of that we, central bankers are interested in limiting currency mismatches in the balance sheet of domestic market participants. one can also look at fx borrowing of the unhedged domestic agents as the mirror image of the well - known convergence play, when foreigners invest in assets denominated in local currency. the only constraint of this convergence play is the risk absorption capacity of the borrowers. magyar nemzeti bank supports responsible lending and borrowing behavior that targets to increase the risk absorption capacity of borrowers. i am sure we still have to discuss the role of fx loans in more detail in the future. however, i am convinced that an overly simplified view, emphasizing only type of risks, would not lead us towards a consensus view and would help little in guiding future policy measures. finally let me say a few words about the events of the most recent months and touch briefly on future challenges we are facing. summer brought favourable developments in various dimensions. global risk aversion eased significantly, thanks mainly to the well coordinated fiscal and monetary measures of developed countries. this was obviously a very welcome phenomenon for hungary. it helped the currency to appreciate by more than 10 % compared to the levels in spring, and also contributed to the significant drop of domestic bond yields, even at longer maturity. i consider the functioning of the government securities market to be a key indicator of market perception on fiscal sustainability. in this regard, it was particularly favorable that, following a long pause, the government was also able to issue long maturity bonds in forints. while the imf / eu package provides reliable source of financing, the ultimate goal is obviously to return to market financing, preferably in forints. therefore we not only have to present sound and credible fiscal consolidation measures to the international institutions for approval, we also have to make sure that market participants find the fiscal path credible. last, but not least, the return of market confidence gave the magyar nemzeti bank the room to start reducing the key interest rates. further positive news was coming from price developments. ex ante there were wellgrounded concerns about the inflation impact of the large vat hike, a crucial part of the fiscal tightening measures. central banks never welcome any administrative increase in the price level, there is always the risk that a part of the one - off increase will lead to more permanent inflation pressure. this was especially a pronounced concern in hungary given our less than satisfying track record of meeting the inflation targets. while it

jens weidmann : presentation of the bundesbank ’ s annual accounts for opening statement by dr jens weidmann, president of the deutsche bundesbank, at the presentation of the bundesbank ’ s annual accounts for 2014, frankfurt am main, 9 march 2015. * 1. * * welcome good morning, ladies and gentlemen. i am glad that you have come and would like to welcome you to our press conference on the annual accounts of the deutsche bundesbank for 2014. i would like to take this opportunity to take stock in two ways. first, with regard to the size and determinants of our balance sheet and of the bundesbank profit. second, i would like to refer to key political and economic developments and how they have impacted on the work of the bundesbank. 2. continuing the course of reform is the order of the day the debates on economic and monetary policy in the euro area were chiefly shaped last year by low interest rates and the no more than sluggish and uneven economic recovery in the countries of the euro area. fortunately, however, despite the continuation of the sovereign debt crisis, there were no periods of major tensions in the financial markets, such as those that occurred in 2012, for example. on the contrary : the spreads on sovereign bonds – in other words, the risk premiums which are frequently perceived as a barometer of the sovereign debt crisis – have gone back down in all of the member states severely affected by the crisis, with the exception of greece for obvious reasons. moreover, interest on sovereign debt has fallen to all - time lows. the governments of italy, spain and portugal are obtaining funding more favourably than at any time since the introduction of the euro. an extremely accommodative monetary policy as well as continuing progress in adjustment in most of these countries are among the factors which have played a part in this. despite differences in terms of how far countries have already implemented reform steps, the measures that have so far been taken nevertheless mostly point in the right direction. price competitiveness has improved, although this is partly due to the depreciation of the euro. large public deficits have been reduced and current account deficits have been massively cut back. it is now all the more important not to squander the progress made so far. lasting success will be achieved only if budgetary consolidation and the improvement of competitiveness stay consistently at the top of the political agenda. the favourable conditions for government