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First, monetary policy is always decided under conditions of uncertainty: not only uncertainty about inflation dynamics but also uncertainty about each of the channels connecting medium-term inflation to our monetary policy instruments.

As a cross-institutional forum, FSPI is expected to become a forum of effective coordination, communication, and harmony between Bank Indonesia, Financial Services Authority, Ministry of Finance, Ministry of Trade, and Ministry of Communication and Information in supporting the implementation and development of Payment System in Indonesia. 3.

Moreover, a European supervisor helps to preserve a level playing field, which is essential to the single market. However, as envisaged by the banking union, a common resolution scheme should soon complement a single banking supervisor. First of all, it will ensure that owners and creditors bear the risk of their investment.

A common resolution scheme would also avoid inconsistencies and frictions that could otherwise arise between a single supervisor and national resolution authorities. Ultimately, it could significantly improve the way in which we cope with failing internationally active banks. Their orderly recovery or resolution is a key element of financial stability and cross-border effects play a crucial part in it.

This year, we will publish a stand-alone Financial Stability Report outlining the extensive work being undertaken by the Bank on financial stability. Financial stability work includes the development of various early warning indicators of systemic risks. These are events that could spread from one institution to another giving rise to serious problems in the financial system and the economy more generally.

The work also includes the procedures required in the event of a systemic emergency. The reason for the strong focus on financial stability is that financial crises are very costly, not alone in financial but also in economic terms. Many countries have experienced crises that seriously impacted on economic growth - in some cases, 10% or more of GNP.

A well-functioning public administration improves the operation of markets and competition, reduces firms’ costs, and is reflected in the quality and cost of public services and thus on the tax burden. The efficacy of the reforms depends on it.

Restrictive regulation and a legal and institutional environment that is unfriendly to entrepreneurial activity hamper the transfer of resources towards the more efficient firms and sectors and the growth of productivity. The same elements also affect the Italian economy’s ability to attract investment from abroad, which is very poor compared with other economies, ultimately curbing the diffusion of innovative technologies and managerial practices.

The Reserve Bank has followed a strategy of elongating the yield curve by issuing a fine blend of longterm securities along with the short-term to suit the preference of both the issuer and the investor.

With the issuance of longer term securities, the yield curve on government securities has emerged over a spectrum of 30 years, although the yield curve is not liquid at the longer end of the maturity (Chart 8). Thus, various measures undertaken have led to a significant improvement in the functioning of the government securities market.

The working-age population plays a core role in production activity, and such a decline will constrain economic growth from the supply side through a reduction in the number of workers. The working-age population is also a major driver of private consumption and significantly contributes to tax revenue.

Therefore, even from the demand side, a decline in the working-age population will lower growth potential unless necessary measures are taken. Such measures include deregulation in the areas of health care and nursing care services for the elderly to meet rising demand from the aging population, as well as measures to offset a rising fiscal burden on the working-age population.

In the United States and the United Kingdom, consumer interests figure even more prominently in supervision. The conclusion is therefore that even in a Civil Society, it may be necessary to protect the interests of vulnerable groups by formulating standards and values. Is the Civil Society infeasible? So much for key elements of the Civil Society.

Does this mean that the Civil Society is infeasible? Far from it. As I noted earlier, the proponents of the Civil Society are well aware of the bounds of societal responsibility. The Civil Society has nothing to do with unbridled liberalism. On the contrary, the protagonists of the Civil Society are continuously seeking to improve and supplement its model.

And it would bring spreads more into line with the underlying risk, thus sending a disciplining signal to the sovereign. If additional capital requirements for European banks were imposed to cover sovereign exposures, the additional capital would be rather small on aggregate – albeit with substantial differences between banks. The inclusion of sovereigns in the large exposures regime might lead to more substantial repercussions.

But these would be manageable if introduced over a transition period – which without question has to be granted. Obviously, establishing a sustainable fiscal framework and consolidating public budgets are only two of the numerous challenges facing the euro area in becoming more stable.

However, while the restraint on economic activity from the financial shocks appears to be easing, any realistic assessment of the economic outlook must take into account prospects for conditions in credit markets, which will be a critical element shaping the recovery. Thus, I plan to discuss how I see these developments influencing the economy over the coming year.

Also, all financial service providers have a moral responsibility to bring in a fair degree of transparency and fairness, more so those engaged in selling financial products and financial counseling and the ethical grid within which they are supposed to work. This initiative is no less challenging than propagating financial literacy to the members of the public. 16.

The integration of the euro area central government bond market is therefore well under way. Differences in bond yields should be reflective of differences in creditworthiness of debtors, and even more so of the liquidity of a given bond.

This liquidity effect is visible in the term structure of yields across the euro area, as the lowest yields at different points on the maturity spectrum have been seen on bonds that have been issued by different countries in the euro area that have had different credit ratings. Turning to equity markets, a similar process of integration is apparent.

In view of this, and given the current environment of subdued economic activity, we do not see a high risk of this translating into inflationary pressure in the near future. The continuing strengthening of the euro since early this year together with the weak pace of economic growth in the euro area are in fact dampening inflationary pressure.

Moreover, under the second pillar of the ECB's strategy, the Governing Council also evaluates indicators of financial market expectations derived from financial yields and prices. The Governing Council also looks at forecasts for the euro area produced by international organisations and the private sector.

The FOMC is now on a path of measured reductions, which, if continued, will end the purchase program later this year. If the economy continues to improve, we could find ourselves still trying to increase accommodation in an environment in which history suggests that policy should perhaps be moving in the opposite direction.

Total migration has been running at more than 60,000 persons per annum over the past two years. This is well in excess of the mid-1990s. Of course, more people means more demand for accommodation. Is there more to this story? Yes, we think so.

We have warned about poor economic performance for several years, and although we did not expect the first-quarter GDP1 figure to be quite so weak in quarter-on-quarter terms, our assessment in the May MPC2 meeting was that the risks to the growth forecast were on the downside.

1 gross domestic product 2 Monetary Policy Committee Page 1 of 10 Meanwhile, inflation has returned to within the target range, as expected. Some recent numbers have come in a bit lower than anticipated, but our forecast still indicates inflation in the upper half of the target range across the forecast horizon, which stretches to the end of 2019.

Jerome H Powell: Anti-money laundering and the Bank Secrecy Act Testimony by Mr Jerome H Powell, Member of the Board of Governors of the Federal Reserve System, before the Committee on Banking, Housing, and Urban Affairs, US Senate, Washington DC, 7 March 2013.

Recognising the importance of operating as part of a European regulatory system, I represent the Central Bank on the Supervisory Board of the SSM1, and on the Boards of the European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA).

Our definition of price stability has guided our citizens in their economic decisions and has acted as a built-in stabiliser in the deepest phases of the crisis.

According to national economic development plan, financial institutions should be guided to earnestly implement the requirement of national industrial policy by further improving credit structure and upgrading financial service. Fifth, the share of direct financing will be further increased. Bond market will be vigorously expanded by encouraging bond products innovation and encouraging institutional investor development.

As you are aware, the Reserve Bank Board has held the cash rate steady at 1½ per cent since August 2016. This has helped support the underlying improvement in the economy that I spoke about earlier. In thinking about the future, there are four broad points that I would like to make.

The first is that we expect a further pick-up in the Australian economy. Increased investment and hiring, as well as a lift in exports, should see stronger GDP growth this year and next. The better labour market should lead to a pick-up in wages growth. Inflation is also expected to gradually 15 / 16 BIS central bankers' speeches pick up.

As suggested by the European Commission’s new sustainable finance strategy, the NGFS scenarios should be considered a starting point for testing the impact of Europe-specific transition plans, as well as guiding banks in setting their own targets. The Commission encourages EU environmental and financial authorities to work together to tailor the global NGFS scenarios to European policies in a science-based manner.

Such scenarios would also speed up the development of more advanced supervisory tools for assessing the forward-looking alignment strategies contained in banks’ transition plans. In addition, EU-wide scenarios would serve as a benchmark for the financial industry as a whole and thereby promote self-discipline among market participants. We will also need transparency and appropriate disclosures around banks’ transition plans.

Previous asymmetries in bank lending rates across the euro area have now largely been reversed, the cost of bank borrowing has stabilised at record lows everywhere in the euro area, and so has its dispersion across countries. We can now say that the pass-through from our past policy measures to lending rates is nearing completion.

In light of the Committee’s request, I will give a brief overview of the economic outlook, payment breaks, issues in the insurance sector, the Tracker Mortgage Examination and the credit union sector. We are happy to expand on these or any other matters in the subsequent discussion.

Competitiveness is also being promoted through structural reforms which have increased the flexibility of labour and product markets. As a result of these improvements in competitiveness, a rebalancing of the Greek economy is taking place. The share of exports of goods and services in GDP rose from 18 per cent in 2009 to 28 per cent last year. This share continues to rise.

3/5 BIS central bankers' speeches 4 What role for bank mergers & acquisitions? So far, I have answered the question as to what banks and policymakers should do. That leads to the question – certainly in this room, at least: What role can mergers & acquisitions play?

* * * Year 2000 Readiness in the Financial Industry in Japan Introduction With less than one and a half years before the year 2000, various industries in Japan are currently making a wide range of efforts to address the “Year 2000 problem”.

The monthly press conferences, which were without precedent at the time among major central banks, are a telling example. This year has also shown that the ECB stands ready to adapt its communication policy where deemed necessary. For example, we have published the procedures governing the provision of Emergency Liquidity Assistance (ELA).

These reviews are extensive in that lenders must review the underlying loan documentation and customer files for the in-scope accounts to determine their specific contractual obligations, and also to determine if the documentation that each customer received had the potential to confuse or mislead the customer, both on a stand-alone basis and when read in conjunction with other communications – be they written or verbal – made to the individual customer.

This is particularly the case with the Bali FinTech Agenda – the IMF’s blueprint for FinTech development, produced together with the World Bank. Being one of the jurisdictions to take on the FinTech challenge early on, this shows that the overall direction we have chosen has put us on the right track.

In the context of the Euro Area other measures operated also to reduce those tensions.

I am referring to the re-activation of the SMP programme in August 2011, the outcome of the meeting of the euro area Heads of State or Government on 9 December, which led to the adoption of the “fiscal compact”, and finally to the ECB decisions to reduce key interest rates and organize two 3 year Long Term Refinancing Operations.

But the fact that varying techniques can produce significantly different results means that there must be a fair bit of uncertainty around any individual estimate. Hence, while the results provide some comfort, we can have only limited confidence that they would be replicated in a real-world downturn.

Such large, and persistent, current account imbalances between the core and the periphery would not have been possible but for the explicit moral hazard of fixed and stable exchange rates created by the single currency because the respective national currencies of the periphery would have depreciated in real terms resulting in timely automatic rebalancing of the current account imbalances!

Those macro-prudential instruments which can be adjusted over time to manage the conditions in the credit market will offer a way to better control the accumulation of excess risk and help prevent future crises. These instruments operate so close to monetary policy that central banks should be very closely involved, if not themselves responsible, in developing and using them.

Mr Chairman, I have previously said that Australia would come through the global crisis well placed to benefit from renewed expansion. For a time, the challenge was to sustain confidence, and to support the economy and financial system through some exceptionally demanding circumstances. By and large those efforts were successful. Now we must turn our attention to the challenges of managing an economic expansion.

However, subdued global demand growth, the remaining tensions in euro area sovereign debt markets and their impact on credit conditions, as well as the process of balance sheet adjustment in the financial and non-financial sectors, continue to dampen the underlying growth momentum. This outlook is subject to downside risks.

They notably relate to tensions in euro area debt markets and their potential spillover to the euro area real economy. Downside risks also relate to possible adverse developments in the global economy, higher than assumed increases in commodity prices, protectionist pressures and the potential for a disorderly correction of global imbalances.

We intend to use this support to sharpen our regulatory and supervisory oversight of Islamic banks in Mauritius. 37. Payments Systems The modernisation of the payments system has been on the cards since 2007 but, like many other significant projects at the Bank, got unfortunately entangled with protracted procurement difficulties arising from the Boardroom squabble referred to earlier.

This will ensure the necessary degree of monetary accommodation and contribute to a gradual recovery and a return of inflation to levels closer to below, but close to, 2%. If, however, it becomes necessary to further address risks of too prolonged a period of low inflation, the Governing Council is unanimous in its commitment to using additional unconventional instruments within its mandate.

Foreign exchange receipts from tourism are likely to be further impacted by huge discounts offered by hotels to encourage visitor travel. Profits in the industry are likely to be adversely affected, even in circumstances where in some cases occupancy has not been severely impacted.

This will bring into sharper focus the financing needs of the economy and the currency, both as a facilitator of economic adjustment and as a source of inflation risk.6 These changing global conditions impact on how we conduct monetary policy. From being in a position to cut rates deeply to support recovery, we are now in a very different environment.

In part, this is because of the potentially negative impact of rising inequality on financial stability.

Despite the pandemics, before the russian invasion into Ukraine, Lithuania was on the path of growth and the long-term economic transformation of digitisation and sustainability. In these unprecedented times we must stay on this path. No matter the current uncertainty, we need to ensure that investment directed towards our long-term goals continues.

Looking forward, once recovery is on a firm footing, the Fund should again look beyond its crisis management role. I am pleased that our discussions here in Istanbul have shown that there is broad support among its membership for a strong Fund in normal times, too. BIS Review 123/2009 3

The point of most concern about the high and growing level of indebtedness is that it is occurring at a time of historically low interest rates so that any significant increase in rates or downturn in economic activity in the future would cause problems, particularly for recent and more highly indebted borrowers.

However, the creation of a CCP means that the counterparty risk is now concentrated in a single agent, the clearing house. A universal acceptance of CCP model for everything will result in the concentration of risks at one point, which will become the single point of failure for market stability.

In case of exchange traded products, there is also the issue of legal separation between the exchange and the CCP. Obviously then, the CCP has to be a highly regulated entity.

Fifth, relative to trade in goods, externalities are more prevalent in regard to financial sector, especially the banking sector. Hence, some regulation is essential and it tends to be national.

However, the financial flows are rapid due to modern technology and could be quite substantial, but in view of global scale, it becomes extremely difficult to identify or enforce the rules of origin in regard to financial flows.

However, the short-term outlook for the aggregate supply and demand balance is unpredictable, because of the simultaneous occurrence of severe supply-side constraints due to the disaster, and a plunge in demand arising from the decline in firms’ appetite for investment and households’ appetite for consumption.

A lasting solution to food price pressures lies in a supply response that raises agricultural production and productivity, improves supply chain management and sets the right incentive framework for both producers and consumers. The outlook on food inflation in the short to medium term will be determined by the speed and quality of such a supply response by the Government.

The use of MFIs which engage in capacity building of the group members and also in providing "credit plus" services enable banks to minimize credit risk by improving viability while expanding outreach to large number of poor customers.

Members participating in the multilateral borrowing arrangements with the Fund should have the option of earmarking a portion of their lending for assistance to low income countries. Vigorous efforts to increase donor contributions to the subsidy resources should be pursued. Governance Governance continues to be critical to the legitimacy, credibility and effectiveness of the Fund.

Additionally, many investors relied greatly on credit rating agencies for the valuation of complex financial instruments and their use as collateral. 2. Strong economies and higher commodity prices were fuelling expectations of tighter monetary policy before the crisis started. In the first half of the year the economic situation proved to be very robust. Most major central banks were normalising interest rates.

Strong demand for commodities BIS Review 120/2007 1 put upward pressure on prices so that interest rates were rising in the first half of the year. 3. Mortgage rate re-settings at higher interest rate levels caused delinquency rates to rise, most pronounced in the sub-prime mortgage market.

Based on this understanding, the Bank’s JGB purchases are expected to generate downward pressure primarily on the risk premia and then on the expected path of short-term interest rates. Moreover, the Bank’s commitment to achieve the 2 percent target stably is likely to enhance the downward pressure.

I see one particularly important aspect of this blueprint in that fact that the Fed in the role of a “market stability regulator” would, for the first time, institutionalise a primarily macro-oriented perspective on the financial system. I await with keen interest how this debate will proceed.

A hyperlink to the websites of the banks has also been provided on the RBI’s website (www.rbi.org.in) to enable the bank customers to have a single-point access to the websites of various banks, particularly for information on the service charges and fees levied by the banks for their various services.

In this direction, monetary policy aims to contain perceptions of inflation in the range of 4.0–4.5 per cent with a particular focus on the behaviour of the non-food manufacturing component. This objective is consistent with the estimated threshold level of inflation of 4–6 per cent suggesting the absence of a “new normal” for inflation in India.

In this environment banks have made progress in deleveraging 4 BIS central bankers’ speeches and restructuring. However, as late as last year there was still uncertainty as to the true extent and quality of this deleveraging. This was shown by persistent investor doubts about bank asset valuations, and low credit growth for the real economy.

As you will hear, the FOMC has made great progress in formulating, and communicating, the objectives of monetary policy to the public. I will discuss some of that progress and then move on to some ideas about how the Committee can make further improvements along these lines. I look forward to your questions, as well – I always learn a lot from Q&A sessions.

Our lending to nonbank institutions was grounded in clear authority found in section 13(3) of the Federal Reserve Act permitting a five-member majority of the Federal Reserve Board to authorize a Reserve Bank to lend to individuals, partnerships, or corporations in “unusual and exigent circumstances.” These actions also generally adhered to Walter Bagehot’s dictum, a time-honored central banking principle for countering a financial panic: Lend early and freely to solvent institutions at a penalty rate and against good collateral.

3 Central banks are uniquely equipped to carry out this mission. They regularly lend to commercial banks against a wide variety of collateral and have the infrastructure to value and perfect their interest in the underlying collateral.

Measures to address the rapid financial contraction In order to address the rapid financial contraction triggered by the failure of Lehman Brothers, the Bank successively conducted same-day funds-supplying operations and introduced U.S. dollar funds-supplying operations as emergency measures to provide liquidity for financial markets.

Furthermore, the Bank decided to introduce outright purchases of CP and corporate bonds, based on the recognition that a significant decline in the functioning of markets, such as the serious shortage of liquidity in the CP and corporate bond markets, was causing a tightening of overall corporate financing conditions.

For instance, it does not appear conceivable that the obligation of TPPs to identify themselves to the ASPSPs differs between Member States. With a proper regulatory framework and an integrated market infrastructure in place, the foundation has been laid. The PSD2 cannot however settle all issues.

Other essential ingredients for improving economic governance are the separation of policy and regulatory functions, which were earlier combined within the ministry. Regulatory agencies have been set up for economic activities such as banking, finance, aviation, telecommunications, power, oil, gas etc. The regulatory structures are now independent of the ministry and enjoy quasijudicial powers.

So girls and boys, “be Money Wise” is designed to teach you, and all the children in Fiji, “money smart” principles. This is done through creative, fun-filled activities, some of which you will get to do over the course of today.

We envision, that over time, such activities will lead to the development of a culture of financial prudence (smartness), preparing you well for your adult working life. Relating money to future goals So let’s first talk about money, and how important it is in our everyday lives.

This would double the amount outstanding of ETFs from the end of 2012 to the end of 2014. Regarding CP and corporate bonds, it was decided to maintain the amounts outstanding of these holdings given the already low levels of risk premia (expected excess returns demanded by investors relative to safe assets) after the decision in January.

Aspect 3: Emphasis on inflation expectations and adopting the “quantity” target Third, QQE emphasizes the expectations of markets, firms, and households – particularly medium- to long-term inflation expectations – as one of the most important channels for achieving the 2 percent target. This feature draws a clear line between QQE and the previous CME.

One shouldn’t be too pessimistic about this, because if the sort of efficiency-enhancing reforms which are being pursued on so many fronts are successful, then the potential rate of growth of these countries should be enhanced rather than diminished.

The euro has brought favourable financing conditions with market interest rates being much lower than in pre-EMU times, thereby supporting investment and sustainable economic growth. The citizens of the euro area ultimately benefit in terms of more competition, favourable prices and better employment prospects.

The important point is that lenders are better placed than borrowers to carry risk because they can diversify risks across many borrowers. Borrowers are willing to pay to reduce risk, either through a higher interest rate or through sharing their capital gains or losses with their lender.

In the end, the International Monetary Fund, the World Bank, a number of the governments of industrial countries, and the international investment community, had to provide a massive amount of financial support -- more than US $ billion -- to assist these countries. The countries themselves also had to implement painful corrective measures that will, over time, restore equilibrium in their economies.

I hope that this contribution will be seen in that spirit. References Bernanke, B. S. “Federal Reserve Communications”, address at Cato Institute 25th Annual Monetary Conference, Washington, D.C., 2007. Bernanke, B.S. “Communication and Monetary Policy”, address at Herbert Stein Memorial Lecture, Washington, D.C., 2013. Blinder, A., M. Ehrmann, M. Fratzscher, J. de Haan and D. Jansen, 2008.

To deal with this threat, I will not hesitate to use the powers conferred upon the Bank of Uganda by the Financial Institutions Act 2004 to force a reduction in loan concentration. Let me now review a number of recent initiatives which are designed to increase the efficiency of the banking system.

Let me briefly present some of the empirical findings: First, by defining the overriding price stability objective in quantitative terms and adopting and announcing a monetary policy strategy, the ECB has provided clear guidance for market participants to form expectations about inflation and a basis for understanding and anticipating the likely response of monetary policy to shocks or to new incoming information.

As a consequence, both survey-based and market-based medium to long-term inflation expectations in the euro area have remained well anchored at levels consistent with the ECB’s quantitative definition of price stability, even at times when inflation outcomes were volatile as a result of adverse shocks that affected aggregate demand or supply.

The first outreach program occurred in December 1998, when officials from the Federal Reserve presented, via videoconference, an interactive session with its depository institution customers on the Federal Reserve’s contingency planning for the Year 2000. Banks are urging their regulators and other government officials to promote public confidence by speaking clearly and forcefully about Year 2000 preparedness.

Of the economic challenges, the continuing high inflation was particularly worrisome due to its impact on fixed income earners, savers, investors and the poor. Rising inflation creates uncertainty in long-term decision-making, delaying investment decisions and BIS Review 3/2010 1 distorting business plans. Therefore inflation has fundamental implications for long-term employment and growth. 7.

The proposed forum for a consultative process on the MFIs would also be useful in evolving an appropriate framework for development of the MFI sector.

No doubt, a very well-crafted balance between the regulation and growth objectives would be warranted in formulating our approach to a regulatory regime, keeping in view the big challenge of financial inclusion of a large segment of the Indian population. Thank you.

And this shallow growth path remains vulnerable to a series of downside risks. The slow rollout of vaccines in the euro area and the spread of new variants of the virus are delaying the full reopening of the economy. This delay – and the uncertainty around it – is likely to depress consumer and investor sentiment.

3/19 We are likely to see higher cyclical divergence from the United States, where the recovery will be further supported by significant fiscal stimulus in 2021. This divergence will bring risks of its own: in fact, we are already seeing undesirable contagion from rising US yields into the euro area yield curve.

One of the significant processes behind this increase is the enactment of the Mandatory Pension Law in 2008, which requires workers and employers to set aside a significant percentage of their income for pension.

This topic is relevant and timely, given the subpar performances of many Caribbean economies in the wake of global economic and financial crisis.

Yet, if such an eventuality materializes, the functioning of the economy should not be affected, provided that monetary and fiscal fundamentals remain strong, and the banking system highly liquid and well capitalized. An additional element of strength will continue to be the flexible exchange-rate system that has served as a shock absorber in previous turbulent times.

In any case, the financial authorities will have to continue monitoring potential risks from various sources that may impair the functioning of the financial system, to prevent this from occurring and to act accordingly if an adverse situation emerges.

So these are the four elements that I see as important to an effective inflation-targeting regime. We have all four elements in Australia. Our commitment to deliver an average inflation rate over time of 2 point something provides a strong nominal anchor.

We have always viewed the inflation target in the wider context, reflecting the broad mandate for the RBA set out in the Reserve Bank Act 1959. That Act was passed 60 years ago and has stood the test of time.

The delay in the Fed’s tapering should be used to address external and internal macroeconomic imbalances in the emerging market economies as soon as possible in order to be better prepared for the eventual monetary tightening in the U.S.A.

Prudent macrofinancial measures are necessary to address potential negative balance sheet effects on domestic borrowers or a stagnation in lending, which could arise in the medium run from the combination of increasing interest rates and relenting GDP growth. Finally, it should be noted that global financial stability is a shared responsibility.

The goal of the reforms is to help you become stronger players, and in a manner that will ensure longevity and hence higher returns to your shareholders over time and greater impacts on the Nigerian economy.

It is now important to keep the momentum in the implementation of the ongoing global initiatives. Effective coordination of all policy initiatives is key for ensuring global consistency and success; but financial stability ultimately depends on the implementation of global initiatives at the local level.

Coming to the precise theme of this session, viz., the price or cost of customer centricity, I would like to briefly touch upon a few special aspects of operations of a banking institution.

That is a crucial disadvantage of the purchase programme. I am absolutely aware of the danger that the low costs of financing alleviate the pressure on governments to consolidate their public budgets and tackle the necessary structural reforms. Expansive monetary policy can only provide an impetus for more growth. The decisive impulses must come from economic policies.

And our rebound from lockdown is looking weak compared with other countries. 19 As a country, we need to find a path back to fiscal sustainability and growth.

We can borrow from new creditors; we can shift our debt towards shortterm borrowing; we can move things around different balance sheets – but this is not a recovery strategy; it is just a way to buy time. If public sector borrowing were the way to achieve sustained growth, the last 10 years of debt accumulation should have been enough.

In terms of resilience, we rapidly adapted our work schemes and transitioned to a general remote work setting which, in the case of Banco 2 de México, had only been implemented as a business continuity strategy for critical processes and in very specific areas.

We believe it is critically important in these unprecedented times to demonstrate the unwavering support of the global community to the poorest countries and we look forward to the review by Executive Directors of the decision concerning the 2020 IDA transfer by December 2020. An extension of the Debt Service Suspension Initiative (DSSI) by 6 months is warranted by the continued liquidity pressures.

Some countries have started to reform their social security systems. Unemployment benefit systems have been streamlined, but in a number of cases, together with high marginal tax rates, they continue to provide a disincentive to take up work. Larger contractual flexibility, such as for part-time jobs, helped to expand employment in certain segments of the labour market.

But further reforms are needed that allow wages to reflect more strongly regional and sectorial productivity differences. In addition, the skill requirements posed by a knowledge-based economy imply that governments should intensify their efforts to improve education and training systems. EU countries made a lot of progress in product market reforms during the 1990s and this is an encouragement to do more.

Today, I would like to discuss how Canadian monetary policy has been conducted in the presence of economic surprises or shocks - both domestic and external. I would also like to add some thoughts on the issue of the appropriate monetary response, nationally and internationally, to common economic disturbances.

Economic surprises and Canada's inflation-targeting approach to monetary policy To put things in context, let me start by providing a bit of background about Canada's inflationtargeting system. When it comes to conducting monetary policy, our formal mandate is not dissimilar to that of the U.S. Federal Reserve or to those of many other central banks.

c) Enhanced competition in both banking and non-banking financial sectors has been gradually introduced – through a dynamic mix of public and private as well as domestic and foreign ownership – along with deregulation or adaptive regulations. d) Simultaneously, regulation and supervision of banks, financial markets and infrastructure were improved to increasingly align them with international standards and best practices.

To conclude, let me mention four of the implications of enhanced competition in financial sector for our monetary policy. First is the positive impact on both growth and price stability – especially due to the competitive pressures in the banking sector.

This recent surge seems to be attributable to the following four factors that have materialized in the wake of the COVID-19 pandemic, although the factor on which the most importance is placed differs among economists and by country and region. The first is an expansion in aggregate demand (Chart 2).

Unfortunately, the foreign reserves have fallen below the levels to which we have become accustomed in the recent past, raising concern among the public about the trajectory. This situation is reversible but increased foreign exchange inflows together with a dampening of demand for foreign exchange are now needed.

We have seen a rise in the share of mortgages issued by private lenders in the Toronto area, although we do not have this type of data for cities outside of Ontario. We have also seen a greater share of highly indebted borrowers taking out variable-rate mortgages.

In doing so, they are lowering their debt-service burdens because, usually, the interest rate on a variable-rate mortgage is lower than on a fixed-rate mortgage. This frees up money for spending or saving in the short term, but exposes the borrowers to unexpected increases in interest rates down the road.

SEBI is trying to facilitate the setting up of a repo clearing corporation. We keep our fingers crossed that going forward we will see this market too start to develop. Issues, concerns and challenges 19.

Increased domestic production should help boost supply of food crops, alleviate price pressures and also contribute to prosperity for all. Information from the business confidence survey index conducted by BOU continues to reveal that many firms are positioning themselves to increase investment and boost the supply of domestically produced goods within the near term.

We have also lately witnessed discretionary policy actions by an increasing number of central banks with direct effects on the foreign exchange value of their currencies, naturally raising concerns about a recourse to beggar-thy-neighbour policies and competitive devaluations.

I am confident that banks will find the best strategies to address these challenges and to further strengthen the competitiveness of the banking sector. I will not take more of your time. To close, I would stress that the financial crisis has taught us many lessons and brought about fundamental changes in the functioning of the financial system.

It’s an extremely consultative process, both internally and externally, with RBI staff from many departments, banks and other market participants. The rigour of the process was a revelation; I did not appreciate it from the outside. BIS Review 12/2010 3

As shown in the Outlook for Economic Activity and Prices (hereafter the Outlook Report) released at the end of October, the outlook in terms of the median of the Policy Board members’ forecasts of the real GDP growth rate was 1.2 percent for fiscal 2015 and 1.4 percent for fiscal 2016. II.

We observed a measurable upward movement at all tenors as well as a steepening of the curve. As a result, just before the announcement of the PEPP on 18 March, GDP-weighted 10-year euro area sovereign bond yields were around 70 basis points higher than before the outbreak of the pandemic.

Even German Bund yields had risen by around 20 basis points over that same period. The announcement of the PEPP helped break this dynamic and partly reversed the steepening of the curve.

Olli Rehn: A European and Rawlsian view on inequality, inclusive growth and monetary policy Speech by Mr Olli Rehn, Governor of the Bank of Finland, at the high-level panel discussion on “Central banking after the pandemic: the challenges of inequality and inclusive growth”, CEBRA Annual Meeting, virtual, 8 July 2021.

Mr. Macfarlane puts recent suggestions for improving the operation of the international financial system into perspective Talk by the Governor of the Reserve Bank of Australia, Mr. I.J. Macfarlane, to CEDA Annual General Meeting Dinner in Melbourne on 25/11/98. It is a pleasure to be in Melbourne again for CEDA’s Annual General Meeting.

In 2014, the federal government amended Canada’s anti-money laundering legislation to include businesses dealing in cryptoassets. Regulations based on the legislation are now being finalized. The Canada Revenue Agency also published a note on the tax laws that apply to cryptoassets. And the Financial Consumer Agency of Canada has a useful backgrounder on the risks and tips for using cryptoassets.

At the provincial level, the Canadian Securities Administrators issued a staff notice in 2017 on crypto offerings, warning investors about issues such as volatility, transparency, valuation, custody and liquidity, as well as the use of -8unregulated cryptocurrency exchanges. The notice also offers guidance on the applicability of securities laws and what steps businesses should take if they are raising capital through ICOs.

"Federal Reserve Communications," speech delivered at the Cato Institute 25th Annual Monetary Conference, Washington, November 14. Clarida, Richard, Jordi Gali, and Mark Gertler (1999). "The Science of Monetary Policy: A New Keynesian Perspective," Journal of Economic Literature, vol. 37 (December), pp.1661707. Erceg, Christopher J., Dale W. Henderson, and Andrew T. Levin (2000).

"Optimal Monetary Policy with Staggered Wage and Price Contracts," Journal of Monetary Economics, vol. 46 (October), pp. 281-313. Giannoni, Marc P., and Michael Woodford (2005). "Optimal Inflation-Targeting Rules," in Ben S. Bernanke and Michael Woodford, eds., The Inflation-Targeting Debate. Chicago: University of Chicago Press, pp. 93-162. Goodfriend, Marvin, and Robert G. King (1997).

While many of the factors may not be of immediate relevance to our market, the experience may hold important lessons as the regulatory regimes and market systems across jurisdictions which are increasingly becoming homogenized.

While regulatory changes are likely to have had mixed effects on market liquidity, several structural drivers, such as, concentrated holdings by institutional investors, growth of electronic platforms and high frequency trading, reduced market making, etc. have also played a part. 33. We will have to assess the implications of these factors, including the emerging regulatory regime, on corporate bond market development.

In Paris, almost six years ago, the parties to the UN Framework Convention on Climate Change set a goal: to “make financial flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development”. We – central banks and supervisors of the NGFS – have heard you very clearly and have sought to take action, within our mandates, to contribute to this goal.

While governments are in the driving seat to lay out policies and set ambitious transition paths, we are committed to playing our part and fulfilling our responsibilities, within our mandates, to support and contribute to a successful transition to net zero.

And I express my gratitude to everyone for your cooperation in various business operations of the Bank of Japan’s Nagasaki branch. At the Monetary Policy Meeting held last week, the Bank of Japan took additional steps to provide monetary accommodation decisively toward overcoming deflation as early as possible and achieving sustainable economic growth with price stability, and decided on three things.

I think it was a very, very good discussion – a very important one too because the discussion took place at the moment where we are experiencing the market correction, which is significant, which is ongoing and from that standpoint I think it was a very, very timely G7 meeting. And very stimulating, very interesting. A very good Presidency.

It is a process that feeds upon itself, because once inflation begins to rise, further price increases feed into wage increases. The basic framework is based on supply and demand. At NAIRU, supply and demand are balanced, so inflation is stable, matched by expected inflation. The trigger for increases in inflation is excess demand for labor and goods.

We also have to look very closely at the evolution of competitiveness and, in particular, of indicators of competitiveness such as unit labour costs and the level of national inflation by comparison with that of the euro area.

In the October 2013 Outlook Report, it is projected to reach 1.9 percent in fiscal 2015 in terms of the median of the Bank’s Policy Board members’ forecasts. As the background to this outlook for Japan’s economy and prices, overseas economies have been somewhat weak, but they are expected to pick up gradually, particularly the advanced economies.

Looking at respective major countries and regions, the U.S. economy has been recovering moderately on the back of firm private demand and is expected to gradually accelerate its pace of recovery, as accommodative financial conditions will be maintained and the fiscal drag will gradually fade. The European economy, which had been receding slowly, has finally bottomed out and is expected to gradually pick up.

In modernizing the FHA, the Congress might encourage joint efforts with the private sector that expedite the refinancing of subprime loans held by creditworthy borrowers facing resets. It might also consider granting the agency the flexibility to design products that improve affordability through such features as variable maturities or shared appreciation.

Also, the FHA could provide more refinancing options for riskier households if it could tailor the premiums it charges for mortgage insurance to the risk profile of the borrower. As I have discussed in earlier testimony, the Federal Reserve is taking steps to avoid subprime lending problems from recurring while preserving responsible subprime lending.

Deeply convinced that, especially in all European matters, “Nothing is possible without humans, but nothing is lasting without institutions” (as Jean Monnet said), his concern was to shape the ECB as an independent institution that is nevertheless – and necessarily – embedded within the overall institutional context of the EU.

This shaping was a dynamic process, because the EU as a “polity in the making” is constantly evolving. He also devoted particular attention to making the ECB’s actions and policies understandable for the people of Europe, to whom the ECB is ultimately accountable.

According to the first preliminary estimate for the July-September quarter of 2013, the real GDP growth rate decelerated after recording high annualized growth rates of around 4 percent for two consecutive quarters, mainly due to a decrease in exports, with private consumption being more or less flat on the whole.

Such developments would add to efficiency gains for societies across the globe. Let us now focus on fintech. As you can see, global investment in fintech companies has surged from 9 to 25 billion USD in just few years. What makes this sector so lucrative for investors? To put it straight, it is the potential benefits.

In Japan, the most-restrictive capital controls were relaxed in the early 1980s, but major liberalization came in the mid-1990s with the “Big Bang” financial reform measures. Similarly, many emerging-market economies removed or weakened currency and capital account controls in the 1990s. One cross-country study finds that, from 1983 to 1998, capital account openness improved 6 markedly.

Moreover domestic economic policies and performance can have extensive consequences for neighboring territories, with feedback effects on Trinidad and Tobago itself. 2. The characteristics of the economy and the relationships built over time necessitate constant attention to external dynamics.

Before arriving at a firm policy position on this issue, we must examine all the risks associated with persistently high rates of inflation over relatively long periods of time. In this address, I propose to do three things: 1. Examine the growth-inflation dynamics in the Indian economy over the past couple of decades to see if any patterns can be discerned; 2.

Examine the drivers of the recent trends in inflation and relate them to underlying growth drivers; 3. Present some key issues and concerns that I believe should influence our policy thinking.

Of course, given the persistence of high energy prices that the global economy has confronted of late, policymakers cannot be complacent. Central bankers must reinforce their credibility and validate the confidence of market participants by actively leaning against inflationary pressures long before inflation itself builds.

Again, the FOMC has done just that through its commitment to adjust policy as required to keep inflation at bay. Aside from such anecdotal evidence, much formal research supports the view that a strong commitment to price stability helps reduce and stabilize inflation.

At the June 2009 meeting the monetary policy stance remained unchanged, but at the August meeting the repurchase rate was reduced by a further 50 basis points as the committee assessed that the risks to the inflation outcome had tilted further to the downside. The easing in monetary policy was applied despite the fact that inflation was still outside the inflation target range.

For your information, part of the BSP’s Gold Collection has been shown in Europe twice: the first was in the 1990s and the second in 2013 at the Museé du quai Branly in Paris in partnership with the French Government. In Paris, visitors were amazed at the sophistication and artistry of our precolonial gold ornaments.

There are three key developments that help to explain the dynamics over the past few years: • First, over that period there has been a weakening in the growth of labour demand, reflecting the decline in mining investment and the still weak state of overall demand across the non-mining economy.

• Second, there’s been a decline in the growth of labour supply, some of which reflects a cyclical “discouraged worker” effect, but the ageing of the population is also a significant and enduring influence. • Third, wages are adjusting to the degree of spare capacity in the labour market.

This means that in the actual formation of inflation expectations, the backwardlooking component determined by actual inflation rates observed in the past plays a large role. Moreover, in standard theoretical models, it is assumed outright that the commitment to monetary easing is perfectly credible, which potentially gives rise to a discrepancy between such theoretical models and reality.

Another trend in the post-war decades that is easy to miss, for we can always find flaws—certainly they have them—these multinational Bretton Woods institutions have played an important role in promoting better governance throughout the world by emphasizing the need to foster strong and legitimate institutions, to hold policymakers accountable, and to make the policymaking process more transparent.

If, however, the ratio of losses to capital exceeds a certain critical point, there is a possibility that the financial intermediary function will become significantly impaired; in other words, the relationship between the scale of capital and the financial intermediary function is nonlinear. This was observed after the economic bubble burst in Japan.

For several years, the workings of the financial intermediary function did not become an issue, although increases in nonperforming loans were recognized as a big problem. However, in the latter half of the 1990s, a credit crunch materialized where lending could not be increased due to capital constraints.

Irrespective of all the changes to the regulatory framework, in a fiscal union, those countries which are experiencing macroeconomic or financial imbalances would consequently have to implement structural reforms to put their public finances in order to get the economy back on its feet. Depending on the form that it takes, a fiscal union could contain substantial transfer components.

I am, however, convinced that most of the euro-area public would not accept simply glossing over the structural problems in individual countries by means of transfer payments, especially as it is more likely that the problems would just become further entrenched. 4 BIS central bankers’ speeches The focus of the debate has quite legitimately been the issue surrounding joint liability.

In the region we can now observe all types of monetary and exchange rate regimes, from formal euro-ization and currency boards linked to the euro, all the way to monetary targeting. This is proof, if proof was needed, that there is no single solution, to economic problems but that the policies of each country should be tailored to its specific needs.

Given the commitments in pipeline, momentum in foreign flows will pick up further in the last quarter supported also by the floatation of global deposit receipts whose timing is now coordinated with the settling of domestic scenario and world financial markets which currently exhibit high spreads.

BIS central bankers’ speeches 3 However, a proponent of size caps might reasonably reply: “Fine, but how do I know that these surcharges are actually enough to change behavior – that is, to exert a meaningful influence on the size distribution of the banking system?” After all, the analogy between a capital requirement and a tax is somewhat imperfect, since we don’t know exactly the implicit tax rate associated with a given level of capital.

Some view capital requirements as quite burdensome, which would mean that even a 2 percent surcharge amounts to a significant tax and, hence, a strong incentive for a bank to shrink, while others have argued that capital requirements impose only modest costs, which would imply little incentive to shrink.9 This uncertainty about the ultimate effect of a given capital-surcharge regime on the size distribution of banks could potentially tip the balance back in favor of quantity-based regulation, like size caps.

The leverage ratio sets a cap on how many assets a bank can hold for each dollar of equity. It protects the system from risks we might think are low but in fact are not.

In conclusion, let me leave you, with four types of knowledge that I feel are imperative for weaving together the ideas subsumed in the theme of today’s Seminar: (i) Self-knowledge or personal values and goals; (ii) Social Network Knowledge that involves those who surround you daily; (iii) Organizational Knowledge that extends to knowing and understanding people at all levels at the work-place; and (iv) Contextual Knowledge which engages myriad other stakeholders that your organization directly or indirectly works with.

We have come a long way since then and the ICAI, established in 1949 by an act of Parliament, is today the world’s second largest professional accounting body after the American Institute of Certified Public Accountants (AICPA), with over 180,000 members. Over the six decades of its existence, it has played a vital role in nation building through its services. 3.

In line with its motto of “Ya Aeshu Suptaeshu Jagruti” (a person who is awake amongst those that sleep) and its emblem of the Garuda, the “vahana” of Lord Vishnu, the Institute is playing a key role in keeping a watchful eye on financial statements, ensuring that they represent a true and fair view of the state of affairs. 4.

More importantly, our growth outlook would imply a narrowing of the economy’s excess capacity over the course of 2017 and into 2018. So in the absence of any new shocks we would expect all inflation measures to converge sustainably on 2 per cent in the latter part of our projection horizon.

For example, monetary policies also diverged in the middle of the 2000s, with the Bank of Japan continuing its quantitative easing while the Federal Reserve gradually raised its policy rate, and during this period, Japanese financial institutions increased their purchases of U.S. Treasury paper and agency securities.

2 BIS central bankers’ speeches

In the United States, Federal regulators have recommended that financial institutions complete all necessary reprogramming by the end of 1998 to allow time for thorough testing before January 2000. This will be needed because, in changing a lot of banking software, new bugs could be introduced along the way.

In the preceding discussion, I mainly touched upon asset price bubbles, which are one aspect of financial imbalances that could threaten the stability of the entire financial system and adversely affect economic activity. Such imbalances can also take the form of excessive mismatching in terms of interest rates and foreign exchange rates at financial intermediaries.

As we have witnessed in the current crisis, imbalances could also develop in an unprecedented manner as a result of new financial techniques and products.

That said, the social costs of retail payment instruments, including cash and non-cash payments, remain substantial, as a recent ECB study has shown. Those costs amount to almost 1% of GDP in Europe, with considerable differences from country to country.3 In the title of the conference we say that retail payments are at a crossroads.

I am convinced that the decisive contribution by monetary policy to financial stability is and remains price stability, whereby a longer-term outlook has become even more important. Monetary policy must look beyond the cycle. It must not succumb to a purely short-term crisis logic and thus create new risks to the stability of prices and the financial system.

Among the firms under the greatest pressure were Fannie Mae and Freddie Mac, Lehman Brothers, and, more recently, American International Group (AIG). As investors lost confidence in them, these companies saw their access to liquidity and capital markets increasingly impaired and their stock prices drop sharply.

Despite the sound policies in place, we frequently witness sharp volatility which is due to speculative capital flows and not justified by its fundamentals. At the same time we have progressed quite liberally in terms of our capital and current account policies. The adoption of these policies was endorsed by multilateral agencies, including the IMF, during the height of the Asian crisis.

Amid the lack of allure of traditional government bonds, which could be in play in the foreseeable future, alternative instruments and assets, such as equities, could feature in future SAAs. Some research has shown that improved capital preservation, while generating somewhat higher returns, is on offer from equities relative to bonds. But any broad based moves into equities will be highly country-specific.

Concluding remarks There can be no doubt that the game has changed for central bank reserves managers. The fast changing world and investment landscape is requiring of reserves managers to adapt to a playing field that is characterised by high levels of uncertainty and volatility, resulting in the need to reconsider investment strategies on a more frequent basis.