richard dzina : luncheon remarks at the community bankers conference remarks by mr richard dzina, executive vice president of the financial services group of the federal reserve bank of new york, at the community bankers conference, federal reserve bank of new york, new york city, 18 april 2018. * * * good afternoon. i am conscious that i am the concluding speaker for today ’ s conference, a line usually followed by “ and the only thing that separates you from the bar. ” in this case, i ’ m the only thing that separates you from the gold vault, which may be even more compelling, so i ’ ll keep things brief, but hopefully meaningful. allow me to share two preliminary comments as prelude to formal remarks : first, convening this conference underscores for me and my colleagues that fulfillment of federal reserve mandates in monetary policy, supervision, and financial services does not constitute an end to itself, but a means to an end. the end is to foster conditions and to provide services that support robust and sustainable economic activity on which our nation depends and in which community banks play an integral, indeed indispensable, role. may those of us who have the privilege of serving this great institution, and working within these walls, never forget the ultimate object of our mandate, at which you sit at the center. second, my perspective in addressing you today is not as overseer, or as policy maker, but as head of financial services at the federal reserve bank of new york. in other words, perhaps uniquely in the constellation of the federal reserve system, my colleagues and i work for you. my standing before you represents a visceral reminder of our accountability to depository institutions, independent of size, which rely upon our services to send and receive time critical payments ; to maintain and permit the transfer of fedwire eligible securities ; and to provide cash services to support the needs of consumers and commercial establishments. it is with this orientation that i offer these remarks today, which reflect my own views and do not necessarily represent those of the federal reserve bank of new york or the federal reserve system. the theme of today ’ s conference, appropriately, has been “ navigating future risks for community banks ”. allow me to elaborate upon the single risk that dominates from my vantage, regrettably not a “ future risk ” but an all too present one, and to highlight some of the measures that we are taking in response. the risk to which i refer is not

##ørgen elmeskov, which will be discussed tomorrow, will provide empirical evidence about the determinants of the pace of the reform process. our own ecb research, presented in the paper by lorenzo cappiello, philipp hartmann, peter hordahl, arjan kadareja and simone manganelli, will dwell on the impact of the euro on the integration of european financial markets, notably the equity and bond markets. this stock - taking exercise and associated analysis should also assist in identifying where, precisely, structural changes are most urgently needed and how to make the necessary reforms a success. concluding remarks the introduction of the euro and the conduct of the single monetary policy have established an environment of price stability in the euro area. the ecb ’ s monetary policy has acquired credibility and has succeeded in anchoring long - term inflation expectations to price stability, thereby exerting a moderating influence on price and wage - setting behaviour. both short - term interest rates and long - term bond yields are at historically low levels in nominal and real terms. but, as we know, price stability and favourable financing conditions establish necessary but not sufficient conditions for sustainable growth. there is still some way to go in terms of the implementation of the necessary structural reforms that will result in faster and durable growth in the euro area, through higher productivity growth, increased labour utilisation, and improved competitiveness in the global economy. which brings me to a final reflection, opening up a broader perspective. the issues to be discussed in this workshop should also be seen against the background of globalisation. the forces and dynamics of globalisation influence economic developments in the euro area ( for instance through pressures on firms ’ cost structures ) and also have an impact on the integration process that has been triggered by the euro. of course, it is not easy to disentangle the effects of globalisation on the european integration process from those which stem from the creation of the single currency. however, both processes call for mechanisms that facilitate the economy ’ s efficient adjustment so as to cope with the challenges of a constantly changing environment for firms, consumers and policy - makers. all of which reinforces the urgency to pursue the structural reform agenda in the euro area in a determined and systematic manner. with this wider - ranging reflection, i conclude. once again, welcome to this ecb workshop. i can rationally predict that it will be a very productive and enriching one.