amando m tetangco, jr : the pursuit of financial stability – a daunting but necessary prudential agenda speech by mr amando m tetangco, jr, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the financial stability co - ordination council ( fscc ) moa signing, manila, 29 january 2014. * * * securities and exchange commission chairperson teresita herbosa, insurance commissioner emmanuel dooc, philippine deposit insurance corporation president valentin araneta, national treasurer rosalia de leon, representing dof secretary cesar purisima, members of the monetary board, our partners from the various government institutions, my colleagues from the bangko sentral ng pilipinas, members of the media, ladies and gentlemen, good morning. the bsp is honored to host this signing of the memorandum of agreement formalizing the creation of the financial stability coordination council. today, the five agencies represented here – the dof, sec, ic, pdic, and the bsp – publicly affirm our collective resolve to pursue financial stability as the norm for prudential policy. with that resolve comes the commitment to identify, monitor and mitigate the build - up of system - wide financial risks and deploy as necessary so - called macroprudential measures. the bigger picture this is certainly not the first time that we have publicly mentioned financial stability and our desire to make it the pillar of financial market oversight. however, financial stability is prone to being misunderstood, if not under - appreciated. perhaps, it is the sheer enormity of the tasks ahead that creates confusion. or perhaps, it is the absence of a holistic and formalized textbook framework that makes the journey to financial stability and maintaining it quite daunting. the financial stability agenda talks of co - mingled risks, and systemic consequences. this is not the type of language or focus that we have been used to in organizing our prudential oversight of our respective segments of the financial market. yet, the dislocation that comes with financial instability has been very evident for everyone to see and, unfortunately, for many jurisdictions to experience. from the breakdown of wall street to the difficulties in the eurozone and general weaknesses in consumer protection, we saw for ourselves how previously unmonitored and unrecognized risks could create system - wide consequences that are a burden borne ultimately by financial consumers. the global reform agenda is thus designed

yves mersch : the causes of monetary policy measures and their impact - a review speech by mr yves mersch, member of the executive board of the european central bank, at the euro finance week, faros institutional investors forum, frankfurt am main, 17 november 2016. * * * “ the knowledge of causes produces a knowledge of effects. ” ( marcus tullius cicero : “ cognitionem causarum enim cognitio eventorum facit. ” topica 67 ) the financial sector is facing an upheaval. many of the changes are intentional and positive. but certainly not all of them. and to understand the individual factors and their interactions better, i ’ ll be taking a closer look today at the causes of our monetary policy measures and their effects. for the european central bank ’ s policy is often referred to as a cause of the current problems in the banking and financial sector. it will quickly become clear that this assumption has its shortcomings. by focusing on the causes of our actions we can understand more easily how to get back to a normalisation of monetary policy. causes : low natural interest rates let us start with the causes. why are interest rates so low? the growth trend has been declining in many mature economies not just since the crisis, but for several decades. there are many reasons for this, which i won ’ t consider here in detail. the fact is, the slowdown in growth has led to lower long - term interest rates. in these circumstances, there is a risk of a self - reinforcing downward spiral as these developments do not go unnoticed by economic actors ; their expectations are worsening. if a company expects demand to fall, it will be less inclined to make big investments. moreover, ageing societies, which exist in many mature economies, not only have to cope with a shrinking labour force, but they also have to save more. this has led to a savings glut and to a shortage of safe assets. so investments are falling and savings are rising. this reluctance to invest is further reinforced when public authorities – with room to manoeuvre as well as existing demand – invest less than is needed even to preserve the capital stock. this dynamic has led to a reduction in the natural interest rate, i. e. the real rate of interest in which savings and investments are in equilibrium in an economy operating at its potential, where there is neither upward nor downward pressure on inflation. the natural rate of interest plays an