philipp hildebrand : financial stability – objectives and challenges for central banking speech by mr philipp hildebrand, vice - chairman of the governing board of the swiss national bank, at the bank of france, fondation banque de france, centre for economic policy research ( cepr ), paris, 30 november 2007. * * * i am honored and very pleased to be able to participate in this distinguished conference hosted by the banque de france and cepr. allow me to thank governor noyer and his colleagues for their hospitality. my objectives today are to discuss why central banks are interested in financial stability and address some of the challenges that central banks face during the ongoing market turbulence. unfortunately, the market turbulence is not behind us. it is therefore difficult to draw conclusive lessons. as a result, much of what i have to say is tentative by nature. naturally, i would be pleased if some of my remarks ultimately spark some interest for future research amongst the many academics here. financial stability is not a new topic for central banks. in many ways, central banks were created to strengthen the stability of the financial system. lender of last resort facilities and banking supervision essentially constitute a tandem response to the fact that banks – which are by design leveraged institutions – have periodically proven to be prone to crises. such crises can lead to sharp contraction of credit and thus cause or augment costly economic downturns. monetary policy and financial stability are therefore deeply and historically linked. nonetheless, it is evident that most central banks devote far greater resources to financial stability related issues than they did twenty years ago. one indicator of this heightened interest in financial stability is the number of financial stability reports that are now routinely published. currently, more than 40 central banks publish a financial stability report on a regular basis. interestingly, most central banks have intensified their work on financial stability issues during a period in which the global financial system can be said to have been robust. during the past few years, the overall conditions in the global financial system have been described by many observers as " as good as it gets ". the financial system was apparently very resilient and able to absorb a series of significant shocks. meanwhile, recent research suggests that in the past two decades systemic risk in banking has increased in both the us and the euro area. 1 indeed, systemic risk seems to have re - emerged quite suddenly when, after august 9, many of the world ’ s money markets dried up and a wide range of risk indicators

mr reddy gives a valedictory address with concluding remarks on flexibility, autonomy and the regulatory refocus in banking valedictory address by dr y v reddy, deputy governor of the reserve bank of india, at the conference of chairmen of banks at nibm, pune, on 7 january 2000. * * * at the outset, i am thankful to the institute for giving me an opportunity to be here and share the experiences and be a witness to the variety of sentiments and ideas. there is no prepared valedictory address ; and i deliberately decided not to have one, so that i can share with you my perception of what happened in this conference and incidentally make a few comments. this is a somewhat risky path for a central banker, especially with the press being here. but, by and large, the press has been fair and, i, therefore, continue to trust them. this is not a machiavellian comment where “ gratitude is only hope of benefits to come ”. it is a pretty straightforward and genuine comment. the background papers have been excellent, and they really provide an overview of both the theory and practice, as of today. inaugural session for convenience, in this valedictory address, i will go session by session. mr bhide, in his broad overview, referred to the bhagwad geeta and how arjuna was confused and sought krishna ’ s advice. perhaps krishna is the most ancient consultant that we have. he never fought a war, but he always advised. in fact, he offered his advice to both the parties and as some say, even managed to see that they quarrel. anyway, certainly the type of problems that we have are complicated and it does require substantial input of expertise and international experience to solve them. from the reserve bank of india, we are also in a similar search as arjuna, and i can almost visualise that arjuna who fought the war must have known how difficult it is to operationalise an advice. that there could be problems in actual implementation was evident from the response of the chairmen present here, to various ideas. dr ganti subrahmanyam noted that this conference is being held after 10 years. as you are aware, substantial reform has occurred in the financial sector in the last 9 to 10 years. obviously we have had to undertake a lot of day to day fire - fighting as we moved ahead in the reform process. perhaps now, it is about time we really looked at the reform