paul tucker : shadow banking – thoughts for a possible policy agenda speech by mr paul tucker, deputy governor for financial stability at the bank of england, at the european commission high level conference, brussels, 27 april 2012. * * * it is excellent that the eu commission has published a consultative paper on shadow banking and is holding this conference today. the commission ’ s paper fits well with the approach that the g20 financial stability board is taking. the issues here are very important since, as the international community reregulates the banking industry, more activity is almost bound to be booked outside banking. we need at some point to move on to policy. i am therefore going to use today ’ s occasion to put on the table some thoughts for a possible concrete policy agenda. i am doing so in the spirit of wanting to help nudge this work into its next stage. and i should be clear that the fsb, where our work is led by adair turner, have not yet articulated our collective preferred policy approach. the definition of “ shadow banking ” employed by the fsb and the eu commission is, paraphrasing, credit intermediation, involving leverage and maturity transformation, that occurs outside or partly outside the banking system. 1 that is very close to the definition i used in a speech two years ago calling for work on shadow banking, except that in addition to leverage and maturity transformation i include “ monetary services ”. 2 i want to make three broad points about this. first, it is very clear that “ shadow banking ” is not the same as the non - bank financial sector. this is not a debate about the appropriate regulatory framework for the whole of finance. for example, the vast majority of hedge funds are not shadow banks, and don ’ t trade in the credit markets or especially illiquid markets. second, non - bank intermediation of credit is not a bad thing in itself. indeed, it can be a very good thing, helping to make financial services more efficient and effective and the system as a whole more resilient. we must remember that as we make policy. but, as we know from this crisis and from previous ones, true shadow banking can weaken the system. regulatory arbitrage, which is always with us, can distort and disguise channels of intermediation. that leads me to my third general point. shadow banking comes in lots of shapes and colours. there are degrees to which any particular instance of shadow banking replicates

isabel schnabel : interview in die welt interview with ms isabel schnabel, member of the executive board of the european central bank, conducted by ms anja ettel and mr holger zschapitz on 10 february 2020 and published on 11 february 2020. * * * you want to clear up misunderstandings about the ecb. would you say that you are now on a type of peacekeeping mission to mediate between the central bank and the german public? no, that is not what this is about. i am not a mediator between two parties ; i am now a member of the ecb ’ s executive board. but in my new role as a board member i am committed to seeking greater public understanding and clearing up misunderstandings. for people to constantly hear that the ecb ’ s policy is harmful to them is misleading and it undermines their trust. this worries me. which misunderstanding do you wish to clear up specifically? the expropriation of savers is the main misconception. even the term itself is legally incorrect. it would imply that the ecb is taking something away from people that rightfully belongs to them. but that is not the case. but rather? the real interest rate – that is, the interest rate adjusted for inflation – emerges from the economy ’ s growth potential in the long run. sweeping macroeconomic trends – such as demographic ageing and weak productivity growth – have caused a worldwide decline in real interest rates. the ecb cannot change these fundamental developments but can only steer its key interest rates around the trend. if it wishes to fulfil its mandate and stimulate the economy at a time when inflation is too low, it has to lower interest rates even further. if the policy rate then approaches zero, it becomes increasingly difficult to attain its objective with conventional tools. we see this constellation all over the world. you ’ re suggesting that the ecb is a victim rather than a perpetrator in respect of negative interest rates. are there any robust economic studies that back this up? there are countless studies that estimate the equilibrium interest rate, using various methods and delivering different outcomes. but the trend is clear, it is pointing downward. i understand the frustration about low returns on savings, but that is not the whole picture. borrowers and property owners have benefited, as have the government and employees. analyses have been conducted on what would have happened without the ecb ’ s loose monetary policy. they found that