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The Bank hosts the Secretariat of the Committee of Central Bank Governors (CCBG) in the Southern African Development Community (SADC) and supports the implementation of CCBG projects. The SADC Finance and Investment Protocol (FIP) was ratified by the South African Parliament in 2008 and work has begun in the various committees.

Of note is the completion of the drafting of the proposed SADC central bank model law, which will pave the way for the harmonisation of the legal and regulatory frameworks of SADC central banks. The Bank plays a leading role in the SADC payment system project.

On the other hand, depending on when and how interest rates applied to excess reserve balances of financial institutions' current accounts at the Bank are raised, payment of such interest could increase substantially and a negative spread could occur.

This could lead to a deterioration in the Bank's profits and impairment of its capital, and at the same time cause a possible decrease or delay in the Bank's payment to the government, which in turn could decrease government revenue.

Section 4: Role of NBFCs in promoting inclusive growth NBFCs play an important role in promoting inclusive growth in the country, by catering to the diverse financial needs of bank excluded customers. By financing real assets and extending credit to infrastructure projects, NBFCs play a pro-active role in the development process of the country.

One factor that explains the rather benign outcome is that European banks had entered the pandemic in fairly good shape. Having learned the lessons from the euro area sovereign debt crisis, banks have indeed now proved to be part of the solution, rather than the problem. The pandemic has disrupted supply chains.

The internationalisation of our currency was a by-product of the move to a floating exchange rate and the abolition of capital controls. For us, it has been a positive experience. My expectation is that one day China too will be able to make the same claim. It is easy to appreciate why the Chinese authorities have sought to have an internationalised currency.

Accordingly, we commenced in September, a consultative process with the Banking Sector that will lead to the formulation of a policy position on implementation of Basel II in Kenya in the course of 2008.

The price mechanism indeed provides the core discipline of the market economy, and through price changes, markets signal messages and activate automatic adjustment processes intended to hold demand and supply in equilibrium. In the context of international capital flows, the exchange rate is, of course, the most important price.

It is important for the smaller countries therefore to ensure flexible adjustment processes for exchange rate changes in the environment of a volatile global financial environment. It is almost impossible to maintain a fixed exchange rate for any currency once large amounts of capital start flowing out of or into a country.

Financing of infrastructure 21. The first issue, which immediately comes to my mind, is the issue of infrastructure financing. I am sure that this issue will also be uppermost in your minds as well. Inadequate infrastructure exerts a cascading impact on the economy, negatively affecting productivity, employment, personal income and international competitiveness and costs.

The 12th Five Year Plan as mentioned earlier has estimated the infrastructure requirement at around INR 56 trillion, with a gradually increasing role for the private sector. Given the limited fiscal headroom and the long gestation lags involved in its fructification, there is a need to rope in long-term providers of funds. Can banks chip in? Yes and in fact has already done so.

Besides focusing on diversifying sources of imports, it may also be necessary to focus on greater strategic trade integration, including in the form of early completion of bilateral free trade agreements with the US, EU and UK. V. Infrastructure as Force Multiplier for Growth 20.

In India, the progress made on physical infrastructure in the country in the last five years needs to be viewed as no less than a dynamic shift. Road construction, the primary mode of transportation in India, has increased from 17 kms per day in 2015-16 to close to about 29 kms per day in the last two years.

Today, despite our most recent crisis, the CPI is over 219. Not once during more than half a century has the index systematically declined. I find no evidence that deflation is the most serious threat to the recovery today. BIS Review 107/2010 5 Conclusion I agree that the Federal Reserve needs to keep its policy rate accommodative.

For a while longer, it should remain even below the long-run equilibrium rate. However, the economy is improving and is growing at a rate faster than the last two recoveries. Importantly, the recent financial crisis and recession was not caused by high interest rates but by low rates that contributed to excessive debt and leverage among consumers, businesses and government.

Therefore, even if a bank were to suddenly become unable to settle, disruption to the system would be limited: suspension of the operation of the entire settlement system, which can occur under designated-time settlement, can be avoided.

Each of the 10 banks requiring an additional capital buffer has pledged to have the necessary buffer in place by the November 9 deadline. Many of the banks are well ahead in finding private-sector options for increasing their common equity, and several have announced plans for new equity issues.

Differences in the extent of resource redistribution through such job changes and other avenues, and in the ensuing pace of improvement in labor productivity, could also be engendering differences in wage inflation. In the United States, the wages of people who have not changed jobs have been rising together with the wages of those who have (Chart 17).

And hopes were high that it was only the start of many more years of stability to come. Some even dared to ask whether the business cycle had ended.3 In retrospect, one might be forgiven for thinking that it sounded a bit like the “end of history” for monetary policy.

The pass-through is systematically faster and stronger in periods of higher inflation than in periods of lower inflation.5 Thus, following several years of low inflation in the euro area, a more tentative pass-through of wages to prices is understandable. But as labour costs rise, the buffer room for absorbing cost increases through margins will eventually vanish.

As price increases become more widespread and firms become more confident about their pricing power, we should see a higher degree of pass-through. That said, if firms start to become more uncertain about the growth and inflation outlook, the squeeze on margins could prove more persistent.

Weakness in non-mining business investment has been most evident in Western Australia and, to a lesser extent, Queensland, where the decline in mining investment and commodity prices have contributed to weak conditions in those states more broadly. More recently, non-mining investment appears to have increased in New South Wales and Victoria, where economic conditions have been improving.

10 There has also been some decline in population growth, most notably in Western Australia. 11 See Jacobs D and A Rush (2015), ‘Why Is Wage Growth So Low?’, RBA Bulletin, June, pp 9–18. 12 For a discussion of the differences between these <www.rba.gov.au/publications/smp/2016/aug/price-and-wage-developments.html>.

Since 1990, the number of people living in cities in China and India has risen by nearly half a billion, the equivalent of housing the entire population of Canada every 18 months. This process can be expected to continue for decades.

* * * Ladies and gentlemen, the Vice-President and I would first like to express to all of you our best wishes for the New Year and welcome you to this press conference. Let me now report on the outcome of today’s meeting of the ECB’s Governing Council, which was also attended by Commissioner Almunia.

Conclusions Let me sum up my three simple lessons for dealing with highly uncertain circumstances: first, remain permanently alert and ready to respond to change when it happens; second, always ask the analytical preparation to be as comprehensive and robust as possible; and third, do not forget that in such circumstances collegial wisdom and experience are always of the essence.

The Committee recommended that it should be made mandatory for all newly proposed UCBs to come through a process of graduation from a co-operative credit society on the strength of demonstrated and verifiable track record. 7.

The active job openings-to-applicants ratio has been at a high level that exceeds the peak marked during the bubble period, and the unemployment rate has been in the range of 2.0-2.5 percent, remaining at around a low level that was observed during the bubble period. While labor market conditions have remained tight, employee income has been increasing.

Japan's economy thus has been on a moderate expanding trend, with a virtuous cycle from income to spending continuing to operate in both the corporate and household sectors, although exports have shown some weakness.

Indeed, survey evidence suggests that the perceived labour market risk is higher for workers in more internationalised sectors (Scheve and Slaughter 2004) and that opposition to economic integration is stronger from individuals who are theoretically more likely to be damaged by it – such as low-skilled workers in countries that receive low-skilled migration inflows.

Bearing in mind these points and issues, the way forward must be to continue implementing structural reforms in product and labour markets so that the euro area countries can fully reap the benefits of both globalisation and EMU. A more flexible euro area economy would also facilitate innovation and help exporters improve competitiveness and move more rapidly into the most appropriate sectors and products.

Regional integration and the creation of a large economic area have also come to be seen as even more necessary in order to prosper in an increasingly globalised world economy.

This is the reason for modifying the Philippine framework by taking into account, the local banks’ state of readiness, local conditions and practices consistent with the nature, complexity and materiality of the local institution’s activities. This is also the reason for providing a breathing space for thrift and rural banks in implementing Basel II.

Owing to the abolition of national currencies, it is no longer possible for member states to resort to individual monetary and exchange rate policies. Interest rate differentials and currency fluctuations, hitherto devices for readjusting economic competitiveness in the event of asymmetric shocks, will have to be replaced by more market flexibility.

At the same time, we are seeing signs of an ever-increasing degree of economic concentration in terms of large-scale transnational mergers and acquisitions in virtually all sectors of the European 7 BIS Review 38/1999 economy. There is also an open contest between regions for corporate investors.

Indeed, I feel a great sense of honor in being allowed to serve the public in this capacity. And a great sense of purpose comes with knowing that I am able to use the best of my talents and the breadth of my professional passion to help protect the public from experiencing such a fallout again. And through social action.

2 Under this program, which is expected to begin operation next month, the Federal Reserve will lend for up to three years on a nonrecourse basis against asset-backed securities. By providing this financing, the program should increase the availability of credit to households and small businesses.

The fact that we showed ourselves to be very firm about price stability, fully in line with our definition – less than 2% but close to 2% over the medium term – helped us in the crisis. Because we avoided not only a materialisation of the inflation risk but also of the deflation risk which, after Lehman bankruptcy, was becoming the main danger.

A comparison of inflation expectations shows that we have had one of the best “anti-deflation” protections of comparable advanced countries. The movement of the “indignant ones” is on the rise around the world. Do you understand these feelings of helplessness in the face of globalisation?

Well, policymakers should continue what they started during the Covid crisis and use the current windfall of low interest rates to address the structural challenges our economies face. That will not only offer us a chance to improve the resilience of our monetary union, but also help to future-proof our economies.

First, the starting point for the current large-scale monetary easing was the adoption of the price stability target of 2 percent in January 2013. Major central banks around the world had already adopted such inflation targets, and it was at this time that Japan adopted one as well.

It has been moved from the anniversary of the Peace in Lund on 26 September 1679, when Denmark definitively surrendered the provinces of Scania, Halland and Blekinge to Sweden, to the anniversary of the referendum on 2 October 1972, when a majority of the Danes voted to join the EC. Surely that signals a positive, forward-looking attitude.

As regards the international economy, the 1st half of the year was a little weaker than expected at the turn of the year. Growth is expected to pick up in the 2nd half of 2014 and in 2015. The US economy grew in the 1st half of 2014, while economic development was weaker in the euro area.

Austrian measures to combat the financial crisis • The measures adopted by Austrian policymakers to fight the financial crisis were endorsed by the Austrian Parliament in October 2008 and encompass primarily two new laws, the Interbank Market Support Act (InterbankmarktstärkungsG), and the Financial Market Stability Act (FinanzmarktstabilitätsG).

inflation cannot take place without a more rapid increase in the quantity of money than in output, provided that the velocity of circulation of money remains unchanged.

BIS central bankers’ speeches allowed to override basic prudence. I am sure that our banking system will rise above the formidable challenges and emerge stronger and more efficient. I wish the Conference all success. Thank you. BIS central bankers’ speeches 13

Therefore, abstracting from the large swings that foreign exchange markets are known for at times, over a longer period the exchange rate is an important ingredient in shaping domestic inflation outcomes. In 1999, the euro was introduced at an exchange rate of 1.18 vis-à-vis the US dollar. You know what is its value today. It needs no further commentary.

The Need For Financial Modernization Technology and globalization are changing markets all over the world, but perhaps none have been more affected than the financial markets. Yet in the United States much of our legal framework has essentially not changed since the 1930s.

We are not expecting to change monetary policy in the near term, and when we look further into the future we no longer see a clear probability of it moving in one direction rather than the other. Importantly, this is also the collective view of the market, as shown by the yield curve and by economists' forecasts.

The government’s Finance Bill operates with a government budget deficit of 3 per cent of GDP next year and a deficit of 0.5 per cent of GDP on the structural balance. That is BIS central bankers’ speeches 1 precisely what the Stability and Growth Pact and the Budget Act allow and leaves no scope for negative surprises.

It was obviously crucial for the Eurosystem to address people’s fears of becoming infected through the use of cash. We therefore commissioned analyses by top-tier laboratories as early as March 2020. The results confirmed that the risk of transmission via banknotes and coins is very low, and thus cash remains safe to use.

Some observers have argued that traditionally low interest rate economies are suffering as a result of EMU, as their interest rate comparative advantage relative to other countries was removed with the convergence process and the introduction of the euro.

However, the fact that all euro area countries now enjoy stable prices, low inflation expectations and thus low financing costs is also beneficial for economies such as Germany, not least by enhancing trade and financial integration.

The first genuinely macro-prudential tool to have been introduced is the counter-cyclical capital buffer that will be gradually implemented as part of Basel III. This buffer will be activated in periods of excessive credit growth, such as the credit booms frequently originating from or associated with housing price bubbles.

Finally, it is argued that banks can still be treated separately for purposes of prudential requirements without necessarily linking them with the central bank, whose primary responsibility should be price stability. In considering the pros and cons of single regulator or unified regulation and multiple regulators, a major issue that needs to be addressed is: should banks be supervised by central banks?

The task is to refashion a regulatory structure so as to encourage the efficient allocation of capital to productive uses, while protecting the financial system from the defects and excesses that are inherent in financial markets.

For those of us at the regulatory agencies, I believe there should be a three-part response: • first, the agencies should adjust their policies and practices in light of the lessons learned from examination of past shortcomings or of new problems revealed by the crisis; • second, we should contribute to the discussion of possible Congressional initiatives that could provide useful new legislative authorities to help contain systemic risk and the problem posed by institutions that are too-big-to-fail; and • third, we should be developing ideas and proposals that are not appropriate for adoption now – and, indeed, may never be – but are worthy of consideration to inform the debate on policy alternatives.

For community banks with limited resources, the necessary investments in API technology and in negotiating and overseeing data-sharing agreements with data aggregators and third-party providers may be beyond their reach, especially as they usually rely on service providers for their core technology.

Some fintech firms argue that screen scraping--which has drawn the most complaints about data security--may be the most effective tool for the customers of small community banks to access the financial apps they prefer--and thereby necessary to remain competitive until more effective broader industry solutions are developed.

For our part, the Federal Reserve will promote a smooth transition by communicating our assessment of the economy and our policy intentions as clearly as possible. IV. Concluding remarks To summarize and conclude, the Fed’s statutory objectives are defined by its dual mandate to pursue maximum sustainable employment and price stability in the U.S. economy.

But the U.S. economy and the economies of the rest of the world have important feedback effects on each other. To make coherent policy choices, we have to take these feedback effects into 22 8 See Kindleberger (1986). BIS central bankers’ speeches account.

19 While post hoc explanations generated by model agnostic methods can allow inferences to be drawn in certain circumstances, they may not always be accurate or reliable, unlike intrinsic explanations offered by interpretable models. Basing an explanation on a model’s behavior rather than its underlying logic in this way may raise questions about the explanation’s accuracy, as compared to the explanations of interpretable models.

In particular, the ECB has taken several non-standard measures to ensure the transmission of its monetary policy to the economy. The latest unconventional measures announced by the ECB (the targeted long term refinancing operations (TLTROs), and the covered bond and ABS purchase programmes) will have a sizeable impact on our balance sheet, which we expect to move towards its early 2012 dimension.

In Europe a key response to the crisis was the creation last year of the European Systemic Risk Board (ESRB) – an independent EU body responsible for the macro-prudential oversight of the Union’s financial system. An important challenge for the ESRB in its task of monitoring systemic risks and vulnerabilities is bringing this new macro-prudential perspective to the traditional microprudential one.

Third, we must improve the regulatory framework, which may involve reversing some of the deregulation that occurred in the 1990s. Specifically, adopting a version of the proposed Volcker rule would be healthy for long-term stability.

Thus the latest developments confirm that the stimulative impact of the low level of interest rates remains the dominant factor behind the current high trend rate of monetary expansion. Overall, further acceleration of monetary and credit growth in this environment continues to point to upside risks to price stability over the medium to longer term.

Monetary developments, therefore, require careful monitoring, especially in the light of the strengthening of economic activity and, in particular, of strong asset price dynamics, especially in housing markets. To sum up, annual inflation rates are projected to remain elevated in 2006 and 2007 and the economic analysis confirms that the risks to price stability continue to lie on the upside.

Monetary policy framework and objectives The changes made to the monetary policy framework are meant to enhance policy formulation in support of the objective of achieving a sustainable, low and predictable level of inflation. Additional factors are now considered more systematically to assess the future path of inflation, indicators of domestic demand and inflation expectations.

This assessment involves both statistical and expert analysis and, in view of improved analytical capacity, the Bank decided to discontinue the use of the rate of growth of commercial bank credit as an intermediate target.

To be clear, this shift would require us to revisit our current CCyB policy and would introduce additional layers of decisionmaking complexity to the SCB proposal. On balance, however, I think this kind of shift would provide the Board with a helpful, additional tool that could be adjusted quickly in response to economic, financial, or even geopolitical shocks.

I’d also like to preemptively address a potential objection to this option. That is, that it may be a “stealth” cut to our strong capital levels for the largest banks. I reject that characterization, and it is not supported by the approach I have outlined today.

Japan) Asian Exports to Africa Source: International Monetary Fund. 6 BIS Review 107/1999

When I taught graduate school economics at one private university in Korea in 1998, right after the Asian financial crisis, I set up a course there on “Economic Crisis Management”, which was to my knowledge the first and only course of its kind in Korea, thinking that economic crisis management would become a buzzword in the global market in the future.

Fabio Panetta: Protecting the European financial sector - the Cyber Information and Intelligence Sharing Initiative Introductory remarks by Mr Fabio Panetta, Member of the Executive Board of the European Central Bank, at the fourth meeting of the Euro Cyber Resilience Board for pan-European Financial Infrastructures, Frankfurt am Main, 27 February 2020.

* * * It is a pleasure to welcome you back to Frankfurt. As you may know, I recently became responsible for market infrastructures and payments at the ECB. As this includes the ECB’s work on the cyber resilience of financial market infrastructures, I have taken over chairmanship of the Euro Cyber Resilience Board for pan-European Financial Infrastructures (ECRB).

2/4 BIS central bankers' speeches We support initiatives that would make it easier for Filipinos to have the necessary requirements to apply for new bank accounts or financial services. The BSP is currently collaborating with the Philippine Statistics Authority to implement the Philippine ID System. Under the agreement, the BSP will produce 116 million pieces of cards over the next three years.

Filipinos, especially the unbanked, will be able to easily obtain a valid government ID card, which they can use to apply for bank accounts and other financial services. The BSP is also actively exploring RegTech and SupTech solutions to enhance the timeliness and quality of our risk-based decision making.

The United States Agency for International Development (2009) defines a financially literate SME owner/manager as “someone who knows what are the most suitable financing and 2 2 “Micro, Small and Medium Enterprise Finance in India”, IFC, World Bank Group, November 2012.

BIS central bankers’ speeches financial management options for his/her business at the various growth stages of his/her business; knows where to obtain the most suitable products and services; and interacts with confidence with the suppliers of these products and services. He/she is familiar with the legal and regulatory framework and his/her rights and recourse options.” 13.

To this end, the Reserve Bank has indicated an intention to provide a regulatory framework for the introduction of technology based innovative products for the use of all. Reserve Bank has also noted the need for ensuring the availability of low-cost and safe domestic remittances to large number of unbanked population and migrants through appropriate technology and affordable cost has also been emphasized.

8 BIS central bankers’ speeches The proposed introduction of International Bank account Number (IBAN) /Basic Bank Account Number (BBAN) is expected to result in efficiency in the system through introduction of a single parameter (i.e., the account number) that would replace different types of bank/branch codes (e.g., IFSC, BSR code, MICR code, SWIFT BIC code, etc.).

Hong Kong is a small open economy for which the existing exchange rate regime is the sole option “to counteract large, unexpected shocks from the global capital movement”, as you, Mr Yam, constantly point out. By contrast, the euro area is one of the largest currency areas in the world. Together, the participating countries account for more than 15% of global GDP.

But this summer has now come to an end, as “seasons come and seasons go”. But times are still good on the economic front. The economy is expanding at a robust pace, interest rates are still low, asset prices are high, and volatility in financial markets is relatively low. So, for the most part, the expectations regarding economic developments have been confirmed.

Successful lending requires the lender to act to secure his position at the first sign of trouble, otherwise the slow banker ends up providing the loss cover for more agile bankers or for unscrupulous promoters. To survive in the changing business of lending, public sector banks need to have strong capabilities, undertake careful project monitoring, and move quickly to rectify problems when necessary.

In the past, PSBs had the best talent. But today, past hiring freezes have decimated their middle-management ranks, and private banks have also poached talented personnel from PSBs. PSBs need to be able to recruit laterally, while retaining the talent they have, but to do so they need to be able to promise employees responsibility as well as the freedom of action.

In late 1979, the Federal Reserve began significantly tightening monetary policy to reduce inflation. In response to this tightening, which precipitated a severe economic downturn in the early 1980s, overall inflation moved persistently lower, averaging less than 4 percent from 1983 to 1990. Inflation came down further following the 1990–91 recession and subsequent slow recovery and then averaged about 2 percent for many years.

Since the recession ended in 2009, however, the United States has experienced inflation running appreciably below the FOMC’s 2 percent objective, in part reflecting the gradual pace of the subsequent economic recovery. Examining the behavior of inflation’s estimated long-term trend reveals another important change in inflation dynamics.

The first conclusion that I would draw to your attention is that if monetary policy aims primarily at stabilizing income in the face of a permanent supply shock, it will produce the opposite result, i.e. unstable output and inflation. Let’s consider now the case in which the central bank aims primarily at price stability, instead of stabilizing income.

While the underlying problems differ slightly between individual countries, the key to overcoming the crisis lies with the affected countries themselves. In the years following the introduction of the euro, fiscal and economic policies in some member states failed to meet the requirements of a monetary union. And it was these countries which experienced strong capital inflows.

The first factor was the overconfidence that became so pervasive throughout Japan. Japan’s growth rate gradually declined after its high growth era ended in the early 1970s, and yet growth rates remained far greater than those of other advanced economies up until the 1980s. Inflation rates were quite subdued, and therefore, Japan boasted of itself being an honor student.

But as recent events have reminded us, even in the countries with the most developed systems of bank supervision, we still continue to be surprised by the capacity of the best and the brightest to take risks the magnitude of which even they do not understand.

The first component, yield curve control, is a policy under which the Bank aims to keep short- 8 and long-term interest rates stable at low levels.

A public-sector solution for Lehman proved infeasible, as the firm could not post sufficient collateral to provide reasonable assurance that a loan from the Federal Reserve would be repaid, and the Treasury did not have the authority to absorb billions of dollars of expected losses to facilitate Lehman's acquisition by another firm.

the mechanisms stressed by these models, in particular the link running from asset price bubbles to financial crises (Reinhart and Rogoff 2008, 2009; Brunnermeier 2009). Moreover, early warning models also link asset price and credit bubbles to financial crises (Beutel, List, and von Schweinitz 2018).

Indicators of the health of the banking system continue to post favorable readings, with asset levels and bank earnings continuing to improve. The capital adequacy ratio remained high at 16 percent and non-performing loans also remained generally low at less than 4 percent of total loans. The favorable performance of the domestic financial markets reflects the upturn in the country’s economic prospects.

We are well aware that this segment of the population mainly consisted of farmers; especially small and marginal farmers, artisans, weavers, and weaker sections. Over a period of time, the role played by commercial banks increased financing of priority sectors, viz., agriculture and small scale industries. 6.

Economic growth is projected to be even more robust in the second semester of 2007 along with significant improvements in private investment and greater government capital expenditure.

Implications for South Africa As has been the case since the beginning of the financial crisis, South Africa has not been immune to these fluctuations in international markets.

It lowered the interest rate on deposits that banks make with the Eurosystem (the deposit facility), which has been in negative territory since June 2014, by 10 basis points to -0.5 per cent.

1.2 Size of the sector The share of NBFCs’ assets in GDP (at current market prices) increased steadily from just 8.4 per cent as on March 31, 2006 to 12.5 per cent as on March 31, 2013; while the share of bank assets increased from 75.4 per cent to 95.5 per cent during the same period (Table 1).In fact, if the assets of all the NBFCs below Rs.100 crore are reckoned, the share of NBFCs’ assets to GDP would go further.

Our aim is to safeguard the resilience of the sector and ensure it is better able to absorb rather than amplify adverse shocks. We have had good engagement on these proposals and are now considering the feedback received before we finalise the design of the measures. We expect to announce the outcome over the coming months.

Basel II has brought regulation and risk management to the centre stage: the regulatory capital is more closely aligned to the risks in banks and there is a trend towards convergence of the regulatory and economic capital, especially in the advanced approaches.

The evolution of repo markets and central clearing can serve to illustrate both the potential benefits and the complexities that arise as the market seeks new infrastructure models. Repo clearing The U.S. repo market is composed of several segments, as illustrated in Figure 3. Dealers are at the center of the figure and operate in all five of the segments shown.

According to EY’s FinTech Adoption Index1, South Africa boasts financial technology (FinTech) adoption levels of 33%, which is in line with the global average. The survey respondents expect this type of adoption to increase to an average of 52% globally, with South Africa counting among the countries with the highest intended use among consumers at 71%.

The purpose of this conference is therefore to develop deeper insights into emerging innovations in the payments ecosystem, which we hope will provide a better understanding of regulatory frameworks, stimulate debate, and spur development within the payments space in support of our country’s developmental objectives. 1 EY. 2017. ‘EY FinTech Adoption Index 2017 – The rapid emergence of FinTech’.

You can see snippets of their presentations in a video that we will play at the end of the event. I would like to pay special tribute to all the teachers who supported the learners. We are aware that you invested a lot of effort and hard work into this project. Congratulations to schools whose learners reached the final stages of the competition.

Your support and encouragement exposed learners to a rare experience that will leave an indelible mark in their memories. We salute both the teachers and principals for making a difference MPC Challenge Objective achieved The main purpose of the MPC Schools Challenge is to promote interest in economics and deepen the understanding of Monetary Policy.

It would be consistent with this approach for local authorities themselves to adopt rules on expenditure. Compliance with budget constraints must be based on an appropriate system of incentives and penalties. The limits set at central level should also cover transfers to local government.

On the basis of current information and prevailing futures prices for oil, annual HICP inflation is expected to remain very low or negative in the months ahead. Such low inflation rates are unavoidable in the short term, given the recent very sharp fall in oil prices and assuming that no significant correction will take place in the next few months.

As Fabrizio Coricelli discusses in his presentation, creditless recoveries are not uncommon in the aftermath of financial crises, in particular when financial crises were preceded by periods of credit booms to the private sector. Calvo et al (2006), in a seminal paper published in the American Economic Review, describe creditless recoveries as “Phoenix Miracles”.

The phenomenon of creditless recoveries has been documented mainly in Emerging Market and low-income economies but seems to also play a role in industrial countries. Empirical evidence suggests that creditless recoveries are more likely when the preceding recession was deep and when the recession coincided with a banking crisis.

Furthermore, the concerted effort by Government towards an inclusive parliamentary democracy in 2014 has also been a major contributor to regained confidence amongst investors and consumers alike. The improved confidence is well reflected in our major macroeconomic indicators.

Discretion remains indispensable in the daily implementation of monetary policy. Economics, after all, is not an exact science. In the world of macroeconomic policy two plus two may sometimes add up to five. The central banker must, however, never try to stretch it to six.

In this respect, the ECB has benefited from the confidence and credibility that the German central bank, the Bundesbank, had acquired in the course of decades. Notably in its first years of operation, the ECB focused on maintaining continuity relative to the traditional monetary policy stance of the largest Member State, Germany.

We therefore have to carefully channel what is left of the original momentum. I join those calling for an end to the development phase and a turn to the implementation phase of regulatory reforms.

And in parts of Asia, there is considerable overcapacity in some manufacturing industries. This collective economic slack has reduced upward pressure on both prices and wages. The second factor is a self-reinforcing dynamic originating from the decline in headline inflation caused by the fall in commodity prices, including oil prices.

With headline inflation rates so low, many workers have agreed to smaller wage increases than would have otherwise been the case, especially where expectations of future inflation are also low. The low wage increases have in turn reinforced the low inflation outcomes.

Papua New Guineans are farming their land for many generation, and achieving results in agriculture can be realized relatively in a short time. Once the education system will progress and the population’s technical skills will improve, the development of more sophisticated industries can be encouraged and incentivized by the Government.

To do this, banks will need to strengthen their capacities for identifying and evaluating potential new loan customers and ensuring that the characteristics of the loan products on offer are suitable for the types of business undertaken by their customers, especially in aligning loan repayments with the future stream of business revenues.

I am invited to all Eurogroup meetings once every month. That makes occasions of contacts three times a month. As regards the Parliament, I am invited five times a year and members of the Executive Board are invited on other issues as well. On top of these official hearings I participate in a number of informal gatherings with members of European Parliament.

And, indeed, you have achieved so much over the course of your career. You have shaped the landscape of monetary policy in Europe like few others. To this day, the Bundesbank and the ECB are still reaping the benefits of your legacy.

We have seen that weaknesses in financial systems can place constraints on the maintenance of a pegged exchange rate, but can also create systemic instability and impose severe costs on the real economy when the currency is permitted to depreciate. And we have seen that weak financial systems can place substantial constraints on the availability of new credit and hence delay economic recovery.

• The risks of inadequate transparency. Lack of transparency, both in the public and private sectors, can exacerbate financial distress by reducing the scope for market disciplines to operate and by weakening the ability of creditors and investors to make informed decisions. In some cases, herd behaviour and resultant over-selling of currencies can be attributed in part to inadequate transparency.

The amendment would not alter the time period that a private party has to challenge a banking agency's approval of a transaction for reasons related to the Community Reinvestment Act. 11. Repeal certain reporting requirements imposed on the insiders of insured depository institutions (Matrix No.

4) Amendment repeals the provisions of current law that require: (i) an executive officer of a bank to file a report with the bank's board of directors concerning the officer's indebtedness to other banks; (ii) a member bank to file a separate report each quarter concerning any loans made to its executive officers during the quarter; and (iii) executive officers and principal shareholders of a bank to report to the bank's board of directors any loans received from a correspondent bank.

As in most other industrialised economies the recovery process started in spring 2009, driven mainly by a massive fiscal and monetary stimulus. Still, GDP contracted by 5% compared to 2008 and hence by much more than in the United States. Around the turn of the year, economic activity was dampened as the fiscal stimulus wore off and also owing to the inventory cycle.

The relatively cold and snowy winter weather was an additional burden for the recovery process. However, trend recovery remained basically intact and the recovery process is expected to regain momentum in the second quarter of 2010. As a typical mainstay of the German economy, exports will once again play an important role in the recovery.

First, the Federal Reserve created a number of liquidity programs, which provided well-secured, mostly short-term credit to various parts of the financial system that were under increasingly severe strains.

Among these were the Term Auction Facility (TAF), which auctioned short-term funds to banks; the Primary Dealer Credit Facility, which served as a backstop liquidity provider for securities firms; the Term Asset-Backed Securities Loan Facility (TALF), which was designed to help revive the market for asset-backed securities, and others.

In response to these developments, the Federal Reserve reduced the spread of the primary credit rate – the rate at which most institutions borrow at the discount window – relative to the target federal funds rate, and also made it easier for banks to borrow at term.

In addition, we often issue guidance to provide the industry with supervisory “best practices” for addressing safety and soundness and consumer protection matters. Guidance is generally a moreresponsive supervisory tool than rules, and it allows institutions more flexibility in adopting new business practices.

At the end of March 1997, the ratio of short-term debt to the level of reserves amounted to a little over 25 per cent, compared to about 100 per cent for Indonesia, 50 per cent for Argentina, and 25 per cent for Malaysia.

A CBDC will need to meet AML requirements while balancing the important value that the public places on their privacy.13 The ____________ The Reserve Bank supervises banks, non-bank deposit takers and life insurers to ensure they meet obligations designed to help deter and detect money laundering and terrorist financing.

Current shortcomings in coordination Current shortcomings in coordination reflect two main weaknesses: diverging interests and knowledge gaps. Diverging interests Diverging interests of banks and CCPs in CCP risk mitigation were underlined in the recent debate on CCP recovery and resolution. This is unsurprising, given the potentially very large unfunded payment obligations that may arise in such situations.

While these diverging interests may be most visible at the end of the financial waterfall, they arise throughout a CCP’s lifecycle, and should therefore be addressed in a holistic manner. Banks in particular have argued that their financial obligations in extreme events should be strictly limited, as they may otherwise be unable to manage their exposures.

Sarah Bloom Raskin: How well is our financial system serving us? Working together to find the high road Speech by Ms Sarah Bloom Raskin, Member of the Board of Governors of the Federal Reserve System, at the Graduate School of Banking at Colorado, Boulder, Colorado, 23 July 2012.

* * * Thank you for inviting me to the Graduate School of Banking at Colorado to share some thoughts about your future and our common work.

Half a century on, the basic idea behind the Phillips curve has been considerably extended, and many related theories have evolved in connection with the role of expectations, the mechanisms that bring about price rigidity, and so forth. For monetary policy to achieve its objective of price stability, it is extremely important to accurately understand the dynamics of inflation.

Other policies Notwithstanding the strength of the ongoing recovery, supply-side policies as well as institutional reforms are required in order to firmly secure a self-sustainable recovery and a better functioning euro area. Country level policies should be aimed at increasing productivity and facilitating innovation and business investment.

In addition, overseas reinsurers are now acutely aware of natural disasters and the cost of property insurance for all New Zealanders has risen across the country with Christchurch and Wellington being especially impacted.

Medium term influences As the governments of developed countries in the western hemisphere struggled to deal with the consequences of the GFC, their spending and borrowing ballooned causing fiscal deficits to rise at pace.

The euro is intended to be a borderless currency in the sense that the national borders within the supranational euro area will have no bearing either on the fixing of monetary policy or on the use of the currency.

We have indicated that a consistently lower rate in the near term, at the midpoint of our target band (4.5%), would lower long-term interest rates and be more supportive of balance in the economy. What do we mean by balance? First, let me say what it is not.

With the finalization of the implementing measures, the public funds provided by Law 2/2009 will soon be available.

2 But have all countries benefited from these trends? And what about other, “softer” indicators of prosperity? Research about “happiness“ provides some novel and very interesting insights. Rising incomes, for example, contribute to individual well-being (Layard 2005), and more recent evidence also suggests this to be the case at the aggregate level (Stevenson and Wolfers 2008).

It is not enough that you have physical stamina, it is also important that you deal with your co-workers and our legitimate visitors with courtesy. They should feel safe even in the presence of armed personnel; let them know that you are there to protect them. Always remember to work with vigilance, diligence, intelligence, and courtesy.

The regulators, like Reserve Bank, have always followed a consultative approach and welcomed suggestions from the stakeholders. It is also expected that the market participants need to be more active and participate in corporate bond market and make use of risk management tools/financial products.

Moreover, there are signs that wages of non-regular employees including part-time employees are also being raised as a result of labor shortages. Reflecting the improvement in the employment and income situation, private consumption has been resilient, albeit with some fluctuations due to factors such as the weather.

As the central bank lending offered by the PBOC to financial institutions should be repaid when they expire, financial institutions who issue carbon emission reduction loans to enterprises need to bear relevant risks on their own. In this sense, the "carrot", or the incentive, is moderate and market-oriented.

To help deal with these problems, the Committee (in association with the Basle Supervisors) has taken steps to encourage key market participants to improve their public disclosure practices, notably in the area of market and credit exposures, by drawing on information generated by their internal risk management systems.

The semi-annual global statistics on derivatives markets, referred to above, should also help participants assess the significance of their own positions in these markets.40 36 37 38 39 40 Data on loans made by banks will increasingly be available on an “ultimate risk” basis.

Consequently, the liquidity problem transformed into a solvency problem leading to bank failures in the US and other advanced economies in Europe. The attendant wealth loss on account of collapsing asset prices further accentuated the problem in the real sector.

I quote, “Little substantive discussion took place with the authorities on whether or not the exchange rate peg was appropriate for Argentina over the medium term, and the issue received scant analysis within the IMF” unquote. The Fund gave the authorities the benefit of the doubt for too long and did not acknowledge that temporary positive developments were not supported by structural changes.

Whilst these changes are necessary to satisfy customers’ sophisticated needs, they have come with increased risks in the banking industry. What needs to be done is for banks to improve their financial risk management capabilities in order to survive. Risk appetite While there are increasing incidences of frauds in the banking industry, it is important to note that fraud is a derivative risk.

Fraud occurs because either gaps exist in the organization’s internal controls or the mechanism of monitoring such controls is compromised. In this regard, as bankers, we must revisit our appetite of taking on high risks in anticipation of high returns.

This is an important phenomenon, and a close examination of the driving factors is therefore required. Germany, for example, has seen moderate growth in unit labour costs over an extended period, leading to a correction of the losses in competitiveness that arose in the aftermath of German reunification.

This correction – and the corresponding sustained period of relatively low inflation – is, of course, fully justified and most welcome. It also shows that adjustment mechanisms in the euro area work. A higher degree of wage flexibility would help to accelerate such desirable adjustment processes. At the other extreme, some countries may, to some extent, be catching up with others’ higher living standards.

Figure 13 USA: net lending (-) or borrowing (-) by sector (in percent of GDP; quarterly data) 60 40 20 0 -20 -40 Government -60 Corporates Households -80 Total -100 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 Source : Federal Reserve, Flow of Funds Accounts.

To Carroll Wright’s descendants, one of whom is with us today, thank you, on his behalf, for this valuable contribution. This legacy lives on in the agency Carroll Wright founded, and few of his successors did as much to advance this principle as Janet Norwood.

To meet those demands, investors have reduced their leverage and liquidated holdings of securities, putting further downward pressure on security prices. Credit availability has also been restricted because some large financial institutions, including some commercial and investment banks and the government-sponsored enterprises (GSEs), have reported substantial losses and writedowns, reducing their capital available to support increased lending.

Some key securitization markets, including those for nonconforming mortgages, continue to function poorly if at all. These developments in financial markets – which themselves reflect, in part, greater concerns about housing and the economic outlook more generally – have weighed on real economic activity.

This is particularly true over the period from 2005 to 2007, when the overheating pressures became most apparent. Efforts to reduce wage growth and contain rapid credit growth during that period also proved largely ineffective. In the end, the macroeconomic imbalances accumulated by the Estonian economy were quite significant, and the magnitude and speed of the adjustment that followed were indeed dramatic.

However, the Estonian economy, and the citizens that support it, adapted rather quickly to the new economic environment, proving a remarkable capacity for adjustment. This speaks for the flexibility of Estonia’s economy and the “alertness” of its people. The new economic environment required prompt, determined action and the adoption of difficult policy measures.

Price stability is inscribed in the conduct of economic agents, even in countries which were previously the most inflationary, enhancing the legacy of the best traditions of the participating central banks.

Finally, on the issue of sustainability, while a direct link with deposit insurance is difficult to make, the wider requirement for insurance in a scenario of long-term environmental change and the vulnerabilities of several production systems to it – for example, agriculture, fisheries and tourism – is well recognized.

Notwithstanding these social and geographical advantages, ANI faces several developmental challenges, especially in the aftermath of tsunami that wreaked large-scale damage in December 2004. Apart from natural and rich human resources, it is important to have a well-functioning financial system for sustainable economic development.

In recognition of this, the Reserve Bank has stepped up its efforts in recent years to enhance the penetration of the formal financial sector and promote financial inclusion with a view to improving the well-being of our society. In this regards, the Reserve Bank has been undertaking special initiatives for extending the outreach of banking facilities in states and union territories.

There are inevitably limitations on trying to grasp or estimate economic realities that are changing day by day on the basis of conventional theories, models and experiences. We 12 BIS Review 82/2010 must therefore devote our best efforts to developing new approaches and analytical techniques, that correspond more closely to the real world.

We will also work to ensure that the outcomes and publications of the Bank of Korea’s research can be utilized more productively and effectively for the sake of the national economy. In any country, the results of research undertaken by its central bank should be put to good use by a wide range of economic agents, in the government, academia and the financial markets.

For the quotation, see Friedman (1963, p.17). 28 See DeLong (1997) and Taylor (1997) for a discussion of views during the 1970s on the costs of inflation. BIS central bankers’ speeches 5 As you know, under the leadership of Chairman Paul Volcker, the Federal Reserve in 1979 fundamentally changed its approach to the issue of ensuring price stability.

The Optimum Quantity of Money. New York: MacMillan. Hebden, James, and J. David López-Salido (2018). “From Taylor’s Rule to Bernanke’s Temporary Price Level Targeting,” Finance and Economics Discussion Series 2018-051. Washington: Board of Governors of the Federal Reserve System, July, https://doi.org/10.17016/FEDS.2018.051. Holston, Kathryn, Thomas Laubach, and John C. Williams (2017).

Again, without wanting to review that work in detail, it does show that the 1991 to 1997 expansion was both long and strong relative to the cycles that preceded it. That does not seem to support a proposition that inflation targeting, or the particular version of it practised in New Zealand, is inherently hostile to growth.

We are working on the inclusion of other credit providers such as hire-purchase companies and utility companies in the MCIB. This extended coverage will give a more complete picture of the potential borrower’s indebtedness. The MCIB data base will allow us to develop appropriate policies to address the issue of over-indebtedness of vulnerable households.

As Chairman Powell said at his swearing-in: “As a public institution, we must be transparent about our actions so that the public, through its elected representatives, can hold us accountable.” 12 We will continue to do so to the best of our ability. Thank you, and I look forward to answering your questions.

And own funds should be designed to absorb unexpected losses. The second: Financial reporting and financial stability supplement one another. They are like a horse and carriage. I believe a combination of transparent capital requirements and accounting concepts based on expected losses, would boost trust in financial institutions and thus improve financial stability.

The runs on prime money funds and commercial paper were particularly disappointing, since in many ways they resembled runs that we saw in these markets during the GFC. Money fund reforms implemented in 2016 were followed by investors shifting away from prime money funds and towards MMFs that hold securities backed by either the U. S. government or governmentsponsored enterprises.

EBA has also confirmed that there will be no stress test this year. Bank lending is also stabilising. Banks are starting to assess their financial situation more positively and in many cases their willingness to make loans is increasing. BIS central bankers’ speeches 1 How has the picture changed so clearly in only four months? There are two parts to the answer.

While FinTech can significantly expand access to financial services, people in certain conditions or circumstances may suffer disadvantages from new technologies such as automated credit examination, for instance. In this regard, we have raised the issue of aging and financial inclusion at the G20 under Japan's presidency this year.

We will discuss whether the development and diffusion of digital technologies might impede the access to financial services by the elderly, and how to provide convenient and accessible financial services for all. Second, we need to secure economic, financial, and social stability.

Pensions Commissions (2005), A new pension settlement for the twenty-first century – The second report of the Pensions commission (www.pensionscommission.org.uk). Perotti E. C. and A. Schwienbacher (2007) “The political origin of pension funding”, CEPR discussion paper, no. 6100. Siegel, J. (2002), Stocks for the long run, third edition, McGraw-Hill, New York.

Tuljapurkar, S., N. Li and C. Boe, (2000), “Is there a universal pattern of morality decline? Evidence and forecasts for the G7 countries”, Nature, vol. 405, pp. 789-792. Visco, I. (2007), “Longevity risk and financial markets”, in Balling, M., E. Gnan and F. Lierman (eds. ), Money, finance and demography: the consequences of ageing, SUERF colloquium volume 2006, SUERF, Vienna.

Furthermore, the costs of operating branches in rural areas are large relative to the rather limited volume of revenues which can be generated from these branches, especially as many of the basic requirements of operating a bank, such as the provision of electric power, are more expensive in rural areas than in urban areas.

Although I’ll focus mainly on the stability efforts of the Federal Reserve, a number of federal regulatory agencies have responsibilities in this area. All of these agencies are represented on the Financial Stability Oversight Council, or FSOC, which is chaired by the Treasury Secretary and which provides a forum for interagency cooperation in responding to emerging risks.

From a bank’s perspective, it’s a classic “make or buy” decision whether to make use of internal development resources or to harness the innovative power of financial technology start-ups. In the digital era, it may appear irrelevant where business partners are located, but even in times of bits and bytes and the ultra-fast exchange of data, proximity is still an advantage.

So providing a supportive business environment for such newcomers can give financial centres a decisive competitive edge. The Frankfurt financial centre will certainly benefit from the recent fintech initiative launched by the Hessian Ministry of Economics and Deutsche Börse AG. And even central banks – which don’t normally rank amongst the early adopters of new technologies – are doing experimental work of their own.

Amando M Tetangco, Jr: Promoting the rule of law in the financial sector Speech by Mr Amando M Tetangco, Jr, Governor of Bangko Sentral ng Pilipinas (the central bank of the Philippines), at the launching of the BSP’s book on “Special Banking Laws and annotated”, Bangko Sentral ng Pilipinas, Manila, 13 February 2013.

In this Forum, we have the perfect platform to share, learn and affirm our commitment in advancing financial inclusion across the region. I urge you all to ask the questions that will assist you in your drive to build on financial inclusion when you get back home.

As you all know, in financial markets, a pessimistic view had prevailed regarding the outlook until around autumn 2016. With the benefit of hindsight, however, the momentum for global economic growth seems to have strengthened since mid-2016. In particular, improvement in manufacturing and trade has been notable.

An uptrend has become evident recently in indicators related to business sentiment of the manufacturing sector globally, mainly on the back of an increase in IT-related demand led by that for smartphones and of the progress observed in emerging economies in inventory adjustments of materials (Chart 2).

Standards of living have risen because depreciation and other cash flows generated by industries employing older, increasingly obsolescent technologies have been reinvested to finance newly produced capital assets that embody cutting-edge technologies.

Similarly, the Bank has entered into bilateral MoUs and Memorandum of Cooperation with other domestic authorities, as well as foreign central banks with a view to exchanging information on AML/CFT matters, both spontaneously and upon request. Ladies and Gentlemen, Mauritius has also adopted its National Strategy for Combating Money Laundering and the Financing of Terrorism and Proliferation 2019–2022.

Chart 12 Current account structure Chart 13 Current account and FDI projection (in EUR mn) (in % of GDP) 4,000 15 10 2,000 1,970.1 2,468.2 5 0 -2,000 754.7 814.8 0 -573.0 -2,590.8 -2,676.3 -706.9 -4,000 -6,000 -5 -10 -4,749.6 Secondary income, net Primary income, net Services Goods Current account deficit -15 -1,209.7 -20 -25 2019 -8,000 H1 2021 2020 H1 2022 Sources: SORS and NBS.

Sources: NBS. * NBS projection. 2021 2022* Secondary income Services Current account 2023* 2024* Primary income Goods FDI 7 It is important to emphasise that since mid-April, FDI inflow returned to the levels recorded before the outbreak of the Ukraine conflict and that it exceeded EUR 2 bn in the seven months of the year.

2 New ideas and products are spreading at an exponential pace, putting pressure on innovators and promoters to compromise on the quality of their products. Third, is the rise of sustainability concerns. It is now widely appreciated that businesses can only be as successful as the societies they operate in and draw their existence from.

Environmental, Social and Governance (ESG) considerations are now paramount in any organization’s strategy and operations. Most notably, the adverse impact of climate change has become evident. Natural disasters, associated previously with developing countries, have spectacularly reared their ugly heads in the developed countries.

The buffer (surplus of provisions over specific provisions) will be allowed to be used by banks for making specific provisions for NPAs during periods of system wide downturn, with the prior approval of RBI. 20. The financial crisis also led to heavy criticism of accounting rules that permitted certain structured/ special purpose entities and exposure to remain off-balance sheet.

Amando M Tetangco, Jr: Turning challenges into opportunities – the key to sustainable growth Speech by Mr Amando M Tetangco, Jr, Governor of the Central Bank of the Philippines (Bangko Sentral ng Pilipinas), at the BAIPHIL’s Induction of Officers, Directors and Committee Chairpersons and the General Membership Meeting, Makati, 15 July 2008.

Prime Minister Tsipras even said that the ECB has got a rope around Greece’s neck. What is your comment on that? Decisions by the ECB are guided by rules, not political considerations.

Following these rules, the ECB has fully played its role as the central bank of Greece, continuously increasing its liquidity provision to Greek banks to ensure that they can serve the real economy. What we cannot do is fund the government, for example by refinancing Greek banks’ purchases of Tbills at a time when the Hellenic Republic does not have market access.