andrew g haldane : accounting for bank uncertainty remarks by mr andrew g haldane, executive director, financial stability, bank of england, at the information for better markets conference, institute of chartered accountants in england and wales, london, 19 december 2011. * * * the views are not necessarily those of the bank of england or the financial policy committee. i would like to thank alan ball, verena bracke, antony ford, priya kothari, vasileios madouros, colin miles and peter richardson and paul tucker for comments and contributions. introduction1 fair value accounting principles are under attack from all quarters – accountants, regulators and politicians. the paper by christian laux is a welcome attempt to shed some analytical light on this heated debate. it represents a staunch defence of fair value accounting principles, as the least - worst means of measuring and managing financial risk. it makes a compelling case. in these comments, i will focus on three issues. linking these issues is the idea that the special characteristics of banks might require a special accounting treatment, perhaps even a distinct accounting regime. as context for that, the fair value debate is first placed in some historical context. accounting rules for banks have not stood the test of time, especially at crisis time. better recognition of the uncertainties associated with bank assets, and the fragilities associated with bank liabilities, might make for a more durable accounting regime. fair values and financial crises the fair value debate is not a new one. it has a history stretching back at least a century. the fortunes of this debate have been shaped importantly by financial crises. indeed, a clear historical pattern has emerged : fair value accounting principles have waxed when asset prices and banks are rising and waned when both are falling. 2 consider experience in the united states either side of the great depression. fair value principles were rolled - out progressively during the early part of the 20th century. this move was led by the banks who held marketable securities as assets. as these securities rose in value ahead of the great crash, marking them to market allowed profits to be booked. rising asset prices and bank profits went hand in hand, with fair values playing the role of matchmaker. that was one reason why the “ roaring ‘ 20s ” roared. the stock market crash of 1929 put paid to this happy marriage. falling asset prices, marked to market, crushed bank profits and balance sheets. in the united states, around 10, 000 banks went bust between

francois villeroy de galhau : what can monetary policy do? speech by mr francois villeroy de galhau, governor of the bank of france, at the house of finance days of paris - dauphine university, paris, 14 march 2016. * * * ladies and gentlemen, it is a great pleasure for me to participate in this first edition of the house of finance days of paris - dauphine university. in order to “ [ imagine ] the finance of tomorrow ” – to quote the theme of this event – it is essential to understand all facets, and in particular to be able to decipher the prevailing environment. through its three main tasks, the banque de france plays a key role as, firstly, it implements monetary strategy, as a member of the eurosystem alongside the european central bank in frankfurt ; secondly, it ensures financial stability, by supervising the banks, insurance firms and, more generally, the financial system ; and, lastly, it provides an economic service to households and smes / vses. today i will focus on the monetary policy that we conduct in the framework of the eurosystem. monetary policy has long been considered a technical or even an austere subject. but, since 2008, it has been far more widely discussed : central banks in different countries have played a major role, and a role largely hailed as positive, in exiting the crisis. today, however, their actions to address the persistence of very low inflation are subject to debate. i would first like to talk about our objective, then our instruments and their effectiveness. first, the question of the objectives. this question, which really covers two questions, has generated much thought and debate. indeed, central banks examine their actions, with a lot more modesty than is often credited : 1. what is the objective, the “ mandate ”, of the central bank? 2. what are, with regard to this objective, the current challenges? 1 ) let us start by the mandate. a ) in the united states, the federal reserve has a dual mandate of price stability and full employment. in the euro area, under the maastricht treaty – approved democratically in each country, and in france by referendum in september 1992 – the objectives are clearly set out in a hierarchical order : the eurosystem is dedicated to price stability, which is its primary objective ; ensuring a high level of employment and sustainable growth is secondary to its price stability objective. this difference has often