of the factors, which escalated irresponsible borrowers ’ behavior before the crisis, especially since it was not stopped early enough. second, there was a housing loan insurance scheme, which shifted the risks of the riskiest borrowers from banks to the state - owned mortgage insurance company. naturally, this created grounds for moral hazard concerns. in other words, such government policy stance, together with other economic factors ( such as eu membership, plans to introduce euro in 2007, the enthusiasm regarding economic expansion etc. ) clearly fostered credit and house price growth. looking back, it is evident that policymakers failed to acknowledge the excessive boom in the economy. subsequently, they did not make effective use of fiscal stabilization tools. the introduction of a universal property tax ( or at least a credible plan to do so ) and the abolishment of the tax incentive could have had a suppressing impact on property prices. indeed, according to oecd research, reduction of tax deductions related to mortgage financing costs can reduce house price volatility. that would probably not have prevented the bubble from emerging, but it might have limited the damage. returning to today, we see that lithuania still does not have a universal residential real estate tax. last year, the bank of lithuania released suggestions concerning the tax system. one of those suggestions was primarily related to the residential real estate tax – we suggested broadening the base of residential real estate taxation. our proposals have not yet found their way forward politically. what we have today in lithuania is a situation in which real estate taxation exists – but more in theory than in practice. for example, last year, residential real estate taxation generated only 1. 7 m euro as budgetary income, which is only a tiny fraction – 0. 02 % – of the total state budget income. oecd also reports that, in total, real estate taxation in lithuania constitutes around 0. 4 % of gdp. is that enough? to compare, total real estate taxation in latvia constitutes around 0. 9 % of gdp, while in poland – around 1. 2 % of gdp. the oecd average is around 1 %. so due to the current tax design real estate taxation in lithuania has little real effect. this is clearly not a 2 / 3 bis central bankers'speeches suitable outcome. the current discussion is relevant not only internationally, but also for lithuania in particular – especially given our past experiences. we – i mean many of us – still need to do

payments system. while the private sector excels at customer - facing activity, central banks provide the basis for trust, ensure liquidity, and set standards. central banks, while independent institutions, are accountable to the general public. this accountability necessitates building public confidence through intensive communication, namely, explaining the specific policy decisions taken by decisionmakers under specific economic conditions. shifting to data - driven decision - making and evolving together with changing technologies will ensure that central banks remain effective and credible, in turn enabling us to fulfill our mission of creating value for society. distinguished guests, lietuvos bankas is pleased to organize this centenary conference in cooperation with our colleagues from the bank for international settlements ( bis ), an institution that serves as a central bank for central banks. lietuvos bankas'relationship with the bis is almost as old as both these institutions! the bis commenced operation in 1930, and in march of 1931, lietuvos bankas became its shareholder. please allow me to give the floor to mr. luiz pereira da silva, deputy general manager of the bank for international settlements. luiz, the floor is yours. 1 from the speech " monetary policy in a changing economy ", delivered 24 august 2018 at " changing market structure and implications for monetary policy " symposium sponsored by the federal reserve bank of kansas city, in jackson hole, wyoming. 3 / 3 bis - central bankers'speeches