benoit cœure : triparty settlement interoperability speech by mr benoit cœure, member of the executive board of the european central bank, at the signing ceremony for the memorandum of understanding on triparty settlement interoperability, frankfurt am main, 15 july 2013. * * * ladies and gentlemen, it is a great pleasure to host today at the ecb, the signing ceremony for the memorandum of understanding on triparty settlement interoperability, and to be together with key representatives from the european repo council ( erc ), and the repo market infrastructures who have worked together on this initiative for many years now. i have seen in the memorandum of understanding that triparty settlement interoperability is conveniently abbreviated to “ tsi ” so i will take advantage of this shorter form in my remarks today. the aim of the “ tsi initiative ”, as you are all well aware, is to bring together borrowers and lenders, regardless of where the underlying liquidity or collateral is held, thereby avoiding the build - up of silos in the market. in order to place the tsi initiative in context, let us reflect for a moment on the european repo market, which has grown significantly since the beginning of the financial crisis. as you are all aware, the repo market plays a vital role in the financial system, as a source of funding and more generally, for the provision of market liquidity. the euro repo market is particularly large and has increased significantly in importance in recent years. after an initial slowdown in interbank repos at the onset of the financial crisis, icma erc surveys have shown the value of euro area repos increase significantly from 4. 6 trillion eur in 2008 to 5. 6 trillion eur by the end of 2012. in the context of these figures, the importance of tsi to further improving the efficient working of the repo market can be clearly seen. i am extremely pleased that so much progress has been achieved on the tsi over the last few months because it is an initiative that has been strongly supported by the eurosystem over the years, and in particular through the ecb contact group on euro securities infrastructures, cogesi. indeed, in a workshop later today, we will discuss a report on collateral eligibility requirements prepared by cogesi ( and to which i understand a number of persons in this room have contributed ) – and we will see that the tsi initiative can help

roger w ferguson, jr : the role of central banks in fostering efficiency and stability in the global financial system remarks by mr roger w ferguson, jr, vice - chairman of the board of governors of the us federal reserve system, at the national bank of belgium conference on efficiency and stability in an evolving financial system, brussels, 17 may 2004. * * * it is a great pleasure for me to open this conference. our agenda is filled with addresses by distinguished speakers and research papers of uniformly high quality on topics of keen interest to central bankers. indeed, few subjects are more important for central bankers than the efficiency and stability of the financial system. many of the papers to be presented and discussed over the next two days focus on the behavior of private institutions operating in financial markets. i thought i could complement these presentations by discussing the efforts of an important class of public institutions - - central banks - - to foster efficiency and stability in the financial system. before proceeding, i should note that my remarks today represent my own views, which are not necessarily shared by my colleagues on the federal reserve board or on the federal open market committee. in previous discussions, i have found it useful to offer a working definition of financial instability that seems most relevant from a public - policy perspective. although difficult to define precisely, financial instability, in my view, connotes the presence of market imperfections or externalities in the financial system that are substantial enough to create significant risks for real aggregate economic performance. over the past few decades, economic research has identified a variety of imperfections inherent in markets, such as moral hazard, asymmetric information, and externalities. on occasion, these imperfections can become so widespread and significant as to result in outcomes that threaten the functioning of the financial system and adversely affect real economic variables. history suggests that these imperfections reach this advanced and disruptive stage when they are exacerbated by large external shocks. such outcomes include panics, bank runs, severe market illiquidity, and excessive risk aversion. these outcomes are highly undesirable for society because they can be accompanied by a variety of economic distortions : financial prices can diverge sharply and for prolonged periods from fundamentals, and their correction is likely to impose great cost on society ; the availability and pricing of credit may be too lax at times and at other times too restrictive relative to underlying macroeconomic conditions. as a result of these distortions, spending and real activity may undergo much wider swings