24. 05. 2017 welcome address i conference on financial stability / banco de espana - cemfi luis m. linde governor good morning ladies and gentlemen, it is my pleasure to welcome you to this first conference on financial stability, jointly organised by the banco de espana and the centro de estudios monetarios y financieros ( cemfi ). thank you very much for your interest in and attendance at the conference. we have a very interesting agenda for today and tomorrow, structured around six sessions and a panel discussion covering a wide range of topics related to the theory and policy practice of financial stability. this event is bringing together distinguished speakers and discussants from central banks, international financial institutions and academia - a combination which will offer a diversity of perspectives and also ensure a lively and, for sure, interesting debate over the next two days. this conference has been possible thanks to the joint effort of banco de espana and cemfi. i am very grateful to the organisers, in particular to rafael repullo, director of cemfi, as well as to all the members of the scientific committee responsible for promoting this meeting and selecting the papers to be presented in the programme. this event has aroused particular interest among researchers, with - i am told - nearly one hundred papers having been submitted for just twelve slots. with this auspicious start, i trust this conference may become a regular forum of dialogue between researchers and policy - makers : central banks and financial supervisory authorities have many things to learn from the research carried out in academia, away from the frequent policy - making urgencies that drive the daily workload in our institutions. financial stability and macroprudential policy the last crisis generated a good deal of issues to be dealt with by authorities with a role in financial stability. the experience gained over recent years has shown the importance of safeguarding the stability of the financial system as a whole. we now understand that this ambitious task requires the use of sophisticated analytical tools to identify vulnerabilities at an early stage and anticipate how potential shocks can propagate across the financial system. to this end, both micro and macroeconomic methodologies can offer valid insights, and this is why the conference programme intends to offer a mix of both approaches. one of the most relevant and obvious legacies from the crisis is the introduction of a fullyfledged macroprudential policy framework. as we all know, macroprudential policy has, essentially, a

- 20 - 30 " unfavorable " - 5 - 10 large firms - 40 medium - sized firms - 15 small firms - 50 cy 07 09 11 13 15 17 19 21 23 cy 07 09 11 13 15 17 19 21 23 - 20 fy 08 10 12 14 16 18 20 22 24 notes : 1. in the left - hand chart, figures are based on the tankan. 2. in the middle chart, figures are current profits based on the financial statements statistics of corporations by industry, quarterly and exclude " finance and insurance. " figures from 2009 / q2 onward exclude pure holding companies. 3. in the right - hand chart, figures are based on the tankan, including software and r & d investments and excluding land purchasing expenses. r & d investment is not included before the march 2017 survey. figures are for all industries including financial institutions. sources : bank of japan ; ministry of finance. chart 3 i. economic developments household sector confidence indicators private consumption s. a., cy 2019 = 100 s. a. total real private consumption of which, services ( travel, dining - out, etc. ) of which, nondurable goods ( food products, clothes, daily necessities, etc. ) cy 19 improved consumer confidence index economy watchers survey ( household activity ) worsened cy 19 notes : 1. in the left - hand chart, figures for total real private consumption are the real consumption activity index ( travel balance adjusted ) based on staff calculations, which exclude inbound tourism consumption and include outbound tourism consumption. 2. in the right - hand chart, figures for the economy watchers survey are those for the current economic conditions di. sources : bank of japan ; cabinet office. chart 4 i. economic developments overseas economies imf projections in the world economic outlook update y / y % chg. imf projections real gdp growth in the united states ann., q / q % chg. - 2 - 4 cy 21 cy 1990 - 2019 average : + 3. 6 % - 1 - 2 - 3 cy 00 02 04 06 08 10 12 14 16 18 20 22 24 labor market in the united states 16 % cy 19 unemployment rate ( left scale ) ratio average hourly earnings ( y / y chg., left scale ) ratio of job openings to unemployment ( right scale ) 3. 5 3. 0 2. 5 2. 0 1. 5 1. 0 0. 5 0. 0 note : in the left - hand chart