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An obvious choice is to focus on the OECD’s “inward oriented” index of product market regulation, which includes information on the degrees of “state control” and “barriers to entrepreneurship,” but abstracts from “barriers to trade and investment” (Figure 4). This simple, aggregate analysis is nevertheless suggestive of the association between an anti-competitive regulatory environment and poor labour productivity growth.

In Albania and Serbia, for instance, where central banks have adopted inflation-targeting frameworks, exchange rate flexibility remains relatively limited as policymakers are mindful of adverse balance sheet effects resulting from sudden and substantial exchange rate fluctuations.

The importance of financial stability It has been widely observed that financial crises are almost always accompanied by exchange rate crises, resulting in large devaluations of the domestic currency.

In this case, ownership by a legal monopoly has not compromised quality or competitiveness. 7. The symbols of value you have been working on are much sought after. Once a bank note makes it into production the numbers involved are staggering. I will not attempt to give exhaustive statistics regarding the production of bank notes in South Africa.

To do the same for leveraging cycles – at least in the sample of advanced industrial countries that the BIS study surveys – you need a 16 year frequency. This obviously calls for long spells of data. And, the two-sided structure of the filter stretches data requirements even further – into the unknown future!

So, 1 Drehmann M., C. Borio and K. Tsatsaronis (2012), “Characterising the financial cycle: don’t lose sight of the medium-term!”, BIS Working Paper No 380. 2 BIS central bankers’ speeches the approach – interesting and informative as it is for retrospective inference – is not yet fully applicable for policy purposes.

With a League of Nations Protocol as its birth certificate, the new bank began its operations in the spring of 1928. The product of an unpalatable deal to obtain much needed foreign credit, the bank was greeted with scepticism, if not outright animosity at first.

Kasama rito ang ating mga kababayan na PWD. We laud the National Council on Disability Affairs and other stakeholders for upholding and protecting the rights of the PWD sector. Rest assured that the Bangko Sentral ng Pilipinas is committed to continuously engage the sector so we can better respond to your needs. Naririnig po namin kayo.

It is not until Shibor is introduced to internal transfer pricing that can the rights and interests of various departments and branches of large commercial banks be balanced in a scientific, reasonable and persuasive manner because Shibor is an objective price that links the internal parties with external parties.

These characteristics force producers in two important directions - towards creating some elements of monopoly attaching to their production, and to seek larger and larger markets.

This is because: First, the strong economic fundamentals of Hong Kong and the entrepreneurial and management skills of the people of Hong Kong are the basis for its continued prosperity and stability. Secondly, the Basic Law has provided a legal safeguard for the maintenance of the prosperity and stability of Hong Kong.

What insurance can economic and financial policy-makers take against these risks? I said earlier that the resolution of global imbalances will require market-based solutions. In many cases, building the right framework will involve eliminating some of the policies that inhibit markets from resolving these imbalances. This was the theme of the G-7 discussions at Boca Raton two years ago.

Other reforms, such as those around central clearing and OTC derivatives are also having a significant impact on the way many of you do business, but I will leave them for another time. The Basel III measures will strengthen the requirements for financial institutions’ liquidity and capital.

It is the impact of some of these reforms on financial markets and on funding costs that I would like to address today. In thinking about this issue, it is important to remember that the intent of the regulatory reforms is to alter the incentives for financial institutions and thereby bring about changes in behaviour.

And it would be wrong for that confidence to be undermined by incentives to shield banks. Policymakers, then, would do well to respect the professional independence of authorities and the objective decisions they make. Conversely, this means that they must refrain from applying pressure on authorities for political reasons. 5/6 BIS central bankers' speeches 5.

Conclusion We have made considerable progress since the financial crisis erupted. The banking and financial system is a great deal better off these days. We have created a toolkit to make future crises less likely and make institutions more resilient to withstand any turbulence that does occur. Banks have more capital, and they are managing their risks better.

We have since clarified that these guidelines regarding extending collateral free loans up to Rs. 5 lakh sanctioned to the units of MSE sector (both manufacturing and service enterprises) as defined under MSMED Act, 2006 are mandatory in nature and banks must not obtain collateral security in the case of loans up to Rs. 5 lakh extended to all units of the MSE sector.

The business sector is also entering the year on a positive note. At the national level, manufacturing activity accelerated over the final three months of 2013. The Philadelphia Fed’s Business Outlook Survey of regional manufacturing, which is a reliable indicator of national manufacturing trends, also showed that manufacturing activity picked up in the second half of 2013.

By securitising and tranching, it appeared for a while to be possible to convert unstable individual loans to almost fail-safe securities. Some observers called this “financial chemistry”. In the corresponding passage in its last Annual Report, the German Council of Economic Experts wrote of transforming “vin de pays into a cru”, a bit like trying to make silk purses out of sows’ ears.

A large decline in NPL rates across all categories of SME/Corporate loans has been evident in recent years, although more than 10 per cent of loans are non-performing and substantial sectoral variation in NPL rates arises. 1/3 BIS central bankers' speeches Some categories of household credit are showing positive growth, including non-mortgage credit and mortgage lending at fixed rates.

The roots of this position can be traced back to the so-called “liquidationist” view, which was widely entertained by mainstream economists in the context of the heated debate over the stock market boom of the 1920s in the US.

The view had some prominent advocates within the Board of Governors of the Federal Reserve System who substantiated their inclination for a strong policy reaction to market dynamics on the grounds that the central bank, by acting decidedly, would force liquidation of the most stretched positions without dealing further damage on sound investment strategies and the economy more broadly.

More than 40 years ago, in his seminal speech on the subject, James Tobin said, “Unemployment and inflation still preoccupy and perplex economists, statesmen, journalists, house-wives and everyone else.” 1 For the Bank of Japan, employment is not explicitly included in its monetary policy mandate, unlike in the case of the Federal Reserve.

Donald L Kohn: Restoring financial intermediation by banks – the role of regulators Speech by Mr Donald L Kohn, Vice Chairman of the Board of Governors of the US Federal Reserve System, at the Office of Thrift Supervision National Housing Forum, Washington DC, 8 December 2008.

We know that markets will function effectively if they are competitive, that is, if every market participant takes a position according to the information available and if that participant does 1 Abreu, D. and M. Brunnermeier, (2003) “Bubbles and Crashes”, Econometrica, Vol. 71, no.1, 173–204. 2 Interview with the BBC on 10 September 2009.

BIS Review 66/2010 3 not try to influence others. A key aspect of the difference between theory and practice on which I would like to focus is the dissemination of information among market participants. 3 Markets are competitive if each participant is large enough not to be able to change prices unilaterally.

But we have not yet seen sufficient political will to implement this third pillar of the banking union. Member States are currently discussing a model for the transition period, a “hybrid model” that offers liquidity support to national schemes as a first step.

In my view, this hybrid model could be a possible compromise way forward, as long as an EDIS with full risk-sharing, covering both liquidity needs and losses in the steady state, remains the end goal.

Nevertheless, our goal remains the same – man and his wellbeing in the 21st century. Dear friends, New age and new finance call for even stronger cooperation between countries and nations.

The IFC’s decision to partner with GHL through equity participation demonstrates its tremendous confidence in the local financial services industry, despite the challenges the sector currently faces. GHL, in turn, is expected to benefit from IFC’s considerable expertise and its association with a strong reputable partner, which has funds available for follow-up investments.

Turkey has been growing at a similarly rapid pace, while the most economically vigorous region of the world, emerging Asia, has been growing even faster, at close to 8% per annum. This makes emerging markets one of the main engines of world growth, with a contribution of over one half last year.

There has been no criticism when Member States have planned proportionate measures to address these issues. Since around 2016, and with the peak I mentioned in 2017, the ECB, with increasing regularity, has had to address in detail the topic of limits to cash payments.

The Board firmly believes that lenders should give due consideration to a borrower's ability to repay a loan, before the loan is extended. We and the other regulators have emphasized this several times in a variety of guidance statements on mortgage lending. This is also one of the areas we are looking at in our revisions to the HOEPA rules.

This debate has led to a wealth of academic literature being published on the ideal conditions for delegating powers and coordination between policies.4 To be clear from the outset: it is the task of safeguarding the purchasing power of the currency that requires shelter from political influence.

As everyone in this room would know, there is only one source of ongoing higher rates of growth of real per capita incomes, and that is higher rates of growth of productivity. Everyone here also knows that it is now just about impossible to avoid the conclusion that productivity growth performance has been quite poor since at least the mid 2000s.

So everything comes back to productivity. It always does. It has been observed before that past periods of apparently easy affluence, conferred by favourable international conditions, probably lessened the sharpness of our focus on productivity. Conversely, the will to reform was probably most powerful when the terms of trade reached a long-term low in the mid 1980s.

It would not be appropriate for me to endorse specific programs; that is the prerogative of the Congress. However, I can safely predict that these and other policy proposals to address concerns about worker displacement will be the subject of active debate in coming years.

Mortgage and consumer lending is driven by credit analysis, and for small-business lending, also by a belief in the potential success of the business venture. Because it is critical that low- and moderate-income lending be, and be perceived as, an extension of regular business practice, we have been building a substantial database on low-income credit experience and business opportunities.

This is a critical reason for the SARB’s constitutional mandate to protect the purchasing power of the rand, as this mandate ensures that we can continue to work towards improving and advancing the economic well-being of all South Africans.

Looking ahead, domestic headline inflation is projected to remain elevated, returning to the target range in the third quarter of this year and averaging 6.0% for the year.

The crisis has also proved the important role that central banks play in influencing the yield curve through both their conventional and unconventional policies; including forward guidance, asset purchases and enhanced credit support.

This raises a host of questions about the relative effectiveness of these policies, but also about conventional yield curve models and whether they adequately capture the mechanisms that explain the role of these policies, particularly given that for tractability and simplicity real-world complications like credit and liquidity premia, pricing anomalies and even the influence of the macro economy and monetary policy are often not directly considered.

Even if we can’t quite declare victory, the global economy and financial markets have witnessed some improvement since then, as continued action by the world’s major central banks to provide the necessary liquidity to sustain the global economic recovery has largely removed the “tail risks” that unsettled global markets.

While these actions have removed acute financial stability risks, the transmission mechanism into the real economy remains generally impaired, resulting in what continues to be a slow, unbalanced and fragile recovery.

We are letting the economic and financial players make up their own minds, without trying to influence them. Le Figaro Magazine: With regard to the crisis, some European countries – such as France – today allow themselves discrepancies, notably budgetary discrepancies, with the Maastricht criteria. Do you blame them?

2 BIS Review 9/2009 Jean-Claude Trichet: An area with a single currency which unites 16 sovereign states, each with their own budgetary policies, must respect the principle of a close collegial coordination and monitoring of budgetary policies, in which the Commission plays an important role.

Theoretically, the neutral interest rate is generally understood as a real variable, and it is common practice to add the inflation objective – the implicit or explicit target inflation rate – to determine the neutral nominal policy rate. Neutral real interest rate has the simplest interpretation in terms of a rate that is neither expansionary nor contractionary.

INSTITUTIONAL INDEPENDENCE In pursuing policy continuity, let me also assure you that the BSP will sustain its institutional independence with the Monetary Board acting as a collegial body. We shall continue to pursue monetary and financial sector policies that are data-driven, evidence-based, and attuned to the evolving market environment. Thank you very much and have a good morning. 2/2 BIS central bankers' speeches

While the current economic environment continues to pose challenges, we have a strategy that will govern the progressive exit from the set of non-conventional measures currently in place. Our preparations for a gradual exit from these measures, however, do not suggest that fundamental change in policy is imminent.

Rather, the development, communication and eventual timely implementation of a well-designed exit strategy are vital in terms of the preservation of the macroeconomic and financial stability gains derived from the nonconventional measures. BIS Review 141/2009 5

Our recruitment policy is geared to attracting women employees, and in fact over time more women, especially the higher educated who are the high potentials for advancing to the top, have joined the Bank.

To give you some figures, whereas our percentage of female employees increased merely from 30 to 34 percent over the last 6 years, the percentage of women in the higher salaried positions has doubled in that period. But, and that is a minus, we apparently don’t do enough to allow women to advance to the top.

It means – first and foremost – that we aim to avoid large business cycle fluctuations as the frequent occurrence of sizable boom-bust cycles is associated with significant economic costs, affecting the longrun growth potential of an economy.

Second, sustainable growth also implies that economic growth is diversified as much as possible to avoid the economy’s dependence on the performance of a few sectors, which makes the economy more vulnerable in the case of asymmetric shocks.

Furthermore the TLTROs provide banks with the opportunity to ease their refinancing conditions by substituting comparatively more expensive legacy wholesale funding with funding obtained via the TLTROs. In this context, the recent modifications to the package of non-standard measures should contribute further to have a positive impact on economic and financial conditions in the Irish economy.

3 Asdrubali P; Sørensen, B E; Yosha, O (1996), “Channels of Interstate Risk Sharing: US 1963–1990”, Quarterly Journal of Economics, 111(4), 1081–1110. 4 Balli, F S; Kalemli-Ozcan, S; Sorensen, B E (2012), Risk Sharing Through Capital Gains. In: Canadian Journal of Economics, Vol 45(2), pp 472–492. 5 Afonso, A; Furceri, D (2007), Business Cycle Synchronization and Insurance Mechanisms in the EU.

Pursuant to the promulgation of the Ordinance, the Reserve Bank identified a set of accounts to be referred for resolution under IBC, based on the recommendations of an Internal Advisory Committee (IAC). The process adopted for identifying the entities was consistent with the object of making quickest recovery of economic value.

The classification criteria recommended by the IAC was based on an intelligible differentia (quantum, materiality, as well as age as of the NPA) and had close nexus with the underlying object of the IBC and the Ordinance. 10. It must be emphasised, however, that being referred for insolvency process under IBC does not necessarily mean that the company is being liquidated.

BIS Review 22/2007 1 Together, these developments have jolted up the investment/GDP levels, which are expected to grow to 21% in FY07, after stagnating at the level of 17% over the previous five years.

As regards the first work stream, MaRs identifies the lack of widely accepted theoretical and empirical frameworks that thoroughly integrate realistic characterisations of widespread financial instability in aggregate models as one of the main weaknesses of contemporaneous economics laid bare by the crisis.

The slowdown recorded in the early months of the year is therefore expected to be temporary. Household spending also continues to rise. The recovery has been driven until now by the durable goods sector, which had contracted more than the others in the early stages of the crisis, but in recent years has fared comparatively better owing to the highly accommodative financial conditions.

Loans to households in the form of home purchase mortgages and consumer loans have increased considerably. The latest available data show that the increase in household spending is now extending to services. Real estate wealth, which accounts for over 60 per cent of net Italian household wealth, has turned upward again thanks to the initial signs of a recovery in prices.

1 I am grateful to Kurt Lewis for assistance in preparing these remarks. These remarks represent my own views, which do not necessarily represent those of the Federal Reserve Board or the Federal Open Market Committee.

2 See, for example, the Federal Reserve Bank of Atlanta’s GDPNow, which revised up the estimate for first-quarter growth by 5 percentage points on the release of the retail sales data. The latest estimate is 8.8 percent. The GDPNow forecast is available on the Federal Reserve Bank of Atlanta’s website at www.frbatlanta.org/cqer/research/gdpnow.

This portion comprises 30 percent of the total funds, and is not directly linked to the lending from the IMF. We have also seen an expansion in bilateral swap agreements. When a crisis occurs, countries can use a swap agreement to exchange their currency for another in order to obtain the funds needed for international transactions.

We need input from end users and others to finalize the ARRC’s plans, and I look forward to hearing the views of those in attendance. Successful implementation will require a coordinated effort from a broad set of market participants.

Current situation and outlook for Japan’s economy Japan’s economy has been recovering moderately as domestic demand has been firm and overseas economies as a whole have been picking up moderately.

Compared with what was anticipated at the time of the April Outlook Report, the economy as a whole has been developing almost as expected, with external demand slightly weaker, as exports have been picking up at a somewhat slower pace, and domestic demand slightly stronger.

I am grateful to the organisers for affording me this opportunity to be with this august audience and to share some my thoughts on the very topical subject of Contemporary International and Domestic Banking Developments and the Emerging Challenges.

The recent global developments point to a very important systemic dimension which is closely intertwined with the core mandate of the Reserve Bank of India, namely, maintaining monetary and financial stability in the system. 2. As you are aware, the credit markets in the western world have witnessed in the recent past considerable turmoil leading to significant loss of market liquidity.

Expectations from the Insolvency framework A modern insolvency law such as the IBC deserves support and patience from all stakeholders and the attitude towards the new piece of law should not be influenced merely by losses materialised in respect of resolution of assets that have been stressed for long.

We need to revitalise the action plan. With this in mind, in my view it would be useful to reassess the narrative attached to the CMU. A new concept – “Growth and Investment Union” for example – might put a more positive drive on the project.

------------------, "Speech in the Concluding Panel Discussion," in the 12th international conference, Monetary and Economic Studies, Vol.23, No.S-1, Institute for Monetary and Economic Studies, Bank of Japan, pp.243-248, 2005.

The Bank currently assesses Japan’s economy as recovering moderately. According to the second preliminary estimates of real GDP statistics released on September 9, 2013, Japan’s economy grew at an annualized rate of 3.8 percent in the April-June quarter, showing positive growth for the third consecutive quarter.

In addition, I found it important to indicate in a frank manner my awareness of greater downside risks to the public and market participants, as this might contribute to enhancing their confidence in the Bank’s conduct of monetary policy and thereby provide them with a greater sense of security regarding the future economic situation.

Therefore, at the MPM held on October 31, 2013, I voted against the risk assessment described in the Outlook Report and presented a new proposal (the first point of my proposal that I made at the MPM). My proposal was to insert the following description in the last part of subsection “A.

The unemployment rate has declined to the range of 2.5-3.0 percent recently, which is virtually full employment. Under such tightening of labor market conditions, wages have been rising moderately (Chart 7). In particular, the year-on-year rate of increase 2 in hourly cash earnings of part-time employees, which are responsive to labor market conditions, has accelerated, being at around 2 percent of late.

For those in the audience from the buy-side the question I would put to you is: can you justify to your stakeholders — whether they are your investors (if you are a fund manager) or shareholders (if you are a business) — why you have not adopted a set of principles which represent industry best practice when you are managing their money?

It is there for the sell side, the buy side, non-bank participants and the platforms; its breadth is both across the globe and across the whole structure of the industry. The Code is intended to apply to all aspects of the wholesale foreign exchange market.

From 2003 to 2005, the y-o-y growth of urban housing price registered 5.1%, 10.8%, 6.5% and 5.3% respectively. As of October 2007, the y-o-y growth of sales prices in 70 large-and-medium-sized cities averaged at 9.5%. Sales prices of newly constructed commercial housing rose by 10.6%, representing an overall upward trend. 2. The mix of housing available in the market is irrational.

Additional work is under way in the central banking community to investigate the opportunity of establishing regular cross-border mechanisms to counter problems in the international circulation of liquidity, especially at a time of emergency, for instance through the establishment of standing currency swap lines or the introduction of the possibility to accept foreign-currency denominated assets as collateral.

320–352; and 13 / 14 BIS central bankers' speeches Bianchi, F. (2012), “Evolving Monetary/Fiscal Policy Mix in the United States”, The American Economic Review, Vol. 102, No 3, pp. 167–72. 12 See ECB (2017), “The composition of public finances in the euro area”, Economic Bulletin, Issue 5; and Coenen et al.

See also Welcome address by Luigi Federico Signorini to the Bank of Italy - CEPR Conference on Labour market participation: Forces at work and policy challenge, 2018. Based on data from Istat, Italian Labour Force Survey, 2019 and 2021. 4 without pay and, often, with little social-security protection;14 they may entail human capital losses that further reduce career prospects.

Temporary workers who would like to have a permanent job may not be able to find one because employers try to avoid higher hiring/firing/regulatory costs. The right balance of job protection in various segments of the labour market is a much-debated policy issue. Perhaps less often discussed is the role of market competition (or lack thereof) in determining the equilibrium in the labour market.

Another problem with the MFIs is of availability of finance and ensuring regular collection of larger installments from the borrowers. Recognising the importance of community-based financial institutions as delivery mechanisms for housing finance to the financially excluded, the NHB has initiated a housing microfinance programme by way of financial assistance to the MFIs.

The programme is based on an integrated habitat and partnership approach with customised product intervention aimed at supplementing various other financial sector interventions. Private sector stakeholders Today, technological innovations have transformed the conventional style of trade and commerce. There are numerous examples which reflect that with adoption of technology, the end-product can be highly improvised and made affordable to all segments of customers.

• Current experience worldwide has called for robust stress testing practices in the banks. Stress testing alerts bank management to adverse unexpected outcomes related to a variety of risks and provides an indication of how much capital might be needed to absorb losses should large shocks occur.

In India, banks should not take stress testing exercise a mere compliance requirement but accord due importance to it to facilitate the development of risk mitigation or contingency plans across a range of stressed conditions. 8. To conclude, Indian banking system which has shown resilience in withstanding the global crisis is well placed to meet the requirements of the rapid inclusive growth.

December 26, 2018 Bank of Japan Japan's Economic and Price Developments and Future Prospects Speech at the Meeting of Councillors of Nippon Keidanren (Japan Business Federation) in Tokyo Haruhiko Kuroda Governor of the Bank of Japan (English translation based on the Japanese original) Introduction It is a great honor to have this opportunity to address such a distinguished gathering of business leaders in Japan today.

This is the sixth time I have the occasion to give a speech here wrapping up the year. Today, I would first like to talk about the Bank of Japan's view on domestic economic and price developments while looking back on the past six years.

Fellow Governors, our role today is to consider the Report of the Economic Affairs Sub-committee report with a view to agreeing on a strategic framework covering the legal, institutional and organizational preparation for the region to achieve monetary union according to the timetable that has been determined by the Summit.

BIS Review 23/2008 1 The first manifestation of a Monetary Union is a common currency. Therefore the strategic framework must include a Monetary policy by the five Central Banks that will serve to ensure that the unified regional currency will be stable in order to foster further economic and financial integration among Partner States.

I have chosen this topic because the Australian economy is currently experiencing a surge in mining activity, one of a sequence of mining booms since the European settlement of Australia. These have been a powerful force in shaping the Australian economy. Tonight I want to review the effects of these booms.

Of particular interest is the question of whether there are recurring themes from which we can draw lessons on how to manage the current episode. My talk is based on research by a couple of my colleagues from the Bank which draws on the work of several economic historians.

Out of that research has come the most cited dating of Australian business cycles. Modelling and forecasting The Melbourne Institute has been synonymous with modelling, particularly during the reign of Peter Dixon. The modelling by Peter Dixon, as well as that done by Peter Brain was, of course, more of the CGE world than the macroeconomic world.

Perhaps this is one of the reasons why growth in retail sales has been much weaker for smaller firms than larger firms. Whether through lower costs, narrower margins or a combination of both, this competitive dynamic has weighed on prices for consumer durables (Graph 3, top panel).

Where there are challenges there are also numerous opportunities for growth of microfinance businesses. SBP and the Government of Pakistan are committed to increasing outreach and facilitating the development of the microfinance sector. To kick start real action, SBP with industry developed a Microfinance Strategy which was adopted in 2007.

and to provide an environment for safer and faster remittance services through our banking system. At the same time, the Bangko Sentral has been conducting lectures on saving, investing and money management for overseas Filipinos and their dependents in the last three years.

South Africa is in a process of gradually implementing the GEAR strategy, although Government is often criticised for moving too slowly, particularly with the privatisation programme, and with the introduction of more flexibility in the labour market.

7 See J. F. Helliwell, “From Flapper to Bluestocking: What Happened to the Young Woman of Wellington Street?” Bank of Canada Review (Winter, 2005–2006): 31–39. 8 See Bank of Canada, “Revisions to Potential Output,” Monetary Policy Report (April 2009): 12. 9 New Zealand was the first country to adopt an inflation target, doing so in 1990. Canada followed, 11 months later.

Nevertheless, the ECB will certainly play a part in harmonising the supervisory approaches to all banks in the euro area. Consequently, national supervisors will have to take a more European perspective in supervising those banks which remain within their direct sphere of responsibility. 2 BIS central bankers’ speeches But what about those banks which are directly supervised by the ECB?

Are national supervisors being pushed to the sidelines in these cases? Well, let us consider the facts. The ECB has to supervise 123, mostly very large and complex banking groups, which are located in 19 different countries. To do so, the ECB has a staff of 1,000, most of whom are located in Frankfurt.

The Bank’s forecast on the rate of increase in the core CPI for fiscal 2014 was revised downward from 1.4 percent in the April 2013 forecast point to 0.9 percent in the most recent forecast (Chart 2).

In Canada too, there were signs that domestic demand, which had held up through the first part of 2001, was softening and that the inventory adjustment, particularly in the electrical and electronic sectors, was less advanced than expected. Accordingly, we revised down our projections for the second half of 2001 and the first half of 2002.

In this regard, some structure for partial credit enhancement, outside banking, could, however, be considered. Under the extant regulations of the Foreign Exchange Management Act (FEMA), entities like multi-lateral/regional financial institutions, government and financial institutions, foreign equity holders, etc. have been enabled to provide credit enhancement and for this guarantee fees up to 200 bps could be paid by the Indian issuers.

Together with strong financial reforms, monetary policy built on these principles will assist the recovery and promote future growth and stability. As emerging market economies become increasingly important in the global trading and financial systems, the world economy will depend even more on them to maintain strong domestic growth and economic and financial stability.

These are difficult issues and given today’s audience, we here deal with broad generic issues rather than particulars. In the more innocent days of my youth, perhaps, the term value based professional would have been a tautology. It was then taken for granted that professionals possessed values.

The word profession evoked fields that require extensive study and mastery of specialized knowledge, such as law, medicine, engineering, accounting, etc. This contrasted sharply with the more humble term occupation, which referred merely to the nature of a person’s employment.

Ladies and gentlemen, let us offer a toast to blessings of peace and prosperity for everyone-for our people and for our country. Para sa Bawat Pilipino, Bangko Sentral ng Pilipinas! Mabuhay tayong lahat! Mabuhay ang buong bansang Pilipinas at lahat ng taong dumating dito! 1 The BSP became an inflation-targeting central bank in 2002, under the leadership of former Gov. Rafael Buenaventura.

I’ll kick things off with some basics about the Federal Reserve System and the Federal Open Market Committee (the FOMC). But the plan is for us to spend the bulk of our evening on your questions.

This has been partly the result of external factors, commodity price declines and tighter financial conditions particularly important among them, which have put pressure on both external and fiscal accounts. However, problems of a domestic origin have also played a prominent role in some economies.

In this context, economic activity in this group of countries has decelerated for five consecutive years and prospects are bleak. Is monetary policy divergence likely to persist? The possible evolution of policy divergence among advanced economies is subject to some question marks.

Even though the appreciation of the RMB has somewhat offset the impact, the driving force of the imported inflation remains strong. Second, due to the limited supply, prices of important commodities such as pork have risen rather quickly. Third, the rising cost of labor and price adjustment of resources exerted upward pressures on prices.

The cost of labor and the imported inflation are reinforcing with each other resulting in spiraling prices. 2. The impact of sub-prime mortgage crisis on China’s economy cannot be ignored. Although the sub-prime mortgage crisis has a limited direct impact on China’s economy, it can never be ignored.

A large volume of stocks and other securities continues to be delivered physically, and DVP systems are yet to be established for such securities. Furthermore, the lag between the contract and the settlement, that is, the final transfers of securities and funds, needs to be shortened for various securities.

In this respect, the Bank intends to contribute actively and expects further efforts on the part of the private sector. F. Developments in Electronic Money I would now like to briefly discuss the developments in electronic money, which might become a popular means of settlement in the future.

Mention climate change and the first thing most people think about is natural catastrophes: storms, heatwaves, droughts, floods and hurricanes. You might remember that last year’s Atlantic hurricane season was one of the worst on record. Catastrophes on that scale mainly inflict widespread human suffering, of course, but they also present economic risks, or "physical risks", as they are known.

And those risks can affect every one of us: individuals, government budgets, insurers, and other financial institutions. We are already seeing the costs materialising on the balance sheets of non-life insurers and reinsurers today. They add up to more than $ billion for the 2017 hurricane season. That is why these costs usually make the headlines.

In this regard, it is important that our countries take advantage of their high technological advancement and well-educated labour forces, to produce higher quality and more sophisticated goods and to redirect their exports towards strongly growing markets. Looking even more closely into the domestic structure of an economy we come to the notion of productivity.

It should, however, be noted that currently in the United States, commercial real estate prices continue to fall and the quality of consumer loans continues to deteriorate, and therefore the sequence in which the problems related to impaired assets arise is different in the United States from that in Japan.

Again within another co-ordinated action of the five central banks, the BoE announced on 11 March 2008 a continuation of its expanded 3-month OMO against the wider range of collateral.

On 21 April 2008 the BoE introduced a special liquidity scheme to swap high quality mortgage-backed and other securities for UK Treasury Bills – which are provided to the bank by the UK treasury for this purpose – for a given period of time.

Notably, following the ideas of Lars Svensson and others, the FOMC has moved toward a framework that ties policy settings more directly to the economic outlook, a so-called forecast-based approach.43 In particular, the FOMC has released more detailed statements following its meetings that have related the outlook for policy to prospective economic developments and has introduced regular summaries of the individual economic projections of FOMC participants (including for the target federal funds rate).

I will now turn to a brief update on the economic situation. Ongoing developments in financial markets are directly affecting the broader economy through several channels, most notably by restricting the availability of credit. Mortgage credit terms have tightened significantly and fees have risen, especially for potential borrowers who lack substantial down payments or who have blemished credit histories.

This is especially true for community banks, which are frequently the banks working most closely with fintech lenders. 1 These remarks represent my own views, which do not necessarily represent those of the Federal Reserve Board or the Federal Open Market Committee.

2 TransUnion, “FinTechs Taking Larger Share of Personal Loan Market While Increasing Portfolio Risk-Return Performance,” press release, November 2, 2017, https://newsroom.transunion.com/ fintechs-taking-larger-share-of-personal-loan-market-while-increasing-portfolio-risk-return-performance/. 3 TransUnion, “Fact versus Fiction: Fintech Lenders,” (2017) (finding that fintech firms and banks originate 38 percent and 28 percent of personal loans, respectively).

[16] When applying these approaches to the euro area, it emerges that, in comparison to the years prior to the crisis, estimates of the equilibrium real rate have sharply declined during the crisis and have kept declining or remain in deep negative territory over the recent periods (see chart above on Estimates of the equilibrium real rate).

The current account deficit of the balance of payments has more than halved compared to the corresponding period in 2015 – it equals 3.3% of the estimated GDP and remains fully covered by foreign direct investments.

The establishment of OMT has therefore been beneficial to everybody: sovereigns, corporations, banks as well as individuals, and it has benefitted both periphery and core countries. Therefore, I would like to reflect in more detail on this measure. What is its purpose? OMTs are aimed at eliminating redenomination risk from the markets – the unwarranted anticipation of euro area breakup.

Redenomination risk undermined our ability to preserve price stability and contravened the singleness of monetary policy. The possibility that financial claims may be redeemed in a different unit of account than the one in which they were denominated at issuance – that is, the euro – was the prime source of panic that fractured transmission of monetary policy a year ago.

Sustaining the Growth Momentum Of course, the strength of the economy [is] the high level of confidence, especially, I think, the current administration's policies are very well-received by markets, not just here but abroad as well. We are confident that the economy will remain strong. Of course, there are disagreements on what the growth rate will be this year.

The most pessimistic is the IMF [International Monetary Fund] at 5.0 percent. Our own forecasts [at the central bank] are quite consistent with [Finance] Sec. Ben's. We, [the economy], should be between 6.0 percent and 7.0 percent this year.

Introduction In May 2000, the Economist magazine labelled Africa the “Hopeless Continent”, claiming that natural disasters, mass murders, a string of wars, institutional constraints and a lack of commitment to democratic practices meant that the new millennium had brought disaster rather than hope to Africa.1 In March 2013, the Economist had a complete change of mind declaring that Africa is “a Hopeful Continent” since “African lives have greatly improved over the past decade…and the next ten years will be even better”2.

It is heartening to note that negative perceptions about African economic prospects, which were the norm at the turn of the millennium, are less of an issue today. While many challenges persist, Africa has shown that there is a high level of commitment and potential to achieving economic success.

Banks’ substantial exposure to sovereign risk – which even increased in 4 BIS central bankers’ speeches some quarters during the crisis – owed something to the 0% risk weight for government bonds and the absence of upper limits for lending to governments.

Putting an end to this practice of privileging sovereign debt over corporate loans would also represent a major step towards making lending to businesses more attractive again. That’s not the only regulatory measure that’s of decisive importance. Higher capital requirements are key to ensuring that banks can withstand greater losses under their own steam, thereby shifting risk back to shareholders.

However, it is often argued that gross income is not always a perfect proxy for operational risk since it may fluctuate with the business/ economic cycle. Nevertheless, in the absence of any other proxy, income is being used due to its simplicity, comparability and reduced capital arbitrage opportunity.

And Brexit is certainly one of these defining issues. So today I am going to take a broader perspective and discuss the longer-term challenges that Brexit poses for the EU. I will cover three issues that I believe need to be addressed through long-term innovation in the EU’s architecture.

The rate of decline is considerably steeper in the late 1990s than in the period from 2000 to 2010. In the past five years, the rate of decrease has accelerated somewhat but remains slower than that experienced in the late 1990s.

Even if users have to identify themselves when they first access digital euro services, different degrees of privacy can still be maintained for their payments. Certain transactions could be conducted without the payment details being shared with third parties. For example, if low-value offline payments were offered, they could be settled between the payer and payee without any data being shared with intermediaries.

Only 12 of the 46 banks rated by BCSBI received ‘high’ rating in terms of performance while 24 were above average and 10 remained as ‘average’ performers. In fact, the position has marginally worsened since 2015 survey. 4.

The increasing integration of the banking sector into the global financial markets, through cross border banking and capital flows, has created or heightened exposures to these new sources of risk. The evolution of technology has made possible the issuance and innovation of numerous type of banking products including the VISA, MasterCard, online Banking, Mobile money, Internet Banking and e-commerce.

Combined with the future legislation on CSDs and CCPs as well as MiFID, T2S will provide the operational framework to stimulate competition in the post-trade environment. Moving on to banking crisis management, we fully support the Commission’s initiative to introduce an EU bank recovery and resolution framework that should contribute to address current obstacles to the effective crisis management of EU cross-border financial institutions.

Every Member State should have a broad set of tools, such as recovery and resolution plans, BIS central bankers’ speeches 3 asset separation and bridge banks.

If you look at their balance sheets and income statements, you will see that community banks are thriving. Capital, earnings, and asset quality are improving for banks of all sizes, but particularly for community banks. In 2004, nonperforming assets, net charge-offs, and loan-loss provisions for community banks were at long-term lows.

High returns on equity - just less than 12 percent for community banks - and a steady flow of new bank charter applications and approvals suggest that banking has been and remains a profitable industry. The continuing strength of the financial sector is also visible in supervisory ratings.

As you may know, the personal credit information database, with a network covering all commercial banks and technically ready rural credit cooperatives throughout China, has officially started its operation nationwide since January this year, after being on trial operation for about one year. I would like to share with you some background information about building a credit registry system in China. 1.

That follows a structure for forward guidance that the Committee first began last August, when it said conditions were likely to warrant exceptionally low rates through mid 2013. Then in January, it pushed back that calendar date another 18 months.

It has also been possible to reduce the interest-rate spread in relation to the euro interest rate, and this is now as low as 20 basis points. When capital flows are reversed at some point in the future, we are of course also prepared to sell currency.

Those who are familiar with our operations will be in no doubt that Danmarks Nationalbank's currency defence will be extremely resolute in terms of both intervention and widening of the interestrate differential.

Do you feel misunderstood? This means that we have to tirelessly explain what we are doing. We have strictly separated (in accordance with the “separation principle”) our interest rates, which are designed to deliver price stability, and our “non-standard measures”, which are helping to improve the transmission of our interest rates in this period of market disruption.

We cannot ignore the fact that we are experiencing the worst global financial crisis for 66 years! What do you say to your critics? What exactly is the criticism? Have we delivered price stability since the inception of the euro – both before and during the crisis? Are we credible in delivering price stability over the next ten years?

The second one addresses the question whether the costs related to employment adjustments vary significantly between local firms and multinational enterprises. In my opinion, the issues that will be debated today and tomorrow, during the four sessions of the conference, are extremely interesting, not just for academic circles but also for those involved either closely or indirectly in economic policy decision-making processes.

It’s therefore important to understand how globalisation, and the concerns that it generates in households and companies, affects the latter’s behaviour. Let me give you an example provided by Robert Shiller.

It is, for example, about ten times the annual flow of Official Development Assistance from OECD’s Development Assistance Committee members in 2008. 2 BIS central bankers’ speeches These problems of western finance, which induced a slowdown in the global economy over the past few years, are now referred to as the World Economic Crisis.

Hypotheses abound about why productivity growth might have accelerated in the mid 1990s. Technology clearly has something to do with it. Although the telecommunications and information management revolution did not start in the 1990s, it may have been just at the right point by then to offer firms that are facing strong demand and tight labor markets a way to increase their efficiency.

Global drivers of inflation gradually gained in importance at the expense of domestic factors, allowing for a broader international diffusion of major economies’ disinflationary trends.1 The shift towards lower trend, or equilibrium, interest rates continued in the wake of the global financial crisis, although it could not be solely attributed to better control of inflation and inflation expectations.

In fact, in several advanced economies, central banks for the first time struggled to raise average inflation towards targeted levels, and undershooting became the norm.

The current account balance, which consists of the balance of trade in goods and services, the balance of income, and current transfers, remained in surplus in 2011, although the surplus decreased substantially mainly due to the trade deficit.

The services balance records the receipts and payments for international transactions in services, while the income balance records the international receipts and payments of interest and dividends, and current transfers record contributions to international organizations as well as the flow of government food and financial assistance.

Higher oil prices have damped the consumption of oil in the United States, but growing concerns about long-term supply, along with large prospective increases in demand from the rapidly growing economies of China, India, and other emerging-market economies have fueled an increase in futures prices of oil.

Both developed and developing countries, therefore, are focusing on programs for financial literacy/education. SBP has started a pilot Financial Literacy Program (FLP) with the private sector as an implementing partner. The Program is the first ever initiative to promote financial literacy among the general public at the national level.

An option to be discussed is reducing banks’ access to the non-collateralised call market to about 2 per cent of aggregate deposits as in the case of urban co-operative banks, or, as an alternative to 25-50 per cent of their net owned funds.

Simultaneously, in order to gain greater effectiveness in money market operations of RBI through Liquidity Adjustment Facility, the automatic access of refinance facility from the RBI to banks would also have to be reassessed.

Overviewing the Bank’s current and past forward guidance practices, it can be said that both the price stability objective and the related monetary policy conduct are clearer under QQE than in the past (Chart 7).

Therefore, the effectiveness of QQE may be greater than that of past practices – mainly through exerting greater downward pressure on the entire yield curve, through stronger impact on the portfolio rebalance and wealth effects, and through indirect impact on the yen’s exchange rate.

The natural next question is: has the CCAR qualitative objection for the largest firms also run its course? In my view, the time has come to normalize the CCAR qualitative assessment by removing the public objection tool, and continuing to evaluate firms' stress testing practices through normal supervision.

Underlying inflation – which relates more to domestic price pressures – continues to remain subdued, as unutilised resources still weigh on wage and price growth. In fact, the annual rate of HICP inflation excluding food and energy has mostly remained below 1% since late 2013. Today, an important element keeping underlying price pressures subdued is muted wage dynamics, which are shaped by many factors.

While business efforts such as developing new sales channels, reviewing suppliers and BIS Review 74/2010 5 processing methods, and reorganizing management structures are routine at firms, adding the new challenge of capturing potential demand could lead to these routine efforts developing into innovations.

The role of financial institutions With regard to innovation and raising productivity, another aspect I would like to emphasize is the important role played by financial institutions. Schumpeter stressed the role of “the banker” in providing funds to entrepreneurs and support efforts toward innovation.

At its apex sits the Committee of Central Bank Governors, with each Governor in their capacity as head of the financial stability function in the area under their jurisdiction. It is the task of the current conference to advance the process of putting that system in place.

Policymakers, including macroprudential authorities, must carefully consider if and how the crypto ecosystem needs to be regulated. Europe has been at the forefront here with the agreement on the Markets in Crypto-Assets Regulation (MiCA). Its swift implementation is key to closing regulatory gaps, with MiCA providing a consistent framework for crypto-asset issuance and service provision in the EU.

Leveraged loans may not have been a material cause of the crisis, and leveraged lending alone would likely not have threatened the overall health of the large institutions. But caution on the part of supervisors is certainly understandable here.

I would also urge you to collectively work towards finding the balance between profit-making and protection of depositor funds, underpinned by strong corporate governance, prudent business practices, and high ethical standards. Investments in appropriate technology and good human resources are also critical to helping the sector reposition itself to drive financial inclusion, improve efficiency and lower transaction costs for S&Ls and their customers.

Safeguarding the value of the currency is not always an easy task. The correct answer to this challenge forms the basis of an efficiently running economy and of social cohesion. As John Maynard Keynes observed, “there is no subtler, no surer means of overturning the existing basis of society than to debauch the currency”.

It would be comforting to find in the history of central banking a record of steady progress and orderly development from earliest antecedents to present knowledge. The facts, however, are different. The past 75 years have included remarkable achievements and some setbacks both globally and in the Greek economy.

Third, I highlight our experience in India in the conduct of monetary policy and how we have combined it with financial stability. Finally, I conclude by drawing three practical lessons in central banking in terms of monetary policy framework, institutional design and communication in pursuit of both monetary and financial stability.

Evolution of central bank objectives Let me first turn to central banking history for some insights. What was the motivation for setting up central banks in the 17th century? While the early central banks were set up for issuance of currency and financing governments, financial stability considerations got embedded as trade expanded and the banking and financial sectors developed.

From a policy perspective, transparency to investors is largely an issue of investor protection, which, in turn, depends on the nature of investors. The need for counterparties to have adequate information is a risk-management issue. Concerns about hedge fund opacity and possible liquidity risk have motivated a range of proposals for regulatory authorities to create and maintain a database of hedge fund positions.

BIS Review 90/2006 3 There are some uncertainties associated with the settling of trades in newer types of over-the-counter (OTC) derivatives, particularly credit derivatives. As part of recent financial innovations, the creditderivative and structured-credit markets have grown rapidly during the past few years, allowing dispersion of credit risk by financial players.

Some financial institutions have already started actively exploring potential demand on their own initiative, bearing in mind their future utilization of the measure. The Bank therefore believes that the measure has made a rather good start, in that it has prompted financial institutions to explore new areas of growth in line with its intended purpose. BIS central bankers’ speeches 7 B.

Comprehensive monetary easing policy Next, I will talk about the “comprehensive monetary easing policy,” which the Bank – with a view to further enhancing monetary easing – decided to implement on October 5.

Its smooth functioning is crucial for the effective implementation of the central bank’s monetary policy and for maintaining financial stability. An efficient payments and settlement system can become a source of competitive advantage and enhance our competitiveness as an international financial centre. In my last letter, I had already mentioned the various projects on which we had embarked.

This requires complex legal arrangements to ensure proper distribution of payoffs and risk-sharing to align the incentives of all parties involved. Secondly, infrastructure projects are long term and are therefore subject to various risks including those due to changes in policies, delays in clearances, etc.

During calm and predictable market conditions, this compresses risk premia. At the same time, financial innovations may well have created new types of systemic risks that will only become evident in more turbulent conditions. Finally, the combination of large global imbalances and signs that political support for globalization may be beginning to wane is a clear cause for concern and a source of uncertainty.

We should avoid sounding alarmist, but one of the lessons of history is that when the consensus view is becoming very optimistic, a prudent person should become worried. Implications for central banks What does this dichotomous view of the word, a benign baseline underpinned by continued smooth globalization and the apparent increase in uncertainty mean for central banks?

John McDermott: Forward guidance in New Zealand Speech by Dr John McDermott, Assistant Governor and Chief Economist of the Reserve Bank of New Zealand, to the Goldman Sachs Annual Global Macro Conference 2016, Sydney, 4 February 2016. * * * Accompanying figures can be found at the end of the speech.

Introduction I would like to thank Goldman Sachs for the invitation to speak here in Sydney today. It is a pleasure to take the trip across the Tasman to be part of your annual Macro Economic Conference.

Lack of recognition is not the problem. What is lacking is consistent and credible implementation. For example, the European Union has been relatively ambitious in its climate policy and established an ETS way back in 2005. However, the scheme covers less than half of total greenhouse gas emissions in the EU. (Non-aviation) transport, buildings and agriculture are not yet included in the EU’s ETS.

I mention Brexit because it is important to be clear that it has not gone away. As I said in Waterford recently, the Withdrawal Agreement – assuming it is ratified by the next UK Parliament – represents merely the end of the beginning.

For the first eight months of 2020, the value of InstaPay rose by 388.7 percent, while that of PESONet jumped 100.7 percent. year-on-year. By volume of transactons, InstaPay and PESONet soared by 623.8 percent and 129.6 percent, respectively. Personally this is music to my ears.

As the world economy as a whole is feeling the adverse effects of the intensified and prolonged financial market turmoil, the most recent data clearly confirm that economic activity in the euro area is weakening, with contracting domestic demand and tighter financing conditions.

While robust enforcement action will continue to underpin our powers, we would far rather that firms focus on preventing, identifying, and acting upon issues in the first place - and we believe the IAF will assist firms in that purpose.

Accompanying graphs can be found at the end of the speech. Thanks for the introduction, and thank you for the invitation to join you here today. It’s a pleasure to be back in Rochester. I’ll begin my speech with some basics about the Federal Reserve System and the Federal Open Market Committee (the FOMC).

Inflation expectations, as measured by the five-year inflation-linked swap rate, edged up to 1.77% at the beginning of December, close to the values recorded at the beginning of this year, slightly higher than prior to the start of the PSPP last year.

Moreover, the December 2016 Eurosystem staff projections foresee the euro area HICP inflation at 0.2% in 2016, and 1.3% in 2017, while real GDP growth is foreseen at 1.7% in both 2016 and 2017 and at 1.6% in both 2018 and 2019, broadly unchanged from previous estimates.

Clinton, Kevin, Charles Freedman, Michel Juillard, Ondra Kamenik, Douglas Laxton, and Hou Wang (2015). “Inflation-Forecast Targeting: Applying the Principle of Transparency,” IMF Working Paper WP/15/132. Washington: International Monetary Fund, June, https://www.imf.org/external/pubs/ft/wp/2015/wp15132.pdf. D’Amico, Stefania, William English, David López‐Salido, and Edward Nelson (2012). “The Federal Reserve’s Large‐Scale Asset Purchase Programmes: Rationale and Effects,” Economic Journal, vol. 122 (November), pp. F415-46. D’Amico, Stefania, and Thomas B.

King (2013). “Flow and Stock Effects of Large‐ Scale Treasury Purchases: Evidence on the Importance of Local Supply,” Journal of Financial Economics, vol. 108 (May), pp. 425-48. Eggertsson, Gauti B., and Michael Woodford (2003). “The Zero Bound on Interest Rates and Optimal Monetary Policy,” Brookings Papers on Economic Activity, no. 1, pp. 139-235, https://www.brookings.edu/wpcontent/uploads/2003/01/2003a_bpea_eggertsson.pdf. Engen, Eric M., Thomas Laubach, and David Reifschneider (2015).

Glenn Stevens: The director’s cut – four important long-run themes Address by Mr Glenn Stevens, Governor of the Reserve Bank of Australia, to the Australian Institute of Company Directors Luncheon, Sydney, 17 September 2008. * * * Thank you for the invitation to speak to you today.

Nevertheless, recognizing increasing volatilities in world oil prices and interest rates, the BSP responded to changing monetary conditions and allowed the term deposit facility (TDF) rates to rise. Market rates have correspondingly risen. Our two successive policy rate hikes in May and June were measured and deliberate responses to the evolving economic environment and dynamic market conditions.