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Once we start with one ‘political solution’, there is no end to it and the system would suffer. In the interest of preserving the integrity of 4 BIS Review 43/2004 the system, transparency and probity, we will insist on the rules and regulatory framework, in the interest of Nigeria and Nigerians.

1 This efficiency will also drive business innovation and promote greater transparency in transactions. All these are also crucial in preparing for a more integrated ASEAN Economic Community. 1 Le Sar, Porteous, Introduction to National Payments System, National Payments System Institute, 2013.

As an intended consequence of these regulatory changes, banks have been steadily deleveraging, in particular by reducing the riskiest positions on their balance sheets. The contraction of bank intermediation has been accelerated by two factors. First, the macroeconomic environment, with its low level of interest rates and flat term structure, has put further downward pressure on banks’ profitability.

Looking globally, a number of countries are going through a time of hardship. Public debt is a real economy problem when not sustainable. When public debt is unsustainable, it creates a debt overhang problem with the effect that the private sector believes the government will raise taxes in future to pay the public debt.

References Bruno Michael and William Easterly. 1995. “Inflation Crises and Long-Run Growth,” NBER Working Paper No. 5209 (Cambridge, Massachusetts: National Bureau of Economic Research). Easterly William and Stanley Fischer. 2001. “Inflation and the Poor.” Journal of Money, Credit and Banking. Volume 33, Issue 2. May. 160–178 Fischer Stanley 1993. “The Role of Macroeconomic Factors in Growth”. Journal of Monetary Economics.

So at the RBA we are carefully examining every piece of data that comes in for insight into the net effect of these forces. We are also frequently talking to businesses and industry groups to better understand what is happening in firms at the forefront of structural change.

In addition to freeing up banks, the floating of the currency and the opening up of capital markets, a range of technological advancements – as well as economic development and policy changes affecting other sectors in the economy – also were important drivers of change in the financial system.

We at the Bank continue to judge that the risks to our inflation projection are roughly balanced, although there is now a slight tilt to the upside. 8 BIS Review 41/2007 Last Tuesday, the Bank left its key policy rate unchanged at 4 1/4 per cent.

We need to raise productivity to keep unit cost competitive. Predictability and certainty in government polices and their implementation is also important. We also need a sound and efficient financial system. Economic fundamentals First, let’s look at our economic fundamentals and here I am referring to inflation, the balance of payments and government debt.

The African-American poet and Pulitzer Prize winner Gwendolyn Brooks once wrote… and I quote: “We are each other’s harvest; we are each other’s business; and finally… we are each other’s magnitude and bond.” End of quote. And so today, let us commit together to be the best we can be in the service of our country and our people.

This linkage may prove to be a liability at some future point of time if something goes wrong to the Chinese economy but even then the trade among these countries other than China has also picked up. 30 products account for half of the intra-regional trade. Of these, 20 are inputs for further production.

The basis for intraregional trade is that they buy raw materials and commodities from each other to make labour intensive products for the US and European Markets. South Asia, on the other hand, is the only region in the world where the tentacles of regional integration are least spread out and intra-regional trade linkages hardly exist.

Our forecasts suggest this will moderate to 3.6 per cent next year.

On the other hand, the realization has become widespread that in the absence of such budget-cutting measures, employment and wages would become even more depressed. Moreover, people have found that many of the actions taken to cut budgets, including privatization of money-losing state enterprises, has led to better service and an improved quality of life.

Some of these mechanisms, such as the large diffusion of securitisation, have certainly increased the productivity of the financial sector, if measured by the ability of financial intermediaries to leverage capital and liquidity to expand their operations.

However, securitisation has also meant that the traditional chains of reactions that monetary policy used to rely upon to influence credit conditions might have become more tenuous and more difficult to predict. The empirical evidence is yet too fragile and has mostly been derived for samples covering periods of booming securitisation and derivatives activities.

The primary emphasis of the new Accord is on improving the measurement of risk. The process of measurement of market risk is maintained. Three alternatives for calculating credit risk capital requirements are proposed to be made available to banks, depending on the complexity of their business and the quality of their risk management operations.

The next question you asked is how fast the economy can grow. Over the short run, that depends on the amount of slack in the economy. Once the economy has moved to capacity, the maximum sustainable growth rate is limited by the rate at which productive capacity expands over time. This limit is generally referred to as trend growth.

The most talked-about story for 1997 is Goldilocks. This is a reference to Goldilocks finding a bowl of porridge that was neither too hot nor too cold. The analogy is to an economy where growth is neither too fast nor too slow, allowing a comfortable and peaceful expansion without inflationary overtones. I like the story, but it is not the right one for 1997.

Although private enterprises in China are already market-driven and free of cost distortion, the reforms of the public sector are incomplete despite considerable achievements in reforming SOEs. The lack of clearly-defined and fully monetized cost structure hampered the adjustment of savings ratio. It is therefore important to expedite the reform of the public sector and the transformation of the government functions.

By contrast, the European Central Bank’s decision to extend the quantitative easing programme at least until the end of 2017 will mitigate the negative effects of the Fed’s monetary policy normalisation.

These decisions affect not only their economies, but also global markets and capital flows to emerging economies, which in turn inevitably affects the pace of Serbia’s trade growth and financial cooperation with the rest of the world.

As I have mentioned, triggered by the collapse of Lehman Brothers, providers of funds, such as financial institutions and institutional investors, became extremely cautious about counterparties' creditworthiness. That led to a sharp decline in transactions, not only in the interbank market where banks exchange funds but also in the CP and corporate bond markets where firms raise funds.

1/2 BIS central bankers' speeches Following the global financial crisis of 2007, the Basel Committee on Bank Supervision (BCBS) issued BCBS 239 covering the principles for effective risk data aggregation and risk reporting.3 These principles, issued in January 2013, aim to strengthen banks’ risk data aggregation and risk reporting with a view to improving their risk management, decision-making processes, and resolvability.

The independence of INEGI from the Bank of Mexico should further support monetary policy credibility. Finally, I would like to acknowledge the critical role that responsible fiscal policy in Mexico has played in the reduction of inflation.

Narrow fiscal deficits and the adequate management of public indebtedness, as expressed in moderate debt-to-GDP ratios, the long duration of public debt, and low foreign-currency exposure, among other indicators, have been notably supportive. Definitively, the deepening of a solid fiscal position will continue to be a prerequisite for sustainable price stability in Mexico.

While the build-up should continue, banks need to also concentrate on reaching geographical areas and segments of populace that have not been embraced by this expansion.

It is difficult to achieve financial inclusion without involving rural-India in the payment system out-reach and those banks who do so first, will reap the benefits of increase in volumes and increase in market-share, leading to concomitant increase in revenues, and of-course increase in other businesses as well.

There are also risks to specific sectors associated with climate change—some of which have started to materialize. For example, the forestry sector has seen the epidemic infestation of the mountain pine beetle, the agricultural sector is facing more frequent droughts and the mining sector encounters infrastructure challenges when ice roads become impassable.

It is likely that further implications, as yet unknown, will become evident as global warming progresses. In economic terms, such events have effects on both aggregate supply and demand. As a central bank, we can react to events as they occur. But we cannot build them into our economic forecasts or adjust our monetary policy in advance because each is unique and unpredictable.

This area requires more attention, given that data quality may have an impact on the reputation of banks besides posing other risks. You would appreciate that accurate data is a sine-qua non for improving the quality of MIS and an effective Decision Support System (DSS).

The recent experience of the U.S. banking system suggests that it has begun to prepare itself for the task. BIS Review 56/2002 3

Rather, the question that now faces us is whether it can be expanded and re-structured to address a greater variety of requirements that the financial system now has.

These are issues that will obviously be discussed during the technical sessions of this conference and I look forward to being informed of the significant points that emerge from them, both for my own education and as inputs into the shaping of strategies for DICGC.

This is especially important when approaching the lower bound on interest rates. How does this apply to current circumstances? Under normal circumstances, a reduction in our key policy rates is translated relatively smoothly to financing conditions across different euro area countries. Certainly, we have seen improvements in overall market financing conditions.

Developments in the euro area in the last few years suggest that the decline in labour productivity growth may have come to a halt, although at a very low level, 2 Estimates from international institutions project euro area potential output growth to be between 1.8% and 2.0% in 2009 (European Commission 1.8%, OECD 1.9% and IMF 2.0%).

We need to foster a flexible education system - one that integrates work and training and that serves the needs both of experienced workers at different stages in their careers and of students embarking on their initial course of study.

Community colleges, for example, have become important providers of job skills training not just for students who may eventually move on to a four-year college or university but for individuals with jobs - particularly older workers seeking to retool or retrain.

As mentioned earlier, my assessment is that QQE has exerted a considerable effect.

In this current situation, I personally consider that the new role that monetary policy should play in the overall economic policy has shifted to consistently providing, while maintaining favorable financial conditions, indirect support for positive efforts by the government and firms so that the economy's growth potential – which is represented mainly by the potential growth rate and the productivity growth rate – will increase to the level consistent with the 2 percent inflation rate.

The FOMC has significantly raised the target range for the federal funds rate to dampen aggregate demand, but U.S. consumers and businesses are showing remarkable resilience.

The definition reflects the fact that price stability does not mean zero inflation. The theory and practice of monetary policy has consistently found that a low but positive rate of inflation is critical to the functioning of the real economy.

The improvement of the first months of this year showed up particularly in the rebound of equity prices, and a decline in risk spreads in the bond markets. The expectation strengthened that Europe would follow in the tailwater of the US, where promising signs of economic recovery have already been observed.

The uncertainties However, as you are aware, the last couple of weeks have again demonstrated the fragility of the situation. At the turn of the second quarter of 2012, doubts arose once more about the viability of the southern European fiscal programmes.

The rule calls for systematic adjustments in the federal funds rate relative to its expected longer-run neutral level in response to movements in inflation and the output gap, defined as the percentage difference between actual output and the economy’s productive potential. 12 To implement the rule, one must decide on the appropriate definition and measurement of its inputs.

Should inflation be defined using the latest noisy quarterly reading on headline PCE inflation or a measure intended to smooth through transitory price movements? What technique should be used to approximate the output gap, given that different approaches often yield materially different estimates? And what assumption should be made about the neutral value of the federal funds rate in the longer run?

In the process, countries try to access markets or resources and gradually reduce the cost of production and transaction by expanding overseas manufacturing operations in countries where certain ownership-specific advantages can help them to compete globally. Adoption of such strategies helps them to catch up with competing economies.

Thus zakat enables the distributive allocation works independently and help stabilize the extreme business cycles. As for 5 awqaf, since the principal of awqaf will always increase from time to time, due to return of productive activities and new awqaf collection, awqaf could act as shock absorber of economic shocks. Distinguished guests, ladies and gentlemen, 22.

Why capital account convertibility was advocated so forcefully? Let me list some of the benefits envisaged. a. The most obvious argument is that all developed countries are capital account convertible; hence this is an inevitable destiny of the developing countries in their path to development. b.

Mr. Tietmeyer’s address at the International Frankfurt Banking Evening Co-speaker’s address by the President of the Deutsche Bundesbank, Prof. Hans Tietmeyer, following the lecture “Achieving a Credible Currency for Europe” held by Dr. Sirkka Hämäläinen, Governor of the Bank of Finland at the International Frankfurt Banking Evening on 5/5/98.

Negative interest rate policy: how it works in practice The other contemporary issue is the implementation of negative interest rate policies (NIRPs) at some central banks, including the Bank of Japan. NIRP has been included most lately in the unconventional policy toolbox.

Given the close economic and financial links between the euro area and south-eastern Europe, it goes without saying that progress in addressing the crisis in the euro area is in the interest of countries in this region. The SSM may bring particular benefits, as subsidiaries or branches of euro area banks are of systemic importance in the financial systems of many south-eastern European countries.

Not only do lending rates respond to changes in the Board’s cash rate target, there is no sense in which the aggregate supply of credit appears to have been constrained by the ongoing changes in ADIs’ funding patterns.

1/2 BIS central bankers' speeches In this regard, greater policy dialogue and close coordination of relevant government agencies in terms of fiscal planning and budget execution, as well as program planning is a policy imperative. Needless to say that the road ahead requires a lot of work.

In order to increase transactions, there should be clear communication to customers about the mission and banks should be incentivised to provide appropriate products that increase usage.

The same is true for fit and proper assessments. The rules here are also very diverse. And finally there are the tools for crisis management. We still have no common approach to such things as insolvency laws and moratoriums. This too needs to change. Likewise, the rules for early intervention measures need to be streamlined.

Not only have we reduced the debt-to-GDP ratio, but we have paid down almost $ billion of federal debt. This has freed up about $ billion of resources every year for the federal government. The main point is that, while the initial work of fiscal consolidation is certainly difficult, it is necessary in order to enjoy the dividends later on.

Concluding remarks These policies I've mentioned - fiscal consolidation; a monetary policy focused on low, stable, and predictable inflation; and improving flexibility through trade liberalization and structural reform - have all been difficult to implement. Putting Canada's strong economic policy framework into place involved short-term pain.

So far, in the wake of the initial wave of the pandemic, household spending and business investment has lagged behind incomes and earnings. But it is still too early to tell how, if at all, things are different this time. Will people’s reactions be more delayed or muted, or will the historically low interest rates and significant disruption facilitate a necessary investment recovery?

In effect, then, a group that was born in the wake of one crisis really got the opportunity to demonstrate its effectiveness when another one precipitated. This crisis also had its genesis in the financial sector, which helped retain the relevance of the group’s structure, with its core constituencies being finance ministries and central banks.

The Fed has an inflation target of 2%, averaged over time. This averaging introduces some flexibility to not respond to inflation shocks that are temporary, just as in our flexible inflation-targeting framework. But the Fed framework does not say that when unemployment rises it will aim for a higher inflation rate.

In other words, the dual mandate recognises that in the long run, the highest cyclical employment rate is consistent with low inflation. In the policy debate at present in the US, there may be a rise in cyclical unemployment to get inflation back down and to achieve a lower sustainable unemployment rate. 11 See Kabundi, Schalling and Some (2016) and Botha et al. (2020).

The average value of series 3 has been used as a proxy for CDS from March 1, 2000. The CDX spread-based index values have been converted into price-based based values so that the ratio of gold price and implied CDS price can be worked out on a “comparing apple-with-apple basis”. ** CASE-SHILLER US National Home price index is published quarterly.

The latest one is available up to quarter ended June 2011. The level of the index was compared with the quarterly average of daily gold price since April 2000.

Qardh and rahn contracts, among others: a. Transaction Value b. Period of Time c. FF Rate, or the level of cost of storage and maintenance of collateral (mu’nah) d. Nominal value and type of SBS collateral (SBSN/SukBI/SBIS) 4. Refunds and cost of storage and maintenance collateral (mu'nah) **) BI-SSSS SHORT (BUS/UUS) 4. Released pledge agunan SBS 5.

Talking about domestic industry, the fast growth of Islamic banking in Pakistan would not have been possible without sound regulatory, supervisory and Shariah foundations laid down by the State Bank of Pakistan under my illustrious predecessors. Promoting Islamic finance has remained an important component of strategic goals of the central bank.

While the peso experienced episodes of depreciation, it should be noted that this was partly due to the strong demand for imports of capital goods, partly because of Build Build Build program, raw materials and intermediate products needed to support a growing economy. The country’s external payments position is reliably supported by strong structural foreign exchange inflows.

The Bank of Russia and the Eurosystem Against the background of these global and regional developments, the Eurosystem and the Bank of Russia have significantly extended cooperation on central banking issues over the past few years. The most visible form of this is the Eurosystem’s involvement in the EU TACIS project with the Bank of Russia on banking supervision.

The Eurosystem also has a vital interest in the proper functioning of financial and payment systems in accession countries. In the context of EU accession, we expect candidate countries to adopt EU legislation in the area of financial services, including those related to banking, insurance and investment firms.

For example, banks and funds transfer service providers incur substantial costs to monitor fraudulent transactions as a measure against money laundering and other financial crimes. In recent years, automatic detection systems for fraudulent transactions utilizing machine learning technology have been considered and introduced. However, one of the challenges is that individual firms by themselves cannot necessarily collect sufficient amounts of data for machine learning.

In fact, monetary policy accommodation, by improving domestic credit conditions and stimulating nominal spending, creates additional global demand, rather than just leading to demand-switching from one economy to the other – as some observers have suggested.

Vice versa, a large literature has reported a decline in the exchange rate pass-through to inflation, suggesting that the relative role of this channel is likely to have become less relevant in the quest to reflate the domestic economies.

At best it is likely to cause a continuation of the low growth scenario, persistently elevated levels of unemployment, and in the context of ageing populations in Europe, even further pressures on the fiscus. The current social unrest being observed in many parts of Europe is an outcome of this.

A further implication of these developments is that monetary policy becomes the main countercyclical policy instrument. With interest rates close to their zero bound in a number of countries, quantitative easing has continued.

Emerging international consensus and standards The legal issues concerning financial ecology have always been at the center of attention in the evolution of the views of international organizations and the emergence of international standards.

At the G20 ministers meeting held on November 20-21, 2004 in Berlin, Germany, the G20 issued a paper entitled Financial Institutional Building, which summarized the consensus among the G20 members on the priorities of institution building in the financial sector.

Then again, Garret’s UCD degree was in French (first class honours), History (first class honours) and Spanish (second class honours – that was, of course, before grade inflation). For the rest of his life, Garret’s favourite holiday destination was France.

This gave him a strong foundation for what he would in later years always regard as the best and most enjoyable part of his career, namely the years in which he was Minister of External Affairs. In this role, Garret was in at the ground floor in Ireland’s membership in the European Community.

This policy aims at creating an economic situation where prices increase at around 2 percent on average, as is the case with the United States and Europe, by raising people’s medium- to long-term inflation expectations to around 2 percent and re-anchoring these expectations at that level.

The proposal seeks to address these potential limitations of the present rule while taking into account the Truth in Lending Act's (TILA) requirement to disclose plan-related charges before they are 6 BIS Review 62/2007 imposed.

In a Forbes magazine article, internationally best-selling author and strategic business and technology advisor Bernard Marr notes that there are 2.5 quintillion bytes of data created each day.

Further, 90% of available data across the globe was created only in the last two years.1 On the other hand, according to the World Economic Forum, the entire digital universe is expected to reach 44 zettabytes by 2020, roughly 40 times more bytes than there are stars in the observable universe. Going by this, data is the new currency.

However, the current Eurozone crisis is at least partly due to excessive risk taking by many European financial institutions before the Lehman Crisis, especially in the U.S. financial markets, and in particular in those of structured products. Several years before the Lehman Crisis, notably after 2004, European financial institutions accelerated their search for yield and expanded their balance sheets.

Chart 1 shows the total assets of the financial institutions of Germany, France, Italy and Spain, relative to their position in 2004. A notable acceleration of expanding balance sheets is found in European financial institutions, except for German ones. Here the grand experiment of the euro played a pivotal role.

This seems to have been the story in the United States - which has also become much more dependent on foreign savings in recent years.

Otherwise, we will find ourselves in a situation of steady and continual decline – which, to a large extent, has already begun. Therefore, it is important to examine in depth the problems that afflict education in Israel and to formulate – and implement – a solution.

The exercise has been comprehensive, rigorous, forward-looking, and highly collaborative among the supervisory agencies. Undoubtedly, we can use many aspects of the exercise to improve our supervisory processes in the future. Although capital remains a critical bulwark of a strong banking system, the crisis has also demonstrated the importance of effective liquidity management.

Along with our colleagues at the other U.S. banking agencies, we are monitoring the major firms' liquidity positions on a daily basis and are discussing liquidity strategies, key market developments, and liquidity risks with the firms' senior managements.

Mark Carney: Capitalizing on the commodity boom – the role of monetary policy Remarks by Mr Mark Carney, Governor of the Bank of Canada, to the Haskayne School of Business, Calgary, Alberta, 19 June 2008. * * * Everyone here remembers the bumper sticker. For two decades, Albertans promised not to waste the next boom if one were granted.

As Chairman Bernanke notes, the large-scale purchase of financial assets aims at lowering long-term interest rates. In terms of assessing monetary policy in Japan in light of such an aim, the financial conditions in Japan are extremely accommodative (Chart 20).

First, massive fiscal support has preserved production capacity so far, but has also led to sizeable budget deficits for 2020. As the new wave of the pandemic is weighing on the recovery, it is important that this support is maintained and, in some areas, even scaled up in the coming months.

Specifically, against the background of the worldwide decline in U.S. dollar liquidity, the Bank introduced U.S. dollar funds-supplying operations as part of the coordinated measures of central banks in September and thereafter expanded such operations.

At the end of the period, if he could not pay he was beheaded. Punishments became less harsh over time. If you defaulted in Victorian England, you went to debtor’s prison. Today, the borrower typically only forfeits the assets that have been financed, and sometimes personal property too if he is not protected by limited liability, unless he has acted fraudulently.

Therefore, with regard to the cyclical situation, recent data seem to confirm our earlier assessment that there are downside risks for output growth and that production may have slowed down around the turn of the year. Nonetheless, in the opinion of the Governing Council there are also no clear signals as yet of a stronger than expected weakening in output growth.

Second, I would like to thank BCDA President and CEO, Mr. Vince Dizon, for graciously hosting today’s event onsite at the New Clark City. I know this is a busy time for BCDA since preparations for the upcoming Southeast Asian Games are in full-swing.

This in turn has introduced further important changes to the financing of commodities trading. Deleveraging has been the most significant trend in the global financial system since the crisis – one that is likely to continue for some time to come.

 In cumulative terms up to 2009, the primary balance surplus stood at over 50 percent of GDP in seven EU Member States (Belgium, Bulgaria, Denmark, Ireland, Luxembourg, Netherlands and Finland). There are also lessons to learn from the Asian crisis in the 1990s.

All Asian countries under stress at that time who engaged in an IMF program managed to return to creditworthiness and regained market access (with the exception of Indonesia). The programs called for endeavor and temporary restraint to the population of these countries. But finally they managed. Both solidarity and stability-compliant economic and fiscal policy are needed.

To take just one statistic, aggregate emerging market growth has slowed sharply in recent years, from just under 8% in 2010 to around 4.5% last year. One component of this slowdown has been a structural moderation. In retrospect, the early part of this century stands out as an exceptional period for emerging economies.

Between 2000 and 2010, aggregate growth in emerging markets averaged 6% on an annual basis. That compared to around 4% in the preceding two decades. The future looks less rosy. Estimates from the IMF2 point to a significant moderation in potential growth in large emerging markets. The factors behind the slowdown are varied.

Banks are also advised to take appropriate steps, including providing of ramps at the entrance of bank branches, wherever feasible, so that the persons with disabilities/wheel chair users can enter bank branches and conduct business without difficulty. Banks have been advised to report the progress made in this regard periodically to their respective Customer Service Committee of the Board and ensure compliance.

• Talking ATMs with Braille keypads to facilitate use by persons with visual impairment Banks should make all new ATMs installed from July 1, 2014 as talking ATMs with Braille keypads.

Our efforts in implementing the NRPS are rapidly providing individuals, businesses and government, additional options on how to complete payments, collections or disbursements, depending on their specific needs and the characteristics of the fund transfers or payments. Right now as we launch InstaPay, we have seven (7) pioneer BSP-Supervised Financial Institutions capable of sending and receiving payments.

In addition, another thirteen (13) are able to receive payments. By the middle of this year — in a few months — we expect more financial institutions to participate in InstaPay. In parallel, the BSP is engaging the private sector and the government to encourage their adoption of InstaPay and PESONet to meet their payment system requirements. We now have critical mass.

By having a continuous business relationship with the Factor in place, small traders, industries and exporters get the advantage of improving the cash flow and liquidity of their business as also availing ancillary services like sales ledger accounting, collection of receivables, credit protection etc.

Although not all now running for office may prove to be so. Time will tell. 2. I am here reminded of that quip in Bernard Shaw’s Major Barbara 1, assessing a young man’s employment prospects: He knows nothing and thinks he knows everything. That points clearly to a political career. 3.

In the current phase, if we start from 2002, when the level of oil prices was 21 dollars, the present level of 110-120 dollars – somewhat below the recent peak – is more than five times the level recorded in 2002.

As a result, the size of the income outflow resulting from the surge in oil prices has also been the largest during the current phase: about 5 percent of real GDP, compared with about 3 percent during the two oil crises.

Notably, many homeowners have taken advantage of low interest rates to refinance their mortgages, some having done so several times over the past couple of years. In more than one-third of these “refis,” the borrower took cash out during the transaction, often to pay down loans with higher interest rates.

Dear Jean-Claude, I imagine that many of your fellow heads of government look to you from time to time for guidance on how you have managed to succeed. Praise for Mr Juncker must also pay tribute to his leadership skills – as President of the Eurogroup – during the current financial and economic crisis.

The dilemma, of course, is that if markets know in advance that help is forthcoming under generous dispensations, they break down more frequently and function less effectively.” 24 In Australia, for example, there was a well-informed and bipartisan discussion when these issues came before the Australian Parliament recently (House of Representatives, 26 March 1998), with both sides of politics exhibiting a depth of knowledge which has simply been absent from the legislative debate in America.

It was also specified that “Price stability is to be maintained over the medium term”. The announcement of a quantitative definition of price stability is an essential element of the ECB’s stabilityorientated monetary policy strategy.

It is precisely then that capable, well-resourced and well-supported regulators need to be able to say “no”. Conclusion Edward Shann died tragically in 1935. He did not live to see the full recovery from the Great Depression, nor the long post-war prosperity. He could not take part in the subsequent debate about financial regulation in its ebbs and flows.

The future generation will not benefit from these savings through annual cheques as was done by Alaska but through Government’s ability to maintain expenditures over the long term when oil and gas revenues are gone. While not a specific objective, the Fund, by holding resources abroad, could provide a cushion to monetary policy in the face of volatile external flows.

For generations, human ingenuity has been creating products, industries, and jobs that never before existed, from vehicle assembling to computer software engineering, and with them have come new opportunities for workers with the necessary skills. Judged by rates of return and productivity gains, our workforce has appeared sufficiently skilled, through these generations to manage our increasingly complex capital stock.

But in the past two decades, our system has had obvious strains, apparently reflecting an inability of our workforce to fully meet the ever-increasing skill requirements of an economy whose GDP is becoming more conceptual.

Ladies and Gentlemen, The first implication is that we have to acquire, improved, and further enhance our skills and capabilities. We need to improve our risk management skill considering that the nature of risk is changing very fast with new technology and products. BIS Review 44/2003 1 The other is the requirement for us to conduct good corporate governance in the business.

The need for transparency and corporate governance in any business including banking is very critical. Banking supervision cannot function well if sound corporate governance is not in place. Supervisory experience underscores the necessity of having the appropriate levels of accountability and checks and balances within each bank. Put plainly, sound corporate governance makes the work of supervisors infinitely easier.

In recent years, there is greater institutional effort for improving measurement of prices in India. We have a new CPI (rural, urban and combined) now. The base of WPI was also revised.

I should end by saying that they can count on our continued support. BIS Review 55/2003 5

This relates to a suggestion for the new Data Gaps Initiative (DGI).22 In addition, markets need to be provided with standards regarding what kind of inputs to record. The Central Product Classification (CPC) managed by the United Nations Statistics Division23 developed by the UN Statistics Division may be used as a basis to this effect, also for recording information on carbon contents.

This leaves us with the third topic that will be relevant for this year’s annual meeting: institutional reform. Let us take a closer look at the reform of financial regulation. Here, we have already made good progress. We have, for instance, agreed upon new capital requirements for banks. These will make banks more resilient against shocks, thereby enhancing financial stability.

§ 78c(a)(4)(C). 3 See 15 U.S.C. § 78c(a)(4)(B)(viii). BIS Review 70/2001 5 Third-party networking arrangements The GLB Act also permits banks to establish so-called "networking" arrangements with registered broker-dealers, under which the broker-dealer makes securities brokerage services available to the bank's customers.

One provision of the statutory exception permits bank employees who are not registered representatives of the broker-dealer to receive a nominal, one-time cash fee for the referral of customers to the broker-dealer so long as payment of the fee is not contingent on whether the referral results in a securities transaction.

Stablecoin liquidity in decentralised exchanges is approximated based on the ten most liquid pairs on Curve, Uniswap and SushiSwap as at 29 November 2022. “Stablecoins (collateralised)” includes Tether, USD Coin and True USD. “Stablecoins (algorithmic)” includes DAI, Magic Internet Money and three further stablecoins. “Other crypto-assets” includes ether, PAX Gold and FNK wallet.

Manufacturers' shifts to overseas production could adversely affect certain regions or industries in the short term. However, we cannot stop firms' moves to utilize an international division of labor more efficiently amid globalization. Furthermore, these movements could bring benefits to the economy as a whole, in the medium to long term.

If these transactions are successful, the bank will reap the benefits; if they make a loss, the taxpayer may ultimately have to foot the bill. Large and interconnected banks therefore intrinsically pose a risk to financial stability. At the same time, this is precisely why they engage in such risk-taking in the first place – which all makes for a dangerous feedback loop.

So how can regulation help? One option would be to prevent large banks from becoming distressed in the first place. Notably, the new Basel III capital requirements are an important step in this process. But can they rule out bank failures altogether? And should we even try to do so? My answer to both of those questions is a resounding “no”.

These link-ups show that ASEAN is not turning inwards and away from the global economy, and will give ASEAN a valuable edge as an investment destination. Singapore’s economic restructuring: philosophy & initiatives Given this bracing environment, Singapore is at a turning point in our economic development. The whole landscape has changed. We need to change our strategies to continue to thrive.

This is why we convened the Economic Review Committee (ERC), to carry out a comprehensive review of our economic policies, and to identify ways to develop a vibrant and competitive private sector. We have concluded that the key tenets of our economic strategy are as follows: BIS Review 61/2002 17 First, we must enhance the competitiveness of our economy.

* * * Invited Guests; Chairman of the Central Bank of Kenya Board of Directors; Members of the Monetary Policy Committee; Researchers; Distinguished Guests; Ladies and Gentlemen: Good Morning.

It gives me great pleasure to be here this morning at the official opening of the Research Seminar on “Public Debt, Fiscal Policy and Forward Looking Monetary Policy ” organized by the Research Centre at KSMS. As you are aware this is the second time we are gathered here to discuss the research findings of our researchers.

Lower potential output growth also has implications for fiscal policy because it implies less tax revenue than otherwise. Less revenue could limit governments’ abilities to implement countercyclical fiscal policy when needed, particularly as demands for public expenditures rise with an aging population. This aspect is important for monetary policy, too.

The credibility and success of our inflation-targeting regime depends critically on the coherence of the overall macroeconomic policy framework.xviii What policies have supported potential output growth in the past and could again in the future? To maintain solid potential output growth and rising living standards in the future, what policy lessons can be drawn from the past?

The Importance of Macroprudential Policy for Monetary Policy, Monthly Report, March, pp. (pages) 39-71. Frankfurt a.M. Deut​sche Bun​des​bank (2017). Financial Stability Review, November. Frankfurt a.M. Deut​sche Bun​des​bank (2018). Financial Stability Review, November. Frankfurt a.M. Eggertsson, G. and P. Krugman (2012). Debt, Deleveraging, and the Liquidity Trap: A Fisher-Minsky-Koo Approach, Quarterly Journal of Economics, 127, 1469–1513.

Eichengreen, B., A. El-Ganainy, R. Esteves, and K. J. Mitchener (2019). Public debt through the ages, CEPR Discussion Paper 13471. London. Farhi, E. and J. Tirole (2012). Collective moral hazard, maturity mismatch, and systemic bailouts. American Economic Review 102(1), 60-93. Financial Stability Board (FSB) (2011). Policy Measures to Address Systemically Important Financial Institutions. Basel. Financial Stability Board (FSB) (2019).

In 2014 the BRRD, approved by the Council and the European Parliament, extended that scheme, starting from this year, to include also ordinary bonds and deposits of over € (i.e., the bail-in).

I have recently emphasised, also in the light of the (bad) experience we have gained in Italy with the resolution of four small banks last November, the importance of reconsidering the adequacy of the new legislative framework for managing banking crises.

The role of the ECB can be described as that of a central co-ordinating, controlling and monitoring body, focusing in particular on the timely production of the euro banknotes and on the organisation of the changeover. Let me emphasise that both production and delivery of euro banknotes are on schedule.

In most countries frontloading and sub-frontloading of euro banknotes and coins has already started and is well under way. Frontloading is the advance distribution of euro banknotes and coins to those credit institutions that are counterparties for monetary policy operations within the Eurosystem.

Put another way: With the amount of money that people wanted to save running ahead of the amount that people wanted to invest in physical assets, there was a strong incentive for the financial sector to find ways to issue more financial claims against the stock of existing investment. That, of course, is a recipe for rising asset prices.

In our view, the widespread nature of the increases in house prices, which, as I have noted, have encompassed most major countries and virtually all parts of Australia, makes it hard to attribute them only to factors which have localised effect – e.g. land usage policies, taxes and transport arrangements.

This broad view is indeed one of the great advantages of European banking supervision. Among other things, we have benefitted from it when looking at non-performing loans, interest rates risk in the banking book, leverage finance and business models in general. All this shapes our thinking and helps us to focus on the risks that count.

European banking supervision has helped to maintain financial stability. It has done so by making banks safer and sounder. Euro area banks now hold more capital than ever before: their fully loaded CET1 ratio has increased by about 2.5 percentage points since 2014. Back then, it stood at 11.2%, now it stands at 13.8%.

Ten U.S. banks meet the proposed criteria to be core banks and thus would be required, under our proposal, to adopt A-IRB and AMA to measure their credit and operational risks, respectively. As they grow, other banks could very well meet the criteria and thus shift into the core group in the years ahead.

We would also permit any bank that meets the infrastructure requirements of A-IRB and AMA the ability to quantify and develop the necessary risk parameters on credit exposures and develop measurement systems for operational risk exposures - to choose Basel II.

And the closer we get to next year's European elections, the bigger the chance that divisive initiatives, like a capital markets union, end up in a drawer entirely. 2/3 BIS - Central bankers' speeches Of course, central banks don't have a seat at the legislative table. But it is our obligation to be vocal about what is at stake.

Internal political risks to reducing inflation to its target decreased after the new convocation parliament started to operate and a new government was formed. This makes it possible to intensify negotiations on a new cooperation program with the International Monetary Fund.

The corona crisis, however, has ripped through global supply chains for a time, which is why some are now pushing for “renationalisation” – that is, bringing production back to Germany. However, international value chains are not risky in and of themselves. Rather, it is the reliance on individual suppliers, locations or customers that’s the problem.

To be better shielded from disruptions, enterprises should, if anything, get more suppliers on board from different countries. Then if one supplier were to fail, this would not immediately cripple the enterprise’s entire production. It ultimately all comes down to the old economic adage that you shouldn’t put all your eggs in one basket.

First and foremost, macroeconomic stability should be consolidated. If this is lacking, there is no growth, no rise in incomes and no reduction in the incidence of poverty. An increase in investment is also required. Gross domestic investment as a share of GDP is very low in Africa.

We attract only a marginal share of world FDI to Africa, and it tends to go into extractive industries. Global investors will only be interested in the rest of our countries in Africa if we can offer peace, stability, good governance, the rule of law and the absence of corruption. Africa needs to strengthen its financial systems.

In that regard, I have noted a change to the way we will present our forecasts to try and encourage a shift of focus to the central tendencies for the future paths of key economic variables. We will continue to assess how our forecasts turn out and adjust our framework and methodology where and when appropriate.

We will try and understand the sources of forecast misses and question whether they were knowable ex ante or ex post. In doing so, we continue to aspire to have ‘perpetual beta’, recognising the need to be cautious, pragmatic, self-reflective, analytical and thoughtful updaters. [18] Endnotes [*] Thanks to Mick Plumb for his help.

These USD liquidity providing operations have increased over time in terms of size and number of participants (and now involve thirteen central banks, from both developed and emerging economies, in addition to the ECB). As far as the Eurosystem is concerned, the scope of this facility has significantly increased over time in terms of maturities covered and volumes involved.

In any event, since the development of the MBS market, the determinants of interest rates that finance home purchase have exhibited little, if any, response to the size of GSE portfolios. The past year provides yet more evidence of this independence, with GSE portfolios not growing and mortgage spreads, as well as the spread between yields on GSE debentures and Treasury securities, declining further.

II: How & why Finance is involved Since the publication of the NGFS progress report last October, it’s no longer a question of asking why we must get involved. Climate-related risks are a source of financial risk. That is why it falls squarely within the mandates of central banks and supervisors to ensure the financial system can withstand these risks.

Such adjustment should also follow the existing regulation in place and the transfer of ownership share to other parties must gain clearance from the authority. I wish to avoid the buying and selling of business permit since in principle business permit granted are merely facilities provided by the state and cannot be transferred without prior approval from the rightful authority. 56.

The European Union has concluded “Europe Agreements” with ten Eastern European countries. These are important steps and they can be built upon further. Constructive mutual cooperation will be most conducive to a positive perception of the region’s stability, thereby helping attract investment. Cooperation could gain an added dimension in the future.

* * * Members of the Monetary Board, Undersecretary Roberto Tan, BAP President Ramon Sy, Mr. Paul Favila, fellow bankers, special guests, good morning. I am glad we now have this Memorandum of Agreement for the Enhanced Intraday Liquidity Facility.

That is “bail-in,” not “bailout.” Another strand of criticism argues that reforms do not go far enough and calls for more activity limits on banking firms, for limiting their size or systemic footprint, or for simply breaking them up. Activity limits Some have urged the resurrection of the 1930s-era Glass-Steagall prohibitions – that is, preventing the affiliation of commercial banks with investment banks.

For example, between 1992 and 1998, unemployment in Germany increased by almost 2½ percentage points. In recent years, however, increases in unit labour costs have been very moderate, so that the conditions for job creation have clearly improved. This development also shows that wages and prices are more flexible than sometimes thought.

Specifically, I believe the forward guidance in the statement may be too passive, given underlying economic conditions. The benefits of systematic monetary policy Let me now turn to the importance of conducting monetary policy in a systematic manner. By systematic policy, I mean conducting policy in a rule-like manner as opposed to relying on discretion.

Decisions are always made period by period, but in a rules-based approach, the decisions are guided by the rules. Discretion is the opposite of rules-based decisionmaking. Discretionary decisions are made without being constrained by past promises or previous forward-looking statements.

If we calculate the Tier 1 capital of internationally active Japanese banks according to the US standard, it would decline from 6.6% to the 4% level. Indeed, there is clearly a big difference in the capital structure between major Japanese banks and US money center banks.

Simulations carried out by the Netherlands’ Bureau for Economic Policy Analysis 6 show that by dropping it, the expected output boost as a result of the Services Directive is reduced by some 40 %. Completing the single market for services therefore holds the promise of substantial economic gains.

Third, structural reforms in goods, capital and labour markets have to proceed in order to allow the euro area to better exploit its growth potential in the future. I am very optimistic about the first two of these elements. EMU is of course in place, economic integration appears to be making good progress, and the outlook for continued macroeconomic stability is good.

In the last two Financial Years (FY), Uganda’s economy has grown on average by 6.1 per cent from a growth of 3.9 per cent in FY2016/17. Investor surveys suggest that business conditions and sentiments are strong. Credit to the private sector has improved; helped by accommodative monetary policy stance.

Before I look into this question, it is worth remembering that for all the structural similarities between these two currency areas, Switzerland and the euro area differ considerably in a number of respects, one of which is fiscal policy.

Observations from other economies, including Japan, China and Republic of Korea showed that these countries have done very well because of their governments’ policies and focus on encouraging small and medium enterprises to contribute towards economic growth. These are experiences worth noting and studying.

And we have to ensure that proper safety measures are in place should the rope break unexpectedly. But in reality, it’s a bit more complex, of course. With regard to banks it’s not just a rope that might break. There are many different risks that have to be well managed to ensure the well-being of banks.

Some risks are quite likely to materialise, others less so. We all have a list of risks in our minds. And I am sure that these lists look quite similar. They might include interest rates that could be too low for too long, a sudden reversal of risk premia, geopolitical uncertainties, non-performing loans and cyber risks. Banks must monitor and manage all these risks.

In the 12 weeks following the reversal of risk sentiment during May 2012, assets under management for emerging market fixed-income funds fell by 7.6 per cent (or $ billion), much smaller than in 2008, when assets under management fell by 36 per cent (or $ billion) during the first round of the asset sell-off in September–October 2008, although the impact on local currency bond yields was similar across the two episodes.

Emerging market countries have come a long way in the last two decades and are not as fragile today as they would have been in the past.

Like others, in referring to a lost decade, I am drawing an analogy with Japan’s experience between 1991 and 2000, when average annual per capita GDP growth was less than 0.5%.

With Japan’s experience in mind, a particularly worrisome scenario for the euro area is related to the possibility that the banking sector’s efforts to reduce leverage and to restructure its balance sheets have not yet been completed. Troubled banks’ balance sheets have the potential to choke the engine of recovery and exert a more persistent drag on economic growth.

17 For recent – more formal – treatment of the role of information and transparency see, e.g., D. Kahneman, “Maps of Bounded Rationality: Psychology for Behavioral Economics”, American Economic Review, 2003, 93 (5), pp. 1449-75 or S. Morris and H.S. Shin, “Social value of public information”, American Economic Review, 2002, 92(5), pp. 1521-1534. BIS Review 138/2007 7 policies.

Easy access to information also allows investors to better differentiate across economies, borrowers and companies. Ultimately, this helps to lessen herding behaviour and contagion when market volatility increases. This is why transparency is so crucial. And in recent years, a lot of progress has been made to enhance transparency and to facilitate access to information as well as its dissemination to market participants.

Under Decree Law 73/2021, passed in May (‘sostegni bis’), the moratoriums granted by law were extended to the end of 2021, for the principal amounts only and at the borrowers’ request. By mid-June, loans subject to this measure were equal overall to just under € billion.

Consequently, banking crises in individual euro area countries placed large fiscal burdens on governments, calling into question their solvency and making the use of counter-cyclical fiscal policy infeasible. In light of the exposure of the banks to the debt of their sovereigns, the deteriorating fiscal positions, in turn, affected the banks.

The roadmap includes initiatives to 1) increase the volume of treasury bills, 2) provide stable, predictable and transparent issuance of government securities, 3) develop a systematic set of obligations, rights and incentives for market-makers, 4) establish a reliable yield curve, 5) introduce a repo program, and 6) strengthen regulatory oversight over the repo and fixed income market.

These reforms in the government securities market will translate into increased market efficiency, lower borrowing cost, more dynamic and increased participation. As the domestic debt market develops rapidly, there will be more alternative sources of funding for economic activities besides the banking sector. Risks will also be better managed.

The year-over-year core PCE inflation rate was less than 1 percent and was expected to rise to 1.3 percent over the course of 2011. Now, fast-forward to October 2011. The unemployment rate is 9.1 percent and is expected to be near 8.5 percent by the end of 2012.

The year-over-year core PCE inflation rate is 1.6 percent and is expected to stay near that level – or even higher – over the course of the coming year.3 So, since November 2010, the unemployment rate and the outlook for the unemployment rate have improved. Inflation and the outlook for inflation have both risen closer to 2 percent.

Although there was a general expectation that tapering of quantitative easing would begin in September, there was a great deal of uncertainty around the pace and timing, and the period between the May and the September FOMC meeting was highly volatile.

In the event, the Fed refrained from tapering in September, out of concern about the slow pace of recovery in the US labour market; the unresolved fiscal issues in the US which could lead to further fiscal contraction when the debt ceiling is reached, possibly in mid-October; and the negative impact of tight financial conditions and higher long term interest rates on the nascent housing market recovery in the US.

In Europe, the Committee of Banking Supervisors (CEBS), in cooperation with national supervisory authorities, the ECB and the Commission, recently concluded a stress test of its own on the 22 leading European banking groups.

However, for firms as a whole, revenues and profits continue to be on an upward trend, especially for major firms, supported by increasing exports and buoyant demand for information technology-related goods and services. Fixed investment plans are also being revised upward. If this trend continues, the recovery in business conditions can be expected to spread to smaller firms.

28 In fact, ECB research shows that there is evidence that monetary liquidity shocks have played a role in driving asset prices, particularly housing prices across OECD countries, during the boom phase of asset price cycles, and that they have also contributed to explaining the negative effects on economic activity during the subsequent bust phase.

29 Other Eurosystem research has identified effects of an accommodative monetary policy on housing prices in the euro area and in the United States. 30 The intriguing aspect of this hypothesis and of the associated empirical findings is that the monetary policy stance might be perfectly appropriate for and consistent with the preservation of price stability over a short-to-medium term horizon.

The key task is therefore to fully implement what has been agreed in a cooperative manner. All G 20 members have committed to the implementation of the Basel III package. However, major jurisdictions have come out with their own regulatory standards. It is important that there is no disharmony that could be confusing. We need to guard against the possibility of regulatory arbitrage.

Therefore, the objective of the European capital markets union is not to abandon bank-based financing but to supplement it with capital markets-based funding. And in Europe there is plenty of scope to do so. The European stock market is only 60% the size of its US counterpart when measured in relation to GDP.

As writers and editors, all of you are prodigious consumers and producers of communication. At first glance, the FOMC’s communication may not seem so different from what you’ve heard other government agencies say about their policies or businesses say about their products. I hope to show how communication plays a distinct and special role in monetary policymaking.

The Bank Supervision Department has drawn up the principles regarding the existence of a main risk management function in banks, and all banks have appointed a chief risks officer. The principles of a proper compensation policy have also been formulated, and changes in this sphere are becoming evident world wide.

Reliable credit ratings, thus, facilitate availability of credit more easily and at fair cost. Ratings can also serve as a powerful self-improvement tool for SMEs and help them strengthen and fine-tune their operations. It is, however, generally observed that a vast population of MSMEs still remains unrated.

With a view to encourage entities to get themselves rated, part reimbursement of rating fees is also being provided through National Small Industries Corporation (NSIC). MSMEs should seriously consider the benefits of credit rating and get themselves rated. Industry bodies may play an active role in educating MSMEs on the need and benefits of ratings.

By the decade’s end, we saw even more substantial legislation that has led to truly nationwide banking and the possible combination of banking, securities, and insurance underwriting activities under common ownership.

And we need to build on the Pillar 3 disclosure requirements of the framework to strengthen banks’ transparency around exposures to structured credit products and securitised assets, including banks’ involvement as sponsors. I also want to emphasise the importance of strong capital supporting trading book exposures. For the largest global banks, balance sheet assets have more than doubled between 2000 and 2006.

Yet in recent years, a large and influential body of academic work has disregarded or deemphasised the role of money as a determinant of inflation, even in the long run.

Of course, the program is not a silver bullet. And if policymakers are not careful, it could also pose challenges in the economy. In the long-run, while infrastructure investments promise to support economic growth and employment, unforeseen large external demand and price pressures that affect the import requirements of infrastructure projects can, in turn, limit the benefits of improving macroeconomic conditions.