jiri rusnok : basel consultative group meeting - welcome speech welcome speech by mr jiri rusnok, governor of the czech national bank, at the basel consultative group meeting, topic " regulatory treatment of sovereign exposures - survey of recommendations ", czech national bank and bank for international settlements, prague, 4 october 2016. * * * dear basel consultative group members, dear experts from all around the world, dear ladies and gentlemen, let me warmly welcome you to the czech national bank ( cnb ). we are proud to host the expert meeting on the basel regulatory reform and its design, using the perspective of emerging markets and developing countries. in the wake of the recent global financial crisis, the basel committee on banking supervision ( bcbs ) is making reform steps towards more healthy, stable, and resilient banks and financial systems. the latest basel reform includes more and better bank capital, leverage and liquidity requirements, as well as macro - prudential measures, ranging from g - sib surcharges to countercyclical capital buffers. the reform effort is successfully underway and new standards are gradually being implemented worldwide, covering advanced as well as emerging markets and developing countries. when designing further details of the regulatory reform, we have to pay special attention to differences in financial systems among countries and regions. namely, financial systems in emerging markets and developing countries are often shallower and less liquid than in advanced economies. therefore, emerging market countries can hardly take over all regulatory measures without modifications. on the contrary, they need to contribute to the design of the measures to make them robust and effective across countries. similar holds for regulatory objectives, as what is considered a priority for regulators in advanced countries, like the g20 countries, might not be considered as urgent in emerging market countries. in this regard, i welcome and strongly support the effort of the basel consultative group ( bsg ) as a forum for deepening the engagement of the bcbs with non - member authorities, international institutions, and regional groups of banking supervisors on the regulatory reform and banking supervisory issues. i see cooperation between the bcbs and the bcg as a key component helping to design robust regulation and supervision, taking into account financial sector aspects in both advanced and emerging markets and developing countries. as a member of the bcg, the cnb has actively participated in the work of the group. we contributed to the work agenda evaluating major intended and unintended consequences of basel iii implementation for emerging and smaller economies

a victory. there are still two more phases in the fight against inflation : in the second phase, inflation needs to fall to below 10 % in the second half of this year, in line with our forecast. and then, in the third phase, inflation needs to continue to fall to levels close to 2 % next year, which will be the best news for the economy. to ensure this happens, we are now considering whether we should leave rates unchanged again or increase them at the next meeting in june. more than before, the new bank board is monitoring and discussing money flows in the economy, and above all loans to households, firms and the government. we must look at money. we conduct monetary policy. the term is derived from the word " money ", which we label as m and define as the quantity of money in the economy. we have added elements of monetarism to new keynesian economics, the predominant school 2 / 7 bis - central bankers'speeches of thought at the cnb so far. our dsge model created according to the new keynesian theory ends with the three - month pribor interest rate ( michl 2019b ). on top of that, in our considerations, the bank board must discuss the evolution of longer client interest rates and take into account how the interest rate transmission mechanism works and how changes in short - term rates will affect long - term rates. that is why our decisions take into account not only the opinion of the monetary department, but also that of the financial stability department. we attribute a greater role to credit in the economy and debt, which our model previously left out. deputy governor eva zamrazilova will also talk about this after me. deputy governor jan frait also discussed this topic in his lecture at the university in ostrava in 2023. credit market developments very well combine our two main objectives – price and financial stability. the current data from money flow monitoring are as follows : the volume of new mortgages dropped by 70 % year on year in 2023 q1. to give an idea, czk 149 billion in new mortgage loans was provided in 2022 as a whole, compared with czk 368 billion a year earlier. the decrease in loans totalled czk 219 billion. new koruna loans to firms fell by 56 % year on year in q1. however, firms are fleeing to the euro – 43 % of new loans to firms are currently in euros. nevertheless, this