martin redrado : financial turbulence – impact on developed and emerging economies ( closing address ) closing address by mr martin redrado, governor of the central bank of argentina, at the central bank of argentina 2008 money and banking conference “ financial turbulence – impact on developed and emerging economies ”, buenos aires, 1 september 2008. * * * when we started planning this event, by mid last year our goal was to exchange diagnoses and innovative ideas that, at the end of the day, would contribute to redesign global policies. and when i say “ us ”, i mean policymakers and academic economists merging the views of both the emerging and developed countries. this is exactly what, in my opening address, i suggested we should aim for : taking advantage of this unique opportunity that the international financial crisis provides us in order to reflect on the efficacy of our policies and thus, based on experience, improve the quality of our instruments. we also undertook to consolidate, in argentina, an international scenario for debating international finance in these unique circumstances for the global economy. this contributes to our engagement with the world ; very often we face many everyday challenges that prevent us from reflecting on more global matters which also affect us. that is why i would especially like to thank my central banker colleagues and friends from the academic world, with whom i usually meet in various international fora, for promptly accepting my invitation to come to argentina. uncertainty persists about the duration and depth of the current global financial crisis. with recession increasing in the advanced economies, it remains unclear how it will continue to spread ; what is clear is that the u. s. economy is not disconnected from the rest of the world, as randy kroszner stated yesterday in his very convincing remarks. in this framework, developing countries are relatively stronger vis - a - vis other past events. this is reflected in financial assets that fluctuate less than, for example, comparable u. s. and european assets. countries with large fiscal and current account deficits mainly financed with short - term capital flows ( e. g. eastern european, unlike latin american and asian countries ) are the hardest hit. in fact, if we aggregate emerging countries with current account deficits above 5 points of gdp and compare them to the rest, we see a difference of almost 500 bp in cd spreads whereas, at the end of 2007, values were similar. another recurrent theme during these days was the pervasive global inflationary scenario, which poses a challenge both

andrew bailey : capital and lending article by mr andrew bailey, deputy governor of prudential regulation and chief executive officer of the prudential regulation authority at the bank of england, published in the sunday times, 5 may 2013. * * * crises often lead to big changes in public policy. britain ’ s decision in the 1990s to embrace the objective of sustained low inflation and an independent central bank had its roots in the horribly high inflation of the 1970s. now we have a big change in financial regulation rooted in a more recent crisis, the credit crunch of six years ago. since the start of april, the financial policy committee ( fpc ) of the bank of england has had a statutory duty to protect and enhance the stability of the financial system. alongside it at the bank is the new prudential regulation authority ( pra ). its job is to promote the safety and soundness of banks, insurers and large investment firms by focusing on the problems they cause for financial stability. this is a new direction for financial regulation. the crises that lead to such big changes often follow long upswings in economic and financial conditions that are allowed to go to excess. light touch regulation in the run - up to the start of the financial crisis in 2007 supported expansionary growth in the balance sheets of banks – too much borrowing – which was literally too good to be true. our new approach is designed to counter the risk that policy is too accommodating in upswings and too harsh in downturns. two important principles stand out for me : first, that we must carry out financial regulation with an eye on conditions in the real economy, which means promoting stable and sustainable credit creation and growth ; and second, we should always be prepared to look to the risks ahead, and exercise sensible judgment. the financial crisis has taught us in the most painful way of the dangers of waiting too long to take action and then being unable to prevent the worst consequences of delay. the fpc has recommended that british banks make sure their capital level is high enough to withstand future threats. some banks will need to increase their equity capital for a given level of risk in their balance sheets. concerns have been expressed that this change will harm lending to the uk economy. i do not agree with these concerns. equity capital is not money that has to be stashed away for a rainy day and thus put to no good use. it is the shareholders ’ stake in the company. in nonfinancial