pt. com / 2013 / 02 / 12 / bank - of - england - publications - news - releases - news - release - g7statement. bis central bankers ’ speeches advanced - economy demand. which of these two effects would be greater is an empirical matter. simulations of the federal reserve board ’ s econometric models of the global economy suggest that the effects are roughly offsetting, so that accommodative monetary policies in the advanced economies do not appear, on net, to have adverse consequences for output and exports in the emerging market economies. 8 a return to solid growth among the advanced economies is ultimately in the interest of advanced and emerging market economies alike. regarding capital flows : it is true that interest rate differentials associated with differences in national monetary policies can promote cross - border capital flows as investors seek higher returns. but my reading of recent research makes me skeptical that these policy differences are the dominant force behind capital flows to emerging market economies ; differences in growth prospects across countries and swings in investor risk sentiment seem to have played a larger role. 9 moreover, the fact that some emerging market economies have policies that depress the values of their currencies may create an expectation of future appreciation that in and of itself induces speculative inflows. of course, heavy capital inflows and their volatility pose challenges to emerging market policymakers, whatever their source. policymakers do have some tools to address these concerns. in recent years, emerging market nations have implemented macroprudential measures aimed at strengthening their financial systems and reducing overheating in specific sectors, such as property markets. policymakers have also experimented with various forms of capital controls. such controls raise concerns about effectiveness, cost of implementation, and possible microeconomic distortions. nevertheless, the international monetary fund has suggested that, in carefully circumscribed circumstances, capital controls may be a useful tool. 10 in sum, the advanced industrial economies are currently pursuing appropriately expansionary policies to help support recovery and price stability in their own countries. as the modern literature on the great depression demonstrates, these policies confer net benefits on the world economy as a whole and should not be confused with zero - or negative - sum policies of trade diversion. in fact, the simultaneous use by several countries of accommodative policy can be mutually reinforcing to the benefit of all. let me end these remarks as i began, by paying tribute to mervyn king. he has been a leader

oversight of third - party service providers under the authority granted to banking regulators under the bank service company act. better aligning supervisory attention with the source of risk in this way could be a more efficient mechanism to address risks on the borders of the regulatory perimeter. closing in closing, thank you again to the southwestern graduate school of banking for the invitation to discuss my thoughts about the future of banking. bank management and directors face significant challenges in preparing for an unpredictable future, a future that will be impacted by emerging risks, new business opportunities, regulatory actions, and many other factors beyond a bank's immediate control. while the factors i have highlighted do not - and could not possibly - provide a roadmap to the future, they do provide a different way of thinking about the long - term challenges and opportunities in the banking industry, a perspective that may be helpful for bank directors, bankers - and even for regulators. 1 the views expressed here are my own and are not necessarily those of my colleagues on the federal reserve board or the federal open market committee. 2 notably, information technology issues continue to be one of the most frequently cited findings in supervisory examinations of regional banking organizations and community banking organizations. see board of governors of the federal reserve system, supervision and regulation report ( pdf ) ( washington : board of governors, november 2023 ), figure 16, " outstanding supervisory findings by category, cbo firms, " and figure 17, " outstanding supervisory findings by category, rbo firms. " 3 see michelle w. bowman, " the innovation imperative : modernizing traditional banking, " speech at the independent community bankers of america icba live 2023 conference, honolulu, hawaii, march 14, 2023. 4 see michelle w. bowman, " new year's resolutions for bank regulatory policymakers, " speech at the south carolina bankers association 2024 community bankers conference, columbia, south carolina, january 8, 2024. 5 see michelle w. bowman, " the role of research, data, and analysis in banking reforms, " speech at the 2023 community banking research conference sponsored by the federal reserve system, the conference of state bank supervisors, and the federal deposit insurance corporation, st. louis, missouri, october 4, 2023. 7 / 7 bis - central bankers'speeches