olli rehn : europe's economy - taming inflation, tackling productivity speech by mr olli rehn, governor of the bank of finland and first vice - chair of the european systemic risk board, at the 2024 risklab at arcada, bank of finland and european systemic risk board joint conference on ai and systemic risk analytics, helsinki, 7 june 2024. * * * ladies and gentlemen, dear colleagues and friends, good morning everyone. may i also take this opportunity, as governor of the bank of finland, to welcome you today. i am glad to see so many of you here in helsinki, and of course a warm welcome to all those who are online. once again, the organizers of this conference have put together an impressive programme, with cutting edge topics and distinguished speakers. it is a great privilege to share my thoughts with you today. let me begin with yesterday's news – literally! that is, yesterday we decided at the governing council of the european central bank to reduce the ecb's key monetary policy rates by 0. 25 percentage points. what then is the story behind this very newsworthy decision? first and foremost, we have made significant progress in disinflation since our last rate hike in september 2023. inflation has fallen by more than 2. 5 percentage points, and the inflation outlook has improved markedly. barring further setbacks, for instance in the geopolitical situation and energy prices, or in wage developments for that matter, inflation is projected to converge to our 2 % target in the medium term. euro area economic activity is showing increasing signs of recovery, and the labour market has remained robust. the growth outlook was revised upwards yesterday, which is obviously good news. looking ahead, the ecb governing council will continue to follow a data - dependent and meeting - by - meeting approach when determining the appropriate policy stance. we will set our rates based on our analysis – at each governing council meeting – of three parameters : the inflation outlook, the dynamics of underlying inflation and the strength of monetary transmission. and we are not pre - committing to any rate path. in every meeting we also assess the risks to financial stability. in this regard too, it is clear that today geopolitics is the main risk that may cast a shadow over financial stability in europe and more globally. the european systemic risk board, the esrb, monitors geopolitical developments closely, as these could act as a trigger for many of the key

erkki liikanen : low interest rate environment and systemic risks – current issues speech by mr erkki liikanen, governor of the bank of finland, at the risklab / bof / esrb conference on systemic risk analytics, helsinki, 6 october 2016. * * * accompanying slides can be found on the bank of finland ’ s website : slides ( pdf ). [ slide 1 ] [ slide 2 ] 1. introduction [ slide 3 ] since the financial crisis there have been significant efforts in fiscal, monetary and structural policies to resurrect demand across the globe. monetary policy has had an important role. high debt levels in many countries are constraining fiscal policies. but even in those countries composition of expenditure could be more growth friendly. there has been progress in the structural reforms, but there is still room to go beyond of what we have witnessed so far. on the side of the financial market regulation the regulators around the world have worked to make the banks and the financial system safer. banks ’ capital levels have been increased to improve resilience and more liquid assets are required to cover banks´ liquidity needs in stress. banks will also be required to fund their operations from stable sources that reduce the reliance on the short - term wholesale market funding. plans are laid out to guarantee an orderly resolution of the largest and systemically most important banks. as banks adjust to these requirements they will have to re - evaluate their business models. while banks have become safer, the new requirements may have pushed parts of their traditional business outside the banking sector to the so called shadow banking sector, which has been growing recently. in this talk i will discuss the underpinnings of the low rates environment and its implications for financial stability. i will also touch upon the developments outside the banking sector that we need to follow in order to make sure we make use of the lessons we have learned from the crisis. 2. the low interest rates environment [ slide 4 ] following the financial crises, the return to economic growth has been slow in many regions. this is explained in part by some of the long - term forces that existed already before the crisis, and partly by the effects that resulted from the crises. [ slide 5 ] the potential long - term causes are related to ageing populations, and changes in the pace of technological development, which drive productivity gains. [ slide 6 ] 1 / 5 bis central bankers'speeches while the demographic trends are evident, a persistent decline in productivity growth is only