senad softic phd governor, central bank of bosnia and herzegovina conference : macroeconomic imbalances and eu convergence 07 november 2019 welcome speech and opening of the conference dear friends of the central bank of bosnia and herzegovina, distinguished panelists, dear guests, dear colleagues, a very good morning to all of you. it is my great pleasure to welcome you to sarajevo, to another international research conference of the central bank, jointly organized with the usaid finra project. a number of experts have agreed that large macro imbalances were the main cause of the euro area crisis. the eu has reacted with many institutional and organizational changes. this process will continue and our conference hopes to be a part of the efforts to discuss both the macroeconomic imbalances and the eu convergence process. i would mention some of the main macroeconomic imbalances : excessive government deficits and debts, excessive bank credit expansion, stock market and real estate bubbles, and large external account surplus or deficits. all of them can result in serious economic problems if unattended. in bosnia and herzegovina, as you all know, we have a currency board regime. we do not have independent monetary policy, nor can we use nominal exchange rate as a policy tool. if action is needed, we must rely on fiscal policy or use flexible labor markets to bring about the necessary adjustment. fiscal policy options can also be limited, especially if there is a trend of ageing population or decrease in working age population. in the case of structural imbalances, even fiscal policy measures can be of reduced efficiency. policy makers must keep in mind the macroeconomic context. let us take, for example, the annual growth rates of credit in bh in 2006, 2007 and the first half of 2008. just before the global financial crisis ( gfc ), loans to private sector were growing at the rate higher than 30 per cent annually. although it was viewed as a sign of overheating, the policy makers also considered factors such as low initial levels of lending. today, such accelerated credit growth would be considered a serious vulnerability. similarly, the path of the accession towards the eu is bringing structural changes to a candidate country ’ s economy. the convergence process itself will generate imbalances that, if not addressed properly, may be dangerous for macroeconomic stability. if the imbalances are neglected, the country may, at best, stay in the accession process for a long time. during the accession period, the legal framework and

norman t l chan : domestic and international dimensions of unconventional monetary policy opening remarks by mr norman t l chan, chief executive of the hong kong monetary authority, at the conference on “ domestic and international dimensions of unconventional monetary policy ”, organised by the hong kong monetary authority and the federal reserve bank of new york, new york city, 20 march 2014. * * * mr mcandrews, professor sims, professor woodford, ladies and gentlemen, 1. a very warm welcome to all of you for attending today ’ s conference jointly organised by the federal reserve bank of new york and the hong kong monetary authority. this joint conference is very timely, as it is neither too early nor too late to examine the effects of the unconventional monetary policy ( ump ) of the fed, including its spill - over effects on the emerging market economies ( emes ). as we all know, the fed has already started tapering and, if everything goes according to plan, would end the asset purchase programme by the end of this year. the fed has made it very clear in its external communications that tapering is not tightening and that there would likely to be a gap between the end of qe and the actual tightening of policy interest rates. however, the market considers that we are now in the phase of “ exit ” from the ump, which also marks the beginning of the normalisation of us interest rates. when chairman bernanke first talked about a possible timeline for tapering in may last year, there were strong market reactions globally and all emes experienced significant sell - off. the market then calmed down somewhat for several months before we saw another round of eme sell - off in january this year. the question that is most talked about now in the financial and central banking community is the pace of the fed ’ s exit and its impact on emes going forward. were these two rounds of eme sell - off merely isolated market over - actions or are they warning signals on the turbulence that awaits the emes when us interest rates normalise? 2. to assess what may lie ahead, it is useful to look back and try to understand what happened in the past five years during which the global monetary and financial environment was dominated by the ump of the us and other advanced economies. in 2009, the market expectation was basically that qe would last for a year or so, i. e. “ low for a short while ”. the expectation then changed to “ low for long