to meet liquidity requirements. while the fed is no longer making net purchases, it has indicated that it will keep the stock of its asset holdings constant for some time by reinvesting maturing holdings in us treasuries. one remarkable outcome is that a large proportion of developed countries ’ government bonds are now trading at negative yields in secondary markets. two - thirds of the german and swiss government bonds on issue are currently trading at negative yields, while yields on bonds of up to five years in maturity from the japanese and a variety of european governments have recently traded at negative yields. five - year, 5 - year - forward real yields have generally followed the trajectory of nominal yields, but have declined by less over 2014. with larger declines in nominal yields than real yields, estimated breakeven inflation rates – the spread between nominal and inflation - linked bond yields – have declined ( graph 3 ). ( this calculation is complicated somewhat by the relatively lower liquidity in indexed bond markets. ) one interpretation of this is that expectations for inflation have fallen considerably. the sharp decline in oil prices has certainly reduced near - term inflation expectations as most advanced economies are net oil importers. but this would only account for a decline in inflation expectations in the short term. a substantial decline in medium - term inflation expectations is more difficult to explain. survey - based inflation expectations from market economists and consumers do not appear to have declined substantially over the same period. it is also worth noting that the decline in longer - run inflation expectations over the past six months is not a universal phenomenon – australian breakeven rates were broadly flat over the second half of 2014 ( and consistent with the rba ’ s inflation target ). finally, one potential explanation that i have only briefly discussed above is that yields are being held down by a shortage of risk - free assets as demand for these assets has increased. 1 i find this explanation of increased demand for such assets in the face of slower growth in the supply to be the most plausible. but even so, term premia are unusually compressed and there is little overall compensation for risk. zoltan pozsar has some interesting work on this ; see pozsar z ( 2015 ), “ a macro view of shadow banking : levered betas and wholesale funding in the context of secular stagnation ”, mimeo, 31 january, available at < http : / / ineteconomics. org / sites / inet. civicactions. net / files /

jorgovanka tabakovic : taking knowledge to a higher level in serbia speech by dr jorgovanka tabakovic, governor of the national bank of serbia, on the occasion of signing of the memorandum of cooperation between the national bank of serbia and the faculty of economics in belgrade, belgrade, 27 january 2016. * * * dear colleagues, esteemed mr. boricic, esteemed members of the press, allow me at the beginning to answer four simple questions. why is this memorandum signed today by mr. boricic, as the dean of the faculty of economics, and myself, as the governor? because, by definition, it is the top manager's task to be in command of the future, finance and human resources. this is and has been the responsibility of the head of an institution. why are we signing this memorandum today, three and a half years into my term in office? because all informal channels, personalities, letters of reference have so far turned out to be an insufficient guarantee that we would get the best people. yes, some came and have stayed, but there are also many who came and left. many of those for whom the nbs was just a stepping stone, a training ground, and, in the worst - case scenario for this country, a reference for a future elsewhere, outside serbia. after signing this memorandum, we will have a chance to select “ the best of the best ” and ensure they stay with the national bank of serbia. how did the memorandum come about? it was at the initiative of the young people from the faculty of economics who are here with us today. they knocked on our doors introducing themselves as the team for serbia. the team. and for me, this was the key word. because, the solution lies not in genius individuals, but in the genius of a team of individuals. a team with a leader – yes, a team at the top – no, and this is why we are here today and why we are signing this memorandum. this meeting is motivated by the basic needs of men : to learn, to progress and to create. and why do we need each other – the faculty of economics in belgrade and the national bank of serbia? because there is no alternative to knowledge. and because in order to add value and improve by practice, you must have something of value to start with. during summer practice in the nbs, students are given a chance to improve on the qualities they already demonstrated during