s update of the stability programme published this week rightly provides for such a control of public expenditure once the recovery is firmly established ( 0. 7 % growth per year from 2023 on average ), although this is somewhat higher than 0. 5 % per year, and incorporates a more optimistic view on potential growth than our own forecast ( 1. 35 % vs. 1. 1 % ). what is more important in this regard however is not the exact number but that the established targets are effectively met. the level to be fixed – and then respected –, is a matter for democratic debate, not for central banks. this is a demanding but attainable goal : many of our european neighbours have achieved it. * * in conclusion, the covid crisis has completely warranted a very supportive fiscal policy. but the gradual exit from this crisis should be a crucial opportunity for us europeans to respond to one core question : how to maintain the right use of the fiscal tool while ensuring the sustainability of our debt, in order to be able to finance our common social model for coming generations. accommodative monetary policy obviously helps, but it cannot be taken for granted eternally. to draw an analogy from the sphere of climate change, we should avoid a « tragedy on the horizon ». thomas paine, an english - born political philosopher and citizen of the world, once said : “ if there must be trouble, let it be in my day that my child may have peace. iii ” this is exactly what we should aim at in the next decade. thank you for your attention. les notes du conseil d ’ analyse economique, pour une refonte du cadre budgetaire europeen, avril 2021 abiad a., furceri d., topalova p., the macroeconomic effects of public investment : evidence from advanced economies, imf working paper, may 2015. iii the american crisis ( circa 1776 ) i ii

simon topping : basel ii - implications for hong kong speech by mr simon topping, executive director ( banking policy ) of the hong kong monetary authority, at the city university of hong kong / oracle systems hong kong limited “ basel ii : implications for hong kong ” seminar, 5 july, hong kong. * * * i ’ d like to start by thanking the city university and oracle systems for organising today ’ s seminar and for giving me this opportunity to share with you some thoughts on basel ii, and in particular on the implications for hong kong. the process of devising a new capital accord has now been going on for more than four years and it is still another three and a half years until countries start implementing it. it ’ s clear from this timescale that what we are talking about here is a very major project indeed, and one which has important implications for the banking industry. it ’ s very welcome, therefore, to have occasions like this to help spread the word on what it ’ s all about. but why such a big deal? what ’ s so wrong with the existing capital accord? the answer is simply that, in the 15 years since it was introduced, things have moved on. the nature of banks ’ business and the risks they are running have changed dramatically, and the existing accord no longer comes up to scratch - it no longer functions as a mechanism for ensuring that banks hold an amount of capital that is broadly commensurate with the risks they run. in particular, the current broad - brush treatment of credit risk means that the capital requirement in respect of credits of widely varying quality is the same. and though the existing accord was modified a number of years ago to incorporate capital requirements in respect of market risk, it doesn ’ t require banks to hold capital against many other risks they run - for example, operational risk, interest rate risk in the banking book, and business cycle risk. so there are many good reasons why there should be a basel ii to address these weaknesses in the current capital accord. but while this objective of better matching capital requirements to the risk taken is certainly very worthwhile, it ’ s really only part of the story. for the aims of basel ii are somewhat broader than this. basel ii is not about creating some wonderful all - singing all - dancing system of capital requirements to keep the banking supervisors happy. it ’ s not a case of supervisors trying to dictate how banks should manage their business. on the contrary, it ’ s quite