amando m tetangco, jr : launch of the strengthening program for rural banks ( sprb ) keynote message by mr amando m tetangco, jr, governor of bangko sentral ng pilipinas ( the central bank of the philippines ), to the philippine deposit insurance corporation ( pdic ), makati city, 8 august 2010. * * * pdic president jose nograles, members of the pdic board, ms. cora miller and other officers of the rural bankers association of the philippines ( rbap ), fellow workers in government, distinguished guests, friends from media, ladies and gentlemen, good morning to all of you. first, let me thank you for inviting me to deliver a message in this milestone event – the launching of the strengthening program for rural banks ( sprb ). it is indeed a pleasure for me to affirm today the bsp ’ s commitment, support and partnership with the pdic and the rural banking industry in this important undertaking. rural banks are, what i often refer to as, the “ natural frontliners ” in our national program to broaden and deepen the reach of responsible … and empowering … financial services to local communities. it is therefore incumbent upon the regulators to ensure that the strength and viability of this critical segment of our banking system is sustained, particularly during these challenging times that we face. the sprb is specifically expected to achieve this goal of creating a stronger rural banking system as it promotes mergers and consolidations between or among rural banks and eligible strategic third party investors ( stpis ) under a specific set of guidelines. there are two prongs to the sprb – one, the capital augmentation component, and two, the regulatory relief package. the capital augmentation and direct loan component is to be made available through financial assistance from the pdic. to flesh out the regulatory relief package, the monetary board approved a set of incentives that include the conversion and opening / relocation of head offices, branches and extension offices, the waiver of penalties and other incentives pertaining to rediscounting and emergency loans. in addition to the financial strengthening of the resulting entities, the grant of these incentives is expected to allow such entities to achieve economies of scale, attract more skills, and better manage their liabilities. furthermore, through mergers and consolidations, the resulting banks will achieve higher capitalization, which would then enable them to diversify their portfolios to reduce risk, fund growth

will discuss how this adjustment has had exactly the intended effect on money market conditions, and how it has reinforced my certainty that the federal reserve is well positioned to maintain the public ’ s high i would like to thank james egelhof, jacqueline yen and samuel zief for their assistance in the preparation of these remarks, vivek manjunath for his assistance with data, and colleagues in the federal reserve system for numerous insightful comments and suggestions. see powell, “ monetary policy influences on global financial conditions and international capital flows, ” may 8, 2018. the effective federal funds rate is calculated as a volume - weighted median of overnight federal funds transactions reported by banks on the fr 2420 report of selected money market rates. the new york fed publishes the effr for the prior business day, along with volumes and rate percentiles, on its website daily at approximately 9 : 00 a. m. eastern time. the effr is used as a measure of the typical fed funds transaction and is the way the new york fed ’ s open market trading desk ( the desk ) measures its success in meeting the directive on interest rate control from the fomc. confidence in its ability to appropriately control overnight interest rates over the period of normalization. i will then conclude with some comments on recent developments in broader money market rates, in particular u. s. - dollar libor. u. s. term money market rates are of global significance, owing to the heavy use of the dollar outside the united states and the large stock of dollar - libor - linked debt issued abroad. 4 the spread of libor to overnight indexed swaps has fluctuated in recent years, along with similar term unsecured dollar borrowing rates, driven in part by the same factors influencing overnight rates but also by specific past regulatory and legislative changes that have impacted flows in term markets. evidence, such as from the fx swaps market, suggests that dollar borrowing markets continue to function well. policy normalization continues as expected i ’ d like to start by taking stock of where we are with the normalization of monetary policy in the united states. the federal reserve entered this tightening cycle with its overnight policy rate at the zero lower bound and with a large portfolio of long - duration securities. normalization, therefore, has two parts : increasing the overnight rate, and reducing securities holdings to a smaller size. the fomc began raising the overnight rate from zero in late 2015, and it began reducing the size