverage tends to amplify losses, and I would suggest that many of the losses during the recent financial crisis, particularly at the largest firms, were a result of off-balance-sheet leverage.

This is in part because emerging-market economies have less developed financial systems that may not be able to generate enough financial assets to absorb domestic savings, so capital flows from these countries into others where the financial systems are more advanced. See E. G. Mendoza, V. Quadrini and J.-V. Ríos-Rull, “ Financial Integration, Financial Deepness and Global Imbalances,” Journal of Political Economy 117, no.

More recently, in India, a development platform with the promise to reverse several years of sub-par growth and high inflation is being pursued. The lesson to take from this is that we are not helpless in the face of economic disappointment, of high inflation and low growth. For monetary policymakers, with limited tools, this situation provides no attractive choices.

Simply put, the primary market for a security is the place where an issuer creates the security and sells it into the market; it involves the creation of new securities with the government as seller. The secondary market covers trading of securities after issuance and before redemption.

This rigidity problem constrains our efforts to improve outcomes and permanently lower interest rates. Our inflation outcomes appear to have settled at around the top of the target range, close to 6 per cent. This implies that nominal market interest rates will never fall much below 9 per cent.

In the October 2013 Outlook Report, on the assumption that the consumption tax rate will be raised twice, the Bank considered that, while there will be a swing due to the front-loaded increase and subsequent decline in demand, Japan’s economy is likely to continue growing at a pace above its potential, as a trend.

Notes: Capital flows are a four-quarters moving average of total “gross capital inflows” aggregated over 50 economies and reported as a percentage of total GDP. The global stock market factor is constructed from a dynamic factor model for stock returns in 63 countries.Latest observation: Q2 2018.

BRED Bank viewed Fiji as having a relatively good developed market size, with appealing future economic prospects. The fact that we are being seen more and more as an economic and financial hub in our Pacific region is also extremely appealing. Considering this vision of BRED Bank, let me make some comments on our economy and the near term outlook.

Washington: Board of Governors of the Federal Reserve System, February. Mishkin, Frederic S. (2007a). "Inflation Dynamics", speech delivered at the Annual Macro Conference, Federal Reserve Bank of San Francisco, San Francisco, March 23. Mishkin, Frederic S. (2007b). "Housing and the Monetary Transmission Mechanism", Finance and Economics Discussion Series 2007-40. Washington: Board of Governors of the Federal Reserve System, August. Mishkin, Frederic S. (2008a).

Private consumption growth and the continued cyclical recovery of business investment are expected to support domestic demand. Underpinning consumption are the improvements in labour market conditions, with 1/3 BIS central bankers' speeches unemployment steadily falling despite a rise in participation.

I can assure you that the Bank of Canada takes these issues very seriously. In terms of the management of the public purse, let me quote from the Bank's new medium-term plan, which was put up on our website earlier this month. "Good governance is an investment in preserving the trust of Canadians in our ongoing stewardship of the Bank.

More recently, housing prices have fallen. Since the peak in mid 2017, housing prices Australia-wide have declined by around 7 per cent. The falls in Sydney and Melbourne have been larger. The question we are asking ourselves is, given the high levels of debt and falling housing prices, are there any significant implications for financial stability?

But the greater puzzle is the slow pace of increase in compensation per hour at prevailing unemployment rates. This is more clearly the case after the downward revision in compensation in the July NIPA revisions, bringing that measure of compensation per hour more in line with the Employment Cost Index.

Given the rate of increase in compensation, an unchanged trend growth in productivity of 1.1%, for example, seems quite consistent with recent price performance. Although not without some serious shortcomings, the published productivity data provide little encouragement to the view that there has been a significant improvement in underlying productivity growth. The growth in measured productivity over this expansion has, in fact, been disappointing.

* * * Ladies and gentlemen, Allow me to welcome you on behalf of the National Bank of Serbia, and to extend my appreciation for the magazine “European Integration Challenges” whose very title points to the key challenges we shall be facing in the near future.

Today I would like to touch on three key issues: first, what does integration to the EU mean for the National Bank from the point of view of concrete steps we have been taking so far; second, what is an “expensive” credit in Serbia versus Europe, and finally, what measures has the NBS taken so far to lessen the effects of the crisis by drawing on the ample experience of EU countries.

First, the effects of the crisis on potential output should fade as the economy continues to heal.6 And second, if the headwinds begin to dissipate, as I expect, growth should pick up further as many who are currently unemployed or out of the labor force find work.

Headwinds affecting the recovery What are the headwinds that have slowed the return of our economy to full employment? Some have come from the housing sector.

What we are seeing in countries that are export oriented, and thus able to take advantage of the present age of globalization, is a reduction in poverty and a convergence of income per capita toward industrialcountry levels. In India and China, for example, globalization in recent years has lifted the incomes of more than 1 billion people above the levels of extreme poverty.

As I noted earlier, confident answers to these questions can only be given when we have a greater perspective on the reasons why the recent crisis occurred and spread. But certain tentative conclusions are already possible. In the first place, the international community can do a better job of establishing standards by which the various actors in international capital markets agree to be bound.

The measures taken by SBP have enabled the corporate governance regime for banks and its different elements are not only compatible with international best principles but are also parallel with most other emerging economies. Central Banks are vital in instilling confidence in the economy. They are key towards the promotion of trust and confidence in the financial sector.

Interested groups on the other hand may attempt to disrupt the regulatory framework and in turn confidence in the institution. Accordingly, we must provide constant reassurance to the public of the confidence in the Central Bank.

Given the importance of corporate governance in banking institutions, the independent functioning of the Board of Directors cannot be overemphasized. Our Guideline on Corporate Governance requires the Board of a banking institution to have a healthy proportion of independent directors and encourages a minimum of 40 per cent.

* * * Introduction Ladies and gentlemen, Let me start by thanking Clearstream for the kind invitation to speak to you today. I am delighted that the Bundesbank is part of this event, as it has been in previous years. Looking at the calendar, the date of your conference is quite momentous – we are two days away from Brexit.

Accordingly, when communicating about net purchases, we have expressed our intention to continue with our chosen pace of monthly purchases until we see “a sustained adjustment in the path of inflation consistent with our inflation aim”. This phrase describes the key contingency that has guided the course of our policy in the past few years and will continue to do so in the future.

Third, given the dramatic consequences that a CCP default would have for financial stability, it is vital that there are robust recovery and resolution regimes for CCPs. The CPSS-IOSCO and Financial Stability Board (FSB) have made good progress to that end. Fourth, it is important to react swiftly to any structural developments that may cause systemic disruption.

Some of these nations and companies have achieved competitive edge because the improvements in their ICT had allowed them to leverage the benefits of network economies, knowledge management and the advantages of rapid, frictionless, information flow. They have optimized the full spectrum of their capabilities and have from it, realized significant gains in sharing information, products, ideas, and intellectual capital.

They have, in that way, positioned themselves in leadership roles in the global market place of the new millennium.

Second, asset purchases are particularly effective in easing the monetary policy stance in the current crisis environment because they can directly affect market funding conditions for companies and the price of credit for households and small and medium-sized businesses.

Likewise, when primary dealers were asked about the timing of the announced change in reinvestment policy, the average of their responses was a relatively flat distribution of possible dates, with almost equal probability on the announcement occurring in the fourth quarter of 2017, the first two quarters of 2018, or the second half of 2018 (figure 5).

From 1950 to 1973 the world economy grew at an annual rate of 4.9%; the industrial countries achieved 4.4%, Latin America, Asia and Oceania a higher rate. Inflation was a little above 3% in the industrial countries and less than 5% in the world as a whole.

This will entail reviewing the constitution of the association, putting in place a code of conduct and allocating more resources to the secretariat.

Generally, there is good reason to be confident that underlying inflation will gradually 1/4 BIS central bankers' speeches rise in the period ahead. Wages are rising as labour markets continue to improve and labour supply shortages become increasingly binding in some countries.

Higher wage growth, as well as a recovery in producer and import prices, is expected to continue to support the upward adjustment in underlying inflation. In addition, long-term market and survey-based inflation expectations are reasonably well anchored and broadly in line with this outlook. Overall, recent developments confirm the Governing Council’s earlier assessments of the medium-term inflation outlook.

The most problematic situations have been managed through market solutions that safeguarded financial stability and protected depositors.

Until the first few months of last year, also thanks to greater confidence in the economic outlook for Italy and the euro area, the involvement of qualified investors made it possible to relaunch a number of banks, whose business models were completely overhauled and adapted to the new competitive scenario.

That implies that there will be some spare capacity in the labour market for a time. Inflation is low. In year-ended terms, we expect underlying inflation to remain around 1½ per cent for a few quarters before gradually increasing to more normal levels.

In addition, I will discuss several ongoing supervisory and regulatory initiatives that aim to improve consumer information and expand consumer protection. Federal Reserve System’s minority-owned institutions (MOI) program Nationally, there about 200 minority-owned depository institutions serving a broad range of communities and populations.

It is a great pleasure for me to be here in Madrid. In my speech I would like to discuss the reasons for the current state of fragmentation of the euro area and ways to remedy this situation, including through the completion of the banking union.

The point I will make is that financial integration is desirable for an efficient allocation of resources in our economy, but that it will have to assume a different form to also ensure stability is delivered. To this end, I will elaborate on two interrelated issues. First, I will consider past and current developments in the degree of financial integration in the euro area.

Calenda r Year Share in Exports Share in Imports Chart 2: India's share in global merchandise trade 2015 1.6% 2.4% 2016 1.6% 2.2% 2017 1.8% 2.7% 2018 2.0% 3.1% 2.0% 2019 2.0% 2.9% 1.0% 2020 1.7% 2.3% 0.0% 2021 2.4% 3.5% 4.0% 3.0% 2015 2016 2017 Share in Exports 2018 2019 2020 2021 Share in Imports 6.

Just a few Italian corporations make bond issues on the capital market (an average of ten a year over the past decade). Here, again, Italy lags significantly behind, and in recent years the gap has widened (Figure 5).2 The same pattern holds for other instruments of direct or indirect recourse to the market, such as asset securitizations.

According to World Bank indicators, between 1981 and 2015, the share of the world population in extreme poverty declined from 42% to 10%, and the world’s real GDP per capita grew by 63%. Naturally, these global dynamics have produced asymmetric impacts across regions. In 2012, the World Bank report Golden Growth described Europe as a “convergence machine”, fuelled by trade and financing.

The region had gone through the largest and deepest regional integration process in recent history, generating a sizeable convergence in living standards. However, the convergence machine has left some people and regions behind. A more recent World Bank report, Growing United, identifies two emerging divides that interfere with the convergence process: a productivity divide between countries and regions; and household income inequality within countries.

1/3 BIS - Central bankers' speeches Against this background, we welcome the Report on the Evolution of the WBG and commend management and the Board of Directors for their effort over the last months.

Gross domestic product is a measure of the income generated within New Zealand, and New Zealand's growth in GDP was not too bad during the 1990s. But because we have become increasingly reliant on finance from foreign savers, an increasing share of the income this economy generates goes (in interest and dividends) to those who financed us.

A stock-take of the effectiveness of unconventional policy, the risks associated with tapering and the differing experiences in the American and European systems is highly important for the calibration and effectiveness of monetary policy on both sides of the Atlantic.

At the nexus between unconventional monetary easing and the legacy impairments of the previous crisis lies the issue of bank profitability, which will be the subject of a session that I will chair later this morning.

In the case of Japan, overseas lending activities by Japanese-owned financial institutions began to decline sharply in the 1990s, mainly as a result of nonperforming-loan problems. In recent years, there has been a shift in this trend as these financial institutions have begun to actively extend credit overseas again (Chart 17).

Lending activities to emerging Asia have undergone a particularly brisk expansion through both Japanese- and non-Japanese affiliated firms. While the presence of European banks has declined in this region, Japaneseowned financial institutions have been swiftly extending credit to such countries as China, Indonesia, South Korea, Malaysia, and Thailand, thereby mitigating the adverse impact of stocks.

Here I would like to take a moment to mention the following: It is odd that the intense public debate on the relationship between budgetary policy and economic growth, recently rekindled following publication of a box in the latest edition of the IMF’s World Economic Outlook, has focused only on the size of the short-term budgetary multipliers, when the wider and more dynamic view of the problem, which considers the negative effects of the macroeconomic uncertainty and the high indebtedness levels on growth, is also widely covered by the IMF in the same report.

That said, risks to the outlook for prices are skewed to the downside, and thus close attention should continue to be paid to the possibility that the momentum toward achieving the price stability target will be lost.

There has been a dramatic change, as non-bank financing sources have become much more important since the onset of the financial crisis. Total assets of investment funds in percentage of total bank assets increased from 16% in 2007 to 44% last year.

The percentage of bank loans in the total stock of firms’ external financing in 2017 was just above 12% (or 15%, if intra-company loans and trade credit are excluded from total external financing).

Estimates for investments required in areas such as efficiency improvements, renewable energy, nuclear energy, carbon capture and storage amount to as much as 1 trillion euro annually. Technological innovation is assisting this transition. This includes developing efficient heating solutions, advances in LED lighting technology, utilizing geothermal power, and developing electric vehicles.

Meanwhile, survey results will help us see if the short-term inflation expectations of consumers and firms are coming back down. This will be an important sign that monetary policy is working and that Canadians are beginning to feel some relief.

Real asset prices have since risen again but, so far, have not resumed the earlier trend rate of increase, and at this stage they show no signs of doing so. They look very much like they are on a much flatter trend. This adjustment has been considerably less abrupt than those seen in some other places.

Nonetheless, it is a very substantial change in trend. If people had been banking on a continuation of the earlier trend, they would be feeling rather disappointed now. Of course if that earlier trend in gross wealth owed something to a tendency to borrow to hold assets, then a continuation would have exposed households to increased risk over time.

A satisfactory solution to this impending complication needs to be found quickly. 21. As we all understand, a benchmark is as good as the underlying market. Developing good benchmarks is eventually dependent on developing deep and liquid financial markets, which is an ongoing and drawn-out process. Meanwhile, effort can focus on improving the integrity and credibility of the benchmark process.

This requires achieving a balance between good statistical techniques and realistic subjective judgement, of both market participants in their role as submitters and benchmark administrators. And above all, recognizing that every system is in a process of constant evolution.

Among the other factors that will now enter into this assessment are nonbank assets, short-term wholesale funding, and off-balance-sheet exposure. The changes 8 Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency, “Agencies propose rule regarding the treatment of high volatility commercial real estate,” news release, September 18, 2018, https://www.federalreserve.gov/newsevents/pressreleases/bcreg20180918a.htm.

A resurgence in house price inflation House price to income ratios are high in New Zealand, and especially in Auckland. Although house price inflation has slowed markedly, a further surge in house prices can’t be ruled out as mortgage rates are low, net migration flows are strong and large supply and demand imbalances remain in the housing market.

That being said, many firms are experiencing less room for further cost reductions. In these circumstances, they need to increase sales in order to maintain or raise the level of profits in the face of upward pressure on labor costs.

The Bank presented the projection of economic activity and prices for two years ahead through fiscal 2007 in its Outlook for Economic Activity and Prices (hereafter the Outlook Report) released on April 28, 2006: Japan's economy is likely to experience a sustained period of expansion, with domestic and external demand and also the corporate and household sectors well in balance, and the year-on-year rate of increase in the consumer price index (CPI; excluding fresh food, on a nationwide basis) is likely to rise gradually.