##f sector. 18 3 / 10 bis central bankers'speeches moreover, the absence of other changes in investors ’ behavior suggests that mmf investors were driven by a narrow desire to preserve the money - likeness of their investments. when moving from prime to government mmfs, investors largely remained in the same fund family. figure 3 illustrates this observation using a scatter plot of outflows from prime funds versus inflows into government funds at the family level. additionally, investors shifted into funds that invest primarily in agency debt, the sub - segment of the government mmf industry with a riskreturn profile most similar to that of prime mmfs. 4 / 10 bis central bankers'speeches this response to mmf reform differs significantly from what happened in 2008. although during the 2008 mmf run, investors also fled from prime to government mmfs, the characteristics of the run differed substantially : outflows were large but quickly reverted following the guarantee ; they largely occurred across — and not within — fund families as investors became wary of particular counterparties ; and investors moved to the safest sub - segment of the government mmf industry, that is, funds investing only in treasuries and treasury - backed repos. 19 these contrasts further illustrate a difference between investors ’ demand for money - like assets in normal times, when regulation changes, and their demand for safety in non - normal times. public sector provision of money - like assets there is a view that regulation and supervision alone are not sufficient to fully mitigate the financial stability risks associated with private maturity and liquidity transformation, and thus, the official sector should consider providing more money - like assets. 20 the argument is that when the official sector increases its supply of money - like assets, it reduces the convenience yield on very short - term securities, thereby weakening the private sector ’ s incentives to create short - term runnable securities. 21 some recent market pricing helps to illustrate this characteristic. as shown in figure 4, an increased supply of bills issued by the u. s. treasury in late 2017 was accompanied by a tightening of the spread between rates on 3 - month t - bills and overnight indexed swaps ( ois ) — a spread between two risk - free instruments that can be thought as reflecting the premium associated with bills ’ money - like characteristics in normal times. 22 5 / 10 bis central bankers'speeches while this is an area worthy of further research, i personally am not compelled by the notion that the public sector can calib

klaas knot : high debt and financial stress - implications for asian financial stability speech ( online ) by mr klaas knot, president of the netherlands bank and chair of financial stability board, at the asean + 3 economic cooperation and financial stability forum, kanazawa, 5 december 2023. * * * thank you for inviting me to speak today. i am sorry that i cannot be there in person with you, as i was unable to travel from the cop28 proceedings, where i am today, to kanazawa in time. nevertheless, i am grateful to be able to share a few words with you on a theme that aligns so closely with the mandate of the fsb : safeguarding growth and stability in a complex world. a resilient and stable financial system is indispensable to sustaining economic growth, particularly in the current environment. this is at the core of the fsb's mandate. as the global financial stability watchdog, the fsb is responsible for assessing vulnerabilities affecting the global financial system. in addition, the fsb identifies and reviews the regulatory and supervisory actions needed to address these vulnerabilities. so how do we go about that? to start with, our surveillance framework aims to proactively identify vulnerabilities and provides a global, cross - border, and crosssectoral perspective on existing vulnerabilities. this framework draws on the collective perspective of the broader fsb membership. but that perspective can only take us so far in understanding and responding to global vulnerabilities. indeed, the global issues of today require coordinated responses, but this does not necessarily mean one size fits all. regional perspectives matter. to gain a truly global perspective, it is important for us to incorporate the experience and intelligence of emerging market economies ( emes ) and also look beyond our g20 membership. our regional consultative groups are one way we do this. they provide us with a richer and more detailed regional perspective. one which we appreciate ever more during times like the present when financial and macroeconomic uncertainty are elevated. last week our regional consultative group for asia met in hong kong. members discussed global and regional financial market developments and their impact on asian economies. a key theme was rising government indebtedness and financial stability risks linked to the sovereign - bank nexus. i note that amro's financial stability report raises many of the themes discussed by our regional group, including elevated private and public nonfinancial