programme. see ft, 24 april 2011. bis central bankers ’ speeches given that such a system – of preventive psi – does not exist elsewhere in any other parts of the world, the euro area would be seen by investors as handicapping itself and it would feel the effects of discrimination. the euro area, in terms of both sovereign and private investments, would become less attractive. the financial system in particular would be highly exposed to sovereign restructuring. it would also put the euro area at odds with the rest of the international community. given the damage that such a system would inflict on other investors and countries, the other shareholders may be discouraged from supporting imf programmes in the euro area. this is how a good idea can turn into bad practice. continuing to pursue it suggests strong masochistic tendencies. how should the problem be solved? how can we prevent taxpayers of the good performers in the euro area from being asked to foot the bill for the excesses of the bad performers? emu is based on two pillars. the first is price stability, ensured by an independent central bank. the second is sound public finances, promoted by the stability and growth pact. this second pillar has not worked properly and needs to be repaired. including some form of automatic private sector involvement does not repair the sgp. it actually weakens it by delegating discipline to the financial markets, which we know are late and pro - cyclical. it makes debt restructuring easier and thus discourages fiscal discipline. the only way to protect taxpayers in “ virtuous ” countries is to avoid over - indebted countries from easily getting away with not repaying their debts ; the payment of debts should be enforced, through sanctions if need be. when countries go off track they can receive financial assistance only in exchange for strict adjustment programmes, including asset sales, which allow these countries to remain solvent. respect for contracts is the one of the key principles underlying the market economy. it is also the basis of monetary union between sovereign countries. bis central bankers ’ speeches

jerome h powell : community banking opening remarks by mr jerome h powell, member of the board of governors of the federal reserve system, at the webinar on “ community banking ”, washington dc, 20 october 2014. * * * thank you for the opportunity to speak with you today about some of the key issues facing community banks. as the chairman of the federal reserve board ’ s community and regional bank subcommittee, i try to meet with groups of community bankers whenever i can to better understand what is on community bankers ’ minds. while today ’ s webinar is no substitute for face - to - face meetings with bankers, it is a special treat to be able to leverage technology to speak to and hear from so many community bankers across the country at the same time. as all of you surely know, community banks play a vital role in the u. s. financial system. community banks have strong links to the people and businesses in their communities, as well as direct knowledge of local economic conditions. these close ties give community bankers a clear advantage in understanding local needs and tailoring their products and services to meet those needs. my colleagues on the federal reserve board and i are committed to making sure that we understand the issues that are most important to community banks as you strive to serve the financial needs of your communities. one way that we further our understanding is by talking to the bankers themselves in a variety of venues, such as this webinar and a community banking research conference that i attended last month in st. louis, which was co - sponsored by the federal reserve system and the conference of state bank supervisors. and there is another opportunity to communicate with the federal reserve and our fellow regulators that i want to make sure you are aware of. the economic growth and regulatory paperwork reduction act ( egrpra ) of 1996 tasked financial regulators with reviewing regulations issued by the agencies at least every 10 years to identify outdated, unnecessary, or unduly burdensome regulations. the agencies kicked off that process earlier this year, and in addition to collecting comments in writing, we are beginning a series of meetings with the public in december. one of the themes that we hear in our interactions with community bankers is concern that the regulatory environment could be tailored more effectively for community banks, and the egrpra process gives all interested parties a voice in identifying areas where regulatory requirements may be disproportionate to risk. i therefore encourage you to participate in this important process and hope you will raise