patrick honohan : international credit and financial market integration – after the storm? opening remarks by mr patrick honohan, governor of the central bank & financial services authority of ireland, at the 8th infiniti conference on international finance, trinity college, dublin, 14 june 2010. * * * it is a pleasure to open the 2010 infiniti conference, an acronym i understand to mean “ international financial integration studies at trinity ”. research on international financial policy issues has never been more important in ireland and abroad than it is now. the great financial crisis has thrown up many key questions for research. our own experience in ireland has many international financial ramifications. for, even if i have been emphasising recently how much of ireland ’ s banking difficulties were home grown, they have certainly occurred in an international context. ireland is one of the most globalised economies in the world – one indication : the ratio of exports to gdp approaching one ( which, by the way, you will realise is not a theoretical upper bound ). and its property price and construction bubble was financed to an important extent from abroad. over a four year period 2003 – 2008 net indebtedness of the banks to the rest of the world jumped from 10 per cent of gdp to over 60 per cent. interestingly, this foreign borrowing was not only used to finance the domestic property bubble but also to finance property development abroad – mirroring a common phenomenon of high income countries incurring foreign debt to acquire foreign equity – in this case equity in the property market some of which did not perform too well. and there was another international development that was important in igniting the property boom. in line with shiller ’ s theory of how bubbles get going, a myth that a new economic era was unfolding drove expectations. thus there was not only an unrealistic expectation that the irish economy would grow beyond the sustainable level of output – close to the production frontier and at full employment – which it had achieved in the celtic tiger period based on sustainable improvements in competitiveness and efficiency. in addition, the sharp fall in nominal and real interest rates on euro entry led many investors to exaggerate the degree to which a higher capitalization rate would apply to long - lived assets such as property. what new areas come to the fore now as topics for study? i would like to emphasise a number of issues which relate to the interaction of fiscal and banking policy. the direction of the interaction is two - way. banks

zhou xiaochuan : financial services of the central bank and industrial development speech by mr zhou xiaochuan, governor of the people ’ s bank of china, at the high - level forum of industrial development, beijing, 12 january 2006. * * * ladies and gentlemen, dear participants, good afternoon. first of all, let me congratulate on the inauguration of the china industrial development promotion society. taking this opportunity, i would like to discuss financial services that central bank can provide to promote the development of other industries. provided jointly by commercial banks and central banks in most cases, financial services, including deposits, loans, private banking services, transactions of various financial instruments and financial market services, etc. involve many aspects and huge volumes. as these services are delivered to consumers directly by commercial banks and other financial institutions, people are likely to neglect supporting services provided by the central bank. many people may only have limited knowledge of the services provided by a central bank. talking about a central bank, people may link it with macro adjustment policy, like adjusting interest rate and exchange rate, but actually only less than half of the staff in the people ’ s bank of china involve in macro economic adjustment works, while the others are involved in financial services. as to the financial services of a central bank, most people may directly associate them with printing banknotes, such as issuing banknotes in different series, denominations and currencies, withdrawing worn notes etc. currently, the outstanding balance of banknotes in circulation totaled some 2. 4 trillion yuan, requiring an enormous transportation and storage system by the people ’ s bank of china to ensure such large amount of banknotes in circulation. however, cash accounts for less than one tenth of the broad money ( m2 ) ; in most circumstances, money is only numbers on customers ’ bank accounts. fund transfer and payment among those accounts are realized through computer network. accordingly, i would like to introduce five supporting service systems that the central bank provides to protect the safe operation of economy and financial industry. first is the payment & settlement system. previously, fund transfer between enterprises or between a holding company and its subsidiaries relied on postal system and took a lot of time, but nowadays, based on computer and electronic network, remote network system and even international multicurrency payment system, fund transfer can be realized through electronic and automatic methods. commercial banks also have their own fund transfer system. if both the receiver and payer open accounts in the same commercial bank, internal fund transfer