chris salmon : financial market volatility and liquidity – a cautionary note speech by mr chris salmon, executive director for markets of the bank of england, at the national asset - liability management europe symposium, london, 13 march 2015. * * * i would like to thank andrew butcher, jonathan rand, allison parent, joseph noss, olga cielinska, liam crowley - reidy, sebastian vismara, lu liu and yuliya baranova for their comments and contributions. as executive director for markets at the bank of england it is my job to manage the balance sheet, implementing various policy decisions that the bank makes. i am also responsible for ensuring that the bank extracts as much “ market intelligence ” from financial market developments as is possible to inform those decisions. but it ’ s not my job to set policy. given that, my remarks will focus on the key insights we have drawn from financial market developments over the past year or so, in the context of what has been quite a dynamic period for monetary policy. but i will not speculate on the future course of policy by the bank of england or any other central bank, nor the likely effectiveness of the different strategies employed by central banks to achieve their targets. and my punch line will reveal me to be the central banker that i am : there are reasons to be cautious. in particular, recent periods of financial market volatility suggest that there are reasons to be cautious about the robustness of liquidity in core financial markets. to set the scene let me return to the middle of last summer, when volatility was exceptionally low across a range of financial markets ; both compared to the period of heightened volatility that we saw in the crisis years and the period preceding it. that can be seen from this spider chart which shows measures of short - term implied volatility for a number of assets relative to these two periods. anything less than zero is less volatile than the past, with the opposite true for positive plots ( chart 1 ). our market intelligence suggests that a number of factors contributed to these stable outcomes. there was a relatively low level of uncertainty about the macroeconomic outlook. the extraordinary policy easing from central banks had depressed both implied and realised volatility. forward guidance, as well as repeated rounds of quantitative easing had also led to market participants to take comfort from the mantra of “ low - for - long ”. this in turn incentivised investors to “ search for yield ”, which of

luis de guindos : outlook for the euro area economy and financial stability introductory remarks by mr luis de guindos, vice - president of the european central bank, at the 34th edition of " the outlook for the economy and finance ", organised by the european house - ambrosetti, cernobbio, 1 april 2023. * * * financial stability is essential to the ecb's primary objective of price stability. the events of the past few weeks have reminded us of the benefits of strong and harmonised banking regulation and the importance of completing the banking union. we are closely monitoring developments in financial markets and financial institutions. the euro area banking sector is resilient, with strong capital and liquidity positions that are well above the minimum requirements. and banks currently meet a very large portion of the liquidity requirements with the most liquid asset available – reserves held at the central bank. this situation is very different to 2008 and 2009. since then, harmonised european banking supervision has been set up and we have made good progress in implementing the global regulatory reform agenda that was launched in the aftermath of the global financial crisis. but there is no room for complacency. recent events in financial markets have heightened uncertainty, which may hamper the transmission of our monetary policy across the euro area. and we are likely to see a further increase in banks'cost of funding, a tightening of credit standards and a deceleration in the growth of lending volumes. there could also be a drop in consumer and investor confidence and lower overall aggregate demand. however, it is too early to draw conclusions about the impact all of this will have on growth and inflation. the turbulence may well be short - lived, but if amplification effects do emerge, they will show up in the data. in this context of heightened uncertainty, our approach to bringing inflation down to our 2 % medium - term target will remain data - dependent. as we clarified in our latest press conference, our future policy path will be determined by our assessment of the inflation outlook in light of the incoming data, the dynamics of underlying inflation and the strength of monetary policy transmission. we believe that headline inflation is likely to decline considerably this year, while underlying inflation dynamics will remain strong. we came from double - digit monthly inflation in the euro area towards the end of 2022. inflation has been edging downwards, falling to 8. 5 % in february, to 6. 9 % in march ( flash estimate ), and we